Seaberry v. Richeson Management ( 2004 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 95-10387
VERNA SEABERRY,
Plaintiff-Counter Defendant-Appellee,
versus
RICHESON MANAGEMENT CORP. and JIMMY C. AVERITT,
as Trustee of the Verna Seaberry Trust,
Defendants-Counter-Claimants- Appellants.
Appeals from the United States District Court
For the Northern District of Texas
(7:93-CV-076-X)
October 9, 1997
Before WISDOM, EMILIO M. GARZA, and PARKER, Circuit Judges.
PER CURIAM:*
IT IS ORDERED that the petition for rehearing filed by
appellant Richeson Management Corporation (“RMC”) is GRANTED, and
the following is substituted in the place of our earlier opinion.
From October of 1971 until July of 1992, Plaintiff Verna
Seaberry ("Seaberry") was employed by Defendant Richeson Management
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Corporation ("RMC") or an affiliated entity. RMC operates several
Dairy Queen Restaurants throughout Texas, and Seaberry advanced
through various management level positions.
In 1992, RMC and Seaberry entered into a written contract
entitled "Supplemental Income Plan for Verna Seaberry" ("Income
Plan") and the "Verna Seaberry Trust" ("Trust") (collectively
referred to as "the Plan"). The Income Plan was executed by RMC on
March 16, 1992, and by Seaberry on the following day. The Trust
was executed by RMC on March 16, 1992, and by Defendant Jimmy
Averitt ("Averitt"), Trustee of the Trust, on March 19, 1992. The
effective date of both instruments is April 1, 1992.
Section 1.2 of the Income Plan states RMC's purpose in
providing retirement benefits to Seaberry: "The Employer believes
that the Employee's commitment and loyalty to the Employer has
[sic] been and is [sic] valuable to the Employer and should be
rewarded. Accordingly, the Employer provides the Employee with
retirement benefits in the form of a supplemental income plan as
set forth by this agreement."
Section 2.1 of the Income Plan, entitled "Establishment of
Plan," states: "The Employer hereby agrees to provide the Employee
with the Plan Benefits subject, however, to the eligibility
requirements specified by this Article and the other terms,
provisions and conditions of this Agreement." Section 2.1(b)
provides that payments under the Income Plan will begin to be paid
to Seaberry on her "Retirement Date."
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Section 2.1(c) of the Income Plan is entitled "Definition of
Retirement Date." That portion reads: "References in this
Agreement to 'Retirement Date' shall mean the last day of the month
during which the Employee ceases to be employed by the Employer
[whether by resignation, retirement, or disability on a voluntary
or involuntary basis]" (bracketed phrase in original).
On June 20, 1992, three months after the Plan went into
effect, RMC terminated Seaberry's employment, allegedly for cause.
RMC refused to fully fund the Trust and consequently precluded
Averitt from dispersing the benefits in the Trust to Seaberry.
On June 24, 1993, Seaberry filed suit alleging that RMC had
improperly denied her benefits under the Plan. RMC timely
answered, arguing inter alia that Seaberry's employment with RMC
was terminated for cause and that termination for cause was not
included in the definition of "Retirement Date." Therefore, RMC
argued, Seaberry was not eligible for the Plan benefits because she
never reached her "Retirement Date." The parties filed cross
motions for summary judgment. The district court granted
Seaberry's motion, finding that the clause in question was
ambiguous and resolved the ambiguity in favor of the
employee/claimant, citing Ramsey v. Colonial Life Ins. Co of
America, 12 F.3d 472, 479 (5th Cir. 1994)(affirming summary
judgment granted in favor of an ERISA claimant and applying the
contra proferentum rule of contract interpretation to construe
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ambiguous language of ERISA plan). Appellant RMC contends on
appeal that the language is not ambiguous and even if it is
ambiguous, the district court erred in granting summary judgment
and holding that, as a matter of law, termination for cause does
not fall within the provision. Having reviewed the summary
judgment evidence and considered the briefs of the parties, we
AFFIRM the grant of summary judgment for essentially the reasons
given by the district court. See Seaberry v. Richeson Management
Corp., Civil Action No. 7:93-CV-076-X, Northern district of Texas
(Dec. 6, 1994).
ERISA also provides that "the court in its discretion may
allow a reasonable attorney's fee and costs of action to either
party." 29 U.S.C. § 1132(g)(1). This section applies both to
trials and appeals. Sims v. Great-West Life Assurance Co., 941
F.2d 368, 373 (5th Cir. 1991). Furthermore, § 3.7 of the Income
Plan provides as follows:
Attorneys' Fees. If any action at law or in equity,
including an action for declaratory relief, is brought to
enforce or interpret the provisions of this Agreement,
the prevailing Party shall be entitled to recover
reasonable attorneys' fees and all other costs and
expenses of litigation from the other Party, which
amounts may be set by the court in the trial of such
action or may be enforced in a separate action brought
for that purpose, and which amounts shall be in addition
to any other relief which may be awarded.
This section of the Plan makes the prevailing party's right to
attorneys' fees and costs mandatory. Accordingly, Seaberry is
entitled to recover her reasonable attorneys' fees and costs in
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defending the district court's judgment. This amount is to be
determined by the district court on remand. See Trustees of the
Plumbers & Pipefitters Nat'l Pension Fund v. Mar-Len, Inc., 30 F.3d
621, 624 n.4 (5th Cir. 1994); Carpenters Amended & Restated Health
Benefits Fund v. John W. Ryan Constr. Co., 767 F.2d 1170, 1176 (5th
Cir. 1985).
The summary judgment is therefore AFFIRMED and the case
remanded to the district court for a determination of appropriate
attorneys' fees and costs.
IT IS FURTHER ORDERED that the petition for rehearing
filed by appellant Jimmy C. Averitt, Trustee in this case is
GRANTED. Plaintiff Seaberry brought suit against RMC and Averitt,
the trustee of the “Verna Seaberry Trust.” The parties agree that
Averitt has no obligation to fund the trust on his own, and that
Averitt has no duty to take any action until RMC is ordered to fund
the trust. To the extent that the district court’s judgment can be
read to make Averitt jointly and severally liable for the payment
of Seaberry’s retirement benefits, the district court’s judgment is
REFORMED to absolve Trustee Averitt of such liability.
AFFIRMED in part, REFORMED in part, and REMANDED for
consideration of attorney fees.
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