PALMISANO v. ALLINA HEALTH SYSTEMS, INC., 1999 U.S. App. LEXIS 21652 (8th Cir. September 10, 1999)-Palmisano was forced to resign from a vice-president position after allegations of serious billing improprieties. He commenced an action in state court, asserting claims for defamation and breach of contract. The court granted summary judgment against these claims, but permitted Palmisano to amend his complaint to add a claim for severance benefits under the ERISA. After the case was removed to federal district court, Palmisano's ERISA claim was dismissed and his motion to reopen the state court's summary judgment rulings was denied. This court affirmed those rulings.
In March 1994, when Palmisano was working for an Allina predecessor named HealthSpan Health Systems Corporation, HealthSpan provided him a personalized copy of its Executive Benefit Plan Book (the "Plan Book"), a loose-leaf compilation describing HealthSpan's various employee benefit plans and programs. It stated: " In the event of involuntary termination without cause, you will continue to receive your salary and Executive Benefits for a period of 18 months." Under the formal plans, however, severance benefits were available only when an employee’s position was eliminated.
Rather than contending that the plan book’s description was a valid summary plan description (SPD), Plaintiff admitted that it was faulty. Therefore, the district court required a showing of reliance. Palmisano urged the court to abandon this distinction as irrational because it treats employers who write faulty SPDs more leniently than those who comply with the SPD requirements of ERISA. However, the court found that the summary provided was so thoroughly lacking in the required detail that it could not be deemed even a faulty SPD. Since no SPD existed, only the formal plan could control for ERISA purposes. Further, the failure to provide a valid SPD, while itself a violation, did not entitle the participant to benefits to which he was not entitled under the plan.
