Opinion ID: 3001092
Heading Depth: 2
Heading Rank: 1

Heading: ERISA Estoppel Claims

Text: Kannapien and Rozhon’s first claim is for ERISA estoppel under 29 U.S.C. § 1132(a)(3). Kannapien and Rozhon concede that they have been paid benefits according to the written terms of the Retirement Plan; however, they seek to estop Quaker and PepsiCo from enforcing the express terms of the Plan because they allege that they detrimentally relied upon misstatements by Quaker employees in their decisions to retire. We agree with the district court that Kannapien and Rozhon do not raise any genuine issue of material fact with respect to their ERISA estoppel claim. The written plan document ordinarily governs ERISA plan administration; statements or conduct by individuals implementing the plan can only estop an employer from enforcing the plan’s written terms in “extreme circumstances.” Vallone, 375 F.3d at 639; Sandstrom v. Cultor Food Sci., Inc., 214 F.3d 795, 797 (7th Cir. 2000); see also Downs v. World Color Press, 214 F.3d 802, 805 (7th Cir. 2000). We have consistently required that modifications to an ERISA plan must be in writing because ERISA exists, in part, to protect the financial integrity of pension and welfare plans by confining the payment of benefits to a plan’s written terms. See Operating Eng’rs Local 139 Health Benefit Fund v. Gustafson Constr. Corp., 258 F.3d 645, 650 (7th Cir. 2001); Downs, 214 F.3d at 805. As a result, in order to prevail on an estoppel claim under ERISA, we ordinarily require that plaintiffs show: (1) a knowing misrepresentation; (2) made in writing; (3) reasonable reliance on that representation by them; (4) to their detriment. Vallone, 375 F.3d at 639; Coker v. 10 No. 06-2543 Trans World Airlines, Inc., 165 F.3d 579, 585 (7th Cir. 1999). Here, we see no basis upon which to grant estoppel to Kannapien and Rozhon as they fail to satisfy any required element of an ERISA estoppel claim. First, Kannapien and Rozhon cannot prove that any Quaker employee knowingly misrepresented the terms of the Retirement Plan to them. See Brosted v. Unum Life Ins. Co. of America, 421 F.3d 459, 465 (7th Cir. 2005). The December 2002 estimate statements did not contain any knowing misrepresentations. These statements inadvertently listed Kannapien’s and Rozhon’s respective hire dates; however, the district court determined that the record clearly established that these mistakes were solely clerical errors and not knowing misrepresentations. The record supports this conclusion because the written statements accurately reflected the dollar amounts that Kannapien and Rozhon would receive under the written terms of the Retirement Plan. At any rate, Kannapien and Rozhon concede that these clerical errors in the estimate statements were unintentional. Further, the representations made to Kannapien and Rozhon by their Human Resources Manager, Satterlee— that their Golden Grain hire dates would be used in calculating their change-in-control benefits—were the product of an innocent mistake, not a knowing misrepresentation. Indeed, the record contains ample evidence to support this as well. Specifically, Satterlee advised both Kannapien and Rozhon to consult the Employee Administration Center to obtain benefits estimates after telling them that he could not individually compute their benefits. Satterlee also sought to rectify his misinformation by contacting the Employee Administration Center on their behalf once he discovered his error. Kannapien and Rozhon also conceded in their depositions that they believed Satterlee made an honest mistake. No. 06-2543 11 Finally, Winters’s statement to Kannapien that she “would be pleased” if she considered taking early retirement does not constitute a knowing misrepresentation. In fact, we agree with the district court that this statement does not misrepresent anything about the terms of the Retirement Plan, see Kannapien, 433 F. Supp. 2d at 902 n.5, nor does it represent anything at all because this forward-looking statement was not a statement of fact, see Frahm v. Equitable Life Assur. Soc. of U.S., 137 F.3d 955, 961 (7th Cir. 1998). Likewise, Kannapien and Rozhon cannot point to any written misrepresentation by Quaker or PepsiCo. Oral misrepresentations may become grounds for ERISA estoppel only where plan documents are ambiguous or misleading. Vallone, 375 F.3d at 639; Bowerman v. WalMart Stores, Inc., 226 F.3d 574, 587-90 (7th Cir. 2000); cf. Bland v. Fiatallis N. Am., Inc., 401 F.3d 779, 784 (7th Cir. 2005) (approving use of extrinsic evidence to prove the meaning of language in ERISA welfare plan documents “only if the language of the plan document is ambiguous and the ambiguities are not clarified elsewhere in the document”). Here, both parties concede that the written terms of the Quaker Retirement Plan unambiguously stipulate that Kannapien’s and Rozhon’s credited service began on July 1, 1990, the date they became participants in the Plan. In light of the Retirement Plan’s clear language, Kannapien and Rozhon must present a written misrepresentation to trigger estoppel. See Bowerman, 226 F.3d at 588 (“We have made clear in our earlier cases that the oral representations of an ERISA plan may not be relied upon by a plan participant when the representation is contrary to the written terms of the plan and those terms are set forth clearly.”). In their brief and at oral argument, Kannapien and Rozhon focused almost exclusively on the oral statements made to them by Satterlee and Winters. 12 No. 06-2543 Even if we agreed that these oral statements were misrepresentations (which we do not), they are insufficient grounds for estoppel. See id. The only alleged written misrepresentations Kannapien and Rozhon cite are contained in the December 2002 estimate statements and in the Employee Administration Center documents provided to them by Satterlee in early 2003. But as we have already explained, these estimate statements merely contained a clerical error; they did not misrepresent the actual amounts that Kannapien and Rozhon were entitled to under the Retirement Plan. Beyond this, the estimate statements contained disclaimers that expressly stated that, in the event of a conflict, the written terms of the Retirement Plan would govern. Similarly, the Employee Administration Center documentation did not contain any misrepresentations. These materials accurately explained that the change-incontrol benefits would be paid out of the Retirement Plan. Although the Employee Administration Center documents left the term “years of service” undefined, it made reference to the Plan, which defines the term consistently throughout. Kannapien and Rozhon have not presented evidence of any inaccuracies in the Employee Administration Center documentation. In an attempt to distinguish our precedent and evade the first two requirements of an ERISA estoppel claim, Kannapien and Rozhon rely heavily on our decision in Bowerman v. Wal-Mart Stores, where we applied estoppel based on innocent oral misrepresentations; however, a brief examination makes it clear that Bowerman is inapposite. See id. In Bowerman, we applied ERISA estoppel to Wal-Mart because its written health plan contained ambiguous provisions, and its employees made repeated incorrect statements that misled Bowerman into declining additional coverage provided under federal law. See id. Had Bowerman elected the additional coverNo. 06-2543 13 age, she would have been entitled to medical expenses for a pre-existing condition upon her return to Wal-Mart. See id. Three distinctions between this case and Bowerman are immediately apparent. First, and most critically, the written plan at issue in Bowerman contained ambiguous language, while it is conceded here that the Quaker Plan is unambiguous. Second, the plaintiff in Bowerman detrimentally relied on statements by employees, and her reliance deprived her of benefits that she would have been eligible for under the terms of the plan had she made the additional-coverage election; here, it is uncontested that Kannapien and Rozhon received the full benefits to which the written terms of the Retirement Plan entitled them, regardless of any alleged reliance. Third, Bowerman concerned an employee health plan, while the instant case concerns a pension plan. See Helfrich v. Carle Clinic Ass’n, 328 F.3d 915, 918 (7th Cir. 2003) (stating that unlike welfare benefits plans, ERISA requires pension plans to be very formal). We therefore see no reason to depart from the traditional rubric we use to evaluate the sufficiency of an ERISA estoppel set forth in Vallone. See 375 F.3d at 639. Moreover, there is no evidence in the record of any reliance—detrimental or otherwise—by Kannapien or Rozhon either on the December 2002 estimate statements or on the Employee Administration Center documents in making their decisions to retire. In fact, Kannapien and Rozhon each acknowledged at separate depositions that the benefits under the Severance Plan, which were properly paid and are not at issue in this case, significantly motivated her decision to retire; each also admitted that she relied on the honest mistake conveyed to her orally by Satterlee. These admissions, even taking all facts in the light most favorable to Kannapien and 14 No. 06-2543 Rozhon, make it impossible for either to prove that she relied on any written statement to provided to her by Quaker. See Sides, 496 F.3d at 822. Kannapien and Rozhon further attempt to extricate themselves from the requisite elements of ERISA estoppel by arguing that they have not asserted their estoppel claims against the ERISA plan itself, but instead have raised an estoppel claim against Quaker and PepsiCo directly. Thus, they assert that they may estop Quaker and PepsiCo based upon honest, oral misstatements. We find this argument unavailing. In their briefs and at oral argument, counsel for Kannapien and Rozhon characterized the benefits to which they were entitled as part of a “one-time-only-offer.” This characterization by counsel conflated the change-in-control benefits paid out of the Retirement Plan with the benefits his clients already received under the Severance Plan. But it is clear from the record that the Severance Plan benefits have been paid in full and that they are not in dispute in this case. In fact, Kannapien and Rozhon have never challenged the calculation of those benefits—not even in their internal appeals to the PepsiCo Administration Committee. Contrary to counsel’s suggestion, the benefits that Kannapien and Rozhon seek in this case are change-in-control benefits that must be paid out of the Retirement Plan, a pension plan under ERISA, and we have noted that when a plaintiff seeks to recover benefits under an ERISA Plan, such claims must be asserted against the plan and not against the employer. See Helfrich, 328 F.3d at 917 (“Claims based on the plan . . . must be enforced against the plan . . . .”). Kannapien and Rozhon do not cite any authority for their attempted circumvention of our clear view that estoppel claims based upon alleged oral misrepresentations cannot succeed when asserted against an unambiguous, No. 06-2543 15 non-misleading ERISA pension plan. See Bowerman, 226 F.3d at 588.1 Kannapien and Rozhon make one further argument. They argue that Quaker should not be allowed to enforce the written terms of the Retirement Plan because Quaker allegedly disregarded the plan’s express language by offering Kannapien and Rozhon, who retired voluntarily, benefits that are reserved for “involuntary terminations” under the Retirement Plan. We agree with the district court that this argument is unpersuasive. Kannapien, 433 F. Supp. 2d at 906. First, it is not clear that Quaker has deviated from the written terms of the Retirement Plan, as the term “involuntary termination” is not defined in the Retirement Plan. More importantly, Kannapien and Rozhon benefitted from Quaker’s departure from formalism: they received extra pay under the Severance Plan and extra money from the change-in-control benefits that they would not have been entitled to under the Retirement Plan’s written terms. Kannapien and Rozhon cannot appeal to equity to obtain more than the written language of the Retirement Plan allows. See Shields v. Local 705, Intern. Bhd. of Teamsters Pension Plan, 188 F.3d 895, 905 (7th Cir. 1999) (Posner, J., concurring). Because the Retirement Plan unambiguously defines “credited service” as commencing on July 1, 1990 for both women, and because neither Kannapien nor Rozhon can 1 We pause here to note that this tactic attempts to substitute state-law estoppel principles for the ERISA framework. Such a tactic, if allowed, could raise serious questions with respect to ERISA’s preemption of state law. See 29 U.S.C. § 1144(a). It could also raise doubts as to subject-matter jurisdiction in this case, where all parties are residents of Illinois and jurisdiction is based solely on federal questions arising under ERISA. See 28 U.S.C. § 1331; 28 U.S.C. § 1332; 29 U.S.C. § 1132(a)(3). 16 No. 06-2543 prove that she relied on any knowing written misrepresentation by Quaker, we hold that there was no issue of material fact on the ERISA estoppel claim and that the district court properly held that Quaker and Pepsico were entitled to summary judgment as a matter of law.