     Case: 10-30720 Document: 00511477761 Page: 1 Date Filed: 05/13/2011




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                 FILED
                                                                            May 13, 2011
                                       No. 10-30720
                                                                            Lyle W. Cayce
                                                                                 Clerk



DONNA HARGRAVE,

                                                   Plaintiff-Appellee,

versus

COMMONWEALTH GENERAL CORPORATION’S
LONG TERM DISABILITY PLAN,

                                                   Defendant-Appellant.




                    Appeal from the United States District Court
                       for the Western District of Louisiana
                                  No. 6:09-CV-788




Before SMITH, DeMOSS, and OWEN, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*




       *
         Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
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                                     No. 10-30720

       Commonwealth General Corporation’s Long-Term Disability Plan 1 appeals
a summary judgment in favor of Donna Hargrave granting disability benefits
pursuant to § 502(a)(1)(B) of the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B). The main issue is which of two ver-
sions of the Plan applies. Commonwealth argues that, under a 1998 version of
the Plan, it may offset a tort settlement Hargrave received in 1994 against her
2006-2011 benefits, and Hargrave contends that it may not do so under a 1991
version of the Plan. Because Commonwealth’s determination that it may offset
pre-1998 tort settlements against the payment of post-1998 disability benefits
under the 1998 version of the Plan is legally correct, we vacate and remand.


                                            I.
       Hargrave was employed by Commonwealth Insurance Company, where
she was covered for disabilities under the Plan, which she paid for through pay-
roll deductions. In June 1991, she was seriously injured in a car accident. In
March 1992, after a determination that she was totally disabled, Commonwealth
granted her monthly disability benefits.
       In 1994, Hargrave settled her tort claims against the person allegedly re-
sponsible for the accident. Under the terms of that settlement, she received a
lump sum of $445,000 and $1,939.96 per month for 240 months from the tort-
feasor’s insurer.2 The Plan in effect in 1991 through 1997 (“the 1991 Plan”) did
not allow Commonwealth to offset tort settlement proceeds against Hargrave’s
monthly disability benefits. The 1991 Plan did state, however, that the “com-



      1
        Because Commonwealth General Corporation’s Long-Term Disability Plan refers to
both an insurance agreement and a legal person, we use “the Plan” when referring to the
agreement and “Commonwealth” when referring to the legal person.
      2
        In addition, Hargrave’s husband and four children received lump sums of $25,000 and
$7,500 each, respectively.

                                            2
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                                      No. 10-30720

pany reserves the right to change or discontinue this Plan.”
       The 1991 Plan was amended in 1998 (“the 1998 Plan”) to provide, in a sec-
tion titled “Effect of Other Income on Benefits,” that disability benefits “will be
reduced to the extent that you qualify for benefits payments from . . . disability
payments which result from the act or omission of any person whose action
caused your disability. These payments may be from insurance or other sourc-
es.” The 1998 Plan further states that “[a]ny of these ‘Other Income Benefits’
that date back to a prior date during a certified period of disability may be allo-
cated on a retroactive basis.” It then explains that, if the claims administrator
determines there has been an overpayment of benefits, it may “reduce, by the
amount of overpayment, any future benefit payment made to or on behalf of you
or your dependent(s).” Failure to reimburse an overpayment “will result in sus-
pension of benefits until reimbursement has occurred.” In addition, the 1998
Plan includes an amendment limiting the timing of any legal action against
Commonwealth to three years from the initial denial of a claim.
       In September 2005, Sally Kalnas, claims manager for Commonwealth,
wrote Hargrave advising her that Commonwealth was “unable to issue your ben-
efits check” because Hargrave was receiving workers’ compensation payments
that should have been offset.3 Kalnas requested information about those bene-
fits “to avoid any further overpayment situation.” Despite the language in Kal-
nas’s letter, Commonwealth continued to pay Hargrave monthly benefits.
       Hargrave submitted information to Commonwealth showing that the pay-
ments she was receiving were tort settlement payments. Kalnas responded in
June 2006 that, because of the settlement income Hargrave was receiving, there



       3
         Hargrave was not receiving workers’ compensation payments, but contemporaneous
emails in the administrative record show that Kalnas mistakenly believed at the time that the
$1,940/month in settlement payments that Hargrave was receiving were workers’ compensa-
tion settlement payments rather than tort settlement payments.

                                             3
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                                         No. 10-30720

was an overpayment in her disability benefits. Kalnas’s letter, citing the 1998
Plan, stated that the disability benefits should have been offset since 1994 by the
lump sum settlement proceeds Hargrave had received. The letter explained
that, as a result of the failure to offset the settlement proceeds from 1994 on-
ward, Hargrave had been overpaid $82,185, and her future monthly benefits
would be withheld for five years to recoup that overpayment.4
       Hargrave responded in May 2007 that none of the 1991 Plan’s terms re-
quired the offsetting of tort settlement proceeds; she attached a page of the 1991
Plan to her letter. Kalnas replied in June and explained that, under the 1998
Plan, benefits would be reduced to the extent Hargrave qualified for “benefit
payments from . . . disability payments which result from the act or omission of
any person whose action caused your disability.” Kalnas acknowledged that the
1998 Plan does not “specifically list ‘settlement of a tort claim,’” but she never-
theless concluded that the provision Hargrave cited covered tort settlements.
       Hargrave sent another letter to Kalnas in December 2007 arguing that
Kalnas’s “reliance on the 1998 Plan is incorrect,” because it went into effect “long
after [Hargrave]’s accident, disability, and tort settlement.” Hargrave requested
“further explanation” of the decision to deny Hargrave’s benefits pursuant to the
1998 Plan rather than the 1991 Plan. Kalnas responded in January 2008, stat-
ing only that she was enclosing a copy of the 1998 Plan and telling Hargrave
that she was waiting for an answer from AEGON “in regards to any amend-




       4
          The $82,185 overpayment was calculated as follows: Hargrave received $1,369.75 per
month in disability benefits from Commonwealth in the five years from December 1, 1994, to
November 30, 1999. Under the 1998 Plan, an offset of a lump sum payment or a periodic pay-
ment “that could have been chosen in a lump sum” may last no longer than five years. Be-
cause Hargrave had obtained five years’ worth of disability benefits that should have been
completely offset, Kalnas calculated the offset to equal those five years’ worth of disability ben-
efits, for a total of $82,185.

                                                4
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                                     No. 10-30720

ments during the time frame in question” that would affect her determination.5
      In June 2008, Hargrave wrote to Kalnas stating that she was still waiting
for a response and restating her argument that the 1991 Plan should apply. Kal-
nas responded that same month stating that she would “have to direct” Har-
grave to AEGON, which was now in possession of Hargrave’s file and policy; Kal-
nas provided a contact person, Tina Ohl.6 Hargrave sent Ohl a letter repeating
her arguments that the 1991 Plan should apply, but Ohl never responded.
      Hargrave sued AEGON in state court in May 2009. AEGON removed the
case to federal court, and, in June 2009, Hargrave amended her complaint to in-
clude Commonwealth as a defendant. After Commonwealth stipulated that it
was the proper defendant, the court dismissed Hargrave’s claims against
AEGON without prejudice. The district court then denied Commonwealth’s mo-
tion to dismiss, without citing legal authority, because it believed deciding in
Commonwealth’s favor would be unfair. Hargrave filed a motion for partial
summary judgment seeking to recover the monthly benefits Commonwealth had
withheld, which the district court granted without stating reasons.


                                           II.
      Summary judgment is appropriate if there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law. F ED. R.
C IV. P. 56(a). Commonwealth argues that the documents attached to Hargrave’s
motion for summary judgment were improperly considered by the district court
because they were not in the administrative record. In Vega v. National Life In-
surance Services, 188 F.3d 287, 299 (5th Cir. 1999) (en banc), abrogated in part


      5
       AEGON’s precise role in the benefits determination has not been established, but it
is immaterial to the resolution of the issues presented to us.
      6
       The administrative record shows that Kalnas and Ohl had repeatedly communicated
about Hargrave’s benefits claim since 2005.

                                            5
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                                          No. 10-30720

on other grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (2008), we held
that, “when assessing factual questions, the district court is constrained to the
evidence before the plan administrator.” The administrator must first “identify
the evidence in the administrative record,” then the claimant may contest
whether that record is complete. Vega, 199 F.3d at 299.
       Once the scope of the administrative record has been determined, the dis-
trict court may stray from it in only limited circumstances, none of which is ap-
plicable here. See id. To add evidence into the administrative record, the claim-
ant, before filing suit, may “submit[] it to the administrator in a manner that
gives the administrator a fair opportunity to consider it.” Id. at 300. “If the
claimant submits additional information to the administrator . . . and requests
the administrator to reconsider his decision, that additional information should
be treated as part of the administrative record.” Id.
      Although Commonwealth does not say specifically which documents at-
tached to the motion for summary judgment it believes were improperly consid-
ered, it explained to the district court that it was referring solely to the affidavits
Hargrave submitted (exhibits A and B) and to exhibits 9 through 15. Those ex-
hibits consist of correspondence between Hargrave and Commonwealth (and
Hargrave and AEGON, after Kalnas directed Hargrave to speak to AEGON in-
stead) and affidavits attesting to the authenticity of the exhibits. All correspon-
dence occurred before Hargrave sued and in a manner that gave the administrat-
or a fair opportunity to consider it. That evidence therefore was part of the ad-
ministrative record, and the court properly considered it. See id. Although the
affidavits’s attestations to the authenticity of the other exhibits were not part of
the administrative record, the court could consider them for the limited purpose
of showing that the other exhibits were.7 The district court therefore did not er

       7
           See Vega, 188 F.3d at 300 (“[W]e will not permit the district court or our own panels
                                                                                    (continued...)

                                                6
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                                      No. 10-30720

roneously rely on evidence outside the administrative record to resolve the merits
of Hargrave’s claim.


                                            III.
      Hargrave sues to “recover benefits due to [her] under the terms of the plan,
to enforce [her] rights under the terms of the plan, [and] to clarify [her] rights to
future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). First, we
must determine which version of the Plan applies: the pre-settlement 1991 ver-
sion or the post-settlement 1998 version. Hargrave argues that Commonwealth’s
offset of her benefits beginning in 2006, based on the language in the 1998 Plan,
because of a settlement she obtained in 1994, is an impermissible retroactive ap-
plication of the Plan. Under our precedent, it was not. Because the post-amend-
ment benefits she seeks are not “due to” her and she has no “right” to them under
the terms of the 1991 Plan, the terms of the 1998 Plan apply.
      Where, as here, the plan gives the administrator discretionary authority
to determine eligibility for benefits, we apply an abuse-of-discretion standard to
the denial of benefits. Holland v. Int’l Paper Co. Ret. Plan, 576 F.3d 240, 246 (5th
Cir. 2009). If the administrator’s determination is legally correct, however, our
review ends, and there can be no abuse of discretion. Stone v. UNOCAL Termin-
ation Allowance Plan, 570 F.3d 252, 257 (5th Cir. 2009). Only if the determin-
ation was legally incorrect must we determine whether the administrator’s deci-
sion was an abuse of discretion. Id. We consider three factors in assessing
whether the administrator’s determination was legally correct: “(1) whether the
administrator has given the plan a uniform construction, (2) whether [it] is con-
sistent with a fair reading of the plan, and (3) any unanticipated costs [to the


      7
        (...continued)
to consider evidence introduced to resolve factual disputes with respect to the merits of the
claim when that evidence was not in the administrative record.” (emphasis added)).

                                             7
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                                        No. 10-30720

plan] resulting from different interpretations of the plan.” Id. at 258 (quoting
Crowell v. Shell Oil Co., 541 F.3d 295, 312 (5th Cir. 2008)).
      With respect to the first factor, Hargrave has not alleged that Common-
wealth did not give the Plan a uniform construction, and there is no evidence it
did. The second factor, whether the administrator’s determination is consistent
with a fair reading of the plan, is the most important factor, id. at 257, and is the
focus of our discussion.8
      In Inter-Modal Rail Employees Ass’n v. Atchison, Topeka & Santa Fe Ry.,
520 U.S. 510, 515 (1997), the Court reaffirmed the principle that “unless an em-
ployer contractually cedes its freedom, it is generally free under ERISA, for any
reason at any time, to adopt, modify, or terminate [its] welfare plan.” (internal
quotation marks and citations omitted). “The flexibility an employer enjoys to
amend or eliminate its welfare plan is not an accident” but a congressionally-
recognized feature of ERISA to reduce the cost and simplify the administration
of ERISA plans. Id. If plans were locked into the benefits they initially offered,
they would “err initially on the side of omission,” harming beneficiaries.9 Thus,
“welfare plans offer benefits that do not ‘vest’ (at least insofar as ERISA is con-
cerned).” Id. at 514.
      Although ERISA does not statutorily vest welfare plan benefits, an employ-
er may choose to vest future benefits contractually. Whether an employer may
reduce or deny welfare plan benefits (retroactively or otherwise) turns on wheth-


       8
          We need not discuss the third factorSSwhether different interpretations of the Plan
would result in unanticipated costs to CommonwealthSSbecause Commonwealth’s interpreta-
tion is less costly to it than is Hargrave’s, and the other two factors already go in Common-
wealth’s favor.
       9
         Inter-Modal, 520 U.S. at 515 (quoting Heath v. Varity Corp., 71 F.3d 256, 258 (7th Cir.
1995)); see also Moore v. Metro. Life Ins. Co., 856 F.2d 488, 492 (2d Cir. 1988) (“Congress ev-
idenced its recognition of the need for flexibility in rejecting the automatic vesting of welfare
plans. Automatic vesting was rejected because the costs of such plans are subject to fluctuat-
ing and unpredictable variables.”).

                                               8
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                                        No. 10-30720

er the benefits have contractually vested.10 An employer vests an ERISA welfare
plan benefit “when it intends to confer unalterable and irrevocable benefits on its
employees, and it does so by using clear and express language.” Halliburton Co.
Benefits Comm. v. Graves, 463 F.3d 360, 377 (5th Cir. 2006).
      Not only did Commonwealth not use “clear and express language” that it
intended to confer unalterable and irrevocable benefits to Hargrave, it used clear
and express language that it did not intend to do so. The 1991 Plan plainly
states, “While the company fully expects to continue this Plan indefinitely, the
company reserves the right to change or discontinue this Plan.” Thus, Hargrave’s
right to future benefits never vested.11 Accordingly, Commonwealth was free to
alter the 1991 Plan to modify (or even terminate) Hargrave’s future benefits,
which is precisely what it did when it amended the Plan in 1998. Once it did so,
the terms of the 1998 Plan governed Hargrave’s subsequent benefits.12
      We have already so held in an essentially identical case. In McGann v.



       10
           See Spacek v. The Maritime Ass’n ILA Pension Plan, 134 F.3d 283, 293 (5th Cir. 1998)
(“[T]o the extent that we have concluded that nothing in ERISA prohibits retroactive applica-
tion of the Amendment to Spacek in this case, whether the Amendment can be retroactively
applied to him will be determined by the terms of the Plan itself. Unless the Plan’s language
indicates that it has contractually obligated itself not to do what ERISA would otherwise enti-
tle it to do . . . no basis exists for concluding that the Plan’s application of the Amendment to
Spacek constituted an abuse of discretion.”).
       11
          See Halliburton, 463 F.3d at 378 (“If a contract provides that benefits can be termin-
ated, then those benefits do not vest.” (quoting Murphy v. Keystone Steel & Wire Co., 61 F.3d
560, 565 (7th Cir. 1995))); Spacek, 134 F.3d at 293 (“[A] general amendment provision in a wel-
fare benefits plan is of itself sufficient to unambiguously negate any inference that the employ-
er intends for employee welfare benefits to vest contractually, and thus become unalterable,
after the employee retires.”).
       12
          See Hackett v. Xerox Corp., 315 F.3d 771, 774 (7th Cir. 2003) (“If benefits have not
vested, the plan participant does not have an unalterable right to those benefits. . . . Since the
employer can change the plan, then it must follow that the controlling plan will be the plan
that is in effect at the time a claim for benefits accrues.”). A claim for benefits under ERISA
accrues “at the time benefits are denied,” Vercher v. Alexander & Alexander Inc., 379 F.3d 222,
226 n.6 (5th Cir. 2004), so the Plan in effect at the time Hargrave’s claim for benefits accrued
was the 1998 Plan.

                                               9
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                                       No. 10-30720

H & H Music Co., 946 F.2d 401, 403 (5th Cir. 1991), McGann, the plan partici-
pant, was diagnosed with AIDS, and after he submitted his first insurance claim,
the employer amended the plan to reduce benefits for all employees with AIDS
from up to $1 million to only $5,000. Before the amendment, the employer had
fully reimbursed McGann for his medical expenses, but afterward it limited reim-
bursement to $5,000. Id. at 405 n.5. As here, the plan contained a provision
permitting the plan sponsor to terminate or amend the plan at any time. Id. at
405. The employer conceded that the reason it reduced benefits was because of
its knowledge of McGann’s illness. Id. at 404 & n.4.
      McGann sued, arguing that he was entitled to the $1 million benefits cap.
See id. at 403. We held that the cap was not a vested benefit, because the plan
“show[s] no promised benefit, for there is nothing to indicate that defendants ever
promised that the $1,000,000 coverage limit was permanent.” Id. at 405. Thus,
McGann was not entitledSShe had no “right” to—the continued availability of the
limit after the plan was amended.13
      Similarly to the employer in McGann, Commonwealth amended the 1991
Plan in 1998, as the 1991 Plan said it could, and took advantage of that amend-
ment to reduce Hargrave’s subsequent benefits payments. It is true that Com-
monwealth denied Hargrave benefits because of events that occurred before the
Plan was amended, but the same was true in McGann, where the plaintiff con-
tracted AIDS and received benefits under the earlier version of the plan until his
employer amended the plan to reduce subsequent benefits. Id. at 403, 405 n.5.
McGann is the same as the instant case if we replace “contracted AIDS” with


       13
          McGann, 946 F.2d at 405. McGann discussed the issue in the context of a discrimina-
tion claim under Section 510 of ERISA. Id. But § 510’s reference to “any right to which [the
participant or beneficiary] is entitled under the provisions of an employee benefit plan,” 29
U.S.C. § 1140, refers to the same rights as does § 502(a)(1)(B)’s reference to “rights under the
terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). Indeed, § 510 is broader in scope than § 502(a)-
(1)(B), because it also covers “any right to which such participant may become entitled under
the plan.” 29 U.S.C. § 1140 (emphasis added).

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                                   No. 10-30720

“obtained a tort settlement.”
      Indeed, the result in McGann was far harsher than Commonwealth’s
change in benefits: An employee who had recently discovered he had AIDS was
left with essentially no disability insurance to pay for it. By contrast, Hargrave,
although totally disabled, received several hundred thousand dollars through her
settlement, and Commonwealth seeks only to reduce her disability benefits by
about $80,000 because of that settlement. In addition, unlike in McGann, Com-
monwealth did not amend the Plan because of Hargrave’s settlement, because it
did not even know about it at the time. It merely used that amendment to reduce
Hargrave’s subsequent benefits.
      The decision in Member Services Life Insurance Co. v. American National
Bank & Trust Co. of Sapulpa, 130 F.3d 950 (10th Cir. 1997), relied on by Har-
grave, is also instructive. In February 1988, a fire severely injured several chil-
dren who were beneficiaries under their father’s welfare benefit plan. The plan
paid out about $570,000 in medical expenses incurred by the children; it did not
allow offsetting of tort settlement proceeds at the time but did permit amend-
ments and modifications. Id. at 952.
      In October 1988, the plan was amended to allow the administrator to re-
coup any money received from a negligent third party as a result of injuries for
which benefits were paid. In October 1992, the children’s guardian was awarded
a $19 million judgment against the third-party tortfeasor, but the judgment was
for strict product liability, not negligence. As a result, in January 1993 the ad-
ministrator amended the plan again to provide for a right of recoupment against
settlement payments received by a beneficiary from a third-party tortfeasor un-
der any theory of liability, with the amendment retroactively effective as of Aug-
ust 1987. The administrator attempted to use the amendment to claw back the
$570,000 in medical expenses it had already paid out. Id. at 952-53. The Tenth
Circuit held that, because the benefits already paid by the plan were “vested

                                        11
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                                       No. 10-30720

through payment,” retroactive application of the amendment “would impermis-
sibly destroy vested rights.” Id. at 954.
      That is consistent with our holding here. The plan in Member Services had
paid out benefits under the earlier contract; that money already belonged to the
beneficiaries, because performance had already occurred under the contract as
it existed at the time of payment.14 The administrator could not then claw back
those past benefits by amending the contract later; that amended contract would
apply only to future, still unvested payments.
      The facts of this case differ from those in Member Services, because Com-
monwealth has not attempted to take back a penny that it has already given to
Hargrave. Commonwealth has merely denied Hargrave future benefits that it
never promised her and that have not yet “vested through payment” by an
amendment to the Plan. Indeed, that is precisely the ground on which Member
Services distinguished McGann:
      [The plan in McGann] never guaranteed the continued availability
      of the original $1,000,000 limit. While the $1,000,000 limit was in
      effect, the employee had been fully reimbursed for all claimed ex-
      penses incurred. Moreover, after the date of the amendment impos-
      ing the $5,000 limit on AIDS-related claims, the employee had been
      reimbursed for up to $5,000 of all such expenses. Thus, the employer
      had at all times honored the existing, enforceable obligations it had
      assumed.
Id. at 956 (citing McGann, 946 F.2d at 405 & n.5). Hargrave misunderstands
Member Services by focusing on how Commonwealth’s purpose is similar to the
plan administrator’s in that case rather than on the Tenth Circuit’s reasoning,


       14
         See Member Servs., 130 F.3d at 956 (“The notion of protecting vested rights prevents
one party to a contract from unilaterally changing the terms of performance after that perfor-
mance has become due. While it is true that benefits need never vest prospectively under an
ERISA welfare benefit plan, [ERISA case law] and general principles of insurance contract law
hold that such benefits do vest when performance is due under the contract. At that point, the
contract is no longer executory and must be performed in accordance with the terms then in
existence.” (emphasis added)).

                                             12
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                                         No. 10-30720

which distinguishes between clawing back past benefits and reducing or termin-
ating future benefits. Thus, because Commonwealth’s decision to apply the 1998
Plan was legally correct, it could not have abused its discretion by relying on the
language of the 1998 Plan. Stone, 570 F.3d at 257.


                                               IV.
      Given that the 1998 Plan applies, the next question is whether Hargrave
is time-barred from bringing her claim pursuant to the limitation-of-actions pro-
vision in the 1998 Plan. Hargrave correctly argues that Commonwealth waived
that argument by failing to raise it in the district court.
      Although Commonwealth never addressed the limitations issue in the dis-
trict court, its co-defendant, AEGON, which was represented by the same counsel
as was Commonwealth, raised that issue at length in its motion to dismiss, to
which Hargrave responded. Commonwealth thus argues that AEGON’s raising
the issue preserved it for Commonwealth’s appeal.
      We have held that the mere fact that only one party’s counsel raises an ar-
gument before the district court does not necessarily preclude another party’s
counsel from making that identical argument on appeal.15 In some cases, for a
defendant to raise the same argument that a codefendant already made would
be an empty formality.16


       15
         See United States v. White, 589 F.2d 1283, 1290 n.14 (5th Cir. 1979) (“Counsel for Ke-
no did not object to this wording in the instruction; counsel for White did. We believe objection
by codefendant’s counsel is sufficient to preserve any error.” (citing United States v. Lefkowitz,
284 F.2d 310, 313 n.1 (2d Cir. 1960)).
       16
           See United States v. Westbrook, 119 F.3d 1176, 1185 (5th Cir. 1997) (“[L]ittle reason
may exist to refuse to permit codefendants to appeal such points because (1) at least one de-
fendant properly raised the issue now on appeal and ensured that the district court would con-
sider it (at least with regard to the defendant who raised it), (2) identical challenges mounted
by similarly situated codefendants would not have changed the district court’s ruling, and (3) if
one defendant succeeded in convincing the district court to grant his motion, his codefendants
                                                                                     (continued...)

                                               13
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                                        No. 10-30720

      In this case, however, because the district court dismissed the claims
against AEGON on other grounds, it did not need to address AEGON’s argument
that Hargrave brought her claim too late. Had Commonwealth itself pressed that
argument, the district court would have had to address it, but because Common-
wealth did not raise it, the court never ruled on it. We are thus bereft of the dis-
trict court’s considered views on Commonwealth’s limitations defense. So Com-
monwealth waived its right to assert that defense on appeal.


                                               V.
      We must now address whether Commonwealth could offset Hargrave’s fu-
ture benefits in 2006 on the basis of the 1998 Plan language. Hargrave argues
that, even if the 1998 Plan applies, she is entitled to recover benefits under that
version of the Plan.


                                               A.
      Hargrave points to a provision in the 1998 Plan that says, “No amendment
to the Long-Term Disability Plan, specifically including a Long-Term Disability
Plan amendment with a retroactive effective date, may negate or reduce a benefit
to which you are entitled under the Long-Term Disability Plan on account of a
claim incurred prior to the Long-Term Disability Plan amendment.” 17 She argues
that because she was entitled to benefits under the 1991 Plan, the 1998 Plan

      16
        (...continued)
would then simply have filed the same motion.”).
       17
          Hargrave also points to another provision of the 1998 Plan that says, “The Company
reserves the right . . . at any time and from-time-to-time [sic], and retroactively if deemed nec-
essary or appropriate, to amend any or all of the provisions of the [Plan]. . . .” That provision
does not help Hargrave. It merely states that amendments can go into effect retroactively, i.e.,
the effective date of an amendment can occur before the date of the amendment’s enactment.
But that is not the sort of “retroactivity” that is at issue. The question is not when the 1998
amendments went into (or could go into) effect—that happened in 1998—but only whether
they can be used to reduce benefits in 2006 based on a pre-1998 settlement.

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                                    No. 10-30720

amendments may not negate or reduce those benefits under the terms of the 1998
Plan.
        The provision Hargrave cites is ambiguous about whether it means that
only amendments to the 1998 Plan may not negate or reduce benefits to which
one is entitled under the 1998 Plan, or whether it also means that amendments
to the 1991 Plan may not negate or reduce benefits to which one is entitled under
the 1991 Plan. That ambiguity exists because the Plan language refers to bene-
fits to which one is entitled “under the Long-Term Disability Plan” without ex-
plaining whether that means the 1998 version only or also previous versions.
        We do not need to resolve that ambiguity, however, because the provision
does not entitle Hargrave to benefits either way. If the provision means only that
amendments to the 1998 Plan may not negate or reduce benefits to which one is
entitled, it would not apply, because the 1998 Plan has not, to our knowledge,
been amended. If it instead means that amendments to the 1991 Plan may not
reduce benefits to which Hargrave is entitled, it would still not help Hargrave,
because she was not “entitled” under the 1991 Plan to a certain level of future
benefits: The 1991 Plan stated that the employer could change or terminate the
Plan.
        That latter conclusion follows from the plain meaning of the word “entitled”
and our analysis in part II, supra. To “entitle” means “[t]o grant a legal right to
or qualify for.” B LACK’S L AW D ICTIONARY (9th ed. 2009). Because benefits under
the 1991 Plan could be changed or discontinued, Hargrave had no legal right to
and did not qualify for, i.e., was not entitled to, a guaranteed level of benefits
under that Plan. Just as we held in McGann that the plaintiff was not entitled
to his $1 million coverage limit because it was never promised to him, see Mc-
Gann, 946 F.2d at 405, the same is true here. Indeed, the section of ERISA that
we interpreted in McGann specifically referred to “any right to which the [partici-
pant or beneficiary] is entitled under the provisions of an employee benefit plan”

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                                        No. 10-30720

and “any right to which such participant may become entitled under the plan.” Id.
at 403 (emphases added) (quoting 29 U.S.C. § 1140). To be sure, McGann in-
volved interpretation of a statutory provision, not a contractual provision, but it
would make no sense for the word “entitled” to mean something different, in an
ERISA-governed benefit plan, from what it means under the plain language of
ERISA itself, absent a plan provision indicating otherwise.18


                                              B.
      That leaves the question whether the 1998 Plan permits the offsetting of
tort settlement proceeds against benefits paid under the Plan. As mentioned, the
1998 Plan says,
      The benefits you receive under the [Plan] will be reduced to the ex-
      tent that you qualify for benefit payments from any of the following:
      . . . disability payments which result from the act or omission of any
      person whose action caused your disability. These payments may be
      from insurance or other sources.
      The Plan’s reference to the offsetting of Plan benefits to the extent a benefi-
ciary qualifies for “benefit payments,” an undefined term in the Plan, suggests
that it might permit offsetting only payments that a beneficiary receives from an-
other insurance policy or the like.19 Indeed, most of the specific types of “benefit
payments” cited by the Plan fit that categorization. But that meaning of “benefit
payments” is belied by the fact that “income from any employer, or from any oc-
cupation or compensation for profit” qualifies as a benefit payment as well. Or-
dinary employment income is surely not a form of insurance, pension, or annuity


       18
           Our interpretation of the word “entitled” does not render the Plan provision superflu-
ous. If, for example, a participant’s benefits had “vested through payment” under the Plan be-
fore an amendment, that participant would be “entitled” to those benefits, and the amendment
could not retroactively negate or reduce them. See Member Servs., 130 F.3d at 954.
       19
          See MERRIAM -WEBSTER ’S COLLEGIATE DICTIONARY (11th ed. 2003) (defining “benefit”
as, inter alia, “a payment or service provided for under an annuity, pension plan, or insurance
policy”).

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                                       No. 10-30720

income. Moreover, the Plan also uses the terms “[o]ther [i]ncome” and “[o]ther
income benefits” to refer to income that may be offset against Plan benefits, also
implying a broader meaning of “benefit payments.” The term “benefit payments”
under the Plan is thus more fairly construed as broadly meaning other financial
assistance, rather than merely financial assistance from insurance or similar
sources, which, indeed, is not inconsistent with another dictionary definition of
“benefit.” 20
       Moreover, the Plan’s subsequent reference to “disability payments which
result from the act or omission of any person whose action caused your disability
. . . from insurance or other sources” (emphasis added) fairly covers tort damages
for a disability. That provision broadly refers to sources other than insurance
and does not suggest that such sources are limited to those that serve a function
similar to insurance. Rather, coming as it does after a listing of numerous differ-
ent types of alternative sources of financial assistance for a person with a disabil-
ity, it appears to be a sort of catch-all provision to cover other disability payments
not previously listed. The provision’s application is limited to payments for the
disability that “result from the act or omission” of a person who caused the disa-
bility, but tort damages (or a settlement of the claim) plainly fit that language.
       Further confirming the view that the Plan is meant to permit offsetting of
tort settlement payments, it explains, in the section explaining how to offset oth-
er income, that
       If you receive lump sum payments . . . which result from the act or
       omission of any person who caused your disability, that part of the
       lump sum payment that is for disability will be counted, even if it is
       not specifically apportioned or identified as such. This will be done
       whether or not it is the result of a compromise, settlement, award,
       or judgment.



        20
        See id. (also defining “benefit” as “financial help in time of sickness, old age, or un-
employment”).

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                                        No. 10-30720

That language is broad enough comfortably to include a tort settlement or judg-
ment. Commonwealth’s reading of the 1998 Plan to permit offsetting of proceeds
resulting from a tort settlement with the person who caused the beneficiary’s in-
jury is thus a fair reading of the Plan and is legally correct, so we need not ask
whether that determination was an abuse of discretion. Stone, 570 F.3d at 257.21


                                              C.
      Finally, Hargrave urges, for the first time on appeal, that her tort settle-
ment payments are not payments for her disability. Because the district court
did not address that argument, we remand for it to decide that issue and any oth-
ers in the first instance. The summary judgment and award of attorney’s fees are
VACATED and REMANDED for whatever proceedings the district court may
deem appropriate. We express no views on what the district court should decide
on remand.22




       21
          Accordingly, we do not address Hargrave’s arguments that Commonwealth abused
its discretion in making its benefits determination.
       22
            Judge DeMoss concurs in the result only.

                                             18
