Tateyama v. AT&T, Inc. et al

Filing 45

ORDER that AT&Ts motion for summary judgment 41 is GRANTED. Defendant shall prepare an appropriate judgment for the courts consideration. Signed by Judge James C. Mahan on 7/31/12. (Copies have been distributed pursuant to the NEF - ECS)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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BILLY Y. TATEYAMA,

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2:11-CV-835 JCM (CWH)

Plaintiff,
v.
AT&T, INC., et al.,

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Defendants.

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ORDER

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Presently before the court is defendant AT&T, Inc.’s (AT&T) motion for summary judgment.

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(Doc. #41). Plaintiff Billy Y. Tateyama has filed an opposition (doc. #42), to which AT&T has

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replied (doc. #43).

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I. Factual Background

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Plaintiff was an employee at AT&T for more than twenty years before he retired. (Compl.

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at ¶ 11). Plaintiff participated in the employee pension plan that was offered by AT&T. Id. at ¶ 12.

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According to the terms of the plan, when a retired participant reaches the age of 70 1/2, the

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plan must distribute any and all accrued benefits. Id. at ¶ 14. The participant has the option of

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receiving the funds in one lump sum or in annual installments. Id. The plan is also required to

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provide participants with a written explanation as to the participant’s right to elect how to receive

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the funds. Id. This written explanation must be delivered to the participant at least thirty days before

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the first disbursement. Id. The participant must inform the plan administrator of their payment

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option within thirty days of receiving the written explanation or their election is deemed waived and

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James C. Mahan
U.S. District Judge

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the plan is distributed in one lump sum. Id.

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Plaintiff reached the age of 70 1/2 on July 28, 2008. Id. at ¶ 15. Plaintiff alleges that he did

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not receive the written explanation described above, but, had he received such notice, he would have

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elected to receive his funds in annual installments rather than a lump sum. Id. at ¶ 16. Plaintiff

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received a lump sum of his accrued benefits ($251,919.12) on or about January 5, 2009. Id. at ¶ 17.

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Plaintiff alleges that the plan deducted $117,880.00 in taxes as a result of receiving his benefits in

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a lump sum. Id.

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On April 24, 2009, plaintiff requested that his funds be returned and that he be allowed to

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elect to receive them in annual installments. Id. at ¶ 18. On May 21, 2010, plaintiff was notified that

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his appeal had been denied. Id. at ¶ 19. Upon denial of the appeal, AT&T informed plaintiff that he

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had exhausted his administrative remedies. Id. Plaintiff then filed the instant action under section

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502 of ERISA.

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In its motion for summary judgment, defendant submits that it sent plaintiff a letter on

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November 26, 2008, informing plaintiff of his rights and that plaintiff failed to act pursuant to the

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notice. (Doc. #41 at 5:10 and 6:9-10). Because plaintiff failed to take appropriate action, defendant

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argues that no genuine issue of material fact exists for trial. (Doc. #41 at 2:21). AT&T argues that

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the letter adequately informed plaintiff that he would receive a lump sum payment by electing a total

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distribution or by taking no action by December 17, 2008, and further explained that plaintiff could

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elect annual installments by contacting the service center by December 17, 2008. (Doc. #41 at 5:22-

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26; Doc. #22-1 at 10-11 and 38-40). Defendant alleges that, because plaintiff failed to respond to

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the letter, the terms of the plan required a check be issued to plaintiff for the lump sum of his benefits

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($444,536.57), less the appropriate tax withholdings. (Doc. #41 at 6:12-15; Doc. #22-1 at 3-4).

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II. Discussion

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A.

Standard of Review

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A party is entitled to summary judgment when “the pleadings, depositions, answers to

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interrogatories, and admissions on file, together with the affidavits, if any, show that there is no

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genuine issue as to any material fact and that the party is entitled to judgment as a matter of law.”

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James C. Mahan
U.S. District Judge

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Fed. R. Civ. P. 56(c). In Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986), the Supreme Court

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explained that material facts are those which may affect the outcome of the case, and a dispute is

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genuine where there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving

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party. Id. at 248.

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A court may properly grant summary judgment when the contract terms are clear and

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unambiguous, even if the parties disagree as to their meaning. See United States v. King Features

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Entertainment, Inc., 843 F.2d 394, 398 (9th Cir. 1988); see also Int’l Union of Bricklayers v. Martin

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Jaska, Inc., 752 F.2d 1401, 1406 (9th Cir. 1985). Interpretation of the contract, including whether

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it is ambiguous, is a matter of law. Beck Park Apts. v. United States Dep’t of Housing, 695 F.2d 366,

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369 (9th Cir. 1982). Nevada courts have recognized that such questions are “suitable for

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determination by summary judgment.” Ellison v. Cal. State Auto Ass’n, 106 Nev. 601, 603 (1990).

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B.

Analysis

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Where an ERISA plan vests its administrator with discretionary authority to construe the

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terms of the plan and award benefits accordingly, the district court may only review the

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administrator’s determinations for abuse of discretion. Firestone Tire & Rubber Co. v. Bruch, 489

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U.S. 101, 115 (1989). A plan administrator’s decision is considered an abuse of discretion if “it is

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made without a rational connection between the known facts and the decision or between the found

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facts and the evidence.” Gothard v. Metropolitan Life Ins. Co., 491 F.3d 246 (5th Cir. 2007).

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Further, when a court is reviewing an ERISA plan administrator’s decision, “the court may not

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merely substitute its view for that of the fact finder, and should consider whether the plan

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administrator acted illogically, implausibly, or without support in inferences that could reasonably

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be drawn from facts in the record.” Kaufman v. Unum Life Ins. Co. Of America, 834 F. Supp.2d

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1186 (D. Nev. 2011).

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If there is no alleged conflict of interest, a court may set aside the administrator’s decision

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only if it is deemed arbitrary and capricious. See Sznewajs v. United States Bancopr Amended &

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Restated Supplemental Benefits Plan, 572 F.3d 727, 733 (9th Cir. 2009); Johnson v. District 2

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Marine Engineers Beneficial Association-Associated Maritime Officers, Medical Plan, 857 F.2d 514,

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U.S. District Judge

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516 (9th Cir. 1998) (holding that a decision is not arbitrary or capricious if it is “based on a

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reasonable interpretation of the plan’s terms and was made in good faith”). Furthermore, the court

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must limit its review to the record used by the plan administrator. Abatie v. Alta Health & Life Ins.

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Co., 458 F.3d 955, 970 (9th Cir. 2006) (en banc).

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Plaintiff is not disputing receipt of his benefits, only that he disagrees with the manner in

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which he received the funds. ERISA only guarantees that a beneficiary will receive their vested

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benefits but says nothing as to the method in which they will receive them. Alessi v. Raybestos-

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Manhattan, Inc., 451 U.S. 504, 512 (1981). “Whether [the plaintiff] received his benefits in the form

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of an annuity or a lump-sum distribution, the amount paid to him would be actuarially equivalent.”

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Oster v. Barco of California’s Employees’ Retirement Plan, 869 F.2d 1215, 1218 (9th Cir. 1988).

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Plaintiff has stated in his reply that the plan administrator’s decision to deny his requests was

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unreasonable but fails to provide any factual evidence as to why this court should agree. (Doc. #42

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at 4:8-9). A decision is considered to be arbitrary and capricious when it is made in “bad faith or

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upon lack of factual foundation or when unsupported by substantial evidence.” Fentron Industries,

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Inc. v. National Shopmen Pension Fund, 674 F.2d 1300, 1301 (9th Cir. 1982). Here, there is no

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evidence provided by plaintiff showing that the plan administrator in this case has ever granted

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requests similar to plaintiff’s in the past. Furthermore, the administrator’s decision was not arbitrary

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or capricious. It “adhered to the plain terms of the plan”, therefore the court has no control over the

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decision. See Firestone v. Bruch, 489 U.S. at 115; see also Sznewajs v. United, 572 F.3d at 733;

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(Doc. #22-1 at 4-5; 22-2 at 16-17 and 38-39; and 22-3 at 9-10)

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Plaintiff’s argument that he never received the notice requiring him to respond by December

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17, 2008, is not supported by any evidence. Furthermore, defendant has provided evidence that on

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November 26, 2008, the Service Center mailed the notification to plaintiff. (Doc. #22-1 at 03),

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including a redacted excerpt of the mailing label containing plaintiff’s name and address which was

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attached to the list of those who were mailed the November 26, 2008 letter. (Doc. #22-1 at 10 and

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20). The plan administrator’s decision was not only logical, but it was also well supported by the

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facts provided by the record. Therefore, this court may not supersede the plan administrator’s

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James C. Mahan
U.S. District Judge

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decision. See Kaufman v Unum, 834 F. Supp.2d 1186 (2011) (holding that a court is not at liberty

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to substitute its own judgment for that of the plan administrator’s decision when interpreting policy.).

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Here, plaintiff first contacted the plan administrator, via letter, about his objections to the

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plan distribution in late April of 2009, well after the December 17, 2008, deadline. (Doc. #41 at

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6:16-17; Doc. #22-2 at 9). Similarly, plaintiff’s reason for his delayed election – that he flew to

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Chicago on December 27, 2008, to help care for his dying mother-in-law – does not fully explain

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his tardiness. The flight to Chicago was ten days after the response deadline. (Doc. #22-2 at 9).

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that AT&T’s motion for

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summary judgment (doc. #41) be, and the same hereby is, GRANTED.
IT IS FURTHER ORDERED that defendant shall prepare an appropriate judgment for the
court’s consideration.
DATED July 31, 2012.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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