United States Court of Appeals

For the First Circuit







No. 02-1660





Plaintiffs, Appellants,



v.



INSURANCE COMPANY GROUP SALES REPRESENTATIVE DEFERRED

LIFE MUTUAL INSURANCE COMPANY,



Defendants, Appellees.







APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE



[Hon. Gene Carter, 
U.S. District Judge
]







Before



 Lynch, 
Circuit Judge
,

Stahl, 
Senior Circuit Judge
, 

and Howard, 
Circuit Judge
.







Chad A. Cloutier
, with whom 
Joseph M. Cloutier
 and 
Joseph M. Cloutier Associates, P.A.
, were on brief, for appellants.

Seth W. Brewster
, with whom 
Valerie A. Wright
 and 
, were on brief, for appellees.










November 8, 2002






STAHL, 
Senior Circuit Judge
.  Plaintiff-appellants Bob Cogan 
et
 
al.
et
 
seq.
, and contract law in connection with a deferred compensation plan.  We affirm.

I. 
BACKGROUND

Plaintiffs were formerly employed as sales representatives of Phoenix Home Life Mutual Insurance Company ("Phoenix I"), now known as Phoenix Life Insurance Company, and are participants in the Phoenix Home Life Mutual Insurance Company Group Sales Representative Deferred Compensation Plan ("the Plan").  Defendant-appellees include Phoenix Life Insurance Company, Phoenix Home Life Mutual Insurance Company, Phoenix Home Life Mutual Insurance Company Group Sales Representatives Deferred Compensation Plan, and the Benefit Plans Committee of Phoenix Home Life Mutual Insurance Company.
1:Defendant Benefit Plans Committee of Phoenix Home Life Mutual Insurance Company is the administrator of the Plan.  


	Plaintiffs alleged the following facts in their complaint:  The Plan was established in 1997 as a non-qualified employee benefit plan subject to ERISA.  Its purpose was to provide supplemental retirement benefits for a select group of sales employees.  The Plan provided for retroactive benefits for the years 1994-96.  From 1997 through 1999, Phoenix I credited each plaintiff's participant account in the Plan with a benefit amount calculated in accordance with Article 4.2 of the Plan.  No funds were actually set aside, segregated or held in trust for any plaintiff.  Rather, the aggregate amount of the accounts was and remains part of the general liabilities of Phoenix I.

Shortly before January 1, 2000, Phoenix I formed a subsidiary called Phoenix American Life Insurance Company ("Phoenix American").  Plaintiffs' employment was transferred to Phoenix American, although this change was not disclosed to them at the time.  On or about December 13, 1999, GE Financial Assurance Holdings, Inc. ("GEFA") announced that it had agreed to purchase Phoenix American from Phoenix I.  The sale closed on April 1, 2000.  Plaintiffs alleged in their complaint that since that date, they have been employed by GEFA.
2:At oral argument, however, there was some suggestion that plaintiffs were employed by Phoenix American, as a wholly-owned subsidiary of GEFA.


 
In the original Plan, section 5.2 specified the conditions under which a participant could receive a benefit payment:

Payment of benefit amounts. . . shall be made . . . solely upon the occurrence of the following events and subject to the following conditions:









d. upon elimination of the Participant's position by the Company. 

The Plan also contained a clause permitting amendment:



On March 28, 2000, just before GEFA's purchase of Phoenix American, the Benefits Plan Committee adopted the First Amendment to the Plan.  The First Amendment stated, in relevant part:

1. Anything in Article IV of the Plan to the contrary notwithstanding, all benefit accruals under the Plan shall cease accrual of Benefits effective as of March 31, 2000.



* * * *



3. All other terms, provisions and conditions of the Plan shall continue to apply except that for purposes of Section 5.2 and 5.3 referenced [sic] to "Company", "Pension Plan" and "Welfare Benefit Plan" shall be applied to mean GE Financial Assurance Holdings, Inc. or such subsidiary or affiliate thereof by which a Participant is employed after the effective date hereof . . . .

4. The effectiveness of this Amendment is contingent upon the occurrence of the closing for the purchase of Phoenix American Life Insurance Company by GE Financial Assurance Holdings, Inc., and this Amendment shall be void and of no force or effect if such closing does not occur. 

On or around November 7, 2001, plaintiffs filed a complaint in the United States District Court for the District of Maine asserting claims of ERISA violations, breach of contract and promissory estoppel.  On April 4, 2002, the magistrate judge issued a recommended decision allowing defendants' motion to dismiss for failure to state a claim.  He held that plaintiffs' contract claim was preempted by ERISA, and that defendants did not violate ERISA by failing to provide plaintiffs with immediate payment of their accrued benefits upon the sale of Phoenix American Life to GEFA.
3:The district court also dismissed Count III of the complaint, holding that it failed to allege the necessary elements of a claim of promissory estoppel.  Plaintiffs do not revisit that issue on appeal.


  The district court affirmed the recommended decision on May 6, 2002.
4:Copies of the Plan and the First Amendment were attached to the complaint, and were properly considered by the district court on the motion to dismiss.  
See
 
Shaw
 v. 
Digital Equip. Corp.
, 82 F.3d 1194, 1220 (1st Cir. 1996) (court "may properly consider the relevant entirety of a document integral to or explicitly relied upon in the complaint . . . without converting the motion into one for summary judgment").


II. 
DISCUSSION

The district court dismissed plaintiffs' claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.  We review the dismissal 
de
 
novo
, "accepting as true all well-pleaded factual averments and indulging all reasonable inferences in the plaintiff's favor."  
SEC
 v. 
SG Ltd.
, 265 F.3d 42, 46 (1st Cir. 2001) (citation and internal quotation marks omitted). "If the facts contained in the complaint, viewed in this favorable light, justify recovery under any applicable legal theory, we must set aside the order of dismissal."  
Id.
 (citing 
Conley
 v. 
Gibson
Aulson
 v. 
Blanchard
, 83 F.3d 1, 3 (1st Cir. 1996)).

Plaintiffs contend in Count I of the complaint that defendants violated ERISA by failing to provide plaintiffs with "immediate lump-sum payment of their accrued benefits" upon the sale of Phoenix American to GEFA.  Specifically, they argue that the sale of Phoenix American eliminated their positions by making them employees of GEFA, thus triggering their right to receive benefits pursuant to section 5.2(d) of the Plan.  

Such payment is precluded by the First Amendment to the Plan, which was promulgated under Phoenix I's express reservation of right in section 7.1.  
See
 
Kemmerer
 v. 
ICI Americas Inc.
, 70 F.3d 281, 288 (3d Cir. 1995)
 ("[N]othing in ERISA prohibits the parties from contracting to limit the employer's right to amend or terminate a plan.").  The First Amendment took effect at the time of the closing and amended section 5.2(d) to provide, in relevant part, that payment of benefits becomes due only when plaintiffs' positions are eliminated by GEFA, not by Phoenix Home Life.  Plaintiffs do not allege that GEFA has eliminated their positions.

Section 1054(g) provides, in relevant part:

Decrease of accrued benefits through amendment of plan



(1) The accrued benefit of a participant under a plan may not be decreased by an amendment of the plan, other than an amendment described in section 1082(c)(8) or 1441 of this title.



(2) For purposes of paragraph (1), a plan amendment which has the effect of--



(A) eliminating or reducing an early retirement benefit or a retirement-type subsidy (as defined in regulations), or



(B) eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment shall be treated as reducing accrued benefits. 



The anti-cutback provision does not apply here, however, as the Plan is unquestionably a "top hat" employee benefit plan.  ERISA describes such a plan as "unfunded" and "maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees."  
Id.


Top hat plans are expressly exempted from ERISA's anti-cutback provision.  
Demery
 v. 
Extebank Deferred Comp. Plan (B)
, 216 F.3d 283, 287 (2d Cir. 2000).  Section 1054(g) is contained in Part 2 (Participation and Vesting) of ERISA.  The first section of Part 2, "Coverage," provides, in relevant part:

This part shall apply to any employee benefit plan . . . 
other
 
than
 --



* * * *



(2) a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees . . . .



Finally, plaintiffs argue that the district court erred in dismissing Count II of their complaint, which purports to set forth a breach of contract claim under federal common law, apparently apart from ERISA.  We are unaware of any such independent cause of action.  

 
Metropolitan Life Ins. Co.
 v. 
Taylor
, 481 U.S. 58, 62-63 (1987)
see
 
also
 
Pilot Life Ins. Co.
 v. 
Dedeaux
, 481 U.S. 41, 54 (1987).  If the breach of contract claim for these top hat benefits arose under state law, it would be preempted.  The plaintiffs contend that top hat plans are a "rare species" of ERISA plan and must be interpreted in keeping with common law contract principles, citing 
Kemmerer
, 70 F.3d at 288.  
Kemmerer
Id.
  Accordingly, we agree with the district court that a separate cause of action for breach of contract cannot lie.
5:We have considered plaintiffs' other arguments -- that the court wrongly decided facts and failed to weigh the plan administrator's conflict of interest -- and conclude that they do not warrant reversal.


	Affirmed.

