Opinion ID: 3011431
Heading Depth: 3
Heading Rank: 2

Heading: Written Communications

Text: As part of the VJEP project, Freedom Forge sent out letters in 1982 announcing the plans that stated that early retirees would have continuation of full Hospitalization, Surgical and Major Medical coverage under the `Program of Hospital and Physicians' Services and Major Medical Expense Benefits' for retirees to age 65. Thereafter, you and 8 your spouse are covered by the `Program of Hospital and Medical Benefits Supplementing Medicare.' There was no explicit reference, in either this letter or the programs referenced therein, to the fact that the company retained the right to amend or cancel the programs. The company sent out similar letters in 1991.3 Freedom Forge also issued two distinct kinds of documents detailing plan benefits. First, in 1981, 1986, and 1993, it distributed a booklet, which conformed with the ERISA SPD requirements, entitled Program of Insurance Benefits for Eligible Salaried Employees to all employees and retirees.4 Each booklet included a clear disclaimer informing all beneficiaries that Freedom Forge retained the right to amend or eliminate the Plan without the consent of the beneficiaries.5 These booklets each include a section discussing the medical coverage for Pensioners, Employees Receiving Long Term Disability Benefits and Surviving Spouses stating that pensioners (and the other named individuals) would be enrolled in the Company Paid Program or the Program Supplementing Medicare. Additionally, Freedom Forge issued booklets describing health benefit programs for retirees and their spouses with titles that, according to the retirees, suggested _________________________________________________________________ 3. These letters promised continued coverage under the Program of Health Care and the Program of Hospital and Medical Benefits Supplementing Medicare. It is unclear to what these programs refer, but at all events there was no indication in this letter that Freedom Forge retained the right to amend or cancel the benefit plans. 4. There was no evidence that any of the plaintiffs either had or had not read them. 5. This reservation accords with the actual terms of the Plan. According to Article 7 of the Plan, Freedom Forge reserves the right at any time and from time to time. . . to amend, suspend, or terminate the Plan or any Component Plan for any reason, in whole or in part, and to adopt any amendment or modification thereto, all without the consent of any Employee or other person. However, the Company shall not have the right to amend or terminate this Plan or any Component Plan or any Benefit with respect to Benefit claims already incurred at the time of amendment, suspension, or termination. 9 they were self-contained programs, and specifically intended for pensioners.6 Unlike the other booklets, these did not include explicit language reserving the company's right to unilaterally amend or eliminate the benefits.7 The plaintiffs assert that they believed that they were not salaried employees and therefore not controlled by the 1981, 1986, and 1993 booklets. Each booklet was self-titled a Program of Insurance Benefits for Eligible Salaried Employees (emphasis added). Instead, they relied solely on statements of company representatives, the letters describing the VJEPS, and those booklets directed at retirees for information about their benefit programs. Since none of the pensioner-directed booklets prior to 1994 stated that Freedom Forge retained the right to amend the Plan, and the plaintiffs claim to have been orally assured that they would be covered in the same way for life, they represent that they thought that the company could not unilaterally change or amend their benefits. Plaintiff Ross Smith, for example, testified that he understood that the special booklets about benefits for pensioners replaced those for active salaried employees. When asked whether there was a distinction conveyed to him between active and pensioned employee benefit programs, he answered,Oh yes. There always was. That's why there are separate booklets for the different categories of pensioners. He remembered that the benefits administrators specifically went over these things [the benefits] because they were kind of unbelievable to us, that they would make this offer. _________________________________________________________________ 6. These booklets included the: Program of . . . Benefits, Salaried Pensioners & Surviving Spouses Eligible for Medicare (1988); Program of . . . Benefits, Pensioners and Surviving Spouses--Retired Prior to December 31, 1986, Not Eligible for Medicare (1988); and the Comprehensive Major Medical Plan, Standard Steel Pensioners and Surviving Spouses--Retired After December 31, 1986 (1988). 7. Two 1988 programs for Salaried Pensioners & Surviving Spouses do include provisions about continuation after termination with the caveat, [t]his continuation provision does not apply if Standard Steel - Division of Titanium Metals Corporation of America replaces this Program with another program. In this event, all benefits will cease on the date this Program is terminated. There is no description of how, or under what circumstances, a replacement or termination would take place. 10 In 1994, Freedom Forge published booklets that were clearly applicable to retirees that contained the reservation of rights language. However, all of the testifying plaintiffs (except Snyder) had retired by that time.