Gulley v. International Paper Company
Filing
22
MEMORANDUM OPINION AND ORDER. Signed by Honorable Robert T. Dawson on May 10, 2012. (lw)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
EL DORADO DIVISION
BERNEST GULLEY
PLAINTIFF
v.
Case No. 10-1034
RETIREMENT PLAN OF
INTERNATIONAL PAPER COMPANY
DEFENDANT
MEMORANDUM OPINION AND ORDER
Plaintiff brings this action pursuant to the provisions of
the Employee Retirement Income Security Act of 1974, 29 U.S.C.
§§ 1001, et seq. (“ERISA”), alleging Defendant’s decision to
deny his claim for early retirement benefits was unreasonable.
Before
the
Stipulated
Court
are
the
Administrative
Plaintiff’s
Record
Complaint
(Doc.
14),
(Doc.
1),
Defendant’s
Memorandum Brief in Support of its Motion for Judgment on the
Administrative Record (Doc. 17)1, Plaintiff’s Motion for Summary
Judgment (Doc. 19) and Defendant’s Brief in Response (Doc. 21).
For reasons reflected herein, Defendant’s Motion for Judgment on
1
Plaintiff
did not file a response to Defendant’s Motion for
Judgment on the Administrative Record. The Court will treat
Plaintiff’s Motion for Summary Judgment as his response. “On or
about June 27, 2011, plaintiff’s counsel informed counsel for
defendant that he intended to rely on the motion for summary
judgment and supporting material facts filed on April 5, 2011,
and found at Docket Entries 11 and 12.”
(Doc. 17, p.2).
Defendant did not file a Motion for Judgment, only a Memorandum
Brief in Support. (Doc. 17).
Page 1 of 10
the
Administrative
Record
(Doc.
17)
is
GRANTED,
Plaintiff’s
Motion for Summary Judgment (Doc. 19) is DENIED and Plaintiff’s
Complaint (Doc. 1) is DISMISSED WITH PREJUDICE.
I.
BACKGROUND
On August 13, 1979, Plaintiff Bernest Gulley (“Gulley”) was
hired by International Paper Company (“International Paper”) to
work as an hourly employee at its Mill in Camden, Arkansas.
Gulley worked for International Paper until his termination on
July 19, 1991.
(Admin. Rec. p. 1). At the time his employment
ceased,
had
Gulley
accrued
twelve
years
of
service
under
International Paper’s Retirement Plan. (Doc. 1).
In
1999,
Resources
Gulley
Service
made
Center
disability retirement.
an
inquiry
to
concerning
Direct
his
Line
Human
eligibility
for
On April 2, 1999, he received a written
response from Direct Line advising that he was not eligible to
apply
for
disability
International Paper.
benefits
from
the
(Admin. Rec. p. 11).
Retirement
Plan
of
The letter provided:
“You are, however, eligible for a deferred vested benefit when
you
reach
eligible
commencing
your
to
at
Normal
receive
any
Retirement
your
time
Age
benefit
after
in
of
a
attainment
65.
You
are
reduce[sic]
of
age
55.
also
amount
No
retirement benefits are payable to you prior to age 55.” (Doc. 1
Ex. A).
Page 2 of 10
On March 5, 2001, the Benefit Administration division of
International Paper’s Employee Service Center wrote to Gulley,
informing him that as of his termination in 1991, his vested
benefits
would
be
paid
at
his
normal
retirement
age
of
65.
(Admin. Rec. p. 13).
On November 25, 2003, Gulley received another letter from
the
Service
retirement.
Center
in
response
to
his
request
for
early
The letter informed Gulley that at the time of his
termination, in accordance with the plan document, an employee
must have 15 years of vesting service to be eligible for early
retirement.
Since Gulley only had twelve years of service, he
was not eligible for early retirement.
(Admin. Rec. p. 19).
August 31, 2008, Gulley received an identical letter.
On
(Admin.
Rec. p. 33).
On April 26, 2010, Gulley filed his Complaint alleging that
he was entitled to retirement benefits from International Paper.
(Doc. 1).
On July 26, 2010, Hon. Harry F. Barnes, United States
District Judge, granted the parties’ Joint Motion to Stay (Doc.
7) until Gulley exhausted his administrative remedies pursuant
to the Retirement Plan of International Paper Company.
(Doc.
8).
On June 28, 2010, Gulley applied to the Retirement Plan for
early
retirement
benefits.
In
support
of
his
application,
Gulley provided a letter from his attorney, the April 2, 1999,
Page 3 of 10
letter from Direct Line and one page from the Retirement Plan’s
2003 Summary Plan Description2.
(Doc. 1 Ex. B).
In response,
International Paper forwarded to Gulley a copy of the Summary
Plan Description in effect on the date that Gulley left his job
at International Paper as well as a description of the claim
procedure.
On October 25, 2010, the Retirement Plan denied Gulley’s
claim for early retirement benefits.
The Plan explained that
“[u]nder the Plan provisions in effect at the time of [his]
severance from employment with International Paper Company, a
participant needed at least 15 years of vesting service in order
to
be
eligible
benefit....”
to
The
retire
and
Retirement
receive
Plan
an
further
early
retirement
explained
that,
because Gulley had only twelve years of service, he was not
eligible to receive early retirement benefits.
The Retirement
Plan also confirmed that Gulley would be eligible to receive a
vested retirement benefit of $220.33 per month when he reached
2
Gulley
refers to the document as “Defendant’s Employee
Handbook.”
(Doc. 20, p. 2).
International Paper states that
the document is page 11 from its 2003 Summary Plan Description.
The page reads, in relevant part, “The vested benefit payable at
your normal retirement date is calculated under the applicable
benefit formula based on your years of credited service in
effect as of the date you terminate employment.
A reduced
benefit is payable as early as age 55 provided you have at least
10 years of vesting service.
If you choose to start receiving
your benefit before age 65, your benefit will be paid according
to the following schedule with proportional credit given for
partial years....” (Emphasis added). (Doc. 1 Ex. B).
Page 4 of 10
the age of 65.
that
any
contrary
In addition, the Retirement Plan informed Gulley
information
was
he
erroneous
may
and
have
had
received
been
correspondence in 2001, 2003 and 2008.
in
corrected
1999
by
to
the
subsequent
(Admin. Rec. p. 88).
On November 1, 2010, Gulley appealed the denial of his
claim
for
early
retirement
benefits.
In
support
of
his
contention that he only needed ten years of service in order to
receive early retirement benefits, Gulley again submitted the
page from the 2003 SPD, describing it as the “Plan Booklet.”
(Admin. Rec. p. 127).
By letter dated December 13, 2010, the Plan Administrator
denied
Gulley’s
appeal,
concluding
that
“Mr.
Gulley
is
not
eligible to commence early retirement under the Plan based on
the provisions of the Plan in effect at the time of Mr. Gulley’s
termination
of
employment”
in
1991.
The
Plan
Administrator
informed Gulley that Section 1.29 of Article 1 of the Retirement
Plan
of
International
Paper
Company
for
union
Represented
Employees (Group A) was the relevant provision in effect when he
left International Paper in 1991, and that, pursuant to that
provision, Gulley needed fifteen years of service to be eligible
for an early retirement benefit.
Because Gulley had only twelve
years of service when he left International Paper’s employment,
he “did not have the required number of years of service when he
terminated
employment
with
the
company”
Page 5 of 10
to
trigger
an
early
pension benefit. (Admin Rec. p. 446).
denied,
the
Stay
was
lifted
on
After his appeal was
January
6,
2011,
and
Gulley
resumed pursuit of his claim, asking this Court to find that he
is entitled to retirements benefits as well as attorney’s fees
pursuant
to
International
29
U.S.C.
Paper
§
Company
1132(g).
was
International Paper Company.
Retirement
substituted
of
defendant
as
Plan
for
(Doc. 10).
II. STANDARD OF REVIEW
Under ERISA, a denial of benefits by a Plan Administrator
must
be
reviewed
de
novo
unless
the
benefit
plan
gives
the
Administrator discretionary authority to determine eligibility
for benefits or to construe the terms of the Plan, in which case
the
Administrator’s
decision
is
reviewed
for
an
abuse
of
discretion. Woo v. Deluxe Corp., 144 F.3d 1157, 1160 (8th Cir.
1998) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S.
101, 115 (1989)). Accordingly, the Court must be guided by the
language of the Plan to determine the proper standard of review.
The
Plan
provides,
in
pertinent
part,
that
the
Plan
Administrator has the power and authority to interpret the Plan,
and to resolve ambiguities, inconsistencies and omissions, which
findings shall be binding, final and conclusive.
p. 261).
(Admin. Rec.
It further provides that all questions arising out of
or in connection with the administration of the provisions of
the Plan shall be determined by the Plan Administrator, and any
Page 6 of 10
determination so made shall be conclusive and binding upon on
all persons having an interest in or under the Plan.
Rec. p. 262).
Plan
grants
(Admin.
In his brief, Gulley concedes that the Retirement
the
Administrator
discretion
to
decide
questions
concerning benefits claims and to construe provisions of the
Plan. (Doc. 12).
Gulley contends that the Court should closely
scrutinize the entire record to determine if all aspects of
ERISA law were followed and all of the evidence was considered
by the Defendant.
(Doc. 20). Gulley also argues that the Court
should determine de novo what plan was in effect when he ceased
employment in 1991, averring that such a determination is not a
discretionary
finds
this
function
argument
International
Paper
of
the
Plan
Administrator.
unpersuasive.
Company
The
gives
the
The
Retirement
Court
Plan
Administrator
of
broad
authority to construe the Plan and to determine a claimant's
eligibility
Trustee’s
for
benefits.
determination
Accordingly,
of
the
we
applicable
conclude
that
the
Plan
should
be
reviewed under the arbitrary-and-capricious standard. Collins v.
Central States, Southeast and Southwest Areas Health and Welfare
Fund, 18 F.3d 556, 559 (8th Cir. 1994)(Trustees' determination
that an individual is ineligible to participate in the Fund
because
he
does
not
meet
the
Plan's
definition
of
employee
should be reviewed under the arbitrary-and-capricious standard.)
Page 7 of 10
Therefore,
the
plan
administrator’s
decision
may
only
be
reviewed for an abuse of discretion.
The Eighth Circuit has “variously defined . . . an abuse of
discretion as being ‘extremely unreasonable,’ ‘virtually’ the
same
as
arbitrary
and
capricious,
and
‘extraordinarily
imprudent.’” Shell v. Amalgamated Cotton Garment, 43 F.3d 364,
366 (8th Cir. 1994) (citations omitted). “The proper inquiry
into
the
deferential
administrator’s
decision
standard
was
is
whether
reasonable;
i.e.,
‘the
plan
supported
by
substantial evidence.’” Cash v. Wal-Mart Group Health Plan, 107
F.3d 637, 641 (8th Cir. 1997) (quoting Donaho v. FMC Corp., 74
F.3d 894, 899 (8th Cir. 1996)). “While the word ‘reasonable’
possesses
numerous
connotations,
this
court
has
rejected
any
such definition that would ‘permit a reviewing court to reject a
discretionary
trustee
decision
with
which
the
court
simply
disagrees (.)’” Id. (citation omitted). A decision is reasonable
if “a reasonable person could have reached a similar decision,
given the evidence before him, not that a reasonable person
would have reached that decision.
If the decision is supported
by a reasonable explanation, it should not be disturbed, even
though
a
different
reasonable
interpretation
made.” Id. (citation omitted).
Page 8 of 10
could
have
been
III.
DISCUSSION
The Plan Administrator determined that the Retirement Plan
in effect when Gulley was terminated from International Paper in
1991 was the plan approved by the Internal Revenue Service on
November 4, 1985, and which included amendments effective June
1, 1979, June 1, 1982, June 1, 1983, January 1, 1984 and January
1, 1986. (Admin Rec. pp. 171 - 437). That plan, as described in
the Summary Plan Description effective June 1, 1989, provided
that for an employee to receive early retirement benefits at the
age of 55 he or she must have accrued at least fifteen years of
creditable
service.
(Admin.
Rec.
p.
67).
Gulley
does
not
explain where or how he received the page from the 2003 SPD, or
why it should apply to him twelve years after his employment
with International Paper ended.
The only argument that Gully
has for maintaining that he could receive retirement benefits at
age 55 is the letter from International Paper in 1999.
Ex. A).
(Doc. 1
This was eight years after he terminated employment
with International Paper, so he could not have relied on that
erroneous information at the time of his termination.
on
numerous
occasions
after
that
letter,
Further,
International
Paper
advised Gulley that he had been given incorrect information and
that, under the applicable Plan, he did not have the hours of
creditable service required for early retirement.
Page 9 of 10
(Admin. Rec.
pp 13, 19, 33).
We find the Plan Administrator’s determination
reasonable.
IV. CONCLUSION
For
the
Defendant’s
Accordingly,
reasons
decision
stated
was
above,
not
Defendant’s
an
Motion
the
abuse
for
Court
of
Judgment
concludes
discretion.
on
the
Administrative Record (Doc. 17) is hereby GRANTED, Plaintiff’s
Motion for Summary Judgment (Doc. 19) is DENIED and Plaintiff’s
Complaint (Doc. 1) is DISMISSED with prejudice. Each party is to
pay their own costs and fees.
IT IS SO ORDERED this 10th day of May, 2012.
/s/ Robert T. Dawson
Robert T. Dawson
United States District Judge
Page 10 of 10
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?