## Facts

- Allen Schmidt participated in a multiemployer pension plan administered by the Sheet Metal Workers’ National Pension Fund (the Fund).
- In 1994, after being diagnosed with terminal cancer, Allen sought to make his son, Richard Schmidt, the sole beneficiary of his plan’s death benefit.
- Allen and Richard called the Fund and spoke with a benefit analyst, who said he would send a form to accomplish the beneficiary change.
- The analyst mistakenly sent the wrong form.
- The written plan required a specific beneficiary designation form (contained in the plan booklet) to name one child as the sole beneficiary.
- Allen did not complete and submit the required booklet form before his death.
- Under the plan’s default provisions, because no proper designation was on file, the death benefit was payable in equal shares to Allen’s children; the Fund paid half to Richard and half to his sister.
- Richard sued under ERISA, seeking the full benefit based on estoppel, breach of fiduciary duty, and allegedly deficient notice of appeal rights.
- The district court granted summary judgment to the Fund and denied the Fund’s request for attorney’s fees; Richard appealed and the Fund cross-appealed.

## Issues

1. Whether ERISA estoppel can require payment of benefits contrary to unambiguous written plan terms based on a plan representative’s incorrect statements and transmission of the wrong form.
2. Whether sending an incorrect form and related communications constituted a breach of fiduciary duty warranting payment of benefits inconsistent with the plan’s beneficiary-designation requirements.
3. Whether alleged defects in notice of administrative appeal rights entitled the claimant to substantive relief where an appeal was pursued.
4. Whether the district court abused its discretion in denying the Fund attorney’s fees under ERISA § 502(g)(1).

## Decision

- The court of appeals affirmed summary judgment for the Fund on all of Richard’s claims.
- The court held the plan’s written beneficiary-designation requirements controlled, and Allen’s failure to submit the required form required equal payment to the children.
- The court rejected ERISA estoppel because informal representations could not override clear plan language in these circumstances.
- The court rejected the fiduciary-duty theory, treating the analyst’s conduct as at most a good-faith mistake and concluding the requested remedy improperly conflicted with the plan documents.
- The court held any notice-of-appeal deficiencies were, at most, procedural and caused no prejudice warranting additional relief.
- The court affirmed denial of attorney’s fees to the Fund, finding no abuse of discretion.

## Legal Principles

- ERISA fiduciaries must administer plans in accordance with governing written plan documents; unambiguous plan terms generally control benefit entitlement.
- ERISA estoppel is narrowly available and ordinarily does not permit oral or informal communications to modify or override clear written plan requirements, especially where the requested payment would contradict the plan.
- A mistaken benefits communication or transmission of an incorrect form, without evidence of fraud or similarly egregious conduct and without reasonable detrimental reliance sufficient to justify equitable relief, does not justify awarding benefits contrary to the plan’s express terms.
- Technical noncompliance with ERISA notice regulations, without prejudice and where the claimant actually pursued administrative review, does not warrant substantive benefit relief beyond the plan’s terms.
- Attorney’s fees under ERISA § 502(g)(1) are discretionary; prevailing defendants are not automatically entitled to fees, and courts may consider whether the losing claim was brought in bad faith or was frivolous.

## Conclusion

The Seventh Circuit enforced the plan’s explicit beneficiary-designation form requirement, holding that a participant’s intent and a plan analyst’s mistake could not justify payment of benefits inconsistent with unambiguous plan terms, and it also upheld the denial of attorney’s fees where the unsuccessful suit was not frivolous or brought in bad faith.


Schmidt v. Sheet Metal Workers' Nat'l Pension Fund, 128 F.3d 541 (7th Cir. 1997)