FILED

NOT FOR PUBLICATION DEC 11 2014

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

VIAD CORPORATION No. 12-16892 SUPPLEMENTAL PENSION PLAN, an employee pension benefit plan; VIAD D.C. No. 2:10-cv-01089-ROS CORPORATION, a Delaware corporation,

Plaintiffs-counter-defendants- MEMORANDUM* Appellees,

v.

JOHN R. NASI, an individual,

Defendant-counter-claimant - Appellant.

Appeal from the United States District Court for the District of Arizona Roslyn O. Silver, Senior District Judge, Presiding

Argued and Submitted November 20, 2014 San Francisco, California

Before: GOULD and WATFORD, Circuit Judges, and OLIVER, Chief District Judge.**

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Solomon Oliver, Jr., Chief District Judge for the U.S. District Court for the Northern District of Ohio, sitting by designation. John Nasi appeals the district court’s order granting Viad summary

judgment and declaring that Viad does not owe Nasi supplemental pension

benefits. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

1. Nasi contends that the district court erroneously reviewed the

administrator’s denial of benefits for abuse of discretion as opposed to de novo,

because Viad committed procedural violations by not reaching a timely resolution

and Viad operated under a structural conflict of interest. Where, as here, an ERISA

plan confers the plan administrator discretionary authority, a district court reviews

the administrator’s denial of benefits for abuse of discretion. Abatie v. Alta Health

& Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006) (en banc). An administrator’s

procedural violations ordinarily “do not alter the standard of review unless those

violations are so flagrant as to alter the substantive relationship between the

employer and employee, thereby causing the beneficiary substantive harm.” Gatti

v. Reliance Standard Life Ins. Co., 415 F.3d 978, 985 (9th Cir. 2005). Here,

Viad’s delay in reaching a timely resolution was not a flagrant procedural

violation, especially when much of the delay was due to Nasi’s untimeliness in

producing documents and releasing records. Viad’s structural conflict of interest

does not alter the standard of review, but is a factor that courts must weigh when

2 applying the abuse of discretion standard of review. Abatie, 458 F.3d at 965. The

district court properly applied the abuse of discretion standard of review.

2. Nasi next contends that the letter agreement that he and Viad entered into

on May 28, 1993 is an unconditional guarantee from Viad to pay him lifetime

supplemental pension benefits, but the administrator at Viad reads Nasi’s

entitlement to supplemental pension benefits as subject to a condition precedent

that was never satisfied. The administrator’s interpretation is supported by the

plain terms of the letter agreement and by the circumstances that gave rise to the

letter agreement. Reviewing the administrator’s denial of benefits for abuse of

discretion, the district court properly granted Viad’s motion for summary

judgment.

AFFIRMED.

3

FILED

Viad Corp. Supplemental Pension Plan v. Nasi, No. 12-16892 DEC 11 2014

MOLLY C. DWYER, CLERK

WATFORD, Circuit Judge, concurring: U.S. COURT OF APPEALS

I agree with my colleagues that the plan administrator didn’t abuse her

discretion in denying John Nasi’s pension claim. I write separately to offer an

alternative ground for affirmance: Even if Viad agreed to pay Nasi $193,397

annually for the rest of his life, as Nasi contends, it no longer has that obligation

because Nasi was significantly overpaid from 1996 to 2008.

In 1995, MCII funded a secular trust on Nasi’s behalf with $595,848. MCII

also sent a tax gross-up payment of $498,188 directly to the IRS. After Nasi

retired in March 1996, he received a check for $8,292 every month until September

2008, when MCII filed for bankruptcy. The key in this case was how that $8,292

figure was (mis)calculated. MCII started with $16,116, the monthly installment of

Nasi’s $193,397 annual pension. It then subtracted Nasi’s monthly tax-qualified

pension payment ($1,930) and, because Nasi had already received the value of his

secular trust up front, the monthly annuity value of his secular trust payment

($5,894). Nasi agrees that these offsets were proper.

What the calculation above doesn’t account for is the tax payment sent

directly to the IRS, a fact on which Viad relied in its denial letter. That Nasi never

saw that money is irrelevant—it was nonetheless his. He received a benefit of

$498,188, and his monthly pension checks should have been reduced by the Page 2 of 2 monthly annuity value of that tax payment ($4,928) in addition to the monthly

annuity value of the amount paid to the secular trust ($5,894).

The most Nasi should have been paid per month was $3,332. That figure

reflects the monthly value of his $193,397 pension ($16,116) minus his qualified

benefit ($1,962, as adjusted in 2004) and the annuity values of his trust payment

($5,894) and tax payment ($4,928). Nasi was therefore overpaid $4,960 per month

for twelve and a half years, for a grand total of $744,033—even before factoring in

an appropriate discount rate, which would make that figure grow significantly.

By the time of his actuarially projected demise, in 2022, Nasi should have

received a total of $1,039,643, the sum of his $3,332 monthly payments. By

October 2008, however, he had already received $1,242,249.

In sum, even if Viad owes Nasi $193,397 per year—and its denial letter

states compelling reasons why it doesn’t—Nasi has already received more than the

benefit of his bargain.