Court Opinion

ID: 3041204
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:05:22.246609+00
Date Added: 2024-06-11T12:54:24.845295
License: Public Domain

United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 06-1158
                                   ___________

LaVerne I. Johnson; Paul Edwards,     *
                                      *
           Appellants,                *
                                      * Appeal from the United States
     v.                               * District Court for the
                                      * Southern District of Iowa.
Lend Lease Real Estate Investment,    *
                                      *
           Appellee.                  *
                                 ___________

                             Submitted: September 29, 2006
                                Filed: October 31, 2006
                                 ___________

Before ARNOLD, BYE, and MELLOY, Circuit Judges.
                           ___________

ARNOLD, Circuit Judge.

       LaVerne Johnson and Paul Edwards filed suit against their former employer,
Lend Lease Real Estate Investments, Inc., claiming that letters that Lend Lease sent
to them upon termination of their employment constituted free-standing ERISA plans
under the Employee Retirement Income Security Act of 1974 (ERISA), see 29 U.S.C.
§§ 1001-1461, and contesting Lend Lease's decision to terminate the benefits provided
in the letters. Lend Lease moved for summary judgment, which the district court1
granted. Messrs. Johnson and Edwards appealed that order. We affirm.

      1
      The Honorable Ronald E. Longstaff, United States District Judge for the
Southern District of Iowa.
                                            I.
       Messrs. Johnson and Edwards were employed by Lend Lease until January,
1995, and June, 2002, respectively. Upon termination of their employment, the
plaintiffs both received letters notifying them that Lend Lease would continue their
medical, dental, vision, and life insurance benefits through Lend Lease's ERISA
welfare plans, and indeed Messrs. Johnson and Edwards continued to receive these
benefits post-employment.

       In 2004, Lend Lease terminated all operations in the United States and,
concurrently, terminated the plan under which Messrs. Johnson and Edwards were
receiving benefits. The plan specifically allowed Lend Lease to terminate it at any
time under a "reservation of rights" clause contained in the plan documents. Lend
Lease notified Messrs. Johnson and Edwards of this termination and explained the
transition benefits being offered voluntarily by Lend Lease (namely, paying the cost
normally due from employees for their temporary health insurance under the
Consolidated Omnibus Budget Reconciliation Act (COBRA), a $10,000 cash
payment, continued life insurance eligibility, a help line, and access to consultants to
assist participants in obtaining successor coverage). Rather than accepting the
transition benefits, which would have required them to release Lend Lease from "any
and all claims, promises, actions, causes of action and liabilities of any kind or nature
whatsoever" relating to the plan, Messrs. Johnson and Edwards filed the present
action.

       The district court granted summary judgment to Lend Lease, holding, inter alia,
that the letters that Messrs. Johnson and Edwards received at the time that they left the
company neither constituted separate and distinct ERISA plans nor indicated an intent
to provide vested, lifetime benefits. We review de novo a district court's grant of
summary judgment, and will affirm the grant only when, viewing the facts in a light
most favorable to the nonmoving party, no genuine issues of material fact remain and
the moving party is entitled to judgment as a matter of law, Fed. R. Civ. P. 56(c).

                                          -2-
Walsh v. United States, 31 F.3d 696, 698 (8th Cir. 1994). The parties here do not
genuinely dispute the material facts.

                                          II.
       The only issue before us is whether the letters constitute free-standing ERISA
plans, and if so, whether they indicate that the benefits provided in the letters are to
be provided for life. "A plan is established for ERISA purposes when a reasonable
person can ascertain (1) the intended benefits, (2) the class of beneficiaries,
(3) a source of funding, and (4) the procedures for receiving benefits." Petersen v.
E.F. Johnson Co., 366 F.3d 676, 678 (8th Cir. 2004).

       Messrs. Johnson and Edwards argue that the general references to "medical,
dental and life insurance benefits" in the letters sufficiently state the intended benefits
for ERISA purposes. But, as Lend Lease relevantly points out in its brief, the "only
possible way to determine what benefits either of them might receive was by reference
to Lend Lease's existing Plan." Lend Lease also points out additional questions left
unanswered by the letters: "What were the deductibles? What were the co-pays?
What were the annual or lifetime maximums? What services were covered? Were
hospital benefits provided? Private or shared ... hospital rooms? Were prescription
drugs reimbursed? Were outpatient services provided? Did the plan reimburse well
care?"

      The letters, moreover, repeatedly refer to "continued" coverage and at one point
describe benefits only as "the same as your current coverage." Both Messrs. Johnson
and Edwards were instructed by the letters to complete and return a "Continuation of
Insurance Upon Retirement Form." We think that the foregoing makes clear that the
only way to determine "the intended benefits" under the letters was by reference to the
underlying Lend Lease ERISA plan, and that the letters thus fail to constitute free-
standing ERISA plans. Since the letters do not provide the requisite information

                                           -3-
regarding "intended benefits" to allow them to qualify as free-standing ERISA plans,
we need not address the remaining three requirements outlined in Petersen.

      Because the letters are not free-standing ERISA plans, and because, as we have
already noted, Lend Lease's underlying ERISA plan does not provide for lifetime
benefits due to its "reservation of rights" clause, it follows that neither the letters nor
the underlying plan provide lifetime benefits to Messrs. Johnson and Edwards.

      Affirmed.
                         ______________________________

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