Court Opinion

ID: 194587
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:20:38+00
Date Added: 2024-06-11T12:37:52.203206
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March 10, 1993    UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                       

No. 92-1977

                     LUIS E. RODRIGUEZ-ABREU,

                      Plaintiff, Appellant,

                                v.

                 THE CHASE MANHATTAN BANK, N.A.,

                       Defendant, Appellee.

                                       

                           ERRATA SHEET

     The  opinion of this court  issued on February  25, 1993, is

amended as follows:

     Page  6, line 3:  Replace "Fed.  R. Civ. Pro." with "Fed. R.

Civ. P." 

     Page 11, line 3:  In the citation to Northwestern Nat'l Ins.
                                                                 

Co.,  908  F.2d 1077,  1984 (1st  Cir.  1990), delete  "1984" and
   

insert in its place "1084".

February 25, 1993 UNITED STATES COURT OF APPEALS

                      FOR THE FIRST CIRCUIT

                                           

No. 92-1977

                     LUIS E. RODRIGUEZ-ABREU,

                      Plaintiff, Appellant,

                                v.

                 THE CHASE MANHATTAN BANK, N.A.,

                       Defendant, Appellee.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF PUERTO RICO

          [Hon. Hector M. Laffitte, U.S. District Judge]
                                                       

                                           

                              Before

                       Selya, Circuit Judge,
                                           

                  Bownes, Senior Circuit Judge,
                                              

                      Stahl, Circuit Judge.
                                          

                                           

     Jorge M. Silva-Cu tara, for appellant.
                           

     Jay  A.  Garc a-Gregory, with  whom Arturo  Bauermeister and
                                                             

Fiddler, Gonzalez & Rodriguez, were on brief, for appellee.
                             

                                           

                        February 25, 1993

                                           

          BOWNES, Senior  Circuit Judge.  The  plaintiff, Luis E.
          BOWNES, Senior  Circuit Judge.
                                       

Rodriguez-Abreu ("Rodriguez"), appeals  summary judgment  granted

in  favor  of  the  defendant,  The  Chase Manhattan  Bank,  N.A.

("Chase"), on  cross motions  for summary  judgment  in his  suit

brought pursuant  to the Employee Retirement  Income Security Act

of  1974,  as  amended, 29  U.S.C.     1001  et seq.,  ("ERISA").
                                                    

Finding that summary judgment was appropriate, we affirm.

                                I.

                            BACKGROUND
                                      

           Rodriguez's  claims  involve   two  employee   benefit

programs offered  by Chase:   (1)  the Long-Term Disability  Plan

("LTDP"),  and (2) the Voluntary  Separation Plan ("VSP").    The

LTDP  provides  a  continuing   source  of  income  for  eligible

employees who become disabled and unable to work for a continuous

period  of  six months  or longer.   The  VSP was  a new  plan of

limited  duration introduced by Chase in August of 1990 to reduce

its work force.   The  VSP offered employees  who applied  before

September  10, 1990,  and who  were accepted  into the  program a

package  of  benefits:   severance pay;  up  to twelve  months of

health care costs coverage; up to twelve months of coverage under

the  Chase   life  insurance  plan,  and   group  counselling  to

facilitate transition  to another job with  a different employer.

The VSP application contained waiver and release provisions.

          Rodriguez  was employed  by  Chase from  1957 until  he

                                4

resigned effective September  21, 1990, as  a participant in  the

VSP.   The parties stipulated that Rodriguez was absent from work

from March 19 until the effective date of  his resignation due to

a heart  ailment.1    While  he  was absent,  Rodriguez was  paid

first through his accumulated vacation and sick leave and then by

Chase through a special paid sick leave.  Rodriguez did not apply

for or receive LTDP benefits before his resignation from Chase.2

           Chase introduced  the VSP  on August 8,  and Rodriguez

attended  the  orientation   meeting  on  August  10.     At  the

orientation,   Rodriguez   inquired  as   to  whether   he  could

participate  in both the VSP and LTDP, and the Chase Compensation

Manager  informed  him  that   the  Bank  would  investigate  his

question.   On  August 17,  Rodriguez met  with  Migdalia Lebron,

                    

     1   The  district  court stated  in  its Opinion  and  Order
granting  summary judgment  for Chase  that Rodriguez  was absent
from  March 6  until  he resigned  effective  September 21.    On
appeal, Chase argues that Rodriguez was not continuously disabled
for  the requisite six months prior to his resignation to qualify
him  for LTDP  benefits.   Chase  points to  other dates  used to
determine the  date of  disability: (1) Statement  of Uncontested
Material Facts in the Pretrial Order that Rodriguez stated in his
Disability-Benefits Application  Form signed on June  22, that he
had  been unable to  work since  April 25,  and (2)  the parties'
stipulation  that  the  disability  period  for  Social  Security
benefits began on April 26.    Rodriguez   replies   that   Chase
should be held to the stipulated date, March 19, for absence from
work.  

     2   Rodriguez stated in his letter to the Plan Administrator
of the LTDP, dated October  17, 1990, that he had been  told that
he  could  not submit  claims for  LTDP  benefits until  his non-
occupational disability insurance benefits ended  in September or
October of 1990.  On appeal he explains that he did not apply for
LTDP benefits because the Chase representatives  told him that he
would  have to  withdraw his  application for  the VSP  before he
could apply for LTDP benefits.

                                5

Employee Benefits Officer of Chase, and asked about participation

in both the  VSP and LTDP.   She told him that she  would ask the

Plan Administrator in  New York.   Also on  August 17,  Rodriguez

signed the  Application and  Release for  the VSP which  provided

that it could be withdrawn before  September 10.  During the week

of  August 20, Mrs. Lebron  informed Rodriguez that  he could not

participate  in both the LTDP and the  VSP and that he would have

to withdraw  his application for  the VSP  in order to  apply for

LTDP benefits.   Rodriguez did  not withdraw his  application for

the  VSP.   Rodriguez's  application  was  accepted by  Chase  on

September  13, and  his  voluntary separation  from Chase  became

effective on September 21, 1990.

          On  October   17,   Rodriguez   wrote   to   the   Plan

Administrator  of the LTDP  requesting a  review of  the decision

that he was not  entitled to benefits from both  programs, review

of  the amount  awarded for  severance, and  copies of  the "Plan

Administration"  books for the two  plans.  Chase  responded by a

letter from Charles A. Smith,  Executive Vice President of Chase,

dated December 28, that Rodriguez's eligibility for LTDP benefits

ended on  September 21  with the  termination of  his employment,

that he had given up his rights to LTDP benefits when he chose to

participate  in  the VSP  and  denied  his  claim  for  increased

severance benefits.  Chase provided summary plan descriptions for

the  VSP and  LTDP and  provided a  telephone number  for further

questions.  On January 30, 1991, Rodriguez, through a letter from

his  attorney, requested review of the October determination as a

                                6

"final administrative appeal," and  again requested copies of the

"Plan  Administration"  booklets.     Chase  affirmed  denial  of

Rodriguez's claims on March 12  and sent more copies of the  plan

summaries  for  the  VSP   and  LTDP.    Chase  sent   the  "Plan

Administration"  booklets  on  May  2, 1991.    In  the meantime,

Rodriguez had begun the present action against Chase.3

          Both  Chase  and  Rodriguez filed  motions  for summary

judgment.   The district court granted Chase's motion for summary

judgment, and  also granted Rodriguez's claim  that his severance

pay benefits  should have  been  determined based  upon his  last

scheduled salary  review, and  awarded him the  increased amount.

On appeal,  Rodriguez contends that  he was  entitled to  receive

long-term  disability benefits  which were  denied by  Chase, and

that  the district  court should  have imposed  sanctions against

Chase  for  its  delay  in  providing  Rodriguez  with  requested

information  about Chase's  long-term disability  plan.   Neither

party  appeals  the  district   court's  award  to  Rodriguez  of

increased severance benefits.

                               II.

                    

     3   The issue of  exhaustion of administrative  remedies has
not been raised  in this case.  Most courts,  including this one,
generally require exhaustion of  administrative remedies in ERISA
cases.  Drinkwater  v. Metropolitan Life Insurance  Co., 846 F.2d
                                                       
821,  826 (1st Cir.), cert.  denied, 488 U.S.  909 (1988); United
                                                                 
Paperworkers v. International Paper Co., 777 F. Supp. 1010,  1014
                                       
(D.  Me. 1991)  (collecting cases).   Under the  circumstances in
this case, particularly in  light of the fact that  the plaintiff
did not receive the information which  specified the final appeal
process to the Named  Fiduciaries until after suit was  begun, we
will  not  address  the  issue of  exhaustion  of  administrative
remedies.

                                7

                        STANDARD OF REVIEW
                                          

          We follow the familiar  standard when reviewing summary

judgment in ERISA actions.   Allen v. Adage, Inc., 967 F.2d  695,
                                                 

699 (1st Cir. 1992);  Manchester Knitted Fashions v. Amalgamated,
                                                                

967  F.2d  688,  693  (1st  Cir.  1992).    Summary  judgment  is

appropriate  if  the factual  materials  submitted  to the  court

establish  that there is no genuine dispute as to material facts,

and if  the moving party is  entitled to judgment as  a matter of

law. Fed. R. Civ. P. 56(c);  Burnham v. Guardian Life Ins. Co. of
                                                                 

Am., 873  F.2d 486,  488  (1st Cir.  1989).   Our  review of  the
   

district  court's grant of summary  judgment is both  de novo and
                                                             

plenary:  we review  afresh the entire  record in the light  most

favorable to  Rodriguez, resolving  all inferences in  his favor.

August v. Offices Unlimited,  Inc., No. 91-2329, slip op.  at 7-8
                                  

(1st Cir.  Dec. 11, 1992);  Allen, 967 F.2d  at 699; Williams  v.
                                                             

Caterpillar, Inc., 944 F.2d 658, 661 (9th Cir. 1991).
                 

          A district court reviews  ERISA claims arising under 29

U.S.C.    1132(a)(1)(B)4  de  novo unless  the  benefits plan  in
                                  

question  confers upon the administrator "discretionary authority

                    

     4 Although Rodriguez did not specify the statutory authority
in his complaint to the district court, his claims arise under 29
U.S.C.   1132(a)(1)(B) which specifies:
               (a) Persons empowered to bring a civil 
                   action
          A civil action may be brought--
               (1) by a participant or beneficiary--
                         . . .
                    (B) to recover benefits due to him 
               under the terms of his plan,  to enforce
               his rights under the  terms of the plan,
               or  to  clarify  his  rights  to  future
               benefits under the terms of the plan[.]

                                8

to determine eligibility for benefits or to construe the terms of

the plan." Firestone Tire  & Rubber Co. v.  Bruch, 489 U.S.  101,
                                                 

115  (1989).  Interpretation of terms of a plan and determination

of  the validity of claims  are not, in themselves, discretionary

functions.   Id.  at  112,  115.   The  Firestone  rule has  been
                                                 

interpreted  to mean  that  a benefits  plan  must clearly  grant

discretionary  authority  to the  administrator  before decisions

will  be  accorded  the deferential,  arbitrary  and  capricious,

standard of  review.  Brown  v. Ampco-Pittsburgh Corp.,  876 F.2d
                                                      

546, 550 (6th Cir. 1989).     

          In this case, the district court employed the de novo
                                                               

standard  based  upon its  findings  that  Rodriguez's claim  was

denied by the Plan  Administrator5, and neither the LTDP  nor the

Plan  Administration Booklet  granted discretionary  authority to

the  Plan Administrator  necessary  to invoke  the arbitrary  and

capricious standard.   The  Plan Administration  Booklet contains

the only direct statements  of authority for determining benefits

under Chase's benefit plans:

          Named Fiduciaries
          The Named Fiduciaries have  general authority
          over  the administration and operation of the
          Plans.  
                . . .    

          Plan Administrator
          The    Plan   Administrator    is   primarily
          responsible    for    the   publication    of

                    

     5  The  Plan  Administration  Booklet  identifies  the  plan
administrator  for  all  of   Chase's  benefit  programs  as  the
Corporate Human Resources Executive.

                                9

          information  to  Plan  participants  and  the
          filing of reports regarding the Plans.
                . . .

          In  making   a  final  decision,   the  Named
          Fiduciaries    or   their    delegates   have
          discretion  in  interpreting  the meaning  of
          Plan provisions and in  determining questions
          of fact.

Rodriguez did not make a written request of the Named Fiduciaries

as  provided  in the  Plan Administration  Booklet, but  sent his

letter of  October 17, requesting a  review of the denial  of his

LTDP  benefits, to  the  Corporate Human  Resources Executive  of

Chase.   His letter was  answered by Charles  A. Smith, Executive

Vice President  of  Chase, and  further communication  concerning

Rodriguez's claims for LTDP benefits and additional severance pay

was with Mr. Smith.           Chase  contends  that the  district

court should have used the deferential, arbitrary and capricious,

standard because the Plan Administrator (Smith) was acting as the

delegate of  the Named Fiduciaries who  are granted discretionary

authority.  Chase points to the fact that Smith used "we" instead

of "I" in his  response to Rodriguez's final request  which Chase

suggests  means  that   Smith  was  acting   on  behalf  of   the

Fiduciaries.  Chase also argues  that because Smith was answering

Rodriquez's final request for review, his response was  the final

determination of Rodriguez's claim on behalf of the Fiduciaries.

            As the  district court  found, neither the  LTDP, the

VSP,  nor  the  Plan  Administration  booklet  granted  the  Plan

Administrator discretionary authority to review claims.  The Plan

                                10

Administration  booklet granted  the Plan  Fiduciaries, or  their

delegates,  discretionary   authority.     ERISA   allows   named

fiduciaries  to  delegate  responsibilities (other  than  trustee

responsibilities)  through express  procedures  provided  in  the

plan.   29 U.S.C.   1105(c)(1).6   To be an  effective delegation

of discretionary  authority so  that the deferential  standard of

review  will   apply,  therefore,  the  fiduciary  must  properly

designate a delegate for the fiduciary's discretionary authority.

Madden v. ITT Long  Term Disability Plan, 914 F.2d  1279, 1283-84
                                        

(9th Cir. 1990).

          Chase's claim that Smith was  acting as the delegate of

the Fiduciaries fails for  lack of evidence.  First,  Chase fails

to point to  any plan provisions which provide express procedures

for the delegation of  the Fiduciary's discretionary authority to

a  delegate, and  we  have found  none.     Second,  there is  no

expression  of intent  that  Smith act  as  the delegate  of  the

Fiduciaries and  Smith did not claim to be acting on behalf of or

as the delegate  of the  Fiduciaries.  Instead,  Chase relies  on

inferences from the circumstances to establish that Smith was the

delegate of the Fiduciaries, which  we find insufficient to prove

                    

     6  29 U.S.C.   1105(c)(1) provides:
          The   instrument  under   which  a   plan  is
          maintained   may    expressly   provide   for
          procedures   (A)  for   allocating  fiduciary
          responsibilities    (other    than    trustee
          responsibilities)  among  named  fiduciaries,
          and  (B) for  named fiduciaries  to designate
          persons other than named fiduciaries to carry
          out  fiduciary  responsibilities (other  than
          trustee responsibilities) under the plan.

                                11

delegation   of  discretionary  authority,  particularly  in  the

context  of Chase's  motion for  summary judgment.   Because  the

relevant plan documents did  not grant discretionary authority to

the  Plan  Administrator  and   the  Named  Fiduciaries  did  not

expressly  delegate their  discretionary  authority to  the  Plan

Administrator, we find that the district court correctly employed

the de novo standard of review.
           

                               III.

                            DISCUSSION
                                      

          ERISA   regulates   employee   benefit  plans   through

standards of conduct for fiduciaries, requirements of information

disclosure, schedules  for accrual and vesting  of pension funds,

and  by providing remedies and access  to the courts. 29 U.S.C.  

1001(b); Massachusetts  v. Morash,  490 U.S. 107,  112-13 (1989).
                                 

The plans in  question, the VSP and the LTDP,  are both "employee

welfare benefit plans" under  ERISA and as such, are  not subject

to the  stringent vesting, participation and funding requirements

imposed  by ERISA on "employee pension benefit plans."  29 U.S.C.

  1002(1) & (2); Allen, 967 F.2d at 698; Bellino v.  Schlumberger
                                                                 

Technologies, Inc., 944 F.2d  26, 29 (1st Cir. 1991);  Wickman v.
                                                              

Northwestern  Nat'l  Ins. Co.,  908 F.2d  1077, 1082  (1st Cir.),
                             

cert.  denied,  111 S.  Ct. 581  (1990).   When  interpreting the
             

                                12

provisions of  an ERISA benefit plan, we  use federal substantive

law    including   the   "'common-sense    canons   of   contract

interpretation.'"   Bellino, 944 F.2d  at 29 (quoting  Burnham v.
                                                              

Guardian  Life Ins.  Co.  of Am.,  873  F.2d 486,  489  (1st Cir.
                                

1989)).  Both trust and contract principles apply to interpreting

ERISA plans.   Allen, 967  F.2d at 698.   Because  ERISA preempts
                    

state  law related to employee  benefit plans for  the purpose of

providing  a  uniform body  of law,  federal  case law  which has

developed  in  interpreting  ERISA   plans  governs  rather  than

individual states' rules of  contract interpretation.  Sampson v.
                                                              

Mutual Benefit Life Ins. Co., 863 F.2d  108, 110 (1st Cir. 1988).
                            

Because  state law provides the richest source of law of contract

interpretation, we have incorporated  state law principles in the

process of developing a body  of federal common law.  Wickman  v.
                                                             

Northwestern  Nat'l  Ins.  Co., 908  F.2d  1077,  1084  (1st Cir.
                              

1990).7  A.  Eligibility for LTDP Benefits
         A.  Eligibility for LTDP Benefits
                                          

          The terms  of  the LTDP  require  that an  employee  be

continuously  disabled for  six consecutive  months by  a covered

disability  before  the  employee  will be  eligible  to  receive

                    

     7 Puerto Rico, where  the parties in this action  reside and
where the contract  was made,  has codified its  law of  contract
interpretation as follows:
             If the  terms of a contract  are clear and
          leave no  doubt as  to the intentions  of the
          contracting parties, the literal sense of its
          stipulations shall be observed.
             If the words should appear contrary to the
          evident intention of the contracting parties,
          the intention shall prevail.
P.R. Laws  Ann. tit. 31,    3471 (1990);  see also Simcox  v. San
                                                                 
Juan Shipyard, Inc., 754 F.2d 430, 445-46 (1st Cir. 1985).
                   

                                13

benefits.   Rodriguez claims that he was eligible to receive LTDP

benefits when  his employment terminated  pursuant to the  VSP on

September 21  because the requisite six-month  waiting period had

passed  since the onset of  his illness.   He never received LTDP

benefits  nor did  he  apply for  them.8   On  appeal, Chase  has

raised  an   issue  about  the  beginning   date  of  Rodriguez's

disability for  purposes of determining his  eligibility for LTDP

benefits  before his resignation  from Chase.   Chase argues that

the date of  absence or onset of  illness is not the  same as the

beginning  of disability  for purposes of  the LTDP,  and asserts

that Rodriguez's disability did not begin until April.    

          Chase's  argument  raises  issues  of  fact  which,  if

material, would require remanding the case to the district court.

The  terms  and  conditions  of the  termination  of  Rodriguez's

employment contained  in the VSP Application and Release  control

the  outcome  of the  case, however,  and  eliminate any  need to

pursue  the factual dispute about the inception of disability and

the date of Rodriguez's eligibility for LTDP benefits.

B.  Release of Benefits and Claims in the Application for VSP
                                                             

          We assume  for purposes of this  decision only, without

resolving disputed  facts and without reference  to relevant LTDP

provisions  or applicable  law,  that Rodriguez  would have  been

entitled to LTDP benefits on or before the date of termination of

his employment  with Chase  if he  had not  applied for and  been

accepted for the VSP.  Within that framework, we next examine the

                    

     8 See supra note 2.
                

                                14

effect of the  release and waiver  provisions in the  Application

and  Release  for  the   Chase  Manhattan  Bank,  N.A.  Voluntary

Separation Program (VSP Application and Release).

          The VSP  Application and Release is  a contract between

Rodriguez  and Chase  establishing  the mutual  rights, benefits,

obligations and waivers involved in the VSP. Interpretation  of a

contract  presents a question of law for this court to determine.

Fashion House,  Inc. v. K  Mart Corp.,  892 F.2d 1076,  1083 (1st
                                     

Cir. 1989).  "[A] contract is to be interpreted in a manner which

gives reasonable effect to its terms and conditions."  Manchester
                                                                 

Knitted Fashions, 967 F.2d at 694.  Contract language in an ERISA
                

action is  to be given its  plain meaning.  Burnham,  873 F.2d at
                                                   

489.   Determining whether contract language is ambiguous is also

a  question of  law, and  contract language  is ambiguous  if the

terms  are  inconsistent on  their face,  or  if the  terms allow

reasonable   but  differing  interpretations  of  their  meaning.

Federal Deposit  Ins. Corp. v.  Singh, 977 F.2d 18,  22 (1st Cir.
                                     

1992);  Fashion  House, Inc., 892 F.2d at 1083.   If the language
                            

of   the  contract   is   ambiguous,  we   turn  to   surrounding

circumstances,  undisputed  extrinsic  evidence,  to  divine  the

parties'  intent.   Lumpkin v.  Envirodyne Industries,  Inc., 933
                                                            

F.2d 449, 456  (7th Cir.), cert.  denied, 112  S. Ct. 373  (1991)
                                        

(interpreting a release in an ERISA action); Restatement (Second)

of Trusts    24 cmt.  b, and    164 cmt.  e (1959).   Unlike  the

interpretation of  ambiguous  terms in  insurance policies  which

uses  the  doctrine of  contra  proferentem,   when  interpreting
                                           

                                15

severance pay plans  in the  ERISA context, we  generally do  not

construe ambiguous terms against the drafter.  Allen, 967 F.2d at
                                                    

701.   Summary judgment based  upon the construction  of contract

language  is appropriate only if  the meaning of  the language is

clear,   considering  all   the  surrounding   circumstances  and

undisputed evidence of intent,  and there is no genuine  issue as

to  the  inferences  which might  reasonably  be  drawn from  the

language.  Healy  v. Rich  Products Corp., No.  92-7398, 1992  WL
                                         

358117 at *4  (2d Cir. Dec.  7, 1992) (quoting  Science Corp.  v.
                                                             

Rochdale  Village, Inc., 920 F.2d  147, 151 (2d  Cir. 1990)); see
                                                                 

also  Singh, 977 F.2d 18, 21 (1st Cir. 1992); Allen, 967 at  699,
                                                   

701-02.

          The VSP Release and  Application consists of two parts,

(1)  Application and  (2) Full  and Final  Waiver and  Release of

Claims.   The second section, entitled "Full and Final Waiver and

Release of Claims,"  states in pertinent part:      

             In return for the benefits available to me
          under the  VSP, the  sufficiency of which  is
          hereby  acknowledged,  I  fully  and  finally
          waive,  discharge  and  release  any  and all
          claims  of  whatsoever   nature,  known   and
          unknown,   other  than   my   right  to   the
                                
          enforcement of  the terms  of the VSP  and my
                                                       
          rights  to  vested benefits  which  have been
                                                       
          accrued, funded  and vested to  date, against
                                              
          The  Chase  Manhattan  Bank,  N.A.,  .   .  .
          including  but not  limited to,  claims under
          . . . the Employee Retirement Income Security
          Act of 1974, . . . .

(Emphasis added.)   Both  parties contend  that  the language  is

plain   and   unambiguous,   but   they   disagree    about   the

interpretation.  Rodriguez contends that the emphasized  language

                                16

excepts  his right to LTDP  benefits from the  waiver because his

right  to  those   benefits  had  "vested":     his  rights  were

established and  fixed because  he had fulfilled  the eligibility

requirements  and, therefore,  he was  entitled to  the benefits.

Chase counters  that  "vested", as  used  in the  release,  means

pension benefits  which are the  benefits that ERISA  requires to

vest.   Because  the parties  attribute reasonable  but differing

meanings to the term "vested", we find that the term is ambiguous

as used in  the emphasized  language of the  VSP Application  and

Release.   

          The  Second Circuit has  recently addressed the meaning

of "vested" in the context of an exception to a release clause in

a  stock purchase  agreement which  involved release  of benefits

from  ERISA plans in Healy  v. Rich Products  Corp., No. 92-7398,
                                                   

1992 WL 358117  (2d Cir. Dec 7, 1992).   The plaintiff, in Healy,
                                                                

had  specifically  requested that  language  be  inserted in  the

release  to except  particular plans  from  which he  was already

receiving benefits.  The defendant  added language to the release

using  the  term  "vested"   apparently  to  effect  the  purpose

requested  by  the plaintiff,  and  then  claimed on  motion  for

summary  judgment that  the  term "vested"  did  not include  the

plaintiff's benefits.   The  district court  did not address  the

intent  of  the  parties,  but  instead  used the  definition  of

"vested" from the ERISA  statute as applied to pension  plans and

found that the term did not include the plaintiff's benefits.  On

appeal,  the Second  Circuit  held that  the  term could  not  be

                                17

defined by the ERISA statute because the plans at issue were  not

ERISA pension plans.   Accord Bellino, 944 F.2d  at 31 ("we  give
                                     

preeminence  to the natural meaning  of ERISA plan  terms, and we

may not supplant  such meaning with rigid definitions or contrary

interpretations offered by the parties.")  The Second Circuit, in

Healy, remanded the case  to the district court to  determine the
     

meaning of "vested" according  to ordinary principles of contract

interpretation with reference to  evidence of the parties' intent

from the  surrounding circumstances including  extrinsic evidence

of  intent if necessary.  In the  case before us, the evidence of

intent is  undisputed and does not  require factual determination

by the district court.  

          To divine the  parties' intent in this case, we examine

the VSP Application  and Release  as a whole  and the  undisputed

circumstances surrounding  the formation of the contract.  In the

Application   section,   the  Separation   Incentive  sub-section

provides:  "I understand that, if this application is accepted, I

will receive the  following benefits  in lieu of  any benefits  I

might otherwise receive under Chase's salary continuance  policy:

[benefits  are  listed]."   The LTDP  is  part of  Chase's salary

continuance policy because the  stated purpose of the LTDP  is to

provide a disabled  employee with a  continuing source of  income

during  the disability,  and LTDP  benefits are  determined based

upon  the employee's  monthly base  salary.   The parties  do not

dispute the meaning of  this provision and the meaning  is plain:

Rodriguez agreed to waive his rights to LTDP benefits in exchange

                                18

for the benefits listed in the VSP.    

          The undisputed circumstances surrounding  Chase's offer

of  the VSP also demonstrate  that Chase's intent  was to require

waiver  of  other   benefits,  such  as  LTDP  benefits,  by  VSP

participants.  During the orientation and application process for

the  VSP, Rodriguez  asked  the Chase  representative whether  he

could participate in  the VSP  and still  receive LTDP  benefits.

The representative consulted with the Plan Administrator and then

informed Rodriguez that the two plans were mutually exclusive and

that he would have to withdraw his application for the  VSP if he

wanted  to  preserve  his  right  to  apply  for  LTDP  benefits.

Rodriguez decided not to withdraw his VSP application and did not

pursue  his   LTDP  benefits  until  after   his  employment  was

terminated.  Despite Rodriguez's arguments to the contrary, there

can be no genuine dispute that based upon the VSP Application and

Release,  read as a whole,  and Chase's declared  intent that the

VSP and LTDP be mutually exclusive, the plain meaning of "vested"

does not include  Rodriguez's LTDP benefits even  if the benefits

had vested or accrued before the time of the release.  

          ERISA  does   not   prohibit  knowing   and   voluntary

relinquishment  of  employee benefits.    Dist.  29, United  Mine
                                                                 

Workers v. New  River Co.,  842 F.2d  734, 737  (4th Cir.  1988).
                         

Further,  the heightened  scrutiny  applied to  waiver of  rights

accrued in ERISA pension  plans does not apply in this case where

the plans involved were  both welfare benefit plans.   See, e.g.,
                                                                

Finz v. Schlesinger, 957 F.2d 78, 82 (2d Cir.), cert. denied, 113
                                                            

                                19

S. Ct. 72 (1992).  Issues of relinquishment of rights and  waiver

are  governed by  federal  common law  developed  in ERISA  cases

rather than by particular state law although state law may inform

the  development of  the  federal common  law.   Matter  of  Heci
                                                                 

Exploration Co.,  Inc., 862 F.2d 513, 523 (5th Cir. 1988).  To be
                      

valid,  a  waiver  of  ERISA  benefits  must  be  an  intentional

relinquishment or abandonment of a known right or privilege.  Id.
                                                                 

           Rodriguez was  aware of his potential  eligibility for

LTDP  benefits when  he began  the orientation  for the VSP.   He

asked  about receiving  both  VSP and  LTDP  benefits, and  Chase

personnel informed  him that  the plans were  mutually exclusive,

that he  would lose his right  to LTDP benefits if  he elected to

participate in  the VSP, and that  if he wished to  continue as a

Chase  employee and  apply for  LTDP benefits,  he would  have to

withdraw  his   VSP  application.    Rodriguez   admits  that  he

understood  that   he  was   presented  with  a   choice  between

alternatives:   (1)  choose  the VSP,  terminate employment  with

Chase, and  receive the  lump  sum separation  payment and  other

benefits; or  (2) continue  employment with  Chase and  apply for

LTDP benefits.  He was a  management level employee at Chase.  He

consulted  an  accountant  about  the  plans.    Armed  with  the

necessary information concerning his alternatives, Rodriguez made

a voluntary and  informed choice  to participate in  the VSP  and

waive  his right to LTDP benefits.  Under these circumstances, we

find that Rodriguez's  waiver was valid and that  he relinquished

                                20

his  right, if any, to  claim LTDP benefits  after termination of

his employment with Chase pursuant to the terms of the VSP.

C.   Denial of Request for Imposition of Penalties
                                                  

          A plan administrator is obligated by statute, 29 U.S.C.

  1024(b)(4),9  to provide specified  information about  employee

benefit plans  to  participants  or  beneficiaries  upon  written

request.    In  this  case,  Rodriguez,  and  then  his  counsel,

requested,  in writing,  the  Plan  Administration booklets  from

Chase's  Plan Administrator who sent the plan summary for the VSP

and  the plan  booklet for  the  LTDP instead.    After the  last

request, the  Plan  Administrator sent  the  Plan  Administration

booklet.

           The  district court  denied  Rodriguez's  request  for

penalties to be imposed on Chase's Plan Administrator pursuant to

29  U.S.C.    1132(c)(1)10  on the  grounds  that "Rodriguez  has

                    

     9  29 U.S.C.   1024(b)(4) provides:
             The  administrator   shall,  upon  written
          request  of  any participant  or beneficiary,
          furnish a copy of the latest  updated summary
          plan description, plan  description, and  the
          latest  annual  report, any  terminal report,
          the  bargaining  agreement, trust  agreement,
          contract,  or  other instruments  under which
          the  plan  is established  or operated.   The
          administrator may make a reasonable charge to
          cover  the cost  of furnishing  such complete
          copies.   The  Secretary  may  by  regulation
          prescribe  the  maximum  amount   which  will
          constitute  a  reasonable  charge  under  the
          preceding sentence.

     10  29 U.S.C.   1132(c)(1) provides in pertinent part:

          Any  administrator.  .   .(B)  who  fails  or
          refuses  to comply  with  a request  for  any
          information   which  such   administrator  is

                                21

failed  to  show  that  his  rights  were  harmed  or   otherwise

prejudiced by the delay in his receipt of the information and has

not  demonstrated bad faith or  intentional delay on  the part of

the defendant."   The  imposition of  penalties is committed,  by

statute, to  the discretion of the  trial court, and we  will not

overturn the court's determination absent an abuse of discretion.

Fisher v. Metropolitan  Life Insurance Co.,  895 F.2d 1073,  1077
                                          

(5th Cir. 1990).  

          Although prejudice and bad  faith are not prerequisites

for imposition of penalties, these are factors which the district

court  properly considered  in exercising  its discretion  not to

impose penalties.    Godwin  v.  Sun Life  Assurance  Company  of
                                                                 

Canada, No. 91-1368, 1992  U.S. App. LEXIS 33897, at *9 (5th Cir.
      

Dec.  31,  1992); Harsch  v. Eisenberg,  956  F.2d 651,  662 (7th
                                      

Cir.), cert. denied, Bihler  v. Eisenberg, 113 S. Ct.  61 (1992).
                                         

Although we acknowledge that  the Plan Administration booklet was

important and should have  been sent, we agree with  the district

court that there is no evidence that the Plan Administrator acted

                    

          required by this  subchapter to furnish  to a
          participant   or  beneficiary   (unless  such
          failure  or  refusal  results   from  matters
          reasonably   beyond   the   control  of   the
          administrator)   by   mailing  the   material
          requested to  the last known  address of  the
          requesting participant  or beneficiary within
          30 days after such request may in the court's
          discretion  be  personally  liable   to  such
          participant  or beneficiary in  the amount of
          up  to  $100  a day  from  the  date of  such
          failure or refusal, and  the court may in its
          discretion  order  such  other  relief  as it
          deems proper.

                                22

intentionally  or in bad faith by sending the plan booklets after

the first two  requests and then sending  the Plan Administration

booklet  only after the  third request.   We also  agree with the

district court that Rodriguez failed to show that his rights were

prejudiced  by  the delay.   Rodriguez  asserts  that he  was not

informed  of the proper appeal process until he received the Plan

Administration booklet in May, but he does not show how the delay

caused  him harm.11  Therefore,  we find that  the district court

did not  abuse its  discretion by  declining to  impose penalties

against the Plan Administrator.

          Affirmed.  Costs to appellee.
                                      

                    

     11 Because  exhaustion of administrative remedies  is not an
issue  in this case, Rodriguez's  failure to file  a final appeal
with   the   Named  Fiduciaries,   as   provided   in  the   Plan
Administration booklet, has not prejudiced his court action.

                                23