Wolf v. Causley Trucking, Inc. et al
ORDER Adopting 47 Report and Recommendation, Granting Defendant's 40 Motion for Summary Judgment, and Denying Plaintiff's 39 Motion to Vacate the Administrative Decision. Signed by District Judge Thomas L. Ludington. (KWin)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
FRANCES M. WOLF,
Case No. 15-cv-12530
Honorable Thomas L. Ludington
CAUSLEY TRUCKING, INC, et al.,
ORDER ADOPTING REPORT AND RECOMMENDATION,
GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT, AND
DENYING PLAINTIFF’S MOTION TO VACATE THE ADMINISTRATIVE DECISION
Randy Rieck was a former Vice President and Director of Maintenance at Defendant
Causley Trucking, a business owned by Mr. Rieck’s uncle, Defendant Gregory Causley. Compl.
¶¶ 10-11. Mr. Rieck passed away on August 7, 2014. Id. at ¶ 9. After his death, Mr. Rieck’s
surviving spouse, Plaintiff Frances Wolf, applied for benefits under Causley Trucking’s Death
Benefit Only Plan (the “Plan”). Wolf was awarded $206,405.39. Unsatisfied with the benefits
determination, Wolf filed an appeal with Causley, who upheld the benefits determination. Wolf
proceeded to file suit in Michigan state court, which was subsequently removed by Defendants to
this Court on July 16, 2015, who alleged that Wolf’s claims were preempted by the Employee
Retirement Income Security Act (“ERISA”). Wolf then filed an amended complaint on August
On August 31, 2015 Defendants moved to dismiss all but the first count of Wolf’s
amended complaint, or all but Plaintiff’s claim that Defendants wrongfully denied her benefits
under the plan pursuant to ERISA. See ECF No. 11. Wolf then moved to remand the action to
State Court on September 17, 2015. See ECF No. 13. On February 5, 2016, Wolf’s motion to
remand was denied, and Defendants’ motion to dismiss was granted in part and denied in part.
See ECF No. 21. Plaintiff’s denial of benefits claim (Count I) and her estoppel claim (Count IV)
survived in their entirety, and her breach of fiduciary duty claim (Count II) survived in part.
The matter was referred to magistrate judge Patricia T. Morris. See ECF No. 31. On
August 16, 2016 the magistrate judge issued an order denying Plaintiff’s procedural challenge,
and determining that discovery outside of the record was not justified and would not be
permitted as to Count I. See ECF No. 34. The parties then filed cross-motions for summary
judgment on December 16, 2016. See ECF Nos. 39, 40. On March 23, 2017 the magistrate judge
issued her report, recommending that Defendants’ motion be granted and Plaintiff’s motion be
denied. See Rep. & Rec., ECF No. 47. Plaintiff timely filed objections. See ECF No. 48. For the
reasons stated below, Plaintiff’s objections will be overruled and the report and recommendation
will be adopted.
In her report and recommendation, the Magistrate Judge has summarized the factual and
procedural background of the parties’ dispute.
Because neither party has objected to that
summary, it is adopted in full.
Pursuant to Federal Rule of Civil Procedure 72, a party may object to and seek review of
a magistrate judge’s report and recommendation. See Fed. R. Civ. P. 72(b)(2). Objections must
be stated with specificity. Thomas v. Arn, 474 U.S. 140, 151 (1985) (citation omitted). If
objections are made, “[t]he district judge must determine de novo any part of the magistrate
judge’s disposition that has been properly objected to.” Fed. R. Civ. P. 72(b)(3). De novo review
requires at least a review of the evidence before the magistrate judge; the Court may not act
solely on the basis of a magistrate judge’s report and recommendation. See Hill v. Duriron Co.,
656 F.2d 1208, 1215 (6th Cir. 1981). After reviewing the evidence, the Court is free to accept,
reject, or modify the findings or recommendations of the magistrate judge. See Lardie v. Birkett,
221 F. Supp. 2d 806, 807 (E.D. Mich. 2002).
Plaintiff’s first objection concerns her claim that she was wrongfully denied benefits
under the Plan pursuant to ERISA. Plaintiff argues that in recommending denial of her claim the
magistrate judge erred in focusing too narrowly on the language of the Plan, and did not
sufficiently consider general concepts of fairness. Plaintiff essentially argues that because of
Defendant Causley’s conflict of interest and his changing statements regarding the amount of
benefits expected to be payable to Plaintiff, a more exacting standard of review should apply.
Plaintiff’s argument is without merit. ERISA’s civil enforcement provision permits a
participant or beneficiary to bring a civil suit “to recover benefits due him under the terms of his
plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits
under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B) (emphasis added). “ERISA does not
mandate that employers provide any particular benefits, and does not itself proscribe
discrimination in the provision of employee benefits.” Shaw v. Delta Air Lines, Inc., 463 U.S.
85, 91 (1983). “Under the arbitrary-and-capricious standard, the determination of an
administrator will be upheld if it is rational in light of the plan’s provisions.” McClain v. Eaton
Corp. Disability Plan, 740 F.3d 1059, 1064 (6th Cir. 2014) (emphasis added) (internal quotations
and citations omitted). “[T]he conflict of interest inherent in self-funded plans does not alter the
standard of review, but should be taken into account as a factor in determining whether the
decision was arbitrary and capricious.” Peruzzi v. Summa Med. Plan, 137 F.3d 431, 433 (6th Cir.
1998) (internal quotations and citation omitted). Because the benefits awarded to Plaintiff were
rational in light of the plan’s provisions, her first objection will be overruled.
In her second objection, Plaintiff argues that the magistrate judge did not address her
broad claim that Defendants did not act in the best interest of the plan beneficiaries when
determining the benefit award amount under 29 U.S.C. § 1104(a)(1)(A). This objection is
without merit, as the magistrate judge did address this argument in her report and
recommendation. See Rep. & Rec. 15-18. The magistrate judge specifically addressed Plaintiff’s
claims that Causley (1) did not act in the best interest of the plan by lowering the death benefits
amount to retain funds for himself and his company and (2) commingling assets of the Plan with
assets of the company. The magistrate judge concluded that, because the Plan provided that
death benefits “shall be provided out of the general assets of the corporation,” it was proper for
Causley to deposit monies received from the insurance policy on Rieck into the general coffers
of Causley Trucking. If Plaintiff wished the magistrate judge to address another theory as to
how Defendants did not act in the best interest of the plan beneficiaries, it was Plaintiff’s
responsibility to raise that argument before the magistrate judge. Because Plaintiff did not do so,
her objection is without merit.
Plaintiff also argues that the magistrate judge erred in rejecting her claim that Defendants
wrongfully commingled the insurance proceeds with the general assets of Causley trucking.
However, as pointed out by the magistrate judge, there is no requirement that the assets of an
employee benefit plan be held in trust where the assets of the plan consist of insurance contracts
or policies. 29 C.F.R. § 2550.403b-1. And as emphasized by Defendants, the Plan Documents
establish that “the Corporation shall be designated as owner and the beneficiary of any [life
insurance] policies purchased and all rights and benefits accruing from such policies shall belong
solely to the Corporation. The Participant shall have no rights or interest in such policies.” Am.
Compl. Ex. A ¶ 3. As a participant’s surviving spouse, Plaintiff was entitled only to an amount
“no less than the cash value of the policy….” Am Compl. Ex. B ¶ 1. Plaintiff received all that
she was entitled to under the Plan, and she has not demonstrated that Defendants’ actions
impaired the value of the Plan as a whole. See LaRue v. DeWolff, Boberg & Associates, Inc., 552
U.S. 248 (2008). Plaintiff’s second objection will be overruled.
In her third objection, Plaintiff repeats her argument that the magistrate judge did not
sufficiently take into account Causley’s conflict of interest in analyzing her breach of fiduciary
duty claim. This argument is again without merit because the magistrate judge did address
Causley’s conflict of interest in her report and recommendation. See Rep. & Rec. 15-18.
Plaintiff’s third objection will be overruled.
In her fourth and final objection Plaintiff argues that the Plan is not an ERISA governed
employee welfare benefit plan and should have been remanded. This argument has already been
rejected at length by this Court. See ECF No. 21. Plaintiff’s fourth objection will therefore be
Accordingly, it is ORDERED that Plaintiff’s objections, ECF No. 48, are
It is further ORDERED that the report and recommendation, ECF No. 47, is
It is further ORDERED that the Defendant’s motion for summary judgment, ECF No.
40, is GRANTED.
It is further ORDERED that Plaintiff’s motion to vacate the administrative decision,
ECF No. 39, is DENIED.
s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge
Dated: May 23, 2017
PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on May 23, 2017.
KELLY WINSLOW, Case Manager
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