Bruce H Barton v. ADT Security Services Pension Plan et al

Filing 67

FINDINGS OF FACT ANDCONCUSIONS OF LAW AFTERCOURT TRIAL by Judge Beverly Reid O'Connell (see attached Order for further detais). The Court does not award plaintiff any statutory penalties under section 502(c)(1) of ERISA. Judgment is for Defendant. (MD JS-6, Case Terminated). (jp)

JS
-6
1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

CENTRAL DISTRICT OF CALIFORNIA

10
11

BRUCE H. BARTON,

12
13

Plaintiff,
v.

Case No. CV 12-06971 BRO(CWx)
FINDINGS OF FACT AND
CONCUSIONS OF LAW AFTER
COURT TRIAL

14

ADT SECURITY SERVICES
PENSION PLAN, a pension plan,
TYCO INTERNATIONAL
16 MANAGEMENT COMPANY, as plan
sponsor, TYCO INTERNATIONAL
17 MANAGEMENT COMPANY, LLC
ADMINISTRATIVE COMMITTEE, as
18 plan administrator, and DOES 1
through 100, inclusive,
15

19
20

Defendants.

21
22
23
24
25
26
27
28
BartonFindingsfnl.d
ocx

FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1

I.

2

INTRODUCTION
This action is brought pursuant to the Employee Retirement Income Security

3
4

Act of 1974 (“ERISA”) (29 U.S.C. § 1001, et seq.). Plaintiff Bruce Barton seeks:

5

(1) declaratory relief, that he is entitled to a pension; (2) pension benefits based upon

6

his employment with American District Telegraph Company, (“ADT”) from 1967 to
7
8 1986; and, (3) ) recovery of statutory penalties under 29 U.S.C. § 1132(c)(1) and 29
9 CFR § 2575.502(c)(1). Defendants contend: (1) Plaintiff is not entitled to a pension
10
11

because there are many subsidiaries of ADT, and Plaintiff never established that he

12 was a participant under the 1968 or 1985 ADT Pension Plans; and (2) he is not
13 entitled to statutory damages because plan administrators produced all legally
14
15

appropriate documents to Plaintiff. After consideration of the parties’ trial briefs,
1

16 oral arguments, the evidence in the Administrative Record,
17
18
19
20

and the extrinsic

evidence offered by both sides at trial in the case, the Court makes the following
Findings of Fact and Conclusions of Law.2
II.

FINDINGS OF FACT

21
22

A.

Plaintiff’s Work History

23

Plaintiff Bruce Barton is a 68 year-old male. In late 1967, American District

24
25

1

The documents considered by the Employee Benefits Committee in denying
Plaintiff’s claim is Trial Exhibit H. The documents considered by the Employee
26 Benefits Committee regarding Plaintiff’s appeal is Trial Exhibit M. Because these
are the materials upon which the committee based its denial of pension benefits,
27 these exhibits constitute the administrative record.
2
Any finding of fact which constitutes a conclusion of law is hereby adopted as a
28
conclusion of law.
2
BartonFindingsfnl.d
ocx

FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

Telegraph Co (“ADT”) of Maine hired Barton as a Serviceman 1. (Decl. of Bruce
Barton, ¶6, Ex. 1 ; Trial Ex. M at 1.) From 1966 to 1971, while employed at ADT

3
4

of Maine, Barton participated in United States Marine Reserve. (Trial Ex. M at 14-

5

15). In December 1968, Barton worked for Ginn-Marvin Moving & Storage Co.

6

(Trial Ex. M at 15.). In 1973, records indicate that American District Telegraph Co.
7
8

of Massachusetts paid in FICA earnings for Barton. (Trial Ex. M at 16.) The “EIN”3

9

on the records differs from that of ADT of Maine. (cf. Trial Ex. M at15-16.)

All

10
11

references reflect an address of “% ATT Tax Dept., 1 World Trade Center, Suite

12

9200, New York, NY”. (See generally Trial Ex. M.) From 1974 to 1976, Barton’s

13

records show FICA wages paid in by “American District Telegraph Co.,” (Id.) From

14
15

1977 to 1981, FICA earnings under Barton’s name were received from “American

16 District Telegraph Co. of Maine.”
17

(Id. at 17.)

From 1982 to 1984, FICA

withholdings were paid by “ADT Diversified Services Inc.” (Id.) The address listed

18
19

was in Parsippany, New Jersey. (Id.) A third EIN was listed. (Id.)

In 1985, Social

20 Security documents provided by Barton show FICA withheld by “American District
21

Telegraph Co. of Illinois”. (Id. at 18.) The address listed was “% ATT Tax Dept” at

22
23

the One World Trade Center address. (Id.) A fourth EIN was listed. (Id.) Part of

24 1986 showed earnings withholdings from “American District Telegraph Co.,” (Id.)
25

On September 11, 1986, Barton resigned his employment. (Trial Ex. H at 32.)

26
27
28
BartonFindingsfnl.d
ocx

3

The court presumes that “EIN” refers to the Employer Identification Number.
3
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1

B.

2

The Plan

Given the breadth of Plaintiff’s employment, multiple iterations of the

3
4

American District Telegraph Company Pension Plan exist. However, the pension

5

plans relevant to these proceedings are American District Telegraph Company

6

Pension Plan in effect on January 1, 1968 (“The 1968 Plan”)4 and January 1, 1985

7
8

(“The 1985 Plan”).

9

1.

10

The 1968 Plan

11
12

Section 2(1) of The 1968 Plan defines “Company” as “American District

13

Telegraph Company, and those controlled companies authorized by the Board of

14

Directors to participate in the Plan.” (Trial Ex. C at 3.) “Full Time Employee”

15
16

refers to any person “customarily and regularly employed by the Company for not

17

less than thirty-five (35) hours weekly ...” (Id. at 4, Sec. 2(7).) The 1968 Plan also

18

defined “term of employment” to mean “continuous employment in the service of

19
20

the Company or of the Company and its controlled companies.”

(Id. at 4, Sec.

21 2(9)(a).) “Continuous service” was not further defined. In order to receive a pension
22

under The 1968 Plan, a male employee must reach a certain age and have a certain

23
24 number of years of service. (Id. at 6, sec. 5.)
25

The 1968 Plan also provides that six members from the Board of Directors

26
27
28
BartonFindingsfnl.d
ocx

4

The 1968 Plan existed prior to the passage of the Employee Retirement Income
Security Act of 1974.
4
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

shall be called the Employees Benefit Committee”. (Id. at 5, sec. 4.) The Employee
Benefit Committee is vested with the power to “determine conclusively for all

3
4 parties all questions arising in the administration of the Plan.” (Id.)

The 1968 Plan

5 defines “any absence from the service without pay . . . shall be considered as a break
6

in the continuity of service ...” (Id. at 14, sec. 9(5).)

Person re-employed after a

7
8 break in service are considered employees of their re-employment date. (Id. at 14,
9 sec. 9(5).)5
10

2.

11
12

The 1985 Plan

The 1968 Plan was amended and restated on at least one occasion prior to

13
14

1985. However, The 1985 Plan guides the decision in this case based upon the

15

court’s findings detailed below.6

16

The 1985 Plan defines “Company” as the

“American District Telegraph Company and such of its “Affiliated Companies as

17
18

have adopted the Plan and have been admitted to participation therein by the Board

19

. . ..” (Trial Ex. A, at 6, sec. 2.8.) “Affiliated Company” means a company “which

20

is a member of a controlled group of corporations of which the American District

21
22

Telegraph Company is also a member.” (Id. at 5, sec. 2.2.) The 1985 Plan defines

23
5

24
25
26
27
28
BartonFindingsfnl.d
ocx

Any person reemployed for ten years after a break in service will be credited with
their entire employment tenure, less any break in service. (Trial Ex. C, at 15, sec.
9(5).)
6
Plaintiff’s counsel argued in passing that ADT Security Services Pension Plan
effective January 1, 2010 should apply because Plaintiff sought pension benefits in
2010. However, Article III, Section A requires the person to be employed as of
January 1, 2010. (See Trial Ex. L at 20, Art. III, Sec. A.) “Continuous Service” is
defined as the completion of one hour after December 31, 1988. (Id.) Plaintiff does
not contend that he was employed by ADT after 1986. Therefore, the 2010 Pension
Plan does not apply.
5
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

“continuous service”. For the period prior to January 1, 1976, “continuous service
shall be that service determined under the terms of the Plan as it was constituted on

3
4 December 31, 1975.”
5

(Id., sec. 2.9.)7 For periods of employment after January 1,

1976, “one year of Continuous Service shall be recorded for any Plan Year during

6

which and Employee has 1,000 or more hours of service . . .” (Id., sec. 2.9(b)(i).)
7
8 Continuous service is not recognized where an employee records less than 1,000
9 hours. (Id., sec. 2.9(b)(ii).) Less than 500 recorded hours is considered to be a break
10
11
12

in service. (Id., sec. 2.9(b)(iii).)
All employees who were Participants in the Plan as of December 31, 1985 are

13 included in The 1985 Plan. (Id. at 11, sec. 3.1.) In addition, all employees, who
14
15

were not Participants previously shall become eligible if: (1) they are 21 years old;

16 and (2) “the completion of 1,000 Hours of Service during the twelve-month period
17

immediately following his date of employment, “or if such employee does not

18
19

complete 1,000 hours within the twelve-month period, one year of continuous

20 service in any succeeding plan year.” (Id. at 12, sec. 3.2(b).) “Credited Service” is
21

defined in two ways. First, “credited service” occurring prior to January 1, 1976 is

22
23

computed according the plan as of December 1, 1975. (Id. at 7, sec. 2.10(a).) After

24 January 1, 1976, “Credited Service” is calculated as the number of years where a
25

Participant works 1,000 hours or more, excepting the years where the Participant

26
27
7

28
BartonFindingsfnl.d
ocx

The 1968 Plan was the applicable document on December 31, 1975.
6
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

joins and retires from the Plan, which is computed on a pro rata basis. (Id. at 8, sec.
2.10(b).)

Paragraph 8.2 provides that if the “employment of a Participant is

3
4 terminated before his Normal Retirement Date but after he has completed 10 or more
5 years of Continuous Service” he shall receive retirement benefits at the retirement
6

ages listed in section five of The 1985 Plan. (Id. at 19, sec. 8.2.)

Like The 1968

7
8 Plan, The 1985 Plan states that the Employee Benefits Committee “shall have the
9 primary responsibility and authority for the administration of the Plan, including the
10
11

authority to interpret its provisions . . . to determine the amount of benefits which

12 shall be payable to any person in accordance with the provisions of the Plan . . .” (Id.
13 at 31, sec. 14.2.)

All “interpretations, determinations and decisions” of the Benefits

14
15
16

Committee is deemed conclusive. (Id. at 33, sec. 14.7.)
C.

Plaintiff’s Request for Pension Benefits

17
18

In 2010, Barton inquired of Aon Hewitt, the Pension record keeper, about

19
20

pension benefits.

On December 13, 2010, Linda Brown, Pension Benefit

21

Administrator, replied stating that Aon Hewitt “could not find any information about

22

your employment with ADT Security Services, Inc.” (Trial Ex. D at 2.) Ms. Brown

23
24
25

enclosed instructions regarding the pension claims and appeals procedures. (Id.) On
or about October 3, 2011, Barton applied for pension benefits. (Trial Ex. 9 at 1.)

26
27
28
BartonFindingsfnl.d
ocx

In support of his claim, Barton included the following documents with his
letter: (1) Linda Brown’s letter dated December 13, 2010; (2) Linda Brown’s June
7
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

24, 2011 letter indicating that the materials submitted by Barton did not indicate he
had a pension; (3) Tyco Pension Services letter dated July 15, 2011 relating a call by

3
4 Barton to the call center and advising Barton of how to file a claim for pension
5 benefits; (4) R.B. Carey’s November 11, 1977 letter congratulating Barton on his
6

completion of “10 years of service as a member of the ADT organization;” (5)
7
8 copies of key cards and identification cards; (6) Barton’s undated letter to Aon
9 Hewitt employee Joyce Guerrieri enclosing documents; (7) W-2 wage statements
10
11

from 1980, 1981, 1982 and1983 listing the employer as American District Telegraph

12 Co. at the One World Trade Center address; (8) two pay stubs from 1981 and 1985
13 with the listing “American District Telegraph” at the bottom; (9) three Personnel
14
15

Data Maintenance Forms for February 1, 1984, May 1, 1985 and February 3, 1986;

16

(10) six pages of documents from the Social Security Administration reflecting an

17

employer of American District Telegraph Co of Massachusetts, American District

18
19
20

Telegraph Co of Maine, summarizing FICA withholding for 1968-1980; (Trial Ex.
H at 8-29.)

21
22

In a letter dated January 10, 2012, Tyco International Management Company

23

Administrative Committee (“The Committee”) member Mindy Ebert-Feldman wrote

24

Barton informing him of The Committee’s denial of his claim for pension benefits.

25
26

Ms. Ebert-Feldman first explained the documents which The Committee reviewed.

27

(Trial Ex. 9.) In addition to the documents described above, The Committee also

28
BartonFindingsfnl.d
ocx

reviewed documents from Barton’s pension file. Those included: (1) Barton’s letter
8
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

to Ray Llewellyn dated September 11, 1986 resigning; (2) A memorandum from
Ray Llewellyn to the file dated September 12, 1986 acknowledging receipt of a

3
4

company truck, tools and presumably an American Express credit card;8 (3) a one-

5

page-document entitled Policies and Procedures regarding company truck usage; (4)

6

a two-page Exit Interview Questionnaire listing a date of employment at “11/10/67”;
7
8

(5) a two-page Telephone Conversation Record regarding pension benefits, dated

9

July 6, 2011 wherein presumably Barton informs the employee that he wants his

10
11

pension and she is “stonewalling;” (6) a portion of The 1968 Plan l previously; (7)

12

portions of an “ADT Pension Plan” referencing 1983; and, (8) portions of The 1985

13

Plan listed above. (Trial Ex. H at 32-56.) Ms. Ebert-Feldman describes the relevant

14
15
16

plan documents, namely The 1968 Plan and The 1985 Plan. She details the relevant
portions of each. (Trial Ex. 9 at 2-3.)

17

Ms. Ebert-Feldman goes on to inform Barton of The Committee’s decision. It

18
19

denies Barton’s claim for a pension because

20

“there are no Plan records indicating your eligibility for participation in the
Plan, your actual participation in the Plan, or your eligibility for benefits under the
22
Plan. In addition, it was unclear from the information you provided whether you had
23 a continuous term of employment or earned the required service to earn at least 10
Years of Continuous Service so as to be vested in a Plan benefit.”
21

24
25

(Id. at 3.) She specifies that Barton did not provide proof of continuous employment

26
27

8

The Court is unable to determine the exact items to which Llewellyn is referring
because the Trial exhibits were redacted. However, such items are irrelevant to the
28
claims at issue here.
9
BartonFindingsfnl.d
ocx

FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

prior to 1976, or proof of at least 1,000 hours of service after 1976 until 1986. (Id.
at 3-4.) Finally, she details the process to appeal a denied claim. (Id. at 4.)

3
4

On January 19, 2012, Barton wrote Ms. Ebert-Feldman requesting certain

5
6

documents. Specifically, Plaintiff requested copies of “all plan documents, records

7 and other information, affecting the claim per your document concerning Applying
8

for Benefits and claim and Appeal Procedures.” (Trial Ex. K at 2.) Barton then

9
10

proceeds to make specific requests for a “Tyco International Summary Plan

11 Description Booklet of my own;” social security documents which Barton claims
12

Tyco “seem[s] to have trouble associating with the list and my name . . .;”examples

13
14

of pension benefit statements and application forms provided by the “service center.”

15 (Id.) That same day, Barton requested a 60-day extension within which to file his
16

appeal. (Id. at 3.)

17
18

D.

Plaintiff’s Appeal of The Committee’s Denial

19
20
21

On February 21, 2012, Ms. Ebert-Feldman wrote Barton granting his 60-day
extension. (Trial Ex. J at 2.) She also provided the following documents: (1) a five

22
23

page document entitled Claim 2011-6 ADT Security Services Pension Plan; Part A –

24

Security Service;9 (2) Barton’s October 3, 2011 letter to Tyco Pension Services; (3)

25
26
9

Ms. Ebert-Feldman testified that this document was prepared by their outside
counsel. Although she did not rely upon this document in reaching her decision, she
28 does not know whether other committee members relied upon the document. (RT
6/11/13 at p. 74, ll. 8-14; see also RT 6/11/13 pp. 65-74).
10
BartonFindingsfnl.d
27

ocx

FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

Linda Brown’s letter dated December 13, 2010; (4) Linda Brown’s June 24, 2011
letter indicating that the materials submitted by Barton did not indicate he had a

3
4

pension; (5) Tyco Pension Services letter dated July 15, 2011 relating a call by

5

Barton to the call center and advising Barton of how to file a claim for pension

6

benefits; (6) R.B. Carey’s November 11, 1977 letter congratulating Barton on his
7
8

completion of “10 years of service as a member of the ADT organization;” (7)

9

copies of key cards and identification cards; (8) Barton’s undated letter to Aon

10
11

Hewitt employee Joyce Guerrieri enclosing documents; (9) W-2 wage statements

12

from 1980, 1981, 1982 and1983 listing the employer as American District Telegraph

13

Co. at the One World Trade Center address; (9) two pay stubs from 1981 and 1985

14
15

with the listing “American District Telegraph” at the bottom; (10) three Personnel

16

Data Maintenance Forms for February 1, 1984, May 1, 1985 and February 3, 1986;

17

(11) six pages of documents from the Social Security Administration reflecting an

18
19

employer of American District Telegraph Co of Massachusetts, American District

20

Telegraph Co of Maine, summarizing FICA withholding for 1968-1980; (12)

21

Barton’s letter to Ray Llewellyn dated September 11, 1986 resigning; (13)

A

22
23

memorandum from Ray Llewellyn to the file dated September 12, 1986

24

acknowledging receipt of a company truck, tools and presumably an American

25

Express credit card; (14) a two-page Exit Interview Questionnaire listing a date of

26
27
28
BartonFindingsfnl.d
ocx

employment at “11/10/67”; (15) a two-page Telephone Conversation Record
regarding pension benefits, dated July 6, 2011 wherein presumably Barton informs
11
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

the employee that he wants his pension and she is “stonewalling”; (16) portions of
The 1968 Plan described previously; (17) portions of an “ADT Pension Plan”

3
4

referencing 1983; (18) portions of The 1985 Plan listed above; (19) the entire 1968

5

Plan; and, (20) the entire 1985 Plan. (Id. at 8-133.)

6
7
8

On June 29, 2012, Ms. Ebert Feldman wrote Plaintiff communicating the
result of his appeal. On behalf of the Tyco International Management Company,

9
10

LLC Administrative Committee (“Appeal Committee”), she informed Barton that the

11 Appeal Committee had denied his appeal. The Appeal Committee concluded that
12

“there is no record of your participation in the Plan or of your eligibility to receive

13
14

Plan benefits, and none of the information you submitted in your appeal indicates

15 you participated in the Plan.” (Trial Ex. N at 2.) She went on: “it is not clear from
16

the information provided that you worked for a participating employer for the

17
18 amount of time required to receive vesting service, which is a continuous term of
19 employment from 1967 to 1976 and then at least 1,000 hours a year from 1976 until
20

your termination of employment in 1986.” (Id.)

21
22

Ms. Ebert-Feldman identified the documents considered by the Appeal

23
24

Committee: (1) Barton’s April 29, 2012 letter to Mindy Ebert-Feldman informing

25 her that he obtained additional information from the Social Security Administration;
26

(2) Ms. Ebert-Feldman’s January 10, 2012 letter on behalf of The Committee

27
28
BartonFindingsfnl.d
ocx

denying Barton’s claim;

(3) two pages of identification cards; (4) R.B. Carey’s
12

FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

November 11, 1977 letter congratulating Barton on his completion of “10 years of
service as a member of the ADT organization” and what appears to be an

3
4

identification card; (5) 10 pages from the Social Security Administration, Itemized

5

Statement of Earnings, detailed FICA withholdings described supra.; (6) two pay

6

stubs from 1981 and 1985 with the listing “American District Telegraph” at the
7
8

bottom; (7)

W-2 wage statements from 1980, 1981, 1982 and1983 listing the

9

employer as American District Telegraph Co. at the One World Trade Center

10
11

address; (8) three Personnel Data Maintenance Forms for February 1, 1984, May 1,

12

1985 and February 3, 1986; (9)

a two-page exit interview questionnaire; (10)

13

Barton’s letter to Ray Llewellyn dated September 11, 1986 resigning; (11) a

14
15

Performance Appraisal Worksheet dated February 1, 1986; (12) a five-page untitled

16

document detailing retirement benefits; and, (13)

17

portions of The 1968 Plan

described previously. (Trial Ex. M at 2-47.)

18
19
20

Ms. Ebert-Feldman described the plans used by the Appeal Committee in
reaching its decision, namely The 1968 Plan and The 1985 plan. (Trial Ex. N at 3-

21
22

4.) Specifically, she stated the definition of “Term of Employment” under the 1968

23

Plan as “continuous employment in the service of the company or of the company

24

and its controlled companies.” (Id.) “Break in Service” was also defined under The

25
26

1968 Plan as “any absence from service without pay . . .” (Id.) With respect to The

27

1985 Plan, Ms. Ebert-Feldman referred to the “Continuous Service” requirement in

28
BartonFindingsfnl.d
ocx

order for a pension to vest. (Id. at 4.) “Continuous Service” was defined as “1,000
13
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

or more Hours of Service.” (Id.) A “break in service” occurred where an employee
works fewer than 500 hours. (Id.)

3
4

Ms. Ebert-Feldman concluded the letter by repeating the Appeal Committee’s

5
6

reasons for denying Barton’s claim:

7

there are no Plan records indicating your eligibility for participation in the
Plan, your actual participation in the Plan, or your eligibility for benefits under
the Plan. You provided no documents indicating that you participated in the
Plan or that you were owed a benefit under the Plan. In addition it could not
be determined from the Information you provided that you earned the requisite
service to be vested in a benefit under the Plan.

8
9
10
11

12 (Id. at 4.) Those conclusions were then explained in further detail. (Id. at 5.)
13

She

also informed Barton that the Appeal Committee’s decision was final. (Id.)

14
15

On August 13, 2012, Barton filed this lawsuit pursuant to the Employee

16
17

Retirement Income Security Act of 1974 (“ERISA”) (29 U.S.C. § 1001, et seq.).

18 (Dkt. 1.) Plaintiff seeks: (1) declaratory relief, that he is entitled to a pension; (2)
19

pension benefits based upon his employment with American District Telegraph

20
21

Company, (“ADT”) from 1967 to 1986; and, (3) recovery of statutory penalties

22 under 29 U.S.C. § 1132(c)(1) and 29 CFR § 2575.502(c)(1).
23
24 III.

CONCLUSIONS OF LAW

25

A.

Declaratory Relief and Recovery of Pension Benefits

26
27
28
BartonFindingsfnl.d
ocx

1.

Standard of Review

ERISA permits an individual to challenge a denial of benefits in federal court.
14
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008) (citing 29 U.S.C. §
1132(a)(1)(B) ) (“MetLife”)).10

Depending on the language and structure of an

3
4

ERISA plan, a district court reviews a plan administrator’s decision to deny benefits

5

either de novo or for an abuse of discretion.

The district court reviews the

6

determination “‘under a de novo standard’ unless the plan provides to the contrary.”
7
8 (Id. at 111) (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115
9 (1989)); Harlick v. Blue Shield of Cal., 686 F.3d 699, 706-07 (9th Cir. 2012). The
10
11

decision will be reviewed for an abuse of discretion, however, where “the plan

12 provides to the contrary by ‘granting the administrator or fiduciary discretionary
13

authority to determine eligibility for benefits.’” Met Life, 554 U.S. at 111 (quoting

14
15
16

Firestone, 489 U.S. at 115)(emphasis in original); Harlick, 686 F.3d at 707 (citing
Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 967 (9th Cir. 2006) (en banc)).

17

Courts apply this abuse of discretion standard even in cases where a conflict of

18
19

interest exists, such as when the plan administrator is also the entity that pays plan

20

benefits. MetLife at 111-12. The Court’s application of an abuse of discretion

21

standard must be “‘tempered by skepticism’ when the plan administrator has a

22
23
24

conflict of interest in deciding whether to grant or deny benefits.” Harlick, 686 F.3d
at 707 (quoting Abatie, 458 F.3d at 968-96)). “In such cases, the conflict is a ‘factor’

25
26

10

Plaintiff does not challenge the benefits denial under any other law. This
action arises only under ERISA § 502(a)(1), 29 U.S.C. § 1132(a)(1), which is the
28 exclusive remedial scheme for relief with respect to a claim of entitlement to a
benefit under a plan subject to ERISA.
15
BartonFindingsfnl.d
27

ocx

FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

in the abuse of discretion review” with the weight of that factor dependent “on the
severity of the conflict.” Harlick, 686 F.3d at 707 (citing Abatie, 458 F.3d at 968;

3
4

MetLife, 554 U.S. at 108). The most frequent conflict arises “when the same entity

5 makes the coverage decisions and pays for the benefits.” Harlick, 686 F.3d at 707
6

(citing MetLife, 554 U.S. at 108).
7
8

Several factors influence the weight given to the conflict factor in an abuse of

9

discretion review. The conflict is “more important . . . where circumstances suggest

10
11

a higher likelihood that it affected the benefits decision.” MetLife, 554 U.S. at 117;

12

Harlick, 686 F.3d at 707. The conflict is given more weight “if there is a ‘history of

13

biased claims administration.’” Harlick, 686 F.3d at 707 (quoting MetLife, 554 U.S.

14
15

at 117). Additional skepticism will apply for procedural irregularities under ERISA

16

where “the administrator gave inconsistent reasons for a denial, failed to provide full

17

review of a claim, or failed to follow proper procedures in denying the claim.” Id.

18
19
20
21

(citing Lang v. Long-Term Disability Plan, 125 F.3d 794, 798-99 (9th Cir. 1997);
Friedrich v. Intel Corp., 181 F.3d 1105, 1110 (9th Cir 1999)).
The conflict, however, “is less important when the administrator takes ‘active

22
23

steps to reduce potential bias and to promote accuracy,’ such as employing a

24

‘neutral, independent review process,’ or segregating employees who make coverage

25

decisions from those who deal with the company’s finances.” Id. (quoting MetLife,

26
27

554 U.S. at 117); Abatie, 458 F.3d at 969 n.7. Further, the Ninth Circuit views “the

28 conflict with a ‘low’ ‘level of skepticism’ if there’s no evidence of malice, of self
BartonFindingsfnl.d
ocx

16
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

dealing, or of a parsimonious claims-granting history.” Saffon v. Wells Fargo & Co.
Long Term Disability Plan, 522 F.3d 863, 868 (9th Cir. 2008). In considering any

3
4

conflict and applying the abuse of discretion standard, the Supreme Court has

5

“emphasized under Glenn, ‘a deferential standard of review remains appropriate

6

even in the face of a conflict.’” Salomaa v. Honda Long Term Disability Plan, 642
7
8

F.3d 666, 647 (9th Cir. 2011). As the Ninth Circuit has made clear: “We now know

9

that the administrator’s decision cannot be disturbed if it is reasonable.” (Id. at 676.)

10
11

In evaluating the specific decision of the claims administrator, the Ninth

12

Circuit has cautioned that courts “may not merely substitute our view for that of the

13

fact finder.” Id. (citing United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)

14
15

(en banc)).

Proper abuse of discretion review examines whether the claims

16

administrator’s decision was “(1) illogical, (2) implausible, or (3) without support in

17

inferences that may be drawn from the facts in the record.” This review applies

18
19
20
21

“with the qualification that a higher degree of skepticism is appropriate where the
administrator has a conflict of interest.” Solomaa, 642 F.3d at 676.
Thus, as an initial matter, the 1968 Plan and 1985 Plan must be

22
23

examined to determine whether the two plans vest the administrators with

24 discretionary authority thereby invoking the deferential abuse of discretion review.
25

Under the 1968 Plan, six members from the Board of Directors shall be called the

26
27

“Employees Benefit Committee”. (Trial Ex. C at 5, sec. 4.) The 1968 Plan confers

28 upon Employee Benefit Committee the power to “determine conclusively for all
BartonFindingsfnl.d
ocx

17
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

parties all questions arising in the administration of the Plan.” (Id.) The 1985 Plan
states that the Employee Benefits Committee “shall have the primary responsibility

3
4

and authority for the administration of the Plan, including the authority to interpret

5

its provisions . . . to determine the amount of benefits which shall be payable to any

6

person in accordance with the provisions of the Plan . . .” (Trial Ex. A at 31, sec.
7
8 14.2.)

All “interpretations, determinations and decisions” of the Employee Benefits

9 Committee is deemed conclusive. (Id. at 33, sec. 14.7.)

Such language has been

10
11
12

held to confer discretionary authority.

See, e.g., Abatie, 458 F.3d at 963

(responsibility for full and final determination of benefits); Sherwood v. United

13 Parcel Serv. Flexible Benefits Plan Short Term Disability (STD) Plan, 156
14
15

Fed.Appx. 941, 941-42 (9th Cir. 2005) (discretionary authority to determine

16

eligibility for benefits or to construe terms of the plan). Accordingly, this court then

17

applies an abuse of discretion standard.11

18
19

2.

20

Whether the Committee Abused Its Discretion in Denying
Barton Benefits

21
22
23

The question then becomes whether the Committee abused its discretion when
it denied Plaintiff pension benefits under The 1968 Plan and The 1985 Plan. This

24
25

court considers the conflict of interest as a factor as to whether the Committee

26

abused its discretion.

This court views the conflict of interest with a low level of

27
28
BartonFindingsfnl.d
ocx

11

Because the court finds an abuse of discretion standard of review, it disregards the
oral testimony presented in this case and considers only the Administrative Record.
18
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

skepticism because there is no evidence in the record to suggest that the conflict
affected the Committee’s decision.

Plaintiff has failed to connect the overall

3
4

corporate and financial reporting structure of Tyco with its benefits decisions in a

5

causal or meaningful way. Further, Plaintiff has also failed to produce evidence of

6

Tyco claims administrator having a history of “malice, self dealing, or . . . a
7
8 parsimonious claims-granting history” in this case or any others.

Contrary to

9 Plaintiff’s assertion, the reasons for Tyco’s denial of pension benefits remained the
10
11

same. There is no evidence of a history of biased claims administration. There are

12

no procedural irregularities present; Plaintiff received an extension, and was

13

provided with an opportunity to present additional evidence.

14
15

The issue then turns upon whether the Committee’s decision was reasonable.

16

There is no evidence in the record that Plaintiff established that he was entitled to

17

benefits under either the 1968 Plan or the 1985 Plan. Under The 1968 Plan, 10 years

18
19

of continuous service is required.

The1968 Plan does not define “continuous

20

service” any further. In order to receive benefits, The 1985 Plan mandates 10 years

21

of continuous service as well. The 1985 Plan defines continuous service as “one

22
23

year of Continuous Service shall be recorded for any Plan Year during which and

24 Employee has 1,000 or more hours of service . . .” (Trial Ex. A, sec. 2.9(b)(i).).
25

Barton did not establish continuous service for a participating company. The

26
27

evidence he did present showed only that he was employed by ADT companies and

28 other companies under the relevant time period. In addition, the letter from R.B.
BartonFindingsfnl.d
ocx

19
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

Carey congratulating Barton on his ten years of service does not prove that he is
entitled to benefits. The letter does not establish continuous service as defined by the

3
4

1968 Plan. The employee pay stubs and W-2 tax forms provide only a snapshot that

5

Barton worked for ADT companies during the months and years detailed on the

6

exhibits. He fails to show that he was employed by a participating ADT company
7
8

for 10 years continuous years. Nor does the letter establish that Barton worked for a

9

participating company.

Evidence in the record shows that Barton worked for

10
11
12
13

numerous ADT companies, as well as other organizations, during the relevant tenyear time period.
Even after applying a low level of skepticism based on the fact that TYCO

14
15

both assesses eligibility and disburses funds, this Court cannot characterize The

16

Committee’s benefits denial decision as “(1) illogical, (2) implausible, or (3) without

17

support in inferences that may be drawn from the facts in the record.” Salomaa, 642

18
19

F.3d at 676. To the contrary, The Committee consistently articulated its position that

20 Barton had failed to show continuous service to a participating company for a period
21

of 10 years. The Committee reviewed the documents presented by Barton, as well as

22
23

its own files and records. The evidence presented, namely tax documents showing

24 multiple names of ADT companies, a single letter thanking Barton for ten years of
25

service to the “ADT organization”, Barton’s exit interview, paystubs for certain

26
27

monthly periods, and W-2 forms for brief periods, create an inference only that

28 Barton worked for a number of ADT entities during the time period. Barton also
BartonFindingsfnl.d
ocx

20
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

failed to produce any information regarding whether those entities were participating
entities. Accordingly, the Committee did not abuse its discretion in denying Barton

3
4 pension benefits.
5
6

B.

Statutory Penalties

7
8

ERISA provides for statutory penalties based upon a pension administrator’s

9

refusal to comply with ERISA’s disclosure obligations. 29 U.S.C. § 1132(c)(1). In
10
11

order to recover statutory penalties, Plaintiff bears the burden of proving that he

12

made a written request of the plan administrator for documents, that the plan

13
14

administrator failed to provide such documents within 30 days and that he is a plan

15

“participant” for purposes of ERISA § 502(c). See Johnson v. Buckley, 356 F.3d

16

1067, 1077 (9th Cir. 2004).

“Participant” includes those persons who have a

17
18

“colorable claim” to benefits under the plan. Firestone, 489 U.S. at 118.

19

Here, in order to invoke statutory penalties, Barton must show that has a

20

colorable claim to prevail on his ERISA suit. Because he did not prevail on his

21
22
23
24

ERISA suit, he lacks standing to assert a violation of ERISA’s disclosure
requirements. Johnson, 356 at 1077.
Even assuming a violation of ERISA’s disclosure requirements, the decision

25
26

to impose sanctions rests in “sound discretion” of the trial court. 29 U.S.C. §1132(l).

27 Hemphill V. Estate of Ryskamp, 619 F. Supp. 2d 954, 975 (E.D. Cal. 2008) specifies
28
BartonFindingsfnl.d
ocx

four factors a court can take into account in exercising its discretion under ERISA
21
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

§ 502 (c): (1) “bad faith or intentional conduct on the part of the administrator; (2)
the length of the delay; (3) the number of requests made and documents withheld; (4)

3
4

and the existence of any prejudice to the participant or beneficiary.” Hemphill, 619

5 F. Supp. 2d at 975-976.
6
7
8
9
10

Although prejudice is not required to prevail on a section 1132(c) penalty
claim, most courts do inquire as to whether the claimant has suffered some
type of prejudice before exercising the discretion vested in them under section
1132(c).
Kaiser Permanent Employees Pension Plan v. Bertozzi, 849 F. Supp. 692, 702 (N.D.

11 Cal. 1994).
12
13

On January 19, 2012, Plaintiff wrote Ms. Ebert-Feldman and requested certain

14 documents. In his pointed letter, Barton sought “all plan documents, records and
15 other information affecting the claim per your document concerning Applying for
16
17

Benefits and Claim and Appeal Procedures.” (Trial Ex. K, p.2.) Specifically, Barton

18 requested: (1) Tyco International Summary Plan Description booklet; (2) Tyco’s
19

entire copy of pages 1 through 4 of the Social Security Form SSA-7005; (3) an

20
21

example of a pension benefit statement and written evidence “that should have been

22 included with the Summary Plan Description booklet;” and (4) an example of
23

application forms “that should have been provided by the service center…” (Trial

24
25

Ex. K, p.2.) Previously, on January 10, 2012, Barton had requested an extension of

26 time to file his appeal of the denial of pension benefits.
27

On February 21, 2012, Ms. Ebert-Feldman responded to Barton’s requests.

28
BartonFindingsfnl.d
ocx

22
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1
2

On behalf of the Committee, she granted Barton’s 60-day extension to file his
appeal. Her letter also states that she is enclosing documents. (Trial Ex. J, p. 2.)

3
4

The enclosed documents consisted of:

(1) a five-page Claim 2011-6 Security

5

Services Summary (Trial Ex. J, pp. 3-7) ; (2) Claim 2011-6 documents submitted by

6

Claimant (Barton) (Trial Ex. J, pp. 9-35) (3) documents from Claimant’s pension file
7
8

(Trial Ex. J, pp. 36-43); (4) Plan Documentation, including portions of The 1968

9

Plan, portions of an ADT Pension Plan, and The 1985 Plan; (Trial Ex. J, pp. 44- 61);

10
11
12
13

(5) The 1968 Plan in its entirety (Trial Ex. J, pp. 62-81); and, (6) The 1985 Plan in
its entirety (Trial Ex. J, pp. 82-133).
Plaintiff, on cross-examination, testified that when he referred to the “Tyco

14
15

International Summary Plan Description booklet,” he was referring to the pension

16 plan documents which pertained to him. (Reporter’s Transcript (“RT”) 6/11/13 p.
17

26, ll. 12-21). Barton sought the information because he wanted to know what the

18
19

Committee based its ruling upon. (RT 6/11/13 p.26, ll. 22-26.).

20

According to the documents enclosed in Ms. Ebert-Feldman’s February 21,

21

2012 letter, Barton did receive a copy of portions of both The 1968 Plan and The

22
23

1985 Plan. (Trial Ex. J, pp. 44-61.) He also received a copy of these documents in

24 their entirety.
25

(Trial Ex. J, pp. 62-133.)

According to Ms. Ebert-Feldman’s

testimony, she sought to provide Barton with all documents upon which the

26
27

Committee based its decision. (RT 6/11/13 at p. 66, ll. 5-11.) The only other

28 documents requested by Barton were his own social security documents, which are
BartonFindingsfnl.d
ocx

23
FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL

1

contained within Trial Exhibit J, and exemplars.12

2

Even accepting plaintiff’s view that Tyco failed to produce certain exemplars,

3
4

the Court finds no prejudice. Barton received The 1968 and 1985 Plans in their

5

entirety. He received portions of the same plans. Barton filed his appeal within the

6

requested time frame. He offers no arguments as to how the failure to provide the
7
8

exemplars inhibited his ability to prosecute his appeal. In addition, there is no

9

evidence of intentional malfeasance by Tyco. As such, even assuming that Barton

10
11

has standing to challenge the disclosure provisions and assuming the truth of his

12 arguments, the court declines to exercise its discretion to impose sanctions. For all
13 of these reasons, the court does not award plaintiff any statutory penalties under
14
15

section 502(c)(1) of ERISA.
Judgment is for Defendant.

16
17
18
19

Dated: July 19, 2013

20

___________________________
Beverly Reid O’Connell
United States District Judge

21
22
23
24
25
26
27

12

ERISA § 502 requires that any production be made within 30 days. 29 U.S.C. §
1132(c). Tyco produced the documents on the first business day after the thirtieth
28
day.
24
BartonFindingsfnl.d
ocx

FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER COURT TRIAL