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Schake v. Colt Industries Operating Corp. Severance Plan for Salaried Employees

filed: April 2, 1992; As Corrected April 7, 1992.

PAUL K. SCHAKE, GEORGE W. HENGLEIN, GUS DAUKA, RICHARD B. ANDREWS, THEODORE KRUPA, RALPH ASHENBAUGH, E.E. KNAPEK, ROBERT R. VLAH, THOMAS H. WILLS, EDMUND M. WERRIES, JR., GEORGE BROWN, JOHN MCKAIN, EARL CHAPMAN, WILLIAM L. GLEASON, R.C. YOUNG, JOHN E. GRIMM, KENNETH M. JANKE, HENRY L. TAYLOR, A.H. SHELINE, LOUIS YOUNG, JR., CARL J. MYERS, EARL CHAPMAN, ALBERT MORRISON, J.D. BALSER, A. BARRASSO, C.R. BLAZIER, J.P. BRESSANELLI, E.C. CALVIN, T.M. COSTELLO, H. FARRINGTON, E.R. FINGER, R. FRONKO, E.R. GUERRA, R. HANSEN, D. HELDMAN, R.T. HOPPER, R. JOHNSON, JR., E.T. JONES, R. KAO, P.A. KEYS, W.J. KOFALT, S.W. KOHLER, R.H. LEWIS, M. MITROVICH, M.A. MOLCHAN, C. MURRAY, G.V. PETERSON, W.J. POPP, D.E. POWELL, R.W. PRENTICE, W.C. PRICE, L.E. RAYKOVICS, T.R. REED, J.W. REIDER, K.E. SANDERS, M. SARVER, A.E. SIX, E.H. SPAZIANI, J.R. TICE, D.A. TOWNLEY, R. TRBOVICH, R.T. TURNER, D.W. WARE, J.A. WHITFIELD, T. WILLIAMS, JR., A.J. YANNI, H. YUTE, W.I. ZAZWIRSKY, AND ADDITIONAL PLAINTIFFS BRESSANELLI, COSTELLO, POPP, AND TRBOVICH, ALSO JOIN IN THE ALLEGATIONS MADE UNDER COUNT IX OF THE PENDING COMPLAINT AND JOIN IN THE DEMAND FOR A JUDGMENT AWARDING SEVERANCE PAY, J.L. CERASI, S. CHRISTY, A.P. DIMARZIO, N.G. FREDERICK, A.J. GOLUTZ, P. GRUBBS, J.D. HAMACHER, JR., J.K. HILE, H.M. HOWELL, R.W. KNALLAY, T. KOMINITSKY, W. LAKE, D.F. LANEVE, W.R. LIVINGSTON, A.J. LYNN, H. MRAUNAC, M.R. MUCKIAN, D.B. MCCLAIN, G.C. PESCION, J. PRESUTTI, M.J. ROSE, J.W. SCHOLTZ, J.F. SUFFOLETTA, F.S. THORNBERRY, JR. ADOPT THE ALLEGATIONS OF PARAGRAPH 1 THRU 3 OF PENDING COMPAINT AND ALLEGATIONS OF PARAGRAPHS 4 THROUGH 72, COUNTS I THRU VII OF SAID COMPLAINT AND JOIN IN THE DEMAND FOR JUDGMENT, R.L. APPLEDORN, M.I. HARPHAM, D.P. KERR, A.J. PASKO, JR., W.W. SIMPSON, G.T. WEEKLEY AS TO PARAGRAPHS 1 THRU 3 OF COMPLAINT AND COUNTS I THRU VIII AND COUNTS XII AND XIII OF FIRST AMENDED COMPLAINT, L.C. ALBACKER, J.W. BAGOSI, H.W. BIGIELMAN, F.C. BUCHOLZ, A.J. DECOSTA, M. DEGRANDE, A. DICICCIO, C.J. DIMARZIO, R.J. DOUGHERTY, M. FERLAINO, J.N. FLARA, R. GOTT, R.S. HOGSETT, R.P. KULLEN, R.A. LIPPERT, J. LUTTON, E.L. MARSH, F. MATSUKAS, H.J. MERCER, A.R. MIDDLETON, L.V. NAGLE, H.S. PEASE, III, W.H. STEPHENS, K.E. THOMAS, J.A. NUZZO, K.G. WASSMAN, JR., D.L. WESTFALL AS TO COUNTS II, III, VII, AND VIII OF FIRST AMENDED COMPLAINT, J.O. BAUER, P. CASTELLANO, L. GORDON, J. HAAF, K. JOHNS, W.H. ORR, M.L. SHERRY, J.E. SMITH AS TO COUNTS II, III, IV, AND VII OF FIRST AMENDED COMPLAINT (ADDITIONAL PLAINTIFFS -- JOINED 11/4/86) JOHN R. BUTCHKO, JOHN R. KUNDICK, AND THEODORE LEHMANN APPELLEES
v.
COLT INDUSTRIES OPERATING CORPORATION SEVERANCE PLAN FOR SALARIED EMPLOYEES, COLT INDUSTRIES OPERATING CORPORATION SEVERANCE PLAN FOR SALARIED, NONUNION EMPLOYEES, APPELLANT



On Appeal from the United States District Court for the Western District of Pennsylvania. D.C. No. 83-02511

Before: Mansmann, Hutchinson, and Rosenn, Circuit Judges

Author: Rosenn

Opinion OF THE COURT

ROSENN, Circuit Judge.

This action raises an interesting issue concerning the time limits the parties to a lawsuit have to file motions for prejudgment interest, costs and attorney's fees and the jurisdictional authority of the district court to act on such motions. After the entry of an amended summary judgment against Colt Industries Operating Corporation Severance Plan for Salaried, Nonunion Employees (the Plan) on October 11, 1990, counsel for the Plan participants filed a motion ninety-seven days thereafter, requesting the United States District Court for the Western District of Pennsylvania to award the participants prejudgment interest, costs and attorney's fees. The court granted the motion and purported to retain jurisdiction to determine the amount of attorney's fees and costs to be awarded and for resolving differences with respect to the amounts of basic severance pay to which the participants were entitled.

The court granted the motion on the theory that its earlier order entering summary judgment, as directed by this court on remand, was not a final judgment but an interlocutory order. The Plan opposed the motion as untimely and asserted that the district court lacked jurisdiction to grant the motion. The district court granted the movants' prayer for relief and the Plan appealed. We reverse.

I.

The facts underlying this appeal are summarized in Frank v. Colt Industries. Inc., 910 F.2d 90 (3rd Cir. 1990). The Plan initially was not a named party to this lawsuit. The original defendants were Colt Industries, Inc. (Colt) and Colt Industries Operating Corporation (CIOC), named subsequently as an additional defendant.*fn1 On April 18, 1985, the district court granted summary judgment for Colt and CIOC on all counts except those concerning severance pay benefits. On appeal, this court vacated the judgment and remanded the case to the district court with directions to dismiss all claims in the complaint except the severance pay issue. Schake v. Colt Industries, Inc., 791 F.2d 920 (3rd Cir. 1986). On October 21, 1987, the district court filed a memorandum opinion in which it granted summary judgment for the Plan. This court vacated the district court's decision to deny severance benefits to plaintiffs and remanded the case with instructions to reconsider it in light of Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 103 L. Ed. 2d 80 , 109 S. Ct. 948 (1989). On remand, the district court held that it had reached the correct result under the standard established in Bruch and entered summary judgment on behalf of the Plan in this action and in the consolidated lawsuit of Frank v. Colt Industries Inc, No. 83-2510 (W.D. Pa. 1989). On appeal, this court held that summary judgment should be affirmed as to three of the individuals who had sought benefits from the Plan but should be reversed as to the remaining individuals who are entitled to the severance pay provided under the Plan, appellees herein. Frank v. Colt Industries Inc., 910 F.2d 90 (3rd Cir. 1990).*fn2 Accordingly, on September 19, 1990, this court issued a certified judgment reversing the district court's judgment and directing the court to enter summary judgment against the Plan and in favor of listed individuals. The judgment did not order any award of prejudgment interest, costs or attorney's fees.

On September 27, 1990, the district court entered a judgment incorrectly directed against CIOC instead of the Plan. The Plan filed a timely motion pursuant to Rule 59(e) of the Federal Rules of Civil Procedure requesting: (1) judgment not be entered against CIOC because it was not a defendant and the appellate mandate directed entry of judgment against the Plan; (2) the district court expressly declare that the appellees were not entitled to prejudgment interest, costs and attorney's fees; and (3) judgment not be entered against the Plan in violation of the Plan's terms that payment of benefits must obtain requisite approvals. The district court amended its September 27 judgment by order dated October 11, 1990, to direct entry of judgment against the Plan rather than CIOC. The district court did not assess any interest, costs, or attorney's fees. The Plan paid benefits directly to appellees at the end of December, 1990.

On January 16, 1991, appellees filed a "Motion that the Court Expressly Declare the Employees' Entitlement to Pre-Judgment Interest and Attorney's Fees." No new facts were alleged. The Plan filed a response claiming that appellees' motion was untimely and that the district court lacked jurisdiction to entertain it. On April 18, 1991, without opinion, the district court adopted and issued the order suggested by the appellees, additionally stating that "the Court will retain jurisdiction with respect to the determination of the amount of attorney's fees and costs to which the Plaintiffs are entitled and for the purpose of resolving differences between the parties with respect to the amounts of basic severance pay to which the Plaintiffs are entitled."

The Plan filed a motion under Rule 59(e) to alter or amend the district court's order of April 18 asserting that the district court lacked jurisdiction to issue that order. On June 19, 1991, without opinion, the district court denied the Plan's motion. The Plan timely appealed.

II.

An award of prejudgment interest and attorney's fees to a prevailing plaintiff in an ERISA case is within the discretion of the district court and may only be reversed for abuse of discretion. Ursic v. Bethlehem Mines, 719 F.2d 670, 674-75 (3rd Cir. 1983). However, a district court's failure to apply the prescribed time limitations concerning motions for interest and attorney's fees makes its action subject to plenary review. See Rode v. Dellarciprete, 892 F.2d 1177, 1182 (3rd Cir. 1990) (while reasonableness of attorney's fees award is reviewed for abuse of discretion, whether the trial court applied proper standards is question of law subject to plenary review); Ursic, 719 F.2d at 674 (because sufficiency of evidence is a matter of law, lack of evidence to support award of attorney's fees is tantamount to legal error subject to plenary review). Because the district court failed to apply the appropriate standards in granting prejudgment interest, costs, and attorney's fees to appellees, our review is plenary.

The district court implemented this court's mandate of September 19 by entering judgment in favor of the appellees on September 27, 1990. More than three months later, appellees filed a motion requesting prejudgment interest, costs, and attorney's fees. On April 18, 1991, without any articulated rationale, the district court granted the ...


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