Rhorer v. Raytheon Engineers & Constructors, Inc.

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.

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