              NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                         File Name: 15a0746n.06
                                                                                 FILED
                                       No. 14-4076                         Nov 12, 2015
                                                                       DEBORAH S. HUNT, Clerk
                      UNITED STATES COURT OF APPEALS
                           FOR THE SIXTH CIRCUIT


ALBERT H. SCHEMPP,                              )
                                                )
       Plaintiff-Appellant,                     )
                                                )      On Appeal from the United States
v.                                              )      District Court for the Northern
                                                )      District of Ohio
GC ACQUISITION, LLC; GLASTIC                    )
CORPORATION SUPPLEMENTAL                        )
EXECUTIVE RETIREMENT PLAN “A”;                  )
ROCHLING GLASTIC COMPOSITES,                    )
LP; JOHN DOES 1-5,                              )

       Defendants-Appellees.

_________________________________/

Before: GUY, BATCHELDER, and GIBBONS, Circuit Judges.

       RALPH B. GUY, JR., Circuit Judge. Plaintiff, Albert Schempp, appeals the

district court’s grant of Defendants’ motion to dismiss this case and the court’s denial of

Schempp’s motion for summary judgment. Schempp claims he was entitled to lifetime

pension benefits under Defendant, Glastic Corporation’s Supplemental Executive

Retirement Plan A (“SERP A”). The district court ruled that Schempp waived his rights
Case No. 14-4076                                                                     2
Schempp v. GC Acquisition, LLC, et al.

to benefits under SERP A because he entered an agreement that superseded SERP A. For

the following reasons we AFFIRM.

                                           I.

       Schempp was President of Glastic Corporation until he retired in 1992. In 1994,

he began receiving lifetime monthly pension benefits in the amount of $4,556 per month

under SERP A. The parties agree that SERP A was an employee pension benefit plan as

defined under 29 U.S.C. § 1002(2)(A) of ERISA, although there is some dispute as to

whether the plan was a funded plan or an unfunded, “top-hat” plan under ERISA.

       In 2005, Glastic notified Schempp that it was terminating SERP A effective

January 1, 2006. The reason for the termination is disputed. Glastic claims that it was

due to adverse economic circumstances while Schempp claims it was done to reduce the

company’s liabilities so that the company would be more attractive to purchasers. The

Glastic board of directors prepared a consent resolution to terminate the plan, which the

then president and vice president–Patrick Greene and Mark DiGiampietro, respectively–

purportedly signed. Glastic has not provided a copy of the signed resolution–a fact that

Schempp notes without arguing it has any effect on the present appeal. Schempp does

claim that the resolution was inadequate to terminate SERP A for reasons discussed

below. Schempp stopped receiving payments under SERP A in January 2006.

       In March of 2006, the Glastic board approved what is referred to as the

2006 Agreement, which provided retirement benefits to Schempp and others for a fixed

rather than open-ended period of time.     The 2006 Agreement also provided certain
Case No. 14-4076                                                                       3
Schempp v. GC Acquisition, LLC, et al.

benefits not allowed under SERP A. First, if Schempp died before all payments had been

made, his designated beneficiary would receive the remaining payments. Second, if he

was still living in July 2014, he would receive an additional benefit. Schempp received

$4,556 per month through December of 2013.

       Glastic Corporation became “Rochling Glastic Composites, LP” in 2007.

       Schempp did not challenge the fact that he was not receiving benefits from SERP

A until he filed the present lawsuit in the fall of 2013, right before the 2006 Agreement’s

benefits were set to end in 2014. It was then that Schempp began to actively argue that

SERP A was never properly terminated and he was entitled to benefits thereunder.

       Glastic filed a motion to dismiss Schempp’s claim arguing that Schempp had

waived his rights to SERP A benefits and that his claim was otherwise time-barred

pursuant to a provision in the 2006 Agreement. Schempp filed a motion for summary

judgment. The district court granted Glastic’s motion to dismiss, which it treated as a

motion for summary judgment. The court declined to rule on whether SERP A was

properly terminated and ruled that “Plaintiff and Defendants voluntarily entered into the

2006 Agreement to supersede SERP A and the rights therefrom” and that Schempp,

therefore, waived his rights under SERP A. The court denied Schempp’s motion for

summary judgment.

                                            II.

       A “court shall grant summary judgment if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a matter
Case No. 14-4076                                                                         4
Schempp v. GC Acquisition, LLC, et al.

of law.” Fed. R. Civ. P. 56(a). A genuine issue of material fact exists when there are

“disputes over facts that might affect the outcome of the suit under the governing law.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). But when “the record taken

as a whole could not lead a rational trier of fact to find for the non-moving party, there is

no ‘genuine issue for trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.

574, 587 (1986) (quoting First Nat'l Bank of Arizona v. Cities Serv. Co., 391 U.S. 253,

289 (1968)).

                                            III.

Waiver of Rights under SERP A

Amendment Provision

       SERP A included the following provision, entitled “AMENDMENT OF PLAN”:

“Any amendment to or termination of this Plan made after the effective date, must be

agreed upon to in writing in advance of such change by the Board of Directors and G.E.

Grant and R.E. Donnelly.” Schempp argues that he is still entitled to benefits under

SERP A because SERP A was never terminated in accordance with this provision

because Grant and Donnelly did not sign it. Schempp also argues that because the 2006

Agreement did not comply with this provision, it could not affect his rights to SERP A

benefits.

       At the time of SERP A’s execution, Grant and Donnelly served as Glastic’s

president and vice president, respectively. They, along with Schempp, were also three of
Case No. 14-4076                                                                      5
Schempp v. GC Acquisition, LLC, et al.

the four intended beneficiaries under SERP A. The district court ruled that the provision

was ambiguous noting:

       The Amendment Clause is ambiguous because it is unclear in which
       capacity Grant’s and Donnelly’s signatures were required. Grant and
       Donnelly played multiple roles in the negotiation; not only were they
       President and Vice President at Glastic, they were also intended recipients
       of the SERP A benefits. Because of this, the requirement of Grant’s and
       Donnelly’s signatures for any amendment to or termination of SERP A
       could be interpreted in one of three ways: (1) the clause required the
       signatures of Grant and Donnelly in their personal capacities, specifically;
       (2) the clause required the signatures of Glastic’s President and Vice
       President, whomever they may have been at the time the amendment or
       termination was sought; or (3) the clause required the signatures of two
       persons representing the intended recipients of SERP A benefits at the time
       the amendment or termination was sought.

The district court ruled that making a determination about how the Amendment Clause

should be interpreted was unnecessary “because the 2006 Agreement was a valid bilateral

modification of SERP A.”

       We agree. Certainly the Amendment Clause would control if Glastic unilaterally

terminated or modified the Plan–an action that would affect all participants and

beneficiaries. But here, Schempp entered into a bilateral agreement to modify his rights

under SERP A (discussed below) rather than amend or terminate the Plan as a whole, and

nothing in the Amendment Clause limits his ability to do that.          As a result, the

Amendment Clause does not govern the 2006 Agreement.

Validity of Waiver

       Because we hold that the Amendment Clause does not control Schempp’s waiver

of rights to SERP A benefits, we next consider whether the 2006 Agreement was a valid
Case No. 14-4076                                                                        6
Schempp v. GC Acquisition, LLC, et al.

waiver of such rights. The district court held that “[t]he 2006 Agreement, on its face,

replaces any rights [Schempp] may have had under SERP A.” The following provision

from the Agreement’s recitals provision was dispositive for the district court: “It is the

intent of the parties that this Agreement, a modification of [SERP A], and all deferrals of

compensation and distributions made pursuant to it, complies with Section 409A of the

Internal Revenue Code of 1986, as amended.”

       Schempp challenges this argument, under various theories. First, Schempp argues

that because the 2006 Agreement does not use the word “waiver” or note that it is a

“settlement agreement,” then the 2006 Agreement cannot affect his rights under SERP A.

But the 2006 Agreement explicitly says that it is a modification of SERP A. The recitals

also note that:

       Believing, because of significant adverse financial conditions, that [Glastic]
       could no longer continue to make payments under [SERP A], the Board of
       Directors . . . previously resolved to terminate [SERP A] . . . Despite its
       financial difficulties, [Glastic] now has determined that it can continue to
       provide a limited supplemental retirement benefit [to] the Participant . . . .

The agreement makes clear that it is modifying his rights to SERP A benefits. The

absence of the specific language Schempp references does not change that fact.

       Second, Schempp argues that the 2006 Agreement could not modify Schempp’s

rights to SERP A benefits because he could not agree to modify something that he

already believed was terminated. To support this claim, Schempp filed an affidavit with

the district court, which stated that at the time of the 2006 Agreement, he believed that

SERP A was properly terminated but he also believed that he had preserved any rights he
Case No. 14-4076                                                                                      7
Schempp v. GC Acquisition, LLC, et al.

had regarding SERP A benefits. Schempp’s statements are contradictory. How could he

truly believe SERP A was terminated if he also believed that he maintained rights under

SERP A? What is more, his affidavit contradicts his response filed to Glastic’s motion

for summary judgment.              There Schempp states that Glastic entered into the

2006 Agreement in order to “avoid a major dispute,” which demonstrates he questioned

whether SERP A was properly terminated. Emails between Schempp’s attorney and

Glastic’s counsel also demonstrate that the 2006 Agreement was intended to settle a

dispute relating to Schempp’s continued right to SERP A benefits. In those emails,

Schempp’s counsel referred to the 2006 Agreement as a “settlement arrangement” and

noted that the agreement was “in lieu of the current SERP plans.”1

        Schempp argues that such extrinsic evidence should not be considered–a curious

position given that he submits his own extrinsic evidence (his affidavit) to establish his

understanding of the 2006 Agreement. Regardless, such evidence is properly considered

to the extent there is any doubt as to the meaning of the modification language in the

agreement. See Shifrin v. Forest City Enters., Inc., 64 Ohio St. 3d 635, 638 (1992).

Considering such evidence, no reasonable fact finder could find that the 2006 Agreement

was anything other than a waiver of Schempp’s rights to SERP A benefits.


1
  Schempp challenges the admissibility of these emails arguing that they are: (1) subject to the attorney-
client privilege; and (2) that they are inadmissible under Rule 408 of the Federal Rules of Evidence
because they relate to a statement made in settlement negotiations. Both arguments fail. First, the emails
noted above were between Schempp’s attorney and opposing counsel in settlement negotiations, and not
subject to the attorney-client privilege. See State ex rel. Leslie v. Ohio Hous. Fin. Agency, 105 Ohio St.
3d 261, 265 (2005). And, Schempp has waived his right to challenge the emails under Rule 408 as he
previously relied on such emails before the district court. See Top Flight Entm’t, Ltd. v. Schuette,
729 F.3d 623, 633 (6th Cir. 2013) (noting that arguments not raised before the district court are generally
waived on appeal).
Case No. 14-4076                                                                      8
Schempp v. GC Acquisition, LLC, et al.

       Schempp next argues that because the consideration referenced in the

2006 Agreement was not Schempp’s explicit waiver of claims to SERP A benefits, this

evinces that Schempp did not waive such claims. Schempp offers no law to support this

claim and we find none.         The 2006 Agreement was undoubtedly supported by

consideration – the parties do not dispute this. And, as discussed above, the Agreement

was clearly a modification of Schempp’s rights under SERP A. Schempp’s claim on this

point fails.

       Finally, Schempp argues that he was coerced into signing the 2006 Agreement.

The only fact that Schempp offers to support this claim is that Glastic had stopped

payment of his SERP A benefits in December of 2005, and he was therefore in a

“disadvantaged position.”     However, Schempp was represented by an attorney who

extensively negotiated the 2006 Agreement–an arms-length transaction.           Certainly

Schempp could have challenged Glastic’s termination of SERP A benefits at that time,

but he chose to accept the 2006 Agreement instead. Such situation does not constitute

coercion. See Blodgett v. Blodgett, 49 Ohio St. 3d 243, 246 (1990) (holding that a party’s

acceptance of a settlement agreement because she could not afford to wait for the

outcome of an appeal does not constitute coercion).

Was Waiver Made Knowingly and Voluntarily

       In his reply brief, Schempp, argues that the district court erred in analyzing the

2006 Agreement under simple contract law. Citing Frommert v. Conkright, 535 F.3d 111

(2d Cir. 2008), rev’d on other grounds, 559 U.S. 506 (2010), Schempp argues that
Case No. 14-4076                                                                         9
Schempp v. GC Acquisition, LLC, et al.

ERISA requires consideration of another factor–whether such waiver was made

knowingly and voluntarily. This court has not previously ruled on whether a waiver of

rights under an ERISA pension plan must be made knowingly and voluntarily to be valid.

Other circuits to have considered the issue have generally applied the knowing-and-

voluntary requirement in this context.       See Russell v. Harman Intern. Indus., Inc.,

773 F.3d 253, 255-56 (D.C. Cir. 2014) (compiling cases). When evaluating whether the

knowing-and-voluntary requirement is satisfied, other circuits generally consider the

following, non-exhaustive list of factors:

       1) the plaintiff's education and business experience, 2) the amount of time
       the plaintiff had possession of or access to the agreement before signing it,
       3) the role of plaintiff in deciding the terms of the agreement, 4) the clarity
       of the agreement, 5) whether the plaintiff was represented by or consulted
       with an attorney, as well as whether an employer encouraged the employee
       to consult an attorney and whether the employee had a fair opportunity to
       do so and 6) whether the consideration given in exchange for the waiver
       exceeds employee benefits to which the employee was already entitled by
       contract or law.

Id. at 256 (citing Laniok v. Advisory Comm. of Brainerd Mfg. Co. Pension Plan, 935 F.2d

1360, 1368 (2d Cir. 1991)).

       Assuming without deciding that the knowing-and-voluntary requirement applies in

this case, we are convinced that a rational trier of fact would conclude that Schempp both

knowingly and voluntarily waived his rights under SERP A. Schempp was President of

Glastic Corporation before he retired, which demonstrates a high level of business

experience. Schempp’s lawyer had access to the 2006 Agreement for enough time to

thoroughly review it, discuss various provisions with Schempp, and negotiate various
Case No. 14-4076                                                                                 10
Schempp v. GC Acquisition, LLC, et al.

terms with Glastic. The agreement is clear. Finally, ample consideration was given for

Schempp’s assent. In fact, if Schempp were to die before all of the benefits under the

2006 Agreement had been paid out, he was in a position to gain more than he would have

received under SERP A as SERP A did not provide a payment to his beneficiary in such

situation.2

       AFFIRMED.




2
 Because we hold that Schempp waived his rights to SERP A benefits, we need not consider the question
of whether SERP A was properly terminated or the effect of the one-year limitations provision.
