                                                                                                                           Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


12-23-2003

Wallin v. Severance Plan Elec
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-1524




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                                                             NOT PRECEDENTIAL

                  UNITED STATES COURT OF APPEALS
                       FOR THE THIRD CIRCUIT


                                  No. 03-1524


                               IRA WALLIN,
Individually and as Class Representative on behalf of all other similarly situated
                                 plaintiffs,

                                             Appellant

                                        v.

THE SEVERANCE PLAN OF ELECTRONIC DATA SYSTEMS; THE PLAN
 COMMITTEE AND ADMINISTRATOR OF THE SEVERANCE PLAN OF
   ELECTRONIC DATA SYSTEMS; ELECTRONIC DATA SYSTEMS
                     CORPORATION



                On Appeal from the United States District Court
                         for the District of New Jersey
                          (Dist. Ct. No. 01-cv-05463)
                 District Judge: Honorable William J. Martini



                  Submitted Under Third Circuit LAR 34.1(a)
                             November 19, 2003

        Before: RENDELL, BARRY and CHERTOFF, Circuit Judges.

                          (Filed: December 23, 2003)




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                                       OPINION


CHERTOFF, Circuit Judge.

       Appellant Ira Wallin (“Wallin”) appeals the judgment and order of the District

Court granting summary judgment in favor of Appellees, The Severance Plan of

Electronic Data Systems; the Plan Committee and Administrator of The Severance Plan

of the Electronic Data Systems; and Electronic Data Systems Corporation (collectively

“EDS”). Wallin filed a class action suit against EDS to recover benefits from EDS’s

Severance Plan (“the Plan”) under the Employee Retirement and Income Security Act

(“ERISA”), 29 U.S.C. §§ 1001-1461 (1994). For the reasons set forth below, we will

affirm the judgment and order of the District Court.

                                            I.

      We will review the facts only briefly. Wallin was employed by Electronic Data

Systems Corporation (the “Company”) in September of 1988. On October 11, 2001, two

Company managers telephoned Wallin to inform him that he was being terminated. The

following day, on October 12, 2001, Wallin received his severance package materials in

the mail. Wallin claims that only then did he learn that the Severance Plan had been

amended on October 5, 2001, and that his severance package had been altered.

      Before the October 2001 amendment, the Plan provided participants with two

weeks of Weekly Base Pay in severance benefits per each complete Year of Service, with

                                            2
a maximum of twenty-six weeks of Weekly Base Pay. After it was amended in October

2001, the Plan stipulated that participants with fewer than three Years of Service were to

be provided two weeks of Weekly Base Pay in severance. Those participants with three

or more Years of Service would be extended four weeks of Weekly Base Pay. Given his

tenure at EDS, Wallin would have received the maximum twenty-six weeks of severance

pay before October 2001, but was entitled to four weeks of severance pay under Plan

amended in October 2001.

       Wallin filed suit against EDS in District Court on November 27, 2001, and filed

an amended complaint on March 22, 2002. In his amended complaint, Wallin alleged

breach of the written provisions of the Plan, breach of fiduciary duty, and a claim of

equitable estoppel against EDS. On January 23, 2003, the District Court denied Wallin’s

motion for Leave to File a Second Amended Class Action Complaint and granted EDS’s

motion for summary judgment.

                                            II.

       This Court has jurisdiction to review the grant of summary judgment under 28

U.S.C. § 1291. We exercise plenary review of the District Court’s grant of summary

judgment. See Blair v. Scott Speciality Gases, 283 F.3d 595, 602-03 (3d Cir. 2002). We

examine the facts in the light most favorable to the non-moving party and affirm the

grant of summary judgment if there is no genuine issue of material fact and if the moving

party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Based on the record,


                                             3
we find that Wallin created no genuine issue as to any material fact relevant to his claims.



       First, Wallin argues that the District Court wrongly granted summary judgment

against his claim that EDS violated the notice provisions of the Plan and that EDS

otherwise “actively concealed the purported Plan amendment, as part of a layoff

program, until they had commenced the layoffs.” (Appellant’s brief at 10). We disagree.

       ERISA’s notice and disclosure requirements provide that the administrator of an

employee benefit plan must furnish participants and beneficiaries with a readily

understandable summary of any “material modifications” in accordance with the notice

and disclosure requirements contained in Section 104(b)(1) of ERISA, 29 U.S.C.

§1024(b)(1). Such notification must be made within 210 days of the end of the plan

year. Id.

       Wallin argues that the specific terms of the Plan imposed burdens on EDS beyond

ERISA’s requirements. He points to Section 5.2 of EDS’s Severance Plan, titled

“Amendment or Termination,” that was in effect prior to the October 5, 2001,

amendments. Section 5.2 reads in part, “EDS reserves the right to modify or terminate

the Plan at any time. EDS through the Board of Directors or any committee designated

by said Board of Directors may amend the Plan pursuant to a formal resolution. If this is

done, eligible Participants will be notified of any important changes.” (App. 64)

       Wallin contends that this language “constitutes an extra-ERISA commitment,


                                             4
above and beyond the statutory [210 day] notice requirement,” which “impos[ed] an

immediate notice burden on defendants.” (Appellant’s brief at 13). He argues that

“defendants undertook an extra-statutory notice obligation without which notification of

an ‘important’ change, the Plan cannot be amended.” (Appellant’s reply brief at 4)

       In fact, the plain language of the Plan only states that “participants will be

notified” about “important changes” to the Plan. The record indicates that Wallin did

receive written notice of the October 5, 2001, amendments to the Plan on October 12,

2001, seven days after EDS had adopted the amended Plan. Wallin’s claim that EDS

was required to provide “immediate” notification is unfounded. No language in the Plan

states, and no evidence suggests, that EDS was obligated to provide notification of

changes within a specific period of time, or that it was required to provide simultaneous

disclosure of the Committee’s adoption of an amendment to the Plan.

       Wallin also argues that the District Court should have upheld his claim that EDS

“actively concealed” changes to the Plan by “burying” the information in its intranet site

that was only accessible to management employees. This contention is frivolous. Even

if Wallin was not able to access the Company’s intranet site on October 11, 2001, when

he was first notified of his termination, he received a copy of the amended Plan the

following day on October 12, 2001. One day’s lapse in disclosure hardly constitutes

“concealment.” And the fact that EDS had on one occasion provided notice of a Board

resolution on the same day it was adopted (the “Todd Memo” of July 27, 1999) does not


                                              5
suggest that a subsequent decision not to provide simultaneous notice constitutes active

concealment by the Company.

       Next, Wallin asserts that the District Court improperly granted summary judgment

in favor of EDS on Wallin’s claims of breach of fiduciary duty. This Court has held that

in order to sustain a breach of fiduciary duty complaint under ERISA, a plaintiff must

demonstrate (1) the company was acting in a fiduciary capacity; (2) the company made

affirmative representations or failed to adequately inform plan participants and

beneficiaries; (3) the company knew of the confusion generated by its misrepresentations

or its silence; and (4) there was resulting harm to the employees. Int’l Union, United

Auto., Aerospace & Agric. Implement Workers of Am., U.A.W. v. Skinner Engine Co.,

188 F.3d 130, 148 (3d Cir. 1999).

       Wallin’s claim founders at the second prong of this test, i.e. “that the company

made affirmative representations or failed to adequately inform plan participants and

beneficiaries.” In support of his breach of duty claim, Wallin simply repackages his

contention that EDS “actively concealed” information on its intranet site and failed to

provide simultaneous notification of the Board resolution to Plan beneficiaries. We have

rejected these arguments already, and they become no more persuasive garbed in the

language of breach of fiduciary duty.

       Wallin’s final argument is that he is entitled to relief from EDS’s October 5, 2001,

amendment to the Plan based on a theory of equitable estoppel. In order to succeed


                                            6
under this theory of relief, an ERISA plaintiff must establish (1) a material

representation, (2) reasonable and detrimental reliance upon the representation, and (3)

extraordinary circumstances. Curcio v. Hancock Mut. Life Ins. Co., 33 F.3d 226, 235-36

(3d Cir. 1994) (internal citations omitted).

       A few days’ delay of notification of a Plan amendment does not rise to the level of

a material misrepresentation. Moreover, Wallin has failed to provide evidence to

substantiate a finding of substantial harm based on this delay. He argues that in the

seven-day window from the date the Board amended the Plan to the date he received

written notice of the changes, i.e. October 5, 2001 to October 12, 2001, EDS “usurp[ed]

[his] opportunity to make an informed decision regarding the future of his benefits and

employment.” (Appellant’s brief at 28). However, an excerpt from Wallin’s deposition

suggests that his complaint is grounded more in wishful thinking than reality.

       Q. It is speculation on your [Wallin’s] part that the position [at Merck
       Medco] was even still available as of October 5, correct?
       A. Yes.
       Q. And between October 5th and October 11th you did not turn down any
       employment opportunities, correct?
       A. Right. There were no specific opportunities offered.
       Q. And during that time, between October 5th and October 11th, you were
       not pursuing any opportunities, correct?
       A. Correct.
       Q. And nobody was pursuing you during that time frame, correct?
       A. Correct.

(App. 116-17, Wallin Dep. at 73-74).


       No further discussion is necessary. EDS amended its Severance Plan on

                                               7
October 5, 2001, and provided Wallin with notice of amendments to the Plan on October

12, 2001. Wallin did not provide evidence to suggest that EDS failed follow the notice

requirements of the Plan or breached its fiduciary responsibilities to him. His request for

relief under a theory of equitable estoppel is also unfounded. Accordingly, the judgment

of the District Court will be affirmed.



TO THE CLERK:

       Please file the foregoing opinion.




                                   /s/ Michael Chertoff
                                   Circuit Judge




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