
USCA1 Opinion

	




          March 10, 1993    UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                     ____________          No. 92-1977                               LUIS E. RODRIGUEZ-ABREU,                                Plaintiff, Appellant,                                          v.                           THE CHASE MANHATTAN BANK, N.A.,                                 Defendant, Appellee.                                     ____________                                     ERRATA SHEET               The  opinion of this court  issued on February  25, 1993, is          amended as follows:               Page  6, line 3:  Replace "Fed.  R. Civ. Pro." with "Fed. R.          Civ. P."                Page 11, line 3:  In the citation to Northwestern Nat'l Ins.                                                    _______________________          Co.,  908  F.2d 1077,  1984 (1st  Cir.  1990), delete  "1984" and          ___          insert in its place "1084".          February 25, 1993 UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 92-1977                               LUIS E. RODRIGUEZ-ABREU,                                Plaintiff, Appellant,                                          v.                           THE CHASE MANHATTAN BANK, N.A.,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                    [Hon. Hector M. Laffitte, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                 Selya, Circuit Judge,                                        _____________                            Bownes, Senior Circuit Judge,                                    ____________________                                Stahl, Circuit Judge.                                       _____________                                 ____________________               Jorge M. Silva-Cu tara, for appellant.               ______________________               Jay  A.  Garc a-Gregory, with  whom Arturo  Bauermeister and               _______________________             ____________________          Fiddler, Gonzalez & Rodriguez, were on brief, for appellee.          _____________________________                                 ____________________                                  February 25, 1993                                ____________________                     BOWNES, Senior  Circuit Judge.  The  plaintiff, Luis E.                    BOWNES, Senior  Circuit Judge.                            _____________________          Rodriguez-Abreu ("Rodriguez"), appeals  summary judgment  granted          in  favor  of  the  defendant,  The  Chase Manhattan  Bank,  N.A.          ("Chase"), on  cross motions  for summary  judgment  in his  suit          brought pursuant  to the Employee Retirement  Income Security Act          of  1974,  as  amended, 29  U.S.C.     1001  et seq.,  ("ERISA").                                                       _______          Finding that summary judgment was appropriate, we affirm.                                          I.                                          I.                                      BACKGROUND                                      BACKGROUND                                      __________                     Rodriguez's  claims  involve   two  employee   benefit          programs offered  by Chase:   (1)  the Long-Term Disability  Plan          ("LTDP"),  and (2) the Voluntary  Separation Plan ("VSP").    The          LTDP  provides  a  continuing   source  of  income  for  eligible          employees who become disabled and unable to work for a continuous          period  of  six months  or longer.   The  VSP was  a new  plan of          limited  duration introduced by Chase in August of 1990 to reduce          its work force.   The  VSP offered employees  who applied  before          September  10, 1990,  and who  were accepted  into the  program a          package  of  benefits:   severance pay;  up  to twelve  months of          health care costs coverage; up to twelve months of coverage under          the  Chase   life  insurance  plan,  and   group  counselling  to          facilitate transition  to another job with  a different employer.          The VSP application contained waiver and release provisions.                    Rodriguez  was employed  by  Chase from  1957 until  he                                          4          resigned effective September  21, 1990, as  a participant in  the          VSP.   The parties stipulated that Rodriguez was absent from work          from March 19 until the effective date of  his resignation due to          a heart  ailment.1    While  he  was absent,  Rodriguez was  paid          first through his accumulated vacation and sick leave and then by          Chase through a special paid sick leave.  Rodriguez did not apply          for or receive LTDP benefits before his resignation from Chase.2                     Chase introduced  the VSP  on August 8,  and Rodriguez          attended  the  orientation   meeting  on  August  10.     At  the          orientation,   Rodriguez   inquired  as   to  whether   he  could          participate  in both the VSP and LTDP, and the Chase Compensation          Manager  informed  him  that   the  Bank  would  investigate  his          question.   On  August 17,  Rodriguez met  with  Migdalia Lebron,                                        ____________________               1   The  district  court stated  in  its Opinion  and  Order          granting  summary judgment  for Chase  that Rodriguez  was absent          from  March 6  until  he resigned  effective  September 21.    On          appeal, Chase argues that Rodriguez was not continuously disabled          for  the requisite six months prior to his resignation to qualify          him  for LTDP  benefits.   Chase  points to  other dates  used to          determine the  date of  disability: (1) Statement  of Uncontested          Material Facts in the Pretrial Order that Rodriguez stated in his          Disability-Benefits Application  Form signed on June  22, that he          had  been unable to  work since  April 25,  and (2)  the parties'          stipulation  that  the  disability  period  for  Social  Security          benefits began on April 26.    Rodriguez   replies   that   Chase          should be held to the stipulated date, March 19, for absence from          work.                 2   Rodriguez stated in his letter to the Plan Administrator          of the LTDP, dated October  17, 1990, that he had been  told that          he  could  not submit  claims for  LTDP  benefits until  his non-          occupational disability insurance benefits ended  in September or          October of 1990.  On appeal he explains that he did not apply for          LTDP benefits because the Chase representatives  told him that he          would  have to  withdraw his  application for  the VSP  before he          could apply for LTDP benefits.                                          5          Employee Benefits Officer of Chase, and asked about participation          in both the  VSP and LTDP.   She told him that she  would ask the          Plan Administrator in  New York.   Also on  August 17,  Rodriguez          signed the  Application and  Release for  the VSP which  provided          that it could be withdrawn before  September 10.  During the week          of  August 20, Mrs. Lebron  informed Rodriguez that  he could not          participate  in both the LTDP and the  VSP and that he would have          to withdraw  his application for  the VSP  in order to  apply for          LTDP benefits.   Rodriguez did  not withdraw his  application for          the  VSP.   Rodriguez's  application  was  accepted by  Chase  on          September  13, and  his  voluntary separation  from Chase  became          effective on September 21, 1990.                    On  October   17,   Rodriguez   wrote   to   the   Plan          Administrator  of the LTDP  requesting a  review of  the decision          that he was not  entitled to benefits from both  programs, review          of  the amount  awarded for  severance, and  copies of  the "Plan          Administration"  books for the two  plans.  Chase  responded by a          letter from Charles A. Smith,  Executive Vice President of Chase,          dated December 28, that Rodriguez's eligibility for LTDP benefits          ended on  September 21  with the  termination of  his employment,          that he had given up his rights to LTDP benefits when he chose to          participate  in  the VSP  and  denied  his  claim  for  increased          severance benefits.  Chase provided summary plan descriptions for          the  VSP and  LTDP and  provided a  telephone number  for further          questions.  On January 30, 1991, Rodriguez, through a letter from          his  attorney, requested review of the October determination as a                                          6          "final administrative appeal," and  again requested copies of the          "Plan  Administration"  booklets.     Chase  affirmed  denial  of          Rodriguez's claims on March 12  and sent more copies of the  plan          summaries  for  the  VSP   and  LTDP.    Chase  sent   the  "Plan          Administration"  booklets  on  May  2, 1991.    In  the meantime,          Rodriguez had begun the present action against Chase.3                    Both  Chase  and  Rodriguez filed  motions  for summary          judgment.   The district court granted Chase's motion for summary          judgment, and  also granted Rodriguez's claim  that his severance          pay benefits  should have  been  determined based  upon his  last          scheduled salary  review, and  awarded him the  increased amount.          On appeal,  Rodriguez contends that  he was  entitled to  receive          long-term  disability benefits  which were  denied by  Chase, and          that  the district  court should  have imposed  sanctions against          Chase  for  its  delay  in  providing  Rodriguez  with  requested          information  about Chase's  long-term disability  plan.   Neither          party  appeals  the  district   court's  award  to  Rodriguez  of          increased severance benefits.                                         II.                                         II.                                        ____________________               3   The issue of  exhaustion of administrative  remedies has          not been raised  in this case.  Most courts,  including this one,          generally require exhaustion of  administrative remedies in ERISA          cases.  Drinkwater  v. Metropolitan Life Insurance  Co., 846 F.2d                  __________     ________________________________          821,  826 (1st Cir.), cert.  denied, 488 U.S.  909 (1988); United                                _____  ______                        ______          Paperworkers v. International Paper Co., 777 F. Supp. 1010,  1014          ____________    _______________________          (D.  Me. 1991)  (collecting cases).   Under the  circumstances in          this case, particularly in  light of the fact that  the plaintiff          did not receive the information which  specified the final appeal          process to the Named  Fiduciaries until after suit was  begun, we          will  not  address  the  issue of  exhaustion  of  administrative          remedies.                                          7                                  STANDARD OF REVIEW                                  STANDARD OF REVIEW                                  __________________                    We follow the familiar  standard when reviewing summary          judgment in ERISA actions.   Allen v. Adage, Inc., 967 F.2d  695,                                       _____    ___________          699 (1st Cir. 1992);  Manchester Knitted Fashions v. Amalgamated,                                ___________________________    ___________          967  F.2d  688,  693  (1st  Cir.  1992).    Summary  judgment  is          appropriate  if  the factual  materials  submitted  to the  court          establish  that there is no genuine dispute as to material facts,          and if  the moving party is  entitled to judgment as  a matter of          law. Fed. R. Civ. P. 56(c);  Burnham v. Guardian Life Ins. Co. of                                       _______    _________________________          Am., 873  F.2d 486,  488  (1st Cir.  1989).   Our  review of  the          ___          district  court's grant of summary  judgment is both  de novo and                                                                __ ____          plenary:  we review  afresh the entire  record in the light  most          favorable to  Rodriguez, resolving  all inferences in  his favor.          August v. Offices Unlimited,  Inc., No. 91-2329, slip op.  at 7-8          ______    ________________________          (1st Cir.  Dec. 11, 1992);  Allen, 967 F.2d  at 699; Williams  v.                                      _____                    ________          Caterpillar, Inc., 944 F.2d 658, 661 (9th Cir. 1991).          _________________                    A district court reviews  ERISA claims arising under 29          U.S.C.    1132(a)(1)(B)4  de  novo unless  the  benefits plan  in                                    __  ____          question  confers upon the administrator "discretionary authority                                        ____________________               4 Although Rodriguez did not specify the statutory authority          in his complaint to the district court, his claims arise under 29          U.S.C.   1132(a)(1)(B) which specifies:                         (a) Persons empowered to bring a civil                              action                    A civil action may be brought--                         (1) by a participant or beneficiary--                                   . . .                              (B) to recover benefits due to him                          under the terms of his plan,  to enforce                         his rights under the  terms of the plan,                         or  to  clarify  his  rights  to  future                         benefits under the terms of the plan[.]                                          8          to determine eligibility for benefits or to construe the terms of          the plan." Firestone Tire  & Rubber Co. v.  Bruch, 489 U.S.  101,                     ____________________________     _____          115  (1989).  Interpretation of terms of a plan and determination          of  the validity of claims  are not, in themselves, discretionary          functions.   Id.  at  112,  115.   The  Firestone  rule has  been                       ___                        _________          interpreted  to mean  that  a benefits  plan  must clearly  grant          discretionary  authority  to the  administrator  before decisions          will  be  accorded  the deferential,  arbitrary  and  capricious,          standard of  review.  Brown  v. Ampco-Pittsburgh Corp.,  876 F.2d                                _____     ______________________          546, 550 (6th Cir. 1989).                         In this case, the district court employed the de novo                                                                  __ ____          standard  based  upon its  findings  that  Rodriguez's claim  was          denied by the Plan  Administrator5, and neither the LTDP  nor the          Plan  Administration Booklet  granted discretionary  authority to          the  Plan Administrator  necessary  to invoke  the arbitrary  and          capricious standard.   The  Plan Administration  Booklet contains          the only direct statements  of authority for determining benefits          under Chase's benefit plans:                    Named Fiduciaries                    The Named Fiduciaries have  general authority                    over  the administration and operation of the                    Plans.                            . . .                        Plan Administrator                    The    Plan   Administrator    is   primarily                    responsible    for    the   publication    of                                        ____________________               5  The  Plan  Administration  Booklet  identifies  the  plan          administrator  for  all  of   Chase's  benefit  programs  as  the          Corporate Human Resources Executive.                                          9                    information  to  Plan  participants  and  the                    filing of reports regarding the Plans.                          . . .                    In  making   a  final  decision,   the  Named                    Fiduciaries    or   their    delegates   have                    discretion  in  interpreting  the meaning  of                    Plan provisions and in  determining questions                    of fact.                      Rodriguez did not make a written request of the Named Fiduciaries          as  provided  in the  Plan Administration  Booklet, but  sent his          letter of  October 17, requesting a  review of the denial  of his          LTDP  benefits, to  the  Corporate Human  Resources Executive  of          Chase.   His letter was  answered by Charles  A. Smith, Executive          Vice President  of  Chase, and  further communication  concerning          Rodriguez's claims for LTDP benefits and additional severance pay          was with Mr. Smith.           Chase  contends  that the  district          court should have used the deferential, arbitrary and capricious,          standard because the Plan Administrator (Smith) was acting as the          delegate of  the Named Fiduciaries who  are granted discretionary          authority.  Chase points to the fact that Smith used "we" instead          of "I" in his  response to Rodriguez's final request  which Chase          suggests  means  that   Smith  was  acting   on  behalf  of   the          Fiduciaries.  Chase also argues  that because Smith was answering          Rodriquez's final request for review, his response was  the final          determination of Rodriguez's claim on behalf of the Fiduciaries.                      As the  district court  found, neither the  LTDP, the          VSP,  nor  the  Plan  Administration  booklet  granted  the  Plan          Administrator discretionary authority to review claims.  The Plan                                          10          Administration  booklet granted  the Plan  Fiduciaries, or  their          delegates,  discretionary   authority.     ERISA   allows   named          fiduciaries  to  delegate  responsibilities (other  than  trustee          responsibilities)  through express  procedures  provided  in  the          plan.   29 U.S.C.   1105(c)(1).6   To be an  effective delegation          of discretionary  authority so  that the deferential  standard of          review  will   apply,  therefore,  the  fiduciary  must  properly          designate a delegate for the fiduciary's discretionary authority.          Madden v. ITT Long  Term Disability Plan, 914 F.2d  1279, 1283-84          ______    ______________________________          (9th Cir. 1990).                    Chase's claim that Smith was  acting as the delegate of          the Fiduciaries fails for  lack of evidence.  First,  Chase fails          to point to  any plan provisions which provide express procedures          for the delegation of  the Fiduciary's discretionary authority to          a  delegate, and  we  have found  none.     Second,  there is  no          expression  of intent  that  Smith act  as  the delegate  of  the          Fiduciaries and  Smith did not claim to be acting on behalf of or          as the delegate  of the  Fiduciaries.  Instead,  Chase relies  on          inferences from the circumstances to establish that Smith was the          delegate of the Fiduciaries, which  we find insufficient to prove                                        ____________________               6  29 U.S.C.   1105(c)(1) provides:                    The   instrument  under   which  a   plan  is                    maintained   may    expressly   provide   for                    procedures   (A)  for   allocating  fiduciary                    responsibilities    (other    than    trustee                    responsibilities)  among  named  fiduciaries,                    and  (B) for  named fiduciaries  to designate                    persons other than named fiduciaries to carry                    out  fiduciary  responsibilities (other  than                    trustee responsibilities) under the plan.                                          11          delegation   of  discretionary  authority,  particularly  in  the          context  of Chase's  motion for  summary judgment.   Because  the          relevant plan documents did  not grant discretionary authority to          the  Plan  Administrator  and   the  Named  Fiduciaries  did  not          expressly  delegate their  discretionary  authority to  the  Plan          Administrator, we find that the district court correctly employed          the de novo standard of review.              __ ____                                                     III.                                         III.                                      DISCUSSION                                      DISCUSSION                                      __________                    ERISA   regulates   employee   benefit  plans   through          standards of conduct for fiduciaries, requirements of information          disclosure, schedules  for accrual and vesting  of pension funds,          and  by providing remedies and access  to the courts. 29 U.S.C.            1001(b); Massachusetts  v. Morash,  490 U.S. 107,  112-13 (1989).                   _____________     ______          The plans in  question, the VSP and the LTDP,  are both "employee          welfare benefit plans" under  ERISA and as such, are  not subject          to the  stringent vesting, participation and funding requirements          imposed  by ERISA on "employee pension benefit plans."  29 U.S.C.            1002(1) & (2); Allen, 967 F.2d at 698; Bellino v.  Schlumberger                           _____                   _______     ____________          Technologies, Inc., 944 F.2d  26, 29 (1st Cir. 1991);  Wickman v.          __________________                                     _______          Northwestern  Nat'l  Ins. Co.,  908 F.2d  1077, 1082  (1st Cir.),          _____________________________          cert.  denied,  111 S.  Ct. 581  (1990).   When  interpreting the          _____  ______                                          12          provisions of  an ERISA benefit plan, we  use federal substantive          law    including   the   "'common-sense    canons   of   contract          interpretation.'"   Bellino, 944 F.2d  at 29 (quoting  Burnham v.                              _______                            _______          Guardian  Life Ins.  Co.  of Am.,  873  F.2d 486,  489  (1st Cir.          ________________________________          1989)).  Both trust and contract principles apply to interpreting          ERISA plans.   Allen, 967  F.2d at 698.   Because  ERISA preempts                         _____          state  law related to employee  benefit plans for  the purpose of          providing  a  uniform body  of law,  federal  case law  which has          developed  in  interpreting  ERISA   plans  governs  rather  than          individual states' rules of  contract interpretation.  Sampson v.                                                                 _______          Mutual Benefit Life Ins. Co., 863 F.2d  108, 110 (1st Cir. 1988).          ____________________________          Because  state law provides the richest source of law of contract          interpretation, we have incorporated  state law principles in the          process of developing a body  of federal common law.  Wickman  v.                                                                _______          Northwestern  Nat'l  Ins.  Co., 908  F.2d  1077,  1084  (1st Cir.          ______________________________          1990).7  A.  Eligibility for LTDP Benefits                   A.  Eligibility for LTDP Benefits                       _____________________________                    The terms  of  the LTDP  require  that an  employee  be          continuously  disabled for  six consecutive  months by  a covered          disability  before  the  employee  will be  eligible  to  receive                                        ____________________               7 Puerto Rico, where  the parties in this action  reside and          where the contract  was made,  has codified its  law of  contract          interpretation as follows:                       If the  terms of a contract  are clear and                    leave no  doubt as  to the intentions  of the                    contracting parties, the literal sense of its                    stipulations shall be observed.                       If the words should appear contrary to the                    evident intention of the contracting parties,                    the intention shall prevail.          P.R. Laws  Ann. tit. 31,    3471 (1990);  see also Simcox  v. San                                                    ___ ____ ______     ___          Juan Shipyard, Inc., 754 F.2d 430, 445-46 (1st Cir. 1985).          ___________________                                          13          benefits.   Rodriguez claims that he was eligible to receive LTDP          benefits when  his employment terminated  pursuant to the  VSP on          September 21  because the requisite six-month  waiting period had          passed  since the onset of  his illness.   He never received LTDP          benefits  nor did  he  apply for  them.8   On  appeal, Chase  has          raised  an   issue  about  the  beginning   date  of  Rodriguez's          disability for  purposes of determining his  eligibility for LTDP          benefits  before his resignation  from Chase.   Chase argues that          the date of  absence or onset of  illness is not the  same as the          beginning  of disability  for purposes of  the LTDP,  and asserts          that Rodriguez's disability did not begin until April.                        Chase's  argument  raises  issues  of  fact  which,  if          material, would require remanding the case to the district court.          The  terms  and  conditions  of the  termination  of  Rodriguez's          employment contained  in the VSP Application and Release  control          the  outcome  of the  case, however,  and  eliminate any  need to          pursue  the factual dispute about the inception of disability and          the date of Rodriguez's eligibility for LTDP benefits.          B.  Release of Benefits and Claims in the Application for VSP          B.  Release of Benefits and Claims in the Application for VSP              _________________________________________________________                    We assume  for purposes of this  decision only, without          resolving disputed  facts and without reference  to relevant LTDP          provisions  or applicable  law,  that Rodriguez  would have  been          entitled to LTDP benefits on or before the date of termination of          his employment  with Chase  if he  had not  applied for and  been          accepted for the VSP.  Within that framework, we next examine the                                        ____________________               8 See supra note 2.                     _____                                          14          effect of the  release and waiver  provisions in the  Application          and  Release  for  the   Chase  Manhattan  Bank,  N.A.  Voluntary          Separation Program (VSP Application and Release).                    The VSP  Application and Release is  a contract between          Rodriguez  and Chase  establishing  the mutual  rights, benefits,          obligations and waivers involved in the VSP. Interpretation  of a          contract  presents a question of law for this court to determine.          Fashion House,  Inc. v. K  Mart Corp.,  892 F.2d 1076,  1083 (1st          ____________________    _____________          Cir. 1989).  "[A] contract is to be interpreted in a manner which          gives reasonable effect to its terms and conditions."  Manchester                                                                 __________          Knitted Fashions, 967 F.2d at 694.  Contract language in an ERISA          ________________          action is  to be given its  plain meaning.  Burnham,  873 F.2d at                                                      _______          489.   Determining whether contract language is ambiguous is also          a  question of  law, and  contract language  is ambiguous  if the          terms  are  inconsistent on  their face,  or  if the  terms allow          reasonable   but  differing  interpretations  of  their  meaning.          Federal Deposit  Ins. Corp. v.  Singh, 977 F.2d 18,  22 (1st Cir.          ___________________________     _____          1992);  Fashion  House, Inc., 892 F.2d at 1083.   If the language                  ____________________          of   the  contract   is   ambiguous,  we   turn  to   surrounding          circumstances,  undisputed  extrinsic  evidence,  to  divine  the          parties'  intent.   Lumpkin v.  Envirodyne Industries,  Inc., 933                              _______     ____________________________          F.2d 449, 456  (7th Cir.), cert.  denied, 112  S. Ct. 373  (1991)                                     _____  ______          (interpreting a release in an ERISA action); Restatement (Second)          of Trusts    24 cmt.  b, and    164 cmt.  e (1959).   Unlike  the          interpretation of  ambiguous  terms in  insurance policies  which          uses  the  doctrine of  contra  proferentem,   when  interpreting                                  ______  ___________                                          15          severance pay plans  in the  ERISA context, we  generally do  not          construe ambiguous terms against the drafter.  Allen, 967 F.2d at                                                         _____          701.   Summary judgment based  upon the construction  of contract          language  is appropriate only if  the meaning of  the language is          clear,   considering  all   the  surrounding   circumstances  and          undisputed evidence of intent,  and there is no genuine  issue as          to  the  inferences  which might  reasonably  be  drawn from  the          language.  Healy  v. Rich  Products Corp., No.  92-7398, 1992  WL                     _____     ____________________          358117 at *4  (2d Cir. Dec.  7, 1992) (quoting  Science Corp.  v.                                                          _____________          Rochdale  Village, Inc., 920 F.2d  147, 151 (2d  Cir. 1990)); see          _______________________                                       ___          also  Singh, 977 F.2d 18, 21 (1st Cir. 1992); Allen, 967 at  699,          ____  _____                                   _____          701-02.                    The VSP Release and  Application consists of two parts,          (1)  Application and  (2) Full  and Final  Waiver and  Release of          Claims.   The second section, entitled "Full and Final Waiver and          Release of Claims,"  states in pertinent part:                             In return for the benefits available to me                    under the  VSP, the  sufficiency of which  is                    hereby  acknowledged,  I  fully  and  finally                    waive,  discharge  and  release  any  and all                    claims  of  whatsoever   nature,  known   and                    unknown,   other  than   my   right  to   the                               ___________                    enforcement of  the terms  of the VSP  and my                                                               __                    rights  to  vested benefits  which  have been                    _____________________________________________                    accrued, funded  and vested to  date, against                    ____________________________________                    The  Chase  Manhattan  Bank,  N.A.,  .   .  .                    including  but not  limited to,  claims under                    . . . the Employee Retirement Income Security                    Act of 1974, . . . .          (Emphasis added.)   Both  parties contend  that  the language  is          plain   and   unambiguous,   but   they   disagree    about   the          interpretation.  Rodriguez contends that the emphasized  language                                          16          excepts  his right to LTDP  benefits from the  waiver because his          right  to  those   benefits  had  "vested":     his  rights  were          established and  fixed because  he had fulfilled  the eligibility          requirements  and, therefore,  he was  entitled to  the benefits.          Chase counters  that  "vested", as  used  in the  release,  means          pension benefits  which are the  benefits that ERISA  requires to          vest.   Because  the parties  attribute reasonable  but differing          meanings to the term "vested", we find that the term is ambiguous          as used in  the emphasized  language of the  VSP Application  and          Release.                       The  Second Circuit has  recently addressed the meaning          of "vested" in the context of an exception to a release clause in          a  stock purchase  agreement which  involved release  of benefits          from  ERISA plans in Healy  v. Rich Products  Corp., No. 92-7398,                               _____     ____________________          1992 WL 358117  (2d Cir. Dec 7, 1992).   The plaintiff, in Healy,                                                                     _____          had  specifically  requested that  language  be  inserted in  the          release  to except  particular plans  from  which he  was already          receiving benefits.  The defendant  added language to the release          using  the  term  "vested"   apparently  to  effect  the  purpose          requested  by  the plaintiff,  and  then  claimed on  motion  for          summary  judgment that  the  term "vested"  did  not include  the          plaintiff's benefits.   The  district court  did not address  the          intent  of  the  parties,  but  instead  used the  definition  of          "vested" from the ERISA  statute as applied to pension  plans and          found that the term did not include the plaintiff's benefits.  On          appeal,  the Second  Circuit  held that  the  term could  not  be                                          17          defined by the ERISA statute because the plans at issue were  not          ERISA pension plans.   Accord Bellino, 944 F.2d  at 31 ("we  give                                 ______ _______          preeminence  to the natural meaning  of ERISA plan  terms, and we          may not supplant  such meaning with rigid definitions or contrary          interpretations offered by the parties.")  The Second Circuit, in          Healy, remanded the case  to the district court to  determine the          _____          meaning of "vested" according  to ordinary principles of contract          interpretation with reference to  evidence of the parties' intent          from the  surrounding circumstances including  extrinsic evidence          of  intent if necessary.  In the  case before us, the evidence of          intent is  undisputed and does not  require factual determination          by the district court.                      To divine the  parties' intent in this case, we examine          the VSP Application  and Release  as a whole  and the  undisputed          circumstances surrounding  the formation of the contract.  In the          Application   section,   the  Separation   Incentive  sub-section          provides:  "I understand that, if this application is accepted, I          will receive the  following benefits  in lieu of  any benefits  I          might otherwise receive under Chase's salary continuance  policy:          [benefits  are  listed]."   The LTDP  is  part of  Chase's salary          continuance policy because the  stated purpose of the LTDP  is to          provide a disabled  employee with a  continuing source of  income          during  the disability,  and LTDP  benefits are  determined based          upon  the employee's  monthly base  salary.   The parties  do not          dispute the meaning of  this provision and the meaning  is plain:          Rodriguez agreed to waive his rights to LTDP benefits in exchange                                          18          for the benefits listed in the VSP.                        The undisputed circumstances surrounding  Chase's offer          of  the VSP also demonstrate  that Chase's intent  was to require          waiver  of  other   benefits,  such  as  LTDP  benefits,  by  VSP          participants.  During the orientation and application process for          the  VSP, Rodriguez  asked  the Chase  representative whether  he          could participate in  the VSP  and still  receive LTDP  benefits.          The representative consulted with the Plan Administrator and then          informed Rodriguez that the two plans were mutually exclusive and          that he would have to withdraw his application for the  VSP if he          wanted  to  preserve  his  right  to  apply  for  LTDP  benefits.          Rodriguez decided not to withdraw his VSP application and did not          pursue  his   LTDP  benefits  until  after   his  employment  was          terminated.  Despite Rodriguez's arguments to the contrary, there          can be no genuine dispute that based upon the VSP Application and          Release,  read as a whole,  and Chase's declared  intent that the          VSP and LTDP be mutually exclusive, the plain meaning of "vested"          does not include  Rodriguez's LTDP benefits even  if the benefits          had vested or accrued before the time of the release.                      ERISA  does   not   prohibit  knowing   and   voluntary          relinquishment  of  employee benefits.    Dist.  29, United  Mine                                                    _______________________          Workers v. New  River Co.,  842 F.2d  734, 737  (4th Cir.  1988).          _______    ______________          Further,  the heightened  scrutiny  applied to  waiver of  rights          accrued in ERISA pension  plans does not apply in this case where          the plans involved were  both welfare benefit plans.   See, e.g.,                                                                 ___  ____          Finz v. Schlesinger, 957 F.2d 78, 82 (2d Cir.), cert. denied, 113          ____    ___________                             _____ ______                                          19          S. Ct. 72 (1992).  Issues of relinquishment of rights and  waiver          are  governed by  federal  common law  developed  in ERISA  cases          rather than by particular state law although state law may inform          the  development of  the  federal common  law.   Matter  of  Heci                                                           ________________          Exploration Co.,  Inc., 862 F.2d 513, 523 (5th Cir. 1988).  To be          ______________________          valid,  a  waiver  of  ERISA  benefits  must  be  an  intentional          relinquishment or abandonment of a known right or privilege.  Id.                                                                        ___                                          Rodriguez was  aware of his potential  eligibility for          LTDP  benefits when  he began  the orientation  for the VSP.   He          asked  about receiving  both  VSP and  LTDP  benefits, and  Chase          personnel informed  him that  the plans were  mutually exclusive,          that he  would lose his right  to LTDP benefits if  he elected to          participate in  the VSP, and that  if he wished to  continue as a          Chase  employee and  apply for  LTDP benefits,  he would  have to          withdraw  his   VSP  application.    Rodriguez   admits  that  he          understood  that   he  was   presented  with  a   choice  between          alternatives:   (1)  choose  the VSP,  terminate employment  with          Chase, and  receive the  lump  sum separation  payment and  other          benefits; or  (2) continue  employment with  Chase and  apply for          LTDP benefits.  He was a  management level employee at Chase.  He          consulted  an  accountant  about  the  plans.    Armed  with  the          necessary information concerning his alternatives, Rodriguez made          a voluntary and  informed choice  to participate in  the VSP  and          waive  his right to LTDP benefits.  Under these circumstances, we          find that Rodriguez's  waiver was valid and that  he relinquished                                          20          his  right, if any, to  claim LTDP benefits  after termination of          his employment with Chase pursuant to the terms of the VSP.          C.   Denial of Request for Imposition of Penalties          C.   Denial of Request for Imposition of Penalties               _____________________________________________                    A plan administrator is obligated by statute, 29 U.S.C.            1024(b)(4),9  to provide specified  information about  employee          benefit plans  to  participants  or  beneficiaries  upon  written          request.    In  this  case,  Rodriguez,  and  then  his  counsel,          requested,  in writing,  the  Plan  Administration booklets  from          Chase's  Plan Administrator who sent the plan summary for the VSP          and  the plan  booklet for  the  LTDP instead.    After the  last          request, the  Plan  Administrator sent  the  Plan  Administration          booklet.                     The  district court  denied  Rodriguez's  request  for          penalties to be imposed on Chase's Plan Administrator pursuant to          29  U.S.C.    1132(c)(1)10  on the  grounds  that "Rodriguez  has                                        ____________________               9  29 U.S.C.   1024(b)(4) provides:                       The  administrator   shall,  upon  written                    request  of  any participant  or beneficiary,                    furnish a copy of the latest  updated summary                    plan description, plan  description, and  the                    latest  annual  report, any  terminal report,                    the  bargaining  agreement, trust  agreement,                    contract,  or  other instruments  under which                    the  plan  is established  or operated.   The                    administrator may make a reasonable charge to                    cover  the cost  of furnishing  such complete                    copies.   The  Secretary  may  by  regulation                    prescribe  the  maximum  amount   which  will                    constitute  a  reasonable  charge  under  the                    preceding sentence.               10  29 U.S.C.   1132(c)(1) provides in pertinent part:                    Any  administrator.  .   .(B)  who  fails  or                    refuses  to comply  with  a request  for  any                    information   which  such   administrator  is                                          21          failed  to  show  that  his  rights  were  harmed  or   otherwise          prejudiced by the delay in his receipt of the information and has          not  demonstrated bad faith or  intentional delay on  the part of          the defendant."   The  imposition of  penalties is committed,  by          statute, to  the discretion of the  trial court, and we  will not          overturn the court's determination absent an abuse of discretion.          Fisher v. Metropolitan  Life Insurance Co.,  895 F.2d 1073,  1077          ______    ________________________________          (5th Cir. 1990).                      Although prejudice and bad  faith are not prerequisites          for imposition of penalties, these are factors which the district          court  properly considered  in exercising  its discretion  not to          impose penalties.    Godwin  v.  Sun Life  Assurance  Company  of                               ______      ________________________________          Canada, No. 91-1368, 1992  U.S. App. LEXIS 33897, at *9 (5th Cir.          ______          Dec.  31,  1992); Harsch  v. Eisenberg,  956  F.2d 651,  662 (7th                            ______     _________          Cir.), cert. denied, Bihler  v. Eisenberg, 113 S. Ct.  61 (1992).                 ____________  ______     _________          Although we acknowledge that  the Plan Administration booklet was          important and should have  been sent, we agree with  the district          court that there is no evidence that the Plan Administrator acted                                        ____________________                    required by this  subchapter to furnish  to a                    participant   or  beneficiary   (unless  such                    failure  or  refusal  results   from  matters                    reasonably   beyond   the   control  of   the                    administrator)   by   mailing  the   material                    requested to  the last known  address of  the                    requesting participant  or beneficiary within                    30 days after such request may in the court's                    discretion  be  personally  liable   to  such                    participant  or beneficiary in  the amount of                    up  to  $100  a day  from  the  date of  such                    failure or refusal, and  the court may in its                    discretion  order  such  other  relief  as it                    deems proper.                                          22          intentionally  or in bad faith by sending the plan booklets after          the first two  requests and then sending  the Plan Administration          booklet  only after the  third request.   We also  agree with the          district court that Rodriguez failed to show that his rights were          prejudiced  by  the delay.   Rodriguez  asserts  that he  was not          informed  of the proper appeal process until he received the Plan          Administration booklet in May, but he does not show how the delay          caused  him harm.11  Therefore,  we find that  the district court          did not  abuse its  discretion by  declining to  impose penalties          against the Plan Administrator.                    Affirmed.  Costs to appellee.                    Affirmed.  Costs to appellee.                    ________   _________________                                        ____________________               11 Because  exhaustion of administrative remedies  is not an          issue  in this case, Rodriguez's  failure to file  a final appeal          with   the   Named  Fiduciaries,   as   provided   in  the   Plan          Administration booklet, has not prejudiced his court action.                                          23
