The opinion of the court was delivered by: PHILIP G. REINHARD
In deciding cross-motions for summary judgment, a court must use care, as each party in opposing the other party's motion is in turn entitled to have the court draw all reasonable inferences and take the facts in its favor. In the present case, however, the parties' dispute is not over the facts. Bruns was first employed by Northwestern Steel & Wire Company ("Northwestern") on May 6, 1964. After working in various positions in the bargaining unit, he was promoted in 1969 into Northwestern's labor relations department. After two years there as supervisor of contract administration, he was promoted to the position of manager of labor relations. In 1984, he was again promoted, this time becoming director of human resources. Eventually, in 1991, Bruns was given the title of vice president of human resources. Bruns remained in this vice president position until his termination in February of 1992. On August 16, 1988, Bruns entered into a three-year employment agreement with Northwestern, which eventually was extended an additional year, to August 16, 1992. According to Bruns, his goal was to retire after thirty years employment with Northwestern, qualifying for a "thirty-and-out" pension.
Northwestern terminated Bruns on February 13, 1992, after twenty-seven years service with the company. Based on his years of service, Bruns was eligible for a deferred vested pension under Pension Plan B for Salaried Employees of Northwestern Steel & Wire (the "plan"). Shortly prior to Bruns' termination, Pension Board member Boesen advised Bruns that if he were disabled, he would qualify for a "70/80 pension" under section 2.6 of Pension Plan B, which provides a pension for employees with certain combinations of age and years of service who have been terminated because of disability.
On June 10, 1992, Bruns entered into an employment termination agreement acknowledging his termination date as February 13, 1992. Paragraph 1 of the agreement stated that Bruns was terminated "other than for Cause or Disability." Paragraph 5 of the agreement contained a general release of Northwestern from liability, with the proviso that Bruns remained "entitled to receive whatever benefits he may have accrued under the Company's Pension Plan B and 401(k) Savings Plan for Salaried Employees in accordance with the terms and provisions of such plans."
In the mid-1970s, Bruns' internist, Dr. Thomas Flynn, had diagnosed Bruns as having rheumatoid arthritis and referred him to the Mayo clinic. Dr. Flynn was Bruns' treating physician for this condition until 1986, when he referred Bruns to Dr. Frederick Dietz, a specialist in the disease, who became Bruns' treating physician for the disease. According to Dietz, while rheumatoid arthritis is a progressive disease with no known cure, medication and other treatments had stabilized the symptoms of Bruns' condition between 1986 and 1991, albeit with periods of improvement and regression. At one point Bruns' symptons improved to the point he could go horseback riding, while at another point, in mid-1990, the arthritis flared up, requiring an adjustment of his medication.
The last time Dietz treated Bruns prior to his termination was July of 1991. At that time, Dietz observed that Bruns had stabilized. When Bruns visited Dietz on February 24, 1992, after his termination, however, the physician believed Bruns incapable of working in any capacity. Dietz suggested to Bruns that he file for disability and noted that Bruns should have no trouble qualifying for it. When Bruns visited Flynn on March 24, 1992, Flynn also was of the medical opinion that Bruns was totally and permanently disabled.
On September 21, 1992, Bruns orally applied for a permanent incapacity pension ("PIP") under section 2.5 of the plan.
The Pension Board then directed him to apply in writing, which he did on October 1, 1992, supplementing his application on November 20, 1992. In a January 6, 1993 letter from John C. Meyer, Northwestern's vice president of human resources, the Pension Board notified Bruns of its decision to deny him a PIP. That letter states the reason for denial as:
Paragraph 2.5 of the Pension Plan provides that a participant may retire from the employ of he Company on Permanent Incapacity Retirement only (i) if he has been totally disabled by bodily injury or disease so as to be prevented thereby from engaging in any employment of a type performed at the Company, and (ii) after such total disability shall have continued for a period of five consecutive months and, in the opinion of a qualified physician, such total disability will be permanent and continuous during the remainder of his life.
The Board concluded that your termination of employment in February, 1992 was not because of disability and that you had not been totally disabled (so as to be unable to work for the company) for a period of five consecutive months prior to the time your employment terminated, as required by Paragraph 2.5, since you were actively employed until February. The Board's decision is based upon the requirements of Paragraph 2.5 after giving consideration to your November 20, 1992 Statement of Facts, supporting documents you furnished in connection with your application for 70/80 Disability Pension, and your Employment Termination Agreement dated June 10, 1992. Accordingly, the Board has disapproved your October 1, 1992 application for Permanent Incapacity Retirement.
On January 8, 1993, Bruns requested an appeal of the Pension Board's decision. In response, the Pension Board requested that Bruns submit specific issues and comments to be considered on appeal, which Bruns' attorney then provided. Bruns' primary contention was that "participant" under the Plan included in this context a retiree, and therefore the Plan permitted a person who becomes disabled after retiring to then qualify for a PIP. Adopting the recommendation of its attorney, the Pension Board implicitly rejected this argument, instead interpreting section 2.5 of the plan to require a participant to have been eligible for a benefit on the last day of service to qualify for it. Because Bruns had not been disabled for five consecutive months prior to retiring, the Pension Board denied Bruns' appeal on April 26, 1993. On June 15, 1993, the pension Board notified Bruns that he had exhausted all administrative steps under the plan. The plan contains the following relevant provisions:
Whenever used in this Pension Plan:
(h) The term "participant" means any Employee who shall have had at least 1 year of continuous service and shall have attained the age of 25 years and who, from time to time during the period in which this Plan is effective, is accruing continuous service; where so indicated in the context, "participant" also refers to a person who is no longer accruing continuous service but who had attained pension eligibility under this Plan at the date he ceased to accrue continuous service, including a person who is retired and is receiving or is entitled to receive pension benefits under this Plan.
1.2 When Retirement Occurs
For purposes of this Plan, retirement shall be ...