Byrd v. Canadian Imperial Bank of Commerce , 157 F. App'x 643 ( 2005 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-1168
E. THOMAS BYRD, JR.,
Plaintiff - Appellant,
versus
CANADIAN IMPERIAL BANK OF COMMERCE; CIBC WORLD
MARKETS,
Defendants - Appellees.
Appeal from the United States District Court for the District of
South Carolina, at Charleston. Patrick Michael Duffy, District
Judge. (CA-04-783-23-2)
Argued: October 26, 2005 Decided: December 9, 2005
Before WIDENER, MOTZ, and DUNCAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
ARGUED: Stanley Eugene Barnett, SMITH, BUNDY, BYBEE & BARNETT,
P.C., Mount Pleasant, South Carolina, for Appellant. Amy Yager
Jenkins, NELSON, MULLINS, RILEY & SCARBOROUGH, L.L.P., Charleston,
South Carolina, for Appellees. ON BRIEF: W. H. Bundy, Jr., SMITH,
BUNDY, BYBEE & BARNETT, P.C., Mount Pleasant, South Carolina, for
Appellant. Stephanie E. Lewis, NELSON, MULLINS, RILEY &
SCARBOROUGH, L.L.P., Charleston, South Carolina, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Thomas Byrd, who prior to becoming disabled, participated in
his employer’s deferred compensation plan, brings this action under
the Employee Retirement Income Security Act (ERISA), 29 U.S.C.A.
§ 1001 (West 1999). Byrd contends that his employer wrongfully
denied him a benefit guaranteed by that plan.1 The district court
disagreed, entering summary judgment on behalf of Byrd’s employer.
Finding no error, we affirm.
I.
In March 1999 Canadian Imperial Bank of Commerce (“CIBC”)
recruited Byrd, a securities broker then employed at Prudential
Securities, to become an Executive Director in the Private Client
Division of CIBC Oppenheimer Corp. The employment offer provided
that Byrd would receive a 40% commission payout for the first 12
months of his employment (with normal commission rates thereafter),
an additional bonus if the assets under his management reached $76
million during his first 12 months of employment, and --
importantly for this case -- an “up-front loan of 50% of [his]
proven trailing-12 months commissions in the form of a five year
forgivable loan.” This employee forgivable loan totaled $664,000,
1
Byrd’s amended complaint originally alleged eight counts,
including breach of contract, fraud, estoppel, breach of fiduciary
duty, refusal to provide information, and wrongful denial of
benefits. Only the wrongful denial claim remains at issue on
appeal.
2
and would be forgiven in five equal increments of $132,800 per
year.
On November 16, 2000, CIBC informed Byrd that he was eligible
to participate in the Company’s Wealth Plus Plan (“WPP” or “the
Plan”), a “long-term wealth” accumulation plan that allowed account
executives to earn deferred compensation based on their
“performance and business-building.” Each participating executive
possessed a WPP account. CIBC credited funds to that account over
time if the employee met certain performance targets. The funds
vested according to specific rules set out in the WPP, but
employees were generally not able to withdraw those funds until
they had retired, were terminated, or had experienced severe
financial hardship.
One of the WPP credits CIBC provided -- the credit central to
this case -- was the “Firm Initial Credit.” That credit rewarded
an employee by depositing “an amount equal to 20%” of the
employee’s annual compensation into his account. If an employee
received a “Special Payout Arrangement,” however, the Plan provided
that CIBC would not award this Firm Initial Credit until the
“expiration” of the “Special Payout Arrangement.” The WPP defined
a Special Payout Arrangement as “any individual [Account Executive]
payout arrangement specifically negotiated by said individual that
provides a payout in excess of the Firm’s Standard Commission
Payout Policy.”
3
At issue in this case is whether Byrd’s employee forgivable
loan constituted a “Special Payout Arrangement” that disqualified
him, under the terms of the WPP, from receiving the Firm Initial
Credit. Byrd, whose rights under the WPP have fully vested now
that he has become disabled,2 asserts that the employee forgivable
loan did not disqualify him from receiving the Firm Initial Credit.
Byrd contends that the word “payout” in the Plan refers only to
commissions, and hence does not extend to the forgivable loan,
which he maintains was more in the nature of a signing bonus.
Hence, he contends that he is entitled to the Firm Initial Credit
under the WPP’s plain language.
CIBC counters that the WPP’s plain language supports its view
because “[r]eferences to ‘any’ payout . . . clearly could be
construed to include the $664,000 EFL [employee forgivable loan]
given to Byrd at the time of hire.” CIBC also notes that it has
consistently interpreted the WPP to deny the Firm Initial Credit to
employees with outstanding forgivable loans; the first letter
notifying Byrd of his eligibility to participate in the WPP
informed him, “[a]s a result of having an up-front forgivable loan,
the initial firm contribution is not credited to your account
balance until the loan has expired.”
2
Byrd suffers from a degenerating eye disease. CIBC’s long
term disability insurance carrier confirmed his disability on
December 5, 2002.
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II.
The district court began its analysis by noting that it is
undisputed that the WPP is an ERISA plan within the meaning of 29
U.S.C. § 1002(1)(A). The court then recognized that the WPP gave
CIBC’s WPP Committee, as the plan administrator, discretionary
authority to interpret the WPP. In light of this discretion, the
court noted that it could review the administrator’s interpretation
of the plan only for abuse of discretion, see Ellis v. Metropolitan
Life Ins. Co., 126 F.3d 228, 232 (4th Cir. 1997), and it found no
abuse of discretion in the administrator’s decision here.
Alternatively, the district court held that even if it “were to
employ a de novo standard of review,” it would reach the same
conclusion, i.e., grant summary judgment to CIBC.
The court explained that the Plan language was “broad” and it
“could think of no plausible reason why a forgivable loan issued to
[Byrd] that was clearly in excess of his standard commission would
not fall within” the Plan’s definition of a Special Payout
Arrangement. The court concluded that Byrd’s contrary
interpretation of the Plan “forces a strained reading of the
special payout provision, particularly given the evidence that
within the brokerage community, the term ‘special payout
arrangement’ commonly includes forgivable loans.” Byrd now
appeals.
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III.
We review the grant of summary judgment de novo, “employing
the same legal standards applied by the district court.” Elliott
v. Sara Lee Corp., 190 F.3d 601, 605 (4th Cir. 1999). After
careful review of the record, the parties’ briefs and oral
arguments, and the relevant case law, we affirm on the reasoning of
the district court. Like the district court, we find CIBC’s
interpretation of the plan correct, no matter what standard of
review is applied. We agree that the Plan’s language unambiguously
excludes recipients of employee forgivable loans from eligibility
for receipt of the Firm Initial Credit; there is no reason not to
construe the up-front cash payment to Byrd as anything other than
a “payout in excess of” the standard commission policy. Under the
plain language of the Plan the employee forgivable loan therefore
disqualified Byrd from receiving the Firm Initial Credit.
For these reasons, the judgment of the district court is
AFFIRMED.
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