Court Opinion

ID: 8961677
Source: CourtListenerOpinion
Date Created: 2022-11-27 09:45:39.265378+00
Date Added: 2024-06-11T17:10:13.064547
License: Public Domain

RYAN, Circuit Judge
(dissenting). I must respectfully dissent.
Mr. Edwards’ case is a classic example of the maxim that hard cases make bad law. The opinions by the district court and this court’s majority convey a sense of understandable heartfelt solicitude for Mr. Edwards and his family. The record shows that Mr. Edwards is a much admired, appreciated, and longtime faithful employee of State Farm who was marked for advancement in the company when, at the age of 40, he became totally disabled following surgical removal of a benign brain tumor. He was never able to return to work thereafter and, at the time this lawsuit was filed, apparently was without visible means of support. These sad facts appear to have blurred the majority’s focus on the controlling issue in this case.
Despite the suggestion in the majority opinion that Mr. Edwards should prevail on this appeal because of principles of equitable estoppel, “detrimental reliance,” and “State Farm’s indiscreet misrepresentation to its detriment,” the only issue properly before us is whether the State Farm Retirement Committee’s decision to deny Mr. Edwards’ request for disability benefits was “arbitrary, capricious or in bad faith.” Adcock v. Firestone Tire & Rubber Co., 822 F.2d 623, 626 (6th Cir. 1987). The parties agree that this is the standard for our de novo review. The issue is not whether the equities are with Mr. Edwards, who presents a most sympathetic claim, or with the corporate employer, State Farm. It is whether the Committee’s decision was arbitrary or capricious.
That being so, our first task is to determine when a decision to deny benefits is arbitrary or capricious.
In Cook v. Pension Plan for Salaried Employees, 801 F.2d 865 (6th Cir.1986), an ERISA action challenging a pension board’s interpretation of plan language that resulted in the denial of claimed pension benefits, this court said:
[Where] the Board has offered a reasoned explanation of its decision made concerning the application of an ambiguous plan provision, and in accordance with the deference accorded plan administrators under ERISA, we must uphold that decision.
Id. at 869.
In Gaines v. Amalgamated Insurance Fund, 753 F.2d 288 (3d Cir.1985), the Third Circuit held:
Judicial review of interpretation of a pension plan document by the Trustees charged with administering the Plan is *138limited to whether the Trustees’ interpretation is arbitrary and capricious.
A plan interpretation should be upheld even if the court disagrees with it, so long as the interpretation is rationally related to a valid plan purpose and not contrary to the plain language of the plan.
Id. at 289 (citations omitted).
Also, the Second Circuit has held:
Where both the trustees of a pension fund and a rejected applicant offer rational, though conflicting, interpretations of plan provisions, the trustees’ interpretation must be allowed to control.
Miles v. New York State Teamsters Conference Pension & Retirement Fund Employee Pension Benefit Plan, 698 F.2d 593, 601 (2d Cir.), cert. denied, 464 U.S. 829, 104 S.Ct. 105, 78 L.Ed.2d 108 (1983) (citation omitted). Thus, it is well-settled that in ERISA actions, if plan administrators adopt one of two plausible and rational interpretations of the language of the plan in question, one that is rationally related to a valid plan purpose and not contradictory to the plan’s plain language, its decision is not arbitrary or capricious. And, even if the plan language can be said to be ambiguous, as is claimed in this case, the rule is that the decision of the plan administrators controls.
Whether the Committee’s decision to reject Mr. Edwards’ claim for disability benefits is an interpretation of the Plan language which is plausible, rational, reasonable, and not contradictory to the Plan’s language, even if not the one the court would reach, depends upon the language of the relevant provision of the Plan. In this instance, that provision is Art. IV, § 4.1 which provides the terms of eligibility for disability benefits:
(B) The sum of the members’ attained age and the length of credited service must be at least 55 years prior to the date of disablement.
It is uncontested that Mr. Edwards began working for State Farm on June 22, 1966, became a member of the Plan on September 1, 1967, and that his date of disablement was July 30, 1981. It is indisputable that the period from September 1, 1967, to July 30, 1981, is 13 years and 332 days. It is also uncontested that Mr. Edwards was 40 years and 241 days old on the date of his disablement. Making the computation mandated by § (B) of the Plan, the Committee concluded that the sum of Mr. Edwards’ age, 40 years and 241 days, and the length of his “credited service,” 13 years and 332 days, is 54 years and 208 days, leaving Mr. Edwards 157 days short of qualifying for disability benefits.
Mr. Edwards claims, on the other hand, that while the Committee’s arithmetic is correct, it has incorrectly interpreted the meaning of “credited service” in § (B), and that his credited service includes 200 days of sick leave time earned prior to his date of disablement but taken thereafter. If the 200 days are added to the period of credited service computed by the Committee, Mr. Edwards would qualify for the benefits he seeks. Thus, the only contested issue in this case is whether the Committee's interpretation of “length of credited service” in § (B), as not including Mr. Edwards’ 200 sick leave days taken after his date of disablement, is “arbitrary or capricious.”
“Date of disablement” is defined as “the first work day of any period of time during which the active or Canadian member does not report to work for the Company because of total disability by reason of accidental bodily injury or sickness.” Art. 1, § 1.36. That date, in Mr. Edwards’ case, was July 30,1981. It is critical to note that under § (B), the “length of credited service” which determines Mr. Edwards’ eligibility for benefits under the Plan is “credited service ... prior to the date of disablement.” The Committee determined that period to be 13 years and 332 days, the actual number of calendar service years and days between the date Mr. Edwards became a member of the Plan and the date of his disablement. That figure, when added to Mr. Edwards’ “attained age” of 40 years and 241 days, leaves him 157 days short of the required 55 years.
*139To pick up those 157 days, Mr. Edwards argues that his “length of credited service” must be construed to include the 200 days of sick leave time he earned and accumulated but did not use prior to his date of disablement. Mr. Edwards makes that argument despite the fact that § (B) specifically provides that disability eligibility requires “credited service ... prior to the date of disablement.” Even if Mr. Edwards’ 200 sick leave days could somehow be logically construed as “credited service,” they clearly were not credited service “prior to disablement” since, indisputably, they were taken entirely after July 30, 1981, his date of disablement.
Putting the best possible light on it, Mr. Edwards’ construction of the language of § (B) is a strained and imaginative effort to find the 157 days of additional credited service he needs to qualify for the disability benefits to which he would have been entitled had he been able to work for another five and one-half months.
But even if the expression “length of credited service” in § (B) is ambiguous or is susceptible to more than one construction, including that which Mr. Edwards puts upon the language, this court is bound to defer to the interpretation given the Plan language by its administrators if the construction chosen by the defendant’s Committee is a plausible, reasonable, and rational interpretation of the Plan language. Cook, 801 F.2d at 869.
The district court stated the case for mandatory judicial deference to the Committee’s decision when it observed, in its opinion:
Here, the court could as easily decide that post-disability sick leave does not count as credited service as it could decide that it does count.
That should have been the end of this case. When the court concluded that the construction put upon the controlling Plan language by the Committee and that put upon it by Mr. Edwards are equally justified, it was duty bound to hold that the decision of the Plan administrators, adopting one of the alternatives, was not, as a matter of law, “arbitrary or capricious.” The district court appears to have recognized that and opted therefore to rest its conclusion that the Plan administrators’ decision was arbitrary and capricious on a different rationale. The district court stated:
Any decision which fails to consider all the relevant issues is obviously arbitrary and capricious.
The district court apparently believed that the Committee did not consider Mr. Edwards’ argument that “sick leave accumulated before disability and used thereafter counts as credited service,” because the argument “was not discussed in the [Committee’s] opinion.” In that finding, the learned district court was simply clearly erroneous. The minutes of the Committee’s April 11, 1987, written decision specifically state:
The Retirement Committee has carefully reviewed Mr. Edwards’ retirement plan file and other relevant documents, and has carefully considered Mr. Lang’s letter and the argument set forth therein.
Mr. Lang, who was Mr. Edwards’ attorney, had written to State Farm several times prior to the Committee decision, arguing that Mr. Edwards’ accumulated sick leave time should be included in the computation of “credited service.” That was his consistent plea on Mr. Edwards’ behalf, and there is every reason to conclude that his letter of March 3, 1983, to the Committee, which the Committee, “carefully considered,” continued to advance Mr. Edwards’ only claim throughout this litigation. Unfortunately, that letter has not been made part of the record below. However, State Farm’s brief to this court asserts that “the undisputed facts establish that the Committee recognized the issue raised by [Mr.] Edwards” because it “carefully considered Mr. Lang’s letter and the arguments set forth therein.” Plaintiff has not contested that assertion by the defendant.
The plaintiff’s arguments for a construction of the Plan, based upon the arguably conflicting language of the Plan’s summary document, Mr. Hill’s letter, the plaintiff’s claimed reliance upon Mr. Hill’s let*140ter, and Mr. Edwards’ interpretation of the term “credited service,” although, to me, strained and logically unpersuasive, are not irrational or entirely unreasonable. Neither is the construction given the Plan by its administrators. Like the district court, the Plan administrators might have decided that Mr. Edwards’ accumulated sick leave, which was not taken before the date of disablement, “does not count as credited service as it could decide that it does count.” That being so, and given the un-contradicted evidence that the Committee “carefully considered” Mr. Edwards’ arguments, the law is clear and settled that the Committee’s decision was not arbitrary or capricious.
I would reverse.