Loggins v. Nortel Networks, Inc. , 206 F. App'x 329 ( 2006 )

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT November 2, 2006
_______________________ Charles R. Fulbruge III
Clerk
No. 06-10361
Summary Calendar
_______________________
ESTELLE LOGGINS,
Plaintiff-Appellant,
versus
NORTEL NETWORKS, INC.,
Defendant-Appellee.
_________________________________________________________________
Appeal from the United States District Court
for the Northern District of Texas
No. 3:04-CV-2517-N
_________________________________________________________________
Before JONES, Chief Judge, JOLLY, and OWEN, Circuit Judges.
PER CURIAM:*
Plaintiff Estelle Loggins, an employee of Defendant,
Nortel Networks, Inc. (“Nortel”), appeals the grant of summary
judgment to Nortel on her claim to recoup benefits from a Long Term
Disability Plan (“LTD”) offset by a Business Travel Accident
Insurance (“BTA”) payment. Because the district court did not err
in finding that the LTD benefits were properly offset by the BTA
payments, we AFFIRM.
*
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opinion should not be published and is not precedent except under the limited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.
I. BACKGROUND
Loggins suffered a disabling injury while traveling on
company business for Nortel. She was covered under Nortel’s LTD
plan, which was administered by Prudential Insurance Company of
America (“Prudential”). The LTD provided benefits in the event an
employee became disabled, while the BTA, furnished by another
insurer, provided for a lump sum payment if an employee was
accidentally killed or disabled while traveling for the company.
Loggins began receiving LTD benefits and also applied for, and
later received (following litigation), a benefit under the BTA plan
in the lump sum amount of $315,000.00. When Prudential learned of
the BTA amount, Prudential’s Disability Claim Manager notified
Loggins that her LTD benefits would be offset by the BTA award, as
an LTD plan provision requires offsets for “other income.” Under
the LTD plan, the lump sum amount would be offset in prorated
amounts over sixty months. He also informed her that previous
overpayments in the amount of $23,600.97, made before Prudential
became aware of the BTA award, must be repaid. Loggins asked
Prudential to reconsider its decision, which it refused to do.
Loggins then appealed to Nortel’s Employee Benefits Committee
(“EBC”). The EBC denied her appeal.
Loggins filed suit in federal court, alleging Nortel
violated her rights under the Employment Retirement Income Security
Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. The district
2
court granted Nortel’s motion for summary judgment, concluding that
the offset was clearly permitted. Loggins now appeals.
II. ISSUES ON APPEAL
Loggins raises a number of issues on appeal. However,
each of the asserted issues can be consolidated as a single claim
that the district court erred by finding that the two plans were
separate, and thus the BTA benefit could be offset against the LTD
benefits under the LTD’s “other income” provision.
III. DISCUSSION
When reviewing a grant of summary judgment, we view the
facts and inferences in the light most favorable to the non-moving
party, and we apply the same standards governing the trial court in
its determination. Blair v. Sealift, Inc., 91 F.3d 755, 760 (5th
Cir. 1996). Here, the district court reviewed the EBC’s denial of
benefits under an “abuse of discretion” standard because of the
discretion granted to it by the LTD plan. Loggins v. Nortel
Networks, Inc., No. 3:04-CV-2517-N, 2006 WL 740278, at *1 (N.D.
Tex. March 9, 2006) (citing Meditrust Fin. Servs. v. Sterling
Chem., 168 F.3d 211, 213 (5th Cir. 1999)). The case law establishes
that a plan administrator does not abuse its discretion if its
interpretation of a plan is legally correct. Id. Summary judgment
must be granted if a court determines “that there is no genuine
issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” FED. R. CIV. P. (56)(c).
3
The district court did not err in concluding that the
EBC’s interpretation of the LTD plan’s offset provision was
correct. The BTA and LTD Summary Plan Descriptions are not
conflicting or misleading. Although the BTA promises “extra
financial security,” nowhere does it state that it will permit
double collection for a single injury from multiple policies.
Moreover, the LTD plan is clear that any benefits will be reduced
by other sources of income. Although the plan does not
specifically state that BTA benefits will cause an offset, it does
state that it will be offset by any “disability, retirement or
unemployment benefits provided under any group insurance or pension
plan or any other arrangement of coverage for individuals in a
group....” It does not list specific sources of such insurance
policies, nor does it exclude any particular policies.
Additionally, the cases relied on by Loggins, Hansen v.
Continental Ins. Co., 940 F.2d 971 (5th Cir. 1991), and Rhorer v.
Raytheon Eng’rs & Constructors, 181 F.3d 634 (5th Cir. 1999), are
off point. These cases dealt with a conflict or ambiguity between
a plan summary given to insureds and the actual ERISA plan
provisions. Here, there is no such conflict, but instead an
alleged ambiguity in the summaries of two separate plans. Although
Loggins claims Hansen and Rhorer cannot be so limited, she can
point to no cases expanding upon or applying them in the
circumstances of this case.
4
Loggins is also incorrect that the BTA and LTD plans
should be construed as a single plan. Although they have the
single purpose of providing employee benefits, they are clearly
distinct policies and apply in different situations.1 To construe
them as a single policy would require the court to assume that all
policies providing employee benefits, no matter how differentiated,
comprise a single policy, simply because all plans share the common
goal of compensating employees for various losses.
There is nothing, other than her assertions, to support
Loggins’s claim that the “other income” provision should be read to
exclude other Nortel plans. The plan description does not specify
the source of any of the specified categories of “other income,”
and nowhere does it require that they be provided by someone other
than Nortel.2 Loggins cannot point to any plan document suggesting
various Nortel plans should be treated differently from other
sources of insurance.
Loggins next argues that the “extra benefit” description
in the BTA summary creates an ambiguity between the BTA and the LTD
plans. This claim is of doubtful merit, as the BTA did provide her
1
For example, if Ms. Loggins had died while traveling on company
business, her beneficiaries would have recovered under the BTA policy, but not
the LTD policy. Additionally, the LTD plan pays benefits for disabilities
arising from any cause, while the BTA plan pays only for accidents occurring
while traveling on company business.
2
In fact, it is likely most employees’ retirement benefits would come
from Nortel rather than an outside source; thus, the listing of retirement
benefits as an offset suggests Nortel’s other plans were clearly intended as an
offset under the provision.
5
with an additional benefit of $189,940.20, even after the offset,
because the lump sum payment is prorated over sixty months.
Despite the partial offset here, the plan provides a significant
additional benefit to many employees and is not merely “smoke and
mirrors” as Loggins asserts.
Moreover, even if an ambiguity existed, it would be
resolved in favor of the plan administrator. Under MacLachlan v.
Exxon/Mobil Corp., 350 F.3d 472, 478-79 (5th Cir. 2003), when, as
here, a plan administrator has been vested discretionary authority
to interpret a plan, courts review the administrator’s decisions
only for abuse of discretion. Given the doubtful evidence of even
a slight ambiguity, the administrator’s decision here was clearly
within the wide discretion allowed.
Finally, Loggins’s assertion that the interpretation
expressed by Kimberly Pulliam, the Global Employee Services
Department (“Global”) employee to whom she spoke regarding a
potential offset, in a phone conversation and email proves the
meaning of the provisions is simply false. Although employees are
instructed to call that department with general benefits questions,
employees also are told to contact the Claims Administrator for
each specific plan for more detailed information. Global was not
the administrator for either the BTA or the LTD, and Global
employees clearly had no authority to bind Nortel.
CONCLUSION
6
The district court was correct in finding no genuine
issue of material fact. We therefore AFFIRM the grant of summary
judgment in favor of defendants.
7