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Hozier v. Midwest Fasteners, Inc.

Hozier v. Midwest Fasteners, Inc.

United States Court of Appeals for the Third Circuit

November 30, 1989, Argued ; July 24, 1990, Filed

No. 89-5551

Opinion

 [*1156]  OPINION OF THE COURT

BECKER, Circuit Judge.

Plaintiffs appeal from a grant of summary judgment to the defendant corporations, which formerly employed the plaintiffs and which declined to make certain severance payments to plaintiffs when they were involuntarily terminated. Plaintiffs contend that they are entitled to those payments under the terms of an ERISA welfare plan defendants had created in 1985. Defendants respond that the 1985 plan was amended in 1987, before plaintiffs' termination, and that plaintiffs received all the benefits to which they were entitled under [**2]  the amended, less generous plan.

Plaintiffs contend that defendants, by unilaterally amending their severance plan in order to deny plaintiffs the additional benefits, violated fiduciary duties imposed on them by ERISA. We agree with defendants that they were not acting in their capacity as an ERISA fiduciary when they sought to promulgate the amendment, and that the amendment therefore cannot be struck down on that basis. However, we  [*1157]  agree with the plaintiffs' contention that ERISA precludes oral modification of employee benefit plans. Because defendants concede that the purported 1987 amendment was never reduced to a writing before plaintiffs were terminated, we conclude as a matter of law that the unamended 1985 plan must govern plaintiffs' claims for severance benefits.

Plaintiffs contend that in evaluating their entitlement to benefits under the 1985 plan, the trier of fact must consider not only the terms of that plan, but also the defendants' failure to comply with ERISA's reporting and disclosure provisions. We reject this contention. However, we conclude that the terms of the plan, considered in light of other record evidence bearing on the proper construction [**3]  of those terms, are sufficiently ambiguous that a reasonable trier of fact could find that plaintiffs are entitled to benefits. Accordingly, we will reverse and remand for a trial on that issue.

I. BACKGROUND

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908 F.2d 1155 *; 1990 U.S. App. LEXIS 12339 **; 12 Employee Benefits Cas. (BNA) 2449

ROBERT HOZIER, RALPH KOHART, PETER A. WHITE, MARC DUNING and DAVID CARROLL, Appellants v. MIDWEST FASTENERS, INC., KSM FASTENING SYSTEMS, INC. t/a ERICO FASTENING SYSTEMS, INC. and ERICO INTERNATIONAL CORPORATION

Subsequent History:  [**1]   As Corrected September 25, 1990.

Prior History: On Appeal From the United States District Court for the District Court of New Jersey; D.C. Civil No. 88-1777.

CORE TERMS

benefits, terms, employees, terminated, reporting, violations, disclosure, severance, merger, plaintiffs', consolidation, vesting, defendants', fiduciary, employee benefit plan, fiduciary duty, memo, package, provisions, purported, amend, summary judgment, plans, severance pay, welfare plan, pension plan, entitlements, unamended, plan administrator, genuine

Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment, Entitlement as Matter of Law, General Overview, Genuine Disputes, Materiality of Facts, Supporting Materials, Governments, Fiduciaries, Pensions & Benefits Law, Fiduciaries, Fiduciary Responsibilities, ERISA, Business & Corporate Compliance, Funding Requirements, Pension Plan Funding, Plan Amendments, ERISA Pension Plan Qualification Requirements, Participation & Vesting, Coverage Requirements, Exempt Plans, Benefit Accrual Requirements, Vesting Requirements, Plan Termination, Prohibited Transactions, Labor & Employment Law, Collective Bargaining & Labor Relations, Labor Arbitration, Discipline, Layoffs & Terminations, Employment Relationships, At Will Employment, Employee Benefit Plans, Pensions & Benefits Law, Plan Establishment, Disclosure, Notice & Reporting, Benefits Information, Civil Litigation, Causes of Action, Failures to Respond, Judicial Review, Arbitrary & Capricious Review, Suits to Recover Plan Benefits, De Novo Standard of Review, Remedies, Damages, Extracontractual Damages, Governmental Employees, Police Pensions, Legislation, Interpretation