Seaberry v. Richeson Management

• Court: Court of Appeals for the Fifth Circuit
• Decided: March 24, 2004
• Docket: 95-10387
• Status: Unpublished

Opinion

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 95-10387

VERNA SEABERRY,

Plaintiff-Counter Defendant-Appellee,

versus

RICHESON MANAGEMENT CORP. and JIMMY C. AVERITT, as Trustee of the Verna Seaberry Trust,

Defendants-Counter-Claimants- Appellants.

Appeals from the United States District Court For the Northern District of Texas (7:93-CV-076-X) October 9, 1997

Before WISDOM, EMILIO M. GARZA, and PARKER, Circuit Judges.

PER CURIAM:*

IT IS ORDERED that the petition for rehearing filed by

appellant Richeson Management Corporation (“RMC”) is GRANTED, and

the following is substituted in the place of our earlier opinion.

From October of 1971 until July of 1992, Plaintiff Verna

Seaberry ("Seaberry") was employed by Defendant Richeson Management

* Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Corporation ("RMC") or an affiliated entity. RMC operates several

Dairy Queen Restaurants throughout Texas, and Seaberry advanced

through various management level positions.

In 1992, RMC and Seaberry entered into a written contract

entitled "Supplemental Income Plan for Verna Seaberry" ("Income

Plan") and the "Verna Seaberry Trust" ("Trust") (collectively

referred to as "the Plan"). The Income Plan was executed by RMC on

March 16, 1992, and by Seaberry on the following day. The Trust

was executed by RMC on March 16, 1992, and by Defendant Jimmy

Averitt ("Averitt"), Trustee of the Trust, on March 19, 1992. The

effective date of both instruments is April 1, 1992.

Section 1.2 of the Income Plan states RMC's purpose in

providing retirement benefits to Seaberry: "The Employer believes

that the Employee's commitment and loyalty to the Employer has

[sic] been and is [sic] valuable to the Employer and should be

rewarded. Accordingly, the Employer provides the Employee with

retirement benefits in the form of a supplemental income plan as

set forth by this agreement."

Section 2.1 of the Income Plan, entitled "Establishment of

Plan," states: "The Employer hereby agrees to provide the Employee

with the Plan Benefits subject, however, to the eligibility

requirements specified by this Article and the other terms,

provisions and conditions of this Agreement." Section 2.1(b)

provides that payments under the Income Plan will begin to be paid

to Seaberry on her "Retirement Date."

2 Section 2.1(c) of the Income Plan is entitled "Definition of

Retirement Date." That portion reads: "References in this

Agreement to 'Retirement Date' shall mean the last day of the month

during which the Employee ceases to be employed by the Employer

[whether by resignation, retirement, or disability on a voluntary

or involuntary basis]" (bracketed phrase in original).

On June 20, 1992, three months after the Plan went into

effect, RMC terminated Seaberry's employment, allegedly for cause.

RMC refused to fully fund the Trust and consequently precluded

Averitt from dispersing the benefits in the Trust to Seaberry.

On June 24, 1993, Seaberry filed suit alleging that RMC had

improperly denied her benefits under the Plan. RMC timely

answered, arguing inter alia that Seaberry's employment with RMC

was terminated for cause and that termination for cause was not

included in the definition of "Retirement Date." Therefore, RMC

argued, Seaberry was not eligible for the Plan benefits because she

never reached her "Retirement Date." The parties filed cross

motions for summary judgment. The district court granted

Seaberry's motion, finding that the clause in question was

ambiguous and resolved the ambiguity in favor of the

employee/claimant, citing Ramsey v. Colonial Life Ins. Co of

America, 12 F.3d 472, 479 (5th Cir. 1994)(affirming summary

judgment granted in favor of an ERISA claimant and applying the

contra proferentum rule of contract interpretation to construe

3 ambiguous language of ERISA plan). Appellant RMC contends on

appeal that the language is not ambiguous and even if it is

ambiguous, the district court erred in granting summary judgment

and holding that, as a matter of law, termination for cause does

not fall within the provision. Having reviewed the summary

judgment evidence and considered the briefs of the parties, we

AFFIRM the grant of summary judgment for essentially the reasons

given by the district court. See Seaberry v. Richeson Management

Corp., Civil Action No. 7:93-CV-076-X, Northern district of Texas

(Dec. 6, 1994).

ERISA also provides that "the court in its discretion may

allow a reasonable attorney's fee and costs of action to either

party." 29 U.S.C. § 1132(g)(1). This section applies both to

trials and appeals. Sims v. Great-West Life Assurance Co., 941

F.2d 368, 373 (5th Cir. 1991). Furthermore, § 3.7 of the Income

Plan provides as follows:

Attorneys' Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys' fees and all other costs and expenses of litigation from the other Party, which amounts may be set by the court in the trial of such action or may be enforced in a separate action brought for that purpose, and which amounts shall be in addition to any other relief which may be awarded.

This section of the Plan makes the prevailing party's right to

attorneys' fees and costs mandatory. Accordingly, Seaberry is

entitled to recover her reasonable attorneys' fees and costs in

4 defending the district court's judgment. This amount is to be

determined by the district court on remand. See Trustees of the

Plumbers & Pipefitters Nat'l Pension Fund v. Mar-Len, Inc., 30 F.3d

621, 624 n.4 (5th Cir. 1994); Carpenters Amended & Restated Health

Benefits Fund v. John W. Ryan Constr. Co., 767 F.2d 1170, 1176 (5th

Cir. 1985).

The summary judgment is therefore AFFIRMED and the case

remanded to the district court for a determination of appropriate

attorneys' fees and costs.

IT IS FURTHER ORDERED that the petition for rehearing

filed by appellant Jimmy C. Averitt, Trustee in this case is

GRANTED. Plaintiff Seaberry brought suit against RMC and Averitt,

the trustee of the “Verna Seaberry Trust.” The parties agree that

Averitt has no obligation to fund the trust on his own, and that

Averitt has no duty to take any action until RMC is ordered to fund

the trust. To the extent that the district court’s judgment can be

read to make Averitt jointly and severally liable for the payment

of Seaberry’s retirement benefits, the district court’s judgment is

REFORMED to absolve Trustee Averitt of such liability.

AFFIRMED in part, REFORMED in part, and REMANDED for

consideration of attorney fees.