Cornelius v. Dykema Gossett PLLC

Filing 46

OPINION and ORDER GRANTING re 34 Objection,DENYING re 35 Objection & AFFIRMING MAGISTRATE JUDGE'S ORDER Signed by District Judge Patrick J. Duggan. (MOre)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
E. FRANK CORNELIUS,
Plaintiff,
Case No. 11-13186
Honorable Patrick J. Duggan

v.
DYKEMA GOSSETT PLLC
RETIREMENT PLAN and
DYKEMA GOSSETT PLLC,
Defendants.
_________________________/

OPINION AND ORDER GRANTING DEFENDANTS’ OBJECTIONS AND
REJECTING PLAINTIFF’S OBJECTIONS TO MAGISTRATE JUDGE
HLUCHANIUK’S AUGUST 3, 2012 ORDER AND AFFIRMING MAGISTRATE
JUDGE HLUCHANIUK’S ORDER
On July 22, 2011, Plaintiff filed this pro se action pursuant to the Employee
Retiree Income Security Act of 1974 (“ERISA”), seeking to require the Dykema Gossett
PLLC Retirement Plan (“the Plan”) and its administrator, Dykema Gossett PLLC
(“Dykema”) (collectively “Defendants”), to use a different method for calculating
Plaintiff’s retirement income benefits. Plaintiff filed a First Amended Complaint on
August 3, 2011. On January 31, 2012, Plaintiff filed a motion to file a second amended
complaint, which this Court referred to Magistrate Judge Michael Hluchaniuk. On
August 3, 2012, Magistrate Judge Hluchaniuk issued an order granting in part and
denying in part Plaintiff’s motion. Presently before this Court are Defendants’ August
10, 2012 objections to the order, in which Defendants ask the Court to strike one factual

finding made by the magistrate judge in his order, and Plaintiff’s objections, filed August
21, 2012. For the reasons that follow, the Court grants Defendants’ objections and rejects
Plaintiff’s objections. The Court affirms Magistrate Judge Hluchaniuk’s August 3, 2012
order to grant in part and deny in part Plaintiff’s motion to file a second amended
complaint.
Magistrate Judge Hluchaniuk’s August 3, 2012 Order
In his motion to file a second amended complaint, Plaintiff sought leave to file five
additional counts (Counts I-V) and to continue asserting claims contained in his First
Amended Complaint but not set forth in enumerated counts. In Count I of his proposed
amended complaint, Plaintiff alleged that Defendants failed to “unequivocally designate”
a plan administrator as required under § 102 of ERISA, 29 U.S.C. § 1022. In Count II of
his proposed amended complaint, Plaintiff alleged that Defendants violated ERISA by
“fail[ing] to disclose in any SPD [Summary Plan Description] the fact that it uses a 45hour week equivalency to convert an attorney’s part-year [c]ompensation to a full-time,
full-year equivalent.” Finally, in Counts III-V, Plaintiff alleged that Defendants failed to
provide him with certain plan documents as requested in violation of ERISA.
Magistrate Judge Hluchaniuk concluded that these claims are futile and Plaintiff
therefore should not be granted leave to amend his complaint to include them. In
reaching this conclusion, Magistrate Judge Hluchaniuk states that Defendants agree that
the relevant SPDs fail to include a description of the manner of prorating work that is less
than a full year. (ECF No. 33 at 7.) Because Plaintiff’s remaining “proposed” claims
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already were set forth in his First Amended Complaint and had not been dismissed for
any reason, Magistrate Judge Hluchaniuk permits them to go forward as set forth in
Counts VI-VIII of his proposed second amended complaint.
Standard of Review
A party may object to a magistrate judge’s non-dispositive orders. Fed. R. Civ. P.
72(a); 28 U.S.C. § 636(b)(1)(A). The reviewing court must affirm the magistrate judge’s
ruling unless the objecting party demonstrates that the magistrate judge’s ruling is
“clearly erroneous” or “contrary to law.” Id. The “clearly erroneous” standard does not
empower a reviewing court to reverse a magistrate judge’s finding because it would have
decided the matter differently. See, e.g., Anderson v. Bessemer City, N.C., 470 U.S. 564,
573-74, 105 S. Ct. 1504 (1985). Instead, the “clearly erroneous” standard is met when
despite the existence of evidence to support the finding, the court, upon reviewing the
record in its entirety, “is left with the definite and firm conviction that a mistake has been
committed.” United States v. U.S. Gypsum Co., 33 U.S. 364, 395 (1948). An order is
contrary to law “when it fails to apply or misapplies relevant statutes, case law, or rules of
procedure.” Catskill Dev., L.L.C. v. Park Place Entm't Corp., 206 F.R.D. 78, 86
(S.D.N.Y. 2002).
Defendants’ Objection
Defendants raise a single objection to Magistrate Judge Hluchaniuk’s August 3,
2012 order. Specifically, Defendants assert that the magistrate judge clearly erred in
finding that they agree that the SPDs do not contain the method used to annualize an
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attorney’s part-time compensation. Defendants argue that there is no basis for this
finding, as they have not stated their position as to whether the SPDs contain or do not
contain this information. As Defendants should not be found to have made a concession
that they never made, the Court grants their objections and strikes this finding from the
magistrate judge’s order.
Plaintiff’s Objections
Plaintiff objects to the magistrate judge’s conclusion that Counts I-V of his
proposed second amended complaint are futile. The Court finds no reason to address
Plaintiff’s objections regarding Count I, as there clearly is no error in Magistrate Judge
Hluchaniuk’s decision. Dykema has been identified without doubt as the administrator of
the Plan. As Dykema only can operate through its partners and employees, it has
identified that person as Kimberly A. Amodeo. The Court will address Plaintiff’s
objections to his other proposed counts in more detail.
Magistrate Judge Hluchaniuk found that 29 C.F.R. § 2520.102-3(n) requires an
SPD to include the details of prorating work for a part-time employee and that the
relevant SPDs did not do so. (ECF No. 33 at 7.) Magistrate Judge Hluchaniuk concluded
that Plaintiff’s proposed Count II is futile, however, because Plaintiff lacks standing to
seek the relief requested for this alleged violation: “to order Dykema to disclose to
present and former attorney participants and their beneficiaries the fact that Dykema has
used a flawed procedure to convert an attorney’s part-year [c]ompensation to a full-time,
full-year equivalent.” (Id. at 7-8; ECF No. 36 ¶ 39.) Plaintiff contends in his objections
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that he is seeking disclosure for himself, and thus has standing. Plaintiff also objects to
the magistrate judge’s conclusion that only 29 C.F.R. § 2520.102-3(n) requires disclosure
of the information he argues should have been in the SPDs. Plaintiff argues that
“[a]lthough this may be true in a direct sense, [he] submits that the regulations do relate to
the issue indirectly . . ..” (Pl.’s Obj. at 18.)
While Plaintiff may have standing to seek the relief for himself, this Court does
not agree that the claim he asserts is viable. Plaintiff argues that § 102(a) of ERISA, 29
U.S.C. § 1022(a), required Dykema to include in the SPD the methodology for converting
part-time compensation to a full-time equivalent for the purpose of calculating benefits,
because the statute mandates that the SPD “shall be sufficiently accurate and
comprehensive to reasonably apprise such participants and beneficiaries of their rights
and obligations under the plan.” Id. However, “the law is clear that the plan summary is
not required to anticipate every possible idiosyncratic contingency that might affect a
particular participant’s or beneficiary’s status.” Lorenzen v. Employees Retirement Plan
of the Sperry and Hutchinson Co., 896 F.2d 228, 236 (7th Cir. 1990) (citations omitted).
The statute and regulations set forth the specific information that must be included in an
SPD. See 29 U.S.C. § 1022(b); 29 C.F.R. § 2520.102-3. This Court disagrees with
Magistrate Judge Hluchaniuk that the methodology at issue is included therein.
Magistrate Judge Hluchaniuk relied on 29 C.F.R. § 2520.102-3(n). This
subsection provides:
(n) In the case of an employee pension benefit plan, a description and
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explanation of the plan provisions for determining years of service for
eligibility to participate, vesting, and breaks in service, and years of
participation for benefit accrual. The description shall state the service
required to accrue full benefits and the manner in which accrual of benefits
is prorated for employees failing to complete full service for a year.
29 C.F.R. § 2520.102-3(n). This provision relates to eligibility, not the calculation of
actual benefits. There is no concern regarding Plaintiff’s eligibility for benefits. For this
reason, the Court concludes that Magistrate Judge Hluchaniuk did not err in concluding
that Plaintiff’s proposed Count II is futile.
Plaintiff’s remaining objections relate to Magistrate Judge Hluchaniuk’s finding
that his proposed Counts III-V are futile. Plaintiff contends that Magistrate Judge
Hluchaniuk erred in finding that he has all of the documents he seeks. Plaintiff maintains
that Defendants have not: (1) provided him the “ ‘1973 Plan, 3rd Amendment’– effective
March 31, 1974; signed October 31, 1974” (see Pl.’s Obj. at 11); and (2) complied with
ERISA’s requirement “that a new SPD be furnished every 5 years, incorporating all plan
amendments made during the 5-year period, and a new one every 10 years if no
amendments have been made,” as well as summaries of material modifications
(“SMMs”). (See Doc. 36 ¶ 41.) Plaintiff complains that Magistrate Judge Hluchaniuk
did not address this allegation in finding the proposed claims futile.
Upon a participant’s or beneficiary’s request, ERISA only requires the production
of “a copy of the latest updated summary[] plan description, and the latest annual report,
any terminal report, the bargaining agreement, trust agreement, contract, or other
instruments under which the plan is established or operated.” 29 U.S.C. § 1024(b)(4)
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(comma and footnote omitted) (emphasis added). “[O]utdated plan descriptions do not
fall into any of the categories of documents a plan administrator must provide to plan
participants under section 1024(b)(4).” Shields v. Local 705, IBT Pension Plan, 188 F.3d
895, 903 (7th Cir. 1999). Plaintiff began receiving early retirement benefits from the Plan
on or about March 1, 2007, and is receiving benefits under the current plan, which is the
2007 Plan. Plaintiff therefore fails to state a claim based on Dykema’s alleged failure to
provide the 3rd Amendment to the 1973 Plan.
Dykema’s alleged failure to previously produce SPDs and SMMs “may have been
at one time an ERISA violation that could have given rise to § 502(c) liability if a
participant had requested them promptly (i.e. when they were the “latest” version of the
plan).” Jackson v. E.J. Branch Corp., 937 F. Supp. 735, 739 (N.D. Ill. 1996) (emphasis
in original). Plaintiff, however, was not a participant when Dykema allegedly failed to
distribute the purported SPDs and SMMs in accordance with ERISA. Moreover, as set
forth above, ERISA does not require Dykema to provide Plaintiff with these documents
now. Thus Plaintiff also fails to state a claim under ERISA based on Dykema’s alleged
failure to provide certain SPDs and SMMs.
Conclusion
Magistrate Judge Hluchaniuk did not clearly err in finding Plaintiff’s proposed I-V
counts futile. Plaintiff’s objections therefore are rejected. Defendants, however, have not
agreed that the SPDs fail to contain the method used to annualize an attorney’s part-time
compensation. As such, Defendants’ objection is granted and that finding in the
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magistrate judge’s order will be stricken. In short, the Court affirms Magistrate Judge
Hluchaniuk’s decision denying Plaintiff’s motion to file a second amended complaint.
SO ORDERED.
Dated: December 12, 2012

s/PATRICK J. DUGGAN
UNITED STATES DISTRICT JUDGE

Copies to:
E. Frank Cornelius, Esq.
Michael A. Alaimo, Esq.

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