Andrew Nalbandian, Jr. v. Lockheed Martin Corporation ( 2013 )

FILED
NOT FOR PUBLICATION MAY 24 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ANDREW J. NALBANDIAN, Jr., an No. 11-17242
individual; et al.,
D.C. No. 5:10-cv-01242-LHK
Plaintiffs - Appellants,
v. MEMORANDUM*
LOCKHEED MARTIN CORPORATION,
a Maryland corporation and LOCKHEED
MARTIN CORPORATION SALARIED
EMPLOYEE RETIREMENT PROGRAM,
an employee pension plan within the
meaning of 29 U.S.C. 102(2)(a) and
1002(35),
Defendants - Appellees.
Appeal from the United States District Court
for the Northern District of California
Lucy Koh, District Judge, Presiding
Submitted May 17, 2013**
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: McKEOWN and WATFORD, Circuit Judges, and ZILLY, Senior District
Judge.***
Andrew J. Nalbandian, Sr., terminated his employment with Lockheed
Martin Missiles and Space Corporation (“Lockheed”) approximately two weeks
before he died. Because he did not live to the date upon which his retirement
benefits were to commence under the Lockheed Martin Corporation Salaried
Retirement Program (“the Plan”), Lockheed determined that no benefits were
payable to Mr. Nalbandian’s designated beneficiaries. Mr. Nalbandian’s
beneficiaries appealed the denial of benefits under ERISA and the district court
granted summary judgment in favor of Lockheed. We have jurisdiction pursuant
to 28 U.S.C. § 1291, and we AFFIRM.
Appellants contend that the district court should have reviewed Lockheed’s
denial of benefits de novo. Jebian v. Hewlett-Packard Co., 349 F.3d 1098 (9th Cir.
2003), on which they rely for that proposition, is factually distinguishable.
Further, subsequent case law clarifies that a procedural error by a plan
administrator does not change the applicable standard of review from abuse of
discretion to de novo review. Instead, a procedural error by the administrator is
***
The Honorable Thomas S. Zilly, Senior District Judge for the U.S.
District Court for the Western District of Washington, sitting by designation.
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one factor that the district court should consider in determining whether the
administrator abused its discretion. Salomaa v. Honda Long Term Disability Plan,
642 F.3d 666, 674 (9th Cir. 2011) (procedural errors committed by the
administrator must be “weighed in deciding whether the administrator’s decision
was an abuse of discretion.”); see also Conkright v. Frommert, 559 U.S. 506, 130
S. Ct. 1640, 1644 (2010) (“single honest mistake in plan interpretation” does not
strip administrator of deference). In the present case, the district court properly
applied the abuse of discretion standard, taking into consideration the structural
conflict of interest and alleged procedural errors in the claims handling process.
Appellants argue that the district court failed to adequately analyze the
structural conflict of interest. Because Appellants did not bring to light any
evidence of actual bias in the claims review process, the district court properly
concluded that the structural conflict of interest “only slightly increases the Court’s
level of skepticism during review for abuse of discretion.” This is consistent with
our reasoning in Montour v. Hartford Life & Accident Ins. Co., that the weight
afforded to a conflict of interest should be adjusted “based on the degree to which
the conflict appears improperly to have influenced a plan administrator’s decision.”
588 F.3d 623, 631 (9th Cir. 2009).
Appellants argue that Lockheed abused its discretion in denying benefits
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under the terms of the Plan. However, Mr. Nalbandian selected the Guaranteed
Period Option which provides guaranteed payments to the participant for a period
of five years, with the proviso that “if he shall die after the Benefit
Commencement Date and before 60 . . . monthly payments have been made” such
payments shall be made to the beneficiary of the participant for the remainder of
the 60-month period. Mr. Nalbandian passed away before his Benefit
Commencement Date, as that term is defined by the Plan. As a result, his
beneficiaries are not entitled to benefits.
Appellants contend that the district court erred by dismissing their claim for
equitable estoppel. This argument fails because the Plan terms concerning
payment of benefits under the Guaranteed Period Option are not ambiguous.
Watkins v. Westinghouse Hanford Co., 12 F.3d 1517, 1527 (9th Cir. 1993).
AFFIRMED.
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