Hart v. Nationwide Mutual Insurance Company
MEMORANDUM AND ORDER. (See Full Order.) IT IS HEREBY ORDERED that defendant Nationwide's motion for summary judgment 20 is granted, and defendant shall have summary judgment on plaintiffs complaint, and plaintiff's complaint is dismissed with prejudice. A separate Judgment in accordance with this Memorandum and Order is entered this same date. Signed by District Judge Catherine D. Perry on 3/23/2016. (CBL)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
NATIONWIDE MUTUAL INS. CO.,
Case No. 4:14 CV 1299 CDP
MEMORANDUM AND ORDER
Patricia Hart was an office manager for Nationwide Mutual Insurance
Company from July 28, 1996, until September of 1998, when she began disability
leave. She received long-term disability benefits from Nationwide until July of
2013, when she sought pension benefits under the Nationwide Retirement Plan (the
Plan). She was initially given an estimate of pension benefits, but then told eight
days later that she was not eligible to receive them. After unsuccessfully appealing
this decision to the Plan’s administrator, Hart filed the instant action against
Nationwide under the Employee Retirement Income Security Act of 1974, 29
U.S.C. §§ 1001 et seq. (ERISA), seeking either unpaid benefits or equitable relief.
Nationwide now moves for summary judgment on both counts of the complaint,
and the issues are fully briefed. Because Hart is not a participant in the Plan as a
matter of law, summary judgment will be granted in favor of Nationwide.
Standards Governing Summary Judgment
The standards for summary judgment are well settled. In ruling on summary
judgment, the Court views the facts and inferences therefrom in the light most
favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith
Radio Corp., 475 U .S. 574, 587 (1986). The moving party has the burden to
establish both the absence of a genuine issue of material fact and that it is entitled
to judgment as a matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
Once the moving party has met this burden, the nonmoving party may not rest on
the allegations in its pleadings but must set forth by affidavit or other evidence
specific facts showing that a genuine issue of material fact exists. Fed. R. Civ. P.
56(e). At the summary judgment stage, I will not weigh the evidence and decide
the truth of the matter, but rather I need only determine if there is a genuine issue
for trial. Anderson, 477 U.S. at 249; ASi Industries GmbH v. MEMC Electronic
Materials, Inc., 2008 WL 413819, *1 (E.D. Mo. Feb. 13, 2008).
Undisputed Background Facts
The Plan is a defined benefit pension plan covering eligible employees of
Nationwide and is governed by ERISA. Only those employees meeting the Plan
definition of “participant” are eligible for benefits. The Plan defines “participant”
to mean “employee(s) or former employee(s)” who meet the eligibility
requirements. “Employee” is in turn defined by the Plan as “a person performing
services for a Participating Employer, excluding the following: (a) NADP-NAPBFADP Agent.” (emphasis supplied). “NADP-NAPB-FADP Agent” is, according
to the Plan, “an individual who is a participant in, or a staff member of any
participant in, any new agents’ development plan maintained by one or more of the
Participating Employers or Non-Participating Employers.”
Hart was hired as an agency office manager for John Sicola, an agent in
Nationwide’s Financed Community Agent Program (FCA program), in 1996.
There is no signed employment or agent agreement. Hart’s job classification was
“financed agency staff” or “agency staff.” Through the FCA program, Nationwide
hired agents and their staff for a limited training period, until the agent either
successfully completed the program and became an independent contractor agent
or was fired. Thus, Hart was a “staff member” of an agent in a “new agents’
development plan,” not an “employee” or “participant” in the Plan.1
Sicola’s employment with Nationwide was terminated on April 14, 1997,
but Hart remained in the office and kept it open while Nationwide found another
agent to take over. Hart was also a licensed agent for Nationwide, but her job
Hart does not dispute that the job classifications of “agency office manager,” “financed agency
staff,” and “agency staff” are used only by Nationwide “for employees who are either agents in a
new agent development program or their staff.” [Aff. of Rick Swinehart Doc. #21-6 at 2].
classification never changed during her employment.2 Four months later Larry
Blanco, who was also part of the FCA program, replaced Sicola.
Hart worked for Nationwide until September of 1998, when she applied for
– and obtained – long-term disability benefits3 under a specific benefits package
available only to “financed agency staff.”4 These benefits were not paid under the
Plan. Hart never returned to work for Nationwide, but she received disability
payments under this special benefits package for 15 years, until she turned 65. It is
undisputed that, if Hart were entitled to pension benefits as a participant under the
Plan, she would not have been entitled to receive disability payments under the
benefits package available only to “financed agency staff.”
While she was on disability leave, Hart received Summary Annual Reports
and Annual Funding Notices about the Plan. She also received form letters about
the Plan addressed to “Dear Nationwide Plan Participant.”
When Hart turned 65, her disability benefits ended. At that time, Hart
decided to retire and applied for pension benefits under the Plan. This decision
Even if she had been an agent under the FCA program during this time, she still would not have
been eligible for benefits under the Plan.
In her affidavit for disability benefits, Hart claimed that she was disabled by “gradual decrease
in mobility and increase in pain from neck, shoulder, arm and hand.” [21-5 at 34].
To obtain these benefits, Hart completed a “Nationwide Insurance Companies Financed
Agency Staff Enrollment Card,” which she signed and dated November 25, 1996. [21-5 at 44].
Her annual benefits paperwork for 1998 also shows that she was receiving life insurance and
disability coverage “under the Fin Agent/Staff LTD option.” This paperwork summarizes her
current and future coverages and does not say anything about a pension benefit. [21-5 at 46-51].
was prompted by a letter she received in August of 2013 entitled “Nationwide
Retirement Plan Pension Suspension Notice,” which contained “important
information related to [her] benefit payable” from the Plan. The letter informs
Hart that, normally she “would be entitled to a benefit from [the Plan] when [she]
reach[ed] age 65,” but that she would not be entitled to receive these benefits
because she was “working past [her] normal retirement date.” The letter instructs
Hart to contact the Nationwide Pension Center when she retires so that she could
start receiving benefits at that time. The Nationwide Pension Center is Aon
Hewitt, a third-party pension administrator responsible for providing pension
estimates and processing applications for benefits under the Plan. Hart contacted
Hewitt about the letter, told them she was retiring, and was sent a “pension packet”
in response. The packet is dated October 1, 2013, and includes a “Retirement Plan
Pension Calculation Statement” indicating that Hart could be entitled to a pension
benefit of up to $640.32 per month. However, before she made any benefit
election, Hart was contacted by Hewitt on October 9, 2013, and told that she was
not eligible for a pension benefit under the Plan.
It turns out that Hart had received the letter and pension packet in error
because of a record-keeping mistake.5 When Nationwide updated its computerized
records back in 2001, Hart was erroneously assigned a “participation date” in the
This same mistake likely explains Hart’s receipt of Plan summaries as well, as these documents
would normally only be sent to Plan participants.
Plan’s benefits tracking system. This internal error was compounded when
Nationwide transferred its records to Hewitt’s electronic data base. Therefore,
Hewitt’s system incorrectly showed Hart was eligible for a pension benefit under
the Plan. This error was explained to Hart by Rick Swinehart, Director of
Nationwide’s Service Center, on October 17, 2013. Swinehart is responsible for
assisting Nationwide employees with retirement issues and investigated the recordkeeping errors that led to the mistake. Hart was upset and sent Swinehart the Plan
summaries and other documents she received over the years, claiming they led her
to believe that she was entitled to pension benefits under the Plan. Hart also
argued that her employment classification might have changed when Blanco was
Swinehart investigated Hart’s allegations and verified that her employment
classification as “financed agency staff” had not changed with the hiring of Blanco
or at any time thereafter. Because Hart remained ineligible for Plan benefits,
Swinehart issued Hart a denial of benefits letter on November 1, 2013. Hart
appealed the decision to the Plan Administrator. In considering Hart’s appeal, the
Plan Administrator reviewed information from Swinehart about Hart’s
employment classification and the record-keeping error, an appeal letter submitted
by Hart’s attorney, communications sent to Hart while she was on disability leave
(including the Plan summaries and documents), the letter and pension packet sent
to Hart by Hewitt, and Swinehart’s November 1, 2013, letter. The Plan
Administrator then denied Hart’s appeal, explaining again that as “financed agency
staff” she was “specifically excluded from participating in the Plan.” This lawsuit
Hart’s complaint states two counts under ERISA. In Count I, Hart
challenges the decision to deny benefits under 29 U.S.C. § 1132(g) and seeks
payment of unpaid and future benefits under the Plan. In Count II, Hart alleges
that Nationwide breached its fiduciary duty as Plan Administrator under 29 U.S.C.
§ 1104 by misrepresenting to her that she was owed benefits. She seeks equitable
relief under 29 U.S.C. § 1132(a)(3), including specific performance, equitable
estoppel, and surcharge.
Nationwide first argues that it is entitled to summary judgment on both
counts of the complaint because Hart lacks statutory standing to bring claims under
ERISA. According to Nationwide, because Hart is excluded from participation in
the Plan by its plain language, she cannot seek payment of benefits or equitable
relief under ERISA as a matter of law. Hart does not address this argument in
opposition to summary judgment.
To bring a civil action under ERISA, a plaintiff must have statutory
standing. Hastings v. Wilson, 516 F.3d 1055, 1060 (8th Cir. 2008). To have
statutory standing a plaintiff must be “a participant, beneficiary or fiduciary” of the
ERISA plan. Id. (quoting 29 U.S.C. § 1132(a)(2)). “A participant or a beneficiary
is defined in ERISA as someone ‘who is or may become eligible to receive a
benefit of any type from an employee benefit plan.’” Adamson v. Armco, Inc., 44
F.3d 650, 654 (8th Cir. 1995) (quoting 29 U.S.C. §§ 1002(7), (8)). The United
States Supreme Court has interpreted the statutory term “participant” to mean
“either employees in, or reasonably expected to be in, currently covered
employment, or former employees who have a reasonable expectation of returning
to covered employment or who have a colorable claim to vested benefits.”
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 117 (1989).
The undisputed facts in this case demonstrate that Hart is not a Plan
participant as a matter of law.6 The Plan excludes “an individual who is a
participant in, or a staff member of any participant in, any new agents’
development plan” from the class of employees eligible to participate in the Plan.
Hart’s job classification was “financed agency staff” throughout the entirety of her
employment. This was the employment designation given to her when she started
with Nationwide in 1996, and it did not change after Sicola was fired or Blanco
replaced him. Nationwide classifies “financed agency staff” as “staff member(s)
of a participant in a new agents’ development plan.” Thus, Hart was excluded
Hart does not argue that she is a beneficiary or fiduciary of the ERISA plan.
from the definition of “employees” who are “participants” entitled to benefits
under the Plan. “‘[I]t is well established that employers may exclude categories of
employees from their ERISA plans.’” Bendsen v. George Weston Bakeries
Distribution Inc., 4:08CV50 (JCH), 2008 WL 4449435, at *4 (E.D. Mo. Sept. 26,
2008) (quoting Capital Cities/ABC, Inc. v. Ratcliff, 141 F.3d 1405, 1409 (10th Cir.
Even if Hart thought she was a covered employee under the Plan, her
subjective belief is not sufficient to create a triable issue of material fact, especially
where – as here – she has admitted all facts set out in Nationwide’s Statement of
Uncontroverted Material Facts, including those relating to her job classification.
See Plf.’s Response in Opposition to Def.’s Motion for Summ. J. at 1 (“Plaintiff
admits all facts set forth in Defendant’s Statement of Uncontroverted Material
Facts . . . .”). . Moreover, although there is no signed employment or agency
agreement to evidence her job classification, Hart completed paperwork to become
eligible for benefits available specifically for “financed agency staff.” To obtain
these benefits, Hart completed a “Nationwide Insurance Companies Financed
Agency Staff Enrollment Card,” which she signed and dated November 25, 1996.
Her annual benefits paperwork for 1998 (the last year she worked before going on
disability leave) also shows that she was receiving life insurance and disability
coverage “under the Fin Agent/Staff LTD option.” This paperwork summarizes
her current and future coverages and says nothing about a pension benefit. Two
years after starting her job at Nationwide, Hart sought long-term disability benefits
under this benefits package, and these benefits were paid to her for 15 years until
they expired at age 65. There is no dispute that if Hart were considered a
“participant” as defined by the Plan, she would not have been entitled to receive
these long-term disability payments under this special benefits package.
The analogous case of Bendsen v. George Weston Bakeries Distribution Inc.,
4:08CV50 (JCH), 2008 WL 4449435, at *4 (E.D. Mo. Sept. 26, 2008), is
instructive. In Bendsen, plaintiffs were distributors of defendant’s wholesale
bakery products and considered independent contractors, not employees, of
defendant. Id. at *3. Although defendant offered a defined benefit plan to its
employees, the plan’s language excluded independent contractors from the
definition of employees eligible to participate. Id. Because plaintiffs were
independent contractors, they were denied benefits under the plan. Id. Plaintiffs
then brought a claim under ERISA, alleging that defendant had wrongfully denied
them benefits under the Plan. Id. at *2. The Court dismissed plaintiffs’ ERISA
claims for lack of statutory standing, reasoning that because plaintiffs were
excluded from the Plan’s definition of employees entitled to participate in the Plan,
they were not “participants” with standing to sue under ERISA. Id. at *4. It held:
“Plaintiffs thus lack standing to bring an action under ERISA, as they are not,
employees in, or reasonably expected to be in, currently covered employment, or
former employees who have . . . a reasonable expectation of returning to covered
employment or who have a colorable claim to vested benefits.” Id. (internal
quotation marks and citations omitted).
The same is true in this case. Because Hart was not a Plan participant, she
lacks standing to bring an ERISA action, as she is not an “employee in, or
reasonably expected to be in, currently covered employment, or [a] former
employee who [has] . . . a reasonable expectation of returning to covered
employment or who [has] a colorable claim to vested benefits.” Firestone Tire &
Rubber Co., 489 U.S. at 117 (internal quotation marks and citations omitted).
Although the Eighth Circuit Court of Appeals has recognized a narrow exception
to Firestone Tire & Rubber Co.’s standing requirement in cases where, “but for the
employer’s conduct alleged to be in violation of ERISA, the employee or former
employee would be a plan participant,” Adamson, 44 F.3d at 654, this exception
does not apply here. Any alleged misrepresentations to Hart regarding her
participation in the Plan through receipt of Plan documents and a pension packet
do not change her undisputed job classification and corresponding exclusion from
the Plan. See Bendsen, 2008 WL 4449435, at *4. Without statutory standing, Hart
cannot maintain her ERISA claims as a matter of law. Nationwide’s motion for
summary judgment will be granted.
Hart was “financed agency staff” and, as such, is excluded from
participation in the Plan. Although Hart is not eligible for Plan benefits, she did
receive substantial payments under a benefits package made available to her
specifically because she was not a Plan participant. While an unfortunate mistake
was made and the Court can certainly sympathize with Hart’s position, Hart
nevertheless does not have standing to pursue her claims under ERISA as a matter
of law. For this reason, I need not, and therefore do not, address Nationwide’s
remaining arguments on the merits of Hart’s claims. Summary judgment will be
entered in favor of Nationwide on both counts of the complaint.
IT IS HEREBY ORDERED that defendant Nationwide’s motion for
summary judgment  is granted, and defendant shall have summary judgment
on plaintiff’s complaint, and plaintiff’s complaint is dismissed with prejudice.
A separate Judgment in accordance with this Memorandum and Order is
entered this same date.
CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE
Dated this 23rd day of March, 2016.
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