Court Opinion

ID: 870279
Source: CourtListenerOpinion
Date Created: 2013-05-24 20:04:57.125388+00
Date Added: 2024-06-11T12:52:52.971655
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                MAY 24 2013

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

ANDREW J. NALBANDIAN, Jr., an                    No. 11-17242
individual; et al.,
                                                 D.C. No. 5:10-cv-01242-LHK
              Plaintiffs - Appellants,

  v.                                             MEMORANDUM*

LOCKHEED MARTIN CORPORATION,
a Maryland corporation and LOCKHEED
MARTIN CORPORATION SALARIED
EMPLOYEE RETIREMENT PROGRAM,
an employee pension plan within the
meaning of 29 U.S.C. 102(2)(a) and
1002(35),

              Defendants - Appellees.

                   Appeal from the United States District Court
                     for the Northern District of California
                      Lucy Koh, District Judge, Presiding

                             Submitted May 17, 2013**
                              San Francisco, California

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: McKEOWN and WATFORD, Circuit Judges, and ZILLY, Senior District
Judge.***

      Andrew J. Nalbandian, Sr., terminated his employment with Lockheed

Martin Missiles and Space Corporation (“Lockheed”) approximately two weeks

before he died. Because he did not live to the date upon which his retirement

benefits were to commence under the Lockheed Martin Corporation Salaried

Retirement Program (“the Plan”), Lockheed determined that no benefits were

payable to Mr. Nalbandian’s designated beneficiaries. Mr. Nalbandian’s

beneficiaries appealed the denial of benefits under ERISA and the district court

granted summary judgment in favor of Lockheed. We have jurisdiction pursuant

to 28 U.S.C. § 1291, and we AFFIRM.

      Appellants contend that the district court should have reviewed Lockheed’s

denial of benefits de novo. Jebian v. Hewlett-Packard Co., 349 F.3d 1098 (9th Cir.

2003), on which they rely for that proposition, is factually distinguishable.

Further, subsequent case law clarifies that a procedural error by a plan

administrator does not change the applicable standard of review from abuse of

discretion to de novo review. Instead, a procedural error by the administrator is

        ***
             The Honorable Thomas S. Zilly, Senior District Judge for the U.S.
District Court for the Western District of Washington, sitting by designation.
                                          2                                     11-17242
one factor that the district court should consider in determining whether the

administrator abused its discretion. Salomaa v. Honda Long Term Disability Plan,

642 F.3d 666, 674 (9th Cir. 2011) (procedural errors committed by the

administrator must be “weighed in deciding whether the administrator’s decision

was an abuse of discretion.”); see also Conkright v. Frommert, 559 U.S. 506, 130

S. Ct. 1640, 1644 (2010) (“single honest mistake in plan interpretation” does not

strip administrator of deference). In the present case, the district court properly

applied the abuse of discretion standard, taking into consideration the structural

conflict of interest and alleged procedural errors in the claims handling process.

      Appellants argue that the district court failed to adequately analyze the

structural conflict of interest. Because Appellants did not bring to light any

evidence of actual bias in the claims review process, the district court properly

concluded that the structural conflict of interest “only slightly increases the Court’s

level of skepticism during review for abuse of discretion.” This is consistent with

our reasoning in Montour v. Hartford Life & Accident Ins. Co., that the weight

afforded to a conflict of interest should be adjusted “based on the degree to which

the conflict appears improperly to have influenced a plan administrator’s decision.”

588 F.3d 623, 631 (9th Cir. 2009).

      Appellants argue that Lockheed abused its discretion in denying benefits

                                           3                                     11-17242
under the terms of the Plan. However, Mr. Nalbandian selected the Guaranteed

Period Option which provides guaranteed payments to the participant for a period

of five years, with the proviso that “if he shall die after the Benefit

Commencement Date and before 60 . . . monthly payments have been made” such

payments shall be made to the beneficiary of the participant for the remainder of

the 60-month period. Mr. Nalbandian passed away before his Benefit

Commencement Date, as that term is defined by the Plan. As a result, his

beneficiaries are not entitled to benefits.

      Appellants contend that the district court erred by dismissing their claim for

equitable estoppel. This argument fails because the Plan terms concerning

payment of benefits under the Guaranteed Period Option are not ambiguous.

Watkins v. Westinghouse Hanford Co., 12 F.3d 1517, 1527 (9th Cir. 1993).

AFFIRMED.

                                              4                               11-17242