Court Opinion

ID: 625797
Source: CourtListenerOpinion
Date Created: 2012-03-20 19:29:06+00
Date Added: 2024-06-11T15:32:42.014557
License: Public Domain

Filed:   March 20, 2012

                 UNITED STATES COURT OF APPEALS
                     FOR THE FOURTH CIRCUIT

                           No. 11-1206
                       (1:06-cv-02805-MBS)

NOORALI SAM SAVANI,

               Plaintiff - Appellant,

          v.

WASHINGTON   SAFETY   MANAGEMENT   SOLUTIONS,    LLC,   f/k/a
Westinghouse Safety Management Solutions, LLC; WESTINGHOUSE
SAFETY MANAGEMENT SOLUTIONS, LLC PENSION PLAN; PAUL HARPER,
as Trustee of Westinghouse Safety Management Solutions LLC
Pension Plan; LEO SAIN, as Trustee of Westinghouse Safety
Management Solutions LLC Pension Plan; PRES RAHE, as Trustee
of Westinghouse Safety Management Solutions LLC Pension
Plan; WASHINGTON SAFETY MANAGEMENT SOLUTIONS, LLC PENSION
PLAN; WASHINGTON GROUP INTERNATIONAL, INCORPORATED; RALPH
DISIBIO, as director of Washington Safety Management
Solutions LLC; PAUL GREFENSTETTE, as Director of Washington
Safety Management Solutions LLC; ROBERT PEDDE, as Director
of Washington Safety Management Solutions LLC; AMBROSE
SCHWALLIE, as Director of Washington Safety Management
Solutions LLC; ROGER ALLEN, as Members of the Administrative
Committee of Westinghouse Safety Management Solutions LLC
Pension Plan formerly Benefits Committee of Westinghouse
Safety Management Solutions LLC Pension Plan; JULIE BROWN,
as Members of the Administrative Committee of Westinghouse
Safety Management Solutions LLC Pension Plan formerly
Benefits   Committee  of   Westinghouse   Safety   Management
Solutions LLC Pension Plan; DAVE HOLLAN, as Members of the
Administrative Committee of Westinghouse Safety Management
Solutions LLC Pension Plan formerly Benefits Committee of
Westinghouse Safety Management Solutions LLC Pension Plan;
DELOYD CAZIER, as Members of the Administrative Committee of
Westinghouse Safety Management Solutions LLC Pension Plan
formerly   Benefits   Committee   of    Westinghouse   Safety
Management Solutions LLC Pension Plan; WSMS PENSION PLAN,
f/k/a Westinghouse Savannah River Company-Bechtel Savannah
River Inc Pension Plan, f/k/a Westinghouse Safety Management
Solutions, LLC Pension Plan, f/k/a                 Washington        Safety
Management Solutions, LLC Pension Plan,

                   Defendants – Appellees,

           and

WASHINGTON SAVANNAH RIVER COMPANY'S PENSION PLAN; WASHINGTON
SAVANNAH RIVER COMPANY, LLC, f/k/a Westinghouse Savannah
River Company LLC,

                   Defendants.

                                   O R D E R

     The   Court    amends   its    opinion    filed   March   20,    2012,   as

follows:

     On the cover sheet, district court information section --

the name of “Margaret B. Seymour, District Judge” is deleted and

is replaced by “Henry F. Floyd, District Judge.”

                                           For the Court – By Direction

                                                 /s/ Patricia S. Connor
                                                           Clerk

                                       2
                           UNPUBLISHED

                 UNITED STATES COURT OF APPEALS
                     FOR THE FOURTH CIRCUIT

                           No. 11-1206

NOORALI SAM SAVANI,

               Plaintiff - Appellant,

          v.

WASHINGTON   SAFETY   MANAGEMENT   SOLUTIONS,    LLC,   f/k/a
Westinghouse Safety Management Solutions, LLC; WESTINGHOUSE
SAFETY MANAGEMENT SOLUTIONS, LLC PENSION PLAN; PAUL HARPER,
as Trustee of Westinghouse Safety Management Solutions LLC
Pension Plan; LEO SAIN, as Trustee of Westinghouse Safety
Management Solutions LLC Pension Plan; PRES RAHE, as Trustee
of Westinghouse Safety Management Solutions LLC Pension
Plan; WASHINGTON SAFETY MANAGEMENT SOLUTIONS, LLC PENSION
PLAN; WASHINGTON GROUP INTERNATIONAL, INCORPORATED; RALPH
DISIBIO, as director of Washington Safety Management
Solutions LLC; PAUL GREFENSTETTE, as Director of Washington
Safety Management Solutions LLC; ROBERT PEDDE, as Director
of Washington Safety Management Solutions LLC; AMBROSE
SCHWALLIE, as Director of Washington Safety Management
Solutions LLC; ROGER ALLEN, as Members of the Administrative
Committee of Westinghouse Safety Management Solutions LLC
Pension Plan formerly Benefits Committee of Westinghouse
Safety Management Solutions LLC Pension Plan; JULIE BROWN,
as Members of the Administrative Committee of Westinghouse
Safety Management Solutions LLC Pension Plan formerly
Benefits   Committee  of   Westinghouse   Safety   Management
Solutions LLC Pension Plan; DAVE HOLLAN, as Members of the
Administrative Committee of Westinghouse Safety Management
Solutions LLC Pension Plan formerly Benefits Committee of
Westinghouse Safety Management Solutions LLC Pension Plan;
DELOYD CAZIER, as Members of the Administrative Committee of
Westinghouse Safety Management Solutions LLC Pension Plan
formerly   Benefits   Committee   of    Westinghouse   Safety
Management Solutions LLC Pension Plan; WSMS PENSION PLAN,
f/k/a Westinghouse Savannah River Company-Bechtel Savannah
River Inc Pension Plan, f/k/a Westinghouse Safety Management
Solutions, LLC Pension Plan, f/k/a          Washington   Safety
Management Solutions, LLC Pension Plan,

                 Defendants – Appellees,

           and

WASHINGTON SAVANNAH RIVER COMPANY'S PENSION PLAN; WASHINGTON
SAVANNAH RIVER COMPANY, LLC, f/k/a Westinghouse Savannah
River Company LLC,

                 Defendants.

Appeal from the United States District Court for the District of
South Carolina, at Aiken.     Henry F. Floyd, District Judge.
(1:06-cv-02805-MBS)

Argued:   January 26, 2012                 Decided:   March 20, 2012

Before WILKINSON, GREGORY, and KEENAN, Circuit Judges.

Reversed and remanded by unpublished per curiam opinion.       Judge
Keenan wrote a dissenting opinion.

ARGUED: Stanley G. Jackson, JACKSON LAW OFFICES, PC, Augusta,
Georgia, for Appellant. H. Douglas Hinson, ALSTON & BIRD, LLP,
Atlanta, Georgia, for Appellees.    ON BRIEF: Gray T. Culbreath,
COLLINS & LACY, PC, Columbia, South Carolina; Emily Seymour
Costin, ALSTON & BIRD, LLP, Washington, D.C., for Appellees.

Unpublished opinions are not binding precedent in this circuit.

                                    2
PER CURIAM:

      Noorali “Sam” Savani brought this action under the Employee

Retirement     Income        Security     Act    (“ERISA”)         § 502(a)(1)(B),       29

U.S.C. § 1132(a)(1)(B) (2006), claiming that the termination of

an   early    retirement       pension     supplement         by    Washington    Safety

Management Solutions (“WSMS”) violated ERISA’s anti-cutback and

notice    provisions.          Because     the       plain    language   of    the     WSMS

pension      plan   (“the       Plan”)     includes          the    early     retirement

supplement     in   its      calculation        of    accrued      benefits,    we    must

reverse the grant of summary judgment to WSMS and remand for

further proceedings consistent with this opinion.

                                           I.

      Savani    was     an     employee     of       Westinghouse     Savannah        River

Company      (“WSRC”)     in    1997     when        WSMS    was   formed.       At    its

inception, WSMS recruited a number of WSRC employees, including

Savani, to transfer to the newly formed company.                               WSMS held

meetings at which WSRC employees were informed of the employee

benefit plans available to newly transferred employees.                               From

the date of his transfer in 1997 until his retirement in 2005,

Savani participated in the Plan.

      The Plan, prior to amendments, provided in relevant part:

“‘Accrued Benefit’ means, as of any date of determination, the

normal retirement Pension computed under Section 4.01(b) . . .

                                                 3
less the WSRC Plan offset as described in Section 4.13, plus any

applicable     supplements   as   described   in   Section   4.12   . . . .”

The Plan further provided for early retirement benefits:                “The

early retirement Pension shall be a deferred Pension beginning

on the first day following the Member’s Normal Retirement Date

and . . . shall be equal to his Accrued Benefit.              However, the

Member   may    elect   to   receive    an    early   retirement     Pension

beginning before his Normal Retirement Date . . . .”                Finally,

the Plan described supplemental benefits:

     4.12 Supplemental Benefits
          (a) If a Member who:
                   (i) otherwise satisfies the requirements
                       for a Pension under this Plan; and
                  (ii) has at least one year of service with
                       WSMS; and
                 (iii) transferred   to   the Plan    from   an
                       Affiliated   Employer  on   or    before
                       January 1, 1998 or transfers to the
                       Plan from WSRC; and
                  (iv) retires before his Normal Retirement
                       Age from active service on or after
                       October 1, 1998,
                        he shall be entitled to a monthly
                        supplement (which shall commence with
                        the first Pension payment made under
                        the Plan on account of such retirement
                        and the last payment shall be in the
                        month preceding the Member’s attainment
                        of Normal Retirement Age) equal to the
                        following: [omitted]
          (b) If a Member who:
                   (i) otherwise satisfies the requirements
                       for a Pension under this Plan;

                                        4
                   (ii) has at least one year of service with
                        WSMS; and
                  (iii) transferred   to   the Plan    from   an
                        Affiliated   Employer  on   or    before
                        January 1, 1998 or transfers to the
                        Plan from WSRC; and
                   (iv) either retires from active               service on
                        or after October 1 1998 or              dies on or
                        after October 1, 1998 and               immediately
                        prior to his death would be             entitled to
                        or is receiving an early                  retirement
                        Pension under the Plan,
                        he shall be entitled to a $200 monthly
                        supplement commencing at his attainment
                        of Normal Retirement Age, which shall
                        continue after such Member’s death to
                        such Member’s spouse, if then living,
                        for such spouse’s lifetime.
    On December 28, 2004, the Plan’s benefits committee 1 amended

the Plan to eliminate § 4.12(a), which granted a $700 monthly

benefit to Plan members electing to take early retirement on or

after   January    1,   2005.     The    Plan’s    actuary     recommended     this

amendment   because      of     his    concern    that   the    Plan   may     fail

discrimination      testing      and     jeopardize      Plan     beneficiaries’

favorable tax treatment.              This action was not communicated to

Plan participants or beneficiaries for nearly seven months.

     Contrary to the committee’s amendment, Savani received an

“Early Retirement Benefit Calculation Estimate” in early 2005

that included both § 4.12 supplements.              Savani retired from WSMS

    1
        The benefits committee was vested with “all powers
necessary to discharge its duties,” including the power “[t]o
approve Plan amendments” under Article 7.01 of the Plan and the
“discretion to interpret the Plan” under Article 7.06.

                                            5
on or about April 30, 2005, believing that he would be entitled

to a $700 per month supplement until he reached age sixty-five.

        On July 29, 2005, WSMS mailed letters to employees who had

retired in 2005, or were eligible to do so, and to those who had

transferred from WSRC, stating that § 4.12(a) of the Plan had

been        eliminated   and   they     would    no    longer   receive       the   $700

monthly        supplement.       However,       Savani      continued    to    receive

payments of the $700 benefit until June 8, 2006.                      At that time,

Savani        received   a     letter    from       WSMS   stating    that     he    had

incorrectly        received     the     $700    monthly     benefit     for   thirteen

months and requesting reimbursement of $9,100 within twenty-two

days.

       Savani originally filed a class action complaint in the

Court of Common Pleas for Aiken County, South Carolina.                             After

WSMS removed the action to federal court, Savani filed a first

amended       class   action    complaint       (“Amended    Complaint”)      alleging

four counts.          The district court rightly dismissed count one of

Savani’s claim for benefits under ERISA for failure to exhaust

administrative remedies. 2

        2
       The district court also properly dismissed count two on
the grounds that a party may not request simultaneous relief
under both ERISA, § 502(a)(1)(B) and § 502(a)(3), Korotynska v.
Metro. Life Ins. Co., 474 F.3d 101, 107 (4th Cir. 2006), and
state law counts three (estoppel) and four (breach of fiduciary
duty) on the basis of preemption by ERISA, Griggs v. E.I. DuPont
De Nemours & Co., 237 F.3d 371, 378 (4th Cir. 2001).

                                                6
     Savani proceeded to exhaust his administrative remedies by

appealing to the Plan’s benefits committee.                   After the benefits

committee    denied    Savani’s    request          for   benefits,    the   district

court reopened the case only as to count one, which the court

had previously construed as a claim for benefits under ERISA, 29

U.S.C. § 1132(a)(1)(B).           On June 12, 2009, the parties filed

cross-motions for summary judgment.                  The district court granted

summary judgment in favor of WSMS, holding that the committee

did not abuse its discretion in denying Savani’s request for

benefits and that deletion of § 4.12(a) from the Plan did not

violate    the   anti-cutback     or    notice       provisions   of    ERISA.      On

March 3, 2011, Savani timely filed this appeal.

                                        II.

                                           A.

     This Court reviews de novo a district court’s ruling on a

motion for summary judgment.               United McGill Corp. v. Stinnett,

154 F.3d 168, 170 (4th Cir. 1998).                  However, in an appeal under

ERISA, the Court must use the same standard that governed the

district    court’s    review     of   a    plan      administrator’s        decision.

Williams v. Metro. Life Ins. Co., 609 F.3d 622, 629-30 (4th Cir.

2010).     Although ERISA is silent on the standard of review for

benefit    denials    challenged       under        § 1132(a)(1)(B),     a    de   novo

standard     applies     “unless        the         benefit    plan     gives      the

                                                7
administrator or fiduciary discretionary authority to determine

eligibility for benefits or to construe the terms of the plan,”

in which case we review the decision for abuse of discretion.

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).

      The Plan at issue gives broad authority to the committee,

granting     it    “total   and   complete         discretion      to    interpret   the

Plan.”     However, “even as an ERISA plan confers discretion on

its administrator to interpret the plan, the administrator is

not   free    to    alter   the    terms   of        the    plan    or    to   construe

unambiguous terms other than as written.”                    Colucci v. Agfa Corp.

Severance Pay Plan, 431 F.3d 170, 176 (4th Cir. 2005), abrogated

on other grounds by Champion v. Black & Decker (U.S.), Inc., 550

F.3d 353 (4th Cir. 2008).           “An administrator’s discretion never

includes     the    authority     ‘to   read       out     unambiguous     provisions’

contained in an ERISA plan, and to do so constitutes an abuse of

discretion.”       Blackshear v. Reliance Standard Life Ins. Co., 509

F.3d 634, 639 (4th Cir. 2007) (quoting Colucci, 431 F.3d at

176).

      While the Plan’s grant of authority requires us to evaluate

the committee’s decision under an abuse-of-discretion standard,

we have held that the abuse-of-discretion standard under ERISA

is less deferential to administrators than the arbitrary and

capricious standard.         Evans v. Eaton Corp. Long Term Disability

Plan, 514 F.3d 315, 322 (4th Cir. 2008).                    A reviewing court will

                                               8
reverse     or    remand        an   ERISA      administrator’s            discretionary

decision    if    it    is     not   reasonable,         although    not    necessarily

irrational, if it is not the result of a deliberate, principled

reasoning process supported by substantial evidence, or if it

does not reflect careful attention to the language of the plan

and ERISA itself.             Id. (citing Firestone, 489 U.S. at 109-11;

Booth v. Wal-Mart Stores, Inc., 201 F.3d 335, 341-42 (4th Cir.

2000); Bernstein v. CapitalCare, Inc., 70 F.3d 783, 788 (4th

Cir. 1995)).

                                           B.

      Savani alleges that the committee’s deletion of § 4.12(a)

from the Plan violated ERISA’s anti-cutback statute and notice

requirements and that the amended Plan’s elimination of the $700

early retirement benefit should be unenforceable against him.

In denying Savani’s request for benefits, the committee found

that the anti-cutback statute was not violated because the $700

benefit    was    not    an    “accrued    benefit”        within    the     meaning   of

ERISA.      Our   decision       turns    on    whether     the     $700    benefit    was

included in the “accrued benefit” as defined by the Plan, ERISA,

and   applicable        regulations.         Because       the    plain,     unambiguous

language of the WSMS Plan contemplates inclusion of both § 4.12

supplements       in     its    definition          of   “accrued     benefit,”        the

committee abused its discretion in denying Savani’s request for

benefits.

                                                9
      ERISA’s anti-cutback statute provides that “[t]he accrued

benefit of a participant under a plan may not be decreased by an

amendment of the plan . . . .” 29 U.S.C. § 1054(g)(1) (2010).

To   determine    whether     WSMS     violated    this     provision,    we   must

determine what benefits may be accrued.               ERISA defines “accrued

benefit”   as    “. . .    the    employee’s      accrued    benefit    determined

under the plan and . . . expressed in the form of an annual

benefit commencing at normal retirement age . . . .” 26 U.S.C.

§ 411(a)(7)(A)(i)         (2010).       We    have    recognized       that    this

definition is “a signpost, directing us to look at the terms of

the plan at issue.”           Bd. of Trs. of the Sheet Metal Workers’

Nat’l Pension Fund v. Comm’r, 318 F.3d 599, 602-03 (4th Cir.

2003). 3

      Under     the   Plan,      the   definition     of     “accrued     benefit”

contemplates the possibility that the $700 supplement can be

included in the total accrued benefit calculation.                     Plan § 1.01

      3
       In Sheet Metal Workers’, we also held that the only
textual limitation imposed by ERISA on the definition of
“accrued benefit” was that it must be “expressed in the form of
an annual benefit commencing at normal retirement age.”      318
F.3d at 602.    However, we did not discuss the definition of
“accrued benefit” in the context of early retirement benefits
which, by their definition, cannot commence at normal retirement
age.    While we have held that unfunded, contingent early
retirement benefits or severance payments are not secured by
ERISA itself, see Pierce v. Security Trust Life Ins. Co., 979
F.2d 23 (4th Cir. 1992), the drafters of a retirement plan may
choose to define any benefits as accrued or vested, and thereby
trigger ERISA’s protections.

                                             10
defines   “accrued      benefit”    as    the      “normal    retirement        Pension

. . . less the WSRC offset . . . plus any applicable supplements

as described in § 4.12 . . . .”               Simply put, prior to the Plan’s

amendment, a beneficiary’s accrued benefit was calculated by an

equation;     the    accrued    benefit   equaled      the    retiree’s         pension,

less a defined offset, plus applicable § 4.12 supplements.

       WSMS   argues     that     the     Plan’s      use     of        the    qualifier

“applicable” allowed the benefits committee to delete the $700

supplement without violating ERISA.                 ERISA administrators have

discretion to interpret terms that are ambiguous in the sense

that they give rise to at least two different, but reasonable,

interpretations.       Colucci, 431 F.3d at 176.              Further, we may not

upset the benefit committee’s interpretation of the Plan unless

it was an abuse of discretion.                  WSMS concedes that the term

“applicable” could reasonably be interpreted as imposing only

the eligibility factors contained in § 4.12.                      Still, it contends

that    the   term    “applicable”       is    ambiguous,         and    the   benefits

committee     was    given   discretion       to   resolve    this       ambiguity    by

reasonably interpreting it as categorically excluding the $700

supplement from the accrued benefits equation.

       However, ignoring the plain language of the Plan’s terms

was not within the committee’s discretion.                   Before the December

2004   amendment,     § 4.12    included       exactly      two    supplements:      the

$700 early retirement benefit described in § 4.12(a) and the

                                              11
$200    lifetime      supplement        described     in    § 4.12(b).             The   Plan

explicitly      defines     “accrued      benefit”     as    including        “applicable

supplements.”         The plurality of that term, when considered in

light of the fact that only two supplements were included in

§ 4.12, mandates that each of the supplements was capable of

being “applicable” under some circumstance.                        Any interpretation

to the contrary, including that of the benefits committee, is

inconsistent with the plain language of the plan.                         Because there

is     no   reasonable       alternative         interpretation          of    the        term

“applicable,” it is not ambiguous.                    The committee did not have

discretion to read out this unambiguous provision of the Plan,

and therefore abused its discretion in finding that the $700

supplement could never be applicable and in denying Savani’s

claim.

       It   should     be   noted       that    our   holding       is   based      on    the

specific       language     of    the    WSMS    Pension      Plan.         Stand-alone,

ancillary       welfare     benefits      generally         are    not      independently

protected by ERISA.              See Pierce, 979 F.2d 23.                Here, however,

the     Plan    plainly      incorporated         both      supplements        into       its

definition       of    “accrued         benefit.”           Regardless         of        their

classification        as    accrued      or    ancillary,         welfare     or    pension

benefits, the supplements’ inclusion in the plain terms of the

Plan’s accrued benefit calculation necessarily meant that any

                                                12
change    to   the    amount   or   existence   of   a   § 4.12   supplement

constituted a change to an “accrued benefit.”

                                     III.

     The focus of both the district court’s decision and the

appeal was the characterization of the supplements as accrued

benefits.      On that issue, we hold that the Plan’s clear terms

include the § 4.12(a) supplement in the definition of accrued

benefits.      We therefore reverse the district court’s grant of

summary    judgment    to   WSMS    and   remand   the   case   for   further

proceedings consistent with this opinion.

                                                     REVERSED AND REMANDED

                                          13
BARBARA MILANO KEENAN, Circuit Judge, dissenting:

     I would affirm the judgment of the district court for the

reasons   well-articulated   in   its   very   thorough   opinion.

Accordingly, I respectfully dissent.

                                  14