Howe v. First Tennessee National Corp. , 256 F. App'x 586 ( 2007 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-1464
JOHN N. HOWE,
Plaintiff - Appellant,
versus
FIRST TENNESSEE NATIONAL CORPORATION, d/b/a
First Horizon National Corporation; FIRST
HORIZON HOME LOAN CORPORATION, formerly known
as FT Mortgage Companies,
Defendants - Appellees.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. William D. Quarles, Jr., District Judge.
(1:05-cv-01468-WDQ)
Submitted: September 17, 2007 Decided: November 29, 2007
Before SHEDD, Circuit Judge, HAMILTON, Senior Circuit Judge, and
Samuel G. WILSON, United States District Judge for the Western
District of Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
James P. Ulwick, Jean E. Lewis, KRAMON & GRAHAM, P.A., Baltimore,
Maryland, for Appellant. Thomas L. Henderson, O. John Norris, III,
LEWIS, FISHER, HENDERSON, CLAXTON & MULROY, L.L.P., Memphis,
Tennessee, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
John Howe brought this action under the district court’s
diversity jurisdiction against his former employer, FT Mortgage
Companies (“FT Mortgage”) and a related corporation, First
Tennessee National Corporation (“First Tennessee”), claiming that
they breached their promise to extend long-term disability benefits
to him beyond the maximum term of his benefits plan.1 The district
court found that the Employee Retirement Income Security Act
(“ERISA”) preempted Howe’s state law claims and denied Howe leave
to amend his complaint to assert an ERISA claim because that
amendment would be futile. We affirm.
I
Howe worked as an asset manager for FT Mortgage for four
years. In 1997, Howe was forced to stop working by a heart
condition and began receiving short-term disability benefits under
FT Mortgage’s benefits plan. On September 3, 1997, near the end of
Howe’s short-term disability period, a benefits counselor at FT
Mortgage sent Howe a letter stating that he understood that Howe
might be applying for long-term disability benefits under the plan.
The 1997 letter explained the long-term disability benefits Howe
1
First Tennessee National Corporation, which does business as
First Horizon National Corporation, is the parent company of First
Tennessee Bank National Association, which, in turn, is the parent
corporation of FT Mortgage Companies. FT Mortgage is now known as
First Horizon Home Loan Corporation.
2
would receive if Howe’s application were approved and concluded:
“[y]our Long-Term Disability Benefits will continue until
03/06/2020 as long you remain disabled. At that time, you will be
eligible to retire from First Tennessee Bank.” The statement that
Howe’s long-term disability benefits would continue until March 6,
2020 when Howe became eligible to retire was in error because Howe
would be 80 years old in 2020 and would have been eligible to
retire 15 years earlier at age 65.
In a separate action in 1998, Howe sued FT Mortgage and First
Tennessee to recover certain retention and severance benefits he
believed he was due. The parties settled the lawsuit. Under the
settlement agreement, FT Mortgage and First Tennessee agreed to pay
Howe $22,144 plus attorney’s fees. In return, Howe agreed to
release FT Mortgage and First Tennessee from all liability to him
except for certain stock options and for the “benefits outlined in
the September 3, 1997 letter from the Company to Mr. Howe . . .
subject to the terms and conditions of the underlying prospectus
and plan documents that govern those benefits.”2
2
The full paragraph contained in the settlement agreement
reads:
Notwithstanding anything to the contrary in this
Agreement, Mr. Howe shall continue to be entitled to the
Company benefits outlined in the September 3, 1997 letter
from the Company to Mr. Howe, attached hereto as Exhibit
A, and the remaining options (which vest and can be
exercised on April 21, 1999 and expire on November 10,
2000) shown on attached Exhibit B, subject to the terms
and conditions of the underlying prospectus and plan
documents that govern those benefits. (emphasis added)
3
Howe brought this state law contract action claiming that the
1998 settlement agreement, which incorporated the 1997 letter,
provided that he would receive long-term disability benefits until
2020 and that FT Mortgage and First Tennessee breached that
agreement by terminating benefits at age 65, in 2005.
Alternatively, Howe sought leave to amend his complaint to claim
that the 1998 settlement agreement and letter constituted an ERISA
plan. The district court held that ERISA preempted Howe’s state
law contract claim. The court also denied Howe leave to amend
because the settlement agreement did not create an ERISA plan and
that even if the agreement had created a plan, it was expressly
subject to the existing plan’s documents which provide that
eligibility for long-term disability terminates when the employee
reaches 65.
II
We agree with the district court and affirm on its reasoning,
which we see no reason to explore further here. We also affirm on
the additional ground that whether we were to apply Maryland
contract law or ERISA to the 1998 settlement agreement, we would
reach the same result because the settlement agreement is expressly
and unambiguously subject to the same underlying plan documents and
under those plan documents Howe’s disability benefits terminated at
age 65.
4
Construction of the meaning of an agreement begins with the
language of the agreement. When the language employed is
unambiguous, the court is required to give effect to its ordinary,
natural or plain meaning. Catawba Indian Tribe of South Carolina
v. City of Rock Hill, 501 F.3d 368, ___ (4th Cir. 2007) (stating
that objective interpretation of contracts gives force to the
language of the contract when it is plain and capable of legal
construction); Honeycutt v. Honeycutt, 822 A.2d 551 (Md. 2003);
Restatement (Second) of Contracts § 202 (1981).
The 1998 settlement agreement expressly subjects Howe’s
disability benefits to the terms and conditions of FT Mortgage’s
plan documents. The plan documents terminate long-term disability
benefits at the time of retirement eligibility, age 65. Howe
attempts to create ambiguity by claiming that only the stock
options listed after the disability benefits in the settlement
agreement are subject to plan documents. However, this court reads
the entire sentence and finds that the unambiguous language of the
settlement agreement forecloses any further argument. Howe’s
benefits are subject to FT Mortgage’s benefits plan, and that plan
terminates benefits at 65.
Therefore, this court finds that Howe is entitled only to
long-term disability benefits provided for in FT Mortgage’s ERISA
plan until age 65, not until 2020 when he reaches age 80.
5
III
For the reasons stated above, this court affirms the judgment
of the district court.
AFFIRMED
6