Court Opinion

ID: 2994223
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:13:29.974894+00
Date Added: 2024-06-11T11:45:20.119001
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 99-3030

Arnold Downs,

Plaintiff-Appellant,

v.

World Color Press,

Defendant-Appellee.

Appeal from the United States District Court
for the Southern District of Illinois, Benton Division.
No. 98 C 4270--J. Phil Gilbert, Chief Judge.

Argued February 16, 2000--Decided May 25, 2000

 Before Kanne, Diane P. Wood and Evans, Circuit
Judges.

 Kanne, Circuit Judge. Arnold Downs is receiving
the exact level of retirement benefits to which
the express terms of his pension plans entitle
him, but he claims that he deserves more. His
former employer World Color Press apparently told
him in error that he would receive twenty-eight
years of service credit under its ERISA plans,
even though Downs worked only sixteen years for
the company. Downs complains that these
misrepresentations modified one of his ERISA
plans and entitled him to more benefits than
allowed under its express terms. We disagree and
affirm the district court’s grant of summary
judgment against Downs.

I.   History

 Arnold Downs worked for the corporate division
of World Color Press ("Corporate Division") in
Effingham, Illinois, from June 1, 1975, to
December 31, 1986. Like most defined-benefit
pension plans under the Employment Retirement
Income Security Act ("ERISA"), 29 U.S.C. sec.sec.
1001-1461, the retirement plan covering Corporate
Division employees ("Corporate Plan") calculates
levels of pension benefits based in part on
length of employment service. Downs received
credit under the Corporate Plan for his eleven
and one-half years of service in the Corporate
Division.

 On January 1, 1987, Downs transferred within
World Color Press to the Salem Gravure division
("Salem Division") in Salem, Illinois. Although
both the Corporate Division and Salem Division
were subunits of World Color Press, each division
maintained separate pension plans for its
respective employees. Salem Division employees,
including Downs as of January 1, 1987, were
covered by the Salem Gravure Salaried Pension
Plan ("Salem Plan"). Accordingly, Downs stopped
receiving service time under the Corporate Plan
and began receiving service credit under the
Salem Plan for his employment service in the
Salem Division.

 In 1989, World Color Press merged the Salem
Plan with the retirement plans for a number of
other divisions to form a new and distinct
pension plan called the Pension Plan for
Employees of World Color Press, Inc. ("Merged
Plan"). The Merged Plan is a defined-benefit
ERISA plan which specifies that a participant can
receive service credit only for time employed by
one of several enumerated employers. The listed
employers under the Merged Plan comprise a number
of divisions within World Color Press, including
the Salem Division but not the Corporate
Division. Consistent with this scheme, Downs
received credit under the Merged Plan for his
employment service with the Salem Division from
January 1, 1987, to his retirement on July 11,
1991. Downs, of course, did not receive credit
under the Merged Plan for his tenure in the
Corporate Division.

 After he retired, Downs received benefits under
the Corporate Plan for his time in the Corporate
Division and received benefits under the Merged
Plan for his time in the Salem Division. This was
the correct result under the express terms of
both plans. However, Downs was unhappy because he
insisted that World Color Press had promised him
retroactive credit under the Merged Plan for his
Corporate Division service. In 1994, Downs
formally appealed to World Color Press that he
should be double credited for his eleven and one-
half years in the Corporate Division.

 Downs asserted that World Color Press made a
number of oral and written representations to him
that he would receive back credit under the
Merged Plan for his time in the Corporate
Division. Downs alleged that World Color Press
Benefits Manager Tom Phillips had assured him on
the day of his transfer that his initial date of
employment for Salem Division retirement benefits
would be June 1, 1975, not January 1, 1987.
According to Downs, his supervisor Clayton
Mitchell and General Manager Jack O’Connor also
verified this arrangement. In addition, Downs
presented benefits paperwork indicating that the
employment date for purposes of calculating his
Salem Division benefits was June 1, 1975.
However, World Color Press explained that if
Phillips, Mitchell and O’Connor had promised him
double benefits for his time in the Corporate
Division, they had done so wrongly and without
legal authority. World Color Press also explained
that the documentation listing Downs’s date of
employment as June 1, 1975, was the result of an
administrative mistake during the creation of the
Merged Plan in 1989. World Color Press rejected
his arguments and enforced the express terms of
the Merged Plan.

 On July 8, 1998, Downs sued World Color Press
in Illinois state court under 29 U.S.C. sec.
1132(a)(1)(B) to clarify his rights under the
Merged Plan, and World Color Press removed the
case to federal district court under 28 U.S.C.
sec. 1441 on August 21, 1998. Before the district
court, Downs argued that World Color Press’s oral
and written representations to him amended the
Merged Plan and entitled him to double benefits
for his time in the Corporate Division. He also
argued that World Color Press’s oral
representations to him estopped World Color Press
from enforcing the terms of the Merged Plan. The
parties submitted cross-motions for summary
judgment, and the district court granted summary
judgment in favor of World Color Press on April
1, 1999. Downs filed a motion for reconsideration
under Rule 60 of the Federal Rules of Civil
Procedure, arguing that the district court failed
to address his request for relief. On July 8,
1999, the district court vacated its judgment for
World Color Press and entered an amended final
judgment for World Color Press specifying Downs’s
compensation under the Merged Plan.

II.   Analysis

 Downs appeals summary judgment and argues that
World Color Press’s oral and written
representations entitled him to additional
benefits under the Merged Plan for two reasons:
(1) World Color Press’s representations amended
the Merged Plan; (2) World Color Press is
estopped by its representations from enforcing
the express terms of the Merged Plan. The
district court rejected both arguments and
granted summary judgment in favor of World Color
Press. We review de novo the district court’s
grant of summary judgment, drawing our own
conclusions of law and fact from the record
before us. See Haefling v. United Parcel Serv.,
169 F.3d 494, 497 (7th Cir. 1999). In determining
whether a genuine issue of material fact exists,
we draw all reasonable factual inferences in
favor of the non-movant Downs. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

  The statements by World Color Press employees
and the incorrect date of employment on Downs’s
benefit papers do not constitute amendment of the
Merged Plan. First, oral modification of an ERISA
plan is prohibited, so Downs cannot rely on the
oral statements to him by Phillips, Mitchell and
O’Connor. See Plumb v. Fluid Pump Serv., Inc.,
124 F.3d 849, 856 (7th Cir. 1997); Doe v. Blue
Cross & Blue Shield United, 112 F.3d 869, 876
(7th Cir. 1997). As we explained in Pohl v.
National Benefits Consultants, Inc., 956 F.2d
126, 128 (7th Cir. 1992), "One of ERISA’s
purposes is to protect the financial integrity of
pension and welfare plans by confining benefits
to the terms of the plans as written, thus ruling
out oral modifications." Second, though written
modification of an ERISA plan is permissible, see
Doe, 112 F.3d at 876, a plan may be amended only
pursuant to its express terms. See 29 U.S.C. sec.
1102(a)-(b); Brewer v. Protexall, Inc., 50 F.3d
453, 457 (7th Cir. 1995). All the written
documentation on which Downs relies came
subsequent to the Merged Plan’s inception, and
Section Twelve of the Merged Plan states that
World Color Press may amend the plan only
"through action of its Board of Directors." Downs
cites a number of World Color Press benefits
documents listing his employment start date under
the Merged Plan as June 1, 1975, but he does not
argue, much less establish, that the World Color
Press Board of Directors ratified any plan
modification that would entitle him to additional
benefits.

 Furthermore, the representations by World Color
that Downs cites do not establish estoppel. For
estoppel to apply, the plaintiff must show the
following: (1) knowing misrepresentation by the
defendant; (2) in writing; (3) with reasonable
reliance by the plaintiff on the
misrepresentation; (4) to the plaintiff’s
detriment. See Coker v. Trans World Airlines, 165
F.3d 579, 585 (7th Cir. 1999). Thus, Downs cannot
rely on the oral statements by Phillips, Mitchell
and O’Connor because the estoppel doctrine does
not override the aforementioned rule proscribing
oral modification of an ERISA plan. See Coker,
165 F.3d at 585; Frahm v. Equitable Life
Assurance Soc’y, 137 F.3d 955, 961 (7th Cir.
1998).

 Downs still argues that documents listing his
start date as June 1, 1975, were written
misrepresentations by World Color Press that
support estoppel here. Yet, whether based on oral
or written representations, any application of
estoppel to an ERISA plan is problematic in light
of the requirements that modification of a plan
occur only in writing and through the express
procedures for amendment. See 29 U.S.C. sec.
1102(a)(1), (b)(3); see also Shields v. Local
705, Int’l Bhd. of Teamsters Pension Plan, 188
F.3d 895, 903-04 (7th Cir. 1999) (Posner, J.,
concurring); Health Cost Controls of Ill., Inc.
v. Washington, 187 F.3d 703, 711 (7th Cir. 1999);
Coker, 165 F.3d at 585. As a result, some
circuits refuse any application of estoppel
principles to modify an ERISA plan. See, e.g.,
Miller v. Coastal Corp., 978 F.2d 622, 625 (10th
Cir. 1992); Coleman v. Nationwide Life Ins. Co.,
969 F.2d 54, 58-59 (4th Cir. 1992). In Black v.
TIC Investment Corp., 900 F.2d 112, 115 (7th Cir.
1990), we held that estoppel applies to unfunded,
single-employer welfare benefit plans, but since
Black, we have repeatedly declined to decide
whether estoppel might apply to an employer-
funded, defined-benefit plan such as we have
here. See, e.g., Shields, 188 F.3d at 900; Coker,
165 F.3d at 585-86; Krawczyk v. Harnischfeger
Corp., 41 F.3d 276, 280 (7th Cir. 1994). In both
Shields and Krawczyk, we explained that it was
unnecessary to decide whether to permit estoppel
in cases involving employer-funded plans because
the plaintiffs had failed to establish the
elements of estoppel. Shields, 188 F.3d at 900;
Krawczyk, 41 F.3d at 280. Likewise in this case,
we again express no opinion whether estoppel may
be applied to ERISA plans other than unfunded
welfare plans because Downs fails in the first
place to establish the elements of estoppel.

 In an attempt at showing detrimental reliance,
Downs claims that he would not have transferred
from the Corporate Division to the Salem Division
if he knew that he would not receive double
credit for his eleven and one-half years in the
Corporate Division. However, Downs could not have
relied upon benefits documents wrongly reporting
his start date in deciding to transfer because
the earliest of these documents are dated March
1989, well after he shifted to the Salem Division
in 1987. Even looking past this fact, Downs
cannot establish that World Color Press’s written
misrepresentations were intentional. Although
World Color Press might have been negligent in
listing the wrong start date on his forms, "[a]
claim will not lie for every false statement
reasonably and detrimentally relied upon by an
unwitting plaintiff." Coker, 165 F.3d at 585.
World Color Press explained that the incorrect
start date was the result of a clerical error,
and Downs does not argue otherwise. We held in
Coker that a similar instance of "bureaucratic
sloppiness," where the plaintiffs received
paperwork and insurance coverage from their
employer well after their benefits should have
ended, did not constitute intentional
misrepresentation. Id. at 586. Moreover, Downs
does not allege that he was harmed by the
transfer. Like the plaintiff in Shields, Downs
does not claim that he "forwent any other more
advantageous job opportunities" or "suffered any
detriment" in reliance on his employer’s
representations. Shields, 188 F.3d at 901. He
argues essentially that he should be permitted to
double dip by receiving almost twice the
retirement benefits to which he is entitled. He
insists in his brief that "equity abhors
injustice," but this principle works here against
Downs, not for him.

III.   Conclusion

 For the foregoing reasons, we AFFIRM the grant of
summary judgment in favor of World Color Press.