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October 26, 1990

DONALD F. BOGUE, Plaintiff,

Charles A. Legge, United States District Judge.

The opinion of the court was delivered by: LEGGE


 Plaintiff Donald Bogue brings this action under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq., claiming that defendants wrongfully denied him severance benefits, breached their fiduciary duties, and interfered with his protected rights. Defendants have moved for summary judgment on all claims alleged against them in the first amended complaint. Having considered the record, the relevant authorities, the moving and opposing papers, and the arguments of counsel, the court concludes that there is no genuine issue of material fact and that summary judgment should be granted in favor of defendants.


 The following facts are undisputed: Plaintiff seeks severance benefits under the terms of the "Allied-Signal/E&I Sector Special Compensation Program for Designated Key Executives." This program was established by Allied-Signal in November 1986 in conjunction with its proposed sale of Ampex Corporation, a wholly owned subsidiary. Plaintiff was an employee of Ampex. The program included severance benefits if:

Neither Allied-Signal nor the Buyer [of Ampex] offers you "substantially equivalent" employment and your employment is terminated.

 Allied-Signal sold Ampex to Newhill Acquisition Corporation in May 1987. Pursuant to that sale agreement, Ampex assumed the financial obligations for the severance portion of the program, and Allied-Signal remained the plan's administrator.

 Ampex was reorganized in November 1987. Prior to the reorganization, plaintiff held the position of Vice President and General Manager of the Audio-Video Systems Division of Ampex. After the reorganization, Ampex offered plaintiff the position of Vice President of Marketing, Sales & Service. Plaintiff accepted the new position. However, he expressed reservations about whether the new position was substantially equivalent to his prior position. Plaintiff resigned his new position in January 1988, because he then believed that the position "consists of significantly diminished responsibility." He made a claim to Allied-Signal for the severance benefits under the program. In March 1988, Allied-Signal denied his claim, finding that plaintiff's new position was substantially equivalent to his former position. Plaintiff's claim was reconsidered by Allied-Signal, and was again denied.


 Plaintiff then filed this action in state court. Defendants removed the case to this court on the ground that plaintiff's severance claims are governed by ERISA, and are therefore within the original jurisdiction of this federal district court. On plaintiff's motion to remand, this court ruled that the severance plan was governed by ERISA and that removal was proper. The court also dismissed the complaint, with leave to amend to replead the claims under the standards of ERISA. Plaintiff then filed the present amended complaint, and this summary judgment motion followed.

 The amended complaint contains four claims: the first is for $ 512,300, plus interest, in severance benefits and for attorneys fees; the second alleges that Ampex is estopped from denying severance benefits to plaintiff; the third alleges that Ampex interfered with plaintiff's protected benefit rights in violation of 29 U.S.C. § 1140; the fourth alleges breach of fiduciary duties in violation of 29 U.S.C. § 1109.


 Plaintiff's first claim, for the recovery of benefits under the plan, is based on 29 U.S.C. § 1132(a)(1)(B) (1985). *fn1" This section creates a cause of action for the recovery of benefits "due to him under the terms of his plan." The resolution of plaintiff's claim therefore turns on an interpretation of the plan provisions which define the severance benefits.


 The first and critical question is the standard for this court's review of Allied-Signal's decision to deny the severance benefits to plaintiff. Plaintiff contends that he is entitled to de novo review of Allied-Signal's decision. Defendants maintain that Allied-Signal's decision can be reviewed only for an abuse of discretion. Both parties agree that the U. S. Supreme Court's decision in Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 103 L. Ed. 2d 80, 109 S. Ct. 948 (1989) is controlling. *fn2"

 ERISA does not itself specify the standard for a district court's review in actions under § 1132(a)(1)(B) challenging the determinations of benefit eligibility by a plan administrator. Firestone, 489 U.S. at 109. To fill this gap, the Supreme Court adopted a standard of review from the principles of trust law. Id. at 954. Those trust principles require a deferential standard of review when a trustee exercises powers that are discretionary. Id. Accordingly, the Firestone court said:

[A] denial of benefits under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.

 Id. 489 U.S. at 115.

 Therefore, the question becomes whether this plan vests in Allied-Signal the discretion either to settle disputed eligibility questions or to construe doubtful provisions of the plan. De Nobel v. Vitro Corp., 885 F.2d 1180, 1186 (4th Cir. 1989); Kunin v. Benefit Trust Life Ins. Co., 898 F.2d 1421, 1424 (9th Cir. 1990), amd., reh'g denied, 910 F.2d 534 (9th Cir. 1990). This court is required to construe the plan in light of its language, "all the circumstances," and other manifestations of the parties' intent. Firestone, 489 U.S. at 112-113. If Allied-Signal is entitled to exercise discretion under the plan, its decision to deny plaintiff's benefits may be disturbed only upon a showing of a procedural or a substantive abuse of that discretion. Johnson v. Trustees of W. Conf. of Teamsters Pension Trust Fund, 879 F.2d 651, 654 (9th Cir. 1989); Firestone, 489 U.S. at 111.


 Defendants contend that the plan gives Allied-Signal discretionary authority both to determine eligibility for benefits and to construe the plan's terms. Plaintiff responds that the plan only designates the entity that is to determine employee claims and that, under Firestone, this is insufficient to confer discretion on the administrator.

 The language of the plan provides for the payment of severance benefits if the buyer of Ampex does not offer plaintiff:

[A] position that is substantially equivalent to your current position. This determination will be made by Allied-Signal upon ...

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