Kirkendall et al v. Halliburton, Inc. et al
DECISION AND ORDER: Defendants’ 55 Motion for Summary Judgment is GRANTED, and Plaintiffs’ 56 Cross-Motion for Partial Summary Judgment is DENIED. The Clerk of the Court is directed to close this case. SO ORDERED. Signed by Hon. Frank P. Geraci, Jr. on 9/29/17. (JO)-CLERK TO FOLLOW UP-
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
KATHY JOY KIRKENDALL, WESLEY SNYDER,
BARBARA CAYA, and BONNIE SETH on behalf of
themselves and others similarly situated,
Case # 07-CV-289-FPG
DECISION AND ORDER
HALLIBURTON, INC., HALLIBURTON RETIREMENT
PLAN, and DRESSER INDUSTRIES, INC. CONSOLIDATED
On May 1, 2007, Plaintiffs Kathy Joy Kirkendall, Wesley Snyder, Barbara Caya, and
Bonnie Seth filed a Complaint alleging that Defendants improperly denied them early retirement
benefits and breached their fiduciary duty. ECF No. 1. In the Complaint, Plaintiffs allege the
following: in Count I, Plaintiffs seek declaratory judgment as to whether they are entitled to early
retirement benefits; in Count II, Plaintiffs allege that they are entitled to have their employment
benefits correctly determined; 1 and in Count IV, Plaintiffs allege that Defendant Halliburton, Inc.
breached its fiduciary duties of loyalty and prudence by choosing the incorrect date to determine
benefits for Plaintiffs. Id.
Before the Court are Defendants’ Motion for Summary Judgment on Counts I, II, and IV
(ECF No. 55), and Plaintiffs’ Cross-Motion for Partial Summary Judgment on Counts I and II.
ECF No. 56.
The Second Circuit affirmed this Court’s dismissal of Count III of the Complaint. Kirkendall v. Halliburton, Inc.,
707 F.3d 173, 182-84 (2d Cir. 2013) (“Kirkendall II”).
For the reasons that follow, Defendants’ Motion for Summary Judgment (ECF No. 55) is
GRANTED, and Plaintiffs’ Cross-Motion for Partial Summary Judgment (ECF No. 56) is
On May 1, 1986, Dresser Industries, Inc. (“Dresser”) established Defendant Dresser
Industries, Inc., Consolidated Salaried Retirement Plan (“DICON” or “the Plan”). The plan was
established as a pension plan for Dresser’s salaried employees. Plaintiffs were all Dresser
employees when DICON was formed and they all enrolled in DICON.
To qualify for early retirement benefits, DICON participants had to satisfy the following
requirements detailed in Section 4.02 of the Plan (ECF No. 11-4 at 42):
(1) the Participant’s Severance from Service Date (“SSD”), or the date they quit, retired,
or were discharged, must occur after they turn 55-years-old but before they reach age
65; and the Participant had to
(2) Participate in DICON on May 1, 1986; and
(3) have 10 years or more of Vesting Service.
Two DICON articles explain how Participants may accrue Vesting Service. Article I,
Section 1.51 defines Vesting Service as Continuous Service, with a few exceptions not at issue
here. ECF No. 11-4 at at 30. Section 1.13(b), the only relevant subsection, explains that
Continuous Service begins on the Participant’s Employment Commencement Date (“ECD”) or
May 1, 1976, whichever is later, and ends on their SSD. Id. A Participant’s ECD is the date on
which the Participant performs an hour of duties for an Employer or Related Entity. Id. at 19. A
The following undisputed facts are taken from the parties’ respective Local Rule 56 Statements. See ECF Nos. 542, 56-2, 58.
Related Entity is “each…partnership [or] joint venture…in which [Dresser] has, either directly or
indirectly, a substantial ownership interest.” Id. at 26.
Article 12, Section 12.03 contemplates the formation of the Dresser-Rand Company
(“DR”) and explains how DR employees may accrue Vesting Service. Importantly, Section 12.03
explains that each Participant who transfers employment from Dresser to DR may use “each such
former Employee’s service with DR commencing on such Employee’s first day of employment
with DR…as Continuous Service under [DICON] for the purpose of determining Vesting Service
(which determines eligibility for retirement benefits)….” ECF No. 11-7 at 24.
On January 1, 1987, Dresser entered into a partnership under New York law with IngersollRand Company (“Ingersoll”) known as DR.
Then, on September 29, 1998, Defendant Halliburton, Inc. (“Halliburton”) acquired
Dresser. Dresser was thus a wholly-owned subsidiary of Halliburton and remained a partner in
After Halliburton acquired Dresser, Halliburton adopted DICON effective January 1, 1999
and amended it to establish the Halliburton Company Benefits Committee (“HBC”) administrator
In February 2000, Halliburton, as owner of Dresser, sold Dresser’s interest in DR to
Ingersoll. Consequently, as of February 2000, Ingersoll owned DR completely.
On February 1, 2000, HBC unanimously ratified a decision to deny DR employees the
ability to “grow in” to early retirement benefits under DICON after the sale. HBC subsequently
interpreted DICON to define “DR” as the partnership between Dresser and Ingersoll as long as
Dresser had an interest in DR. Under that interpretation, once Dresser no longer has an interest in
DR, “DR” no longer existed for purposes of DICON and Plaintiffs could not “grow in” to their
early retirement benefits after Halliburton sold Dresser’s interest in DR to Ingersoll.
Accordingly, HBC deemed that Plaintiffs and similarly-situated DR employees ceased
service with DR as of December 30, 1999. Therefore, any DR employees who did not meet the
requirements for early retirement benefits as of December 30, 1999, could not “grow in” to early
retirement benefits even though their employment with DR continued under Ingersoll’s ownership.
DR’s ownership changed three more times: First Reserve Corporation purchased DR from
Ingersoll on October 29, 2004; DR became a publicly-owned company in August of 2005; and
Siemens AG acquired DR in June 2015.
Plaintiffs filed their Complaint on May 1, 2007. ECF No. 1. Defendants subsequently
moved for judgment on the pleadings. ECF No. 13. This Court found that Plaintiffs had failed to
exhaust their administrative remedies and dismissed the complaint. Kirkendall v. Halliburton,
Inc., No. 07-cv-289-JTC, 2011 WL 2360058 (W.D.N.Y. June 9, 2011). Plaintiffs appealed (ECF
No. 29), and the Second Circuit found that Kirkendall was not required to exhaust her
administrative remedies and remanded to this Court to determine whether Snyder, Caya, and Seth
exhausted their administrative remedies. Kirkendall II, 707 F.3d at 181-82. The Second Circuit
affirmed this Court’s dismissal of Count III, and reinstituted Counts I, II, and IV. Id. at 179-84.
A motion for summary judgment should be granted where the moving party shows that
“there is no genuine dispute as to any material fact” and that the moving party “is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is material if it “might affect the
outcome of the suit under the governing law . . . .” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986). A dispute regarding such a fact is genuine “if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.” Id. Thus, when presented with a motion for
summary judgment, the Court must determine “whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so one-sided that one party must
prevail as a matter of law.” Id. at 251-52.
It is the movant’s burden to establish that no genuine and material factual dispute exists.
Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). To that end, the Court must resolve all
ambiguities and draw all reasonable inferences in favor of the non-moving party. See Giannullo
v. City of N.Y., 322 F.3d 139, 140 (2d Cir. 2003). That is not to say that the non-moving party
bears no burden. Rather, the non-moving party “must set forth specific facts showing that there is
a genuine issue for trial.” Fed. R. Civ. P. 56(e). Indeed, where the non-moving party fails to
respond to a motion for summary judgment, “the court may consider as undisputed the facts set
forth in the moving party’s affidavits.” Gittens v. Garlocks Sealing Techs., 19 F. Supp. 2d 104,
109 (W.D.N.Y. 1998).
To be clear, the non-moving party’s failure to respond to a motion for summary judgment
does not itself justify granting summary judgment. Amaker v. Foley, 274 F.3d 677, 681 (2d Cir.
2001) (noting that, even where the non-moving party “chooses the perilous path of failing to submit
a response to a summary judgment motion,” the court “may not grant the motion without first
examining the moving party’s submission to determine if it has met its burden”). The Court must
be satisfied that the moving party’s assertions are supported by citations to evidence in the record.
Vermont Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004). And the
motion may be granted “only if the facts as to which there is no genuine dispute show that the
moving party is entitled to judgment as a matter of law.” Champion v. Artuz, 76 F.3d 483, 486
(2d Cir. 1996) (internal quotation marks omitted).
Before analyzing the parties’ motions, the Court must address two threshold issues: (1)
whether Defendants’ Statement of Material Facts (ECF No. 54-2) in support of their Motion to
Dismiss is undisputed, and (2) whether Plaintiffs Snyder, Caya, and Seth exhausted their
administrative remedies. The Court will then address Counts II, IV, and I, respectively.
Statement of Material Facts
Defendants argue that their Statement of Material Facts (ECF No. 54-2) is undisputed
because Plaintiffs failed to file a responding Statement of Material Facts. ECF No. 61 at 2-3.
Although Plaintiffs are required to follow Local Rule of Civil Procedure 56(a)(2), the Court does
not consider the entirety of Defendants’ Statement of Material Facts undisputed. Plaintiffs
submitted a Statement of Material Facts (ECF No. 56-2) in support of their Partial Motion for
Summary Judgment. To the extent that facts outlined in Plaintiffs’ Statement of Material Facts
dispute facts in Defendants’ Statement of Material Facts, the Court will treat those facts as
disputed. See Fed. R. Civ. P. 56(e). Notably, Plaintiffs properly supported the facts that they did
provide by “citing to particular parts of materials in the record….” Fed. R. Civ. P. 56(c)(1)(A);
see also N.Y. State Teamsters Conference Pension & Ret. Fund v. Express Servs., Inc., 426 F.3d
640, 648-49 (2d Cir. 2005).
Exhaustion of Administrative Remedies
In Kirkendall II, the Second Circuit concluded that “Kirkendall was not required to exhaust
her administrative remedies” and left it to this Court on remand to determine “whether the other
plaintiffs named in this suit” satisfied the standard set forth in the decision. Id. at 181-82. The
Second Circuit joined the Seventh and Eleventh Circuits in “holding that plan participants will not
be required to exhaust their administrative remedies where they reasonably interpret the plan terms
not to require exhaustion and do not exhaust their administrative remedies as a result.” Id. at 181.
Based on that standard, the Court finds that Plaintiffs Snyder, Caya, and Seth were not
required to exhaust their administrative remedies. In Kirkendall II, the Second Circuit noted that
Kirkendall had written letters to Halliburton through an attorney seeking the process to contest her
benefit determinations. Id. at 181. She received no clear answer or none at all. Id. The Second
Circuit noted that “[i]t is apparent that Kirkendall thought that she had pursued the avenues
available to her and reasonably concluded that the only means of vindicating her claim was through
a lawsuit.” Id.
Defendants argue that Snyder, Caya, and Seth made no such inquiries. ECF No. 55 at 17.
They did not write letters, seek the assistance of an attorney, or pursue any administrative remedies.
Id. Plaintiffs’ do not deny Defendants’ claims, but note that the Second Circuit’s standard does
not require plan participants to pursue administrative remedies for the sake of the pursuit. See
ECF No. 60 at 1-5.
The Court agrees with Plaintiffs.
Snyder, Caya, and Seth all knew of the process
undertaken by Kirkendall, knew of Halliburton’s position on denying participants the ability to
“grow in” to early retirement benefits, and reasonably concluded that the “only means of
vindicating [their] claim[s] was through a lawsuit.” Kirkendall II, 707 F.3d at 181. Moreover, the
Second Circuit was clear that it does not require “plaintiffs to exhaust their administrative remedies
where they make a clear and positive showing that pursuing available administrative remedies
would be futile…” Kirkendall II, 707 F.3d at 179 (quoting Kennedy v. Empire Blue Cross & Blue
Shield, 989 F.2d 588, 594 (2d Cir.1993)) (internal quotation marks omitted).
Based on their knowledge, Snyder, Caya, and Seth reasonably interpreted the plan terms
not to require exhaustion and did not exhaust their administrative remedies as a result.
Accordingly, they were not required to exhaust their administrative remedies.
Count II – Benefit Claim
a. Standard of Review
“ERISA does not itself prescribe the standard of review by district courts for challenges to
benefit eligibility determinations.” Novella v. Westchester Cnty., 661 F.3d 128, 140 (2d Cir. 2011)
(quoting Celardo v. GNY Auto. Dealers Health & Welfare Trust, 318 F.3d 142, 145 (2d Cir. 2003))
(internal brackets omitted). “The Supreme Court has instructed that ‘plans investing the
administrator with broad discretionary authority to determine eligibility are reviewed under the
arbitrary and capricious standard.’”
“Otherwise, courts review plan administrators’
determinations de novo.” Id. (citing Mario v. P & C Food Mkts., Inc., 313 F.3d 758, 763 (2d Cir.
“The plan administrator bears the burden of proving that the deferential standard of review
applies.” Fay v. Oxford Health Plan, 287 F.3d 96, 104 (2d Cir. 2002) (citing Kinstler v. First
Reliance Standard Life Ins. Co., 181 F.3d 243, 249 (2d Cir. 1999)). “Although express use of the
terms ‘deference’ and ‘discretion’ in the plan is not necessary to avoid a de novo standard of
review, this Court will construe ambiguities in the plan’s language against” the plan administrator.
The arbitrary and capricious standard of review is proper where the plan administrator has
the power to “interpret” plan provisions, see Jordan v. Ret. Comm. of Rensselaer Polytechnic Inst.,
46 F.3d 1264, 1270-71 (2d Cir. 1995), and “resolve all dispute and ambiguities.” Nichols v.
Prudential Ins. Co. of America, 406 F.3d 98, 108 (2d Cir. 2005) (quoting Kinstler v. First Reliance
Standard Life Ins. Co., 181 F.3d 243, 251 (2d Cir. 1999)).
Here, Defendants have proven that the arbitrary and capricious standard of review applies.
In their Motion for Summary Judgment, Defendants note that DICON “states that the plan
administrator’s powers include the ‘interpretation, construction, and reconciliation’ of plan
provisions and ‘resolution of all questions that may arise hereunder.’” ECF No. 55 at 21; ECF 115 at 24. Plaintiffs argue that DICON does not give Defendants discretion to interpret ambiguous
plan provisions and that any interpretation of DICON provisions by Defendants was a business
decision and not an interpretation.
Plaintiffs’ arguments are unavailing. While DICON does not explicitly grant Defendants
the discretion to interpret ambiguous plan provisions, granting Defendants the ability to “interpret”
plan provisions and “resolve” all questions that arise under the plan definitively entitles
Defendants’ interpretations to arbitrary and capricious review based on the precedent of this
Circuit. Moreover, whether Defendants’ interpretations were a business decision is irrelevant to
determining the Court’s standard of review. Accordingly, Defendants have proven that the
arbitrary and capricious standard of review applies.
b. Plan Interpretation
“ERISA plans are construed according to federal common law.” Fay, 287 F.3d at 103
(citing Masella v. Blue Cross & Blue Shield of Conn., Inc., 936 F.2d 98, 107 (2d Cir. 1991)). The
Court “will review the Plan as a whole, giving terms their plain meanings.” Id. (citing Brass v.
Am. Film Techs., Inc., 987 F.2d 142, 148 (2d Cir. 1993)). It is a “cardinal principle of contract
construction that a document should be read to give effect to all its provisions and to render them
consistent with each other.” Perreca v. Gluck, 295 F.3d 215, 224 (2d Cir. 2002) (quoting
Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 63 (1995)).
The Court will overturn an interpretation under arbitrary and capricious review only if it is
“without reason, unsupported by substantial evidence or erroneous as a matter of law.” Fay, 287
F.3d at 104 (citing Kinstler, 181 F.3d at 249) (internal quotation marks omitted). “Where both the
[plan administrator] of [an ERISA plan] and a rejected applicant offer rational, though conflicting,
interpretations of plan provisions, the [plan administrator’s] interpretation must be allowed to
control.” Novella, 661 F.3d at 140 (quoting Miles v. N.Y. State Teamsters Conference Pension &
Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 601 (2d Cir. 1983)). However, “where the
trustees of a plan impose a standard not required by the plan’s provisions, or interpret the plan in
a manner inconsistent with its plain words, or by their interpretation render some provisions of the
plan superfluous, their actions may well be found to be arbitrary and capricious.” Miles, 698 F.2d
Here, both Defendants and Plaintiffs offer rational, conflicting interpretations of the
DICON provisions, and so Defendants’ interpretation must control. Plaintiffs’ benefit claim
hinges on whether Defendants correctly interpreted DICON to disallow Plaintiffs to “grow in” to
their early retirement benefits after Halliburton sold Dresser’s interest in DR to Ingersoll in 1999.
Under Plaintiffs’ interpretation, DICON declared DR to be a partnership under New York law.
Under New York law, a partnership “continues until the winding up of partnership affairs is
completed.” N.Y. Partnership Law § 61. Thus, until DR completed the winding up of its affairs,
DR continued and its employees participating in DICON were able to “grow in” to their early
Defendants’ interpretation of DICON is also rational because DICON supports
Defendants’ interpretation. Participants in DICON may “grow in” to early retirement rights by
accruing Vesting Service. ECF. No. 11-7 at 24. One manner in which DICON participants may
accumulate Vesting Service is by working for a “Related Entity.” ECF No. 11-7 at 24; ECF No.
11-4 at 15, 19, 26, 30. A “Related Entity” is “each…partnership [or] joint venture…in which
[Dresser] has, either directly or indirectly, a substantial ownership interest.” ECF No. 11-4 at 26.
Section 12.03, which outlines how DR employees could “grow in” to early retirement benefits,
specifically considered the formation of DR as a partnership between Dresser and Ingersoll. ECF
No. 11-7 at 24. Thus, reading DICON as a whole, giving effect to all its provisions, reading them
consistently with each other, and giving their terms plain meanings, it is rational for Defendants to
interpret DR to mean a “partnership [or] joint venture…in which [Dresser] has, either directly or
indirectly, a substantial ownership interest.” Id. Once Halliburton sold Dresser’s interest in DR
to Ingersoll in 1999, Dresser no longer had a substantial ownership interest, direct or indirect, in
DR. Defendants’ interpretation is rational, reasonable and supported by substantial evidence.
Accordingly, both Defendants and Plaintiffs offer rational, conflicting interpretations of the
DICON provisions, and so Defendants’ interpretation must control.
Count IV – Breach of Fiduciary Duty
“In every case charging breach of ERISA fiduciary duty…the threshold question is not
whether the actions of some person employed to provide services under a plan adversely affected
a plan beneficiary’s interest, but whether that person was acting as a fiduciary (that is, was
performing a fiduciary function) when taking the action subject to complaint.” Pegram v.
Herdrich, 530 U.S. 211, 226 (2000).
Here, Defendant Halliburton is entitled to summary judgment on Plaintiffs’ breach of
fiduciary duty claim because it is undisputed that Halliburton did not act as a fiduciary when it
allegedly caused DICON to determine Plaintiffs’ early retirement benefits based on the wrong
In their Complaint, Plaintiffs allege that Halliburton “breached its fiduciary duties of
loyalty and prudence” when it “caus[ed] [DICON] to determine benefits for Plaintiffs and the Class
based on the wrong date of termination….” ECF No. 1 at ¶44. In response, Halliburton argues 3
that HBC, not Halliburton, made the determination Plaintiffs allege and that “[t]here is simply no
evidence” that Halliburton acted as a fiduciary. ECF No. 55 at 34. Plaintiffs argue that the HBC
merely “ratified” a decision made by an unspecified person, most likely Halliburton, and that
Halliburton breached its fiduciary duty by communicating misrepresentations to Plaintiffs
“through its Human Relations employees.” ECF No. 60 at 16. Significantly, Plaintiffs neglect to
provide any record citations for their factual assertions.
The Court agrees with Halliburton for two reasons. First, Plaintiffs did not meet their
burden under Fed. R. Civ. P. 56. They provided no specific facts or evidence “showing that there
is a genuine issue for trial” that would prevent Halliburton from being entitled to summary
judgment. See Fed. R. Civ. P. 56(e); see also Liberty Lobby, Inc., 477 U.S. at 248. Plaintiffs
dispute that HBC made the determination only insofar as they speculate HBC merely ratified
Halliburton’s decision. Without further evidence allowing the Court to make a reasonable
inference in Plaintiffs’ favor, Halliburton has shown that there is no genuine issue of material fact
and it is entitled to judgment as a matter of law.
Halliburton advances other arguments in support of its motion for summary judgment as to Count IV. ECF No. 55
at 27-29. The Court declines to address those arguments, however, because Halliburton is entitled to summary
judgment since it did not act as a fiduciary.
Second, Plaintiffs’ Complaint contends that Halliburton breached its fiduciary duties of
loyalty and prudence by “causing [DICON] to determine benefits for Plaintiffs and the Class based
on the wrong date of termination….” ECF No. 1 at ¶44. The Complaint does not allege that
“Halliburton, through its Human Relations employees…communicated…misrepresentations to
the participants[,]” breaching its fiduciary duty. ECF No. 60 at 16. This Court has previously held
that “a plaintiff may not use a memorandum of law or similar paper to assert a claim that is not
contained in the complaint.” Ribis v. Mike Barnard Chevrolet-Cadillac, Inc., 468 F. Supp. 2d 489,
495 (W.D.N.Y. 2007). Consequently, Plaintiffs’ arguments fail and Halliburton is entitled to
summary judgment as to Count IV.
Count I – Declaratory Judgment
Finally, Defendants are entitled to summary judgment on Plaintiffs’ declaratory judgment
claim. Plaintiffs’ claim seeks a declaratory judgment finding that DR existed past the sale to
Ingersoll and thus Plaintiffs are able to “grow in” to early retirement benefits. ECF No. 1 at 7. In
other words, Plaintiffs seek monetary damages couched in an equitable claim. See Central States,
Southeast & Southwest Areas Health & Welfare Fund v. Gerber Life Ins. Co., 771 F.3d 150, 154
(2d Cir. 2014). This type of claim attempts to work around “ERISA’s express remedies” and
should be dismissed. See id. Accordingly, Defendants are entitled to summary judgment on
Plaintiffs’ declaratory judgment claim.
For the foregoing reasons, Defendants’ Motion for Summary Judgment (ECF No. 55) is
GRANTED, and Plaintiffs’ Cross-Motion for Partial Summary Judgment (ECF No. 56) is
DENIED. The Clerk of the Court is directed to close this case.
IT IS SO ORDERED.
Dated: September 29, 2017
Rochester, New York
HON. FRANK P. GERACI, JR.
United States District Court
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