Lance v. Hubbell Incorporated et al
Filing
33
ORDER denying 23 Motion for Partial Summary Judgment and granting 25 Motion for Summary Judgment. The Court enters judgment in favor of defendants and against plaintiff. The Court DIRECTS the Clerk of the Court to enter judgment. Signed by Judge David R. Herndon on 12/16/14. (klh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
JOSEPH LANCE,
Plaintiff,
v.
No. 14-0433-DRH
HUBBELL INCORPORATED, and
HUBBELL INCORPORATED RETIREMENT
PLAN FOR COLLECTIVELY BARGAINED
HOURLY EMPLOYEES,
Defendants.
MEMORANDUM and ORDER
HERNDON, District Judge:
I.
Introduction and Background
Pending before the Court are cross motions for summary judgment:
Plaintiff’s motion for partial summary judgment (Doc. 23) and defendants’ motion
for summary judgment (Doc. 25). Based on the following, the record and the
applicable case law, the Court grants defendants’ motion and denies plaintiff’s
motion.
On March 4, 2014, plaintiff Joseph Lance filed a two-count first amended
complaint against defendants Hubbell Incorporated and Hubbell Incorporated
Retirement Plan for Collectively Bargained Hourly Employees in the Saint Clair
County, Illinois Circuit Court (Doc. 2-1). Count 1 is for breach of contract and
Count 2 is vexatious refusal pursuant to 21 ILCS 5/155.
Page 1 of 10
The first amended
complaint contains a claim for disability benefits under an employer-sponsored
retirement plan. On April 14, 2014, defendants timely removed the case to this
Court based on federal question jurisdiction, 28 U.S.C. § 1331, as plaintiff’s claims
are pre-empted by the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et. seq. (Doc. 2). On May 9, 2014, plaintiff filed a
second amended complaint against defendants containing one count under ERISA
(Doc. 18). The second amended complaint alleges that plaintiff is entitled to a
benefit under the Plan for disability income; that defendants should not have
deducted workers’ compensation payments from any disability payment and that
deductions amounted to approximately $175,000. In addition to the $175,000 in
benefits, plaintiff seeks attorney’s fees, costs, and pre/post judgment interest.
On August 25, 2014, plaintiff moved for partial summary judgment (Doc.
23).
Plaintiff argues that the case has two issues: (1) the start of plaintiff’s
disability period and (2) whether defendants are entitled to an offset for workers’
compensation benefits. Plaintiff maintains that defendants are not entitled to an
offset and thus summary judgment should be entered in his favor.
Shortly
thereafter, defendants filed their motion for summary judgment (Doc. 25).
Defendants argue that the Retirement Plan properly withheld plaintiff’s workers’
compensation benefits from his disability retirement benefit and that the
Retirement Plan properly calculated the start of plaintiff’s disability retirement
benefit as the first month after his disability retirement date.
On September 25, 2014, the parties filed a joint stipulation (Doc. 30). The
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joint stipulation provides that the parties agree and stipulate to the following: (1)
that plaintiff was terminated by Hubbell on February 3, 2012; (2) that as a result of
the termination, plaintiff’s retirement date, pursuant to the Plan was March 1,
2012; (3) on February 4, 2014, it was determined that plaintiff was disabled and
therefore eligible for disability retirement benefits under the Plan; (4) plaintiff
received disability benefits for the period from March 2012 to the present
He
received a lump sum retroactive payment (with interest) for the period from March
2012 to June 2014.
Starting in July 2014, plaintiff began receiving monthly
disability retirement benefits; and (5) that there are no issues of fact and that the
only issue of law to be decided is that which is contained in the motions for
summary judgment: whether the Plan’s Retirement Committee was within its
authority to deduct plaintiff’s worker’s compensation benefits from his disability
retirement benefit.
As the motions are fully briefed, the Court turns to address the
merits of the motions.
II.
Facts 1
Lance is a former Wiegmann Hubbell employee who eased his work duties
for the company on September 30, 2008, though he remained employed by
Hubbell.
From November 2008 to July 2013, Lance received $1,627.24 per
month in workers’ compensation payments. Lance
settled his workers’
compensation claim and received a lump sum payment of $99,890 and after
attorney’s fees, Lance received $79,234.91.
1 These facts are not in dispute and merely provide background information regarding the case.
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Lance was terminated from his employment on February 3, 2012. Prior to
his termination in 2012, Lance continued to receive paid vacation, paid sick days
and bonuses. In 2009, Lance received $2,944.00 in paid vacation, $236.64 in
paid sick days and a $25.00 Christmas bonus for a total of $3,205.64. In 2010,
Lance received $2,422.40 in paid vacation, $242.24 in paid sick leave and $25.00
Christmas bonus for a total of $2,689.64.
In 2011, Lance received $2,422.40 in
paid vacation, $242.24 in paid sick days for a total of $2,664.64. In 2012, Lance
received a total of $2,422.40 in paid vacation.
In addition, from 2010-2011,
Hubbell contributed $16,667 to Lance’s healthcare coverage.
On February 4, 2014, the Plan determined that Lance was eligible for
disability retirement benefits under the Plan. On June 10, 2014, Lance was paid
$3,386.34, plus interest, for disability retirement benefits for the period of March
1, 2012 – June 2014. In July 2014, Lance’s regular monthly disability retirement
benefit of $159.35 began.
III.
Summary Judgment Standard
A motion for summary judgment asks that the Court find that a trial based
on the uncontroverted and admissible evidence would-as a matter of law-conclude
in the moving party's favor and is thus unnecessary. See Fed. R. Civ. Pro. 56(c).
When evaluating a motion for summary judgment, the Court must give the
non-moving party the benefit of all reasonable inferences from the evidence
submitted and resolve Aany doubt as to the existence of a genuine issue for trial ...
against the moving party.@ Celotex Corp. v. Catrett, 477 U.S. 317, 330 n. 2, 106
Page 4 of 10
S.Ct. 2548, 91 L.Ed.2d 265 (1986). Nevertheless, Athe Court's favor toward the
non-moving party does not extend to drawing inferences that are supported by only
speculation or conjecture.@ Singer v. Raemisch, 593 F.3d 529, 533 (7th Cir. 2010).
The non-moving party must set forth specific facts showing that there is a material
issue for trial. Fed. R. Civ. Pro. 56(e); Celotex, 477 U.S. 317, 106 S.Ct. 2548, 91
L.Ed.2d 265. The key inquiry is the existence of evidence to support a plaintiff's
claims or affirmative defenses, not the weight or credibility of that evidence, both of
which are assessments reserved to the trier of fact. See Schacht v. Wis. Dep't of
Corrections, 175 F.3d 497, 504 (7th Cir. 1999).
Cross-motions for summary judgment do not automatically mean that all
Franklin v. City of Evanston, 384
questions of material fact have been resolved.
F.3d 838, 842 (7th Cir. 2004). The Court must evaluate each motion
independently, making all reasonable inferences in favor of the nonmoving party
with respect to each motion. Id. at 483.
IV.
Under
ERISA,
judicial
Analysis
review
of
a
plan
administrator's
benefits
determination is de novo unless the plan grants discretionary authority to the
administrator. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109
S.Ct. 948, 103 L.Ed.2d 80 (1989); Diaz v. Prudential Ins. Co. of Am., 424 F.3d 635,
636-37 (7th Cir. 2005).
Where a qualifying plan gives the administrator
discretionary authority to determine eligibility for benefits, the court shall review
the administrator's decision to deny benefits under the arbitrary and capricious
Page 5 of 10
standard.
Mote v. Aetna Life Ins. Co., 502 F.3d 601, 606 (7th Cir.2007); Hackett
v. Xerox Corp., 315 F.3d 771, 773 (7th Cir. 2003). And to determine whether a
plan administrator has discretionary authority, the court looks to the plain
language of the plan. Postma v. Paul Revere Life Ins. Co., 223 F.3d 533, 538 (7th
Cir. 2000).
Here, the Court reviews the decision regarding the benefits under the
arbitrary and capricious standard as the Plan clearly provides for discretionary
authority. 2 Under the arbitrary and capricious standard the Court may overturn
an administrator's decision only if the decision is Adownright unreasonable.@ Mote,
502 F.3d at 606. This standard is deferential, but it is not a Arubber stamp,@ as
the Court will not uphold a denial of benefits if the plan administrator fails to
articulate specific reasons for rejecting evidence and denying the claim.
Black v.
Long Term Disability, 582 F.3d 738, 745 (7th Cir.2009) (citing Williams v. Aetna
Life Ins. Co., 509 F.3d 317, 324 (7th Cir. 2007)). The court's ultimate goal is to
ensure that the plan administrator's decision has rational support in the record.
See Speciale v. Blue Cross & Blue Shield Ass'n, 538 F.3d 615, 621 (7th Cir. 2008);
Exbom v. Central States S.E. & S.W. Areas Health & Welfare Fund, 900 F.2d 1138,
2 The Plan provides in part: “The Retirement Committee shall be the Plan administrator and shall
have all such powers as may be necessary to carry out the provisions…. (i) To have the discretion to
construe and interpret the terms of the Plan, to determine the eligibility for benefits and the amount
of benefits under the Plan. Plan § 9.01(b) (Docs. 24-3 & 29-1). Further, the Plan provides in part:
“The Retirement Committee shall have discretionary authority to interpret the Plan and to make
factual determinations (including but not limited to, determination of an individual’s eligibility for
Plan participation, the right and amount of any benefit payable under the Plan and the date on which
any individual ceases to be a Participant). The determination of the Retirement Committee as to the
interpretation of the Plan or any disputed question shall be conclusive and final to the extent
permitted by applicable law.” Plan § 9.02(f) (Docs. 24-3 & 29-1).
Page 6 of 10
1143 (7th Cir. 1990) (explaining that there must be a rational connection between
the facts found and the administrator's decision). In making its determination, a
reviewing court must consider: (1) the administrator's impartiality; (2) the
complexity of the issues; (3) the process afforded the parties; (4) the extent to which
the administrator utilized experts; and (5) the soundness of the administrator's
rationale. Chalmers v. Quaker Oats Co., 61 F.3d 1340, 1344 (7th Cir. 1995)).
As stipulated by the parties, the Court, in deciding the cross motions for
summary judgment, must determine whether the Plan’s Retirement Committee was
within its authority to deduct plaintiff’s workers’ compensation benefits from his
disability retirement benefit. Plaintiff argues that Schedule H of the Plan provides
that
defendants
should
not
deduct
worker’s
compensation
payments.
Specifically, plaintiff maintains that Schedule H by its terms “restates” the original
Plan, therefore, the original Plan’s terms do not apply and that although Section
4.05 of the original Plan does allow for it to be reduced for worker’s compensation
payments, it does have a limitation. The Court rejects all of plaintiff’s arguments
as they miss the mark.
Section 4.03 of Schedule H of the Plan reads 3:
For the purposes of Section 4.03 of the Plan, an Employee
under this Schedule H, who (i) is actively performing his regular
duties; (ii) has not attained the age 65; (iii) has not incurred a
Termination of Employment; (iv) has fifteen (15) Years of Vesting
Service (determined as of the last day the Participant was actively
performing service); and (v) who becomes Totally and Permanently
3 A review of Section 4.03 of the Plan and Section 4.03 of Schedule H reveals that the provisions are
different.
Page 7 of 10
Disabled and remains so disabled for a period of at six (6) consecutive
months, shall be entitled to a monthly disability retirement benefit as
determined under Section 4.01 of this Schedule H based upon his
Years of Benefit Service accrued to date. Years of Benefit Service
shall be determined as of the Participant’s disability retirement date.
While, Section 4.05 of the Plan states:
Unless the applicable Schedule with respect to a Covered Unit
provides otherwise, a Participant who is entitled to a retirement or
disability benefit under any company sponsored disability plan or
Workers’ Compensation program of an Affiliated Company to which
an Affiliated Company contributes and which is attributable to a
period of Credited Service for which benefits are provided under this
Plan, shall have the amount of benefit that such Participant is
otherwise entitled to hereunder reduced by the amount received from
such other disability or Workers’ Compensation program in the form
of annuity based on the Actuarial Equivalent assumptions used to
derive a lump sum, to be determined when actual payments under the
Plan commence.
As stated previously, the Retirement Committee is entitled to deference in
interpreting the Plan.
The Retirement Committee explained its reasoning at
length:
The Committee previously agreed that Mr. Lance is eligible for
disability benefits under Section 4.03 of Schedule H of the Plan.
Schedule H contains the special provisions that apply to Mr. Lance’s
covered group instead of the general provisions in Section 4.03 of the
Plan.
Although you correctly note that Section 4.03 of Schedule H
says that an employee who meets the requirements for disability
retirements shall be entitled to a monthly disability benefit as
determined under Section 4.01 of Schedule H, the word “shall” does
not mandate that the offset provisions in Section 4.05 are ignored.
Instead, the Plan, like any contract, must be interpreted based on all
its provisions. …
Further, the Retirement Committee explained: “the Committee cannot
Page 8 of 10
disregard the application of the general Plan provision at Section 4.05 unless
Schedule H specifically provides that Section 4.05 does not apply. As you know, it
does not.”
The Court finds that the Retirement Committee’s decision regarding the
benefits in this case was within the discretion afforded to it through the Plan’s
provisions and was a correct interpretation of its own Plan and applicable
schedules.
It is clear to the Court that Schedule H is meant to be an
amendment/schedule to the Plan for certain covered employees (“Covered Unit”)
and not meant to constitute/replace the Plan as a whole. Specifically, it states:
“Hubbell Incorporated, a Connecticut corporation, hereby amends and restates the
Hubbell
Incorporated
Retirement
Plan
for
Collectively
Bargained
Hourly
Employees as it applies to this Covered Unit.” This Schedule H did not delete
Section 4.05 because it simply did not restate it in the schedule document; rather it
amended the sections that were listed in the Schedule H. By following plaintiff’s
logic, that because Schedule H does not repeat each and every provision of the Plan,
then those provisions not listed in Schedule H do not apply or are modified by it,
would defeat the purpose of Schedule H and of the Plan.
The Retirement
Committee’s explanation is supported by the language of the Plan and is a rational
interpretation of the Plan. Thus, the Retirement Committee properly exercised its
discretionary authority to interpret the Plan as to plaintiff’s benefits.
V.
Conclusion
Accordingly, the Court DENIES plaintiff’s motion for partial summary
Page 9 of 10
judgment (Doc. 23) and GRANTS defendants’ motion for summary judgment (Doc.
25). The Court finds in favor of defendants Hubbell Incorporated and Hubbell
Incorporated Retirement Plan for Collectively Bargained Hourly Employees and
against plaintiff Joseph Lance on plaintiff’s second amended complaint.
The
Court DIRECTS the Clerk of the Court to enter judgment reflecting the same.
IT IS SO ORDERED.
Signed this 16th day of December, 2014.
Digitally signed by
David R. Herndon
Date: 2014.12.16
08:42:00 -06'00'
United States District Court
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