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Home > Blog > Fifth Circuit Affirms Denial of Retirement Benefits and Dismissal of ERISA-estoppel Claim

Fifth Circuit Affirms Denial of Retirement Benefits and Dismissal of ERISA-estoppel Claim

In Clark v. Certainteed Salaried Pension Plan, et al., No. 20-30059, __F.App’x__, 2021 WL 2620557 (5th Cir. June 24, 2021), Plaintiff-Appellant Terry Clark sought retirement benefits under the Saint-Gobain Retirement Income Plan (SGRI Plan), an ERISA-qualified plan that provides retirement benefits for employees of the Saint-Gobain Corporation and affiliated entities. A sub-plan to the SGRI Plan is the CertainTeed Corporation Salaried Employee’s Pension Plan (CertainTeed Plan), which is generally limited to employees of CertainTeed or select affiliates prior to January 1, 2001. Clark worked for a company starting in 1989 that was later acquired by a company that was part of a Saint-Gobain-controlled group of corporations. But it was not until 2007 that he transferred to a position with CertainTeed. Prior to this, he received paystubs reflecting “1-A Code,” which he contended meant that he was a CertainTeed Plan participant. In 2015, Clark requested and received two separate benefit-estimate statements from the Saint-Gobain Pension Administration Team which assumed he was a participant in the CertainTeed Plan. The statements included disclaimers that they were not a guarantee of benefits. In 2017, the pension administrator informed Clark that due to a coding error, they had placed him in the incorrect plan and that he was actually a participant in the Saint-Gobain Retired Accumulation Plan. He appealed this, claiming that he was part of the CertainTeed Plan. The Benefits Committee denied his appeal because he did not become a CertainTeed employee until 2007. After his appeal was denied, he filed suit under ERISA § 502(a)(1)(B) for the denied benefits. He also alleged an alternative ERISA-estoppel theory. The district court granted summary judgment to Defendants on all counts, which the Fifth Circuit affirmed.

The Fifth Circuit made several determinations. First, it agreed with Defendants that the district court erred in conducting a de novo review of the Benefits Committee’s interpretation of the CertainTeed Plan. The SGRI Plan expressly gives the Benefits Committee “such duties and powers as may be necessary … [t]o construe and interpret the [SGRI] Plan” and “decide all questions of eligibility and determine the amount, manner and time of payment of any benefits.” Because the CertainTeed Plan was a component of the SGRI Plan, the Benefits Committee was entitled to abuse-of-discretion review.

Second, the CertainTeed Plan clearly provides that “an individual who becomes an Employee on or after January 1, 2001 shall not be eligible to become a Participant.” Clark did not meet any of the exceptions to this requirement. None of the companies that Clark worked for before CertainTeed adopted the CertainTeed Plan so his time with those companies did not count towards his participation. Thus, under the plain terms of the CertainTeed Plan, Clark was not eligible for benefits.

Third, though Clark alleged procedural irregularities, the court did not find that the administrator acted improperly in listing Clark in its internal database and removing him in response to his inquiries about his benefits because “no amount of review can change the fact that Clark is ineligible for benefits under the plain terms of the CertainTeed Plan.”

Fourth, with respect to the ERISA-estoppel claim, Clark had to establish: (1) a material misrepresentation; (2) reasonable and detrimental reliance upon the representation; and (3) extraordinary circumstances. The court found that he did not articulate any reliance beyond conclusory statements. The court explained: “we can imagine ways in which Clark might have detrimentally relied on Defendants’ misrepresentations. Perhaps Clark would have left CertainTeed but stayed in order to receive benefits from the CertainTeed Plan. Or maybe he decided to pass up the opportunity to participate in another retirement investment. But Clark has failed to so much as articulate these positions. And it is not our job to speculate or litigate on behalf of a party.”

Fifth, with respect to the claim that Defendants breached their fiduciary duties, the court agreed that ERISA § 502(a)(3) provides individual relief for breach of fiduciary duty, however, Clark did not articulate how he was injured by Defendants’ actions, and this is fatal to his claim. He was not eligible for benefits under the terms of the Plan and any paystub code or benefits-estimate errors did not cause his ineligibility.

Lastly, with respect to Clark’s statutory-damages claim under ERISA § 1132(c), the court explained that Defendants did not violate ERISA § 104(b)(4) when they failed to timely send the 2015 benefit-estimate statements in response to his request for “copies of all vesting credits” and “account statements.” These benefit-estimate statements are not plan instruments because they do not establish or operate a retirement plan. Though the Benefits Committee did fail to send the entire SGRI Plan within 30 days of Clark’s request, Clark did not press this issue on appeal so the court did not disturb the district court’s grant of summary judgment on this issue.

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