The U.S. District Court for the Eastern District of Louisiana found that the evidence presented by Mothe Life Insurance Company would allow “a reasonable trier‐of‐fact to find that an ERISA plan did not exist.” The court previously held that the agreement between Mothe Life Insurance and Emile Mothe lacks clear procedures for receiving benefits.
However, the company presented Massachusetts Mutual Life Insurance Company Prototype Flexinvest Profit‐Sharing/401(k) Plan to its current motion for summary judgment, saying it supplements the procedures contained within the deferred compensation agreement with Mothe, and the agreement coupled with Mothe Life’s plan documents show that the agreement had sufficient procedures such that an ERISA plan was in existence.
The court found that the only mention of the plan, is contained in one paragraph and recites as follows:
“Whereas, Mothe [Life] and Emile [Mothe] both want to provide to Emile [Mothe], as additional compensation for his services to Mothe [Life], a post-retirement income (or pre-retirement benefits to his beneficiary) over and above what will be available to him under Mothe [Life’s] regular pension and insurance plan for employees.” The court said additionally, the regular retirement plan does not reference the 1999 agreement between Mothe and Mothe Life.This court found that this one paragraph does not provide enough guidance for a reasonable person to reference the plan in order to ascertain the needed procedures. The plan is acknowledged in the agreement only to recognize that Emile Mothe will get additional compensation above and beyond his regular pension and insurance. The court said a reasonable person could not ascertain the procedures for receiving benefits by this one statement in the agreement.
On July 20, 1999 Mothe Life Insurance Company entered into a deferred compensation agreement to pay Emile Mothe, III the sum of $9,000 a month for a period of 120 months following his retirement, or pay $9,000 a month for 120 months following his death to his beneficiary.
Emile Mothe died on July 5, 2003 while still employed at Mothe Life. Mothe Life began making payments to his wife Margaret, but discontinued the payments in July of 2010. Margaret Mothe sued for continuation of the payments, but Mothe Life argued it was permitted to terminate the agreement at any time because it constituted a “top hat” welfare benefit plan under ERISA, and ERISA permits employers to unilaterally terminate top hat welfare benefit plans at any time.The court’s opinion is here.
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