Petition — Myron v. Trust Co. Bank Long-Term Disability Benefit Plan

Office -Supreme Court, U.S.

Pits B

82-1489

MAR 4 1983

ALEXANDER L. STEVAS,

Oe ee we

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1982

HAROLD L. MYRON,

Petitioner,

V.

TRUST COMPANY BANK LONG-TERM

DISABILITY BENEFIT PLAN, TRUST

COMPANY BANK and GREAT-WEST

LIFE ASSURANCE COMPANY,

Respondents

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH Saat CIRCUIT

JERRY L. Sims

Counsel of Record

Lefkoff, Pike & Sims, P.C.

2101-100 Colony Square

1175 Peachtree Street, N.E.

Atlanta, GA 30361

(404) 892-3300

Attorney for Petitioner

HAROLD L.. Myron

QUESTION PRESENTED FOR REVIEW

Does a state evidentiary rule

supercede the Employee Retirement Income

Security Act of 1972 (29 U.S.C. §1001, et

seq.) so that parol evidence may be used

to establish offsets to an employee benefit

plan even though the Act expressly requires

that the governing plan document specify

the basis on which payments are made to

and from the plan?

PARTIES TO THIS PROCEEDING

The party-plaintiff to this

proceeding is Harold L. Myron.

The party-defendants to this

proceeding are Trust Company Bank Long-

Term Disability Benefit Plan, Trust Company

Bank and Great West Life Assurance Company.

(i)

TABLE OF CONTENTS

OPINIONS BELOW oe ccoccccccccccecce

JURISDICTION. ccocccecccccccccece

CONSTITUTIONAL PROVISION

AND STATUTES INVOLVED...-eeeeees

STATEMENT OF THE CASE..eccceces

I. The proceedings below...

II, The factScccccccccvcseees

REASONS FOR GRANTING THE WRIT..

The Court of Appeals in this

case decided an important

question of federal law which

has not been, but should be,

settled by this Court.......

CONCLUSION ec cccccccccccceceeceee

Appendix

Explanation of Opinion of Court

of AppealsS.cccccccccscccccccseces

Order of the District Court....

Judgment of the Court of

APPEalS.ccccccccscsccsccscccsccsces

Petition for Rehearing.....se+6.

Judgment of the District Court.

Constitutional Provision and

StatuteSecccccccecceseceececscee

(ii)

Page

ll

11

29

A-1

A-2

A-37

A-38

A-40

A-42

TABLE OF AUTHORITIES

Cases

Brotherhood of Locomotive

Engineers v. Chicago Rock

Totand and Pacific Railroad

Company, 382 U.S. 423 (1966)...

Cambell v. Hussey, 368 U.S.

6 eeeeeeeeeeeeeeeeeeneee

Cloverleaf Butter Co. v.

Patterson, 315 U.S. 148 (1942).

Freeman v. Baker, 187 Ga. App.

168, 248 S.E.2d 298 (1978).....

Gibbons v. oan 22 U.8-6

Wheat. Beeteceseosoesee

Hill v. Florida ex rel.

Watson, 325 U.S. 338 (1945)....

Huron Portland Cement Co. v.

City of Detroit, 362 U.S. 440

64) ) ayer rryrrrrrrr i

Industrial Welding & Tool

Supplies, Inc. v. CIT Corp.

Is) Ga. App. 611, 278 S.E.2d

50 C29BLdcccoccoccocceecoseesee

Jones v. Rath Packing Co.,

U.S. eeeeeeeeeeee

Myron v. Trust Company Bank

Long Term Disability Benefit

Plan, 522 F.Supp. 511 (N.D.Ga.

OPP TTTITTUTILITITTTrTreree

Nash v. Florida Industrial

Commission, 369 U.S. 235 (1977.

(iii)

Page

17-18

19

19

16,19-20,23

16

19

19

16

18

4,8,10

19

People v. Automobile Trans-

porters Welfare Fund, 17 A.D.2d

448, 235 N.Y.S.2d 702 (1962);

aff'd 13 N.Y.2d 814, 192 N.E.2d

222; cert denied 376 U.S. 908

C19EGSbccctocecesecesescoeseseeece

snyder v. Titus, 513 F. Supp.

2 E.D.Va. LFSLidccoccecececes

Constitutional Provision and

Statutes

Employee Retirement Income

Security Act, 29 U.S.C.

§110l, Ct SCGeeeeeeveesessevess

Section 2, 29 U.S.C.

S1OOLccoaccecoecseseeeseceseseses

Section 102, 29 U.S.C.

SLOZZcccccccsocecsseceeeseseces

Section 104, 29 U.S.C.

SLOZ4 ce cccecccccecccecocecesoeces

Section 402, 29 U.S.C.

SLIOZe ccoccccceseccccccceececces

Section 404, 29 U.S.C.

SLOG ccoccccccccceccececececcce

Section 409, 29 U.S.C.

GlL1LOG ccoccccceccccccececeececes

Section 501, 29 U.S.C.

SLIsleccccccccccceecceceeeecesce

Section 502, 29 U.S.C.

a) yee ee eeeeeereeeey

Section 514, 29 U.S.C.

BLLEb cccccccccccececcecccccece

(iv)

17

12

passim

1l

21

21

11,13,21

14,21

25-26

25-26

25-26

11,17

United States Constitution,

art VI, + Ae rey Ty reer eee 16

Welfare and Pensions Plans

Disclosure Act, Pub.L.No.

85-836, 72 Stat. 99T ce ccccccccce 17,25

Miscellaneous

Annotation, 81 ALR2d 999....... 23

Corbin on Contracts, §508-519

(1 Vol.ed. . >) Arr rrrerrer 23

H.R. Rep. No. 93-533, 93rd

Cong., 2d Sess., reprinted

in [1974] U.S. CODE CONG. &

AD. News, SEsPocccseceseseecoces 14,15

H.R. Rep. No. 93-1280, 93rd

Cong. 2d Sess., reprinted

in [1974] U.S. CODE CONG. &

AD. News, SOZdcccccccecececeeee 14,15

S. Rep. No. 93-127, 92nd Cong.

2d Sess. 5, reprinted in

[1974] U.S. CODE CONG. & AD.

News, GETS ccceecccecececcececece 15,25

S. Rep. No. 93-383, 93rd Cong.

2d Sess. 18, reprinted in

[1974] U.S. CODE CONG. & AD.

News, BESO cc ccccccccececeeeeeeee: 14

4 Williston on Contracts,

§583 (3rd ed. 196]L).ccccccceces 23

(v)

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1982

HAROLD L. MYRON,

Petitioner,

Ve

TRUST COMPANY BANK LONG TERM

DISABILITY BENEFIT PLAN, TRUST

COMPANY BANK and GREAT WEST LIFE

ASSURANCE COMPANY,

Respondents

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE ELEVENTH CIRCUIT

Petitioner Harold L. Myron requests

that a Writ of Certiorari issue to review

the judgment of the United States Court of

Appeals for the Eleventh Circuit entered

on October 20, 1982, and issued as mandate

on January 13, 1983.

OPINION BELOW

The judgment of the Court of Appeals

(A-37) was issued without opinion and was

marked "Do Not Publish.” The opinion of

the District Court (A-2) is officially

reported as Myron v. Trust Company Bank

Long Term Disability Benefit Plan, 522

F.Supp. 511 (N.D. Ga. 1981).

JURISDICTION

The. judgment of the Eleventh Circuit

Court of Appeals was dated and entered

October 20, 1982 (A-37). The order denying

the petition for rehearing filed on behalf

of the petitioner was entered on December 1,

1982 (A-38). This Court's jurisdiction is

invoked under 28 U.S.C. §1254(1).

CONSTITUTIONAL PROVISIONS

AND STATUTES INVOLVED

This case was brought under the

Employee Retirement Income Security Act of

1974 ("ERISA"), 29 U.S.C. §1001 et seq.

(A-42). This case principally involves

3

the following sections of that act: §104(b)

(4) (29 U.S.C. §1024(b)(4)) (A-42); §402

(29 U.S.C. §1102) (A-51); §404 (29 U.S.C.

$1104) (A-53); §502(c) (29 U.S.C. §1132(c))

(A-56); and §514(a) (29 U.S.C. §1144) (A-

58) and United States Const., Art. VI, §2

(the “supremacy clause").

STATEMENT OF THE CASE

I. Proceedings in the courts below

The petitioner, Harold L. Myron, filed

this action in August, 1980. Named as

defendants were Trust Company Bank Long-

Term Disability Plan ("the disability

plan"), Trust Company Bank ("Trust Company"),

and Great-West Life Assurance Company

("Great West"). The jurisdiction of the

District Court was invoked under 29 U.S.C.

§1132. The petitioner claimed in the

complaint, as amended, that he was entitled

to receive monthly benefits of $1,770 per

month under the disability plan. The

defendants claimed in their answers that

the plaintiff was eligible for disability

benefits of only $50.00 per month.

4

Following discovery, cross~motions for

summary judgment were filed. The District

Court denied the petitioner's motion and

granted the defendants’ motion, entering

final judgment for the defendants. The

Eleventh Circuit affirmed the judgment of

the District Court without opinion and

denied the petitioner's motion for rehearing.

II. Facts.

The petitioner retired from the United

States Army in 1973, after 30 years of

service. Shortly after his retirement, he

became an employee of Trust Company and

began receiving military retirement pay.2/

Trust Company sponsored a disability

plan for its employees. Until April 30,

1/the District Court's order indicates

that petitioner began receiving military

retirement pay as of “August l, 1979."

Myron v. Trust Company Bank Long Term

Disability Benefit Plan, 522 F.Supp. 51l,

N.D.Ga. ° A-4). That is

probably a typographical error, as the

benefit commencement date was August l,

1973.

5

1979, the plan was insured and administered

by Northwestern National Life Insurance

Company ("Northwestern"). The petitioner

was furnished with a written description of

that plan. On May 1, 1979, Trust Company

adopted a new disability plan with Great

West. Under the new plan, eligibility

requirements were liberalized, maximum

benefits were increased, and the method of

funding was changed from a fully insured

plan to a self-funded plan which had only

residual insurance.

In early 1978, the petitioner began

receiving some of his military retirement

in the form of income-tax free disability

benefits. In May, 1979, the petitioner

notified Trust Company that he would be

taking disability retirement. In July,

1979, he was advised by Trust Company that

his military retirement would be offset

against the benefits provided by its disability

plan. He was furnished a copy of the provi-

6

sions of the Northwestern plan which

provided for offsets. He was not advised of

the expiration of the Northwestern plan and

the commencement of the new Great West plan

or of the changes effected thereby. Because

he was not advised of these changes, he did

not question the otfsets.

On July 31, 1979, the petitioner

retired due to a total and permanent dis-

ability. As of January, 1980, he was

awarded basic social security retirement

benefits of $485.50 per month. In February,

1980, after he submitted a disability claim,

a $1,770 benefit was approved by Great West

subject to an offset for his social security

benefits.

In March, 1980, after he was sent two

benefit checks, that approval was rescinded.

At that time, the defendants advised the

petitioner that both his social security

benefits and military retirement benefits

should have been offset against his basic

7

benefit, thereby reducing the benefit to the

plan minimum of $50 per month.

In order to determine the basis of the

defendants' contentions, in April, 1980,

the petitioner, through his attorney,

requested a copy of the governing plan

documents. In response, the defendants

sent him a copy of the Northwestern dis-~-

ability plan. That expired plan contained

the offset provisions relied upon by the

defendants. Upon further inquiry, he was

furnished copies of an initial draft of the

Great West plan. The draft had been pre-

pared in December, 1979, more than four

months after his disability retirement.

The offsets contained in that draft were

different than the offsets contained in the

Northwestern plan. Those offsets clearly

did not include his military retirement.

The defendants contended, however, that

this draft had not been approved.

8

Unknown to the petitioner at the time,

the only written document memorializing the

Great West disability plan which existed on

the date of his retirement provided for no

offsets. It was an application for insur-

ance which had been accepted and adminis-

tered by Great West as though a formal plan

had been issued. As the District Court

acknowledged:

The application, Gill Depo-

sition, Exhibit 19, does contain

the four required features of an

ERISA 'plan' as set out in [29

U.S.C.) Section 1102(b). There

is no mention of any offset

provisions in the application."

Myron, 522 F.Supp. at 517 (A-18). The

petitioner was not furnished a copy of the

application until after this action was

commenced in August, 1980.2/

2/the District Court's order states

that “defendants provided plaintiff with

copies of both the Northwestern plan and

the application which together contained

all of the aspects of the plan relevant to

this action." Myron, 522 F.Supp. at 519.

(A-30). This statement implies that the

petitioner was furnished the application

pursuant to his request in April, 1980,

9

According to the Great West employee

who approved the petitioner's disability

claim, the approval was based upon the

application. According to that employee's

supervisor, the approval was based upon the

initial Great West draft.2/ In any event,

all acknowledge that the application was

the only document which had been accepted

by the parties at the time of the peti-

tioner's disabilit* retirement and at the

time of his benefit commencement. No

formal Great West plan was approved until

after this litigation began. Apparently,

that final plan document incorporated the

same offset provisions as were contained in

the Northwestern plan.

'

2/ (Cont Fe )out it was not furnished

then. The petitioner is not aware of any

conflicting evidence or contentions con-

cerning this point.

3/ the latter explanation is more

likely, as the approval was subject to an

offset for social security benefits and the

draft, but not the application, provided

for such an offset.

10

The petitioner contends that the

application controls and that he is

entitled to receive disability benefits of

$1,770 per month unreduced by offsets. The

defendants contend, and the lower courts

concluded, that the petitioner's benefits

should be reduced by the offsets contained

in the expired Northwestern plan. This

result is based entirely on parol evidence

provided by the defendants' employees and

agents stating that Great West and Trust

Company intended that the offsets contained

in the Northwestern plan would be carried

forward into the new Great West plan. It

is manifest that this intention was not

evidenced by the application (or the initial

Great West draft). As the District Court

observed:

If only the provisions of

the application for insurance

were relevant here, the Court

would be inclined to rule for

plaintiff. However, because of

the admissible parol evidence

existent here, the Court cannot

do so.

Myron, 522 F.Supp. at 517.

ll

REASONS FOR GRANTING THE WRIT

The Court of Appeals in this case has

decided an important question of

federal law which has not been, but

should be, settled by this Court.

This case arose under ERISA, a remedial

statute which subjects employee benefits

plans to a comprehensive regulatory scheme.

ERISA was enacted for the stated purpose of

curbing abusive practices in the establish-

ment, maintenance and administration of such

plans. 29 U.S.C. §1001 (A-42). ERISA

expressly preempted conflicting state law.

29 U.S.C. §1144 (A-58).

In this case the District Court found

that Trust Company's written application to

Great West for insurance set out the ele-

ments essential under ERISA for a disability

plan (29 U.S.C. §1102(b)). That application

did not contain any provision for offsets

against plan benefits. Yet, that Court

found that the application for insurance was

12

not an integration of the disability plan

and permitted the defendants to use parol

evidence to incorporate into the Great West

plan offset provisions contained in the

expired Northwestern plan.4/ In doing so,

4/ an analogous situation existed in

Snyder v. Titus, 513 F.Supp. 926 (E.D.Va.

Tel}. There, a pension claimant was denied

benefits when the trustees referred to the

provisions of a prior plan to determine

whether to disregard service credits earned

during the period the prior plan was in

effect. This was done even though the

current plan made no reference to the prior

plan in connection with the termination of

service credits. In concluding that the

denial of the claimant's benefits was wrong-

ful, the court reasoned: "If the Trustees‘

interpretation of the plan were correct --

that alleged omissions in current versions

of the Pension Fund are to be filled by

reference to relevant prior versions of the

plan -- participants and Trustees alike

would be required to read and understand

the current as well as all prior versions of

the plan in the event an interested party

claims a ‘gap' exists in the effective

version... the Trustees have read an ambi-

guity into the pension plan that is not

apparent on the face of the plan, and for

which no justification has been given. The

Court cannot permit such an unfounded inter-

pretation to deprive an employee of his

benefits where he has no way of anticipating

such a deprivation upon reading the clear

language ir the plan in effect at the time

of his application. A contrary result, the

Court believes, would open the door to a

shell game in the administration of pension

plans, frought [sic] with potential abuse

and caprice." 513 F. Supp. at 933-35.

13

the Court vsed state law regarding parol

evidence to contradict the clear Con-

gressional mandate as to the form that an

employee welfare plan must assume,

The Congressional command is this:

(a)

(b)

(1)

(1)

(2)

(3)

(4)

Every employee benefit plan

Shall be established and main-

tained pursuant to a written

instrument....

Every employee benefit plan

shall -

Provide a procedure for estab-

lishing and carrying out a

funding policy and method

consistent with the objectives

of the plan and the require-

ments of this title,

describe a procedure under the

plan for the allocation of

responsibilities for the op-

eration and administration of

the plan...,

provide a procedure for amending

such plan, and for identifying

the persons who have authority

to amend the plan, and

the plan.

29 U.S.C. §1102 (emphasis supplied). (A-46).

14

The requirement that an employee bene-

fit plan be written and contain four key

elements is coupled with the mandate that:

(a)(1)...a fiduciary shall discharge

his duties with respect to a plan

solely in the interest of the parti-

cipants and beneficiaries and--...

(D) in accordance with the

documents and instruments governing

the plan insofar as such documents

and instruments are consistent with

the a of this title or

title IV.

29 0.8.C. §1104. (A-53).

5/ the Joint Conference Report on ERISA

noted that "(U]nder the Conference substi-

tute, plan fiduciaries also must act in

accordance with plan documents and instru-

ments to the extent that they are consistent

with the requirements established in the

bill." 1974 U.S. CODE CONG. & AD. News,

5083. A similar comment was contained in

the report accompanying the Senate Bill.

Id., at 4988. The reports of the House

Education and Labor Committee and the Senate

Labor and Public Welfare Committee, which

accompanied the Bills in the House and

Senate, respectively, stated: "The prin-

ciples of fiduciary conduct are adopted fron

existing trust law, but with modifications

appropriate for employee benefit plans.

These salient principles place a two-fold

duty on every fiduciary; to act in his

relationship to the plan's fund as a prudent

man in a similar situation and under like

conditions would act, and to act consis-

tently with the principles of administering

the trust for the exclusive purposes pre-

viously enumerated, and in accordance with

the documents and instruments governing the

fund unless they are inconsistent with the —

fiduciary principles of the section.” Id. a

4651 and 4866. (Emphasis added. )

15

The requirement that the plan be estab-

lished and maintained in writing is a safe-

guard to ensure that “every employee may, on

examining the plan documents, determine

exactly what his rights and obligations are

under the plan." Conference Committee

Report, 1974 U.S. CODE CONG. & AD. News at

5077-5078. It is manifest that parol affi-

davits and depositions are not "plan docu-

ments" from which Congress intended that

covered employees discern their rights and

duties. &/ The use of parol evidence to

£/congress was particularly concerned

about the effectiveness of communication of

plan contents to participants. The reports

accompanying both the Senate and House Bills

noted that: “Subcommittee findings were

abundant in establishing that an average

plan participant, even where he has been

furnished an explanation of his plan pro-

visions, often cannot comprehend them

because of the technicalities and complexities

of the language used.” 1974 U.S. Code CONG.

& AD. News, pp. 4646 and 4847. The worst

fears of Congress are realized by this case,

as no participant could have even determined

what constituted the plan.

16

establish offsets to the schedule of bene-

fits set forth in the Great West application

is in direct conflict with the directive

that the plan document “specify the basis on

which payments are made to and from the

plan” and that the plan be administered in

accordance with its governing documents.

Assuming that the lower courts' inter-

pretation of the state law of parol evidence

is correct, that law must yield in a direct

conflict with a supreme federal directive.//

U.S. Const. art. VI, §2; Gibbons v. Ogden,

22 U.S. (9 Wheat.) 1 (1824). Congress

intended that the ERISA scheme regulating

plan establishment, reporting and disclosure

tis case presents the unique issue

of which law prevails in a conflict between

a state rule of evidence and a rule of sub-

stantive federal law. The lower courts'

decisions in this case create the issue even

though the application of the parol evidence

rule is tenuous in light of the Georgia rule

that documents comprising a contract required

to be in writing must be “internally con-

nected [and] intelligible without parol

aid." Freeman v. Baker, 147 Ga. App. 168,

248 S.E. 2d 298 (1978); Industrial Welding

& Tool Supplies, Inc. v. CIT Corp., 157 Ga.

App. 611, aT S.E.20 50 (1981), see discus-

sion, infra, at 19-20.

17

would apply uniformly in all jurisdictions,

unaffected by local law. That intention was

stated as follows:

(a) Except as provided in

subsection (b) of this section

{dealing with pre-ERISA regulation

of insurance, banking, and securities]

the provisions of this title [29

U.S.C. §§1001-1144] and title IV

shall supercede any and all state

laws insofar as they may now or

hereafter relate to any [ggvered]

employee benefit plan....—

In this case, the law of parol evidence

and its exceptions are not specifically

targeted at benefit plans; yet as applied,

it unavoidably “related to” those plans, and

its use was impermissible. Where the mandate

of Congress is explicit it is controlling.

Brotherhood of Locomotive Engineers v.

8/n Congressional intention to preempt

state laws concerning the reporting and

disclosure aspects of employee benefit

plans was found under ERISA‘'s predecessor,

the Welfare and Pensions Plans Disclosure

Act, Pub. L. No. 85-836, 72 Stat. 997 (1958).

See People v. Automobile Transporters Welfare

Fund, 17 A.D.20 448, 235 N.Y.S.2d0 702 (1962);

aff'd 13 N.Y.2d 814, 192 N.E.2d 222; cert

denied 376 U.S. 908 (1963).

18

Chicago Rock Island and Pacific Railroad

Company, 382 U.S. 423, 444 (1966).2/

The purported intention of Great West

and Trust Company to incorporate the offsets

of the previous policy into the Great West

plan is entirely irrelevant. The petitioner

respectfully suggests that fiduciaries (like

the defendants) really are obligated by

ERISA to maintain the plan in writing so

that employees can examine the plan docu-

ments and determine what their rights are.

The petitioner further suggests that plan

fiduciaries really are required by ERISA to

administer the plan in accordance with the

governing documents. Permitting plan fidu-

ciaries to establish offsets by evidence not

contained in the plan instruments is incon-

9/without this explicit directive, the

intent of Congress to preempt state law may

be implied from the structure and purpose of

the statutory framework. Jones v. Rath

Packing Co., 430 U.S. 519, 525-26 (1977).

19

sistent with the Congressional requirement

that plan instruments, and not post hoc

declarations, govern. This inconsistency is

fatal to the establishment of parol offsets.

See, e.g., Nash v. Florida Industrial Com-

mission, 389 U.S. 235 (1967); Hill v.

Flordia ex rel. Watson, 325 U.S. 338 (1945);

Cloverleaf Butter Co. v. Patterson, 315

U.S. 148 (1942).

The state in this case has no counter-

balancing interest to be protected by up-

holding the application of its law. Cf.

Cambell v. Hussey, 368 U.S. 297 (1961);

Huron Portland Cement Co. v. City of Detroit,

362 U.S. 440 (1960). In fact, Georgia law

does not generally allow the use of parol

evidence to aid in the establishment of a

contract governed by the statute of frauds:

In Capital City Brick Co. v.

Atlanta Ice &c. Co., supra, p. 443,

it is pointed out ‘Any signed writing

or series of writings internally con-

nected, intelligible without parol

aid, and showing or admitting an

agreement coextensive with the stipu-

lations of the alleged contract, is

20

sufficient.' (Emphasis supplied. )

In North & Co. v. Mendel & Brother,

73 Ga. 400, the Supreme Court held that

several papers might form such a

memorandum as would satisfy the Statute

of Frauds provided the contents of the

signed paper make reference to the

other written paper as to enable the

Court to construe the whole of them

together. ‘If, however, it be neces-

sary to adduce parol evidence, in order

to connect a signed paper with others

unsigned, by reason of the absence of

any internal evidence in the signed

paper to show a reference to or con-

nection with the unsigned papers, then

the several papers taken together do

not constitute a memorandum in writing

of the bargain.‘ Accord, Lester v.

Heidt, 86 Ga. 226, 228 (12 S.E. 214).

Thus, two writings, one signed and the

other unsigned, cannot be correlated b

parol evidence. (Emphasis in oeteiant.

Freeman v. Baker, 147 Ga. App. 168, 248 S.E.

2d 298 (1978). The reason for this rule is

simple. The use of parol evidence to establish

any of the provisions of a contract contradicts

the requirement that it be in writing.

Defendants Trust Company and Great West

are fiduciaries with respect to the dis-

ability plan. They had many fiduciary res-

ponsibilities under ERISA. This case presents

a situation in which the fiduciary require-

ments were largely ignored:

21

(1) As fiduciaries, they were bound to

maintain the plan in writing and administer

it according to its terms solely for the

benefit of participants and their bene-

ficiaries. 29 U.S.C. §§1102(a)(1) and

1104((A)(1) (A-51, A-53). Yet, for over 15

months after the Great West plan became

effective, it was evidenced in writing only

by an application. Further, in order to

reduce the plaintiff's benefits from the

$1,770 per month provided by the application

to only $50 per month and thereby reduce the

cost of the plan to them, they have sought

to supplement the application by parol

evidence.

(2) They were required to furnish a

summary of the “material modifications in

the terms of the plan" relating to eligi-

bility, maximum benefits and funding within

90 days after the Great West plan was sub-

stituted for the Northwestern plan. 29

U.S.C. §§1022, and 1024(b) (A-49). Yet, the

22

petitioner was not advised that the plan had

been changed and was never furnished a

summary of any of the “material modifi-

cations."

(3) They were required to furnish a

copy of the governing documents of the plan

within 30 days after the petitioner made a

written request. Yet, the petitioner was

first furnished a copy of the expired

Northwestern plan in response to his request.

Upon further inquiry, he was furnished a

copy of the initial draft of the Great West

plan and advised that the draft had not been

approvea. The petitioner was not furnished

a copy of the application until after this

litigation began, more than 120 days after

the petitioner's request.

The decision of the District Court,

affirmed without opinion, represents a

significant erosion of the safeguards Congress

wanted. That decision allowed a reduction

of the petitioner's benefits based solely

23

on parol offsets. The application of parol

evidence in this case is not based upon a

local anomaly in the parol evidence rule.

Its application in this case portends its

application in all 50 states. The fact is,

the permissible use of parol evidence in

cases involving a contract required to be in

writing is much more limited in Georgia than

in most states. Cf. Freeman v. Baker, 147

Ga. App. 168, 248 S.E.2d. 298 (1978);

4 Williston on Contracts, §583 (3rd ed.

1961); Annot. 81 ALR2d 991, 999-1003, §4(a),

5; Corbin on Contracts, §§508-519 (1 Vol.ed.

1952).

The result reached by the District

Court was not justified by any special

circumstance. The defendants did not show

that they failed to incorporate the offsets

into the plan because of providential cause,

a wrongful act of the plaintiff, or some

other legally cognizable excuse. They

offered no explanation as to why the offsets

24

were not included in the application or why

a complete, formal plan including the off-

sets was not prepared in timely fashion.

They made no showing, and none was required,

of a good-faith effort to comply with their

duties under ERISA. They simply testified

that they intended to carry the old offsets

forward into the new plan. Apparently, they

were either ignorant of the requirements of

ERISA, they forgot those requirements, or

they ignored them.

While there might, in some exceptional

circumstances, be a justification for cre-

ating a judicial exception to the FRISA

requirements that plans be maintained in

writing and administered in accordance with

the writing, this case presents no such

circumstance. ERISA is an extremely com-

prehensive and carefully drawn piece of

legislation. It represents the response of

Congress to significant abuses which have

25

occurred in the private employee benefit

system, 20/

In light of the present weakness of

the social security system and the consequent

increasing importance of private pensions,

it is imperative that the mandate of ERISA

be unerringly carried out. The message of

ERISA is clear. It imposes special duties

and responsibilities upon plan fiduciaries

and it imposes civil and criminal liability

for breaches of those responsibilities.

See 29 U.S.C. §§1109 and 1131 (A-55, A-

56).21/ Fiduciaries who, through ignorance

10/atter conducting twelve years of

investigation into abuses that stripped

employees of benefits under private pen-

sion plans, Congress enacted ERISA to

replace the Welfare and Pensions Plans

Disclosure Act (Pub.L.No. 85-836, 72 Stat.

997 (1958). It had proved ineffective

because of weak disclosure requirements and

a still weaker enforcement mechanism,

{1974] U.S. CODE CONG. & AD. News 4838,

4841.

11/29 U.S.C. §1109 provides in part

that: “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 title shall

be personally liable to make good to such

plan any losses to the plan resulting from

26

or disregard, violate the mandates of ERISA,

do so at their own peril.

It is true, that before the petitioner

retired, he had no reason to expect dis-

ability benefits which were not subject to

the offset provisions of the Northwestern

plan. This is so because he was not furnished

the governing document of the Great West

plan or advised of the adoption of that plan

before his retirement. Had he been furnished

a copy of the only existing plan document,

'

11/(Cont d+ 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 appro-

priate, including removal of such fiduci-

ary..." (A-55). 20 U.S.C. §1131 provides

in part that: “Any person who willfully

violates any provision of part 1 of this

subtitle [29 U.S.C. §§1021-1031], or any

regulation or order issued under any such

provision,; shall upon conviction be fined

not more than $5,000 or imprisoned not more

than one year, or both...." (A-56).

27

he would have rightly expected a benefit of

$1,770 per month. The defendants’ failure

to inform the petitioner of the material

changes in the plan was an ERISA violation.

Because of this violation, the petitioner

will never know, to a certainty, that he was

not selected for a discriminatory applica-

tion of benefit offsets.12/ Because of this

violation, the petitioner will never know,

to a certainty, that the failure to advise

him of the changes was not a deliberate act

of deceit. This lawsuit resulted from the

defendants’ violation of ERISA and the

suspicion the violation justifiably generated.

ERISA was designed to prevent exactly what

has occurred here, distrust and suspicion,

uncertainty as to benefits and self-serving

declarations by plan fiduciaries.

12/pians like a disability plan in

which the occurrence of claims is actuarially

infrequent are highly susceptible to discri-

minatory administration. Under such plans,

vague or imcomplete descriptions of benefits

can be used to control benefit payments,

depending upon who makes a claim, because

the determination of a right to benefits in

one case is not likely to affect other

claimants.

28

If the ruling of the lower courts is

not corrected, what would prevent the

defendants in this case from doing the same

thing again - adopting a new plan, evi-

dencing it by a sketchy application and

remaining “flexible"? What would prevent

other fiduciaries from claiming the benefit

of self-serving parol evidence to reduce the

benefits of claimants who were in particu-

lar disfavor with the plan sponsor? The

answer is, the District Court's opinion

makes such occurrences likely.

The opinion presents no guidelines or

limitations on the use of parol evidence to

supplement plan documents. Yet, the use of

parol evidence in the case of benefit plans

is unusually risky because there is little

likelihood that any participant will be ina

position to offer evidence contrary to the

claimed intention of the plan fiduciaries.

Just as occurred in this case, most courts

addressing such an issue will be forced to

29

proceed without the safeguard of conflicting

interests among the parties with knowledge.

This a world in which self-interest leads to

discrimination and untruthfulness too fre-

quently. For this reason, the court must

not allow ERISA's preemptory regulatory

scheme to be subverted by the application of

a state parol evidence rule.

CONCLUSION

Because the Georgia law of parol evi-

dence, as applied in this case, directly

clashes with supreme federal law, and

because Congress intended that ERISA alone

govern the establishment, maintenance and

disclosures of the plan at issue, the

District Court erred in permitting the

petitioner's benefits to be reduced by parol

offsets. For these reasons, this petition

for a writ of certiorari should be granted.

JERRY L. SIMS

ATTORNEY FOR PETITIONER

OF COUNSEL:

LEFKOFF, PIKE & SIMS, P.C.

2101-100 Colony Square

Atlanta, GA 30361

(404) 892-3300

A-1l

APPENDIX

The judgment of the Eleventh Circuit

Court of Appeals was issued without opinion

under Circuit Rule 25. That rule provides

- as follows:

RULE 25. AFFIRMANCE WITHOUT OPINION

When the Court determines that any

of the following circumstances exist:

(a) judgment of the district

court is based on findings of fact

that are not clearly erroneous;

(b) The evidence in support of a

jury verdict is not insufficient;

(c) the order of an adminis-

trative agency is supported by

substantial evidence on the record

as a whole;

(d) summary judgment, directed

verdict, or judgment on the

pleadings is supported by the

record;

and the court also determines that no

error of law appears and an opinion

would have no precedential value, the

judgment or order may be affirmed or

enforced without opinion.

A copy of that judgment may be found at page

A-37 °

A-2

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

HAROLD L. MYRON,

Plaintiff, CIVIL ACTION NO.

C80-1428A

vs.

TRUST COMPANY BANK

LONG TERM DISABILITY

BENEFIT PLAN, TRUST

COMPANY BANK, and

GREAT WEST LIFE

ASSURANCE COMPANY,

Defendants.

ORDER

This action under The Employee Retire-

ment Income Security Act of 1974, 29

U.S.C. §§1001, et seqg., and the Court's

pendent jurisdiction, is before the Court

on plaintiff's motion to amend his com-

plaint, defendants Trust Company Bank Long

Term Disability Benefit Plan and Trust

Company Bank's (hereinafter "the Bank")

motion for summary judqment, defendant

Great West Life Assurance Company's (here-

inafter "Great West") motion for summary

A-3

judgment and plaintiff's cross-motion for

summary judgment.

Motion to Amend

Defendants have filed no response to

plaintiff's motion to amend the complaint.

The Court therefore FINDS that this motion

is unopposed and hereby GRANTS plaintiff's

motion. Local Rule 91.2.

Motions for Summary Judgment

The basic undisputed “background"

facts of this case (culled from the var-

ious statements of facts filed in support

of the motions before the Court) are

these:

The plaintiff, Harold L. Myron, is

sixty years of age. Plaintiff served in

the military for thirty years and retired

from the United States Army as a full

colonel in June 1973. From July 1973

through August 1, 1979 plaintiff was an

employee of Trust Company Bank. Plaintiff

retired from the bank due to total and

A-4

permanent disability effective August l,

1979. At the time of his retirement,

plaintiff's basic salary with the Bank was

$35,400 per year.

As a result of his military service,

Plaintiff became eligible for and began

receiving military retired pay as of

August 1, 1979 [sic]. Effective April l,

1978, plaintiff became eligible for and

began to receive disability benefits from

the Veterans Administration (VA). Effec-

tive September 1, 1979, plaintiff became

eligible to receive 100 percent service-

connected VA disability payments. Both of

these payments have increased between the

time of plaintiff's original eligibility

and the filing of this suit.2/

+/the exact breakdown of the payments

plaintiff is receiving is apparently in

dispute. Plaintiff asserts that his

military retirement pay is offset by his

VA payments. Defendants contend (by

implication) that the two payments are

separate and that there is no such offset.

At any rate, the totals reflected in

plaintiff's answer to interrogatory number

2 are greater than the “maximum monthly

indemnity" (see below) for which he is

eligible.

A-5

In May 1980, plaintiff was awarded

social security benefits in the amount of

$485.50 per month. Those benefits were

awarded retroactively to January 1, 1980.

Plaintiff, as of March 31, 1981, was

receiving VA disability, social security

disability, and military retirement pay

totaling at least $3,875 per month or at

least $46,500 per year. Plaintiff's

Answers and Objections to Interrogatories

Nos. l, 2, 3; Appendix Tab B, Great West's

Appendix to Statement of Undisputed Mate-

rial Facts.

Sometime prior to 1976, Trust Com-

pany Bank initiated for its employees a

long-term disability benefit plan. From

July 15, 1975 through April 30, 1979, this

plan was funded through an employee group

long-term disability income insurance

policy with Northwestern National Life

Insurance Company (hereinafter "North-

western").

A-6

In September of 1978, Great West

submitted to Johnson & Higgins of Georgia,

Inc. (an insurance consulting firm) a

proposal containing its funding recom-

mendation for a long-term disability

insurance plan for Trust Company Bank.

The basic provisions of this proposal

were eventually accepted by Trust Company

Bank as of May 1, 1979.

As of May 1, 1979, the Bank con-

tracted with Great West to convert the

funding of the plan to a self-funded

program with claims adjudication and fund

management services to be provided by

Great West.

The Issues

There are two key questions to be

decided here:

(1) What are the terms of the

Trust Company Bank Long-Term

Disability Benefit Plan which

are applicable to plaintiff?

A-7

(2) Should plaintiff's military

retirement pay, VA disability

payments and social security

disability payments be deducted

from any payments to which he

may be entitled under the Bank's

benefit plan?

Under the terms of the Bank's benefit

plan, the “maximum monthly indemnity" that

the plaintiff is eligible to receive is

$1,770 per month. This figure is equal to

60 percent of plaintiff's salary on the

date of his disability, and is undisputed

by the parties. What is disputed is how

much of this $1,770 per month plaintiff is

entitled to receive.

The center of the dispute is the

following excerpt from the section of

what, for now, will be called the original

group disability insurance plan2/ entitled

"Income from Other Sources":

2/ the Original plan is that plan

under which the Bank was operating prior

A-8

The total of an Insured's “income

from other sources” is deducted

from his Gross Monthly Indemnity

to determine his Monthly Income

Benefits and includes the following:

(a) Any benefits the Insured and his

dependents are eligible to

receive because of the Insured's

disability or age under the

Federal Social Security Act,

Public Employees' Retirement

Association, Railroad Retirement

Act or any other Federal, State,

County or Municipal Retirement

Act or Law ...

(c) Any benefits the Insured is

eligible to receive from a

retirement plan, pension

plan, or other similar plan

for which the Insured's

past or present employer

has directly or indirectly

sponsored, or for which

such employer has paid any

part of the cost or has

made a payroll deduction.

(d) Any benefits the Insured is

eligible to receive under Work-

men's Compensation or similar

legislation or under any govern-

mental or private disability

income plan which provides

benefits for loss of time from

2/ (Cont'd. tg the May 1, 1979

switchover from Northwestern to Great

West. What actually constitutes "the

Plan" is in dispute and the Court's

characterization here is not a comment on

the merits of that dispute, but rather is

simolv a convenient mode of reference.

A-9

employment, for which the policy-

holder or the Insured's past or

present employer contributes or

makes payroll deductions.

Allison Deposition, Exhibit 15.

Plaintiff, in his original complaint,

asserted that he is entitled to receive

$1,284.50 per month from the Bank under

the benefit plan. This figure represents

the $1,770 maximum monthly indemnity less

the $485.50 per month plaintiff initially

received in social security disability

benefits. Complaint, 416. In his amended

complaint, plaintiff asserts that he is

entitled to the entire $1,770 in monthly

benefits under the Plan. First Amendment

to Complaint, 4416.

It is plaintiff's contention that his

military retirement pay, his VA disability

benefits, and (now, apparently) his social

security disability benefits, should not

be offset against his benefits under the

. Bank's plan. Plaintiff offers three

theories to support his position. The

A-10

first two are premised on the arqument

that "the plan" under which the Bank was

administering its disability benefit

program prior to May 1, 1979, and from

which the above-quoted excerpt was taken,

was terminated when the Bank switched

insurance companies from Northwestern to

Great West. Because the relevant ERISA

section requires that every employee

benefit plan be “maintained pursuant to a

written instrument,” 29 U.S.C. §1102(a)(1),

and because, under plaintiff's argument,

the original plan was no longer binding,

another “written instrument" must have set

out the terms of the plan.

Consequently, plaintiff's first

theory is that the Bank's application for

insurance to Great West and Great West's

acceptance letter constitute an insurance

policy between the Bank and Great West,

despite the fact that these documents are

incomplete and contradictory, because |

A-11

"they more accurately reflect the status

of the Bank's long-term disability plan as

of May 1, 1979, than any other document

which existed at that time.” Plaintiff's |

Reply Brief at 9. As the application did

not include any offsets for income from

other sources or even refer to those

offsets in the (as plaintiff characterizes

it) "preexisting Northwestern National

policy," plaintiff argues he is entitled

to the full disability payment of $1,770

per month.

Secondly, plaintiff argues that if

the Court does not accept the application

as being the controlling plan document, an

initial draft prepared by Great West in

December 1979 which was sent to the Bank

through Johnson & Higgins for approval

and/or comment constitutes the controlling

plan document. This draft contained

offset provisions which, plaintiff argues,

would only encompass his social security

’

A-12

payments, and, therefore, he would be

entitled under this "plan" to the full

monthly benefit less the amount of the

social security payments.

Plaintiff's final theory is that even

if the case is controlled by the "“Nort-

hwestern National document," the relevant

portions of which are set out above, the

plaintiff is still entitled to disability

benefits of $1,284.50 per month because

his military retirement pay and VA bene-

fits do not fit into the various cate-

gories of “income from other sources"

listed in that document.

Plaintiff also seeks to recover

damages under ERISA of $100 per day plus

attorneys’ fees due to the alleged failure

of defendants to provide him with copies

of the benefit plan in effect on the date

of his disability. Finally, plaintiff

seeks $100,000 in exemplary damages against

defendants.

A-13

The position of all of defendants is

simply that "the Plan" in effect prior to

May 1, 1979 remained in effect with only

two modifications which are irrelevant

here>/ after the Bank switched insurance

companies from Northwestern to Great West.

It is their contention that the Plan

itself is a separate entity from the

insurance policy, and that all of the

parties involved in establishing the new

setup agreed that the provisions of the

plan entitled “Long Term Disability for

Employees of Trust Company of Georgia, et

al.," Allison Deposition, Exhibit 15, were

to remain in effect after May 1, 1979. It

is asserted by defendants that the change

to Great West merely altered the funding

arrangement of the plan and not the plan

itself, and that Great West was simply to

3/ these modifications dealt with a

liberalized eligibility provision and an

increase in the maximum monthly benefit

provided for by the plan.

A-14

supply their administ’ tive expertise in

implementing the Bank's benefit plan.

The defendants argue that plaintiff's

military retirement pay and VA benefits do

fall under the “Income from other sources"

offset provisions of that Plan; that

because of this, plaintiff's income from

other sources exceeds his total "Gross

Monthly Indemnity" of $1,770, and that,

therefore, plaintiff is entitled only to

the $50 per month minimum payment provided

for in the Plan,

Finally, defendants argue that because

plaintiff was provided with a copy of the

Plan in Exhibit 15, no ERISA violation

occurred. Great West argues further that

it was not the ERISA Plan administrator

under the provisions of 29 U.S.C. 1002(16)

and that, therefore, it was under no

obligation to supply plaintiff with a copy

of the Plan as ERISA requires of the

employer.

A-15

The Standard

Under the terms of Federal Rule of

Civil Procedure 56(c), a motion for summary

judgment may be granted only if there is no

issue as to any material fact and the law

favors the moving party. Marcus v. St.

Paul Fire & Marine Insurance Co., 651 F.2d

379, 382 (5th Cir. 1981).

As defendant Trust Company points out,

despite the many statements of facts and

statements of disputed facts filed in

support of an in opposition to the motions

in this case, no real material facts are

disputed. The dispute is in the legal

interpretation of the effect of the facts,

and in which facts are decisive of the

issues. Consequently, the case is ripe for

summary judgment disposition.

What is “The Plan"?

As noted above, all of the defendants

contend that the document entitled "Long

Term Disability for Employees of Trust

A-16

Company of Georgia, et al." which contains

the offset provisions at issue constitutes

“the Plan" by which the outcome must be

governed. They attempt to draw a distinc-

tion between the terms "plan" and "policy,"

and argue that, although the policy was

changed from one with Northwestern to one

with Great West, the parties (i.e., the

defendants) all agreed that the plan which

was in effect prior to the change in

insurance companies was to remain in effect.

This argument cannot stand in light of

the applicable ERISA provision. Twenty-

nine U.S.C. §1102 provides in relevant

part:

(b) Every employee benefit plan

shall --

(1) provide a procedure

for establishing and carrying

out a funding policy and

method consistent with the

objectives of the plan and

the requirements of this

subchapter,

(2) describe any procedure

under the plan for the allocation

of responsibilities for the

operation and administration of

the plan...,

A-17

(3) provide a procedure for

amending such plan, and for

identifying the persons who

have authortiy to amend the

plan, and

(4) specify the basis on which

payments are made to and from

the plan.

As plaintiff correctly points out,

the Northwestern “arrangement,” of which

the document defendants label "the Plan"

was an integral part, expired by its own

terms on April 30, 1979. Plaintiff's

Brief at 3. That part of the Northwestern

documents which contains the offset pro-

visions cannot in and of itself be con-

sidered a “plan” under section 1102(b),

because the first three elements listed in

that section no longer existed when the

arrangement between the Bank and North-

western was terminated. "The Plan” does

not, as the Bank argues, "continue[] in

existence regardless of changes in funding

or administration.” Trust Company Reply

Brief at 7. Section 1102 clearly shows

that funding and administration are integral

A-18

parts of a “plan” under ERISA. However,

as will be set out below, the Court finds

that this mistake in terminology is not

fatal to defendants’ position on the

ultimate outcome of this case.

It is plaintiff's primary contention

that the Bank's written application for

insurance, which was accepted and adminis-

tered by Great West as though a written

policy had been issued, is "the Plan"

which governs the disposition of this

case. The application, Gill Deposition,

Exhibit 19, does contain the four required

features of an ERISA "plan" as set out in

section 1102(b). There is also no mention

of any offset provisions in the applica-

tion, and, therefore, plaintiff argues

that he is entitled to the full $1,770 per

month disability payment.

If only the provisions of the appli-

cation for insurance were relevant here,

the Court would be inclined to rule for

A-19

plaintiff. However, because of the admis-

sible parol evidence existent here, the

Court cannot do so.

Defendants' basis for asserting that

the offset provisions set out in the plan

which existed prior to the change to Great.

West is that all of the parties to the

formulation of the new plan agreed that

this would be the case. This contention

is supported by the following evidence:

(1) The affidavit of Gregory Jon

Allison, the group marketing

officer of defendant Great West

who negotiated the conversion on

behalf of Great West, which

states that:

During the negotiations prior to

and at the time the agreement

was reached to commence coverage

of the Plan under Great West's

self-funding proposal, Great

West and Trust Company Bank,

through Mr. Hillegas [of Johnson

& Higgins), agreed that the

institution of this self-funding

program would not alter the

benefits available to employees

under the Plan, and that the

A-20

benefit provisions of the Great

West policy would remain con-

sistent with the existing Plan

with only two minor exceptions

[which were set out above]....

Allison Affidavit, #4, Appendix

Tab C, Defendant Great West's

Appendix to its Statement of

Undisputed Material Facts.

(2) The affidavit of W. Moses Bond,

a group vice president of defendant

Trust Company Bank, who engaged

Johnson & Higgins to consult

with the Bank regarding the

change in insurance companies

and plan administration. He

states:

The intention of Trust Company

Bank in the transition from a

plan insured by Northwestern

National Life Insurance Company

to a self-funded plan was that

the terms of the plan itself

would remain unchanged....

Specifically, the terms of the

Plan with respect to deductions

for income from other sources

and the calculation of monthly

benefits were to remain unchanged.

(3)

(4)

A-21

Bond Affidavit, 44, Trust Company's

Motion for Summary Judgment,

Exhibit B.

The affidavit of James T. Hillegas,

a vice president of Johnson &

Higgins, who was primarily

responsible for providing that

firm's services to Trust Company

in the conversion and negotiation

process. He states:

The intention of all of the

parties to the transition from

Northwestern National Life

Insurance Company to the new

funding arrangement was that the

terms of the Plan itself would

remain unchanged.... Specifi-

cally, the terms of the Plan

with respect to deductions for

income from other sources and

the calculation of monthly

benefits were to remain unchanged.

Hillegas Affidavit, 49, Trust

Company's Motion for Summary

Judgment, Exhibit C.

The deposition testimony of

Betty J. Gill, claims manager

for Great West, who was informed

A-22

at the time of the conversion

that the terms of the North-

western Plan were to be "dup-

licated" in the Great West

Flan. Gill Deposition, pp.45-

46.

Plaintiff argues that these statements

should not be accepted by the Court because

the application which the Bank sent to

Great West contained the following language:

It is hereby declared and agreed

that all statements, representations

and answers made in this application

are a consideration for and a basis

of the contract(s) of insurance

between the Applicant and the Company

and whether written or printed are

declared to be true, full and complete;

that no other statement, representa-

tion, or information shall be binding

upon or affect the rights of the

Company....

Plaintiff asserts that this language

constitutes a merger clause that clearly

bars the incorporation of the offset

provisions of the Northwestern plan into

the Great West plan, because there

A-23

is no mention of or reference to those

provisions in the application. Plainwiff

notes further that other portions of the

Northwestern plan were specifically

referred to in the application. Plain-

tiff's Brief at 3-4. Plaintiff, however,

has offered no evidence to rebut the

statements of the various affiants.

pm In the first place, as the Bank

points out in its reply brief at page ll,

the clause in question is not really a

merger clause. It says that Great West is

not bound by any statement not contained

in the application, and it says that “all

statements, representations and answers”

made in the application are "true, full

and complete." The clause does not state,

as does the merger clause in Johnson v.

Ford Motor Credit Co., 142 Ga. App. 547,

548 (1977), cited by plaintiff, that

"[t]his contract constitutes the entire

agreement between the parties...."

A-24

It is well settled in both Georgia

and federal law that the evidence in the

affidavits and depositions can be con-

sidered in a situation such as this.

GEORGIA CODE ANN. §20-704(1) states:

Farol Evidence is inadmissible

to add to, take from, or vary a

written contract. All the attendant

and surrounding circumstances may be

proved, and if there is an ambiguity,

latent or patent, it may be explained;

so if a part of a contract only is

reduced to writing ..., and it is

manifest that the writing was not

intended to Spear the whole contract,

then parol evidence is admissible.

(Emphasis added. )

Georgia case law is even more clear

on this point. The case of Forsyth

Manufacturing Co. v. Castley, 112 Ga. 199,

211 (1900), held that

a party is at liberty to prove “the

existence of any separate oral agree-

ment as to any matter on which a

document is silent, and which is not

inconsistent with its terms, if from

the circumstances of the case the

court infers that the parties did not

intend the document to be a complete

and final statement of the whole of

the transactions between them.

A-25

(Citation omitted.) Accord, Hatley v.

Frey, 145 Ga. App. 658, 659 (1978);

Ansley v. Forest Services, Inc., i35 Ga.

App. 745, 747 (1975). See also,

Langenback v. Mays, 205 Ga. 706, 711

(1949).

Plaintiff himself points out that the

application is "silent" as to the offset

provisions. As there is admittedly no

reference to these provisions, there is no

way they can be considered "inconsistent"

with the terms of the Trust Company-Great

West contract. Finally, the “circum-

stances of the case" -- i.e., the afore-

mentioned affidavits, the lack of many

necessary terms and provisions in the

application itself, and the fact that

several draft plans have arisen during the

course of this action -- certainly allow

the Court to infer that the defendants

"did not intend the document to be a

complete and final statement of the whole

of the transactions between them."

A-26

Federal law also supports consider-

ation of this evidence. The Fifth Circuit

has held that "[i]n Georgia, construction

of insurance contracts begins with the

premise that a policy must ‘be construed

so as to carry out the true intention of

the parties. All other rules of contract

interpretation and construction are sub-

servient to that principle....'" National

Hills Shopping Center, Inc. v. Liberty

Mutual Insurance Co., 55] F.2d 655, 657

(5th Cir. 1977) (citation omitted).

Furthermore,

Extrinsic evidence may be even more

helpful in deciding whether there has

been an integraticn, and no rule bars

“parol evidence" or any other rele-

vant evidence for the purpose of

determining whether the parties have

agreed upon the writing as a complete

and accurate statement of what is

agreed between them.

Carolina Metal Products Corp. v. Larson,

389 F.2d 490, 493 (5th Cir. 1967). See

also Vanston v. Connecticut General Life

Insurance Co., 482 F.2d 337, 341 (5th Cir.

1972.) fnarnl avidence rule AidA not nrevent

A-27

plaintiff from proving additional insur-

ance contract terms which were not incon-

sistent with those embodied in the written

agreement); Matthews v. Drew Chemical

Corp., 475 F.2d 146 (5th Cir. 1973).

The true intention of the parties to

the insurance contract here was obviously

to follow the offset provisions set out in

the original Northwestern plan. Therefore,

that is what the Court will allow. The

Court FINDS that the plan which governs

here is the combination of the application

by the Bank to Great West and the benefit

provisions of the original Northwestern

plan (and not “the Plan" as defendants

refer to it) which the defendants intended

to be carried over into the new Great West

plan. In particular, the Court HOLDS that

the relevant offset provisions for "income

from other sources" ar¢ those provisions

contained in the original Northwestern

plan set out above.

A-28

ERISA Violations

While it is true that 29 U.S.C.

§1102(a)(1) requires that every employee

benefit plan "shall be established and

maintained pursuant to a written instru-

ment,” the Court has found no authority

that states that this written instrument

must be one all-inclusive document,

Indeed, the legislative history indicates

that Congress contemplated the possibility

of more than one writing constituting an

ERISA plan. The conference committee

report states: "A written plan is to be

required in order that every employee may,

on examining the plan documents, determine

exactly what his rights and obligations

are under the plan." 1974 U.S. Code Cong.

& Ad. News, 5077-78 (emphasis added).

Certainly, the statement in the appli-

cation which plaintiff erroneously

designated as a merger clause could cause

confusion to a plan beneficiary as to

A-29

whether the Northwestern plan benefit

provisions apply under the Great West

plan. It is also true that “the plan" the

Court has found to be controlling here is

not a fully complete one, as evidenced by

the fact that several subsequent draft

plans have arisen and none has as yet

been accepted as the final benefit plan.

However, no employee of the Bank was ever

told that any other provisions would

apply, and the employees, including

plaintiff, were furnished with copies of

the Northwestern plan benefit provisions.

Therefore, although the “written instru-

ment" requirement was not met as per-

fectly as it could have been, the Court

FINDS that there was no violation of this

ERISA provision. Cf. Johnson v. Central

States, Southeast & Southwest Areas Pension

Fund, 513 F.2d 1173 (10th Cir. 1975)

(though pension plan description in booklet

furnished employee, together with plan

A-30

itself, was unsatisfactory, pension fund

did not violate Welfare and Pension Plans

Disclosure Act).

As the Court has set out "the plan"

which is determinative of this case, and

since defendants provided plaintiff with

copies of both the Northwestern plan and

the application which together contain all

of the aspects of the Plan relevant to

this action, the Court HOLDS that there

was no violation by defendants of 28

U.S.C. §1132 for “refusal to supply

requested information.”

Do the Offset Provisions Apply to

Plaintiff's Military Retirement Pay and

VA Benefits?

The Court has decided that the offset

provisions in the Northwestern plan docu-

ment govern the disposition of this case.

Plaintiff does not deny that the social

security benefits he receives are covered

by those offset provisions. Indeed, he

A-31

acknowledges that the maximum monthly

‘benefit he is entitled to under the con-

trolling document is $1,284.50 -- the

$1,770 maximum less the $485.50 he was

initially eligible to receive in social

security benefits. Plaintiff's Brief at

12. Therefore, the Court must determine

if plaintiff's military retirement pay and

VA disability payments are covered under

the plan's offset provisions.

The Court will first deal with the

military retirement pay, because if those

benefits are covered by the offset pro-

visions, plaintiff would be over his

$1,770 maximum monthly benefit regardless

of whether the VA benefits are offset from

the retirement pay or added to it.

The Court need look no further than

the language of subsection (c) of the

offset provisions, which states: "Any

benefits the insured is eligible to

receive from a retirement plan, pension

A-32

plar or any other similar plan for which

the Insured's past or present employer

has directly or indirectly sponsored, or

for which such employer has paid any part

of the cost or has inade payroll deduction..."

will be offset as “income from other

sources” from benefits provided under the

Bank's plan.

Plaintif€ makes three arguments

against the applicability fo this section

to his military retirement pay. The first

two -- that "[o]ffset (c) is, by its terms

directed to retirement and pension plans

(i.e., private retirement and pension

arrangements establsihed by a trust or

other plan document) of the type typi-

cally covered by ERISA,” Plaintiff's Brief

at 14, and that offset (c) is “related to

private retirement and pension plans" and

does not "relate to governmental retire-

ment acts or laws," Id. at 16 -- are

simply not supported by the language of

A-33

the offset provision. The court finds no

distinction in (c) between plans estab-

lisned by a public employer and plans

established by a private employer.

Finally, plaintiff makes a creative

argument that the, as he calls them,

“limited offsets provided by subpara-

graphs (a) and (d)" would be rendered

meaningless by giving a broad inter-

pretation to offset (c) which would

include the military retirement pay in

question. Plaintiff's Reply Brief at 16-

18. The Court is simply not persuaded

that the construction given to these terms

by plaintiff is correct.

The Court FINDS that the language of

paragraph (c) above, clearly encompasses

the military retired pay plaintiff is

receiving. The benefits plaintiff is

receiving are from a “retirement plan" for

which plaintiff's past employer -- The

A-34

United States government -- has paid all

of the cost.4/

Finally, the Court notes that plain-

tiff has filed a “notice of deposition

upon written questions” for Mr. Marvin

Lind, Director of Life and Disability of

Northwestern National Life Insurance

Company. Plaintiff's attorney indicates

in his affidavit that he “has obtained

{from an unnamed source at Northwestern]

an oral interpretation indicating that the

plaintiff's military retirement income

would not be offset by Northwestern

National against his basic disability

benefit.” Sims Affidavit, 44, Plaintiff's

Appendix Tab 2. Apparently, the deposi-

tion testimony plaintiff hopes to obtain

from Mr. Lind seeks in part to verify this

assertion. See "Plaintiff's Direct

Examination" question 18.

4/The Court also finds that the

language in the provision in question is

much more specific than that in the plan

dealt with in Gladden v. Pargas, Inc. of

Waldorf, Md., 579 F.2d 1901 (ath Cir.

1978), cited by plaintiff, and, therefore,

that case's holding is of no bearing here.

A-35

The Court is not convinced that this

testimony is relevant enough to its

decision here to await completion of this

deposition testimony. It was clearly the

intention of the parties to the Great West

plan that plaintiff's retirement pay be

considered “income from other sources,"

see quoted sections of affidavits set out

above, and the Court has found that sub-

section (c) can reasonably be interpreted

to so include those benefits.

Therefore, as the Court has decided

that plaintiff's military retired pay is

covered by the Plan's offset provisions,

and since at all times relevant to this

action, plaintiff's combined social

security benefits and military retired pay

was greater than the $1,770 maximum

monthly benefit for which he is eligible,2/

5/Plaintiff became eligible for bene-

fits under the Plan on February 1, 1980.

At that time he was (retroactively) receiving

$485.50 per month in social security

benefits and $1,642.86 per month in military

retirement pay ($2,785.86 less $943.00 in

VA benefits) for a total of $2,128.36 per

month in income from other sources.

A-36

the Court HOLDS that plaintiff is only

entitled to receive the $50 per month

minimum benefit under the Bank's dis-

ability plan.

Also, as defendants have prevailed on

the substantive issues, plaintiff's claims

for attorney's fees and exemplary damages

must also fail.

In sum, for the reasons set out in

this opinion, the Court hereby:

GRANTS Plaintiff's motion to amend

complaint;

GRANTS all defendants' motions for

summary judgment; and

DENIES plaintiff's motion for summary

judgment.

SO ORDERED, this 15th day of September,

1981.

ORINDA D. EVANS

United States District

Judge

[Filed Sept. 16, 1981]

A-37

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

NO. 81-7858

D.C. Docket No. CV-80-1428-A

HAROLD L. MYRON,

Plaintiff-Appellant,

versus

TRUST COMPANY BANK

LONG TERM DISABILITY

BENEFIT PLAN, ET AL.,

De fendants~-Appellees.

Appeal from the United States

District Court for the Northern

District of Georgia

( October 20, 1982 )

Before JOHNSON and ANDERSON, Circuit Judges,

and HUNTER*, District Judge. PER CURIAM:

AFFIRMED. See Circuit Rule 25.

"Costs taxed against plaintiff-appellant."

*Honorable Edwin F. Hunter, Jr., United

States District Judge for the Western

District of Louisiana, sitting by designa-

tion.

ISSUED AS MANDATE: JAN 13 1983

[DO NOT PUBLISH]

A-38

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

NO. 81-7858

HAROLD L. MYRON,

Plaintiff-Appellant,

versus

TRUST COMPANY BANK

LONG TERM DISABILITY

BENEFIT PLAN, ET AL.,

De fendants~-Appellees.

Appeal from the United States

District Court for the Northern

District of Georgia

ON PETITION FOR REHEARING

Before JOHNSON and ANDERSON, Circuit Judges,

and HUNTER*, Judge. PER CURIAM:

IT IS ORDERED that the petition for

rehearing filed in the above entitled and

numbered cause be and the same is hereby

denied.

A-39

ENTERED FOR THE COURT:

/s8/_R. Lanier Anderson

United States Circuit Judge

*U.S. District Judge for the Western

District of Louisiana, sitting by des-

ignation.

[Filed Dec. l, 1982)

A-40

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT

OF GEORGIA

ATLANTA DIVISION

CIVIL ACTION FILE

NO. C80-1428A

HAROLD L. MYRON

VS.

TRUST COMPANY BANK

LONG TERM DISABILITY

BENEFIT PLAN, TRUST

COMPANY BANK, GREAT

WEST LIFE ASSURANCE

COMPANY

JUDGMENT

This action came on for consideration

before the Court, Honorable Orinda D,.

Evans, United States District Judge, pre-

siding, and the issues having been duly

considered and a decision having been duly

rendered, pursuant to Order of September 16,

1981

It is Ordered and Adjudged that plain-

tiff take nothing; that the action be

dismissed; and that defendants TRUST COMPANY

BANK LONG TERM DISABILITY BENEFIT PLAN,

TRUST COMPANY BANK, GREAT WEST LIFE ASSUR-

ANCE COMPANY recover of plaintiff HAROLD L.

MYRON their costs of this action.

A-41

Dated at Atlanta, Georgia, this 2lst

day of September, 1981.

FILED AND ENTERED BEN H. CARTER

IN CLERK'S OFFICE Clerk of Court

September 21, 1981

BEN H. CARTER, CLERK

BY: BY:

Patricia M. Ivester Patricia M. Ivester

Deputy Clerk Deputy Clerk

A-42

EMPLOYEE RETIREMENT INCOME SECURITY ACT

TITLE I, SUBTITLE A, §2

29 U.S.C. §1001

§1001. Congressional findings and declara-

tion of policy

(a) Benefit plans as affecting

interstate commerce and the Federal taxing

power. The Congress finds that the growth

in size, scope, and numbers of employee

benefit plans in recent years has been

rapid and substantial; that the opera-

tional scope and economic impact of such

plans is increasingly interstate; that the

continued well-being and security of

millior ; of employees and their dependents

are directly affected by these plans; that

they are affected with a national public

interest; that they have become an impor-

tant factor affecting the stability of

employment and the successful development

of industrial relations; that they have

become an important factor in commerce

A-43

because of the interstate character of

their activities, and of the activities

of their participants, and the employers,

employee organizations, and other enti-

ties by which they are established or

maintained; that a large volume of the

activities of such plans is carried on by

means of the mails and instrumentalities

of interstate commerce; that owing to the

lack of employee information and adequate

safeguards concerning their operation, it

is desirable in the interests of employees

and their beneficiaries, and to provide

for the general welfare and the free flow

of commerce, that disclosure be made and

safeguards be provided with respect to the

establishment, operation, and adminis-

tration of such plans; that they substan-

tially affect the revenues of the United

States because they are afforded preferen-

tial Federal tax treatment; that despite

the enormous growth in such plans many

employees with long years of employment

A-44

are losing anticipated retirement benefits

owing to the lack of vesting provisions in

such plans; that owing to the inadequacy

of current minimum standards, the sound-

ness and stability of plans with respect

to adequate funds to pay promised benefits

may be endangered; that owing to the

termination of plans before requisite

funds have been accumulated, employees and

their beneficiaries have been deprived of

anticipated benefits; and that it is

therefore desirable in the interests of

employees and their beneficiaries, for the

protection of the revenue of the United

States, and to provide for the free flow

of commerce, that minimum standards be

provided assuring the equitable character

of such plans and their financial sound-

ness.

(b) Protection of interstate

commerce and beneficiaries by requiring

disclosure and reporting, setting standards

A-45

of conduct, etc. for fiduciaries. It is

hereby declared to be the policy of this

Act to protect interstate commerce and the

interests of participants in employee

benefit plans and their beneficiaries, by

requiring the disclosure and reporting to

participants and beneficiaries of financial

and other information with respect thereto,

by establishing standards of conduct,

responsibility, and obligation for fidu-

ciaries of employee benefit plans, and by

providing for appropriate remedies, sanc-

tions and ready access to the Federal

courts.

(c) Protection of interstate commerce,

the Federal taxing power, and beneficiaries

by vesting ©f accrued benefits, setting

minimum standards of funding, requiring

termination insurance. It is hereby

further declared to be the policy of this

Act to protect interstate commerce, the

Federal taxing power, and the interests

A-46

of participants in private pension plans

and their beneficiaries by improving the

equitable character and the soundness of

such plans by requiring them to vest the

accrued benefits of employees with sig-

nificant periods of service, to meet

minimum standards of funding, and by

requiring plan termination insurance.

EMPLOYEE RETIREMENT INCOME SECURITY ACT

TITLE I, SUBTITLE A, §3(a)

(2)(A), (7) and (14)

29 U.S.C. §1002

§1002. Definitions

For purposes of this title:

(1) The terms “employee welfare

benefit plan" and “welfare plan" mean any

plan, fund, or program which was heretofore

or is hereafter established or maintained

by an employer or by an employee organizati

or by both, to the extent that such plan,

fund, or program was established or is

maintained for the purpose of providing

for its participants or their beneficiaries

through the purchase of insurance or

A-47

otherwise, (A) medical, surgical, or

hospital care or benefits, or benefits in

the event of sickness, accident, disability,

death or unemployment, or vacation benefits,

apprenticeship or other training programs,

or day care centers, scholarship funds, or

prepaid leaal services or (B) any benefit

described in section 302(c) of the Labor

Management Relations Act, 1947 [29 U.S.C.

§186(c)] (other than pensions on retirement

or death, and insurance to provide such

pensions).

(2)(A) Except as provided in

subparagraph (B), the terms “employee

pension benefit plan" and “pension plan"

mean any plan, fund, or program which was

heretofore or is hereafter established or

maintained by an employer or by an employee

organization, or by both, to the extent

that by its express terms or as a result

of surrounding circumstnaces such plan,

fund, or program--

A-48

(i) provides retirement income

to employees, or

(ii) results in a deferral of

income by employees for periods extending

to the termination of covered employment

or beyond, regardless of the method of

calculating the contributions made to the

plan, the method of calculating the benefits

under the plan or the method of distributing

benefits from the plan...

(7) The term “participant” means

any employee or former employee of an

employer, or any member or former member

of an employee organization, who is or may

become eligible to receive a benefit of

any type from an employee benefit plan

which covers employees of such employer or

members of such organization, or whose

beneficiaries may be eligible to receive

any such benefit...

(14) The term “party in interest”

means, as to an employee benefit plan--

A-49

(A) any fiduciary (including,

but not limited to, any administrator,

officer, trustee, or custodian),

counsel, or employee of such

employee benefit plan....

EMPLOYEE RETIREMENT INCOME SECURITY ACT

TITLE 1, SUBTITLE B, PART 1,

§104(b)(1) and (4)

29 U.S.C. §1024

§1024. Filing and furnishing of information

(b) Publication of summary plan

description and annual report to participants

and beneficiaries of plan. Publication of

the summary plan descriptions and annual

reports shall be made to participants and

beneficiaries of the particular plan as

follows:

(1) The administrator shall

furnish to each participant, and

each beneficiary receiving benefits

under the plan, a copy of the

summary, plan description, and

all modifications and changes

A-50

referred to in section 102(a)(1)

[29 U.S.C. §1022(a)(1))-

(A) within 90 days after he

becomes a participant, or (in the

case of a beneficiary) within 90

days after he first receives

benefits, or

(B) if later, within 120 days

after the plan becomes subject to

this part....

(4) The administrator shall,

upon written request of any

participant or beneficiary,

furnish a copy of the latest

updated summary plan description,

plan description, and the latest

annual report, any terminal

report, the bargaining agreement,

trust agreement, contract, or

other instruments under which the

plan is established or operated.

The administrator may make a

A-51

reasonable charge to cover the

cost of furnishing such complete

copies. The Secretary may be

[sic] regulation prescribe the

maximum amount which will constitute

a reasonable charge under the

preceding sentence....

EMPLOYEE RETIREMENT INCOME SECURITY ACT

TITLE I, SUBTITLE B, PART 4,

§402(a) AND (b)

29 U.S.C. §1102

§1102. Establishment of plan

(a) Named fiduciaries. (1)

Every employee benefit plan shall be

established and maintained pursuant to a

written instrument. Such instrument shall

provide for one or more named fiduciaries

who jointly or severally shall have authority

to control and manage the operation and

administration of the plan.

(2) For purposes of this

title, the term “named fiduciary” means a

fiduciary who is named in the plan instrument,

A-52

or who, pursuant to a procedure specified

in the plan, is identified as a fiduciary

(A) by a person who is an employer or

employee organization with respect to the

plan or (B) by such an employer and such

an employee organization acting jointly.

(b) Requisite features of

plan. Every employee benefit plan shall-

(1) provide a procedure

for establishing and carrying out a funding

policy and method consistent with the

objectives of the plan and the requirements

of this title,

(2) describe any procedure

under the plan for the allocation of

responsibilities for the operation and

administration of the plan (including any

procedure described in section 405(c)(1)

[29 U.S.C. §1105(c)(1))),

(3) provide a procedure for

amending such plan, and for identifying

the persons who have authority to amend

the plan, and

A-53

(4) specify the basis on

which payments are made to and from the

plan....

EMPLOYEE RETIREMENT INCOME SECURITY ACT

TITLE I, SUBTITLE B, PART 4, §404(1)

29 U.S.C. §1104

§1104. Fiduciary duties

(a) Prudent man standard of

care.

(1) Subject to sections 403(c)

and (d) [29 U.S.C. §1103(c) and (d)}, 4042

[29 U.S.C. §1342], and 4044 [29 U.S.C.

§1344), a fiduciary shall discharge his

duties with respect to a plan solely in

the interest of the participants and

beneficiaries and--

(a) for the exclusive

purpose of:

(i) providing benefits

to participants and their

beneficiaries; and

A-54

(ii) defraying reasonable

expenses of administering the

plan;

(B) with the care, skill,

prudence, and diligence under the

circumstances then prevailing

that a prudent man acting in a

like capacity and familiar with

such matters would use in the

conduct of an enterprise of a

like character and with like

aims;

(C) by diversifying the

investments of the plan so as to

minimize the risk of large losses,

unless under the circumstances

it is clearly prudent not to do

so; and

(D) in accordance with the

documents and instruments governing

the plan insofar as such documents

and instruments are consistent

A-55

with the provisions of this title

or title IV.

EMPLOYEE RETIREMENT INCOME SECURITY ACT

TITLE i, SUBTITLE B, PART 4, §409(a)

29 U.S.C. §1109

§1109. Liability for breach of fiduciary duty

(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

title 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 the

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. A fiduciary may also be removed

for a violation of section 411 of this Act

(29 U.S.C. §1111).

A-56

EMPLOYEE RETIREMENT INCOME SECURITY ACT

TITLE I, SUBTITLE B, PART 5, §501

29 U.S.C. §1131

§1131. Criminal penalties

Any person who willfully violates

any provision of part 1 of this subtitle

{29 U.S.C. §§1021 et seq.], or any regu-

lation or order issued under any such

provision, shall upon conviction be fined

not more than $5,000 or imprisoned not

more than one year, or both; except that

in the case of such violation by a person

not an individual, the fine imposed upon

such person shall be a fine not exceeding

$100,000.

EMPLOYEE RETIREMENT INCOME SECURITY ACT

TITLE I, SUBTITLE B, PART 5

§502(c) and (g)

29 U.S.C. §1132

§1132. Civil enforcement

(c) Administrator's refusal to

supply requested information. Any adminis-

A-57

trator who fails or refuses to comply with

a request for any information which such

administrator is required by this title to

furnish to a participant or beneficiary

(unless such failure or refusal results

from matters reasonably beyond the control

of the administrator) by mailing the

material requested to the last known

address of the requesting participant or

beneficiary within 30 days after such

request may in the court's discretion be

personally liable to such participant or

beneficiary in the amount of up to $100 a

day from the date of such failure or

refusal, and the court may in its dis-

cretion order such other relief as it

deems proper....

(g) Attorney's fees and costs;

awards in actions involving delinquent

contributions. (1) in any action under

this title (other than an action described

in paragraph 2) by a participant, benefi-

A-58

ciary, or fiduciary, the court in its

discretion may allow a reasonable attorney's

fee and costs of action to either party.

EMPLOYEE RETIREMENT INCOME SECURITY ACT

TITLE I, SUBTITLE B, PART 5,

§514(a) and (c)

29 U.S.C. §1144

§1144. Other laws

(a) Supersedure; effective date.

Except as provided in subsection (b) of

this section, the provisions of this title

and title IV shall supersede any and all

State laws insofar as they may now or

hereafter relate to any employee benefit

plan described in section 4(a) [29 U.S.C.

§1003(a)) and not exempt under section

4(b) [29 U.S.C. §1003(b)]. This section

shall take effect on January 1, 1975...

(c) Definitions. For purposes

of this section:

(1) The term "State law"

includes all laws, decisions, rules,

regulations, or other State action having

A-59

the effect of law, of any State. A law of

the United States applicable only to the

District of Columbia shall be treated as a

State law rather than a law of the United

States.

(2) The term "State" includes a

State, any political subdivisions thereof,

or any agency or instrumentality or either,

which purports to regulate, directly or

indirectly, the terms and conditions of

employee benefit plans covered by this

title.

UNITED STATES CONSTITUTION,

ARTICLE VI, SECTION 2

This Constitution, and the Laws of the

United States which shall be made in Pur-

Suance thereof; and all Treaties made, or

which shall be made under the Authority

of the United States, shall be the supreme

Law of the Land; and the Judges in every

State shall be bound thereby, any Thing

in the Constitution or Laws of any State to

the Contrary notwithstanding.