O'Shea v. UPS Retirement Plan

United States Court of Appeals
For the First Circuit
No. 15-1923
BRIAN O'SHEA, through his Executor Michael O'Shea; MICHAEL
O'SHEA, in his personal capacity, on his own behalf as Plan
Beneficiary, and on behalf of other Plan Beneficiaries, Meghan
O'Shea, John O'Shea and Colleen O'Shea,
Plaintiffs, Appellants,
v.
UPS RETIREMENT PLAN; UNITED PARCEL SERVICE OF AMERICA, INC.;
UPS RETIREMENT PLAN ADMINISTRATIVE COMMITTEE,
Defendants, Appellees,
DOE DEFENDANTS 1, 2, AND 3,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
Before
Thompson, Circuit Judge,
Souter, Associate Justice, and
Barron, Circuit Judge.
Stephen D. Rosenberg, with whom Caroline M. Fiore and The
Wagner Law Group were on brief, for appellants.
J. Timothy McDonald, with whom Megan S. Glowacki and Thompson
Hine LLP were on brief, for appellees.

The Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
September 13, 2016
THOMPSON, Circuit Judge. This suit, arising under the
Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001
et seq., presents the highly sympathetic case of a retiree whose
death one week before his official retirement date, but after his
final day of work, had the unexpected consequence of depriving his
beneficiaries of ten years of payments under an annuity plan.
Though we regret the heartbreaking outcome, after careful
consideration, we must affirm.
I.
We begin with the facts, which are not in dispute. Brian
O'Shea (O'Shea) worked for defendant-appellee United Parcel
Service of America, Inc. (UPS) for 37 years.1 As an employee of
UPS, he participated in the UPS Retirement Plan (Plan).
Unfortunately, in 2008, O'Shea was diagnosed with cancer. He
became eligible for retirement in 2009, and decided to retire at
the end of that year.
O'Shea met with a UPS human resources (HR) supervisor to
discuss the logistics of his retirement in December 2009. The HR
supervisor informed him that he could maximize his time on payroll
by taking his seven weeks of accrued vacation and personal time
1
For ease, to refer to the defendants-appellees UPS, UPS
Retirement Plan, and UPS Retirement Plan Administrative Committee
collectively, we will use "UPS."
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and, thus, delaying his official retirement date.2 It is standard
practice apparently for UPS to advise its employees that they can
redeem their vacation time before officially retiring.
Regrettably, the HR supervisor was not aware at the time that
O'Shea was terminally ill.3
O'Shea took the HR supervisor's advice. He submitted
his retirement application on January 7, 2010, his last day of
work, and indicated that his annuity starting date4 would be March
1, 2010, the day after his official retirement date of February
28, 2010. He chose the "Single Life Annuity with 120-Month
Guarantee" from a host of annuity payment plan options available
under the Plan, and named his four children -- plaintiffs-
appellants Michael O'Shea, Meghan O'Shea, John O'Shea, and Colleen
O'Shea (collectively, the O'Sheas) -- as his beneficiaries. Under
his selected annuity, "a reduced benefit [would] be paid to
[O'Shea] for his lifetime, with a guarantee of 120 monthly
payments."
The application for retirement benefits, executed by
O'Shea, provided, in pertinent part: "I will receive a monthly
2 Before retirement, O'Shea's monthly salary was $7,800.00.
His monthly annuity payments would have been $4,117.35.
3She did know that O'Shea was "in poor health," but apparently
did not realize the "severity of his illness."
4 The "Annuity Starting Date" is "the first day of the first
period for which an amount is payable as an annuity."
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benefit for my lifetime with a guarantee of monthly payments for
a period of 10 years. If I die within the 10-year guarantee
period, my beneficiar[ies] will continue to receive my monthly
benefit amount for the remainder of the guarantee period." The
section of the application where O'Shea listed his beneficiaries'
information provided: "If you die before the guarantee period ends,
your designated beneficiar[ies] will receive payments for the
remainder of the guarantee period." Nowhere in the retirement
benefits application, and at no point during his consultation with
the HR supervisor, was it made explicit that surviving to the
annuity starting date (i.e., March 1, 2010, the day after his
official retirement date) was a prerequisite to the ten-year
payment guarantee. It seems that O'Shea was therefore unaware he
risked forfeiting the ten years of guaranteed payments to his
beneficiaries by delaying his retirement date, especially while
terminally ill.
The retirement benefits application did explain,
however, that the summarized benefit plan designations would be
paid "subject to the terms of the Plan." Section 5.4(d)(iii) of
the Plan, which describes the "Single Life Annuity with 120-Payment
Guarantee" selected by O'Shea, clarifies that "[i]f the
Participant dies after the Annuity Starting Date but before
receiving 120 monthly payments, the monthly payments shall be paid
to the Participant's Beneficiary . . . ." (emphasis added). The
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only provision of the Plan that explicitly provides for a
retirement benefit if a participant dies prior to their annuity
starting date is Section 5.6, which states: "If a vested
Participant dies prior to his Annuity Starting Date, his Spouse or
Domestic Partner will be entitled to receive a Preretirement
Survivor Annuity . . . ."5 (emphasis added).
After submitting his application for retirement
benefits, O'Shea was invited to participate in UPS's Special
Restructuring Program (SRP), which incentivized early retirement
by offering one year's compensation to select employees in exchange
for signing a release of claims and retiring. O'Shea met with his
attorney on February 12, 2010. The same day, he accepted the SRP
and executed the release of claims. In return, O'Shea received a
single, pre-tax payment of $98,800.
The release, which is only a few paragraphs long, defined
the "Released Parties" broadly as UPS and "all related companies,"
including "employee benefit programs (and the trustees,
administrators, fiduciaries, and insurers of such programs)." The
released claims included "all known and unknown claims, promises,
[and] causes of action . . . that [O'Shea] may presently have . .
5
In a section titled "If You Die Before You Retire," the
Plan's summary plan description similarly provides: "If you die
after you become vested in your Plan benefit but before your
retirement benefit begins, your surviving spouse or surviving
Domestic Partner . . . may receive a monthly benefit from the
Plan."
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. against any Released Party." It did not bar claims that accrued
after execution of the agreement. But the release made clear that
O'Shea was "releasing [c]laims that [he] may not know about."
O'Shea passed away on February 21, 2010, one week before
his official retirement date, and eight days before his annuity
starting date. About a month later, defendant-appellee UPS
Retirement Plan Administrative Committee (the Committee) -- the
Plan's claims administrator -- sent the O'Sheas a letter denying
them payments under the annuity plan. The Committee explained
that only O'Shea's spouse, if he had one, would be able to recover
under the Plan.6
The O'Sheas appealed this decision, believing that the
ten years of annuity payments were guaranteed to them regardless
of when their father died. In particular, they argued that nothing
in the Plan "explains what happens if you select the 'Single Life
Certain Annuity With 10-Year Payment Guarantee' . . . and you die
before you retire (without a spouse or partner)."
The Committee denied the appeal on June 1, 2010. Relying
on Section 5.6 of the Plan, the denial letter explained that the
annuity payments were only guaranteed if O'Shea survived to his
6 According to the O'Sheas' initial letter appealing UPS's
denial of benefits, UPS had also called the O'Shea family in "early
March" and explained that the O'Sheas "would not get [their
father's] pension because he died while still an 'active' employee
and did not, in fact, retire."
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annuity starting date, and that O'Shea's death as an active UPS
employee triggered the "Preretirement Survivor Annuity" (payable
only to spouses or domestic partners) in lieu of the "Single Life
Annuity with 120-Month Guarantee."7
The O'Sheas filed a second administrative appeal, this
time with the help of counsel, arguing that UPS breached its
fiduciary duty to their father. Specifically, the O'Sheas asserted
that their father was talked into delaying his retirement date,
that the consequences of the delay were not made clear to him, and
that UPS had misrepresented to him that his payments were
"guaranteed." On October 1, 2010, the Committee once again denied
the appeal. This time the Committee highlighted language in the
retirement application ("if I die within the 10-year guarantee
period"), in addition to Section 5.6, noting that the application
itself "clearly informed [] O'Shea that the only payments to
beneficiaries were if he died within the 10-year guarantee period."
The Committee also explained that any breach of fiduciary duty or
misrepresentation claim had been released by their father when he
decided to participate in UPS's SRP.
7
Although O'Shea was single when he died, his ex-wife
subsequently brought a claim for the "Preretirement Survivor
Annuity" benefits pursuant to a Qualified Domestic Relations
Order. UPS approved her claim, and she began receiving $315.05 a
month under the "Preretirement Survivor Annuity" (as opposed to
the $4,117.35 UPS would have paid monthly under the "Single Life
Annuity with 120-Month Guarantee").
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The O'Sheas then filed suit in district court, seeking
recovery of the ten years of annuity payments allegedly
"guaranteed" under the Plan. Their complaint included two counts:
a claim for benefits under ERISA § 502(a)(1)(B), 29 U.S.C. §
1132(a)(1)(B), and a claim for equitable relief under ERISA
§ 502(a)(3)(B), 29 U.S.C. § 1132(a)(3)(B). The equitable claim
was based on alleged misrepresentations made to O'Shea when he
selected his retirement benefits.
UPS first moved to dismiss the O'Sheas' equitable claim,
arguing that the claim: (1) was barred by the release O'Shea
executed under the terms of the SRP; (2) was barred by the statute
of limitations for breach of fiduciary duty claims under ERISA, 29
U.S.C. § 1113(2); and (3) was precluded by the O'Sheas' ability
"to avail themselves of other remedies." Ruling from the bench,
the district court granted the motion, concluding that any alleged
misrepresentations were made before O'Shea selected his retirement
benefits and, therefore, any potential claim based on those
misrepresentations would have been released under the terms of the
SRP. Because it held that O'Shea had released his equitable claim,
the district court did not address UPS's other arguments for
dismissal.
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The parties then cross-moved for judgment as a case
stated8 on the O'Sheas' remaining claim for benefits under ERISA
§ 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). The district court
ultimately granted UPS's motion for judgment, concluding that
UPS's construction of the Plan terms was not only "plausible," but
"correct" in light of the plain language of the Plan's terms.
O'Shea v. UPS Ret. Plan, 115 F. Supp. 3d 138, 151 (D. Mass. 2015).
The district court found Section 5.4 -- which describes the "Single
Life Annuity with 120-Month Guarantee" selected by O'Shea and
provides "that '[i]f the Participant dies after the Annuity
Starting Date but before receiving 120 monthly payments, the
monthly payments shall be paid to the Participant's Beneficiary,"
id. at 151 (quoting UPS Plan 62) -- to be "the most important
provision of the Plan" and determined that the O'Sheas' reading of
the Plan would render the first clause of Section 5.4 "useless."
Id. Moreover, the district court found UPS's reading of Section
5.6, which provides for "Preretirement Survivor Annuity" payments
8Since the facts were not in dispute, the parties agreed to
resolve the action at a case stated hearing. O'Shea v. UPS Ret.
Plan, 115 F. Supp. 3d 138, 139 & n.1 (D. Mass. 2015) (explaining
that "[a] case stated hearing is a procedure that allows the Court
to make a judgment based on the record in cases where there are
minimal factual disputes" and allows "the Court . . . to 'engage
in a certain amount of factfinding, including the drawing of
inferences'" (quoting TLT Constr. Corp. v. RI, Inc., 484 F.3d 130,
135 n.6 (1st Cir. 2007))).
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to a participant's spouse or domestic partner, to be "[s]imilarly
reasonable." Id. This appeal followed.
II.
On appeal, the O'Sheas argue that UPS's interpretation
of the Plan is arbitrary and capricious, and that the district
court erred in concluding that UPS's reading of the Plan was
correct. The O'Sheas also contend that the district court erred
in dismissing their claim for equitable relief because, they argue,
the claim "came into existence only after the release was executed"
and O'Shea "did not intend knowingly and voluntarily to relinquish
claims involving annuity payments."
A. Claim for Benefits
Our review of the district court's decision is de novo.
Glista v. Unum Life Ins. Co. of Am., 378 F.3d 113, 125 (1st Cir.
2004). Where, as here, the ERISA plan provides the plan
administrator with the authority and discretion to interpret the
plan and to determine eligibility for benefits,9 we must uphold
the administrator's decision "unless it was 'arbitrary,
capricious, or an abuse of discretion.'" Niebauer v. Crane & Co.,
783 F.3d 914, 922-23 (1st Cir. 2015) (quoting Cusson v. Liberty
Life Assurance Co. of Bos., 592 F.3d 215, 224 (1st Cir. 2010)).
9Section 9.3 of the Plan provides that the Committee "shall
have the exclusive right to interpret the Plan and decide any
matters arising in the administration and operation of the Plan"
in a "conclusive and binding" capacity.
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This analysis focuses on whether the record as a whole supports a
finding that the plan administrator's decision was "plausible,"
"or, put another way, whether the decision is supported by
substantial evidence in the record." Id. at 923.
Under this standard, we need not decide the "best
reading" of the Plan. Stamp v. Metro. Life Ins. Co., 531 F.3d 84,
94 (1st Cir. 2008) (quoting Lennon v. Metro. Life Ins. Co., 504
F.3d 617, 624 (6th Cir. 2007)). We need only consider whether
UPS's interpretation of the Plan and its application of the Plan
terms to the facts of this case was "reasoned and supported by
substantial evidence."10 Id. (quoting Wright v. R.R. Donnelley &
10
As an initial matter, although the O'Sheas concede that the
arbitrary and capricious standard of review applies to this case,
they argue that the district court applied "an excessively broad
and incorrect interpretation" of the standard. In general, they
argue that the district court erred: (1) in applying a
"plausibility" standard instead of considering whether the
administrator's interpretation was "reasonable in light of the
facts" and "comport[ed] with the actual language" of the Plan; (2)
by "effectively ignor[ing] ambiguity in the Plan's terms"; and (3)
by improperly reading an exclusion into the Plan in violation of
our case law.
We think the O'Sheas largely misconstrue the district court's
analysis. Far from depending on an "excessively broad"
"plausibility" standard, the district court analyzed the Plan
language and concluded that UPS's interpretation of the Plan was,
in fact, "correct." O'Shea, 115 F. Supp. 3d at 151. Similarly,
the district court did not "ignore" ambiguity in the Plan terms;
it rejected the O'Sheas' arguments that the Plan was ambiguous,
concluding that because it had already ruled that UPS's reading of
the Plan was correct, the O'Sheas' ambiguity arguments "must fail."
Id. Moreover, the district court considered, and rejected, the
O'Sheas' argument that UPS's interpretation would improperly write
an exclusion into the Plan, determining that O'Shea was not, in
fact, excluded from coverage, but that he simply did not satisfy
- 12 -
Sons Co. Group Benefits Plan, 402 F.3d 67, 74 (1st Cir. 2005));
see also Coffin v. Bowater Inc., 501 F.3d 80, 93, 96 (1st Cir.
2007) (reviewing the plan administrator's determination of benefit
eligibility de novo and upholding its interpretation of the plan
because its interpretation was "significantly more persuasive"
than the plaintiffs' interpretation); Kolling v. Am. Power
Conversion Corp., 347 F.3d 11, 14 (1st Cir. 2003) (concluding that
"the Plan administrator has the discretion reasonably to determine
the meaning of [a] phrase [in the Plan]").
In denying the O'Sheas' claim for benefits, UPS
explained that because O'Shea died while still an active employee
(i.e., before his official retirement and subsequent annuity
starting date), O'Shea's spouse, if he had one, would be the only
person entitled to benefits under the terms of the Plan. And, in
fact, Section 5.6, which provides for payments to a participant's
spouse or domestic partner if the participant dies before the
a condition under the Plan that would allow him to receive the
specific benefit he requested. Id. (noting that "what is happening
in this case is not really an exclusion from coverage . . . .
O'Shea was included within the scope of the Plan -- he just did
not receive the benefit he wanted"). Because we conclude, however,
that UPS's interpretation of the Plan is "'significantly more
persuasive' than the interpretation offered by the [O'Sheas]," D
& H Therapy Assocs., LLC v. Boston Mut. Life Ins. Co., 640 F.3d
27, 36 (1st Cir. 2011) (quoting Coffin v. Bowater Inc., 501 F.3d
80, 93, 96 (1st Cir. 2007)), we need not parse the exact contours
of the district court's application of the standard of review, but
will proceed directly to our consideration of whether UPS's
interpretation of the Plan was arbitrary and capricious.
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annuity starting date, is the only provision in the entire Plan
that provides for a benefit when a participant dies before the
annuity starting date.
The provision, cited by UPS in its denial letter,
describes the "Preretirement Survivor Annuity" and provides that
"[i]f a vested Participant dies prior to his Annuity Starting Date,
his Spouse or Domestic Partner will be entitled to receive a
Preretirement Survivor Annuity . . . ." (emphasis added). Section
5.6 does not state explicitly that the "Preretirement Survivor
Annuity" is the exclusive benefit available if a participant dies
before the annuity starting date. But because no other term in
the Plan provides a benefit in that circumstance, UPS's
interpretation -- that Section 5.6 provides the exclusive benefit
when a participant dies before the annuity starting date -- is
certainly within "the bounds of reasonableness." D & H Therapy
Assoc. LLC v. Boston Mut. Life Ins. Co., 640 F.3d 27, 38 (1st Cir.
2011).
In response, the O'Sheas argue that Section 5.6 does not
reference the retirement benefit chosen by O'Shea -- the "Single
Life Annuity with 120-Month Guarantee" -- and, therefore, Section
5.6 does not address "the possible ramifications if a participant
elects that benefit but dies between . . . the retirement election
- 14 -
and . . . the first annuity payment."11 In the O'Sheas' view,
Section 5.4 of the Plan, which describes the annuity selected by
their father, guarantees ten years of monthly payments to the
participant and his beneficiaries once the benefit is elected.12
In support, the O'Sheas note that Section 5.4 does not directly
state that the 120 months of payments will not be made if the
participant dies before reaching the annuity starting date. This
is true. Nevertheless, we read the plain language of Section 5.4
to comport with UPS's interpretation -- that Section 5.4 only
guarantees ten years of payments if the participant survives to
the annuity starting date.
The "Single Life Annuity with 120-Month Guarantee"
available under Section 5.4 of the Plan provides for a reduced
monthly benefit for the participant's lifetime, with 120 monthly
payments "guarantee[d]." Section 5.4(d)(iii) explains that "[i]f
the Participant dies after the Annuity Starting Date but before
11The O'Sheas also spend a substantial amount of time arguing
that because Section 5.6 was mandated by Congress to protect the
rights of surviving spouses, the section should be read narrowly.
This argument is not persuasive. Whether, or not, the language
was required by Congress is irrelevant. The section now appears
in the Plan, and it provides the only benefit available when a
participant dies before the annuity starting date.
12As UPS points out, under the O'Sheas' interpretation of the
Plan, it is not entirely clear when benefits would become
guaranteed: when the participant selects the benefit; when the
necessary paperwork is submitted; or when the paperwork is
accepted.
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receiving 120 monthly payments, the monthly payments shall be paid
to the Participant's Beneficiary, until the Participant and his
Beneficiary have received a total of 120 payments." (emphasis
added). This language clearly seems to suggest that Section 5.4
only guarantees monthly payments to the participant's
beneficiaries when the participant dies after reaching the annuity
state date and, consequently, appears to create a clear
precondition to the "120-Month Guarantee" -- that the participant
reach the annuity start date.
We agree with the district court that the O'Sheas'
proposed interpretation of this section -- that it guarantees
monthly payments to a participant's beneficiaries even if the
participant dies prior to the annuity starting date -- "renders
the first clause of this key phrase completely useless." O'Shea,
115 F. Supp. 3d at 151. The O'Sheas suggest that the phrase is
included only "to reassure the reader that the payments to the
participant and the beneficiaries will still total 120" even if
the participant dies. But that interpretation still reads the
words "after the Annuity Starting Date" out of the clause. If, as
the O'Sheas argue, Section 5.4 guarantees all 120 payments to a
participant's beneficiaries even if the participant dies before
the annuity start date, the Plan would not need to specify that
beneficiaries will receive the 120 payments "[i]f the Participant
dies after the Annuity Starting Date." (emphasis added). It could
- 16 -
simply provide that if the participant dies before receiving 120
monthly payments, the monthly payments will be paid to the
participant's beneficiary. It does not.
Reading Sections 5.4 and 5.6 together, then, we find
UPS's interpretation of the Plan more than reasonable.13 O'Shea's
beneficiaries were eligible to receive either the "Single Life
Annuity with 120-Month Guarantee" -- if O'Shea passed away after
his annuity starting date -- or the "Preretirement Survivor
Annuity" -- if he passed away before the annuity starting date and
had a spouse or domestic partner. Because O'Shea tragically passed
away before his annuity start date, UPS reasonably concluded that
his spouse (or domestic partner) was entitled to the "Preretirement
Survivor Annuity," but that his beneficiaries were not entitled to
the "Single Life Annuity with 120-Month Guarantee."14
13Although not controlling, see CIGNA Corp. v. Amara, 563
U.S. 421, 438 (2011), contrary to the O'Sheas' arguments, the
summary plan documents and the retirement benefits application
also support UPS's interpretation of the Plan. The summary plan
description provides, for example, "[i]f you die after you become
vested in your Plan benefit but before your retirement benefit
begins, your surviving spouse or surviving Domestic Partner . . .
may receive a monthly benefit from the Plan." And the retirement
benefits application provides that the participant "will receive
a monthly benefit for [his] lifetime with a guarantee of monthly
payments for a period of 10 years. If [he] die[s] within the 10-
year guarantee period, [his] beneficiar[ies] will continue to
receive [his] monthly benefit amount for the remainder of the
guarantee period." (emphasis added).
14Because we find UPS's interpretation of the Plan language
much more reasonable than the O'Sheas' interpretation, we need not
consider the O'Sheas' arguments that the Plan is ambiguous (and
how to construe the Plan in the face of ambiguity). See D & H
- 17 -
The O'Sheas attempt to blunt the impact of Section
5.4(d)(iii), arguing that because UPS did not rely on the section
in its denial letters, we may not consider it now. See Niebauer,
783 F.3d at 926 (explaining that "ERISA's notice provision . . .
requires plan administrators to 'provide adequate notice in
writing to any participant or beneficiary whose claim for benefits
under the plan has been denied, setting forth the specific reasons
for such denial, written in a manner calculated to be understood
by the participant'" (quoting 29 U.S.C. § 1133(1))). But the
purpose of ERISA's notice requirements is "to 'insure that when a
claimant appeals a denial to the plan administrator, [he] will be
able to address the determinative issues and have a fair chance to
present [his] case.'" Id. at 927 (alterations in original)
(quoting DiGregorio v. Hartford Comprehensive Emp. Benefit Serv.
Co., 423 F.3d 6, 14 (1st Cir. 2005)). "[S]trict compliance is not
required" so long as "'the beneficiary [was] supplied with a
statement of reasons that, under the circumstances of the case,
permitted a sufficiently clear understanding of the
administrator's position to permit effective review.'" Id.
Therapy Assocs., LLC, 640 F.3d at 36 (noting that although we have
never articulated precise guidelines for determining "when a plan
administrator's construction will be sufficiently reasonable to
warrant deference even though it is only as persuasive or less
persuasive than the interpretation offered by the plaintiffs," we
need not reach the issue when the plan administrator's construction
is "'significantly more persuasive'" than that offered by the
plaintiffs (quoting Coffin, 501 F.3d at 96)).
- 18 -
(second alteration in original) (quoting Terry v. Bayer Corp., 145
F.3d 28, 35 (1st Cir. 1998)).
Here, UPS consistently explained to the O'Sheas that
they were not entitled to the 10-year monthly annuity payments
because their father passed while he was an active (albeit on
leave) employee and prior to his annuity starting date. In its
initial denial, UPS cited to Section 5.6 to support its contention
that because O'Shea had passed away prior to his annuity start
date the "Preretirement Survivor Annuity" was triggered instead of
the annuity payments. In addition, the final denial highlighted
the retirement application's rephrasing of Section 5.4(d)(iii) --
"if I die within the 10-year guarantee period" -- to demonstrate
why their father reasonably should have understood that his
beneficiaries would only receive the annuity payments if he
survived to the annuity starting date. Therefore, the O'Sheas
were clearly on notice of UPS's position that the "Single Life
Annuity with 120-Month Guarantee" was only available to a
participant's beneficiaries if the participant died after reaching
the annuity start date. Given that the O'Sheas have "no credible
claim that [their] understanding of the issues at stake was so
muddled as to inhibit effective review," we see no error in relying
on Section 5.4(d)(iii) even though it was not cited by UPS in its
denial letters. Niebauer, 783 F.3d at 928.
- 19 -
Finally, the O'Sheas argue that UPS's interpretation
improperly incorporates "an unwritten exclusion of a benefit
earned" into the Plan in violation of ERISA. We agree with the
O'Sheas that UPS may not "carve[] out an exclusion from coverage
that is nowhere expressed in the plan itself." Colby v. Union
Sec. Ins. Co. & Mgmt. Co. for Merrimack Anesthesia Assocs. Long
Term Disability Plan, 705 F.3d 58, 65 (1st Cir. 2013). But, as we
have discussed in some detail, the condition that O'Shea had to
survive until his annuity start date was "expressed in the plan
itself." Id.
Moreover, we agree with the district court that UPS's
interpretation of the Plan does not exclude O'Shea from coverage.
See O'Shea, 115 F. Supp. 3d at 151 (noting that "what is happening
in this case is not really an exclusion from coverage"). Rather,
UPS determined that O'Shea simply did not satisfy a condition under
the plan that would allow him to receive the benefit he requested.
If O'Shea had lived past the annuity starting date, his
beneficiaries would have been entitled to the 10-year guaranteed
benefits payments. Unfortunately, O'Shea did not meet this
mandatory precondition for coverage and, instead, his spouse or
domestic partner was entitled to receive the "Preretirement
Survivor Annuity."
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B. Claim for Equitable Relief
The O'Sheas also argue that the district court erred in
dismissing their claim for equitable relief under ERISA
§ 502(a)(3), 29 U.S.C. § 1132(a)(3). They raise two related
arguments: (1) that the district court erred in concluding that
their equitable claim was barred by the SRP release because the
claim came into existence after their father agreed to the SRP;
and (2) that because the claim came into existence after their
father signed the release, he could not have "knowingly and
voluntarily" waived the claim. Although framed as two arguments,
since both arguments rise and fall on the premise that their
equitable claim did not arise until the annuity benefits were
denied by UPS, we will address them both together.
We review the district court's grant of a Rule 12(b)(6)
motion de novo, taking all factual allegations in the complaint as
true and drawing all reasonable inferences in the non-moving
party's favor. Guerra-Delgado v. Popular, Inc., 774 F.3d 776, 780
(1st Cir. 2014). In order to survive a motion to dismiss, a
complaint must contain sufficient factual material to state a
facially plausible claim. Id.
ERISA allows for the knowing and voluntary release of
claims. Smart v. Gillette Co. Long-Term Disability Plan, 70 F.3d
173, 181 (1st Cir. 1995). "To determine whether a waiver is
'knowing and voluntary,'" we examine the totality of the
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circumstances, including: (1) the employee's "education and
business sophistication"; (2) the roles of the employer and
employee in determining the terms of the release; (3) "the clarity
of the agreement"; (4) the amount of time given to the employee to
review the agreement; (5) whether the employee received
independent advice (particularly the advice of counsel); and (6)
the consideration paid in exchange for the release. Morais v.
Cent. Beverage Corp. Union Empls.' Supplemental Ret. Plan, 167
F.3d 709, 713 & n.6 (1st Cir. 1999) (quoting Smart, 70 F.3d at
181).
The O'Sheas do not seem to attack the validity of the
SRP release, and they concede that their father executed the
release paperwork and agreed to relinquish "all known or unknown
claims" in February 2010 -- approximately a month after he
submitted his retirement application and two months after he met
with UPS's HR supervisor.15 They simply argue that their equitable
claim arises from misrepresentations that did not become
actionable "until after [their father] died, when UPS declined,
solely due to [their father's] death, to pay the annuity." But,
by their own account, the alleged misrepresentations occurred when
15
We note that an examination of the relevant factors supports
the conclusion that the release was made knowingly and voluntarily:
the release is short and written in clear, simple language; O'Shea
was given 45 days to review the agreement; he met with his counsel
the same day he executed the agreement; and he was paid $98,800 in
consideration.
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O'Shea met with UPS's HR supervisor in December 2010 and when he
received the Plan documents. In essence, then, they argue that
even though the acts giving rise to the claim occurred before their
father signed the release, the claim did not arise until they
suffered monetary damages.16 This argument conflates the breach
and the remedy.
Under § 502(a)(3), a civil action may be brought "to
enjoin any act or practice which violates any provision of this
subchapter or the terms of the plan, or (B) to obtain other
appropriate equitable relief (i) to redress such violations or
(ii) to enforce any provisions of this subchapter or the terms of
the plan." 29 U.S.C. § 1132(a)(3). Here, the O'Sheas allege that
their father was "misled" by UPS about the terms of the Plan and
that the terms of the Summary Plan Description were unclear and
deceptive. These events occurred (i.e., he was allegedly misled
and provided with deficient Plan documents) when he met with UPS's
HR supervisor to discuss the logistics of his retirement in
December 2009. At that point, O'Shea could have sought equitable
relief -- reformation, for example -- despite the fact that his
beneficiaries had not yet been denied benefits.17 Therefore, when
16 Alternatively, the O'Sheas seem to imply that their
equitable claim did not arise until they discovered the alleged
misrepresentation. But because the SRP release explicitly covered
all undiscovered claims, this argument goes nowhere.
17Monetary loss is not a necessary component of a claim for
equitable relief under § 502(a)(3). See Amara v. CIGNA Corp., 775
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their father executed the release in February 2010, any equitable
claim based on alleged misrepresentations made to their father
when he selected his retirement benefits was released.
Although we are sympathetic to the unfortunate and
unexpected fallout resulting from his untimely death, we need go
no further. O'Shea's claim for equitable relief existed when he
signed the release, and is therefore barred.
III.
For the reasons articulated above, we affirm. Each side
to bear its own costs.
F.3d 510, 513-14, 518-19, 525-26 n.12 (2d Cir. 2014) (implementing
the Supreme Court's decision in Amara and affirming class
certification for plaintiffs who showed "likely harm" resulting
from an employer's inadequate plan summary).
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