Ritter v. IBM Corporation Pension Plan Administrator

Filing 30

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 1/14/2016. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
MARTHA RITTER
:
v.

:

Civil Action No. DKC 14-2126

:
IBM CORPORATE PENSION PLAN
ADMINISTRATOR

:

MEMORANDUM OPINION
Presently pending and ready for resolution in this case
arising under the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1001 et seq., is a motion to dismiss
or, in the alternative, for summary judgment filed by Defendant
IBM

Corporate

Pension

“Defendant”).1
briefed,

and

necessary.

(ECF
the
Local

Plan
No.

court
Rule

Administrator

11).
now

The

rules,

105.6.

(“Administrator”

issues
no

For

have

hearing

the

been

being

following

or

fully
deemed

reasons,

Defendant’s motion will be granted.
I.

Background
Unless

otherwise

noted,

the

facts

outlined

here

are

undisputed and are construed in the light most favorable to
Plaintiff Martha Ritter (“Plaintiff”).

Plaintiff worked for IBM

as a systems engineer from July 1966 through August 1975.

1

(ECF

Defendant notes that the official name of the plan in
question is the “IBM Retirement Plan.” (ECF No. 11, at 1 n.1).

Nos. 11-1, at 2; 23, at 3).

Plaintiff returned to work at IBM

for approximately three months in 1994.

Prior to 1989, IBM

offered a retirement plan (the “Plan”) that only provided fully
vested retirement benefits to employees who worked at IBM for
ten

years

or

more.

When

Plaintiff

left

IBM

in

1975,

her

retirement benefits had not vested because she had been employed
there for just over nine years.
to

provide

service.

vested

retirement

In 1989, the Plan was amended
benefits

(ECF No. 11-2, at 80).

after

five

years

of

The Plan credited past service

of an employee who, like Plaintiff, incurred a substantial break
in

service

continuous

at

IBM

service

if

she

either

subsequent

to

“complete[d]
the

Break

1

in

year

of

Continuous

Service, or [] reach[ed] age 65 while a Regular Employee of the
Company.”2

(Id. at 58).

Plaintiff alleges that, “[a]s a condition of [her] agreeing
to reemployment with IBM, . . . IBM agreed to vest [her] in
their Employee Retirement Plan immediately upon [her] return to
employment on February 1, 1994.”
in original)).

(ECF No. 23-2, at 2 (emphasis

According to Plaintiff, “IBM accomplished this

by changing [her] ‘service computation date.’”

(Id.).

She

contends that, in order to trigger vesting artificially, IBM
2

This provision applies if an employee “incurs a Break in
Continuous Service . . . of more than 5 years or more than prior
Continuous Service whichever is greater.”
(ECF No. 11-2, at
58).
Plaintiff’s 18 year break in service triggers this
provision, as she was previously employed for only nine years.
2

changed

her

records

to

indicate

that

she

had

been

working

continuously at IBM for nine years since January 1985, rather
than for a nine year period from 1966 to 1975.

She claims that

before she accepted a buyout in 1994, she was assured that her
benefits were vested.
three

months

regarding

her

Later, once Plaintiff left IBM after

employment
expected

in

1994,

she

retirement

requested

income.

In

information

response,

she

received a “vested rights estimate” that indicated she would
receive $1,952.16 annually upon retirement.
2).

Plaintiff

aforementioned

contends

revised

this

employment

(ECF No. 23-3, at

estimate

records

per

utilized
her

the

agreement.

The document included a disclaimer explaining:
These calculations are based on information
provided from your personnel and payroll
records and may be subject to errors in the
accumulation of data. . . . These ESTIMATES
are
prepared
for
retirement
PLANNING
purposes only.
Your actual IBM retirement
calculations will be given to you when you
retire.
. . . The company reserves the
right to amend the Plan at any time for any
purpose.
(Id.).
Plaintiff turned 65 on December 30, 2009.

In January 2010,

she wrote to IBM requesting payment of her retirement benefits.
In February 2010, IBM sent Plaintiff a check for $554.70 and a
letter explaining that this was a one-time lump payment because
her retirement benefits were not fully vested.

3

(ECF No. 11-2,

at

20-23).

On

approximately

March

31,

Plaintiff

arguing that her retirement benefits had vested.

wrote

IBM

(Id. at 19).

In response, the Administrator sent a letter dated April 27
informing Plaintiff that he was “unable to grant [her] request
for a pension” and that she could appeal the denial “within 60
days after receiving” the notice.

(Id. at 14, 16).

According

to Plaintiff, she did not receive the notice until February 10,
2011 due to problems she was experiencing receiving her mail.
(ECF No. 23-2, at 4).

On April 1, 2011, Plaintiff sent an

appeal (ECF No. 11-2, at 10), which the Administrator denied on
June 30 (id. at 32-34).

In its denial letter, the Administrator

stated that the estimate of benefits Plaintiff received in 1994
was incorrect.

The letter also informed Plaintiff that she “may

have a right to file suit in state or federal court [under
ERISA] since [her] appeal has been denied.”

(Id. at 34).

Plaintiff, proceeding pro se at the time, commenced this
suit on June 30, 2014.

(ECF No. 1).

Although Plaintiff avers

that “the complaint is brought under [ERISA §] 502(a)(3),” her
request to recover benefits under the Plan is properly brought
under § 502(a)(1)(B).3

On January 31, 2015, Defendant filed the

pending motion to dismiss or, in the alternative, for summary
judgment.

(ECF

No.

11).

Defendant

3

also

filed

the

Defendant does not oppose construing the complaint as
being properly brought under § 502(a)(1)(B), and the court will
do so given Plaintiff’s pro se status at the time of filing.
4

administrative

record

appeal for benefits.
of

time,

used

to

assess

(ECF No. 14).

Plaintiff,

represented

Plaintiff’s

request

and

After receiving extensions
by

counsel,

responded

in

opposition on October 30 (ECF No. 23), and Defendant replied
(ECF No. 29).
II.

Standard of Review
Defendant has moved to dismiss or, in the alternative, for

summary judgment.

Ordinarily, a court cannot consider matters

outside the pleadings or resolve factual disputes when ruling on
a Rule 12(b)(6) motion to dismiss.

See Bosiger v. U.S. Airways,

510 F.3d 442, 450 (4th Cir. 2007).

If the court does consider

matters outside the pleadings, “the motion must be treated as
one for summary judgment under Rule 56,” and “[a]ll parties must
be given a reasonable opportunity to present all the material
that is pertinent to the motion.”

Fed.R.Civ.P. 12(d); see also

Finley Lines Joint Protective Bd. Unit 200 v. Norfolk S. Corp.,
109 F.3d 993, 997 (4th Cir. 1997) (“[A] Rule 12(b)(6) motion to
dismiss supported by extraneous materials cannot be regarded as
one

for

summary

judgment

until

the

district

court

acts

to

convert the motion by indicating that it will not exclude from
its

consideration

materials.”).

It

of

the

motion

is

appropriate

the
to

supporting

consider

the

extraneous
extraneous

materials submitted by Defendant, and Plaintiff had notice by
virtue of the motion filed by Defendant.
5

See Warner v. Quilo,

No. ELH-12-248, 2012 WL 3065358, at *2 (D.Md. July 26, 2012)
(“When

the

movant

expressly

captions

its

motion

‘in

the

alternative’ as one for summary judgment, and submits matters
outside the pleadings for the court’s consideration, the parties
are deemed to be on notice that conversion under Rule 12(d) may
occur[.]” (quoting Laughlin v. Metro. Wash. Airports Auth., 149
F.3d 253, 261 (4th Cir. 1998))).

Accordingly, Defendant’s motion

will be treated as one for summary judgment.
Summary judgment is appropriate under Federal Rule of Civil
Procedure Rule 56(a) when there is no genuine dispute as to any
material

fact,

and

the

moving

party

is

plainly

judgment in its favor as a matter of law.

entitled

In

to

Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 249 (1986), the Supreme Court
of the United States explained that, in considering a motion for
summary judgment, the “judge’s function is not himself to weigh
the

evidence

determine

and

whether

determine

the

there

a

is

truth

genuine

of

the

issue

matter

for

but

trial.”

to
A

dispute about a material fact is genuine “if the evidence is
such

that

nonmoving

a

reasonable

party.”

jury

Id.

at

could

248.

return
Thus,

a

“the

verdict
judge

for

the

must

ask

himself not whether he thinks the evidence unmistakably favors
one

side

return

a

or

the

verdict

presented.”

other
for

but
the

whether
[nonmoving

Id. at 252.
6

a

fair-minded
party]

on

jury

the

could

evidence

In undertaking this inquiry, a court must view the facts
and the reasonable inferences drawn therefrom “in the light most
favorable to the party opposing the motion.”

Matsushita Elec.

Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)
(quoting

United

States

v.

Diebold,

Inc.,

369

U.S.

654,

655

(1962)); see also EEOC v. Navy Fed. Credit Union, 424 F.3d 397,
405 (4th Cir. 2005).
evidence

in

support

The mere existence of a “scintilla” of
of

the

nonmoving

party’s

case

is

not

sufficient to preclude an order granting summary judgment.

See

Liberty Lobby, 477 U.S. at 252.
A “party cannot create a genuine dispute of material fact
through mere speculation or compilation of inferences.”

Shin v.

Shalala, 166 F.Supp.2d 373, 375 (D.Md. 2001) (citation omitted).
Indeed,

this

court

has

an

affirmative

obligation

to

prevent

factually unsupported claims and defenses from going to trial.
See

Drewitt

v.

Pratt,

999

F.2d

774,

778–79

(4th

Cir.

1993)

(quoting Felty v. Graves–Humphreys Co., 818 F.2d 1126, 1128 (4th
Cir. 1987)).
III. Analysis
A.

Statute of Limitations

Defendant argues that Plaintiff’s suit, filed on June 30,
2014, is time-barred because it was filed more than three years
after Plaintiff “was on notice that her benefits were less than
she expected” in February 2010.
7

(See ECF No. 11-1, at 9).

Plaintiff

counters

that

her

claim

did

not

accrue

“Defendant issued its final denial” on June 30, 2011.

until

(ECF No.

23, at 9).
Because ERISA does not include a statute of limitations for
private causes of action to recover benefits, courts look to the
law of the forum state for an analogous statute of limitations.
See White v. Sun Life Ins. Co. of Canada, 488 F.3d 240, 245 (4th
Cir. 2007), abrogated on other grounds by Heimeshoff v. Hartford
Life & Acc. Ins. Co., 134 S.Ct. 604 (2013); Bond v. Marriott
Intern., Inc., 971 F.Supp.2d 480, 488 (D.Md. 2013).
agree

that

breach

of

limitations

Maryland’s

three-year

statute

contract

actions

applies

‘clock

generally

begins

plaintiff can first file suit.’”

of

here.
to

run

The parties

limitations
“The
at

statute

the

time

for
of
the

England v. Marriott Intern.,

Inc., 764 F.Supp.2d 761, 770 (D.Md. 2011) (quoting White, 488
F.3d

at

245).

“This

means

that

the

statute

of

limitations

begins to run at the moment when the plaintiff may seek judicial
review,

because

ERISA

plaintiffs

must

generally

administrative remedies before seeking judicial relief.”

exhaust
White,

488 F.3d at 246 (citing Makar v. Health Care Corp. of the MidAtlantic (Carefirst), 872 F.2d 80, 81 (4th Cir. 1989)).

Thus,

under the “general rule” in the United States Court of Appeals
for the Fourth Circuit, Plaintiff timely filed her action within

8

three

years

after

the

Administrator

issued

his

final

administrative denial of her claim on June 30, 2011.
Nevertheless, Defendant argues that the court should use an
“alternative

approach”

to

determine

when

Plaintiff’s

claim

accrued before the final denial of her claim because she was on
notice that her benefits were less than she expected in February
2010.

Although the Fourth Circuit recognizes such an approach,

the cases Defendant cites illustrate how it is an exception to
the

general

rule

and

not

applicable

here.

For

example,

in

Cotter v. Eastern Conference of Teamsters Retirement Plan, 898
F.2d

424,

(4th

429

Cir.

1990),

the

Fourth

Circuit,

after

recognizing that the “mandate” to apply the general rule within
the Fourth Circuit “is clear,” noted that “its application to
the

facts

of

the

case

before

[it

was]

tricky

because

specification of the date at which [the plaintiff’s] claim for
benefits

‘was

difficulties

denied’

in

is

determining

somewhat

elusive.”

when

claim

the

To

was

avoid

denied,

the

Fourth Circuit applied the alternative approach of running the
statute of limitations from when the plaintiff should have been
alerted to a denial of a claim.
Mid-Atlantic,

Inc.,

Judge

applied

Blake

118

Id.

F.Supp.2d

the

Similarly, in Cecil v. AAA
659,

alternative

666-67
approach

(D.Md.

2000),

because

the

plaintiff never filed a formal request for benefits other than
the lawsuit.

See also Wallace v. Freight Drivers and Helpers
9

Local No. 557 Pension Fund, No. 11-2062-JKB, 2012 WL 2571223, at
*7 (D.Md. July 2, 2012) (holding that the plaintiff did not have
“knowledge of a clear repudiation of rights under the plan”
because the plaintiff’s “claim for additional benefits was still
subject to further administrative review”); Herman v. Lincoln
Nat. Life Ins. Co., No. 11-cv-03378-AW, 2012 WL 1999879, at *3
(D.Md. June 4, 2012) (“Where, as here, the [p]laintiff has never
made a claim for benefits and been denied, the Fourth Circuit
applies

an

alternative

approach.”).

Here,

Plaintiff

made

a

separate claim for benefits and there is no such difficulty in
determining

that

the

Administrator

administrative denial on June 30, 2011.
34).
and

issued

his

final

(ECF No. 11-2, at 32-

Accordingly, the Fourth Circuit’s “general rule” applies,
Plaintiff

timely

filed

her

claim

within

the

three-year

statute of limitations period.
B.
In

Denial of Plaintiff’s Benefits
reviewing

a

plan

administrator’s

decision

to

deny

benefits, a court must first determine whether the plan gives
the

administrator

discretionary

eligibility for benefits.

authority

to

determine

Booth v. Wal-Mart Stores, Inc., 201

F.3d 335, 340-41 (4th Cir. 2000).

If the plan does not give

discretionary authority, the court reviews the employee’s claim
de novo as it would any other contract claim – by looking to the
terms

of

the

plan

and

other

manifestations
10

of

the

parties’

intent.

Id. at 341.

If, on the other hand, the plan by its

terms confers discretion on the administrator, the court reviews
the administrator’s decision for abuse of discretion.

Champion

v. Black & Decker (U.S.) Inc., 550 F.3d 353, 355 (4th Cir. 2008);
Booth, 201 F.3d at 341.

Here, the Plan gives the Administrator

“the full power, authority and discretion” to administer the
Plan,

“including

the

(ECF No. 11-2, at 52).

review

of

claims”

such

Plaintiff’s.

Plaintiff does not dispute that the Plan

gives the Administrator discretionary power.
Administrator’s

as

decision

will

be

Accordingly, the

reviewed

for

abuse

of

discretion.
Under the abuse of discretion standard, an administrator’s
decision will not be disturbed if it is reasonable.
F.3d at 342.

Booth, 201

“The administrator’s decision is reasonable ‘if it

is the result of a deliberate, principled reasoning process and
if it is supported by substantial evidence.’”

DuPerry v. Life

Ins.

(4th

Co.

of

N.

America,

632

F.3d

860,

869

Cir.

2011)

(quoting Bernstein v. CapitalCare, Inc., 70 F.3d 783, 788 (4th
Cir. 1995)).

“[T]he abuse-of-discretion standard requires that

a court ‘not reverse merely because it would have come to a
different result in the first instance.’”

Boyd v. Bell, 796

F.Supp.2d 682, 689 (D.Md. 2011) (quoting Evans v. Eaton Corp.
Long Term Disability Plan, 514 F.3d 315, 322 (4th Cir. 2008)).
“court

is

not

permitted

to

re-weigh
11

the

evidence

A

itself.”

Evans, 514 F.3d at 325.

The Fourth Circuit has set forth a

nonexclusive list of factors that a court may consider when
determining

whether

a

plan

administrator’s

decision

is

reasonable:
(1) the language of the plan; (2) the
purposes and goals of the plan; (3) the
adequacy of the materials considered to make
the decision and the degree to which they
support it; (4) whether the fiduciary’s
interpretation was consistent with other
provisions in the plan and with earlier
interpretations of the plan; (5) whether the
decisionmaking process was reasoned and
principled; (6) whether the decision was
consistent
with
the
procedural
and
substantive requirements of ERISA; (7) any
external standard relevant to the exercise
of the discretion; and (8) the fiduciary’s
motives and any conflict of interest it may
have.
Booth, 201 F.3d at 342-43.
Defendant
benefits

is

argues

that

reasonable

provision of the Plan.
Article

10(A)

of

the

the

decision

because

it

deny

based

“is

to

on

Plaintiff’s
an

explicit

The April 2010 denial letter quotes
Plan,

regarding

the

manner

in

which

creditable years of service are calculated when there has been a
break in service of more than 5 years.”

(ECF No. 11-1, at 11).

Plaintiff does not contend that the Administrator’s decision was
an unreasonable application of the Plan to her actual employment
history.
unreasonable

Rather,
because

Plaintiff
it

is

asserts
contrary

12

that
to

the

the

denial

was

assurances

and

estimates she received in 1994; Plaintiff avers that she was
promised that her benefits would vest immediately upon returning
to work for IBM in 1994.

(ECF No. 23, at 11-12).

Plaintiff

has, however, sued the Plan Administrator under ERISA, and not
her employer for a breach of contract.

See Grover v. Comdial

Corp., No. 3:01cv00035, 2002 WL 1066951, at *4 (W.D.Va. May 23,
2002) (allowing the plaintiff to bring a breach of contract
claim against an employer, rather than an ERISA claim against a
plan administrator, because “the relief, while it is measured in
part by the benefits the plaintiff would have received, depends
not

on

a

resolution

of

any

question

involving

ERISA

interpretation; rather, it depends on a resolution of whether an
employment contract has been breached”).

Plaintiff also argues

that a conflict of interest exists because the Administrator
administers the Plan and is employed by IBM.

As a result,

according to Plaintiff, the Administrator did not give her claim
for benefits a “full and fair review.”
A
denial

review
of

Administrator

of

the

record

Plaintiff’s
applied

the

shows

benefits
Plan’s

(Id. at 13).
that

the

was

reasonable.

unambiguous

Administrator’s

and

The
explicit

language to Plaintiff’s employment history, determining that she
was not entitled to full retirement benefits based on her years
of service.

As discussed above, Plaintiff does not dispute that

this is the correct application of the Plan’s language to her
13

actual employment history.

The information Plaintiff received

in 1994, which was merely an estimate and included a disclaimer
about potential errors, does not alter the explicit language of
the Plan.

Cf. Pierce v. Sec. Trust Life Ins. Co., 979 F.2d 23,

29 (4th Cir. 1992) (noting that “all benefits plans under ERISA
[must]

be

established

instrument”

such

that

and

maintained

oral

pursuant

modifications

to

are

a

not

written

allowed).

There is no indication that an administrator of the Plan has
ever

applied

changed

the

its

vesting

provisions

interpretation

of

differently

the

vesting

or

otherwise

requirements.

Therefore, the language of the Plan supports the reasonableness
of the Administrator’s decision.
In addition, the Administrator’s decisionmaking process was
reasoned, principled, and provided Plaintiff with significant
procedural

protections

and

an

opportunity

to

be

heard.

Plaintiff first learned that she would not be receiving her
expected benefits in February 2010.
She

then

requested

another

(ECF No. 11-2, at 20-30).
determination,

which

the

Administrator provided in writing and with an opportunity to
appeal.

(Id. at 14-15).

Plaintiff appealed the decision, and

the Administrator considered her appeal without challenging its
timeliness even though it was sent approximately one year after
the initial denial.

In deciding the appeal, the Administrator

“review[ed] the information [Plaintiff] provided, [his] records,
14

and the Plan’s rules.”
IBM

agreed

to

(Id. at 32-34).

alter

her

effective

Plaintiff argued that

service

dates,

provided a copy of the estimate she received in 1994.
11-2,

at

11-13).

Plaintiff

did

not

provide

evidence regarding the alleged agreement.

any

and

she

(ECF No.
additional

In fact, her offer

letter from IBM in 1994 makes no mention of any change to the
vesting

of

Plaintiff’s
determined

her

benefits.

evidence
that

in

the

his

1994

The

Administrator

decisionmaking

estimate

was

considered

process,

erroneous

and

he

because

it

incorrectly assumed that Plaintiff worked for a full year in
1994.

(ECF No. 11-2, at 32-34).

Plaintiff’s

limited

evidence

of

He ultimately decided that
vesting

was

not

enough

to

overcome the explicit language of the Plan and her undisputed
employment history.
Moreover, despite Plaintiff’s conclusory assertions of a
conflict of interest, there is “no evidence raising a concern”
that a potential conflict improperly influenced the decision.
See Champion, 550 F.3d at 362 (reviewing evidence of a conflict
of interest as a factor in determining the reasonableness of a
plan

administrator’s

termination

of

benefits).

The

Administrator gave Plaintiff multiple opportunities to be heard
and

provided

balanced,

well-reasoned

written

determinations.

Plaintiff “provides no contrary evidence tending to show” that
Defendant’s potential conflict “affected the benefits decision.”
15

Id. (citation and internal quotation marks omitted).

The Fourth

Circuit

may

has

held

that

a

conflict

of

interest

be

a

“tiebreaker when the other factors are closely balanced.”

Id.

(citing

117

Metro.

(2008)).

Life

Ins.

Co.

v.

Glenn,

554

U.S.

105,

Here, “the factors are not closely balanced” because

Defendant gave Plaintiff a full and fair opportunity to be heard
and

“provided

denying

a

further

language.”

Id.

well-reasoned
benefits,

justification

based

on

the

for

record

its
and

decision
the

Plan

Accordingly, the Administrator did not abuse

his discretion in denying Plaintiff’s benefits under the Plan.
IV.

Conclusion
For the foregoing reasons, the motion to dismiss or, in the

alternative, for summary judgment filed by Defendant will be
granted.

A separate order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

16