In the
United States Court of Appeals
For the Seventh Circuit

Nos. 00-2628 and 00-3348

Kevin Bock,

Plaintiff-Appellee,

v.

Computer Associates International, Inc. and
Platinum Technology, Inc.,

Defendants-Appellants.

Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99-C-5967--Suzanne B. Conlon, Judge.

Argued February 12, 2001--Decided July 18, 2001



  Before Cudahy, Rovner and Williams, Circuit
Judges.

  Cudahy, Circuit Judge. Kevin Bock sued
Platinum Technology, Inc. (Platinum) and
Computer Associates International, Inc.
(Computer Associates) for breach of a
severance pay agreement. The defendants
removed the case to federal court,
asserting that the agreement was part of
an employee benefit plan under the
Employee Retirement Income Security Act
of 1974, 29 U.S.C. sec. 1001 et seq.
(ERISA). The district court found in
favor of Bock, and the defendants appeal.

I.

  Platinum and Computer Associates are
businesses that service computer networks
and sell software. Platinum employed Bock
as a salesperson from 1995 through 1999.
During that time, he repeatedly surpassed
his sales quotas and was ultimately
promoted to the executive position of
senior vice president of sales. His
compensation plan with Platinum consisted
of a base salary plus commissions; he did
not receive a yearly bonus. Bock’s salary
for 1999 was $145,000, and his commission
from completed sales for 1998 was
$674,333. Bock testified that in 1998, he
was credited with $367 million in revenue
for the company.
  In 1998, Platinum set up a severance pay
program for its executives. An important
purpose of the plan was to keep key
employees working hard for Platinum in
the face of rumors of a corporate
takeover by another company. Under the
agreement implementing the program, an
employee covered by the program would
receive severance benefits if his or her
employment was terminated without good
cause within two years of a corporate
buyout. Larry Freedman, Platinum’s
general counsel, submitted the severance
agreement carrying out the plan to
employees for their acceptance and
signature in fall 1998. The severance
agreement, as submitted to Bock, provided
that employees would receive "aggregate
severance pay" consisting of a "bonus
amount" added to twice the sum of their
highest base salary plus their highest
12-month amount of "incentive
compensation." "Bonus amount" was defined
as the remaining portion of an employee’s
expected yearly bonus. "Incentive compen
sation" was undefined. Bock signed the
agreement in September 1998.

  Computer Associates acquired Platinum in
the spring of 1999. As a result of the
change in ownership, Bock’s employment
was terminated on June 7, 1999. Platinum
later notified Bock that his severance
benefits would consist of $290,000--
double his base salary of $145,000.
(Because Bock earned no yearly bonus, he
received nothing from the "bonus amount"
portion of the severance plan.)

  Bock sued to enforce the severance
agreement as including commission income
under the umbrella of "incentive
compensation." He sought summary
judgment, contending that the agreement
unambiguously entitled him to severance
pay equal to two times his base salary
and commissions. He also claimed that
Platinum was estopped to deny him
additional severance pay, based on
alleged oral representations about
whether commissions were included in the
severance pay calculation.

  The district court, finding the term
"incentive compensation" ambiguous,
denied Bock’s motion for summary
judgment. Then, after a bench trial, the
court found that Platinum’s board of
directors, in adopting the severance
plan, did not intend to include
commission income in the "incentive
compensation" portion of the severance
agreement. This interpretation of the
term "incentive compensation," the court
concluded, was a reasonable one. First,
the court concluded that it was "not
unreasonable" for the term "incentive
compensation" to be a reference to bonus
alone. Second, it looked to the summary
plan document to support the
reasonableness of that interpretation.
The summary states that the amount of the
severance payment would be calculated
"using the sum of base salary and bonus
(in addition to making up a lost bonus
opportunity)." The summary does not
mention commissions (or "incentive
compensation") at all. The district
court, in addition, found that the
company’s decision to exclude commissions
was not effectively communicated to the
affected employees. Thus, Bock and at
least one other participant in the plan
questioned Freedman as to whether their
commission income was included; Bock did
so before signing the agreement. The dis
trict court concluded that Freedman, who
had directed that all questions regarding
the plan be submitted to him, gave
answers in response to these questions
that suggested, but did not state
explicitly, that commission income
wasincluded in the definition of
"incentive compensation." See Tr. at 380-
82. It thus found that Platinum had
violated its fiduciary duty to Bock under
ERISA to clearly disclose that exclusion.
Consequently, the court reasoned, the
defendants were estopped from denying
payment of severance benefits that took
Bock’s commission into account when
calculating severance pay. Bock was
awarded a total amount of $1,909,550.97,
consisting of benefits he had been
denied, pre-judgment interest and
attorneys’ fees and costs.

II.

  Platinum’s severance payment plan is
governed by ERISA and is properly subject
to federal jurisdiction because it is an
employee benefit plan, which the Supreme
Court has defined as "benefits whose
provision by nature requires an ongoing
administrative program to meet the
employer’s obligations." Fort Halifax
Packing Co. v. Coyne, 482 U.S. 1, 11
(1987). This does not mean, however, that
the individual severance agreements are
to be construed entirely under trust
principles, as Platinum argues. Platinum
seeks to accord great weight to its own
alleged intent through application of the
trust principle that the settlor’s intent
governs the interpretation of a trust
agreement. See Firestone Tire & Rubber
Co. v. Bruch, 489 U.S. 101, 112 (1989)
(indicating the importance of the intent
of the settlor in interpreting terms of
trusts); Restatement (Third) of Trusts
sec. 4 ("’[T]erms of the trust’ means the
manifestation of intention of the settlor
. . . ."). But we are dealing here with
severance agreements, contractual in
form, conferring benefits on the employer
as well as the employee and quite
distinguishable from vested benefits
under a pension plan. See Bidlack v.
Wheelabrator Corp., 993 F.2d 603, 616
(7th Cir. 1993) (en banc) (plurality
opinion) (Easterbrook, J., dissenting)
("Pensions vest by law . . . health and
other welfare benefits are left to
contract."); Taylor v. Continental Group,
933 F.2d 1227, 1232 (3d Cir. 1991) ("But
trust law cannot be imported wholesale
into the ERISA context. Severance plans
are often similar to employment
contracts, whose interpretation requires
determining the intent of both
contracting parties.").

  It has been uniformly held that general
principles of contract law--under the
federal common law that guides
interpretation of ERISA plans--are to be
applied to the interpretation of the
language of such severance agreements.
See Anstett v. Eagle-Picher Indus., Inc.,
203 F.3d 501, 503 (7th Cir. 2000) ("the
claim for separation benefits [under this
ERISA plan] is really a claim to enforce
a contract") (citation omitted); Grun v.
Pneumo Abex Corp., 163 F.3d 411, 419 (7th
Cir. 1998) ("we construe [the severance
compensation agreement] in accordance
with the federal common law under ERISA
and general rules of contract
interpretation"); Collins v. Ralston
Purina Co., 147 F.3d 592 (7th Cir. 1998);
Murphy v. Keystone Steel & Wire Co., 61
F.3d 560 (7th Cir. 1995); Hickey v. A.E.
Staley Mfg., 995 F.2d 1385 (7th Cir.
1993); Taylor, 933 F.2d at 1232-33.

  Platinum argues that, because we are
interpreting a plan under ERISA, the
intent of the plan’s settlor governs the
interpretation of the terms of the
severance agreement. For this
proposition, Platinum cites Firestone, in
which the Supreme Court determined, inter
alia, the appropriate standard of review
of benefit determinations under ERISA.
489 U.S. at 104-05. The Court concluded
there that, for actions under 29 U.S.C.
sec. 1132(a)(1)(B) challenging benefit
eligibility determinations, courts are
guided by principles of trust law, which
"make a deferential standard of review
appropriate when a trustee exercises
discretionary powers." Firestone, 489
U.S. at 111. However, unlike eligibility
determinations in which an administrator
is given the power to construe uncertain
terms, or where a plan’s terms give the
administrator’s eligibility
determinations deference, where instead
no discretion has been conferred, "other
settled principles of trust law . . .
point to de novo review of benefit
eligibility determinations based on plan
interpretations . . . ." Id. at 111-12.
The Court concluded: "As they do with
contractual provisions, courts construe
terms in trust agreements without
deferring to either party’s
interpretation." Id. at 112. Firestone
clearly fails to provide support for
Platinum’s position that the intent of
the settlor governs in the matter before
us. It says nothing about applying the
law of trusts to interpretation of simple
contractual agreements governed by ERISA-
-including severance agreements.

  Likewise, Hickey provides no assistance
to Platinum. Platinum argues that Hickey,
in which this court construed terms of a
severance pay plan, demands that courts
must rely on the intent of the plan’s
creator. See Hickey, 995 F.2d at 1389.
But in that case, the plaintiffs failed
to produce any evidence to refute the
employer’s interpretation of the plan
terms; it was not the intent of the
settlor, as such, that governed in
opposition to some other intent. Instead,
there was no evidence of any other
relevant intent in the case. See id. at
1388. It is true that the opinion is
peppered with language hinting that its
task was to determine the "intent of the
plan," but the ultimate conclusion rested
on what was--in light of extrinsic
evidence presented to explain an
ambiguous term--"only one possible
interpretation of the term ’participant.’"
Id. at 1392. The question was whether the
employer’s proposed interpretation of the
plan language was unreasonably narrow in
excluding the plaintiffs from the plan.
There was no evidence of an employer’s
secret intent that was not clear to the
plan participants; thus, the question was
merely a matter of interpreting the
employer’s intent as understood by anyone
who read the language of the plan. Hickey
is further distinguished by the important
fact that, as far as we can discern, the
plan there was not submitted to the
plaintiffs for signature--it was an
employee welfare benefit plan but was not
implemented by a contractual agreement.

  Thus, we proceed to evaluate the
agreement under general contract
principles, without giving special weight
to the intent of either party.

III.

  The issue in construing Bock’s severance
agreement is whether the agreement
included in its prescribed calculations
the commissions that comprised a large
part of Bock’s total compensation. The
answer to this question turns on the
meaning of the term "incentive
compensation." Bock claimed that the term
included commissions. Platinum said it
meant bonus. The district court ruled
that both Platinum’s and Bock’s proffered
meanings of this term were reasonable
and, since a contract term capable of
more than one reasonable meaning is
ambiguous, see Central States, Southeast
& Southwest Areas Pension Fund v. Kroger
Co., 73 F.3d 727, 732 (7th Cir. 1996),
the district court found that the
severance agreement was ambiguous and the
court turned to extrinsic evidence to
establish meaning. The court concluded
that "in the context of the agreement"
the term "incentive compensation" was
subject to more than one interpretation.

  The district court erred in apparently
finding intrinsic ambiguity in the
language of the agreement. The term
"incentive compensation," which is the
operative term, considered within the
four corners of the severance agreement,
is not ambiguous. The issue of ambiguity
here revolves around whether the term
"incentive compensation" includes or
excludes "commissions." Since under no
theory that has been advanced do
"commissions" fail to share the
characteristics common to all examples of
the generic category, "incentive
compensation," we can perceive no
ambiguity in the use of the latter term.
Ambiguity can be present only if it is
reasonable to read "incentive
compensation" as excluding commissions.
There is nothing in the language of the
agreement itself to make this a
reasonable interpretation.

  There is no evidence that the term
"incentive compensation" had any special
meaning to contradict its plain and
ordinary meaning as reflected in the
dictionary. Platinum general counsel
Larry Freedman testified that, as far as
he knew, the term "incentive
compensation" had no defined content in
the software industry. Tr. at 146.
Outside the context of the severance pay
program, "incentive compensation" did not
have a pre-defined meaning for Platinum
either, Freedman testified. Tr. at 64-65,
146. Far from undermining the unambiguous
meaning that we have found for the term,
we think that this testimony merely
establishes that "incentive compensation"
is not some term of art requiring
departure from the plain dictionary
definition.

  In fact, although some authorities have
questioned the efficacy of recourse in
many cases to dictionaries, see 2 E.
Allan Farnsworth, Farnsworth on Contracts
sec. 7.10 at 275 (2d ed. 1998) (citing,
inter alia, Giuseppe v. Walling, 144 F.2d
608, 624 (2d Cir. 1944) (L. Hand, J.,
concurring)), the question here involves
a plainly descriptive term that lends
itself straightforwardly to dictionary
definition. Thus, "compensation" means
"payment for value received or service
rendered." Webster’s Third New
International Dictionary 463 (1981).
"Incentive" means "serving to encourage,
rouse, or move to action." Id. at 1141.
Combining these two words means payments
that serve to move the payee to increase
his or her efforts or output. Incentive
compensation is thus an umbrella term
that includes, at least as relevant here,
commissions and bonuses. It may also
include, for example, for industrial
workers, piecework compensation. Sales
"commissions" are the paradigmatic form
of incentive compensation for
salespersons and, applying the plain and
ordinary meaning of words, "commissions"
would necessarily be included in
"incentive compensation" unless
"commissions" were expressly excluded.
Supporting the plain meaning of the term
is the definition adopted by labor
experts. The term "wage-incentive
systems" has been defined as "a method of
relating wages directly to productivity,
e.g., a piecework system, with a fixed
payment for each unit produced." Labor
Relations Expediter 751:106 sec. 10
(BNA). Further, commission payments have
been defined as "a simple form of
incentive practice in the distribution
industries." Id.

  This determination is reinforced by the
merger clause in the severance agreement.
Paragraph 10(e) of the agreement
provides:

Subject to the rights, benefits and
obligations provided for under any
executive compensation . . . plan[ ] of
the company, this Agreement represents
the entire agreement and understanding of
the parties . . . [and] . . . supersedes
all prior . . . agreements . . . except
as set forth under any executive
compensation plan.

In this connection, Bock had a
"compensation plan" that was revised on a
yearly basis. The plan defined his
compensation as a combination of base
salary and "incentives" in the form of
commissions. Platinum argues that this
does not demonstrate that under the plan
"incentive compensation" included
commissions because that term itself does
not appear in the compensation plan. This
may be correct, but his compensation plan
is certainly consistent with the plain
meaning we have ascribed to the term
"incentive compensation."

  Written contracts are presumptively
complete in and of themselves; when
merger clauses are present, this
presumption is even stronger. See L.S.
Heath & Son, Inc. v. AT&T Info. Sys.,
Inc., 9 F.3d 561, 569 (7th Cir. 1993)
("the presence of a merger clause is
strong evidence that the parties intended
the writing to be the complete and
exclusive agreement between them");
Sunstream Jet Exp., Inc. v. International
Air Serv. Co., Ltd., 734 F.2d 1258, 1265
(7th Cir. 1984) (noting under Illinois
law that "’if the contract imports on its
face to be a complete expression of the
whole agreement, it is presumed that the
parties introduced into it every material
item, and parol evidence cannot be
admitted to add another term to the
agreement’") (quoting Pecora v. Szabo, 94
Ill.App.3d 57, 63, 418 N.E.2d 431, 435-36
(1981)).

IV.

  However, here we must find the term
"incentive compensation" to be ambiguous
based on extrinsic evidence, in spite of
the merger clause. Extrinsic evidence
can, in some circumstances, be admissible
to establish an ambiguity when it is
objective and does not depend on the
credibility of the testimony of an
interested party. See Mathews v. Sears
Pension Plan, 144 F.3d 461, 467 (7th Cir.
1998). "’Objective’ evidence is
admissible to demonstrate that apparently
clear contract language means something
different from what it seems to mean . .
. ." AM Int’l, Inc. v. Graphic Mgmt.
Assoc., Inc., 44 F.3d 572, 575 (7th Cir.
1995). This is called the doctrine of
extrinsic ambiguity, which allows the
consideration of extrinsic evidence "to
demonstrate that although the contract
looks clear, anyone who understood the
context of its creation would understand
that it doesn’t mean what it seems to
mean." Mathews, 144 F.3d at 466
(citations omitted).

  We do not mean to belittle the
importance of the terms outlined in the
original agreement. Under the objective
theory of contract, agreements are
generally analyzed in terms of the
objective (plain and ordinary) meaning of
the terms they contain. See 1 Farnsworth,
Farnsworth on Contracts sec. 3.6 (2d ed.
1998); 2 Farnsworth sec. 7.9. This is the
meaning that is ascribed to the promisor,
and the meaning that creates an
expectation in the promisee. Judge
Learned Hand has instructed:

It makes not the least difference whether
a promisor actually intends that meaning
which the law will impose upon his words.
The whole House of Bishops might satisfy
us that he had intended something else,
and it would make not a particle of
difference in his obligation . . . .
Indeed, if both parties severally
declared that their meaning had been
other than the natural meaning, and each
declaration was similar, it would be
irrelevant, saving some mutual agreement
between them to that effect. When the
court came to assign the meaning to their
words, it would disregard such
declarations, because they related only
to their state of mind when the contract
was made, and that has nothing to do with
their obligations.

Eustis Mining Co. v. Beer, Sondheimer &
Co., 239 F. 976, 984-85 (S.D.N.Y. 1917).
This is the staunchest objectivist
stance, but even more lenient jurists
agree that the fact that one party to the
agreement intends that the terms have
something other than their plain and
ordinary meaning is irrelevant unless
both parties share the same meaning, see
2 Farnsworth sec. 7.9 at 265-67;
Restatement (Second) of Contracts sec.
201(1) (1981), or one party knew, or had
reason to know, the meaning intended by
the other party, see 2 Farnsworth sec.
7.9 at 268-69; Restatement (Second) of
Contracts sec. 201(2). "[I]ntent does not
invite a tour through [the plaintiff’s]
cranium, with [the plaintiff] as the
guide." Skycom Corp. v. Telster Corp.,
813 F.2d 810, 814 (7th Cir. 1987). See
also Laserage Technology Corp. v.
Laserage Laboratories, 972 F.2d 799, 802
(7th Cir. 1992) ("[W]hether [the parties]
had a ’meeting of the minds’ . . . is
determined by reference to what the
parties expressed to each other in their
writings, not by their actual mental
processes.").

  That said, "the overriding purpose in
construing a contract is to give effect
to the mutual intent of the parties at
the time the contract was made." Alliance
to End Repression v. City of Chicago, 742
F.2d 1007, 1013 (7th Cir. 1984) (en
banc). Thus, strong extrinsic evidence
indicating an intent contrary to the
plain meaning of the agreement’s terms
can create an ambiguity--provided that
the evidence is objective./1 This is
what happened here. Along with the
severance pay agreement, Platinum
submitted to its executives a one-page
summary of the agreement to "explain to
people what was included in the package .
. . ." Tr. at 125 (Freedman
testimony)./2 The summary was submitted
simultaneously with the agreement to all
eligible employees. It indicated that the
"amount of severance benefit" is
calculated "using the sum of base salary
and bonus, in addition to making up lost
bonus opportunity." This document
supports the notion that Platinum
intended that "incentive compensation"
meant "bonus." It explained:

The payout period for the salary
component of the severance benefit
program is . . . calculated using the sum
of base salary and bonus (in addition to
making up lost bonus opportunity). The
amount of base salary and bonus is
determined based on the maximum amount
paid to the executive during any trailing
12 month period during the 36 months
prior to the termination of employment.

Nowhere are commissions mentioned as part
of the severance pay calculation. Thus,
the summary plainly evinces Platinum’s
intent to exclude commissions (although
the summary language does not expressly
exclude commissions). More important, had
Bock read the summary, he could
potentially have known of Platinum’s
intent when he signed the agreement.

  Summaries have an established
significance in benefits cases:

Our third illustration of the need to
tailor the federal common law of
contracts to the special characteristics
of ERISA plans is the principle that the
plan summary generally controls in the
case of a conflict with the plan itself
because the summary is what the plan
beneficiaries actually read.

Mathews, 144 F.3d at 466 (citations
omitted). Because the summary has
introduced an ambiguity into the term
"incentive compensation," we are obliged
to resolve that ambiguity--to determine
the true meaning of the term in this
context. We already know, from the
district court’s findings (which we
choose not to disturb), that Platinum
intended to exclude commissions. But
Platinum’s undisclosed intentions are not
controlling. Thus, Platinum’s persistent
plea that it did not intend "incentive
compensation" to include commissions is
beside the point. The key here is whether
both parties shared the same meaning for
the term "incentive compensation," or
whether Bock knew, or had reason to know,
Platinum’s intended meaning. See 2
Farnsworth sec. 7.9.

  The district court apparently did not
attempt to resolve this ambiguity, but
instead proceeded directly to the
equitable reasons it might find in Bock’s
favor. Perhaps this is because the court
accepted Platinum’s argument that the
intent of the settlor governs. But, as we
have noted, the intent of the "settlor"
does not govern the interpretation of
this contract. Regardless of the reasons
for the district court’s conclusions, it
never resolved the ambiguity created by
the summary. Nor was the contract fully
interpreted, except for the finding that
ERISA principles required that Platinum
be estopped to deny Bock’s purported
understanding of the agreement. On
remand, the district judge therefore must
now make findings on the question whether
Bock knew, or had reason to know,
Platinum’s intent with respect to
commissions (or shared Platinum’s intent
in this respect). The findings of the
district court may be based either on
evidence already received or on
additional evidence to be adduced. We
therefore must remand this case for that
purpose.

  We make this remand with several
caveats. First, knowledge, or
constructive knowledge, may not be based
solely on the fact that Platinum
furnished the summary. Bock testified
under cross-examination that, although
the summary clearly meant commissions
were excluded, he could not recall when
he first read it. Tr. at 293. For Bock
was under no duty to read the summary,
although the fact that Freedman invited
employees’ attention to it may be
relevant. See Tr. at 77 (Freedman
testimony). Further, even if the court
were to determine that Bock had read the
summary prior to signing the agreement,
that fact supports, but does not mandate,
a finding that he had reason to know
Platinum’s intent.

  Second, other factors might shed light
on the meaning of this now-ambiguous
term. For example, Platinum has suggested
that its interpretation of the agreement
is supported by evidence that Platinum
designed the severance program primarily
for salaried managers who received
bonuses, and not for commissioned
salespersons. Platinum suggests that
within this context "incentive
compensation" has a more restrictive
meaning--one that excludes commissions.
This sort of restrictive meaning could
prevail if both parties intended that a
term in a contract have a meaning other
than its most plain and ordinary meaning.
See Alliance to End Repression, 742 F.2d
at 1013. Thus, interpreting a consent
decree requires an understanding of the
context in which the decree was entered.
Cf. Alliance to End Repression, 742 F.2d
at 1013 ("[C]ontext, in the broadest
sense, is the key to understanding
language."). But evidence of context is
only of moment if both parties to the
contract shared the special meaning
imported by the context or if one party
conferred a special meaning on language,
and the other party knew, or had reason
to know, the first party’s special
meaning.

  Here, the only evidence in the record
that Bock knew, or had reason to know,
Platinum’s intent--i.e., knew that the
context of the document indicated that
"incentive compensation" was directed at
non-sales executives’ bonuses, rather
than at sales executives’ commissions--is
the fact that he questioned several
persons about whether his commissions
were included. Shortly after Bock
received the agreement, in early
September 1998, he called Freedman to ask
what was included in the severance pay
calculation. Bock testified that Freedman
told him "yes, everything is included,
Kevin, you’re covered, everything is
fine, and that was about the extent of
the conversation." Tr. at 235. Bock then
signed and returned the agreement. In May
1999, a few months after Computer
Associates announced its intent to
acquire Platinum, Bock became suspicious.
Bock contacted Freedman, Executive Vice
President of Sales Tom Slowey and
President and Chief Executive Officer
Andrew Filipowski to ask whether the
severance pay calculation included
commissions. However, these are not
necessarily the actions of an employee
who knew, or had reason to know, that
"incentive compensation" did not include
commissions. Absent additional evidence,
it would be inequitable to regard an
employee’s simple search for reassurance
as a sufficient basis for concluding that
he shared his employer’s intent. Such a
search for reassurance, however, if
fortified by other evidence, might help
support an inference of knowledge of the
employer’s intent.

  As we understand the facts at this
point, there is a likely sequence of
events. Platinum intended to exclude
commissions from the calculation of
incentive compensation for sales
executives and wanted to recognize only
bonus (not generally or substantially
applicable to salespersons). However,
Platinum made an apparently egregious
drafting error in preparing the agreement
for presentation to Bock. Platinum made
what can be described as a
unilateralmistake in failing to exclude
commissions. Platinum therefore may have
created an expectation in Bock, which he
acknowledged by signing the agreement.
See 1 Farnsworth sec. 3.9./3 But we
have no way of knowing the ramifications
of these events without exploring Bock’s
understanding of them. We do not adopt
the view (although we do not foreclose
the possibility) that Platinum’s drafting
was intentionally misleading in its
effort to avoid forthrightly delivering
the bad news to the salespersons. We
leave the district court free to make
appropriate findings on this point.

V.

  Bock prevailed in the district court
because the court concluded that Platinum
breached a fiduciary obligation to fully
disclose the terms of the severance plan.
The court concluded that "the legal
principle remains under both contract and
ERISA law that one cannot induce an
employee to enter into an agreement
without disclosing material facts." Tr.
at 384-85. But the district court did not
appear to consider whether, or to what
extent, the summary may have put Bock on
notice that commissions were not included
in the severance plan. The alleged breach
turns entirely on the question for which
we are remanding to the district court:
did Bock know, or have reason to know,
that Platinum intended to exclude
commissions? If he did, Platinum may be
rescued from the plain and ordinary
meaning of the severance agreement
itself. If he did not, Bock may prevail
as a matter of pure contract
interpretation.
  The district court ruled that Platinum
was estopped from denying Bock the full
severance benefits, defined as including
commissions. The court reasoned that
Freedman’s assurances that "everything is
included . . . you’re covered" induced
Bock to sign the agreement. However,
Platinum correctly points out that ERISA
estoppel claims require a plaintiff to
show "(1) a knowing misrepresentation;
(2) made in writing; (3) with reasonable
reliance on that misrepresentation . . .
(4) to [the plaintiff’s] detriment."
Coker v. Trans World Airlines, Inc., 165
F.3d 579, 585 (7th Cir. 1999). We need
not consider all Platinum’s objections to
the district court’s conclusion because
one will suffice: Bock does not prevail
on an estoppel theory because there was
no showing of detrimental reliance. That
element of the estoppel claim requires a
showing of economic harm. See Shields v.
Local 705, Int’l Brotherhood of
Teamsters, 188 F.3d 895 (7th Cir. 1999);
Panaras v. Liquid Carbonic Indus. Corp.,
74 F.3d 786, 794 (7th Cir. 1996). Bock
argues that his continuing in Platinum’s
employ when put at risk of termination by
a threatened takeover is sufficient
detrimental reliance. However, there has
been no showing, for example, that Bock
refused alternative employment on account
of his belief in a generous severance
provision. If Bock has additional
evidence to proffer on this point or a
related one on remand, the district court
in its discretion may receive additional
relevant evidence.


VI.

  For the foregoing reasons, we VACATE and
REMAND to the district court for further
proceedings consistent with this opinion.

FOOTNOTES

/1 To be "objective," extrinsic evidence "must not
depend on the credibility of testimony (oral or
written) of an interested party-- either a party
to the litigation or . . . an agent or employee
of the party." Mathews, 144 F.3d at 467. Thus,
the evidence "can be supplied by disinterested
third parties: evidence that there was more than
one ship called Peerless, or that a particular
trade uses ’cotton’ in a nonstandard sense." AM
Int’l, 44 F.3d at 575. Summaries of benefits
plans appear to meet this criterion. See Mathews,
144 F.3d at 468.
/2 To preclude consideration of the plan summary
under the present circumstances, the merger
clause would presumably have had to explicitly
exclude the summary. It did not.

/3 Farnsworth illustrates the doctrine of unilateral
mistake well:

[S]o complete is the acceptance of the objective
theory that courts unhesitatingly allow recovery
for loss of expectation if one party has simply
made a mistake in the use of language. If a
seller misspeaks and offers to sell "two hundred
fifty" bushels of apples at a stated price,
meaning to say "two hundred fifteen," a buyer
that accepts, neither knowing nor having reason
to know of the seller’s mistake in expression,
can recover for loss of expectation should the
seller fail to deliver 250 bushels.
