Stark v. Mars, Inc. et al
Filing
59
ORDER granting 43 Defendant's Motion for Summary Judgment; denying 45 Plaintiff's Motion for Summary Judgment. Signed by Judge James L Graham on 7/17/12. (ds)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Virginia Stark,
Plaintiff,
v.
Case No. 2:10-cv-642
Mars, Inc., et al.,
Defendants.
OPINION AND ORDER
This is an action brought pursuant to the Employee Retirement
Income Security Act of 1974 (“ERISA”) and federal common law.
Plaintiff Virginia Stark was an employee of Kal Kan Foods, Inc., a
division of defendant Mars, Inc. (“Mars”), from 1982 to 2004.
The
other defendants named in the complaint were the Mars Benefit Plans
Committee and the Mars Benefit Plans Appeals Committee.
In her first amended complaint filed on September 10, 2010,
plaintiff asserted claims for breach of fiduciary duty based on
defendants’ alleged misrepresentations concerning the amount of her
pension benefits (Count One), promissory estoppel (Count Two),
equitable estoppel (Count Three), and denial of benefits pursuant
to 29 U.S.C. §1132(a)(1)(b) (Count Four). In an order filed on May
11, 2011, this court granted defendants’ motion to dismiss Counts
One and Four insofar as they were asserted against defendant Mars,
and defendants’ motion to dismiss Counts One, Two and Three insofar
as they were asserted against defendant Mars Benefit Plans Appeals
Committee.
See Doc. 27.
On June 16, 2011, the parties filed a
joint stipulation of the dismissal of Count Four without prejudice.
See Doc. 35.
On April 4, 2012, an order was entered which granted
plaintiff’s unopposed motion to substitute real parties in interest
and stated that the sole defendants in this action are Mars, Inc.
and the Mars Inc. U.S. Benefit Plans Committee (“the Committee”).
See Doc. 56.
This matter is before the court on the parties’
cross-motions for summary judgment.
I. Summary Judgment
Standards
“The court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
P. 56(a).
Fed. R. Civ.
The central issue is “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.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).
A
party asserting that a fact cannot be or is genuinely disputed must
support the assertion by citing to particular parts of materials in
the record, by showing that the materials cited do not establish
the absence or presence of a genuine dispute, or by demonstrating
that an adverse party cannot produce admissible evidence to support
the fact.
Fed. R. Civ. P. 56(c)(1)(A) and (B).
In considering a
motion for summary judgment, this court must draw all reasonable
inferences and view all evidence in favor of the nonmoving party.
See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986); Am. Express Travel Related Servs. Co. v. Kentucky,
641 F.3d 685, 688 (6th Cir. 2011).
The moving party has the burden of proving the absence of a
genuine dispute and its entitlement to summary judgment as a matter
of law.
See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
The moving party’s burden of showing the lack of a genuine dispute
can be discharged by showing that the nonmoving party has failed to
establish an essential element of his case, for which he bears the
2
ultimate burden of proof at trial.
Id.
Once the moving party
meets its initial burden, the nonmovant must set forth specific
facts showing that there is a genuine dispute for trial.
322 n. 3.
Id. at
“A dispute is ‘genuine’ only if based on evidence upon
which a reasonable jury could return a verdict in favor of the nonmoving party.”
Niemi v. NHK Spring Co., Ltd., 543 F.3d 294, 298
(6th Cir. 2008).
A fact is “material” only when it might affect
the outcome of the suit under the governing law. Id; Anderson, 477
U.S. at 248.
II. Factual Record
Although the parties disagree about the legal import of the
evidence before the court, there is little dispute as to the events
which form the backdrop for plaintiff’s claims.
Plaintiff was an
employee of Mars until her voluntary resignation in 2004 at age 46.
In 2004, prior to leaving Mars, plaintiff was required to choose
between remaining in the Mars Retirement Plan (“MRP”), a defined
benefit plan, and the new Associate Retirement Plan (“ARP”), a cash
balance plan. Plaintiff was given a booklet which advised her that
her estimated ARP opening balance as of December 31, 2003, would be
$297,826.73, and that if she left the company at age 46, her
estimated monthly benefit at age 50 would be $2,758.
Doc. 43-9,
pp. 3-4. There is no evidence that this information was inaccurate
in light of the information, such as current interest rates,
available to the plan at the time. The booklet further stated that
it was intended to provide general information about the plan, that
the estimates of plan benefits might not reflect actual plan
benefits, and that “if there is any inconsistency between this
statement and the plan documents, the terms of the plan documents
will control.”
Doc. 43-9, p. 6.
3
Plaintiff elected to enroll in
the new ARP plan, thus becoming an ARP-elect participant.
After leaving Mars, plaintiff did not pursue other employment,
but instead lived on her savings and did volunteer work.
In 2008,
plaintiff turned 50 years of age, and was eligible to begin
receiving retirement benefits.
In August of 2008, plaintiff
received a letter dated August 4, 2008, from Mars and Hewitt
Management Company regarding her pension benefits.
Doc. 45-9.
At
that time, Hewitt Associates (“Hewitt”) was under contract with
Mars to operate and maintain the computer database records for the
Mars retirement plans. Hewitt employed its own actuaries to assist
it in programming the computerized benefits calculations.
Hewitt
also operated a web page called “Your Benefits Resources” (“YBR”),
which
provided
information
to
plan
participants
concerning
retirement benefits, and allowed participants to calculate what
their potential retirement benefits would be based on potential
dates for the commencement of benefits.
YRB was also utilized as
a source of plan information by the representatives at the Mars
Benefits Service Center, a call-in center which answered questions
from participants about benefits.
Call center representatives
relied on the information provided by Hewitt and could not perform
their own benefit calculations.
The letter advised plaintiff that
she could begin receiving benefits at any time, and that she
currently had an account balance of $378,763.58.
In February of 2009, plaintiff had exhausted her savings to
the point where she needed to secure additional income.
She
considered re-aligning her investments and beginning a job search,
and also investigated the possibility of activating her pension
benefits.
On February 9, 2009, she visited the YRB website.
Plaintiff noted that, according to the website, a single life five4
year certain annuity would pay benefits of $5,365 per month, with
benefits commencing on June 30, 2009, or December 31, 2009.1
The
website also indicated that as of June 30, 2009, a five-year
certain annuity adjusted for inflation would pay $3,669, a ten-year
certain annuity would pay $2,309 per year, and a ten-year certain
annuity adjusted for inflation would pay $3,644 per year. Doc. 4315, p. 9.
The web page included a disclaimer that “Hewitt
Associates does not give any warranty or other assurance as to the
content of the material appearing on the site, its accuracy,
completeness, timelessness or fitness for any particular purpose.”
Doc. 43-15, p. 7.
On February 10, 2009, plaintiff spoke with Jessica Pierson, a
benefits specialist at the Mars Benefits Service Center.
transcript of the phone call is included in the record.
A
See Doc.
45-13. Plaintiff indicated that she was considering the five-yearcertain single life annuity.
Using the Hewitt system, Ms. Pierson
noted that it was “$5,364.63 a month.”
Doc. 45-13, p. 2.
They
discussed how plaintiff would begin the process of commencing
benefits, and Ms. Pierson explained that plaintiff should complete
the paperwork sixty days in advance of when she wanted to start
receiving benefits.
Doc. 45-13, p. 4.
Plaintiff requested
calculations for starting benefits as of June 30, 2009, and
December 31, 2009.
Plaintiff then stated, “You know, I’ll have to
be honest that this, the number, for either one, the five-year
fixed, or the five-year inflation protected is higher than the
1
The term “certain” referred to this annuity’s feature that if the
participant died less than five years after commencing benefits, the
participant’s designated beneficiary would receive the remaining payments,
whereas if the participant died after receiving payments for five years, no
further benefits would be paid to any beneficiary.
5
numbers that I thought.
So that was very pleasant.”
Ms. Pierson
asked plaintiff how long she had worked for Mars, and plaintiff
responded, “Twenty-three years.” Ms. Pierson then states, “So, see
what a payoff.”
Doc. 45-13, p. 5.
By mail, plaintiff received two documents entitled “Pension
Estimate Calculation Statement” on Mars letterhead, delivered by
Hewitt, dated February 11, 2009, for retirement benefits commencing
as of June 30, 2009, and December 31, 2009.
Doc. 45-10; 45-11.
The statements reported that her plan balance at the commencement
of benefits on June 30, 2009, was estimated at $398,840.01, and
that the balance at the commencement of benefits on December 31,
2009, was estimated at $410,630.59.
Doc. 45-10, p. 1; Doc. 45-11,
p. 1. These statements indicated that for both of these dates, the
monthly benefits for a single life annuity, five-year-certain, was
$5,364.63. The payment for the same annuity adjusted for inflation
was $3,668.87 as of June 30, 2009, and $3,681.75 as of December 31,
2009.
The monthly benefit for a single life annuity, ten-year-
certain was $2,308.63 as of June 30, 2009, and $2,390.19 as of
December
31,
2009.
Both
documents
included
the
following
statement:
Mars, Incorporated reserves the right to correct any
errors. Specifically, if the estimate conflicts with the
benefit defined by the USRP, the USRP will prevail.
Under the law, a plan must be operated in accordance with
its terms.
Doc. 45-10, p. 2; Doc. 45-11, p. 2.
After receiving these statements, plaintiff called the Mars
Benefits Service Center on February 17, 2009, and spoke again with
Ms. Pierson.
This call was also transcribed.
See Doc. 45-14.
Plaintiff asked about starting her benefits as of the end of April.
6
Ms. Pierson verified that plaintiff was requesting the single life
annuity with five-year certain and continuance.
Plaintiff noted
that the amount of the benefit did not change regardless of whether
she commenced benefits in April or June, and she asked if she could
begin receiving benefits as early as the end of April. Doc. 45-14,
p. 1.
March.
Plaintiff then decided to begin benefits as of the end of
Ms. Pierson told plaintiff that she would receive two
payments the end of April, one for March and one for April.
Ms.
Pierson then stated that she was bringing the payment amount up
again on the computer screen to make sure it had not changed, and
she reported that it was still $5,364.63.
Doc. 45-14, p. 5.
Ms.
Pierson indicated that plaintiff would receive the paperwork for
her application for benefits in the mail.
During this
Doc. 45-14, p. 7.
conversation, plaintiff did not comment that the
payment amount seemed high or otherwise question the accuracy of
the information.
Plaintiff
received
by
mail
a
packet
of
materials
dated
February 18, 2009, which included information about making her
pension elections and commencing benefits.
Doc. 43-15.
These
materials also were on Mars letterhead, and delivered by Hewitt.
Plaintiff received a “Pension Calculation Statement” which stated
that as of March 31, 2009, her plan balance was $392,319.07.
43-15, p. 35.
This statement also listed one beneficiary.
Doc.
The
payment options were described as $5,364.63 for the single life
annuity with five-year certain, $3,667.80 for the single life
annuity with five-year certain adjusted for inflation, $2,279.31
for the single life annuity with ten-year certain, and $3,644.19
for the single life annuity with ten-year certain adjusted for
inflation.
Doc. 43-15, p. 36.
The materials also included the
7
statement,
Mars, Incorporated reserves the right to correct any
errors.
If it is determined at any time that the
information provided on this statement conflicts with the
benefit defined by the USRP, the USRP will prevail.
Under the law, a plan must be operated in accordance with
its terms.
Doc. 43-15, p. 38.
In an e-mail to Ms. Pierson dated February 23, 2009, Benefits
Specialist Linda Vesey-Connors stated that she had just spoken with
plaintiff, who was concerned that the paperwork she received only
listed one beneficiary.
her beneficiaries.
Plaintiff had designated two sisters as
Doc. 43-7, p. 2.
Plaintiff testified in her
deposition that during this conversation, she also asked Ms. VeseyConnors if the pension amount was correct. Stark Dep., pp. 74-78.
Plaintiff did not testify what Ms. Vesey-Connor’s response was to
this question. Ms. Vesey-Connors testified that she did not recall
plaintiff questioning the benefit amount in their conversation.
Ms. Vesey-Connors stated that if plaintiff had done so, she would
have referred plaintiff’s question to Ms. Pierson in her e-mail.
Vesey-Connors Dep., p. 18.
The e-mail contains no mention of any
question by plaintiff concerning the amount of her benefit.
On February 24, 2009, plaintiff signed a pension election
authorization form.
Doc. 43-15, p. 53.
This document stated that
plaintiff, through her signature,
[c]ertifies that I understand that Mars, Incorporated
reserves the right to correct any errors.
If it’s
determined at any time that the information provided on
this statement conflicts with the benefit defined by the
USRP, the USRP will prevail. Under the law, a plan must
be operated in accordance with its terms.
Doc. 43-15, p. 54.
Plaintiff began receiving monthly payments of
$5,364.63 at the end of March, 2009.
8
After plaintiff began
receiving pension benefits, she did not engage in a job search or
adjust
her
investments,
and
she
increased
her
discretionary
spending.
Call center representatives cannot independently calculate
pension
benefits
to
identify
information provided by Hewitt.
errors,
as
they
rely
on
the
However, Ms. Pierson testified in
her deposition that the fact that a benefit did not change over a
three-month period would have prompted her to raise the issue with
her supervisor.
Pierson Dep., p. 47.
She recalled Ms. Vesey-
Connors discussing a call she had with another plan participant who
thought that the amount of the benefit seemed high.
Ms. Vesey-
Connors suspected that there might be a glitch in the system and,
and she raised the issue with Benefits Service Center Manager Donna
Croce Farino at a team meeting in February or March of 2009.
Ms.
Vesey-Connors recalled that she raised her concern about how the
system was calculating single life annuity benefits for ARP-elect
associates with either Ms. Farino or Retirement Plans Manager
Bethany Kelleher.
Ms. Vesey-Connors believed that her managers
went to Hewitt with these concerns, and that Hewitt initially
reported back that the system was fine.
Vesey-Connors Dep., pp.
13-14, 34.
More
specifically,
the
record
includes
an
e-mail
dated
February 16, 2009, sent by Ms. Kelleher to a Mars contact at
Hewitt, Ricky Laguerre, questioning the calculations for another
associate, referred to as “B.C.”
Doc. 43-17, p. 3.
Ms. Kelleher
asked why the benefit for the single life annuity with five-year
certain was higher than other benefit options.
Mr. Laguerre
responded on February 17, 2009, and stated that B.C. was an ARPelect participant whose MRP benefit as of June 30, 2004, was higher
9
that the projected ARP benefit.
Under the terms of the ARP, the
associate’s MRP benefit as of June 30, 2004, the date of transition
from the MRP to the ARP, is compared with the benefit available to
the associate under the ARP. If the MRP benefit is higher than the
associate’s
ARP
benefit,
the
MRP
benefit
in
some
cases
is
“grandfathered” into the ARP and the associate receives the higher
MRP benefit amount.
Doc. 43-17, p. 4.
Thus, a significantly
higher benefit would not necessarily raise questions because it may
be a grandfathered or protected benefit.
Deposition of Benefits
Manager Amy Slute, pp. 58-59; Farino Dep., pp. 46-47. A higher MRP
amount can also result in the benefit amount remaining the same
even though
different dates for commencement of benefits are
plugged into the equation.
Farino Dep., p. 48.
In the February 17th e-mail, Mr. Laguerre further explained
that B.C.’s benefit for the single life annuity with ten-year
certain was less than half as much as the benefit for a single-life
annuity
with
five-year
certain
because
B.C.
would
not
qualified for the ten-year certain annuity under the MRP.
have
In that
situation, no benefit under the MRP was grandfathered and the ARP
benefit for the ten-year certain annuity controlled.
However, Mr.
Laguerre also noticed that two other ARP annuities (not the single
life annuity with five-year certain chosen by plaintiff) were not
being compared to the benefits available under the MRP.
Mr.
Laguerre indicated that this issue had been submitted internally to
Hewitt’s Calc Engine Group for research.
Doc. 43-17, p. 5.
His
response was sent to Ms. Kelleher and Ms. Farino, and Ms. Farino
forwarded the e-mail to Ms. Vesey-Connors.
Doc. 43-17, p. 2.
Hewitt subsequently conducted an internal investigation in
which Mars was not involved.
By e-mail dated April 22, 2009,
10
Melinda Roslon, who was a Hewitt benefit service manager and a Mars
contact at Hewitt, advised Ms. Kelleher that Hewitt was continuing
to
hand-check
the
calculations
to
determine
the
amount
of
overpayment to four impacted participants, and that she had also
consulted with Hewitt’s legal resource regarding any recourse for
these participants.
Doc. 43-18, p. 2.
By e-mail dated April 28,
2009, Ms. Roslon advised Ms. Kelleher that Hewitt had completed the
review of the ARP-elect overpayments, and determined that since
December
of
2008,
the
system
had
been
incorrectly
doing
a
comparison of ARP benefits to the grandfathered MRP benefit.
Hewitt also found that the error had affected one additional
participant, bringing the total to five. Doc. 43-19, p. 2. Hewitt
found that the system was erroneously comparing the ARP benefit for
the single-life annuity with five-year certain to the MRP benefit
payable at age sixty-five, not at age fifty.
After receiving the
e-mail on April 28th, Mars requested that Hewitt provide details
concerning the problem and do further research on whether the
problem affected pension estimates. Ms. Farino instructed the call
center representatives not to give out information on benefit
amounts to ARP-elect participants.
By letter dated July 31, 2009, plaintiff was advised that the
amount
of
erroneous.
the
benefits
payments
Doc. 45-15, p. 1.
she
had
been
receiving
was
Ms. Farino also called plaintiff by
phone on August 3, 2009, to inform her of the error and to let her
know to expect the letter in the mail.
The letter was not sent
until July 31, 2009, because it took time to research the error and
to determine who was affected by it.
Farino Dep., p. 56.
The
normal course of action is to investigate the situation, get input
from the legal department and the actuaries, ask the record-keeper
11
(Hewitt) to do an investigation, and draft letters to the affected
group. Slute Dep., p. 102. The letter informed plaintiff that the
correct amount of plaintiff’s benefit was $2,303.18, resulting in
an overpayment of $3,061.45 for five months, or a total overpayment
of $15,307.25.
would
be
Plaintiff was advised that her monthly benefit
reduced
to
$2,199.93,
to
recoup
the
amount
of
the
overpayment plus interest.
On September 29, 2009, plaintiff filed a claim with the
Committee, seeking the higher benefit amount.
Doc. 43-14, p. 2.
By letter dated December 23, 2009, plaintiff’s claim for the higher
benefit was denied.
Doc. 43-15, p. 56.
The letter also stated
that Mars decided to repay the Plan for the $15,307.25 overpayment,
plus interest, that plaintiff’s monthly benefit would be increased
from $2,199.93 to $2,303.12, effective January 31, 2010, and that
plaintiff would also receive a check for $515.95 to compensate her
for the portion of the overpayment which was deducted from her
benefit from August 31, 2009, to December 31, 2009.
Plaintiff was
also offered the opportunity to suspend her pension payments and to
resume them at a later date, and/or to elect another form of
payment.
Doc. 43-15, p. 58.
By letter dated February 11, 2010,
plaintiff filed an appeal from the Committee’s determination. Doc.
43-16, p. 2.
12, 2010.
Plaintiff’s appeal was denied by letter dated April
Doc. 43-8, p. 2.
III. Estoppel Claims
A. Elements of Estoppel Claims
In
Count
estoppel,
and
Two,
in
equitable estoppel.
plaintiff
Count
asserts
Three,
a
plaintiff
claim
of
asserts
promissory
a
claim
of
These forms of estoppel have been recognized
as viable theories in ERISA cases, and are treated the same way.
12
Bloemker v. Laborers’ Local 265 Pension Fund, 605 F.3d 436, 440
(6th Cir. 2010).
The elements of an estoppel claim are: (1) there
must be conduct or language amounting to a representation of
material fact; (2) the party to be estopped must be aware of the
true facts; (3) the party to be estopped must intend that the
representation be acted on, or the party asserting the estoppel
must reasonably believe that the party to be estopped so intends;
(4) the party asserting the estoppel must be unaware of the true
facts; and (5) the party asserting the estoppel must reasonably or
justifiably rely on the representation to his detriment.
Sprague
v. General Motors Corp., 133 F.3d 388, 403 (6th Cir. 1998)(citing
Armistead v. Vernitron Corp., 944 F.2d 1287, 1298 (6th Cir. 1991)).
In Bloemker, the Sixth Circuit held for the first time that
estoppel claims could be asserted in a case involving pension plan
benefits as opposed to welfare plan benefits.
Previously, the
court had held that a party cannot seek to estop the application of
an unambiguous written provision in an ERISA plan, as that would
amount
to
an
argument
that
he
justifiably
relied
on
a
representation that was inconsistent with the clear terms of the
plan, and would have the effect of enforcing something other than
the plan documents themselves.
Marks v. Newcourt Credit Group,
Inc., 342 F.3d 444, 456 (6th Cir. 2003).
However, Bloemker held
that “a plaintiff can invoke equitable estoppel in the case of
unambiguous
pension
plan
provisions
where
the
plaintiff
can
demonstrate the traditional elements of estoppel, including that
the
defendant
engaged
in
intended
deception
or
such
gross
negligence as to amount to constructive fraud, plus (1) a written
representation; (2) plan provisions which, although unambiguous,
did not allow for individual calculation of benefits; and (3)
13
extraordinary
circumstances
in
which
the
balance
strongly favors the application of estoppel.”
of
equities
Bloemker, 605 F.3d
at 443.
Because the Committee, not Mars, is charged with paying
benefits in accordance with the documents
governing the Mars
Benefit Plans, the Committee is the only proper defendant to the
estoppel claims.
Cataldo v. United States Steel Corp., 676 F.3d
542, 553 (6th Cir. 2012).
Thus, Mars is entitled to summary
judgment on the estoppel claims on this ground.
However, in the
interests of judicial economy, the court will address the elements
of the estoppel claim against both defendants.
B. Representation of Material Fact
In this case, the alleged representations concern the amount
of
the
pension
benefit
to
which
plaintiff
was
entitled.
A
representation is “material” if there is a substantial likelihood
that it would mislead a reasonable employee in making an adequately
informed decision about retirement benefits.
See James v. Pirelli
Armstrong Tire Corp., 305 F.3d 439, 449 (6th Cir. 2002). The court
finds that there is no genuine dispute in this case that the
representations to plaintiff about the amount of her pension
benefit concerned a material matter.
C. Awareness of True Facts by Defendants
The second estoppel element is that Mars and the Committee
were aware of the true value of plaintiff’s pension benefit.
This
element requires plaintiff to demonstrate that the defendants’
actions contained an element of fraud, either intended deception or
such
gross
negligence
as
Bloemker, 605 F.3d at 443.
to
amount
to
constructive
fraud.
There is no evidence that Mars, the
Committee or the representatives at the call center knew, at the
14
time the estimates were provided, that they were erroneous, or that
the estimates were given with the intent to defraud plaintiff. The
record shows that Hewitt was under contract with Mars as the record
keeper for the Mars Benefit Plans.
Hewitt was responsible for
maintaining the computer systems which performed the benefits
calculations.
Hewitt.
The YBR website which plaintiff visited was run by
The written benefits statements and forms received by
plaintiff stated that they were “delivered by Hewitt.”
The Mars
call center employees such as Ms. Pierson relied on the information
provided by Hewitt, did not do their own benefits calculations, and
could not identify calculation errors.
There
reasonably
is
no
evidence
conclude
Farino Dep., p. 31.
from
Ms.
that
which
a
Pierson
trier
or
of
any
fact
could
other
Mars
representative knew that the estimates provided to plaintiff in
February of 2009 from the Hewitt website were incorrect.
See
Sheward v. Bechtel Jacobs Co. LLC Pension Plan for Grandfathered
Employees, No. 3:08-CV-428, 2010 WL 841301 at *7 (E.D.Tenn. March
4, 2010)(estoppel claim fails where employer was unaware that
plaintiff’s pension calculation was incorrect at the time of the
representation to him).
When plaintiff commented during the
February 10, 2009, phone conversation with Ms. Pierson that the
amounts seemed high, Ms. Pierson asked plaintiff how long she had
worked
for
years[,]”
Mars,
and
when
plaintiff
responded,
“Twenty-three
Ms. Pierson simply stated, “So, see what a payoff.”
Doc. 45-13, p. 5. This exchange indicates that Ms. Pierson thought
that plaintiff’s years of service accounted for the amount of the
benefit.
The record is also insufficient to show a genuine dispute as
to whether Mars or the Committee or any Mars employee acted with
15
gross negligence tantamount to constructive fraud.
Ms. Pierson
recalled that, at a team meeting in February or March of 2009, Ms.
Vesey-Connors discussed a call she had with another employee who
thought that the amount of the benefit seemed high, and raised the
possibility that there might be a problem in the computer system.
However, the evidence shows that Ms. Kelleher reported these
concerns to Hewitt in an e-mail to Mr. Laguerre, and that Hewitt
initially reported back that the system was fine.
Vesey-Connors
Dep., pp. 13-14, 34.
This is corroborated by the February 17, 2009, e-mail from
Mr. Laguerre to Ms. Kelleher, explaining that the higher amount was
due to the fact that the employee was an ARP-elect participant
whose MRP benefit as of June 30, 2004, was higher than the
projected ARP benefit. Mr. Laguerre noticed that two ARP annuities
(other than the one plaintiff selected) were not being compared to
the benefits available under the MRP, and submitted this issue
internally to Hewitt’s Calc Engine Group for research. Doc. 43-17,
p. 5.
Mars was not involved in Hewitt’s internal investigation.
It wasn’t until the end of April, 2009, that Mars was notified by
Hewitt that a problem stemming from a programming error by Hewitt
in December, 2008, led to erroneous estimates for five employees.
Mars then conducted its own investigation and determined that
plaintiff was one of the affected employees.
plaintiff of the error in early August of 2009.
Mars notified
There is no
evidence that Mars had ever encountered a problem with the accuracy
of Hewitt’s computer services prior to this programming error, or
that Mars had any other reason to question the data provided by
Hewitt.
No trier of fact could reasonably conclude that this
conduct constituted gross negligence.
16
There is likewise no evidence to support a claim that the
inflated estimates were provided to plaintiff with an intent to
defraud.
There is no evidence that Mars or the Mars Benefit Plans
stood to gain anything by the inflation of plaintiff’s pension
figures or plaintiff’s decision to commence her early retirement
benefits when she did. See Pearson v. Voith Paper Rolls, Inc., 656
F.3d 504, 509 (7th Cir. 2011)(noting lack of evidence demonstrating
intentional misrepresentation by the plan where the plan had no
incentive to provide incorrect information to plaintiff as a plan
participant).
Plaintiff was no longer employed at Mars when she
elected to commence her benefits.
This was not a case, for
example, of an employer encouraging an employee to take early
retirement to accomplish a reduction in force or some other type of
economic savings for the company.
At most, the evidence shows that the Mars employees “made an
honest
mistake”
based
on
their
good-faith
reliance
upon
the
information provided by Hewitt, and that they were at most “guilty
of misfeasance, not the malfeasance that estoppel requires.”
Crosby v. Rohm & Hass Co., 480 F.3d 423, 431 (6th Cir. 2007); see
also Pearson, 656 F.3d at 510 (inadvertent mistake or negligence by
the plan in presenting incorrect amounts on pension election form
was
insufficient
to
meet
the
standard
of
knowing
misrepresentation); Schultz-Weller v. Nationwide Mutual Ins. Co.,
670
F.Supp.2d
650,
657
(S.D.Ohio
2009)(miscalculation
due
to
payroll error did not support an estoppel claim); Neiheisel v. AK
Steel Corp., No. 1:06-cv-030, 2008 WL 163610 at *1 (S.D.Ohio Jan.
17, 2008)(rejecting estoppel claim where there was insufficient
evidence suggesting that error in initial calculation of benefits
was anything other than inadvertent). The evidence is insufficient
17
to support this element of the estoppel claims or to raise a
genuine dispute in that regard.
C. Intention that Representation be Acted On
The third estoppel element requires an intention on the part
of the party to be estopped that the representation be acted on, or
conduct toward the party asserting the estoppel such that the
latter has a right to believe that the former’s conduct is so
intended.
In Bloemker, the court found that the complaint was
sufficient
to
state
a
claim
on
this
estoppel
element
where
plaintiff alleged that he received a document stating that he could
elect a pension benefit of a specified dollar amount, including a
certification by the plan administrator that he was entitled to
receive that benefit.
Bloemker, 605 F.3d at 443.
However, there is no reference in Bloemker to any type of
disclaimer language, which distinguishes Bloemker from the instant
case.
The booklet given to plaintiff in 2004 stated that it was
intended to provide general information about the plans, that the
estimates of plan benefits might not reflect actual plan benefits,
and that “if there is any inconsistency between this statement and
the plan documents, the terms of the plan documents will control.”
Doc. 43-9, p. 6.
Plaintiff consulted Hewitt’s YBR web page, which
included a disclaimer that “Hewitt Associates does not give any
warranty or other assurance as to the content of the material
appearing on the site, its accuracy, completeness, timelessness or
fitness for any particular purpose.”
written
estimate
statement
dated
Doc. 43-15, p. 7.
February
11,
2009,
informed
plaintiff:
Mars, Incorporated reserves the right to correct any
errors. Specifically, if the estimate conflicts with the
benefit defined by the USRP, the USRP will prevail.
18
The
Under the law, a plan must be operated in accordance with
its terms.
Doc. 45-10, p. 2; Doc. 45-11, p. 2.
A similarly-worded disclaimer
is found in the pension election materials dated February 18, 2009,
see Doc. 43-15, p. 38, and on the pension election form signed by
plaintiff, see Doc. 43-15, p. 54.
These disclaimers, as well as the use of the word “estimate,”
indicate that Mars and the Committee did not intend for plaintiff
to conclude that the pension benefit figures were guaranteed to be
accurate.
As to whether Mars or the Committee otherwise intended
plaintiff to act on the benefit estimates, there is no evidence in
this case that it mattered one way or another to Mars or to the
Committee
whether
plaintiff
elected
retirement benefits when she did.
to
begin
receiving
her
Further, in light of the
disclaimers, plaintiff could not have reasonably believed that Mars
or the Committee intended for her to rely on the pension estimates
as being error-free.
See Coker v. Metropolitan Life Ins. Co., No.
09-14299, 2011 WL 5838218 at *8 (E.D.Mich. Nov. 18, 2011)(noting
that plaintiff and plan participant could not have reasonably
believed that defendant intended them to rely on confirmation
letter in light of disclaimer).
The evidence in the record is
insufficient to support this element of the estoppel claim, and no
genuine dispute has been shown to exist in regard to this element.
D. Unawareness of True Facts by Plaintiff
The fourth estoppel element requires plaintiff to prove that
she was unaware of the true facts.
To satisfy this element, the
representation must be made to a party without knowledge of the
facts and without the means to ascertain them.
Trustees of
Michigan Laborers’ Health Care Fund v. Gibbons, 209 F.3d 587, 593
19
(6th Cir. 2000).
In addition, to assert an estoppel claim for
pension benefits in a case where the plan is unambiguous, plaintiff
must show that the plan provisions did not allow for individual
calculation of benefits.
Bloemker, 605 F.3d at 443.
There is no argument in this case that any of the provisions
of the plan were ambiguous. However, plaintiff states that she did
not know that the estimates were erroneous, and argues that the
benefit calculations were so complex that she could not reasonably
be expected to have verified the accuracy of the estimates herself.
Ms. Farino testified that the calculations for going from an
ARP account balance to an annuity are complex and require reference
to interest rates and mortality tables.
Farino Dep., p. 43.
Ms.
Farino further stated that although there is an example of the
calculation in the summary plan description, a participant would
still have to use an investment calculator or go to an actuary to
determine the exact benefits.
Farino Dep., pp. 43-44.
The record
suggests that plaintiff was perhaps more knowledgeable than the
typical pension recipient.
Plaintiff stated during the February
17, 2009, telephone call with Ms. Pierson that she was able to look
up the Consumer Price Index to calculate the average rate of
inflation for the past twenty years, and to determine that the
annuity adjusted for inflation was not the better option. Doc. 4514, p. 2.
Nonetheless, it would not be reasonable to require plan
participants to hire their own actuaries or retirement counselors
to verify pension information provided by their employers as a
prerequisite for asserting an estoppel claim.
Defendants also argue that plaintiff could have determined
from the benefits booklet she received in 2004 that the 2009
pension estimates were not correct.
20
Plaintiff was given a booklet
in 2004 which advised her that her estimated ARP opening balance as
of December 31, 2003, would be $297,826.73, and that if she left
the company at age 46, her estimated monthly benefit at age 50
would be $2,758.
Doc. 43-9, pp. 3-4.
Plaintiff acknowledged that
she received this booklet, and that she consulted it before logging
on to the YBR site, but that she did not look at the other
information
in
the
booklet
before
Plaintiff’s Dep., pp. 31, 34, 36.
beginning
her
benefits.
If plaintiff had consulted the
2004 statement which she had in her records, she would have learned
that as of 2004, her estimated benefit at age 50 was $2,758, and
would arguably have anticipated a similar figure upon reaching age
50-and-a-half.
However, the 2004 information would not have
provided her with the exact pension benefit calculated five-andone-half years later in 2009, when circumstances, such as interest
rates, may have changed.
2004
benefit
estimate
While defendants’ argument regarding the
is
relevant
to
the
fifth
element
of
justifiable reliance, the court will assume for purposes of the
summary judgment motions that plaintiff has satisfied the fourth
estoppel element and that she did not know the true amount of her
pension benefit.
E. Justifiable and Detrimental Reliance
1. Justifiable Reliance
Plaintiff
reliance.
must
also
prove
detrimental
and
justifiable
In Bloemker, the court found that plaintiff had alleged
sufficient facts to survive a motion to dismiss where plaintiff
alleged that it would have been impossible for him to determine his
correct pension benefit given the complexity of the actuarial
calculations and his lack of knowledge about the relevant actuarial
assumptions.
Bloemker, 605 F.3d at 443.
21
However, in this case,
there is also evidence that plaintiff received a booklet in 2004
which predicted that her benefit at age 50 would be $2,758.
43-9, pp. 3-4.
Doc.
During the phone conversation with Ms. Pierson on
February 10, 2009, plaintiff stated that she thought that the
numbers for the five-year-fixed and five-year-inflation annuities
were “higher than the numbers that I thought.”
Doc. 45-13, p. 5.
In addition, the statements provided to plaintiff and the YBR
website all had disclaimer language stating that Mars reserved the
right to correct any errors, and that if the estimate conflicted
with the benefit defined by the plan, the plan would prevail.
In
light of these disclaimers, plaintiff could not reasonably rely on
the estimates being correct.
See Livick v. The Gillette Co., 524
F.3d 24, 32 (1st Cir. 2008)(rejecting claim of reasonable reliance
on
erroneous
pension
estimates
where
online
estimator
had
a
prominent disclaimer, and every estimate given to plaintiff was
clearly labeled as an estimate); Mello v. Sara Lee Corp., 431 F.3d
440, 447 n. 6 (5th Cir. 2005)(plaintiff failed to show reasonable
reliance in light of disclaimer which stated that the figures
provided
were
estimates
and
that
the
plan
would
govern
the
determination of benefits); Perreca v. Gluck, 295 F.3d 215, 225-26
(2d Cir. 2002)(rejecting promissory estoppel claim in light of
disclaimer stating that benefits were subject to verification).
Plaintiff relies on Pell v. E.I. DuPont De Nemours & Co. Inc.,
539 F.3d 292 (3d Cir. 2008), arguing that the court in that case
declined to enforce a disclaimer.
that case are distinguishable.
However, the circumstances in
The court relied on the fact that
Pell spoke personally with a pre-retirement counselor, who told him
that his service date was February 10, 1971, not an earlier date.
The court concluded that Pell was justified in concluding, in light
22
of this oral exchange, that the counselor “had set the record
straight” going forward, despite disclaimer language in previous
written communications.
Id. at 302.
In the instant case, the YBR website plaintiff visited on
February 9, 2009, contained a disclaimer.
Plaintiff then spoke
with Ms. Pierson, a call center employee, on February 10, 2009.
Ms. Pierson referred to the online site, then told plaintiff that
she was logging on, and that she could see the calculations
plaintiff had done the previous day.
Thus, it would have been
obvious to plaintiff that Ms. Pierson was looking at the same
information plaintiff had seen the previous day online.
After
plaintiff stated that she was unable to print the screens, Ms.
Pierson stated, “I am happy to get those estimates out to you.”
Doc. 45-13, p. 1 (emphasis supplied). Thus, unlike Pell, this case
did not involve what could reasonably be construed as a definitive
representation by a pre-investment counselor concerning a critical
component of the benefits analysis, Pell’s service date.
Rather,
it would have been clear to plaintiff that Ms. Pierson was simply
agreeing to send out written “estimates” consisting of printed
copies of the benefits calculations plaintiff had already performed
on the website, which featured a disclaimer. Doc. 45-13, pp. 1, 5.
The written benefits calculations sent to plaintiff from Hewitt,
entitled “Pension Estimate Calculation Statement,” also contained
disclaimer language.
Doc 45-10.
When plaintiff spoke with Ms. Pierson again on February 17,
2009, plaintiff enquired about initiating her benefits, and Ms.
Pierson stated, “I’m just bringing up the estimates that we were
looking at.”
Doc. 45-15, p. 1 (emphasis supplied).
Ms. Pierson
explained that at plaintiff’s request, she would generate and send
23
the pension confirmation and authorization forms to plaintiff,
telling her “Right now you have just the estimate.” Doc. 45-14, p.
3 (emphasis supplied).
In light of Ms. Pierson’s use of the word
“estimate,” plaintiff could not have reasonably concluded that Ms.
Pierson was making any binding representation concerning the amount
of her benefits.
The Pension Calculation Statement mailed to
plaintiff
following
this
conversation
language.
Doc. 43-15, p. 38.
contained
disclaimer
By signing the Pension Election
Authorization Form, plaintiff certified that she understood that
Mars “reserves the right to correct any errors” and that if it was
determined at any time that the information provided on this
statement conflicted with the benefit defined by the plan, the plan
would prevail.
Doc. 43-15, p. 54.
In light of the evidence presented, including the disclaimers,
a reasonable trier of fact could not find that plaintiff reasonably
relied on the accuracy of the pension estimates furnished to her.
2. Detrimental Reliance
Plaintiff
must
also
prove
that
she
relied
on
the
representations concerning her pension benefits to her detriment.
Detrimental reliance in the ERISA estoppel context requires a
showing of economic harm.
Pearson, 656 F.3d at 511.
In addition,
the economic harm shown must be more than purely speculative.
Id.
(plaintiff’s claim that he lost an opportunity to bargain for a
better severance package insufficient to show economic harm absent
showing that he had any realistic chance of striking a better
deal).
Plaintiff has presented an affidavit in which she states that
her discretionary spending increased during the first five months
she was receiving the inflated pension benefits.
24
The parties
disagree as to the degree to which this occurred, as plaintiff
admitted to certain figures during her deposition testimony, then
recalculated the percentages in her affidavit. These discrepancies
are not material.
In her deposition, plaintiff acknowledged that
her discretionary spending was as follows:
August, 2008
September, 2008
October, 2008
November, 2008
December, 2008
January, 2009
February, 2009
March, 2009
April, 2009
May, 2009
June, 2009
July, 2009
August, 2009
September, 2009
October, 2009
November, 2009
December, 2009
January, 2010
$1,318.43
$655.83
$1,906.08
$1,513.95
$809.54
$2,503,95
$1,111.98
$1,342.13
$1,864.45
$1,605.14
$1,563.16
$3,168.69 (includes $1,800 MedVet bill)
$1,715.52
$815.12
$1,223.59
$2,020.64
$2,173.60
$1,800.00
These figures demonstrate that both before and after the
period from March 31, 2009, through July 31, 2009, when plaintiff
received the enhanced benefits, plaintiff’s discretionary spending,
reflected in her credit card statements, was consistently in the
$1,000 to $2,000 range, with the exception of August, 2009, which
included a $1,800 bill due to the hospitalization of her cat.
There are months both before and after the enhanced benefits period
in
which
plaintiff’s
discretionary
spending
discretionary spending during that period.
exceeded
her
Thus, it is unclear
which of these expenditures plaintiff would have elected not to
incur absent the inflated pension benefits she was receiving.
However,
discretionary
even
assuming
spending
that
during
the
25
there
was
five-month
an
increase
period,
in
those
increases were modest and are not sufficient to establish economic
loss, as they were more than covered by the inflated pension
payments which plaintiff was permitted to keep.
the
plan
for
the
overpayment
to
plaintiff
in
Mars reimbursed
the
amount
of
$15,307.25, plus interest, refunded to plaintiff the amount which
had previously been deducted from plaintiff’s checks from August,
2009, to December, 2009, to recoup the overpayment, and permitted
plaintiff to keep the overpayment.
Doc. 43-15, p. 58.
Therefore,
regardless of the extent to which plaintiff increased her spending
in reliance on the higher amount, the evidence shows that those
expenses
were
covered
by
Mars’
decision
not
to
recoup
the
overpayment.
There is no evidence that plaintiff incurred any major debt in
reliance on the erroneous pension amounts which she was later
obligated to pay following the reduction in her benefits.
For
example, there is no evidence that plaintiff signed a mortgage in
reliance on her benefits; the record reveals that plaintiff already
owned her home.
Although plaintiff had made arrangements for some
home improvements and remodeling, she was able to cancel those
plans.
Stark Dep., p. 116.
Plaintiff stated that she had
purchased plants for landscaping, and had done some painting and
minor repairs in May.
Stark Dep., p. 117.
Those expenditures
would be reflected in the credit card bills discussed above, which
would have been covered by the pension payments she received.
Plaintiff incurred a bill of $1,800 in July of 2009 when she
decided to place her cat in the hospital.
However, plaintiff said
in her deposition that she did not know if she would have stopped
treatment rather than placing her cat in the hospital when his
health deteriorated in July had she not had the inflated pension
26
benefits.
Stark Dep., p. 171.
She had hospitalized him in the
past prior to receiving pension benefits. In any event, the record
includes no evidence that any extra expenses plaintiff incurred
from March to July of 2009 in reliance on the higher benefit amount
were not covered by the overpayment she was allowed to keep.
Plaintiff
testified
that
following
the
reduction
of
her
benefits, she decreased her discretionary spending, put vacation
plans on hold, and decided to euthanize her cat around the end of
2009 when his health deteriorated.
These are actions taken after
plaintiff was informed of the accurate amount of her pension
benefit.
Although these budget decisions may be an unfortunate
consequence of the reduction of plaintiff’s benefits to the amount
to which she was actually entitled under the plan, they do not
constitute acts taken in reliance on any earlier representations of
a higher benefit amount.
Plaintiff also argues that had she been aware of the true
amount of her pension benefit, she might have pursued other
alternatives,
such
as
beginning a job search.
restructuring
her
other
investments
or
However, there is no evidence that she
sustained any economic loss by foregoing these options in February
of 2008, when she elected to commence her retirement benefits.
There is no evidence that she would have been precluded from
restructuring her investments when she learned five months after
commencing her benefits that they would be reduced.
In fact,
plaintiff stated in her deposition that she subsequently reworked
her investments.
Stark Dep., p. 140.
There is also no evidence
that plaintiff turned down a job offer or abandoned any promising
job prospect in reliance on the higher benefit.
She acknowledged
at her deposition in taken in October, 2011, that she did not go
27
back to work or begin a job search after her benefits were reduced,
and that it probably would have been difficult for her to obtain
employment after being off work for five years.
Stark Dep., pp.
82, 133, 140. The mere possibility that plaintiff may have secured
employment if she had commenced a job search in February, 2009, is
entirely speculative.
Plaintiff further argues that she sustained an economic loss
by reason of the fact that her plan account ceased to accrue
interest when she began drawing her benefits. Under §5.2(d) of the
plan, the account of an ARP participant continued to accrue
interest until the last Friday of the month preceding the month in
which his or her benefits commence.
Doc. 17-1, p. 54.
In other
words, once plaintiff started to receive benefits, her retirement
account no longer accrued interest under the terms of the plan.
Plaintiff posits that had she known the accurate amount of her
retirement benefit, she may not have elected to begin payments, in
which case her account would have continued to accrue interest.
However, when asked at her deposition if she would have elected to
start her retirement benefits in February of 2009 had she known the
correct amount of her benefit, plaintiff answered, “I don’t know.”
Stark Dep., p. 82.
Further, in the December 23, 2009, decision
denying her appeal, plaintiff was offered to opportunity by Mars to
suspend her monthly pension payments and resume them at a later
date.
Doc. 43-15, p. 58.
Plaintiff was given until January 28,
2010, prior to the January 31, 2010, pension payment, to decide
whether to suspend her benefits.
Despite this offer, plaintiff
opted to continue receiving pension benefits.
In light of this
evidence, plaintiff’s argument that she may have opted against
starting her benefits so that her account would continue to accrue
28
interest had she known the true benefit amount becomes mere
speculation.
Further, the fact that plaintiff was offered the
opportunity to suspend her retirement benefits and to resume
payments at a later date also means that plaintiff cannot complain
of any loss of interest.
See Carlo v. Reed Rolled Thread Die Co.,
49 F.3d 790, 795 (1st Cir. 1996)(plaintiff not deprived of an ERISA
benefit where, after his employer discovered the error regarding
plaintiff’s
retirement
benefits,
plaintiff
was
offered
the
opportunity to continue working so that his retirement benefits
would not be adversely affected).
The court concludes that the evidence does not demonstrate the
existence
of
a
genuine
dispute
on
the
issue
of
detrimental
reliance.
F. Other Factors
As to the remaining estoppel factors required in an ERISA
pension plan case, it is undisputed that plaintiff received a
written statement. As noted above, there is also evidence that the
plan terms, although unambiguous, did not allow for individual
calculation of benefits.
The third additional factor requires a
showing of exceptional circumstances.
This factor requires the
plaintiff to point to circumstances “beyond the ordinary.” Aramony
v. United Way Replacement Benefit Plan, 191 F.3d 140, 152 (2d Cir.
1999).
The presence of any of the basic estoppel elements of does
not in itself render a case “extraordinary.” See Pearson, 656 F.3d
at 551 (plaintiff’s reliance on erroneous pension figures during
severance
negotiations
circumstances);
Devlin
v.
did
not
present
Transportation
extraordinary
Communications
Int’l
Union, 173 F.3d 94, 102 (2d Cir. 1999)(reliance, one of the
elements
of
basic
estoppel,
not
29
sufficient
to
constitute
extraordinary circumstance).
Extraordinary circumstances “generally involve acts of bad
faith on the part of the employer, attempts to actively conceal a
significant change in the plan, or commission of fraud.” Jordan v.
Federal Express Corp., 116 F.3d 1005, 1011 (3d Cir. 1997); see also
Kurz v. Philadelphia Elec. Co., 96 F.3d 1544 (3d Cir. 1996)(despite
erroneous information about pending changes to retirement plan,
extraordinary circumstances not found where there was no conduct
suggesting that employer sought to profit at the expense of
employees, no evidence of repeated misrepresentations over time,
and no suggestion that plaintiffs were particularly vulnerable).
Extraordinary circumstances have been found to be present or
sufficiently
alleged
in
a
case
where
the
employer
promised
severance benefits to induce the plaintiff to retire, see Schonholz
v. Long Island Jewish Med. Ctr., 87 F.3d 72,, 79-80 (2d Cir. 1996),
and where the employees devoted twenty to forty years of service to
the company in reliance on repeated guarantees of lifetime life
insurance benefits at no cost, see Devlin v. Empire Blue Cross and
Blue Shield, 274 F.3d 76, 86-87 (2d Cir. 2001)(holding summary
judgment for defendant was not appropriate).
In Bloemker, the
Sixth Circuit held that plaintiff had alleged sufficient facts to
survive a motion to dismiss, where plaintiff retired in reliance on
a certification that he was entitled to retirement benefits in the
amount of $2,339.47 per month, and where he received that benefit
for almost two years before he was informed that his benefit would
be reduced to $1,829.71, and that he would be required to repay
$11,215.16.
Bloemker, 605 F.3d at 439, 444.
In Pell, plaintiff was induced to transfer his employment to
DuPont based on the representation that his years of service with
30
his previous employer would be counted under the DuPont pension
plan.
Pell, 539 F.3d at 297-98.
From 1984 to 2000, he was
repeatedly informed that his previous service date would apply, and
was not told until December 19, 2000, that the previous service
date information was erroneous.
Id. at 298-299.
There was
evidence that if plaintiff had known that the pension information
was erroneous, he could have considered returning to his previous
employer rather than making the transfer to DuPont permanent, could
have obtained other employment with a better pension, or could have
retired sooner to start a consulting business.
Id. at 303.
The
court concluded that the employer’s affirmative misrepresentations
over an extended period of time and plaintiff’s diligence in asking
persistent questions about his benefits constituted extraordinary
circumstances.
Id. at 304-05.
In the instant case, plaintiff left her employment with Mars
in 2004, over four years prior to commencing her retirement
benefits.
benefit
There is no evidence that the account summary and
estimate
she
received
employment were inaccurate.
shortly
before
she
left
her
The erroneous estimates she received
in 2008 were unrelated to her decision to leave her employment in
2004.
There is no evidence that plaintiff was persuaded to accept
or continue her employment, to decline other employment offers or
to leave her employment in reliance on promised benefits.
See
Devlin, 173 F.3d at 102 (extraordinary circumstances not show where
there was no evidence that the employer induced plaintiffs to
retire or otherwise used the promise of benefits to induce any
particular behavior on plaintiffs’ part).
There is also no evidence that Mars or the Committee acted in
bad
faith
or
with
an
ulterior
31
motive,
or
that
they
induced
plaintiff to begin receiving retirement benefits to further some
purpose of their own.
Rather, this is simply a case where
erroneous information was unwittingly provided due to a computer
programming error by Hewitt, the contract record keeper for the
plan.
The mere fact that plaintiff claims she relied on this
information is not enough.
See Pearson, 656 F.3d at 551; Devlin,
173 F.3d at 102.
This is also not a case where the same misrepresentations were
made over an extended period of time, nor was there an unusual
number of inquiries by plaintiff.
YBR website on February 10, 2009.
Plaintiff first consulted the
She then spoke with Ms. Pierson
on February 11, 2009, because she was unable to print the screens
from the YBR website. Ms. Pierson looked at the same screens which
plaintiff
had
used
to
make
benefit
calculations.
Although
plaintiff commented during the conversation that the benefits
seemed higher than she thought, she did not specifically question
the accuracy of the information or ask Ms. Pierson to investigate
further.
After receiving the written estimates dated February 11,
2009, in the mail, plaintiff spoke with Ms. Pierson on February 17,
2009,
for
the
purpose
of
asking
how
she
could
commence
her
benefits. Plaintiff did not raise any concerns about the amount of
the estimate during this conversation.
Plaintiff then received a
packet of written materials, including an election form. Plaintiff
spoke with Ms. Vesey-Connors on February 23, 2009, about the fact
that only one of her designated beneficiaries was listed on the
form.
Plaintiff testified in her deposition that she asked Ms.
Vesey-Connors, “Are you sure that the pension number is right?”
Stark Dep., pp. 74-75.
what
Ms.
Vesey-Connors
However, plaintiff did not testify as to
said
in
32
response.
This
telephone
conversation was not recorded, and Ms. Vesey-Connors made no
mention of this inquiry in her e-mail to Ms. Pierson.
Even
accepting plaintiff’s claim that she questioned the amount of her
benefit in her conversation with Ms. Vesey-Connors, this would be
only the second time that plaintiff made any statement which could
remotely be construed as raising the issue of the accuracy of the
benefit estimate.
24, 2009.
Plaintiff signed the election form on February
The entire application process took two weeks.
This
case falls far short of the circumstances in Pell, in which the
plaintiff repeatedly inquired and was repeatedly assured about the
accuracy of his service date over a period of sixteen years.
This case is also distinguishable from the situation in
Bloemker, where the plaintiff received benefits for almost two
years before being advised of the error, and then was ordered to
repay the overpayment.
In this case, Mars was not advised by
Hewitt until the end of April, 2009, that an error had occurred,
and Mars then promptly ordered an investigation to determine how
many employees were affected.
Plaintiff had just received her
fifth benefit check when she was notified of the error on July 31,
2009.
The plaintiff in Bloemker was ordered to repay the excess
amount of $11,215.16, whereas plaintiff here was not required to
repay the plan for the overpayment.
Rather, Mars repaid the plan
for the overpayment of $15,307.25 plus interest.
The opinion in Bloemker also says nothing about disclaimers.
In this case, the website and the written materials all contained
disclaimers advising plaintiff that Mars reserved the right to
correct any error, and that the terms of the plan would control.
In her conversations with plaintiff, Ms. Pierson spoke in term of
“estimates,”
not
guarantees,
and
33
the
written
materials
dated
February 11, 2009, were also labeled as a pension “estimate.”
The court finds that no reasonable trier of fact could
conclude that extraordinary circumstances were present in the
instant case.
G. Conclusion
For the foregoing reasons, defendants are entitled to summary
judgment on plaintiff’s estoppel claims.
IV. Breach of Fiduciary Duty
A. Elements of Claim
The Sixth Circuit has recognized an equitable claim by a
participant against an ERISA plan fiduciary arising out of 29
U.S.C. §1132(a)(3) when a fiduciary misleads a participant or
beneficiary.
Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 432
(6th Cir. 2006)(citing Krohn v. Huron Mem. Hospital, 173 F.3d 542,
546 (6th Cir. 1999)). To establish a claim for breach of fiduciary
duty
based
on
alleged
misrepresentations
concerning
benefits
available under an employee benefit plan, plaintiff must show: (1)
that the defendant was acting in a fiduciary capacity when it made
the challenged representations; (2) that these representations
constituted material misrepresentations; and (3) that the plaintiff
relied on those misrepresentations to her detriment.
F.3d at 433.
Moore, 458
A fiduciary breaches his duty by providing plan
participants with materially misleading information regardless of
whether
the
negligently
fiduciary’s
or
statements
intentionally.
or
Krohn,
omissions
173
F.3d
at
were
547.
made
A
misrepresentation is material if there is a substantial likelihood
that it would mislead a reasonable employee in making an adequately
informed decision about benefits.
B. Meaning of “Fiduciary”
34
Moore, 458 F.3d at 433.
The threshold issue is whether Hewitt or the call center
employees were acting as fiduciaries when they provided plaintiff
with erroneous pension estimates.
Under ERISA,
a person is a fiduciary with respect to a plan to the
extent (i) he exercises any discretionary authority or
discretionary control respecting management of such plan
or exercises any authority or control respecting
management or disposition of its assets, (ii) he renders
investment advice for a fee or other compensation, direct
or indirect, with respect to any moneys or other property
of such plan, or has any authority or responsibility to
do so, or (iii) he has any discretionary authority or
discretionary responsibility in the administration of
such plan.
29 U.S.C. §1002(21)(A). A fiduciary within the meaning of ERISA is
someone acting in
the capacity of manager, administrator, or
financial adviser to a plan. Pegram v. Herdrich, 530 U.S. 211, 222
(2000).
The Sixth Circuit employs a functional test to determine
fiduciary status.
Briscoe v. Fine, 444 F.3d 478, 486 (6th Cir.
2006); see also Mertens v. Hewitt Assocs., 508 U.S. 248, 262
(1993)(ERISA
“defines
‘fiduciary’
not
in
terms
of
formal
trusteeship, but in functional terms of control and authority over
the plan”).
plan
is
a
Under the statute, an administrator or manager of the
fiduciary
only
“to
the
extent”
that
he
exercises
discretionary authority, control, or responsibility respecting the
management of the plan, the disposition of its assets, or the
administration
§1002(21)(A).
of
the
plan.
Pegram,
530
U.S.
at
225-226;
Thus, it is necessary to ask whether a person is a
fiduciary with respect to the particular activity in question.
Briscoe, 444 F.3d at 486.
Persons performing administrative and ministerial functions
are
not
fiduciaries.
Id.
at
488
(entity
which
performs
administrative and ministerial tasks that did not involve the
35
exercise of discretionary authority was not a fiduciary); Flacche
v. Sun Life Assur. Co. of Canada (U.S.), 958 F.2d 730, 734 (6th
Cir. 1992)(defendant company which performed only ministerial
functions for the plan was not acting as a fiduciary when it
mistakenly calculated plaintiff’s retirement benefits); Baxter v.
C.A. Muer Corp., 941 F.2d 451, 455 (6th Cir. 1991)(person without
power to make plan policies or interpretations and who performs
purely ministerial functions such as processing claims, applying
plan
eligibility
rules,
communicating
with
employees,
calculating benefits is not a fiduciary under ERISA).
and
Department
of Labor regulations state that persons “who have no power to make
any decisions as to plan policy, interpretations, practices or
procedures, but who perform the following administrative functions
for
an
employee
benefit
plan”,
including
“[p]reparation
of
employee communications material[,]” “[c]alculation of benefits[,]”
and “advising participants of their rights and options under the
plan[,]” are not fiduciaries. 29 C.F.R. §2509.75-8 (D-2). Rather,
only persons who perform functions as described in §1002(21)(A)
with
respect
to
an
employee
benefit
plan
are
fiduciaries.
§2509.75-8 (D-2).
Therefore, a person who performs purely ministerial
functions such as the types described above for an
employee benefit plan within a framework of policies,
interpretations, rules, practices and procedures made by
other persons is not a fiduciary because such person does
not have discretionary authority or discretionary control
respecting management of the plan, does not exercise any
authority or control respecting management of the plan,
does not exercise any authority or control respecting
management or disposition of the assets of the plan, and
does not render investment advice with respect to any
money or other property of the plan and has no authority
or responsibility to do so.
§2509.75-8 (D-2).
36
There is no evidence that Hewitt or any of the employees at
the
call
center
exercised
any
discretionary
authority
or
discretionary control respecting management of such plan, exercised
any authority or control respecting management or disposition of
its assets, or had any discretionary authority or discretionary
responsibility in the administration of such plan.
F.3d at 490-91.
Briscoe, 444
Hewitt was the record keeper for the plan and did
not make benefits decisions.
Slute Dep., pp. 13, 23.
Rather,
Hewitt and the employees at the call center were performing
ministerial functions, including the calculation of benefits using
information
provided
by
the
plan,
preparation
of
employee
communications material, advising participants of their rights and
options under the plan.
their
own
benefit
provided by Hewitt.
The call center employees did not perform
calculations,
and
utilized
the
information
The call center employees and Hewitt were not
acting as fiduciaries when they provided the erroneous pension
estimates
to
plaintiff.
See
Livick,
524
F.3d
at
29
(human
resources representative who provided plaintiff with estimate of
future pension benefits was not acting as a fiduciary); Sheward,
2010 WL 841301 at *5 (person performing ministerial function of
providing plaintiff with pension estimate was not acting as a
fiduciary; the mere fact that an error occurred in the calculation
of plaintiff’s benefits was not sufficient to support a claim for
breach of fiduciary duty).
C. Reliance by Mars and the Committee on Hewitt’s Information
A fiduciary must act “with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with
37
like aims[.]”
29 U.S.C. §1104(a)(1)(B).
However, the Department
of Labor regulations provide:
A plan fiduciary may rely on information, data,
statistics or analyses furnished by persons performing
ministerial functions for the plan, provided that he has
exercised prudence in the selection and retention of such
persons. The plan fiduciary will be deemed to have acted
prudently in such selection and retention if, in the
exercise of ordinary care in such situation, he has no
reason
to
doubt
the
competence,
integrity
or
responsibility of such persons.
29 C.F.R. §2509.75-8 (FR-11); see also Christensen v. Qwest Pension
Plan, 462 F.3d 913, 918 (8th Cir. 2006).
In the absence of
evidence that a fiduciary failed to exercise ordinary care in
selecting and retaining a record keeper or in monitoring the
accuracy
of
an
automated
system,
a
fiduciary’s
reliance
on
erroneous data will not amount to a breach of fiduciary duty.
Christensen, 462 F.3d at 918; Hart v. Equitable Life Assurance
Society, 75 Fed.App’x 51, 53-54 (2d Cir. 2003); Schmidt v. Sheet
Metal Workers’ Nat’l Pension Fund, 128 F.3d 541, 547-48 (7th Cir.
1997)(finding no breach of fiduciary duty where trustees were
unaware of misstatement of ministerial employee).
There is no evidence that Mars or the Committee breached a
fiduciary duty to plaintiff by relying on the information provided
by
Hewitt.
There
is
no
evidence
that
Hewitt
had
provided
inaccurate information prior to this instance, which was caused by
a computer programming error in December of 2008.
Mars audits ten
percent of retirements on a monthly basis at random to ensure
accuracy (plaintiff’s benefits were not included in this random
sampling).
reports.
Farino Dep., pp. 27-29.
Slute Dep., p. 18.
Hewitt also sent Mars audit
Ms. Farino was involved in weekly
calls to Hewitt to review outstanding cases.
38
Farino Dep., p. 29.
When Ms. Vesey-Connors became concerned about the estimates for
B.C., another plan participant, her supervisors promptly brought
the matter to the attention of Mr. Laguere at Hewitt, and Hewitt
began its investigation into the matter.
When Hewitt reported the
problem to Mars at the end of April, 2009, Mars began its own
investigation.
Thus, there is no evidence to support a claim of
breach of fiduciary duty based on the retention of Hewitt or
reliance on information provided by Hewitt.
D. Detrimental Reliance on Misrepresentations
As noted in regard to the estoppel claims, the pension
estimates in this case were material.
However, plaintiff must
prove that she relied on the misrepresentations to her detriment,
and that her reliance on the misrepresentations was reasonable.
Moore, 458 F.3d at 433.
For the reasons outlined in connection
with plaintiff’s estoppel claims, the evidence is insufficient to
show
that
plaintiff’s
reliance
on
the
representations
was
reasonable, particularly in light of the disclaimers, see Coker,
2011 WL 5838218 at *6 (disclaimer applied to defeat element of
reliance for purposes of breach of fiduciary duty claim), or that
she relied on the representations to her detriment.
E. Conclusion
For the foregoing reasons, defendants are entitled to summary
judgment on plaintiff’s claim of breach of fiduciary duty.
V. Ruling on Motions
In accordance with the foregoing, plaintiff’s motion for
summary judgment (Doc. 45) is denied.
Defendants’ motion for
summary judgment (Doc. 43) is granted.
The clerk shall enter
judgment in favor of the defendants in accordance with this order
and the court’s order of May 11, 2010.
39
Date: July 17, 2012
s/James L. Graham
James L. Graham
United States District Judge
40
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?