NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 16a0487n.06
Case No. 15-1872
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Aug 19, 2016
KYLE D. KENNARD, ) DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellant, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE EASTERN DISTRICT OF
MEANS INDUSTRIES, INCORPORATED, ) MICHIGAN
)
Defendant-Appellee. )
BEFORE: MOORE and COOK, Circuit Judges; GWIN, District Judge.
COOK, Circuit Judge. This case requires us to revisit our decision in Kennard v. Means
Industries, Inc., 555 F. App’x 555 (6th Cir. 2014). Kyle Kennard asserts that the district court
violated our mandate issued in Kennard and that Means Industries forfeited its offset defense to
his claim for disability retirement benefits. Disagreeing, we AFFIRM.
I.
Means employed Kennard for many years. Injuries eventually forced him to stop
working, at which point he redeemed a workers’ compensation claim with Means for $220,000.
He then applied for disability retirement benefits pursuant to Means’s Employee Retirement
Income Security Act Plan (the Plan). Means’s Plan Administrator denied Kennard’s disability-
The Honorable James Gwin, United States District Judge for the Northern District of
Ohio, sitting by designation.
Case No. 15-1872
Kennard v. Means Industries, Inc.
benefits claim, finding him “not permanently disabled.” The district court affirmed, but we
reversed, ordering the district court to award disability retirement benefits. Kennard, 555 F.
App’x at 558.
On remand, Means and Kennard agreed that the district court should enter judgment in
Kennard’s favor, which it did. But given the parties’ disagreement as to how much Means owed
Kennard, the district court remanded to the Plan Administrator to determine the amount of
disability retirement benefits due. After offsetting Kennard’s $220,000 workers’ compensation
redemption against his disability retirement benefits payable under the Plan, the Plan
Administrator found Kennard entitled to $0. The district court affirmed. Kennard appeals.
II.
A. Judicial Notice
We must first resolve Kennard’s motion for this court to take judicial notice of a certified
transcript of another Means employee’s workers’ compensation redemption hearing. Kennard
says that statements made in that hearing bolster his, and undercut Means’s, arguments. While
we could take judicial notice of this transcript’s existence as “a fact that is not subject to
reasonable dispute,” Fed. R. Evid. 201(b); see also Davis v. City of Clarksville, 492 F. App’x
572, 578 (6th Cir. 2012) (citing United States v. Ferguson, 681 F.3d 826, 834 (6th Cir. 2012)),
the transcript’s existence bears no relationship to this appeal. Instead, Kennard asks us to rely on
the substantive representations in the transcript, which we may not do. In re Omnicare, Inc. Sec.
Lit., 769 F.3d 455, 468 (6th Cir. 2014). We therefore deny Kennard’s motion.
B. Our Prior Mandate
Kennard argues that the district court violated our prior mandate by remanding this case
to the Plan Administrator to determine the amount of disability benefits owed him. See Kennard,
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555 F. App’x at 558. We review the interpretation of an appellate mandate de novo. United
States v. Parks, 700 F.3d 775, 777 (6th Cir. 2012) (citing United States v. Haynes, 468 F.3d 422,
425 (6th Cir. 2006)).
In the prior appeal, we reviewed the Plan Administrator’s decision that Kennard was “not
permanently disabled within the meaning of the [P]lan.” Kennard, 555 F. App’x at 557.
Concluding that no evidence supported the Plan Administrator’s decision, we decided that an
“award of benefits [wa]s appropriate without remand to the [P]lan [A]dministrator.” Id. at 558
(quoting Shelby Cty. Health Care Corp. v. Majestic Star Casino, LLC, 581 F.3d 355, 373 (6th
Cir. 2009)). We therefore “remand[ed] the case to the district court with instructions to award
Kennard disability retirement benefits.” Id.
In attacking the district court’s decision to remand the case to the Plan Administrator,
Kennard highlights our “no-remand” language. But his suggestion that our mandate prohibited
remand to the Plan Administrator for any reason is off base. We instructed the district court to
enter judgment in Kennard’s favor because he “is entitled to disability retirement benefits,” (R.
76, Remand Order); see also Kennard, 555 F. App’x at 558, which the district court did. (R. 76,
Remand Order.) Remanding the case to the Plan Administrator to resolve the parties’ dispute
over the amount of benefits owed remained within our mandate’s purview. As the district court
correctly reasoned, we “did not instruct [it] to determine in the first instance what amount
Kennard is entitled to.” And the district court’s remand order limited the Plan Administrator to
“determin[ing] precisely what benefits are due.” Allowing the Plan Administrator to decide the
amount of benefits due—but nothing else—did not contravene our command to “award Kennard
disability retirement benefits,” Kennard, 555 F. App’s 558, “without remand to the [P]lan
[A]dministrator,” id.
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C. Means’s Setoff Defense
The Plan Administrator found Kennard entitled to $0 after offsetting Kennard’s previous
workers’ compensation redemption against the disability retirement benefits owed him. Kennard
claims that Means forfeited this offset defense by failing to plead it or brief it on summary
judgment.
Though Federal Rule of Civil Procedure 8(c) requires defendants to plead affirmative
defenses, no forfeiture invariably results from their failure to do so. Smith v. Sushka, 117 F.3d
965, 969 (6th Cir. 1997); Moore, Owen, Thomas & Co. v. Coffey, 992 F.2d 1439, 1445 (6th Cir.
1993). Indeed, when the plaintiff learns of the unpleaded defense by other means and has a
chance to rebut it, the plaintiff suffers no prejudice and the defendant may assert the defense.
Coffey, 992 F.2d at 1445; see also Lauderdale v. Wells Fargo Home Mortg., 552 F. App’x 566,
573 (6th Cir. 2014); Sushka, 117 F.3d at 969.
We deem Means’s offset defense preserved because Kennard had notice of it and ample
opportunity to rebut it. First, Means pleaded that “no payment is due under the terms of the
plan” as a defense to Kennard’s claim. Two months later, Means sent a letter to Kennard
alerting him that it would assert an offset defense. (R. 58-3, Letter) (“[Your workers’
compensation] offset amount exceeds the monthly disability benefit to which you could be
entitled. As a result, no disability benefit would be payable to you under the Plan even if you
were determined to be disabled.”.) Second, after the Plan Administrator originally found
Kennard ineligible for disability benefits, Means invoked its offset defense to rebut arguments
Kennard raised to attack that decision. Third, after we remanded the case to the district court,
Means immediately invoked the offset defense.
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To the extent Kennard claims that we resolved the offset-defense issue in his favor in our
prior decision, he is mistaken. True, Means’s brief in the first appeal raised the offset defense.
But it did so as an alternate argument to Kennard’s own alternate argument that Means violated
ERISA’s notice requirements. Our prior opinion left Kennard’s notice argument unconsidered,
and no decision on the offset-defense issue against Means can be discerned by implication. See
generally Kennard, 555 F. App’x 555–58.
D. The Plan Administrator’s $0 Disability-Retirement-Benefits Decision
Finally, Kennard attacks the Plan Administrator’s decision finding him entitled to $0 in
disability retirement benefits as arbitrary and capricious. After reviewing the record, the parties’
briefs, and the applicable law, we determine that further discussion of this issue would be
duplicative and serve no jurisprudential purpose. Accordingly, we affirm on the basis of the
district court’s well-reasoned order of July 7, 2015, affirming the Plan Administrator’s decision.
III.
For the foregoing reasons, we AFFIRM.
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GWIN, District Judge, dissenting. Disagreeing with the majority’s disposition of this
case, I dissent.
When the district court remanded the benefit determination to the Plan Administrator, the
district court disregarded this court’s mandate and violated the law of the case we established in
the first appeal. Moreover, in the first appeal, Means Industries made the same offset argument
and we rejected it. For good reason. Means never directly made the offset argument to the
Administrator or to the district court.
I.
Under Sixth Circuit law, “[t]he law-of-the-case doctrine ‘posits that when a court decides
upon a rule of law, that decision should continue to govern the same issues in subsequent stages
in the same case.’”1 “‘[T]he mandate rule is a specific application of the law-of-the-case
doctrine.’”2 The mandate rule says “that a district court is bound to the scope of the remand
issued by the court of appeals.”3
Once this court issues its opinion and remands to the district court, “‘the trial court must proceed
in accordance with the mandate and the law-of-the-case as established on appeal. The trial court
must implement both the letter and the spirit of the mandate, taking into account the appellate
court’s opinion and the circumstances it embraces.’”4 The mandate “‘must be read with the
analysis offered in the opinion.’ . . . [C]ontext matters.”5
1
Scott v. Churchill, 377 F.3d 565, 569 (6th Cir. 2004) (quoting Arizona v. California, 460 U.S. 605, 618 (1983)).
2
Id. at 570 (quoting United States v. Campbell, 168 F.3d 263, 265 (6th Cir. 1999)).
3
Id.
4
Mason v. Mitchell, 729 F.3d 545, 550 (6th Cir. 2013) (quoting Nemir v. Mitsubishi Motors Corp., 381 F.3d 540,
549 (6th Cir. 2004)).
5
United States v. O’Dell, 320 F.3d 674, 681 (6th Cir. 2003) (quoting United States v. Santonelli, 128 F.3d 1233,
1237–38 (8th Cir. 1997)).
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The law-of-the-case doctrine has three exceptions: “‘(1) where substantially different
evidence is raised on subsequent trial; (2) where a subsequent contrary view of the law is decided
by the controlling authority; or (3) where a decision is clearly erroneous and would work a
manifest injustice.’”6
II.
The district court failed to follow the mandate rule and abused its discretion when it
remanded the benefit determination to the Plan Administrator following our decision in Kennard
I. The majority concludes that “[a]llowing the Plan Administrator to decide the amount of
benefits due . . . did not contravene our command to ‘award Kennard disability retirement
benefits.’”7 In Kennard I, however, this Court expressly forbade the district court from
remanding to the Plan Administrator. The opinion stated that “[b]ecause ‘there [is] no evidence
in the record to support a termination or denial of benefits, an award of benefits is appropriate
without remand to the [P]lan [A]dministrator.’”8
When a reviewing court concludes that a plan administrator has erroneously denied
benefits, the court “‘may either award benefits to the claimant or remand to the plan
administrator.’”9 When applying either remedy, however, the district court cannot remand a
benefits claim to the Plan Administrator to consider new defenses not previously raised.
Under the mandate rule, a binding circuit court decision ordering benefit payments stops
a further remand to the Plan Administrator. In this case, the language of the original Sixth Circuit
6
Vander Boegh v. EnergySolutions, Inc., 772 F.3d 1056, 1071 (6th Cir. 2014) (quoting Hanover Ins. Co. v. Am.
Eng’g Co., 105 F.3d 306, 312 (6th Cir. 1997)).
7
Maj. Op. at 4.
8
Kennard v. Means Indus., Inc., 555 F. App’x 555, 558 (Kennard I) (6th Cir. 2014) (quoting Shelby Cnty. Health
Care Corp. v. Majestic Star Casino, LLC, 581 F.3d 355, 373 (6th Cir. 2009)).
9
Shelby Cnty, 581 F.3d at 373 (quoting Elliott v. Metro. Life Ins. Co., 473 F.3d 613, 621 (6th Cir. 2006)).
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opinion orders a remand to the district court to award benefits. Our decision nowhere ordered a
remand to the Plan Administrator.10
The Kennard I dissent in makes the scope of our mandate clear: “rather than award
benefits, I would remand the case to the plan administrator for further consideration and fact-
finding.”11 This Court did not remand to the district court with directions to remand the case to
the Plan Administrator. This Court awarded benefits to the Appellant.
III.
The district court also failed to follow the law-of-the-case doctrine and abused its
discretion by allowing Means to bring the offset issue back into the case after our remand order.
In the first appeal, Appellee Means Industries made the offset argument, and we rejected the
offset argument. In effect, the district court reversed our holding that rejected Means Industries
argument that benefits should be denied because Kennard had received workers compensation
benefits.
In our earlier case, Means Industries specifically raised the offset issue. In its brief in the
first appeal, Means argued “it would be a useless formality to remand this matter back to the Plan
Administrator [] because even if Kennard was found to be disabled under the Plan he would not
be entitled to any pension benefits because the offset amount of his workers’ compensation
benefits received would exceed the monthly disability benefit to which [Kennard] could be
10
The opinion reads: “Because “there [is] no evidence in the record to support a termination or denial of benefits, an
award of benefits is appropriate without remand to the plan administrator,” Shelby Cnty. Health Care Corp. v.
Majestic Star Casino, LLC, 581 F.3d 355, 373 (6th Cir. 2009) (internal alterations omitted), particularly in the
absence of Means requesting an opportunity to reconsider Kennard’s application. We therefore remand the case to
the district court with instructions to award Kennard disability retirement benefits, retroactive to the date on
which they accrued under the Plan, and to consider his request for attorney fees and costs under 29 U.S.C.
§ 1132(g)(1).” Kennard I, 555 F. App’x at 558 (emphasis added).
11
Kennard I, 555 F. App’x at 559 (Moore, dissenting).
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entitled. See Section 2.3(b) of the Plan.”12 In the earlier appeal, Kennard responded that Means
Industries had waived this offset argument by failing to present it to the Plan Administrator or
present it to the district court as an affirmative defense.13
After considering Means Industries’ argument that it was entitled to an offset for the
workers compensation settlement and after receiving Kennard’s argument that the offset issue
had been waived, we issued a mandate that specifically said the case should not be remanded to
the Plan Administrator. We ruled that “[b]ecause ‘there [is] no evidence in the record to support
a termination or denial of benefits, an award of benefits is appropriate without remand to the plan
administrator.’”14
The majority states that “[o]ur prior opinion left Kennard’s notice argument
unconsidered, and no decision on the offset-defense issue against Means can be discerned by
implication.”15 But in issuing a mandate that the case should not be remanded to the Plan
Administrator, we also rejected Means’s offset argument. The district court disregarded that
mandate when it remanded the damage determination to the plan administrator.
None of the exceptions to the law-of-the-case doctrine apply here. Means Industries
knew about the offset argument before Kennard filed his lawsuit; therefore there was not
substantially different evidence on remand. Second, there was no intervening law change. Third,
finding the offset defense to be waived was not clearly erroneous and would not work a manifest
12
Case No. 13-1911, Doc. 23, Appellee Br., at 51 (emphasis added).
13
Case No. 13-1911, Doc. 26, Reply Br., at 30–31.
14
Kennard v. Means Indus., Inc., 555 F. App’x 555, 558 (Kennard I) (6th Cir. 2014) (quoting Shelby Cnty. Health
Care Corp. v. Majestic Star Casino, LLC, 581 F.3d 355, 373 (6th Cir.2009)).
15
Maj. Op. at 5.
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injustice. “Generally, a failure to plead an affirmative defense . . . results in the waiver of that
defense and its exclusion from the case.”16
In this case, Means failed to raise the offset affirmative defense in its answer. Despite
Means’s failure to raise or argue the offset defense to district court, the majority finds that the
offset defense was preserved because (1) Means’s answer made the generalized defense that “no
payment is due under the terms of the plan,” and (2) a subsequent letter alerted Kennard that it
would assert the defense.17 However, Means’s general defense that it owes no money to Kennard
under the Plan was insufficiently specific to raise the offset defense. Moreover, mentioning the
possibility of offset in one letter is not sufficient to preserve the defense. Before remand,
Appellee never argued offset to the Plan Administrator or the District Court.
Therefore, Means Industries waived the offset argument and could not later rely on an
offset argument to deny benefits. The issue should have been “exclu[ded] from the case.”18
Means raised the offset defense in the first appeal, and we rejected it. Against a backdrop where
Means had never raised the argument to the district court before the first appeal, our earlier
rejection of the offset argument does not satisfy a “clearly erroneous” exception to the law-of-
the-case doctrine.
IV.
For the foregoing reasons, I respectfully dissent. I would REVERSE the district court
judgment that affirmed the denial of benefits, and order that the district court award Appellant
retroactive benefits.
16
Phelps v. McClellan, 30 F.3d 658, 663 (6th Cir. 1994) (citing Haskell v. Washington Township, 864 F.2d 1266,
1273 (6th Cir. 1988); 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1278 (1990);
Fed. R. Civ. P. 8(c)) (emphasis added).
17
Maj. Op. at 4.
18
Phelps, 30 F.3d at 663.
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