UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 98-20347
SUSAN RHORER, Individually as Independent Executrix
of the Estate of James E. Rhorer, as Trustee of the
Trusts created under the Last Will of James E. Rhorer,
and on behalf of Raytheon Engineers & Constructors, Inc.
Basic Life, Optional Life, Accidental Death and
Dependent Life Insurance Plan,
Plaintiff-Appellant,
VERSUS
RAYTHEON ENGINEERS AND CONSTRUCTORS, INC.,
Basic Life, Optional Life, Accidental Death and
Dismemberment, and Dependent Life Insurance Plan;
RAYTHEON ENGINEERS & CONSTRUCTORS, INC.,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of Texas
July 15, 1999
Before HIGGINBOTHAM, DUHÉ, and DeMOSS, Circuit Judges.
DeMOSS, Circuit Judge:
The plaintiff-appellant, Susan Rhorer (“Rhorer”), appeals the
summary judgment dismissal of her suit to recover life insurance
benefits under an employee benefits plan governed by the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001
et seq. Rhorer initially filed a claim for benefits with the plan
administrator, defendant-appellee, Raytheon Engineers &
Constructors (“Raytheon”). Raytheon denied the claim on the ground
that her deceased husband had not satisfied a requirement in the
policy that required Mr. Rhorer to be actively at work on a full
time basis (“the active work requirement”). The main issue in this
appeal is whether the district court properly found that there was
no triable issue of fact on the question of whether Raytheon abused
its discretion in denying her claim. For the following reasons we
affirm the district court in part, reverse in part, and remand for
further proceedings.
I.
Rhorer’s late husband, James E. Rhorer (“Mr. Rhorer”), was the
president of Litwin Corporation, an engineering firm, from 1978
until 1995. In May 1995 he was diagnosed with high grade lymphoma
and in early July began to work from his home and hospital room.1
On July 26, Raytheon purchased Litwin and agreed to retain Mr.
Rhorer as a full-time employee at the same title and salary. At
the time of the purchase, Raytheon knew of Mr. Rhorer’s illness and
was aware that he was no longer working from his office.
After purchasing Litwin, Raytheon sent its employees
enrollment materials for participation in Raytheon’s employee
1
The parties agree that Mr. Rhorer did not work at his
business office after July 1995.
2
benefits plan. Those materials contained a summary plan
description, called Blueprints, but did not include a copy of the
plan’s group life insurance policy. In August 1995, Mr. Rhorer
reviewed those materials, elected $990,000 in optional life
insurance coverage, to take effect on September 1, 1995, and began
paying the required premiums.2 On November 21, 1995, Raytheon
notified Mr. Rhorer by letter that his optional life insurance
election would not take effect until he actively returned to work.
By that time, Mr. Rhorer was physically unable to return to work.
He died on December 1, 1995.
After the death of her husband, Rhorer filed a claim for
$990,000 in benefits based on the optional life insurance policy
Mr. Rhorer had elected under the plan. Raytheon denied her claim
on the ground that Mr. Rhorer had not complied with the active work
requirement contained in the insurance policy. That condition of
coverage required that participating employees “be actively at work
on full time at the business establishment of the Employer or at
other locations to which the Employer’s business requires the
Employee to travel.” Rhorer then filed an administrative appeal,
which was denied.
On February 4, 1997, Rhorer, as executrix of her husband’s
estate, sued Raytheon in federal district court seeking to recover
the proceeds from her husband’s optional life insurance policy.
2
It is undisputed that Raytheon’s employee benefits plan
is governed by ERISA.
3
Rhorer, on behalf of the plan, also asserted a claim against
Raytheon for breach of its fiduciary duty under ERISA. See 29
U.S.C. §§ 1132(a)(2) & 1109.3 Both claims rested on the contention
that the summary plan description failed to adequately disclose the
active work requirement, in violation of ERISA and the applicable
administrative regulations. Rhorer subsequently moved for partial
summary judgment on her benefits claim. Raytheon responded and
filed a cross-motion for summary judgment against all of Rhorer’s
claims. In a memorandum opinion the district court denied Rhorer’s
partial summary judgment motion, granted Raytheon’s motion, and
dismissed Rhorer’s suit in its entirety. Rhorer appeals.4
II.
We review a district court’s grant of summary judgment de
novo. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986); Todd v. AIG Life Ins. Co., 47 F.3d 1448, 1451 (5th
Cir. 1995). Summary judgment is appropriate if the record
discloses “that there is no genuine issue as to any material fact
and the moving party is entitled to a judgment as a matter of law.”
Fed. R. Civ. P. 56(c). In making this determination we must
3
Rhorer also asserted claims under the “federal common
law” for breach of contract, promissory estoppel, and waiver.
4
On appeal Rhorer does not challenge the district court’s
dismissal of her claims for breach of contract and promissory
estoppel.
4
evaluate the facts in the light most favorable to the non-moving
party. Matsushita, 475 U.S. at 587; Todd, 47 F.3d at 1451.
III.
A.
The first issue we must consider is the applicable standard
for reviewing Raytheon’s denial of Rhorer’s claim for life
insurance benefits. Rhorer asserts that de novo review is the
proper standard because this action presents the legal question of
whether the summary plan description was sufficiently accurate
under ERISA. See Penn v. Howe-Baker Eng’rs, Inc., 898 F.2d 1096,
1100 & n.3 (5th Cir. 1990). When presented with this argument, the
district court found that Rhorer’s suit was more properly viewed as
a challenge to Raytheon’s interpretation of the plan’s terms. The
district court thus held that under Firestone Tire & Rubber Co. v.
Bruch, 489 U.S. 101 (1989), Raytheon’s decision was governed
instead by the abuse of discretion standard.
Rhorer’s first amended complaint alleges two separate causes
of action under the ERISA statute. In count one Rhorer sues under
§ 1132(a)(1)(B) of ERISA to recover the insurance benefits
allegedly owed to her under the plan.5 See 29 U.S.C.
5
29 U.S.C. § 1132(a)(1)(B) provides in relevant part:
A civil action may be brought--
(1) by a participant or beneficiary-- . . .
(B) to recover benefits due to him under the
5
§ 1132(a)(1)(B). In count two she asserts a claim under
§ 1132(a)(2), alleging that Raytheon violated its fiduciary duty as
plan administrator by publishing a misleading and incomplete
summary plan description.6 See 29 U.S.C. § 1132(a)(2). We note
the distinction between these two claims because each claim, as
alleged, requires a different standard of review. Rhorer’s claim
to recover plan benefits under § 1132(a)(1)(B) is a direct
terms of his plan, to enforce his rights under
the terms 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).
6
29 U.S.C. § 1132(a)(2) provides in relevant part:
A civil action may be brought--
(2) by the Secretary, or by a participant,
beneficiary or fiduciary for appropriate
relief under section 1109 of this title.
29 U.S.C. § 1132(a)(2). 29 U.S.C. § 1109 provides in relevant
part:
(a) Any person who is a fiduciary with respect
to a plan who breaches any of the
responsibilities, obligations, or duties
imposed upon fiduciaries by this subchapter
shall be personally liable to make good to
such plan any losses to the plan resulting
from each such breach, and to restore to such
plan any profits of such fiduciary which have
been made through use of assets of the plan by
the fiduciary, and shall be subject to such
other equitable or remedial relief as the
court may deem appropriate, including removal
of such fiduciary.
29 U.S.C. § 1109.
6
challenge to Raytheon’s interpretation of the plan’s terms.
Accordingly, since the plan expressly vests Raytheon with the
discretionary authority to construe its terms, under Firestone the
applicable standard is whether Raytheon abused its discretion. See
Firestone, 489 U.S. at 111-12. In contrast, Rhorer’s claim under
§ 1132(a)(2), that Raytheon breached its fiduciary duty, turns on
whether the summary plan description complies with ERISA’s
disclosure requirements. That claim is thus premised on a legal
question which we review de novo. Having clarified the appropriate
standards of review, we now proceed to the merits of this action.
We begin with Rhorer’s breach of fiduciary duty claim.
B.
Rhorer argues that Raytheon violated its fiduciary duty as
plan administrator by issuing a summary plan description that
violates ERISA’s disclosure requirements. See 29 U.S.C. § 1022(a)
(“The summary plan description . . . shall be written in a manner
calculated to be understood by the average plan participant, and
shall be sufficiently accurate and comprehensive to reasonably
apprise such participants and beneficiaries of their rights and
obligations under the plan.”). Specifically, Rhorer contends that
the summary plan description is faulty because it fails to inform
plan participants that optional life insurance is restricted by the
active work requirement. Her claim is unsustainable in light of
7
the Supreme Court’s decision in Varity Corp. v. Howe, 516 U.S. 489
(1996).
In Varity the Supreme Court observed that an ERISA plaintiff
may bring a private action for breach of fiduciary duty only when
no other remedy is available under 29 U.S.C. § 1132. Varity, 516
U.S. at 1077-79; Tolson v. Avondale Indus., Inc., 141 F.3d 604, 610
(5th Cir. 1998). Here, in addition to seeking damages on her claim
for breach of fiduciary duty, Rhorer is seeking to recover plan
benefits under § 1132(a)(1)(B). Indeed, it is readily apparent
from Rhorer’s complaint that her claim to recover plan benefits is
the predominate cause of action in this suit. Accordingly, because
§ 1132(a)(1)(B) affords Rhorer an avenue for legal redress, she may
not simultaneously maintain her claim for breach of fiduciary duty.
See Tolson, 141 F.3d at 610-11. The district court was correct in
dismissing this claim.
C.
The central issue in this appeal is whether the district court
properly granted summary judgment on Rhorer’s claim to recover plan
benefits. To resolve that issue we must review the record to
determine whether there is a triable issue of fact as to whether
Raytheon abused its discretion in denying Rhorer’s claim for
insurance benefits.
In this Circuit courts generally employ a two-step analysis
8
for determining whether a plan administrator abused its discretion
in denying a participant plan benefits. Spacek v. Maritime Assoc.,
I L A Pension Plan, 134 F.3d 283, 292-93 (5th Cir. 1998) (citing
Wildbur v. Arco Chem. Co., 974 F.2d 631, 637 (5th Cir. 1992)). A
court first determines the legally correct interpretation of the
plan, and whether the administrator’s interpretation accords with
the proper legal interpretation. Spacek, 134 F.3d at 292. If the
administrator’s construction is legally sound, then no abuse of
discretion occurred and the inquiry ends. Id. But if the court
concludes that the administrator has not given the plan the legally
correct interpretation, the court must then determine whether the
administrator’s interpretation constitutes an abuse of discretion.
Id. at 293.
1.
Rhorer contends that Raytheon’s interpretation of the plan is
incorrect because it ignores the plain language of the summary plan
description. She insists that while the underlying insurance
policy sets forth an active work requirement for optional life
insurance, nothing in the summary plan description imposes that
requirement. The inconsistency is significant, Rhorer argues,
because under Hansen, 940 F.2d 971 (5th Cir. 1991), the terms of
the summary plan description control over inconsistent terms in the
policy. Rhorer asserts that Raytheon’s interpretation of the plan
9
is flawed because it overlooks this fundamental rule, and focuses
exclusively on the terms of the insurance policy.7
In Hansen the plaintiff filed a claim for life insurance
benefits, alleging that under the summary plan description he was
entitled to 60% of the principal sum, or $120,000. The insurer
denied the claim, relying instead on the conflicting terms of the
underlying policy which indicated that the plaintiff was due only
40% of the principal sum, or $80,000. On appeal the insurer argued
that the summary plan description must be read in conjunction with
the plan document. The insurer also maintained that when a summary
plan description conflicts with the underlying policy, the terms of
the policy control. We rejected those arguments and affirmed the
district court’s judgment in favor of the plaintiff.
We began by observing that ERISA imposes certain requirements
on a summary plan description.
A summary plan description of any employee
benefit plan shall be furnished to
participants and beneficiaries . . . . The
7
This Court has outlined three general factors which may
be used to determine whether a plan administrator’s interpretation
of a plan is legally correct: (1) whether the administrator has
given the plan a uniform construction; (2) whether the
interpretation is consistent with a fair reading of the plan; and
(3) any unanticipated costs resulting from different
interpretations of the plan. Threadgill v. Prudential Sec. Group,
Inc., 145 F.3d 286, 292 (5th Cir. 1998). These factors are not
particularly helpful to our analysis, however, because here we are
reviewing, specifically, the plan administrator’s interpretation of
the summary plan description. Accordingly, in determining whether
Raytheon’s interpretation of the summary plan description was
legally correct, we will use more particularized standards.
10
summary plan description shall . . . be
written in a manner calculated to be
understood by the average plan participant,
and shall be sufficiently accurate and
comprehensive to reasonably apprise such
participants and beneficiaries of their rights
and obligations under the plan.
Hansen, 940 F.2d at 980 (quoting 29 U.S.C. § 1022(a)). We then
reasoned that those requirements would be eviscerated by a rule
that allowed the terms of the policy to control whenever there was
a conflict between the policy and the summary plan description. We
explained:
The result would be that before a participant
in the plan could make use of the summary, she
would have to compare the summary to the
policy to make sure that the summary was
unambiguous, accurate, and not in conflict
with the policy. Of course, if a participant
has to read and understand the policy in order
to make use of the summary, then the summary
is of no use at all.
Id. at 981. We thus held that “the summary plan description is
binding, and [] if there is a conflict between the summary plan
description and the terms of the policy, the summary plan
description shall govern.” Id. at 982. We also found that the
rule of contra proferentum, that ambiguities in contracts are to be
resolved against the drafter, must be applied when a summary plan
description contains an ambiguous term or requirement. Id. Thus,
ambiguous terms in summary plan description are resolved in the
employee’s favor.
On appeal Raytheon defends its decision by pointing to the
11
terms of the policy, which expressly impose an active work
requirement for optional life insurance.8 Raytheon further asserts
that the policy is not in conflict with the summary plan
description because it too sets forth an active work requirement.
Raytheon insists that since there is no conflict between the policy
and the summary plan description, Hansen does not control. We
disagree.
Raytheon’s claim that the summary plan description contains an
active work requirement for optional life insurance is premised on
a provision in the first section of the summary plan description,
entitled “General Information.” That provision, which follows
under the heading “When Coverage Begins,” states “[i]f you are a
new employee, coverage under the Flexible Benefits Program
generally begins the first day of the month following your hire,
provided you are actively at work.” Raytheon argues that this
statement indicates that the active work requirement applies to
each and every benefit under the plan.
If we viewed the quoted statement in isolation, without
reference to other provisions in the summary plan description, we
would be more inclined to agree with Raytheon’s position. But we
cannot review the provision in a vacuum, as it is well settled that
the summary plan description must be read as a whole. Hansen, 940
8
The parties do not dispute that if optional life
insurance carries an active work requirement, Mr. Rhorer did not
satisfy that requirement.
12
F.2d at 98.9 When we view the summary plan description in its
entirety, we find that Raytheon’s argument carries considerably
less force.
When we venture beyond the general introduction, into the
individual sections that detail particular benefits, we immediately
notice that some of those sections expressly contain an active work
requirement, while others do not. The sections on short and long
term disability benefits, for example, specifically state that
coverage begins on the employee’s first day of active work. The
section on health benefits, however, does not. Nor do the sections
on dental care, flexible spending accounts, or retirement benefits.
Those sections simply state that “all full-time salaried employees”
are eligible.
The most striking example of this incongruity is found in the
life insurance section itself. The section seems to establish an
active work requirement for basic, non-contributory life insurance
by stating that coverage begins “on your first day of work.” But
it conspicuously omits the language in the subsequent provision
that addresses optional life insurance coverage. The optional life
insurance provision merely states “[i]f you elect any of the
optional plans . . . coverage begins on the first day of the month
9
A less holistic approach would be “an unrealistically
narrow view of how a reasonably prudent employee would read and
review this important document.” Sharron v. Amalgamated Ins.
Agency Servs., Inc., 704 F.2d 562, 566 (11th Cir. 1983).
13
after your date of hire if you enroll within 31 days after you
become eligible.” The wording of this provision plainly suggests
that, in comparison to basic life insurance, optional life
insurance simply begins one month after your date of hire so long
as you elect coverage within the stated time limit.10
Thus, when we read the summary plan description as a whole, we
see that some benefits are expressly conditioned on an active work
requirement, while others are not. Moreover, we see that very same
inconsistency in the life insurance section, where only basic life
insurance seems to be restricted by the active work requirement.
All of this suggests to the reader that not all benefits under the
plan are governed by an active work requirement, and that
individual sections of the summary plan description must be
consulted to determine whether a particular benefit carries the
10
We searched for other provisions in the summary plan
description that would assist in squaring this apparent
incongruity, but found none. There is a paragraph in the general
introduction with the heading “Who is Eligible.” But in that
paragraph there is no reference to an active work requirement.
That paragraph merely states:
All full-time salaried employees are eligible
for the benefit plans that make up Blueprints,
Raytheon Engineers & Constructors’ Flexible
Benefits Program. Refer to the overview chart
on the preceding pages for specific
eligibility information on each plan in
Blueprints.
The referenced overview chart offers no additional help. It lists
all the various benefits under the plan, details the eligibility
requirements of each, but fails to mention an active work
requirement for any of the benefits.
14
requirement.11 It thus casts doubt on Raytheon’s assertion that the
phrase “coverage under the Flexible Benefits Program generally
begins the first day of the month following your hire, provided you
are actively at work” establishes a universal active work
requirement covering all benefits under the plan.
Accordingly, while the general information section suggests
that an active work requirement may apply to all benefits under the
plan, the selective use of the active work requirement in the
individual sections strongly implies the opposite. In light of
those conflicting inferences, a reasonable plan participant could
not read the summary plan description and know with any degree of
certainty whether optional life insurance was restricted by the
active work requirement. She would have to refer to the actual
policy for clarification.
We thus conclude that the summary plan description is
ambiguous as to whether the active work requirement applies to
optional life insurance. We further find that under Hansen the
correct legal interpretation of the plan requires that the
ambiguity be resolved in Rhorer’s favor. Because Raytheon resolved
11
It is a natural inference, as expressed by the familiar
maxim “expressio unius est exclusio alterius,” or, the express
mention of one thing implies the exclusion of others. Branson v.
Greyhound Lines, Inc., Amalgamated Council Retirement & Disability
Plan, 126 F.3d 747, 758 (5th Cir. 1997).
15
this issue against Rhorer, we hold that its interpretation of the
plan is legally incorrect.
In reaching this conclusion we reject Raytheon’s argument that
Hansen is only controlling in cases where there is a positive
conflict between the summary plan description and the policy.
Though it is true that in Hansen there was an outright conflict
between the summary plan description and policy, our holding was in
no way limited to those facts. In Hansen we clearly stated that an
“ambiguity in the summary plan description must be resolved in
favor of the employee.” Hansen, 940 F.2d at 982. And in
subsequent cases we acknowledged the continuing validity of that
holding. Fallo v. Piccadilly Cafeterias, Inc., 141 F.3d 580, 584
(5th Cir. 1998); Wegner v. Standard Ins. Co., 129 F.3d 814, 818
(5th Cir. 1997).
We also reject Raytheon’s contention that we cannot apply the
rule of contra proferentem in light of the Supreme Court’s decision
in Firestone. It is true, as Raytheon points out, that other
circuits have held that contra proferentem does not apply when the
plan administrator has expressly been given discretion to interpret
the plan. See, e.g., Cagle v. Bruner, 112 F.3d 1510 (11th Cir.
1997); Vizcaino v. Microsoft Corp., 97 F.3d 1187 (9th Cir. 1996);
Morton v. Smith, 91 F.3d 867 (7th Cir. 1996); Pagan v. NYNEX
Pension Plan, 52 F.3d 438 (2d Cir. 1995). But as we explained in
Spacek v. Maritime Ass’n, 134 F.3d 283, 298 n.14 (5th Cir. 1998),
16
this Court uses a unique two-step approach to apply the abuse of
discretion standard, and contra proferentem may properly be used
under the first step.
2.
Having determined that Raytheon’s interpretation was not
legally correct, we next must decide whether there is a material
fact issue with respect to whether Raytheon abused its discretion
in denying Rhorer’s claim. Three factors are important in this
analysis: (1) the internal consistency of the plan under the
administrator’s interpretation; (2) any relevant regulations
formulated by the appropriate administrative agencies; and (3) the
factual background of the determination and any inferences of bad
faith. Wildbur, 974 F.2d at 638. Applying these factors to the
record before us, we find that the district court erred in granting
summary judgment.
There is no question that Raytheon’s denial of Rhorer’s claim
did not disturb the internal consistency of the plan, since the
plan expressly provides that optional life insurance is conditioned
on the active work requirement. But the abuse of discretion
inquiry in this case is directed at Raytheon’s interpretation of
the summary plan description, not its interpretation of the plan
itself. Thus, the first factor does not aid in our analysis.
The federal regulations that govern summary plan descriptions
17
provide that a summary plan description “must not have the effect
to misleading, misinforming or failing to inform participants and
beneficiaries.” 29 C.F.R. § 2520.102-2(b). Also, the summary plan
description must contain “a statement clearly identifying
circumstances which may result in disqualification, ineligibility,
or denial . . . of any benefits that a participant or beneficiary
might otherwise reasonably expect the plan to provide.” 29 C.F.R.
§ 2520.102-3(l). Finally, the administrative regulations expressly
require that “exceptions, limitations, reductions, or restrictions
of plan benefits” be clearly noted. 29 C.F.R. § 2520.102-2(b).
Thus, the relevant administrative regulations dictate that
restrictive provisions, like the active work requirement, be
properly disclosed in the summary plan description. In this case,
however, it appears that Raytheon violated those regulations by
providing Mr. Rhorer with an ambiguous summary plan description
that did not clearly indicate that optional life insurance is
restricted by an active work requirement. The second factor thus
favors a finding that Raytheon abused its discretion.
The factual background surrounding Raytheon’s decision to deny
Rhorer’s claim is not in dispute. After her benefits claim was
denied, Rhorer contacted Raytheon through her attorney on several
occasions, explaining that the summary plan description was
ambiguous and that Raytheon was required to resolve the ambiguity
in her favor. Rhorer made clear her contention that federal law
does not allow a plan participant to resort to the terms of the
18
plan in order to resolve an ambiguity in the summary plan
description. Although confronted with this very specific
contention Raytheon responded with two letters that merely recited
the terms of the underlying policy. In those letters Raytheon
simply stated that the policy contained an active work requirement
that Mr. Rhorer had not satisfied. There is nothing in the record
which indicates, or even suggests, that Raytheon interpreted the
summary plan description and, in the exercise of its discretion,
determined that it was unambiguous. This too points to an
arbitrary and capricious decision.
Finally, there is also some evidence, although slight, that
Raytheon acted in bad faith. Raytheon purchased Mr. Rhorer’s
company with knowledge of his physical illness. It nevertheless
classified Mr. Rhorer as a full-time employee, continued to pay his
full salary, and allowed him to enroll in the optional life
insurance program despite his poor health. Then, less than two
weeks before Mr. Rhorer’s death, when he was unable to return to
active work, Raytheon sought to cancel his optional life insurance
policy based on his failure to satisfy the active work requirement.
Raytheon took this action even though it had known from the
beginning that Mr. Rhorer was no longer working from his office.
Though far from conclusive, these facts do smack of bad faith.
Two of the three factors point to a finding of an abuse of
discretion. In light of that fact we must conclude that the
district court erred in granting summary judgment. In reaching
19
this decision we acknowledge that these factors do not conclusively
establish that Raytheon abused its discretion. But the two
factors, when viewed together in a light most favorable to Rhorer,
do give rise to a genuine issue of material fact as to whether
Raytheon abused its discretion.12
IV.
Raytheon argues in the alternative that Rhorer is barred from
recovering her benefits by the state-law doctrine of quasi
estoppel. Under Texas law, “[t]he principle of quasi-estoppel
precludes a party from asserting, to another’s disadvantage, a
right inconsistent with a position he has previously taken."
Enochs v. Brown, 872 S.W.2d 312, 317 (Tex. App.--Austin 1994, no
12
Raytheon contends that even if the summary plan
description is ambiguous, Rhorer’s claim must fail because there is
insufficient evidence that Mr. Rhorer relied on the summary plan
description. We reject this argument. This Court has never held
that an ERISA claimant must prove reliance on a summary plan
description in order to prevail on a claim to recover benefits.
See Schadler v. Anthem Life Ins. Co., 147 F.3d 388, 393 n.4 (5th
Cir. 1998) (acknowledging the issue but declining to resolve it);
Hansen, 940 F.2d at 983 (same). Moreover, even were we to find
that reliance is a necessary element, there is sufficient evidence
of reliance to preclude summary judgment in this case. Here, the
record demonstrates that Mr. Rhorer received and reviewed the
summary plan description and understood it to mean that he was
eligible for $990,000 in life insurance benefits. He then paid the
required premiums. Under Hansen, these facts are sufficient to
raise a triable issue of fact as to whether Mr. Rhorer relied on
the summary plan description. See Hansen, 940 F.2d at 983 (finding
that even if reliance is a required element, reliance was
established by fact that plan participant read and understood the
summary plan description).
20
writ). The doctrine applies in those cases where it would be
unconscionable to allow a person to maintain a position
inconsistent with one in which he accepted a benefit. Stuebner
Realty 19, Ltd. v. Cravens Road 88, Ltd., 817 S.W.2d 160, 164 (Tex.
App.--Houston [14th Dist.] 1991, no writ).
In this case Raytheon contends that quasi estoppel bars
Rhorer’s action because she previously applied for and received
insurance proceeds under a separate policy with Sun Life which
provided benefits if Mr. Rhorer became medically unable to work
after August 31, 1995. Raytheon asserts that this fact
demonstrates that Mr. Rhorer could not have satisfied the active
work requirement in Raytheon’s life insurance policy even if he had
known of the requirement. Raytheon’s argument misses the mark.
The critical issue in this appeal is whether the active work
requirement was adequately disclosed in the summary plan
description. That is our focus because the terms of the summary
plan description are controlling, and ambiguities in the document
are resolved in favor of the plan participant. As such, whether
Mr. Rhorer satisfied the active work requirement in the underlying
policy is irrelevant if the summary plan description did not
adequately disclose the requirement. Likewise, Raytheon’s claim
that Mr. Rhorer could not have satisfied the active work
requirement is immaterial to our analysis. We reject the
21
contention.13
V.
Rhorer argues that the district court erred in granting
summary judgment on her claim that Raytheon waived the active work
requirement. Rhorer contends that there is a genuine issue of
material fact based on evidence that Raytheon enrolled Rhorer in
the optional life insurance program, accepted premiums from Mr.
Rhorer for several months, and then did not return those premiums
for more than a year. We agree.
Waiver is the “voluntary or intentional relinquishment of a
known right.” Pitts v. American Sec. Life Ins. Co., 931 F.2d 351,
357 (5th Cir. 1991). In this case, there is summary judgment
evidence that Raytheon knew of Mr. Rhorer’s illness in June 1997,
before it bought his company and well before he enrolled in the
life insurance program. There also is evidence that Raytheon knew
that Mr. Rhorer had stopped working from his office because of his
illness. In spite of that knowledge, the record indicates that
Raytheon allowed Mr. Rhorer to enroll in optional life insurance,
accepted his premiums, and did not return the premiums for more
than a year. Viewing that evidence in a light most favorable to
Rhorer, a reasonable jury could conclude that Raytheon knowingly
13
We note in passing that we have serious doubts as to
whether the Texas doctrine of quasi estoppel could be applied in
this federal ERISA action.
22
waived its right to enforce the active work requirement. The
district court erred in granting summary judgment on this claim.
VI.
We affirm the district court’s summary judgment dismissal of
Rhorer’s breach of fiduciary claim. We reverse the district
court’s judgment dismissing Rhorer’s claim to recover benefits and
her waiver claim. We remand this action for further proceedings
consistent with this opinion.
g:\opin\98-20347.opn 23