The case of Waschak v. The Acuity Brand, Inc., 2010 U.S. App. LEXIS 13105 (11th Cir. 2010), is a recent decision on appeal from the Northern District of Georgia. The Eleventh Circuit held that an ERISA employee was entitled to continuation of receipt of retirement benefits at a certain rate under the plan based upon a theory of equitable estoppel. The Court, relying upon the standard under Georgia law that “determined ambiguity through the eyes of the insured,” ruled that the ambiguous language of the plan subjected the reader to two interpretations. However, an award for attorney’s fees was reversed for failure to show evidence of bad faith or evidence that the representation relied upon was inaccurate or misleading.
In the original suit, the employee, Waschak, sought continued monthly retirement benefits based upon his contribution plus interest earned, which were to continue for fifteen years. According to the plan, interest was defined as the Moody’s Interest Rate plus 3 percentage points and contemplated two periods of participation. A 2004 letter from the plan to Waschak explained that since his guaranteed payment of $4,165.90 was greater than the calculated payment, his monthly payment would continue to be the guaranteed rate. Two years later, in 2006, Waschak received a letter from the plan informing him there was a “misinterpretation” of the plan which resulted in an overpayment of retirement benefits by more than $12,000. The overpaid amount would be repaid through reduced future payments to Waschak. On motion for summary judgment, the District Court granted Waschak’s motion ruling that the plan was ambiguous. The District Court determined that Waschak was entitled to an 11% minimum during the payment period under a theory of equitable estoppel.
In its decision to uphold the lower court on the theory of equitable estoppel, this Eleventh Circuit Court recognized a “very narrow common law doctrine under ERISA for equitable estoppel.” Citing to Jones v. American Gen’l Life and Accident Ins. Co., 370 F.3d 1065, this Court used a two-step analysis of equitable estoppel. In the first step, the Court found that the plan’s relevant language was ambiguous. Under the second step, the Court concluded that the plan’s representation to Waschak over the years was “an informal interpretation” of the plan’s language. Thus according to the Court, the two elements for equitable estoppel were established.
ERISA_and_date_geq__04_14_20 (2).pdf (59.65 kb)