International Union of United Automobile , Aerospace v. Rockford Powertrain , Inc .

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-1855
I NTERNATIONAL U NION OF U NITED A UTOMOBILE ,
A EROSPACE AND A GRICULTURAL I MPLEMENT W ORKERS
OF A MERICA , U.A.W. and its L OCAL 803, J OSEPH
W ADZINSKI and E LTON K OPPLIN ,
Plaintiffs-Appellants,
v.
R OCKFORD P OWERTRAIN , I NC .,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Western Division.
No. 00 C 50393—Philip G. Reinhard, Judge.
____________
A RGUED O CTOBER 22, 2003—D ECIDED D ECEMBER 3, 2003
____________
Before F LAUM , Chief Judge, E ASTERBROOK and W ILLIAMS,
Circuit Judges.
F LAUM , Chief Judge. This is a class action on behalf
of retired employees and surviving spouses of retired
employees of Rockford Powertrain, Inc. (“RPI”). They claim
that RPI promised to provide its retirees and their surviv-
ing spouses with health and life insurance benefits for the
duration of their lives, and that RPI’s unilateral reduction,
and later termination, of those benefits violated the terms
of a collective bargaining agreement, Section 502 of the

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2 No. 03-1855
Employee Retirement Income Security Act, 29 U.S.C.
§ 1132, and Section 301 of the Labor Management Relations
Act, 29 U.S.C. § 185. Both parties filed motions for sum-
mary judgment on the issue of whether RPI contractually
was obligated to maintain retirement benefits for the life of
its retirees and their surviving spouses. The district court
granted summary judgment in favor of RPI, finding that the
language of the plan documents included an unequivocal
reservation of RPI’s right to modify the retirement benefits
provided, and further that RPI was not equitably estopped
from modifying the benefits. For the reasons stated herein,
we affirm.
I. Background
In 1988, Rockford Powertrain, Inc. (“RPI”) acquired
a manufacturing plant located in Rockford, Illinois from the
Borg-Warner Corporation (“Borg-Warner”). RPI hired the
majority of the plant’s existing labor force, including named
plaintiffs JosephWadzinski, Elton Kopplin, and all members
of the class. At that time, RPI also assumed the then-
existing collective bargaining agreement and collectively
bargained pension annuity agreement between Borg-
Warner and International Union of United Automobile,
Aerospace and Agricultural Implement Workers of America
(“UAW”). However, RPI did not adopt BorgWarner’s
retirement plan nor did it agree to provide retirement
benefits for any of Borg-Warner’s retirees.
Borg-Warner’s retirement plan included subsidized health
benefits and fully subsidized life insurance benefits for
retirees. The plan document that described the terms of
retirement benefits included the following “Future of the
Plans” provision: “[a]lthough the company expects to con-
tinue the plan indefinitely, it reserves the right to modify,
amend, suspend or terminate them at any time.”

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No. 03-1855 3
RPI adopted a post-retirement benefit plan similar to
Borg-Warner’s. The terms of the plan were described in
a booklet entitled “Your Group Insurance Plan: Hourly,”
dated June 27, 1988. In the “Future of the Plans” section,
the booklet stated that “although the company expects and
intends to continue the plan indefinitely, it reserves the
right to modify, amend, suspend or terminate them at any
time.” The plan description stated that retirees’ “health
insurance is continued until your death . . . if you die after
retirement, health coverage may be continued for your
spouse and children.” It further stated that “[i]n the event
this group plan is terminated, [health insurance] coverage
for you and your dependents will end immediately.” In
contrast to the description of health insurance benefits, the
plan description’s life insurance benefits section contained
no statement of RPI’s intent to maintain the benefits for the
life of the retiree, nor any statement regarding the effect of
termination of coverage.
RPI and UAW assented to a collective bargaining agree-
ment in 1991 after the Borg-Warner-UAW collective
bargaining agreement expired and, in 1994, 1995, and 1998,
assented to subsequent collective bargaining agreements.
The 1998 collective bargaining agreement, effective through
March 4, 2001, governed the relationship between the
parties at the time of the events relevant to this litigation.
That collective bargaining agreement, like all of the
previous collective bargaining agreements between the
parties, included a provision (hereinafter “bargaining pro-
vision”) stating that
the Company and the Union for the life of this
Agreement, each voluntarily and unqualifiedly waives
the right, and each agrees that the other shall not be
obligated, to bargain collectively with respect to any
subject or matter referred to, or covered in this
Agreement, even though such subject or matter may not
have been within the knowledge or contemplation of

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4 No. 03-1855
either or both of the parties at the time that they
negotiated or signed this Agreement. However, this
Agreement may be amended or modified . . . in writing
by mutual agreement.
The collective bargaining agreements reflected the nego-
tiations between RPI and UAW regarding employee and
retiree insurance benefits. Indeed, the collective bargaining
agreements state that“[t]his will confirm that during the .
. . negotiations, the Company concurred with the Union that
the . . . Insurance Agreement . . . [is] considered a part of
the overall labor agreement.” According to both parties,
there is no separate “Insurance Agreement”; the insurance
plan descriptions published by RPI serve as the “Insurance
Agreement” referenced by the collective bargaining agree-
ment.
RPI republished the post-retirement benefits program in
1991, 1995, and 1998. The 1998 plan description is entitled
“Hourly Benefit Plan Information” (“plan description”).
Every plan description published by RPI states in the
“Future of the Plans” section that “[a]lthough the company
expects and intends to continue the plan indefinitely, it
reserves the right to modify, amend, suspend or terminate
them at any time,” (hereinafter “reservation of rights
clause”). The post-retirement health benefits section of the
plan description included two terms relevant to the du-
ration of health benefits. First, the document informed
retirees that their “health coverage is continued until . . .
death . . .[i]f you die after retirement, health coverage may
be continued for your spouse,” (hereinafter “lifetime benefits
clause”). Secondly, “in the event this group plan is termi-
nated, coverage for you and your dependents will end
immediately,” (hereinafter “plan termination clause”). The
post-retirement life insurance benefits section of the plan
description did not include either a lifetime benefits clause
or a plan termination clause. Copies of the 1991, 1995, and

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No. 03-1855 5
1998 plan descriptions were distributed to UAW, UAW-
represented active employees, and to those already retired
from RPI.
RPI provided its retirees with health and life insur-
ance benefits from 1989 through November 1999. During
that time, named plaintiffs Elton Kopplin and Joseph
Wadzinski and all members of the represented class retired
from RPI. Kopplin states that Suzanne Buchanan, RPI’s
Manager of Benefit Programs, told him when he retired
that RPI would provide him with insurance benefits for the
remainder of his life. The plaintiffs allege that Nancy Kolar,
a RPI Benefits Administrator, also told retirees that RPI
would maintain post-retirement health benefits for the
period of their lives. Upon retiring from RPI, each retiree
was provided with a benefit calculation sheet which sum-
marized his or her expected monthly post-retirement
benefits; these documents do not state the expected dura-
tion of benefits nor did they state that RPI reserved a right
to modify the benefits.
In October 1999, RPI informed retirees that, due to
financial pressures caused by the economic recession, it
intended to reduce its share of medical insurance premiums
paid on behalf of retirees and further to terminate the
retirees’ subsidized life insurance benefits, effective in
December 1999. Concurrently, RPI less drastically modified
the benefits for UAW-represented active employees. RPI
announced a complete termination of health insurance
benefits in September 2000, to take effect in December
2000.
On November 7, 2000, UAW and its affiliated Local 803
and two individuals, Elton Kopplin and Joseph Wadzinksi,
filed a complaint alleging that RPI violated the Employee
Retirement Income Security Act, 29 U.S.C. § 1002(1),
(“ERISA”) and Section 301 of the Labor Management
Relations Act, 29 U.S.C. § 185 (“LMRA”) when it made

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6 No. 03-1855
unilateral changes to the retirees’ existing post-retirement
benefits mid-term of a collective bargaining agreement. The
plaintiffs sought to certify a class consisting of 239 former
RPI employees who took early retirement under the terms
of the pension annuity agreement between RPI and UAW.
The district court granted the plaintiffs’ motion for class
certification on August 7, 2001. The class is defined as:
All former UAW Local 803-represented employees
of Rockford Powertrain, Inc. who were participants
in the Rockford Powertrain, Inc. health plans as of
November 30, 1999 and whose employment by Rockford
Powertrain, Inc. had terminated after July 1, 1988. The
class includes eligible dependents of such retirees and
eligible surviving spouses of deceased former employ-
ees.
The parties filed cross-motions for summary judgment on
the question of whether RPI was contractually obligated to
continue providing post-retirement medical and life insur-
ance for the duration of its retirees’ lives and the lives of
eligible surviving spouses. The district court granted RPI’s
motion for summary judgment, finding that the plan
descriptions were incorporated into the collective bargain-
ing agreement, and that the incorporation necessarily
included the reservation of rights and plan termination
clauses found in the plan description. Therefore, the district
court held, RPI’s modification and termination of benefits
did not violate the bargaining provision of the collective
bargaining agreement that barred mid-term unilateral
changes. Further, the district court found that RPI was not
estopped to terminate or modify the retirees’ benefits, as no
retiree was induced to retire on the basis of statements by
RPI benefits personnel regarding lifetime benefits. Plain-
tiffs now appeal.

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No. 03-1855 7
II. Discussion
The plaintiffs’ claim is based on RPI’s plan for post-
retirement medical and life insurance. Under ERISA, 29
U.S.C. § 1002(1), the benefits at issue are “welfare” benefits,
which, unlike pension benefits, do not vest automatically.
Diehl v. Twin Disc, Inc., 102 F.3d 301, 305 (7th Cir. 1996).
“[U]nless an employer contractually cedes its freedom, it is
generally free under ERISA, for any reason at any time, to
adopt, modify, or terminate its welfare plan.” Inter-Modal
Rail Employees Ass’n v. Atchison, Topeka and Santa Fe Ry.
Co., 520 U.S. 510, 515 (1997) (internal quotations and
citations omitted). Thus, it is an issue of contract interpre-
tation whether RPI vested its retirees with post-retirement
welfare benefits. See Murphy v. Keystone Steel & Wire Co.,
61 F.3d 560, 564 (7th Cir. 1995). This Court applies “federal
principles of contract construction, meaning that we will
give contract terms their ‘ordinary and popular’ sense and
avoid resort to extrinsic evidence when faced with unambig-
uous language.” Diehl, 102 F.3d at 306.
“Summary judgment is particularly appropriate in
cases involving the interpretation of contractual docu-
ments.” Ryan v. Chromalloy American Corp., 877 F.2d 598,
602 (7th Cir. 1989). We review the district court’s grant of
summary judgment de novo, viewing all the evidence in the
light most favorable to the plaintiffs. Murphy v. Keystone
Steel & Wire Co., 61 F.3d 560, 546 (7th Cir. 1995).
The parties agree that the documents relevant to the
plaintiffs’ claim are the 1998-2001 collective bargaining
agreement (“CBA”) and the plan description, entitled
“Hourly Benefit Plan Information,” that RPI distributed in
1998 to UAW and all UAW-represented active and retired
employees. The parties further agree that the terms of
insurance, as described in the plan description, were
negotiated and incorporated into the CBA.

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8 No. 03-1855
Plaintiffs argue that RPI is contractually obligated to
maintain health insurance benefits for the duration of the
lives of its retirees and their eligible surviving spouses
because the plan description includes the lifetime benefits
clause: “health coverage is continued until . . . death . . .[i]f
you die after retirement, health coverage may be continued
for your spouse.” In the plaintiffs’ view, this statement
unambiguously vests the retirees with welfare benefits for
the duration of their lives. The plaintiffs’ interpretation,
however, ignores two equally important clauses contained
in the plan description. The lifetime benefits clause was
followed by the plan termination clause: “[i]n the event this
group plan is terminated, [health insurance] coverage for
you and your dependents will end immediately.” That
clause refers to RPI’s reservation of its right to modify
benefits, found in the “Future of the Plans” section of the
plan description: “[a]lthough the company expects and in-
tends to continue the plan indefinitely, it reserves the right
to modify, amend, suspend or terminate them at any time.”
We must resolve the tension between the lifetime benefits
clause, and the plan termination and reservation of rights
clauses, by giving meaning to all of them. See Diehl, 102
F.3d at 307 (stating that when “potentially conflicting
provisions coexist within the same document . . . the rule
that contractual provisions be read as parts of an integrated
whole will lead a court to seek an interpretation that
reconciles those provisions”). Reading the document in its
entirety, the clauses explain that although the plan in its
current iteration entitles retirees to health coverage for the
duration of their lives and the lives of their eligible surviv-
ing spouses, the terms of the plan—including the plan’s
continued existence—are subject to change at the will of
RPI. See Abbruscato v. Empire Blue Cross and Blue Shield,
274 F.3d 90, 99 (2d Cir. 2001) (“Here . . . we have
S[ummary] P[lan] D[escription] language that both appears

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No. 03-1855 9
to promise lifetime life insurance coverage at a particular
level and clearly reserves Empire’s right to amend or
terminate such coverage. Because the same document that
potentially provided the ‘lifetime’ benefits also clearly
informed employees that these benefits were subject to
modification, we conclude that the language contained in
the 1987 SPD is not susceptible to an interpretation that
promises vested lifetime life insurance benefits.”) (emphasis
in original). See also In re Unisys Corp. Retiree Med. Benefit
ERISA Litig., 58 F.3d 896, 904 n. 12 (3d Cir.1995) (holding
that “the promise made to retirees was a qualified one: the
promise was that retiree medical benefits were for life
provided the company chose not to terminate the plans,
pursuant to clauses that preserved the company’s right to
terminate the plan under which those benefits are pro-
vided”). The health insurance section of the plan description
unambiguously does not provide the plaintiffs with vested
lifetime health insurance benefits. Therefore, we need not
resort to extrinsic evidence to interpret the contractual
obligation between the parties. See Diehl,102 F.3d at 305.
Plaintiffs also argue that the plan description provided
them with a vested right to life insurance benefits for the
duration of their lives. In support, plaintiffs note that the
text of the life insurance section of the plan description,
unlike the health insurance section, contains neither a
mention of the expected duration of benefits nor a state-
ment regarding the termination of benefits. This argument
is unavailing because the reservation of rights clause found
in the “Future of the Plans” section, which states that RPI
“reserves the right to modify, amend, suspend or terminate”
benefits, applies with equal force to the life insurance
benefits. There is no ambiguity in a plan description that
states that retirees are currently entitled to life insurance
benefits, but also that these benefits are subject to change.
Plaintiffs do not argue that the reservation of rights
clause contained in the plan description results in unfair

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10 No. 03-1855
1 The issue of whether RPI may change the insurance benefits of
active employees during the term of a collective bargaining
agreement is not before this Court. The Supreme Court has
recognized a distinction between mid-term unilateral modifica-
tions of the insurance benefits of retired and active employees. See
Allied Chemical and Alkali Workers of America, Local Union No.
1 v. Pittsburgh Plate Glass Co., 404 U.S. 157, 188 (1971).
surprise, nor could they. That reservation of rights clause
was included in Borg-Warner’s final post-retirement ben-
efits plan and in every plan description published by RPI
since 1988. When UAW and RPI assented to their first
collective bargaining agreement in 1991, and to subsequent
collective bargaining agreements in 1994, 1995, and 1998,
UAW had the opportunity to negotiate for the removal of
the reservation of rights clause. The plaintiffs characterize
the plan descriptions as “unilaterally implemented” by RPI,
but they also concede that the insurance plan was “negoti-
ated and incorporated into Powertrain’s CBA with the
UAW.” Unfortunately for the plaintiffs, the incorporation of
the insurance plan into the CBA requires the incorporation
of all clauses contained in the plan description, including
the reservation of rights clause. As “[c]ourts do not sit to
relieve contract parties of their improvident commitments,”
Bidlack v. Wheelabrator Corp., 993 F.2d 603, 609 (7th Cir.
1993), we must give meaning to that clause.
Next, the plaintiffs argue that, even if the plan descrip-
tions do not provide a vested right to lifetime health and life
insurance benefits, the CBA prohibits RPI from modifying
post-retirement benefits during the term of the CBA. 1 In
support, they cite the bargaining provision of the CBA,
which states that, for the life of the CBA, neither RPI
nor UAW is “obligated, to bargain collectively with respect
to any subject or matter referred to, or covered in this
Agreement . . . . However, this Agreement may be amended
or modified . . . in writing by mutual agreement.” Thus,
the plaintiffs argue, because the CBA states that the

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No. 03-1855 11
“Insurance Agreement” is “part of the overall labor agree-
ment,” the bargaining provision prohibits RPI from amend-
ing the terms of post-retirement insurance benefits absent
written agreement from UAW.
We disagree. The text of the CBA does not discuss the
terms of post-retirement welfare benefits. Instead, the CBA
refers to the “Insurance Agreement” for all details regard-
ing benefits. And, as discussed above, the parties agree that
the “Insurance Agreement” is found in the plan description
published by RPI. The CBA’s incorporation of the Insurance
Agreement necessarily incorporated the reservation of
rights clause found in the plan description. Thus, RPI’s
unilateral reduction, and later termination, of post-retire-
ment benefits was not an impermissible mid-term unilat-
eral change because the text of the plan—and by incorpora-
tion, the text of the CBA—reserved RPI’s right to alter the
specific terms of insurance.
The plaintiffs cite Diehl v. Twin-Disc, Inc., 102 F.3d 301
(7th Cir. 1996), for the proposition that the text of the CBA,
rather than the text of insurance plan description, controls
whether post-retirement benefits may be changed mid-term.
In Diehl, the collective bargaining agreement, termed a
“Shutdown Agreement,” was negotiated three years after
the Insurance Agreement to which the Shutdown Agree-
ment referred. Id. at 302-03. The text of the Shutdown
Agreement stated that “[a]ll persons retired . . . shall,
notwithstanding any provision of the Insurance Agreement
between the Company and the Union, . . . be entitled for the
lifetime of the pensioner . . .” to benefits. Id. This Court
held that the Shutdown Agreement unambiguously granted
lifetime benefits to retirees, and therefore “abrogated
whatever right Twin Disc may have had to terminate
coverage” under the previously issued Insurance Agree-
ment. Id. at 307. Further, the Court noted that the collec-
tive bargaining agreement in Diehl was an “independent
contact, supported by separate consideration and capable of

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12 No. 03-1855
modifying or supplanting prior contractual arrangements.”
Id. at 306-07. Diehl is thus inapposite to the present case
because the 1998-2001 CBA contains no statement regard-
ing the period of time during which retirees would be
entitled to benefits; thus, there is no conflict between the
terms of the CBA and the terms of insurance provided in
the plan description.
Plaintiffs further argue that RPI vested lifetime benefits
on a retiree-by-retiree basis when it furnished the retirees
with “agreements” at the time of retirement. These “agree-
ments” are actually benefit calculation sheets that confirm
the gross pension benefit for each retiree and the net
amount after insurance premium deductions and taxes. The
plaintiffs argue that, since the benefit calculation sheets
contain “no end date for receiving benefits,” they necessarily
vest the plaintiffs with lifetime benefits. We disagree. The
benefit calculation sheets do not attempt to override the
terms of the CBA or the plan description. In fact, a benefit
calculation sheet from 1998 states that “[e]very effort has
been made to calculate your benefits accurately. However,
eligibility for benefits and the actual amount of any pay-
ment are determined only under the legal documents
applying to the Plan.” Thus, the benefit calculation sheets
do not seek to vest the retirees with any benefit different
from that found in the plan description.
Lastly, the plaintiffs argue that they detrimentally relied
on representations made by RPI’s personnel regarding the
duration of their post-retirement insurance benefits. “The
elements of ERISA-estoppel are: (1) a knowing misrepresen-
tation by the defendant; (2) in writing; (3) with reasonable
reliance by the plaintiff on the misrepresentation; (4) to the
plaintiff’s detriment.” Kamler v. H/N Telecommunication
Services, Inc., 305 F.3d 672, 679 (7th Cir. 2002). The
plaintiffs have failed to demonstrate that their decision to
retire was made in reliance on statements by RPI’s person-
nel; indeed, plaintiffs admit in their brief that the state-

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No. 03-1855 13
ments at issue were made “during exit interviews after the
retirees made their decisions to retire.” As plaintiffs have
failed to produce evidence to support their claim, the
equitable estoppel argument must fail.
III. Conclusion
For the foregoing reasons, we AFFIRM the decision of the
district court granting summary judgment in favor of RPI.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—12-03-03

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