Adams v. The Brink's Company

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 06-1744

JIMMY ADAMS; CHRISTOPHER BROOKS ADDINGTON;
MICHAEL ADKINS; JERRY BAIRD; MICHAEL A.
BLEDSOE; ROBERT BLEDSOE; KIM BOGGS; HARRY
BOONE; GLENDA BRADY; WILLIAM BREEDING; JOHN
BROWNING, JR.; JOHN BROWNING, SR.; BILLY
BULLION; BENNETT S. CANTRELL; BILLY CANTRELL;
FLOYD CANTRELL; FREDDIE CANTRELL; ISAAC W.
CANTRELL; JOHN W. CANTRELL; THELMER CANTRELL;
DONALD CHILDRESS; DONALD R. CLARK; GREG CLARK;
MICHAEL CLARK; RANDALL A. CLARK; JAMES E.
COOKE; CLAUDE COX; VERNUS A. CULBERTSON; TEDDY
DEAN; CARL T. DOTSON; DAVID ELAM; WILLIE M.
FALIN; FRANK FARMER; JOHNNY W. FARMER;
HEZEKIAH FRANKLIN; DAVID M. FREEMAN; LARRY
GILLIAM; ROY R. GILLIAM; EDWARD GRAHAM; DONALD
GREEAR; DENVER HALL; DANE HAMILTON; SCOTTY
HAMILTON; DANNY HAYES; CLEGG HESS; HOMER HILL;
THOMAS HILLMAN; RICHARD HUGHES; JERRY HYLTON;
GREG IRESON; ARTHUR W. JENKINS; ROGER J.
JONES; ROY JONES; DON KENNEDY; DAVID KING;
CHARLES LANE; RONALD LARGE; ATLON LAWSON;
RONNIE L. LAWSON; TIM LAWSON; JOHN LIVINGSTON;
ROBIN LOVELL; WOODROW LOVELL; DAVID G.
MCCONNELL; DWAYNE MCCONNELL; HENRY MCFADDEN;
GEORGE L. MEADE; HOLLY P. MEADE; IVAL MEADE;
RICKY MEADE; DANNY S. MOORE; ROGER D. MORGAN;
DONALD E. MULLINS; DONALD M. MULLINS; FRANKLIN
D. MULLINS; GARY MULLINS; JOHNNY R. MULLINS;
OTTIS MULLINS; RANDY MULLINS; RONNIE MULLINS;
GERALD NEWTON; CHARLES OSBORNE; JEFFREY PETRO;
HOMER PHIPPS; FREDDY POWERS; DENNIS RASNIC;
BOBBY REDMAN; LAWRENCE REEVES; CHARLES
RICHARDSON, JR.; DUSTY ROBINSON; JIMMY ROSE;
MITCHELL SALYERS; DENVER SANDERS; RICKY
SHELTON; RONNIE SLEMP; KENNETH SLUSS; DONALD
STAIR; ROBERT STAPLETON; JEFF SUMMERS; WILLIS
SURRETT, JR.; GARY SWINEY; DANNY TAYLOR; JUDY
THACKER; PHIL THACKER; WILLIE THACKER; JERRY
TIGNOR; RAY WATSON; BOBBY WHEELER; CLARENCE
WHISENHUNT; MIKE WHITAKER; JERRY WHITE; GARY
WILLIAMS; ARTHUR WILSON; RALPH WILSON, JR.;
DENVER WINEBARGER; ROBERT SMALLWOOD; WINSTON
RICHARDSON; MICHAEL HOPKINS; KENNETH MEADE;
TERRY MITCHELL; MICHAEL BOGGS; RAY TAYLOR;
JACK BLANTON; DONALD RATLIFF,

Plaintiffs - Appellants,

and

MARTIN JESSEE; JAMES W. RAY; SAM ADKINS;
DENNIS A. CANTRELL; JEFF FRANKLIN; TRENTON
MULLINS; DAVID MCCARTY,

Plaintiffs,

versus

THE BRINK’S COMPANY; PARAMONT COAL
CORPORATION; THE BRINK’S COMPANY PENSION-
RETIREMENT PLAN; ADMINISTRATIVE COMMITTEE FOR
THE BRINK’S COMPANY PENSION-RETIREMENT PLAN,

Defendants - Appellees.

No. 06-1770

2
GILLIAM; ROY R. GILLIAM; EDWARD GRAHAM; DONALD
GREEAR; DENVER HALL; DANE HAMILTON; SCOTTY
HAMILTON; DANNY HAYES; CLEGG HESS; HOMER HILL;
THOMAS HILLMAN; RICHARD HUGHES; JERRY HYLTON;
GREG IRESON; ARTHUR W. JENKINS; ROGER J.
JONES; ROY JONES; DON KENNEDY; DAVID KING;
CHARLES LANE; RONALD LARGE; ATLON LAWSON;
RONNIE L. LAWSON; TIM LAWSON; JOHN LIVINGSTON;
ROBIN LOVELL; WOODROW LOVELL; DAVID G.
MCCONNELL; DWAYNE MCCONNELL; HENRY MCFADDEN;
GEORGE L. MEADE; HOLLY P. MEADE; IVAL MEADE;
RICKY MEADE; DANNY S. MOORE; ROGER D. MORGAN;
DONALD E. MULLINS; DONALD M. MULLINS; FRANKLIN
D. MULLINS; GARY MULLINS; JOHNNY R. MULLINS;
OTTIS MULLINS; RANDY MULLINS; RONNIE MULLINS;
GERALD NEWTON; CHARLES OSBORNE; JEFFREY PETRO;
HOMER PHIPPS; FREDDY POWERS; DENNIS RASNIC;
BOBBY REDMAN; LAWRENCE REEVES; CHARLES
RICHARDSON, JR.; DUSTY ROBINSON; JIMMY ROSE;
MITCHELL SALYERS; DENVER SANDERS; RICKY
SHELTON; RONNIE SLEMP; KENNETH SLUSS; DONALD
STAIR; ROBERT STAPLETON; JEFF SUMMERS; WILLIS
SURRETT, JR.; GARY SWINEY; DANNY TAYLOR; JUDY
THACKER; PHIL THACKER; WILLIE THACKER; JERRY
TIGNOR; RAY WATSON; BOBBY WHEELER; CLARENCE
WHISENHUNT; MIKE WHITAKER; JERRY WHITE; GARY
WILLIAMS; ARTHUR WILSON; RALPH WILSON, JR.;
DENVER WINEBARGER; ROBERT SMALLWOOD; WINSTON
RICHARDSON; MICHAEL HOPKINS; KENNETH MEADE;
TERRY MITCHELL; MICHAEL BOGGS; RAY TAYLOR;
JACK BLANTON; DONALD RATLIFF,

Plaintiffs - Appellees,

and

MARTIN JESSEE; JAMES W. RAY; SAM ADKINS;
DENNIS A. CANTRELL; JEFF FRANKLIN; TRENTON
MULLINS; DAVID MCCARTY,

Plaintiffs,

versus

3
THE BRINK’S COMPANY; PARAMONT COAL
CORPORATION; THE BRINK’S COMPANY PENSION-
RETIREMENT PLAN; ADMINISTRATIVE COMMITTEE FOR
THE BRINK’S COMPANY PENSION-RETIREMENT PLAN,

Defendants - Appellants.

Appeals from the United States District Court for the Western
District of Virginia, at Big Stone Gap. Pamela Meade Sargent,
Magistrate Judge. (2:02-cv-00044-PMS)

Argued: September 27, 2007 Decided: January 11, 2008

Before WILLIAMS, Chief Judge, DUNCAN, Circuit Judge, and Raymond A.
JACKSON, United States District Judge for the Eastern District of
Virginia, sitting by designation.

Affirmed by unpublished opinion. Judge Jackson wrote the opinion,
in which Chief Judge Williams and Judge Duncan joined.

ARGUED: James A. Holifield, Jr., HOLIFIELD & ASSOCIATES, P.C.
Knoxville, Tennessee, for Appellants/Cross-Appellees. Robert
Martin Rolfe, HUNTON & WILLIAMS, Richmond, Virginia, for
Appellees/Cross-Appellants. ON BRIEF: William S. Lockett, Jr.,
KENNERLY, MONTGOMERY & FINLEY P.C., Knoxville, Tennessee, for
Appellants/Cross-Appellees. Elena E. Ellison, HUNTON & WILLIAMS,
Richmond, Virginia, for Appellees/Cross-Appellants.

Unpublished opinions are not binding precedent in this circuit.

4
JACKSON, District Judge:

Appellants petition for review of the final order of the

district court which disposed of most of Appellants’ claims,

denying additional pension benefits under the Pittston Plan.

Appellees cross-appeal the district court judgment with respect to

Christopher Brooks Addington, who succeeded on his breach of

fiduciary duty claim. For the reasons that follow, we affirm.

Appellants are former employees of Paramont Coal Corporation

and current and/or former employees of the Pittston Company, a

subsidiary of the Brink’s Company. J.A. 101. In this action,

Appellants seek benefit accrual service credit under the Pittston

Plan for service with Paramont before Paramont’s pension plans were

merged into the Pittston Plan. (Appellees’ Br., 4.)

In July 1986, Pyxis Resources, then a subsidiary of The

Pittston Company (“Pittston”), acquired Paramont Coal Company

(“Paramont”). JA 2962. In 2003, Pittston changed its name to the

Brink’s Company and the Pension-Retirement Plan of the Pittston

Company and Its Subsidiaries changed its name to the Brink’s

Company Pension-Retirement Plan. JA 1798.

At the time of Paramont’s acquisition by Pyxis, Paramont

employees were participants in one of two identical defined-benefit

pension plans: (1) the Salaried Employees’ Pension Plan of Paramont

5
Coal Corporation or (2) the Hourly Employees’ Pension Plan of

Paramont Coal Corporation (collectively hereinafter referred to as

the “Paramont Plans”). JA 1394, 1398. The Paramont Plans provided

a maximum monthly retirement benefit of $350 for 20 years of

service with Paramont. JA 2962-2963. All Paramont employees,

regardless of their salary, earned the same retirement benefit for

the same years of service. JA 2963.

The Paramont Plans remained in effect until January 1, 1989,

when the Paramont Plans merged into the Pittston Plan. JA 2963. The

Pittston Plan established a more generous benefit formula than the

Paramont Plans. The Pittston Plan calculated benefits by

multiplying a percentage of an average salary by the number of

years of “Benefit Accrual Service.” JA 176, 2964-65. Moreover, the

Pittston Plan imposed no cap on these benefits. JA 176, 2964-65.

Exhibit G to the Pittston Plan, entitled “Special Provisions

Applicable to Former Participants in the Pension Plans of Paramont

Coal Corporation,” states that the Paramont Plans shall be merged

into the Pittston Plan and that “in connection with such mergers,

the provisions of this Exhibit G shall apply, effective January 1,

1989, notwithstanding any provisions elsewhere in the Plan to the

contrary.”1 JA 315, 2963.

1
Exhibit G states in part: “The accrued pension benefit of
each Paramont Participant under the Plan in respect of periods of
service prior to January 1, 1989, shall be determined solely in
accordance with the provisions of the Paramont Plan in which he was
a participant, as in effect immediately prior to January 1, 1989,

6
Exhibit G further provides that vesting service under the

Paramont Plans would count as vesting service under the Pittston

Plan. JA 315. The district court found the language of Exhibit G

to be clear and unambiguous and concluded that it does not provide

for the inclusion of Appellants’ years of service with Paramont

prior to January 1, 1989, in the calculation of their retirement

benefits under the Pittston Plan. JA 2964. There is no dispute that

Appellants are receiving or are entitled to receive these

retirement benefits as calculated.

Appellants argue that Pittston intentionally deceived them by

saying, on numerous occasions beginning with Paramont’s acquisition

by Pyxis, that Paramont employees would receive benefit accrual

service credit for their years of service with Paramont prior to

January 1, 1989. (Appellants Br., 35.) However, based on the

evidence presented at trial, the district court found that Pittston

had not made misrepresentations.2 JA 3049.

based solely on his ‘Benefit Service’ (as defined in such Paramont
Plan) on December 31, 1988 or any earlier date on which the
Paramont Participant ceases to be an employee of Paramont Coal
Corporation...” JA 277-278,315.
2
The district court concluded that the evidence does not in
any way establish any concerted corporatewide effort to deceive
current and former Paramont employees and that Michael Quillen,
Kathy Fox, and Gerald Spindler did not tell plaintiffs that their
years of service with Paramont prior to January 1, 1989 would be
included in the calculation of their benefits under the Pittston
Plan. JA 3049.

7
Two years after the acquisition of Paramont, all Paramont

employees received a 1988 Employee Handbook that accurately stated

that each was covered for pension benefits by only the Paramont

Plans. JA 1296, 1308-20, 3047. Prior to the merger of the plans,

every Paramont employee received two notices that they would not

receive credit under the more lucrative Pittston Plan formula for

their years of service with Paramont prior to January 1, 1989. JA

3047. These notices came in a November 10, 1988 letter from Randy

Robinette, and a December 1988 article in the Paramont Pride, the

company newspaper. JA 1334-34.1, 1350, 3047.

More than a year after Paramont employees received these

accurate descriptions in 1988, Gerald Spindler, a Pittston Vice

President who performed no routine functions with regard to the

Pittston Plan, spoke at a meeting held at Clinch Valley College in

1990. JA 739, 769, 3009, 3065. The purpose of the meeting was to

explain to the union-free side of Pittston’s operation, which

included more than just Paramont employees, how they could be

affected by the new union contract. JA 739. A contract that settled

a Pittston-UMWA coal strike had been settled the day before the

commencement of the meeting. For the first time in the history of

Paramont, the union-free work force was affected by the language of

the contract. JA 739. At the meeting, Gerald Spindler, Scott

Perkins, and Donnie Ratliff discussed the value of the

Pittston/Paramont marriage, the management structure and growth

8
potential. JA 740. Spindler spoke about contracts, the commitment

to remain union-free, and the importance of the Pyxis group. JA

740. Spindler also answered questions on a variety of subjects, one

of them concerning the Pittston pension funds and Paramont years

counting in the benefit calculation. JA 741. Although the purpose

of the meeting did not specifically include discussing pension

benefits, Spindler made his planned remarks, and when an employee

subsequently inquired about their time of pension service, Spindler

answered, “nothing will change.” JA 741, 872, 3018. Spindler did

not explain or elaborate and the district court found that Spindler

made no misrepresentations. JA 872, 3018.

Additional accurate communications were distributed to all

Paramont employees after the Clinch Valley College meeting. JA

1340, 3047-3048. Also, numerous witnesses at trial testified that

they understood the relevant terms of the Pittston Plan. JA 3048.

However, over the years, a minority of employees received

annual benefit statements that occasionally incorrectly estimated

the amount of their projected pension benefits by including too

many years of benefit accrual service under the Pittston

calculation formula. JA 3049. Of the 836 annual benefit statements

sent to Plaintiffs, 8% incorrectly estimated future retirement

benefits. JA 2951, 3049. The annual benefit statements did not

indicate how the estimate had been calculated and did not state

that the employee’s years of service with Paramont prior to January

9
1, 1989 were included in the calculation of their benefits under

the Pittston Plan formula. JA 3057. Also, the annual benefit

statements cautioned that the figures were estimates. JA 3057.

Appellants instituted this action on December 19, 2001, in the

United States District court for the Eastern District of Tennessee

seeking legal, declaratory and equitable relief for various claims

against (1) Pittston, (2) Paramont, (3) the Pittston Plan, and (4)

the Administrative Committee for the Pittston Plan (“Administrative

Committee”). JA 99-107. Appellants asserted federal question

jurisdiction in the district court pursuant to the general

jurisdictional grant of 28 U.S.C. § 1331 and the Employee

Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001

et seq. JA 102.

On September 6, 2002, Pittston filed a Motion for Summary

Judgment, which the district court granted in part and denied in

part by Memorandum Opinion and Order entered November 18, 2003. JA

497-504. On October 7, 2004, an Agreed Order was entered severing

the claims of five of the then 123 plaintiffs to be tried to the

court first. JA 505-507. The court entered its Findings of Fact and

Conclusions of Law and Judgment in the trial of these five

plaintiffs (“Initial Plaintiffs”) on June 3, 2005. JA 2960-3079. On

October 24, 2005, Pittston filed a Second Motion for Summary

Judgment, seeking entry of summary judgment on the claims of the

remaining 119 plaintiffs. The district court granted Pittston’s

10
Second Motion for Summary Judgment by Memorandum Opinion and Order

entered on March 17, 2006. JA 4667-4730. A Final Judgment was

entered on June 2, 2006, disposing of all claims before the

district court with the exception of the parties’ cross motions for

attorney’s fees. JA 4737-4740.

Appellants are appealing the final order of the district court

entered on June 2, 2006. Appellants timely filed a Notice of Appeal

with the district court on June 26, 2006, pursuant to Rules 3 and

4 of the Federal Rules of Appellate Procedure. JA 4741-4750.

Appellants filed an amended Notice of Appeal on July 7, 2006. JA

4753-4758. Accordingly, this Court has jurisdiction pursuant to 28

U.S.C. § 1291.

II.

On appeal, Appellants argue that the district court erred and

challenge its judgment on four grounds. On cross-appeal, Appellees

challenge the district courts judgment with respect to Christopher

Brooks Addington. We address each argument in turn below.

Appellants first assert that certain Pittston employees were

fiduciaries of the Pittston Plan in accordance with the Supreme

Court’s decision in Varity Corporation v. Howe, 516 U.S. 489

(1996). Specifically, Appellants aver that Gerald Spindler,

11
President of Pittston, acted as a fiduciary of the Pittston Plan

when he spoke to a group of employees at a company-wide meeting

regarding Plan benefits. Appellants also assert that Michael

Quillen was delegated fiduciary responsibilities by the

Administrative Committee and had apparent authority to speak on

behalf of the Plan. In addition, Appellants assert that Donald

Ratliff, Kathy Fox, Rhonda Miller and Eddie Needy were fiduciaries

of the Pittston Plan. The Court disagrees.

The United States Supreme Court has recognized the rights of

an individual participant to sue a person acting as a fiduciary

under an ERISA plan for breach of fiduciary duty, and to seek

relief pursuant to 29 U.S.C. § 1132(a)(3). Varity Corp., 516 U.S.

at 489. In order to establish a claim for breach of fiduciary duty

based on alleged misrepresentations, a plaintiff must show: 1) that

a defendant was a fiduciary of the ERISA plan, 2) that a defendant

breached its fiduciary responsibilities under the plan, and 3) that

the participant is in need of injunctive or other appropriate

equitable relief to remedy the violation or enforce the plan.

Griggs v. E.I. Dupont de Nemours & Co., 237 F.3d 371, 379-380 (4th

Cir. 2001)(“Griggs I”); Blair v. Young Phillips Corp., 235 F. Supp.

2d 465, 470 (M.D.N.C. 2002).

A “person is a fiduciary with respect to a plan,” and

therefore subject to ERISA fiduciary duties, “to the extent” that

he or she “exercises any discretionary authority or discretionary

12
control respecting management” of the plan, or “has any

discretionary authority or discretionary responsibility in the

administration” of the plan. Varity, 516 U.S. at 489 (quoting ERISA

§ 3(21)(A)). Fiduciary status is not an all-or-nothing concept. The

inclusion of the phrase “to the extent” in 29 U.S.C. § 1002(21)(A)

means a party is a fiduciary only as to the activities which bring

the person within the definition. Coleman v. Nationwide Life Ins.

Co., 969 F.2d 54, 60-61 (4th Cir. 1992). When determining whether

a party is a fiduciary, “a court must ask whether a person is a

fiduciary with respect to the particular activity at issue.” Id. A

court is required to examine the relevant documents to determine

whether the conduct at issue was within the formal allocation of

responsibilities under the plan documents and, if not, ascertain

whether, in fact, a party voluntarily assumed such responsibility

for the conduct at issue. Coleman, 969 F.2d at 61; Phelps v. C.T.

Enters., Inc., 394 F.3d 213, 219 (4th Cir. 2005).

In Varity, the Supreme Court concluded that based on the

factual context in which the statements were made as well as the

plan-related nature of the activity engaged in by those who had

plan-related authority to do so, there was sufficient support for

the legal conclusion that Varity was acting as a fiduciary. Varity,

516 U.S. at 503. The Court emphasized that “conveying information

about the likely future of plan benefits, thereby permitting

beneficiaries to make an informed choice about continued

13
participation, would seem to be an exercise of a power

‘appropriate’ to carrying out a plan purpose.” Id. at 502.

Moreover, the court noted that “other documents came from those

within the firm who had authority to communicate as fiduciaries

with plan beneficiaries.” Id. at 503. Contrary to Appellants’

assertions, the specific context for the Pittston Employees’

statements in this case significantly differ from that which the

Supreme Court recognized in Varity.

Pittston was both employer and administrator for the benefit

plan. However, not all of Pittston’s business activities involved

plan management or administration. See id. The district court held

that when the statements were made regarding employee benefits,

Pittston employees were not acting as “fiduciaries” as well as

“employers.” In reviewing this legal conclusion, we give deference

to the factual findings of the district court, recognizing its

comparative advantage in understanding the specific context in

which the events of this case arose. See id. The Court will examine

the specific factual context of the alleged misrepresentations to

determine whether each individual was a fiduciary.

Appellants assert that Gerald Spindler was a fiduciary.

However, the evidence reveals that Spindler had no responsibilities

with respect to the Pittston plan. Spindler, in addition to

Quillen, Fox, Robinette, Miller and Needy possessed no

discretionary authority to alter the terms of the Pittston Plan or

14
to determine eligibility for benefits or the amount of benefits a

participant was entitled to under the Pittston plan. JA 3065.

Despite this, Appellants assert that when Spindler reassured

Paramont employees that their Paramont time would be used for

calculating benefit accrual service under the Pittston Plan he was

acting as a fiduciary. (Appellant’s Br., 38.) The Court disagrees.

In Varity, the Supreme Court focused on the purpose of the

meeting and the actions of the parties. Specifically, the Court

emphasized that offering beneficiaries detailed plan information in

order to help them decide whether to remain with the plan is

essentially an exercise of a power “appropriate” to carrying out an

important plan purpose. Moreover, in Varity the materials used at

the meeting came from those at the firm with authority to

communicate as fiduciaries with beneficiaries. Varity, 516 U.S. at

502. Here, the circumstances of the Clinch Valley College meeting

were different.

Unlike the meeting in Varity, the purpose of the Clinch Valley

College Meeting was not to offer beneficiaries detailed plan

information in order to help them decide whether to remain with the

plan. In fact, testimony in the district court reveals that

Spindler’s only communication regarding benefits was an answer to

a question at the end of a meeting. JA 741. In addition, the

evidence does not suggest that there were any benefit-related

materials used at the meeting that came from those at the firm with

15
authority to communicate as fiduciaries with beneficiaries. See

Varity, 516 U.S. at 502. The situation here can also be

distinguished from Griggs I because Griggs suffered a very specific

harm by relying on written documents from the Plan Administrator.

See Griggs I, 237 F.3d at 374. It is evident that Spindler

possessed no discretionary authority with respect to the Pittston

Plan; moreover, he never offered detailed plan information with the

intention of inducing a particular choice of plans. See Varity, 516

U.S. at 502.

Appellants also assert that Michael Quillen was delegated

fiduciary responsibilities by the Administrative Committee and that

he had apparent authority to speak on behalf of the Plan.

(Appellants’ Br., 39.) Appellants cite various documents and oral

statements in support of this assertion. (Appellants’ Br., 39-41.)

However, the district court found that Quillen possessed no

discretionary authority to alter the terms of the Pittston Plan or

determine eligibility for benefits. Based on the evidence

presented, this Court finds that this statement of fact is not

clearly erroneous. Quillen testified that he never had any

administrative responsibility, any control over, or any discretion

regarding the Pittston Plan. JA 2991. Also, the documents and oral

statements that Appellants cite to in order to establish that

Quillen had authority were contained when Quillen was President of

16
Paramont and trustee of the Paramont Plans before their merger into

the Pittston Plan. JA 2991.

Appellants additionally assert that Robinette, Ratliff, Fox,

Miller, and Needy were all fiduciaries of the Plan because ERISA

defines fiduciary status “functionally,” where virtually any

employee who communicates on benefits issues may be considered a

fiduciary. (Appellants’ Br., 41-42.) Appellants argue that the

local human resource managers were delegated actual authority to

answer questions regarding plan benefits. (Appellants’ Br., 42.)

Further, Appellants support their argument with the following

assertions: (1) Kathy Fox trained Paramont’s administrative

personnel on the Pittston Plan so they could explain benefits to

Paramont employees; (2) Donald Ratliff traveled to mine sites

explaining Pittston plan benefits; (3) Randy Robinette was

Paramont’s Director of Human Resources and, in this capacity, sent

various letters and memos to Paramont employees explaining the

effects of the Pittston-Paramont merger. (Appellants’ Br., 44.)

Appellants aver that the aforementioned facts reveal that these

persons were involved in the administration of the Plan and subject

to fiduciary obligations. (Appellants’ Br., 44.)

However, the district court found that Needy performed no

functions with regard to the Pittston Plan and based on the

evidence presented, the Court does not find this decision to be

clearly erroneous. The district court also found that Fox,

17
Robinette, and Miller performed certain administrative duties for

the Pittston Plan but lacked any discretionary authority to

determine the eligibility for benefits or the amount of benefits to

which a participant was entitled. JA 3065. Based on the evidence

presented, the Court finds that these individuals were not

fiduciaries.

Ministerial administrative acts are not fiduciary acts.

Healthsouth Rehab. Hosp. v. Am. Natl’ Red Cross, 101 F.3d 1005,

1009 (4th Cir. 1996) (stating that the limited role in processing

claims and reading a computer screen to determine who is covered by

a plan is not a fiduciary act). Even if Fox trained other employees

to explain Pittston Plan benefits and Ratliff and Robinette

explained plan benefits at mine sites and in writing, these actions

fail to constitute the exercise of “discretionary authority or

discretionary control respecting management” or administration of

the Pittston Plan. 29 U.S.C. § 1002(21)(A)(2007).

The Court agrees that an employer/plan administrator does not

exercise discretionary authority or control over the administration

of the plan merely when employees tell each other about plan

benefits. As in Coleman, the discretionary authority or

responsibility which is pivotal to the statutory definition of

“fiduciary” is allocated by the plan documents themselves. Coleman,

969 F.2d at 61. In examining the specific context of the alleged

misrepresentations, the Court finds it significant that the

18
Pittston Plan administrators clearly and accurately communicated

the plan benefits to the Paramont employees in writing. JA 307-

3048. Based on the record, none of the alleged statements of the

speakers deprived Appellants of any benefits to which they were

entitled under the terms of the plan. All of the Appellants will

receive the “contractually defined” benefits that their Plan

provided.

In an effort to interpret ERISA’s fiduciary duties, “courts

may have to take account of competing congressional purposes, such

as Congress’ desire to offer employees enhanced protection for

their benefits, on the one hand, and, on the other, its desire not

to create a system that is so complex that administrative costs, or

litigation expenses, unduly discourage employers from offering

welfare benefit plans in the first place.” Varity, 516 U.S. at 497.

In resolving this issue, the Court is sensitive to these competing

purposes.

Appellants contend that Pittston and other fiduciaries

breached their fiduciary duty to Appellants by misrepresenting that

their years of service under the Paramont retirement plans would be

included in the calculation of benefit accrual service under the

Pittston Pension Plan. (Appellants’ Br., 45.) Appellants cite to

the Varity holding to support the proposition that misleading plan

19
beneficiaries violates a fiduciary duty imposed upon plan

administrators by ERISA. Id. However, the district court found that

no misrepresentations were made to any Appellant, with the

exception of Christopher Brooks Addington. The Court concurs with

this factual conclusion.

Findings of fact by a trial court shall not be set aside

unless clearly erroneous. Fed. R. Civ. P. 52(a). Anderson v.

Bessemer City, 470 U.S. 564, 573 (1985). “[A] finding is ‘clearly

erroneous’ when although there is evidence to support it, the

reviewing court on the entire evidence is left with a definite and

firm conviction that a mistake has been committed.” United States

v. United States Gypsum Co., 333 U.S. 364, 394-395 (1948).

With the exception of Addington, the district court found that

the Pittston Plan administrators clearly and accurately

communicated the plan benefits to the Paramont employees in

writing.3 JA 3047-3048. Based on the evidence presented at trial,

3
Specifically, the district court made the following findings:
“...the uncontradicted evidence shows that, in the fall of 1988,
prior to the merger of the Paramont Plans into the Pittston Plan,
every then-current employee of Paramont received notice on at least
two occasions that they would receive credit for their years of
service with Paramont prior to January 1, 1989, in the calculation
of their retirement benefits under the Pittston Plan. These notices
came in the form of Robinette’s 11-10-88 Letter, (Exhibit 3), and
the Paramont Pride Article, (Exhibit 26). Further, a number of
other accurate communications were distributed to Paramont
employees after the merger of the Paramont Plans into the Pittston
Plan on January 1, 1989. Miller’s 4-10-90 Letter was distributed to
all Paramont employees. Miller’s 4-10-90 Letter states that
Paramont employees’ pension benefits consisted of two parts, “your
pension benefits from the Paramont Plan through December 31, 1988,

20
the Court agrees that there was no concerted corporate wide effort

to purposefully deceive Paramont employees with regard to their

plan coverage for pension benefits. Likewise, there was no

concerted effort to deceive employees about how their pension

benefits would be calculated under the Pittston Plan after the

merger of the Paramont Plans into it. Because the facts here

distinguish this case from Varity, in order for Appellants to

succeed with their breach of fiduciary duty claim based on alleged

misrepresentations, they must prove that specific

and your pension benefit from the Pittston Plan from January 1,
1989.” Perkins’s 5-15-90 Letter also was distributed to all
Paramont employees. Attached to Perkins’s 5-15-90 Letter was a
sample pension benefits calculation. This sample calculation used
a hypothetical individual who had 14 years prior service with
Paramont and eight years service under the Pittston Plan. The
sample did not include the employee’s time with Paramont in the
calculation of benefits under the Pittston Plan, but instead used
only the eight years of service under the Pittston Plan. JA 3048.
With the exception of the five plaintiffs, Quillen and Rennie,
every other witness who testified in this case stated that they
understood at the time of the merger of the Paramont Plans into the
Pittston Plan that Paramont employees’ service from only January 1,
1989, forward would be used to calculate their retirement benefits
under the Pittston Plan. These witnesses included upper level
management with Pittston and Pittston Coal, management personnel
with Paramont and Pyxis, Pittston and Pittston Coal human resources
personnel, and individuals in the local human resources departments
responsible for answering Paramont employee inquiries. JA 3048.
Also, while there was evidence that there were errors in the
calculation of retirement benefits provided to Paramont employees
through Pittston’s Annual Benefit Statements beginning as early as
1991, this evidence also reveals that of the 836 Annual Benefit
Statements sent to the plaintiffs in this case, only eight percent
contained an incorrect calculation of their retirement benefits.
Also, of the 132 original plaintiffs in this case, the evidence
shows that only 16 received one or more incorrect Annual Benefit
Statements.

21
misrepresentations were made to them individually. However, because

the Court determines that the named individuals were not

fiduciaries of the Pittston Plan, the Court will not further

address the merits of Appellants’ misrepresentation claims.

Therefore, the Court affirms the district court’s holding that

there were not misrepresentations by fiduciaries. Because this

Court finds that there has been no breach or violation of fiduciary

duty the statute of limitations issue is moot and will not be

addressed.4

Appellants aver that the district court erred in dismissing

Appellants’ claims for benefits under ERISA § 502(a)(1)(B).5

4
Although the Court determines that Appellees did not breach
their fiduciary duty with respect to Addington, the Court will
still discuss the statute of limitations issue because Appellees
seek to recover the mistaken overpayment issued to him. According
to 29 U.S.C. § 1113, “No action may be commenced under this
subchapter with respect to a fiduciary’s breach of any
responsibility, duty, or obligation under this part, or with
respect to a violation of this part, after the earlier of – (1) six
years after (A) the date of the last action which constituted a
part of the breach or violation, or (B) in the case of an omission,
the latest date on which the fiduciary could have cured the breach
or violation, or (2) three years after the earliest date on which
the plaintiff had actual knowledge of the breach or violation.”
Because the evidence reveals that Addington did not know that the
letter contained any misrepresentation until the Fall of 1999 and
the case was filed in December of 2001, Addington’s claim was filed
less than three years after he learned of the misrepresentation.
5
ERISA § 502(a)states: “A civil action may be brought -(1) by
a participant or beneficiary -(B)to recover benefits due to him
under the terms of his plan to enforce his rights under the terms

22
Appellants urge the Court to consider the Pittston Plan as a whole

when determining whether or not the Plan is ambiguous. (Appellants’

Br., 65.) Furthermore, Appellants argue that Exhibit G is ambiguous

because there is nothing in Exhibit G that excludes benefit service

with Paramont in the calculation of benefits under the Pittston

Plan. (Appellants’ Br., 65.) Again, the Court disagrees.

The Paramont Plans were merged into the Pittston Plan

effective January 1, 1989. However, before it was effective, there

was an amendment of the Pittston Plan to add Exhibit G. Exhibit G

states in part that the accrued pension benefit in respect of

periods of service prior to January 1, 1989, “shall be determined

solely in accordance with the provisions of the Paramont Plan in

which he was a Participant, as in effect immediately prior to

January 1, 1989, based solely on his ‘Benefit Service’ (as defined

in such Paramont Plan) on December 31, 1988 or any earlier date on

which the Paramont Participant ceases to be an employee of Paramont

Coal Corporation...” JA 315, 2964. Exhibit G also states that

vesting service under the Paramont Plans would count as vesting

service under the Pittston Plan. JA 315.

The Court finds that the language of Exhibit G is clear and

unambiguous. Paramont employee retirement benefits for periods of

service prior to January 1, 1989, the date of the plan merger, are

of the plan, or to clarify his rights to future benefits under the
terms of the plan. 29 U.S.C. § 1132(a)(1)(B).”

23
to be determined by the Paramont Plan. Also, Article IV of the Plan

provides further guidance by stating that “the commencement dates

for the benefit accrual computation periods for Employees of

specified employers is included in Exhibit M.” JA 170. Exhibit M

presents a chart that displays the benefit accrual period start

date based on an employee’s company. Based on an examination of the

Pittston Plan as a whole, the district court correctly awarded

summary judgment to Pittston on Plaintiffs’ § 502(a)(1)(B) claims.

The language of the plan is not ambiguous.

III.

On cross-appeal, Appellees assert that the district court

wrongly held that the Administrative Committee’s mistaken

overcalculation of pension benefits breached a fiduciary duty to

Addington. (Appellees’ Br., 69.) Appellees do not contest that the

Administrative Committee is a Pittston Plan fiduciary. However,

they assert that there is no evidence that it breached any

fiduciary duty to Addington when it sent him a letter overstating

the amount of his pension benefits and overpaying him for five

years. (Appellees’ Br., 69.) The Court disagrees and holds that

Pittston did violate its fiduciary duty to Addington because

Pittston had an “unyielding duty of loyalty to the beneficiary.”

Griggs I, 237 F.3d at 380. The Court finds that Pittston’s

24
fiduciary duty “encompass[es] more than merely a duty to refrain

from intentionally misleading a beneficiary,” but also includes a

duty “not to misinform employees through material

misrepresentations.” Id.

The lack of intent to deceive does not insulate the

Administrative Committee from liability based on the

misrepresentation to Addington. Under ERISA, a fiduciary has a duty

to provide beneficiaries with accurate information. See id.;

Faircloth, 91 F.3d 648, 656 (4th Cir. 1996). Moreover, in Krohn v.

Huron Mem’l Hosp., the Sixth Circuit stated that “a fiduciary

breaches its duties by materially misleading plan participants,

regardless of whether the fiduciary’s statements or omissions were

made negligently or intentionally.” 173 F.3d 542, 547 (6th Cir.

1999).

The Court finds that the Administrative Committee breached its

duty of loyalty and care by sending inaccurate communications to

Addington. Parsley was a ministerial employee who calculated

pensions according to the terms of the Pittston Plan. JA 3039. The

Administrative Committee’s 1-27-95 Letter to Addington did not

contain accurate information concerning Addington’s monthly pension

benefits under the Pittston Plan. By relying on Parsley’s incorrect

calculation, the Administrative Committee’s subsequent

misrepresentation clearly violated its fiduciary duty to

communicate accurately with a plan beneficiary.

25
B.

Appellees argue that the district court clearly erred when it

found that Addington relied on the mistaken calculation in deciding

to retire early. The district court found that had Addington “been

given accurate information concerning the amount of his monthly

pension benefits, he would not have taken early retirement.” JA

3191-3192. The Court does not find this determination to be clearly

erroneous.

Appellees argue that no equitable relief is appropriate in

this case. They state that Addington could not have relied on the

information contained in the Administrative Committee’s 1-27-95

letter because it was received after he took early retirement.

(Appellants’ Br., 74.) Contrary to this assertion, the district

court found that Addington’s benefits were not approved until the

Administrative Committee sent out the 1-27-95 letter which states,

“The Administrative Committee has approved your application for

early retirement benefits...” JA 3191. Addington testified that,

if he had been given accurate information concerning the amount of

his monthly pension benefits, he would not have taken early

retirement. JA 3192. Although Appellees dismiss this claim as

inaccurate and self-serving, the district court did not doubt

Addington’s credibility and it is quite possible that Addington was

waiting on the approval letter to finalize his decision. Based on

the facts, the Court is not left with a definite and firm

26
conviction that a mistake has been committed in determining that

Addington relied on the mistaken calculation. See United States v.

United States Gypsum Co., 333 U.S. 364, 394-395 (1948).

Because the Court determines that Addington relied and

continues to rely on the mistaken calculation and subsequent

payment by the Administrative Committee, it is necessary to

determine the appropriate remedy in this situation. Appellees do

not ask that Addington return the overpayment before receiving any

future plan payments. (Appellee’s Br., 76.) However, Appellees

contend that any rescission remedy should require Addington to

repay the overpaid pension benefits by offsetting any overpayment

against any past payment due Addington. The Court disagrees.

The district court ordered that the Pittston Plan rescind

Addington’s election to retire early and raise his benefit to the

$1256.00 monthly benefit he would have earned had he worked until

his normal retirement date of November 1, 1997. JA 3196. Appellees

contend that Addington has received an overpayment because he

received $2,140.43 monthly from January 1995 until January 2000. JA

3059. However, the district court stated that it would be

“unreasonable and inequitable” to order Addington to return “any of

the early retirement he received.” JA 3193, 3205. The Court agrees

that partial rescission was proper in this case.

27
Although Appellees argue that the facts in this case do not

justify partial rescission as necessary or equitable, this Court

finds that the district court properly weighed the equities in its

decision not to order Addington to repay incorrectly calculated

pension payments. The evidence does not suggest that the mistaken

pension distribution was caused by Addington but rather was the

result of the Administrative Committee’s miscalculations. See

Phillips v. Maritime Association - I.L.A. Local Pension Plan, 194

F. Supp. 2d 549, 555 (E.D. Tex. 2001)(stating that while fault does

not necessarily preclude restitution, a party’s culpability is an

appropriate equitable consideration). To punish Addington by

forcing him to repay pension benefits that he received as the

result of a mistake made by the Administrative Committee is

contrary to the primary purpose of ERISA, which is to protect plan

participants. The Court intends to restore Addington, as much as

possible, to the position he would have been in had the mistake

never been made without inflicting unnecessary injury on an

innocent beneficiary.

The Supreme Court and this Court have expressly authorized

federal courts to develop a federal common law of rights and

obligations under ERISA-regulated plans. Provident Life & Acc. Ins.

Co. v. Waller, 906 F.2d 985, 990 (4th Cir. 1990). In Varity, the

Supreme Court recognized that courts will keep in mind the special

nature and purpose of employee benefit plans in fashioning

28
‘appropriate’ equitable relief. Varity, 516 U.S. at 515. Federal

common-law restitution is to be used to further the purposes of

ERISA and is governed by general equitable principles. Luby v.

Teamsters Health, Welfare, and Pension Trust Funds, 944 F.2d 1176

(3rd Cir. 1991).

In Griggs I, this Court determined that reinstatement of

employment is an appropriate equitable remedy when an employee had

been induced to accept early retirement based on incomplete or

inaccurate information for which the plan administrator could be

held responsible. 237 F.3d at 385. However, based on Addington’s

situation, rescission of Addington’s election to take early

retirement and reinstatement to his former position is not

appropriate or possible. Here, Addington took early retirement

effectI’ve January 1, 1995 and has been out of the work force for

approximately 12 years. Addington is currently 72 years old and

Pittston has sold all of its coal mining operations. JA 3192.

However, it does appear equitable and appropriate for the court to

order that Addington be allowed to rescind his election for early

retirement benefits and to reinstate him to the benefits he would

be entitled to under the Pittston Plan if he had continued to work

until his normal retirement date of November 1, 1997, which would

be $1,256.00.

Normally, equitable rescission involves a restoration of the

parties to the status quo as it existed before the rescinded

29
transaction. See Printer v. Dahl, 486 U.S. 622, 642 n.18

(1988)(noting that equitable rescission provides for restoration of

the status quo). However, this Court in Griggs II stated that “the

complete-restoration requirement is a general one that is subject

to certain exceptions” and also stated that courts of equity may

order rescission “where the equities of the situation so demanded.”

Griggs v. E.I. DuPont de Nemours & Co., 385 F.3d 440, 448-49 (4th

Cir. 2004)(“Griggs II”). Further, the Court stated that the

formulation of the exception is somewhat broad to give federal

courts the flexibility to appropriately balance the interests of

participants and beneficiaries of ERISA plans against the interests

and obligations of employers and fiduciaries. Id. at 449.

Additionally, the Court stated that “a rule generally requiring

full restoration of benefits to accompany a grant of rescission

protects the financial integrity of ERISA plans, while permitting

an exception to this rule when the equities of the situation

demand[,] provides a necessary incentive for ERISA fiduciaries to

take seriously their obligations to protect the interests of the

participants and beneficiaries.” Id. The Court finds that when

applying this rule and the potential exception to the facts, it

would be unreasonable and inequitable to order Addington to return

any of the early retirement benefits he received or to offset the

overpayment against any future payment in order to rescind his

early retirement election.

30
The responsibility for the miscalculation of Addington’s early

retirement benefits lies with the Pittston Plan and with the

Pittston employees who were entrusted with the task of computing

his benefits. Because of Appellees’ mistakes, Addington and his

wife detrimentally relied on a stated monthly early retirement

payment and have lived according to this fixed monthly standard for

many years. See Kaliszewski v. Sheet Metal Workers’ National

Pension Fund, No. 03-216E, 2005 WL 2297309, at *8 (W.D. Pa., July

19, 2005)(highlighting the significant equitable concerns regarding

the nine-year duration and extent of Plaintiff’s reliance on the

Fund’s erroneous pension information and benefit payments, as to,

e.g., lifestyle and financial planning in denying Defendant’s

motion for summary judgment). Thus, the equities of the situation

demand an exception to the full restoration rule in order to

protect Addington and provide a necessary incentive for Pittston to

ensure that they are protecting the interests of future

participants and beneficiaries. The Court affirms the district

court finding that Addington does not have to repay the overpaid

pension benefits.

For the reasons stated herein, the judgment of the district

court is

AFFIRMED.

Adams v. The Brink's Company

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