Guerra-Delgado v. Banco Popular de Puerto Rico , 774 F.3d 776 ( 2014 )

United States Court of Appeals
For the First Circuit
No. 13-2065
ALFREDO GUERRA-DELGADO, ET AL.,
Plaintiffs, Appellants,
v.
POPULAR, INC., ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]
Before
Howard, Selya, and Lipez, Circuit Judges.
William Santiago Sastre for appellants.
Oreste R. Ramos, with whom Pietrantoni Mendez & Alvarez LLC
was on brief, for appellees.
December 18, 2014
LIPEZ, Circuit Judge. After appellant Alfredo Guerra-
Delgado ("Guerra") retired from appellee Banco Popular de Puerto
Rico ("BPPR"), BPPR undertook a final calculation of his pension,
which yielded monthly payments substantially lower than earlier
estimates had suggested. Guerra brought claims seeking the higher
amount under § 502(a)(1) of the Employee Retirement Income Security
Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1), a theory of
estoppel, and Puerto Rico contract law. The district court
dismissed the ERISA and contract claims, holding that Guerra could
not be awarded relief under the terms of BPPR's retirement plan and
that ERISA preempted the commonwealth law claims. After discovery,
the district court granted summary judgment against Guerra on the
estoppel claim, holding that estoppel could not apply where the
terms of the benefits plan were unambiguous. Agreeing with the
district court's conclusions, we affirm.
I.
Appellant Guerra was an employee of Banco de Ponce for
eight years, from 1980 to 1988.1 Although Banco de Ponce merged
with BPPR in 1990, Banco de Ponce was not affiliated with BPPR
during Guerra's tenure there. Guerra resigned from Banco de Ponce
in February 1988 to work for First Bank of Puerto Rico, where he
remained until he moved to Florida in May 1995 to help his son
1
We recite Guerra's version of the facts in discussing the
summary judgment motion. We look only to the allegations in the
complaint in discussing the motion to dismiss.
-2-
through difficult times. Guerra lived in Florida until 1997, and
during that period he worked three jobs part-time: as an
independent contractor for First Bank of Puerto Rico, as a bus
driver for the Osceola school district, and as a driver at Hertz
Car Rental.
In late 1996, a former colleague, Angel René Guzmán,
recruited Guerra to work for the New York branch of BPPR. Guerra
alleges that BPPR, through Guzmán, agreed as part of its recruiting
effort to credit seventeen years of work for other firms toward his
pension at BPPR. In other words, his pension would reflect prior
work at two different banks, as well as his other jobs in Florida,
beginning with his employment for Banco de Ponce in February 1980.
Guzmán denies making such a promise.
Guerra began working for BPPR in New York in April 1997.
In January 1999, Guerra and many other BPPR employees in New York
became employees of a new entity, Banco Popular North America, Inc.
("BPNA"). Although Guerra retained the same employee ID number,
worked in the same office, and performed the same work, he was
technically an employee of BPNA from January 1999 until he
transferred to a BPPR office in Puerto Rico a year later, in
January 2000.
Guerra remained in BPPR's Puerto Rico office until his
retirement in 2009. At the beginning of his tenure there, Guerra
asked if the period from 1980 onwards was still being credited
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toward his pension. In June 2000, a BPPR Benefits Department
representative, Madeline Mundo, sent Guerra a letter on BPPR
letterhead, which stated: "Having been an employee of [BPNA] from
February 1, 1980, until December 31, 1998, these years of service
will be considered as years of credit for purposes of the Banco
Popular Pension Plan. From January 1, 1999, until January 2, 2000
[i.e., the period Guerra worked in New York for the new BPNA
entity], these years of service will be considered as years of
eligibility for purposes of the . . . Plan." Guerra read this
letter as confirmation that his employer would continue to honor
the alleged 1997 promise. Notwithstanding the contents of the
Mundo letter, it is uncontested that Guerra did not, in fact, work
for BPNA from February 1, 1980 through December 31, 1998.
Every year from 2003 to 2007, Guerra received an annual
"Total Compensation Report" from BPPR. These reports contained
estimates of Guerra's pension benefits, calculated on the basis of
a 1980 start date. Each report contained a disclaimer that the
estimates did not govern the final benefits calculation, and that
the official policies of the company's retirement plan would
govern.
In 2005, BPPR's benefits structure changed. Employees
who had accrued fewer than ten years of benefits had their benefits
frozen and received an eleven percent pay raise. Employees who had
accrued more than ten years of benefits continued to accrue
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benefits and received a smaller, three percent raise. Even though
Guerra did not actually begin working for BPPR until 1997, he
received the latter deal because he had, according to BPPR's
records, accrued over twenty years of pension benefits by that
time.
In 2008, Guerra contacted the BPPR Benefits Department to
determine what his benefits would be if he retired early. On
September 8, 2008, José Torres of the BPPR Benefits Department sent
Guerra an email estimating that he would receive $2,371.99 per
month if he retired on February 1, 2009. Guerra subsequently
received a written "Estimated Pension Calculation" with the same
information. Based on this information, Guerra formally informed
BPPR on December 1, 2008 that he would retire in February 2009.
On January 21, 2009, Guerra attended a meeting for
retirees. There, a representative from the BPPR Benefits
Department suggested to Guerra that he might receive credit for
only ten years of service, and that the Torres email and the
Estimated Pension Calculation based on the 1980 start date may have
grossly overestimated his benefits. Guerra nevertheless retired on
February 1, 2009.
During the first week of February, Guerra spoke with
someone from the BPPR Benefits Department to try to clarify his
benefits entitlement and to make arrangements to return to work in
the event the higher figure was not honored. BPPR was supposed to
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make a final calculation and then follow up with Guerra. Over a
month later, however, Guerra still had not heard from BPPR, nor had
he received any pension payment. On March 18, he emailed the
Benefits Department to press the issue.
The next day, Guerra received a letter from Torres. The
letter explained that he had accrued only seven years of credit,
yielding monthly benefits of $570.87, not the $2,371.99 monthly
payment he had expected. The seven credited years included:
(1) April 29, 1997 through December 31, 1998 (the period Guerra
worked for BPPR in New York, up to the time it became BPNA); and
(2) January 18, 2000 through December 31, 2005 (the period Guerra
worked for BPPR in Puerto Rico, up to the time BPPR discontinued
its benefits program for employees who had accrued fewer than ten
years of credit). The seven years excluded the one-year period he
worked for BPNA in New York and the seventeen years he had worked
for other firms. In the same letter, Guerra was offered $18,137.90
in back pay because he had not accrued more than ten years of
credit by December 31, 2005, and therefore should have received an
eleven percent raise instead of a three percent raise. Guerra
requested reconsideration of the estimates, but BPPR confirmed its
calculation. Guerra was never reinstated and, according to Guerra,
he received no pension payments until after a settlement conference
in this action in December 2013. That month, he began receiving
monthly payments of $485.
-6-
Guerra filed suit in June 2011 against (1) Popular, Inc.
(BPPR and BPNA's parent company); (2) BPPR; (3) BPNA; (4) Plan de
Retiro de Banco Popular ("the Plan"); and (5) Comité Administrativo
de Beneficios de Popular, Inc. ("the Committee"). He advanced
claims under ERISA § 502(a), federal common law doctrines of
promissory and equitable estoppel, and Puerto Rico contract law.
Guerra sought declaratory and injunctive relief, and restitution to
redress denial of benefits, breach of contract, and consequential
losses.
The defendants moved to dismiss the complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6). The district court
granted the motion in part, holding, inter alia, that Guerra had
failed to state a claim under ERISA § 502(a)(1) and that ERISA
preempted the commonwealth claims.2 Only the estoppel claim
survived. After discovery, the defendants successfully moved for
summary judgment on the estoppel claim. The district court held
that the unambiguous Plan terms precluded a claim for estoppel. On
appeal, Guerra challenges both the dismissal of his ERISA and
contract claims and the summary judgment on his estoppel claim.
2
The district court also dismissed all claims against
Popular, Inc. because Guerra had not made any specific allegations
that Popular, Inc. had acted as a fiduciary.
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II.
A. Motion to Dismiss
We review the order granting a Rule 12(b)(6) motion de
novo. Herman v. Meiselman, 541 F.3d 59, 61 (1st Cir. 2008). In
our review, we accept as true all well-pleaded facts in the
complaint and draw all reasonable inferences in the pleader's
favor. Tasker v. DHL Ret. Sav. Plan, 621 F.3d 34, 38 (1st Cir.
2010). The "complaint must contain enough factual material to
raise a right to relief above the speculative level . . . and state
a facially plausible legal claim." Ocasio-Hernández v. Fortuño-
Burset, 640 F.3d 1, 12 (1st Cir. 2011) (internal quotation marks
omitted).
1. ERISA § 502(a)(1) Claim
Guerra's complaint alleges that the defendants are liable
"for the benefits due to [him] under the Plan" per ERISA
§ 502(a)(1)(B). First Am. Compl. ¶ 34 (emphasis added); see 29
U.S.C. § 1132(a)(1)(B) (providing a cause of action to a plan
participant or beneficiary to recover benefits due "under the terms
of [the] plan"). Guerra does not allege, however, that the plain
language of the Plan as adopted requires that he be credited for
the years he worked at other firms. Rather, he alleges that those
years should be counted because various fiduciaries of the Plan
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represented to him that they would be counted.3 For Guerra to be
entitled to benefits under the terms of the Plan, those
representations would have to amount to Plan amendments.
The 1997 promise (in which Guzmán allegedly told Guerra
that BPPR would credit seventeen years of employment at other firms
toward Guerra's pension) cannot plausibly have amended the Plan
because ERISA plans cannot be modified orally.4 See 29 U.S.C.
§ 1102(a)(1) (plans must be "established and maintained pursuant to
a written instrument"); Livick v. Gillette Co., 524 F.3d 24, 31
(1st Cir. 2008); Law v. Ernst & Young, 956 F.2d 364, 370 & n.9 (1st
Cir. 1992). Similarly, of the written documents Guerra
incorporated into his complaint, none purport to make any change to
the Plan, and nearly all of them clearly identify themselves as
"estimates" of Guerra's pension benefits.5 Since it is not
3
A number of written representations, along with the Plan,
were attached to the complaint as exhibits and were incorporated by
reference. They are therefore properly before us in our review of
the motion to dismiss. See Giragosian v. Ryan, 547 F.3d 59, 65
(1st Cir. 2008).
4
Guerra has argued (though he did not allege in his
complaint) that a written memorialization of this promise must have
existed in his now-missing employment file. But such speculation
cannot successfully lift his claim out of the merely possible into
the plausible. See Ocasio-Hernández, 640 F.3d at 12 (a plaintiff
must state a claim that is plausible, not merely possible).
5
The annual "Total Compensation Reports" and the 2008
"Estimated Pension Calculation" are clearly marked as estimates.
An email Guerra received from José Torres of the BPPR Benefits
Department did not include an "estimate" disclaimer, but Guerra
himself refers to the email as an "estimate." Guerra also cites a
letter from Madeline Mundo of the BPPR Benefits Department, but the
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plausible that the Plan was amended by these documents, the relief
Guerra seeks does not flow from the terms of the Plan. He
consequently cannot recover under § 502(a)(1).
2. Commonwealth Claims
In his complaint, Guerra asserts a cause of action for
breach of employment contract and denial of retirement benefits
under Articles 1044 and 1051 of the Puerto Rico Civil Code, P.R.
Laws Ann. tit. 31, §§ 2994, 3015. Article 1044 states,
"Obligations arising from contracts have legal force between the
contracting parties, and must be fulfilled in accordance with their
stipulations." Article 1051 states, in pertinent part, "If the
person obliged to do something should not do it, it shall be
ordered to be done at his expense."
Guerra argues that the district court erred in dismissing
these commonwealth claims as preempted by ERISA. ERISA preempts
"any and all State laws insofar as they may . . . relate to any
employee benefit plan." 29 U.S.C. § 1144(a). "[A] cause of action
'relates to' an ERISA plan when a court must evaluate or interpret
the terms of the ERISA-regulated plan to determine liability under
the state law cause of action . . . [as well as] where the damages
must be calculated using the terms of an ERISA plan." Hampers v.
W.R. Grace & Co., 202 F.3d 44, 52 (1st Cir. 2000). A law is
letter does not purport to amend the Plan and operates from the
uncontestedly mistaken factual premise that Guerra worked for BPNA
from 1980 to 1998.
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preempted "even if the law is not specifically designed to affect
such plans, or the effect is only indirect." Zipperer v. Raytheon
Co., 493 F.3d 50, 53 (1st Cir. 2007) (quoting Ingersoll-Rand Co. v.
McClendon, 498 U.S. 133, 139 (1990)). Where "the very same
conduct" underlies both the state law claim and the ERISA claim,
that overlap "suggests that the state law claim is an alternative
mechanism for obtaining ERISA plan benefits," and the state law
claim is preempted. Hampers, 202 F.3d at 52.
Here, Guerra's commonwealth claims are based on the same
facts as his ERISA claims. Indeed, his complaint relies on the
same allegations for both causes of action. Further, he specifies
in the complaint that "[t]he measure of damages is the difference
between the benefits correctly owed to [him] and the reduced
benefits offered."6 First Am. Compl. ¶ 57. This calculation,
dependent on a calculation of "the benefits correctly owed,"
demonstrates that the commonwealth claims are merely "an
alternative mechanism for obtaining ERISA plan benefits." The
district court thus properly held that Guerra's commonwealth claims
"relate to" the ERISA-regulated Plan and, accordingly, they are
preempted.
6
Guerra also links the commonwealth claims to a claim for
lost social security benefits. He argues that he retired early in
reliance on appellees' representations about his pension, and that
retiring early caused his social security benefits to be
significantly lower than if he had worked to age sixty-five.
However, Guerra forfeited this argument by failing to raise it
below.
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B. Summary Judgment: ERISA Estoppel
We review summary judgment orders de novo. Riley v.
Metro. Life Ins. Co., 744 F.3d 241, 244 (1st Cir. 2014). Summary
judgment is appropriate if there is no genuine dispute of material
fact and the moving party is entitled to judgment as a matter of
law. Id.; Fed. R. Civ. P. 56(a). A "material" fact is one that
could potentially affect the outcome of the case. Calero-Cerezo v.
U.S. Dep't of Justice, 355 F.3d 6, 19 (1st Cir. 2004). A "genuine"
dispute is one that could be resolved in favor of either party.
Id. In other words, summary judgment is inappropriate if a
reasonable factfinder could return a verdict for the non-moving
party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
ERISA § 502(a)(3)(B) authorizes a plan participant,
beneficiary, or fiduciary to bring a civil action for "appropriate
equitable relief" to redress violations of or enforce any provision
of ERISA or the Plan. 29 U.S.C. § 1132(a)(3)(B). Although many of
our sister circuits have recognized equitable estoppel claims under
§ 502(a)(3)(B), see Livick, 524 F.3d at 30-31 (listing cases from
the Second, Third, Fifth, Sixth, Ninth, and Eleventh Circuits);
Mello v. Sara Lee Corp., 431 F.3d 440, 444 n.4 (5th Cir. 2005)
(listing other cases from those same circuits, plus cases from the
Seventh and Eighth Circuits), we have not yet had occasion to do
so. In each of the cases raising the issue, we have concluded
that, even if such a claim were cognizable, the facts specific to
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that case would not support it. See Livick, 524 F.3d at 31; Mauser
v. Raytheon Co. Pension Plan for Salaried Emps., 239 F.3d 51, 57-58
(1st Cir. 2001); City of Hope Nat'l Med. Ctr. v. HealthPlus, Inc.,
156 F.3d 223, 230 n.9 (1st Cir. 1998); Law, 956 F.2d at 370 n.9;
see also Todisco v. Verizon Commc'ns, Inc., 497 F.3d 95, 99 n.4
(1st Cir. 2007) (noting cases). We continue that approach here.
An equitable estoppel claim consists of two elements:
(1) the first party must make "a definite misrepresentation of
fact" with "reason to believe" the second party will rely on it,
Law, 956 F.2d at 368 (internal quotation marks omitted); and
(2) the second party must reasonably rely on that representation to
its detriment, id.; Mauser, 239 F.3d at 57. We have in the past
assumed that any such claim under ERISA is necessarily limited to
statements that interpret the plan and cannot extend to statements
that would modify the plan. See Law, 956 F.2d at 369-70
(discussing the notion that estoppel applies to interpretations but
not modifications of ERISA plans).
Two reasons support this limitation. First, because an
ERISA plan must be "established and maintained pursuant to a
written instrument," 29 U.S.C. § 1102(a)(1), a plan cannot be
modified orally. Law, 956 F.2d at 370 n.9. Therefore, it would be
inherently unreasonable to rely on an oral statement purporting to
modify the plan. Second, ERISA plans must "provide a procedure for
amending [the] plan," 29 U.S.C. § 1102(b)(3), and modifications
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made in contravention of the plan's stated procedure violate that
requirement. Law, 956 F.2d at 370 n.9. It would be unreasonable
to rely on an informal statement that departed from that procedure.
Livick, 524 F.3d at 31. However, representations that interpret
rather than modify the plan may provide "a narrow window for
estoppel recovery." Law, 956 F.2d at 370. We have observed that
"a plan beneficiary might reasonably rely on an informal statement
interpreting an ambiguous plan provision; if the provision is
clear, however, an informal statement in conflict with it is in
effect purporting to modify the plan term, rendering any reliance
on it inherently unreasonable." Livick, 524 F.3d at 31. We have
explained that "[t]his is why courts which do recognize ERISA-
estoppel do so only when the plan terms are ambiguous." Id.
In this case, Guerra argues that ERISA estoppel applies
because the terms of the Plan are ambiguous. Whether the terms of
a contract are ambiguous is a question of law, subject to plenary
review. Smart v. Gillette Co. Long-Term Disability Plan, 70 F.3d
173, 178 (1st Cir. 1995). We will usually find ambiguity if the
"terms are inconsistent on their face" or the language "can support
reasonable differences of opinion as to [its] meaning." Id.
(quoting Fashion House, Inc. v. K mart Corp., 892 F.2d 1076, 1083
(1st Cir. 1989)). Guerra has identified three alleged ambiguities
in the Plan. We take each in turn.
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1. Years of Service
Guerra argues that an ambiguity exists in the Plan's
definition of Years of Service. Years of Service are defined in
§ 1.35 of the Plan as the period of employment for BPPR or an
affiliated company measured in years and months. In addition,
Years of Service include years of active participation or
employment with a handful of specified companies during limited
periods when those companies were not affiliates of BPPR. Guerra
argues that § 1.35 is ambiguous insofar as it leaves open the
possibility that there may be other, unspecified exceptions. We
rejected such thinking in Riley, when we reaffirmed our commitment
to the principle of expressio unius est exclusio alterius. 744
F.3d at 249. "The [expressio unius] maxim instructs that, when
parties list specific items in a document, any item not so listed
is typically thought to be excluded. . . . While this interpretive
maxim is not always dispositive, it carries great weight . . . ."
Id. (quoting Smart, 70 F.3d at 179) (alteration and first omission
in original). Here, the mere inclusion of specifically articulated
exceptions does not render § 1.35 of the Plan ambiguous.
2. Years of Credit
Reprising the same argument in a slightly different
context, Guerra contends that the definition of Years of Credit is
ambiguous because credit may be given for time employed with a
closed set of unaffiliated employers. The argument fails here for
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the same reason it failed in the preceding discussion on Years of
Service.
3. The Power to Amend
Finally, Guerra maintains that there is a "clear
irreconcilable conflict between section 1.34 [Years of Credit]
. . . and section 10.01." Section 10.01 gives BPPR the power to
"amend the Plan, retroactively or otherwise, at any time." Guerra
insists that the power to amend is at odds with a non-fluid
definition of Years of Credit for specified companies that were not
affiliated with BPPR. In effect, he argues that because BPPR can
change the Plan "at any time," the otherwise clear provisions of
the Plan are unstable or, to use a word more useful to his estoppel
claim, ambiguous. But the bare power to amend a plan does not
upset the clarity of its terms. Otherwise, every term in a plan
subject to amendment would be ambiguous. The untenability of that
argument is plain.
Since Guerra has not shown any ambiguity in the Plan, his
equitable estoppel claim necessarily fails.7
7
Guerra also argues that he has vested rights in the Banco de
Ponce pension plan and that BPPR became liable for that pension
when it acquired Banco de Ponce in 1990. The argument was not
raised below until Guerra's post-judgment Rule 60(b) motion. The
district court denied the motion and Guerra did not appeal that
decision. Consequently, the issue was not preserved for appellate
review.
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III.
For the reasons set forth above, Guerra's ERISA
§ 502(a)(1) claim fails because he cannot recover benefits under
the terms of the Plan. His commonwealth claims are preempted. His
estoppel claim pursuant to ERISA § 502(a)(3) fails because the Plan
is unambiguous. Accordingly, we affirm the district court's
judgment.8
So ordered.
8
Guerra bears primary responsibility for this outcome because
of his decision to retire early in the face of uncertainty about
his pension amount. Moreover, under the applicable law, he
unreasonably relied on oral and written representations from BPPR
about his pension that contravened the unambiguous terms of the
Plan. Still, as a factual matter, BPPR bears a share of the
responsibility for Guerra's present circumstances. BPPR employees
provided Guerra with inaccurate written pension estimates for
years, even when he affirmatively sought confirmation of his
pension amount. BPPR's legal victory here does not excuse its own
problematic performance.
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