On Appeal from the United States District Court for the Western District of Pennsylvania
(D.C. Civil Action No. 94-cv-00930)
Before: SLOVITER, Chief Judge, SCIRICA and SEITZ, Circuit Judges
This is an appeal under the Employee Retirement Income Security Act involving the failure of a plan administrator to notify a plan participant of the irrevocability of his retirement benefit election and joint annuitant designation. There are two principal issues on appeal. First, whether the plan administrator's failure to disclose the irrevocability of the retirement benefit election presents a cognizable ERISA claim. Second, if it does, whether the failure to explain the irrevocability of the benefit election was a breach of the administrator's fiduciary duty. Finding the plan participant did not state a cognizable claim under ERISA, the district court granted summary judgment in favor of the plans and the plan administrator. Jordan v. Federal Express Corp., 914 F. Supp. 1180 (W.D. Pa. 1996). We will affirm in part, reverse in part, and remand for proceedings consistent with this opinion.
In May 1965, airline pilot Captain John Paul Jordan commenced flying for Seaboard World Airlines, Inc. and joined its Fixed Pension Plan for Seaboard World Airline Pilots. Jordan continued to fly for Flying Tiger Line, Inc. after it merged with Seaboard, until his disability retirement on June 1, 1989. He also joined the Flying Tiger Line, Inc. Variable Annuity Pension Plan for Pilots (collectively with the Seaboard Plan, the "plans"). Flying Tiger was the plan administrator until 1989, when it merged with the Federal Express Corporation. Thereafter Federal Express was the plan administrator. The plans are "employee benefit plans" under the Employee Retirement Income Security Act. 29 U.S.C. Section(s) 1002(3).
The plans provide retirement benefits for disabled participants in the form of a Statutory Joint and Survivor Annuity. According to the plans' provisions, Flying Tiger was required to furnish participants with information on the available retirement options prior to selection. The plans provide:
Not less than 90 days prior to a Member's Disability Retirement Date . . . the Company shall provide such member with a written explanation of the availability of an election to waive the Statutory Joint and Survivor Annuity, and a written explanation of the terms and conditions of the Statutory Benefit and the financial effect of an election under Section 8.3 [or 7.3]. *fn1
The plans list other retirement benefit options available to the participants besides the basic Joint and Survivor Annuity. *fn2 Of greater consequence here is the irrevocability restriction placed on the participants' election. The plans mandate that, "subsequent to a Member's Retirement Date the election of [the Joint and Survivor Annuity] Option cannot be rescinded nor can the designation of the joint annuitant be changed."
In 1988, Jordan commenced a period of long-term sick leave. By letter, Flying Tiger informed Jordan that after exhaustion of sick leave benefits, he might be eligible for disability retirement. To qualify, Jordan had to submit documentation of his disqualifying medical condition and the Federal Aviation Administration's refusal to issue him a flying certificate at least sixty days prior to his retirement. After receiving the necessary paperwork, the Benefits Department would send Jordan a letter explaining his benefit level and retirement options.
On March 14, 1989, Jordan asked Flying Tiger to begin processing his disability retirement request. Rather than providing the necessary medical and FAA documentation, Jordan advised Flying Tiger that the FAA was evaluating his certification status. Jordan eventually filed the necessary documents on June 3, 1989.
Flying Tiger replied to Jordan's request on June 5, 1989, four days after he retired and two days after receipt of the FAA's letter denying flight certification and his physician's letter describing his debilitating condition. Accompanying the plans' response letter were blank copies of a "Retirement Election Form" and a "Spousal Consent Form." *fn3 The benefits letter advised Jordan of his projected monthly disability benefits under three of "the most commonly elected benefit payment options:" (1) the Straight Life Annuity ($6,769.29); (2) the 50% Joint and Survivor Annuity ($6,109.08); and (3) the 100% Joint and Survivor Annuity ($5,576.79). *fn4
The letter did not mention that the plans prohibit post-retirement changes either to the form of the annuity elected or to the beneficiary designation if the Joint and Survivor Option were chosen. *fn5 Jordan never requested information from the administrator on the revocability of his election, nor did he receive, before his retirement election, a copy of the terms and conditions of the plans or their Summary Plan Descriptions.
Jordan executed and returned the Retirement Election Form, selecting the Joint and Survivor 50% Annuity Option and designating his wife, Linda Jordan, as his joint annuitant. Jordan claims he and his wife were unaware that his election was irrevocable. Had they known it was irrevocable they would have chosen the Straight Life Annuity because of the tenuous state of their marriage.
In September 1989, Jordan received his first disability retirement check. *fn6 Soon thereafter Captain Jordan divorced Linda Jordan and married Patricia Jordan. Under the property settlement, Linda Jordan relinquished all claim to Captain Jordan's retirement benefits, including her Joint and Survivor beneficiary interest.
In February 1992, Federal Express, the present administrator of the plans, denied Jordan's request to substitute Patricia Jordan for Linda Jordan as his designated joint annuitant because "there are no provisions [under the plans] for making changes to the payment form, thus your initial election is irrevocable." The letter advised him that "your payments will continue as is, with Linda E. Jordan as your survivor, in the absence of a Qualified Domestic Relations Order certified by the court."
Jordan sent Federal Express a copy of a Qualified Domestic Relations Order issued by the Mercer County Court of Common Pleas directing that "all rights and interests of Linda E. Jordan [under the plans] . . . are hereby terminated and extinguished in their entirety, the same as if such rights and interests had never accrued in the first instance." He asked the plans either to raise his benefit payment to match the monthly amount disbursed under the Straight Life Annuity or to recognize Patricia Jordan as the beneficiary of his Joint and Survivor 50% Annuity. In response, Federal Express canceled Linda Jordan's right to receive the benefits under the plans without either increasing Jordan's monthly benefits or designating Patricia Jordan as the new beneficiary. *fn7
Jordan appealed the denial of survivor benefits to the Federal Express Corporation Qualified Employee Benefits Committee, which acts as fiduciary for the Federal Express pension plan. The Qualified Employee Benefits Committee denied the appeal but offered to reinstate Jordan's previously designated beneficiary (Linda Jordan) if he so desired.
In June 1994, Jordan filed this action alleging the plans and the administrator violated statutory, regulatory, and plan requirements in their administration of his request for disability retirement benefits. In his amended complaint, Jordan claims he is entitled to revoke his election of his former wife Linda Jordan as his joint annuitant because (1) he did not receive timely written notice of his benefits; (2) he was not informed in advance of his election that he was barred from post-retirement changes in his election; (3) he did not receive a Summary Plan Description; and (4) the plans are being unjustly enriched by "charging" Jordan for the Qualified Joint and Survivor Annuity through reduced pension benefits without his receiving the benefit of having a designated joint annuitant.
On cross motions, the district court granted summary judgment to Federal Express, holding that Jordan failed to state valid claims under ERISA Section(s) 502(a)(1)(B) and 502(a)(3), or federal common law. Specifically the court found (1) the alleged violations of the plans' reporting and disclosure provisions could not be remedied under ERISA Section(s) 502(a)(1)(B), which only permits enforcement of the "terms of a plan;" (2) Jordan had failed to allege or put in issue any "extraordinary circumstances" required for a Section(s) 502(a)(3) claim; and (3) a federal common law claim for "unjust enrichment" was not available. This appeal followed.
This case arose under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. Section(s) 1001-1461. We have jurisdiction under 28 U.S.C. Section(s) 1291 and our scope of review is plenary. "When we review a grant of summary judgment, we apply the same test as the district court should have applied initially." Sempier v. Johnson & Higgins, 45 F.3d 724, 727 (3d Cir.), cert. denied, 115 S. Ct. 2611 (1995). A court may grant summary judgment when "there is no genuine ...