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Brown v. Retirement Committee of Briggs & Stratton Retirement Plan

decided: August 1, 1986.

PINKIE A. BROWN, PLAINTIFF-APPELLANT,
v.
RETIREMENT COMMITTEE OF THE BRIGGS & STRATTON RETIREMENT PLAN, AND BRIGGS & STRATTON CORPORATION, DEFENDANTS-APPELLEES



Appeal from the United States District Court for the Eastern District of Wisconsin No. 82-C-728--John W. Reynolds, Judge.

Wood, Jr., Flaum and Posner, Circuit Judges.

Author: Wood

WOOD, JR., Circuit Judge.

The plaintiff, Pinkie Brown, appeals the district court's grant of summary judgment for the defendants in her action pursuant to 29 U.S.C. § 1132(a)(1)(B) to recover disability benefits under the Briggs & Stratton Retirement Plan (the "Plan"), which is governed by the provisions of the Employee Retirement and Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461. Plaintiff contends that a dispute of material fact exists, that the Retirement Committee which administers the Plan (the "Retirement Committee" or "Committee") applied an incorrect standard of disability, that the Retirement Committee's decision is not supported by substantial evidence, and that the defendants did not accord the plaintiff procedural due process. Plaintiff asks us to reverse both the district court's decision and the Retirement Committee's decision. We affirm the district court's grant of summary judgment.

I. FACTS

Brown began working at Briggs & Stratton in 1968 as an assembly line laborer. During her employment, she developed a disease in both hands, carpal tunnel syndrome, which affects the median nerves of the hand. Brown, who is right-handed, also suffers from de Quervain's disease in the right wrist and thumb. These diseases cause numbness, tingling and pain in plaintiff's hands.

As a result of these symptoms, Brown was forced to stop working at Briggs & Stratton in December 1976. She subsequently underwent four operations between 1977 and 1979 to reduce the pressure on the nerves in her hands. Dr. Alex Vinluan performed all four operations. In May 1977, Dr. Vinluan referred the plaintiff to Dr. Charles Supapodok who also examined her.

In November 1977, Brown attempted to return to work. Dr. William Curtis, the plant physician and a member of the Committee, examined her and found that Brown could only do one-handed work. At that time there was no such work available for Brown, given her seniority level. In June 1978, Brown again attempted to return to work, but again there was no work available within her limitations.

In 1979 Brown filed a worker's compensation claim in state court to determine the nature and extent of her disability and the liability for her medical expenses. In connection with the worker's compensation claim, Dr. John Docktor examined Brown in February 1980, and Dr. David Haskell examined her in April 1980. In June 1980, Brown returned to work at Briggs & Stratton, but worked only four nights due to pain in her hands. In October 1980, Dr. Jack Teasley examined Brown. In April 1981, a state hearing examiner ordered Briggs & Stratton to pay compensation and attorney's fees to Brown.

In March 1981, Brown applied to the Retirement Committee for disability benefits. On April 22, 1981, the Briggs & Stratton Workers Compensation Department informed Brown by letter that Dr. Teasley's report indicated that she was capable of returning to work with restrictions and that "light" work was available. The letter stated that Brown must report for work within five days or she would be discharged. On May 13, 1981, Briggs & Stratton sent Brown another letter stating that the company had "sedentary" work available within her limitations and that failure to report for this work within five days would result in her discharge. Brown did not report to work and was discharged. In June 1981, the Retirement Committee denied Brown's claim for disability benefits, finding that she was not totally and permanently disabled within the meaning of the Plan. In August 1981, Brown's attorney sent a written request for an appeal of the Committee's decision. In September 1981, the Committee again denied Brown's application.

Brown then brought suit in state court to recover disability benefits from Briggs & Stratton. The action was removed to federal court, and the district court denied the defendant's motion for summary judgment and remanded the case sua sponte to the Retirement Committee. Brown v. Retirement Committee, 575 F. Supp. 1073 (E.D. Wis. 1983). The district court found that the letter informing Brown that her claim had been denied did not meet the level of specificity required by 20 C.F.R. § 2560.503-1(f) and that the Committee's review procedures were unsatisfactory.

In December 1983 and January 1984, the Committee wrote Brown advising her that the Committee would consider all written material and documents submitted by February 1984. Brown's attorney requested a hearing, but this request was denied in January 1984. In February 1984, plaintiff therefore submitted additional written material for consideration. On February 21, 1984, the Committee deliberated for two and one-half hours and again denied Brown's claim. In April 1984, the Committee notified Brown's attorney of the denial by a letter with the minutes of the Committee's meeting attached. In June 1984, Brown appealed the decision to the Committee. Brown requested a review by an independent group and included a report by Dr. John Melvin dated February 1984. In June the Retirement Committee met again, considered Brown's requests, and denied both the request for an independent review and also her claim for benefits.

The plaintiff moved to reopen the case in district court in September 1984, and the judge ordered it reopened in November. In January 1985, the defendants filed a second motion for summary judgment. In support of this motion, the defendants filed an affidavit dated January 1985 from Frank Sprtel, the Corporate Insurance Manager for Briggs & Stratton. Attached to the affidavit as exhibits were all the materials considered by the Retirement Committee during its deliberations. The plaintiff filed a brief, two affidavits, and additional documents as exhibits in opposition to the summary judgment motion. The defendants then filed a reply brief and a supplemental affidavit from Frank Sprtel dated February 1985.

The district court considered all the materials presented and granted the defendant's motion for summary judgment. The court determined that no dispute of material fact exists and that the defendants were entitled to judgment as a matter of law. The district court summarized in detail each document that the Retirement Committee considered. The judge decided that the reports of Drs. Haskell, Teasley, and Shapiro constituted substantial evidence supporting the Committee's decision. The judge also determined that the Committee properly disregarded Drs. Vinluan's and Melvin's finding of total and permanent disability because these conclusions did not take into account that Briggs & Stratton had work available that Brown was capable of performing. The court decided that ERISA does not require that a claimant be allowed to appear before the Retirement Committee, and that the composition of the Committee is set by the Plan which is the product of bargaining between Briggs & Stratton and the union. The court concluded that although ERISA requires certain procedural steps in the claims process, "matters such as union representation in the decision-making body are better left to the collective bargaining process." The plaintiff appeals each of these determinations.

II. SUMMARY JUDGMENT

Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).

By entering a summary judgment for a party, the district court is concluding that based on the evidence upon which the plaintiff intends to rely at trial, no reasonable jury could return a verdict for the plaintiff. . . . In reviewing a summary judgment, an appellate court must view the entire record and the inferences drawn therefrom in the light most favorable to the party opposing the motion. . . . If a study of the record reveals that inferences contrary to those drawn by the trial court might be permissible, then the summary judgment should be reversed.

Munson v. Friske, 754 F.2d 683, 690 (7th Cir. 1985). A grant of summary judgment will be overturned upon a showing of a dispute over a material fact, however the appellant must "allude to specific facts which raise a genuine issue for trial." Linhart v. Glatfelter, 771 F.2d 1004, 1008 (7th Cir. 1985).

III. FACTUAL DISPUTE

Reviewing the record with these principles in mind, we find that, as no inferences contrary to those drawn by the district court might be permissible, Brown has not established that a factual dispute exists. Although Brown asserts in one of the subheadings of her brief that "Summary Judgments Should Not Be Granted Where Any Dispute of Fact Exists," Brown does not explain what the factual dispute in this case is. She instead argues in that section that this court should follow the "intermediate view" of disability in interpreting the Plan, see section V supra, and that the Retirement Committee's refusal to adopt this standard was erroneous, arbitrary, and capricious. Consequently, as Brown has not alluded to specific facts in dispute, our decision depends upon whether the defendants are entitled to judgment as a matter of law.

IV. STANDARD OF REVIEW

"A decision to deny benefits under a plan covered by ERISA will be overturned when '(1) arbitrary and capricious, (2) not supported by substantial evidence, or (3) erroneous on a question of law.'" Wolfe v. J.C. Penney Co., 710 F.2d 388, 393 (7th Cir. 1983) (quoting Peckham v. Board of Trustees, 653 F.2d 424, 426 (10th Cir. 1981)). See Allen v. United Mine Workers of America 1979 Benefit Plan & Trust, 726 F.2d 352, 354 (7th Cir. 1984) (trustee's allocation of insufficient trust funds among beneficiaries in absence of bad faith will not be overturned unless arbitrary and capricious). Brown argues that this court should abandon the "arbitrary and capricious" standard in disability benefit cases because this analogy to trust law is inappropriate. Brown argues that a trustee protects and promotes the interests of the trust's beneficiary, but in disability benefit cases an adversarial relationship allegedly exists because the claimant seeks disability benefits and the Retirement Committee functions as "a claims adjuster of an insurance fund."

This description, however, is inaccurate. The trustee or administrator of a pension plan is required by ERISA to "discharge his duties with respect to a [pension] plan solely in the interest of the participants and beneficiaries." 29 U.S.C. § 1104 (1) (1985). The trustee is liable for a breach of this fiduciary duty. 29 U.S.C. § 1109 (1985).

The fiduciary provisions of ERISA were designed to prevent a trustee "from being put into a position where he has dual loyalties, and, therefore, he cannot act exclusively for the benefit of a plan's participants and beneficiaries."

The language and legislative history of § 302(c)(5) and ERISA therefore demonstrate that an employee benefit fund trustee is a fiduciary whose duty to the trust beneficiaries must overcome any loyalty to the interest of the party that appointed him.

NLRB v. Amax Coal Co., 453 U.S. 322, 334, 69 L. Ed. 2d 672, 101 S. Ct. 2789 (1981) (quoting H.R. Conf. Rep. No. 93-1280, at 309 (1974)). Because the administrator of a pension plan under ERISA is bound to act in the best interests of the plan participants, just as a trustee must exercise his fiduciary duty for the ...


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