COTTILLION et al v. UNITED REFINING COMPANY et al
Filing
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MEMORANDUM AND ORDER. Plaintiffs' Motion for Clarification (Doc. 251 ) is DENIED; Defendants' Motion for Attorneys' Fees (filed with Doc. 254 ) is DENIED; Plaintiffs' Motion to Strike (Doc. 252 ) is DENIED; Defendants' Mo tion to Substitute (Doc. 260 is DENIED; the certified class shall consist of the 193 individuals listed in Joint Exhibit 1 (and their beneficiaries under the Plan); judgment hereby is entered in favor of each of the individual certified class membe rs listed in Joint Exhibit 2, in the amounts indicated; and judgment hereby is entered in favor of Gary Berti, Janice Moore, Dennis Tuttle, Homer Morrison, and Stephen Widmer in the amounts set forth in the calculations provided by Defendants. Signed by Judge Cathy Bissoon on 3/24/14. (dcd)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
JOHN COTTILLION, et al., on behalf of
themselves and all others similarly situated,
v.
Plaintiffs,
UNITED REFINING COMPANY, et al.,
Defendants.
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Civil Action No. 09-140 Erie
Judge Cathy Bissoon
MEMORANDUM AND ORDER
I.
MEMORANDUM
This matter is before the Court upon the parties’ submission of a joint report (Doc. 247)
identifying the final composition of the certified class, the payment amounts owed to each
member of that class, and any disputes remaining as to either of the foregoing. In addition, the
following motions are pending: Plaintiffs’ Motion to Clarify the Memorandum and Order Dated
November 5, 2013 (Doc. 251); Plaintiffs’ Motion to Strike (Doc. 252); Defendants’ CrossMotion for Attorneys’ Fees (Doc. 254); and Defendants’ Cross-Motion to Substitute Declaration
(Doc. 260). For the reasons that follow, each of these motions will be denied. A final class
certification order will be issued consistent with this memorandum opinion.
A. BACKGROUND AND PROCEDURAL HISTORY
Plaintiffs John Cottillion (“Cottillion”) and Beverly Eldridge (“Eldridge”) (collectively,
“Plaintiffs”) initiated this action on June 12, 2009, alleging, inter alia, that Defendants had
violated ERISA’s anti-cutback provision, § 204(g), 29 U.S.C. § 1054(g)(2). (Doc. 1). On
April 8, 2013, Judge Sean J. McLaughlin issued a memorandum opinion and order granting
summary judgment in favor of Plaintiffs on their anti-cutback claim. Cottillion v. United
Refining Co., 2013 WL 1419705, *1 (W.D. Pa. Apr. 8, 2013). On November 5, 2013, this Court
granted Plaintiffs’ motion for class certification and certified the following class:
All terminated vested participants of the United Refining Company
Pension Plan for Salaried Employees (“Plan”), who were employed by
United Refining Company and vested under either the 1980 or 1987
version of the Plan at any time between January 1, 1987 and March 18,
2003, and their beneficiaries under the Plan.
Cottillion v. United Refining Co., 2013 WL 5936368, *10 (W.D. Pa. Nov. 5, 2013). The Court
directed the parties to “meet and confer to determine the final composition of the certified class”
and to identify any disputes “as to the composition of the class or the amount of restitution owed
to any individual class member.” Id. at *11.
On January 14, 2014, the parties’ submitted a joint report outlining their stipulations and
disputes concerning final class composition and restitution. (Doc. 247). Specifically, the parties
indicated that they had agreed to the following stipulations:
a. The parties stipulate that the 193 individuals listed in Joint Exhibit 1 (and their
beneficiaries under the Plan) are members of the certified class; and
b. The parties stipulate to the payment amounts due under the Remedies Order as of
December 31, 2013, for the 25 class members that are listed in Joint Exhibit 2.
(Doc. 247 at p. 1). However, the parties could not agree as to whether the following five
individuals qualified as members of the certified class: Lisa Feeny, Charles Fields, Raymond
Gutshall, Gayle Munson, and Stuart Upton. Id. at 2. The parties also disagreed as to the proper
restitution amounts for the following five individual class members: Gary Berti, Janice Moore,
Home Morrison III, Dennis Tuttle, and Stephen Widmer. Id.
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B. ANALYSIS
1. Motion for Clarification
“Although no Federal Rule of Civil Procedure specifically governs ‘motions for
clarification,’ these motions are generally recognized and allowed by federal courts.” Barnes v.
District of Columbia, 289 F.R.D. 1, 13 (D.D.C 2012). “The general purpose of a motion for
clarification is to explain or clarify something ambiguous or vague, not to alter or amend.”
Resolution Trust Corp. v. KPMG Peat Warwick, 1993 WL 211555, at *2 (E.D. Pa. June 8,
1993).
Here, Plaintiffs seek to “clarify” the Court’s November 5, 2013 memorandum and order
with respect to the relief awarded to class members who have reached their Early Retirement
Date but who have not yet commenced receiving a benefit. The pertinent language in the
memorandum stated that Defendants must “provide each class member who has reached their
early retirement date with the opportunity to immediately commence receiving an unreduced
benefit if they choose to do so.” Cottillion, 2013 WL 5936368 at *8. The accompanying order
similarly provided that, “[w]ith respect to those class members who have reached their early
retirement date but have not yet commenced receiving benefits, it is hereby ORDERED that
Defendants must provide each class member so situated with the opportunity to immediately
elect to commence receiving an unreduced benefit if they choose to do so.” Id. at *11. Plaintiffs
urge the Court to interpret this language to require Defendants to provide such class members
with an opportunity to immediately commence an actuarially adjusted benefit – that is, a benefit
that includes an adjustment for the past payments that such class members could have received
had they elected to commence receiving benefits at their early retirement date – rather than
receiving only prospective relief.
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Contrary to Plaintiffs’ assertions, there is nothing ambiguous or vague about the Court’s
order. It simply requires Defendants to provide the class members at issue with the opportunity
to begin receiving benefits immediately, even if they had previously elected to wait until a later
date. Although Plaintiffs urge the Court to interpret this language to require an adjustment for
past benefits that those participants elected not to receive, the Court has already determined that
restitution for such class members “would be entirely speculative.” Cottillion, 2013 WL
5936368 at *8. Consequently, there is nothing to clarify. See, e.g., Wallace v. Powell, 2012 WL
2007294, at *1-2 (M.D. Pa. June 5, 2012) (concluding that clarification of the court’s previous
order was “unwarranted” where the order stated its determination “clearly and unambiguously”).
Plaintiffs’ motion is denied.1
2. Motion to Strike/Motion to Substitute
Plaintiffs’ Motion to Strike addresses the fifth paragraph of a declaration submitted by
Robert Kaemmerer, the Plan Administrator, concerning the dates on which the 1987 Plan was
amended. (Doc. 252). The original paragraph in Kaemmerer’s declaration stated as follows:
Based upon company records, the 1987 Plan was amended effective
January 1, 1995 (the “1995 Plan”) and January 1, 2002 (the “2002 Plan).
A corporate resolution adopted both plans in 1995 and 2002. The
company applied for tax qualification of both Plans and the Internal
Revenue Service issued tax qualification letters. I attach hereto as
Exhibits “C,” “D,” “E,” “F,” “G,” and “H” true and correct copies of the
1995 Plan, the 2002 Plan, the corporate resolution adopting the 1995
Plan, the corporate resolution adopting the 2002 Plan, and the tax two
[sic] qualification letters for both plans respectively.
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Defendants request an award of the attorneys’ fees that they incurred in responding to Plaintiffs’ Motion to Clarify,
contending that Plaintiffs’ motion was the product of “willful bad faith.” (Doc. 254 at p. 13). Although Plaintiffs’
motion lacks merit, the Court does not find that it was designed to “multipl[y] the proceedings . . . unreasonably and
vexaciously” or that it was the product of bad faith. See 28 U.S.C. § 1927. Consequently, Defendants’ motion for a
fee award is denied.
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(Doc. 248 at ¶ 5). Plaintiffs suggest that this portion of Kaemmerer’s declaration contains errors
and contradicts factual findings already made by the Court. Defendants, in response, have
offered (by way of their motion to substitute) to withdraw the offending paragraph and substitute
a corrected version. (Doc. 260).
Courts have “considerable discretion in disposing of a motion to strike under Rule 12(f).”
Dela Cruz v. Piccari Press, 521 F.Supp.2d 424, 428 (E.D. Pa. 2007). In the instant case, the
assertions set forth in each version of Kaemmerer’s declaration are immaterial to matters now
pending before the Court. Each of the documents referenced in Kaemmerer’s declaration is
already part of the record in this case, and the Court is well aware of the import of those
documents and its own previous factual findings. The Court simply has no reason, at this stage
in the proceedings, to utilize or rely upon any representation contained in that portion of
Kaemmerer’s declaration. Consequently, both the motion to strike and the motion to substitute
will be denied.
3. Class Composition Disputes
As noted above, the parties disagree as to whether the following five specific individuals
should be included as members of the certified class. These individuals will be discussed in turn.
a. Lisa Feeny, Charles Fields, Raymond Gutshall and Stuart Upton
To qualify as a member of the certified class in the instant case, an individual must have
vested under either the 1980 or 1987 version of the Plan. Cottillion, 2013 WL 5936368 at *10.
In order to vest, an individual must have been credited with at least five years of vesting service
at the time his or her employment terminated. Id. at *3. With respect to the four individuals
discussed in this subsection, the lone issue in dispute is whether they vested under the 1987 Plan
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(in which case they would be members of the certified class) or the 2002 Plan (in which case
they would not).
By way of background, Feeny, Fields, Gutshall and Upton were hired between
May 19, 1997, and December 8, 1997, at which time the 1987 Plan was still in effect. (Doc.
250-1). However, at the beginning of 2002 – around the time that those four individuals were
approaching five years of vested service – the company was in the process of amending and
restating the Plan. The 2002 Plan was eventually adopted with an effective date of January 1,
2002. (Doc 248-4). As of that date, Feeny, Fields, Gutshall and Upton had not yet accumulated
five years of vested service.
In order to maintain the Plan’s tax qualified status in light of several new legislative
requirements (collectively referred to as “GUST”), Defendants submitted the amended Plan to
the IRS seeking a determination that the Plan was GUST-compliant. (Doc. 143-10). Following
the adoption of a handful of mandatory amendments, the Plan received a favorable determination
letter from the IRS on March 4, 2003. (Doc. 145-4). A restated Plan with the required
amendments was signed on March 18, 2003. Id.
During the time between the effective date of the new Plan (January 1, 2002) and the
adoption of the final GUST-required amendments (March 18, 2003), Feeny, Fields, Gutshall and
Upton each attained five years of vested service. Consequently, in an attempt to bring those
individuals within the scope of the certified class, Plaintiffs contend that the 1987 Plan
Document remained in effect until March 18, 2003. In support of this position, Plaintiffs cite
Depenbrock v. Cigna Corp., 389 F.3d 78 (3rd Cir. 2004), wherein the plaintiff, a pension plan
beneficiary, attacked a plan amendment that had been adopted in a manner contrary to the plan’s
written procedures at the time of its purported effective date. Id. at 79. During the interval
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between the deficient attempt to adopt the amendment and the proper adoption of that
amendment a year later, the plaintiff purportedly accrued rights under the older version of the
plan. Id. at 80. The issue before the Court was whether the company’s initial attempt to amend
the plan was effective and, if not, whether the subsequent, proper adoption of the amendment had
retroactive effect. Id. at 81. On review, the Court of Appeals for the Third Circuit resolved each
of these issues in favor of the plaintiff, concluding that he was entitled to the benefit that he had
accrued between the effective date of the amendment and the formal adoption of that
amendment. Plaintiffs here contend that this holding supports the broader proposition that an
amendment to prospectively eliminated or reduce benefits not yet accrued does not take effect
until the later of the amendment’s adoption date or effective date. (Doc. 247 at p. 3) (emphasis
in original).
Plaintiffs’ argument is misplaced. Unlike Depenbrock, Defendants were not attempting
to correct a deficiency in the amendment process during the interval between January 1, 2002,
and March 18, 2003. Rather, in accordance with well-established IRS procedures, Defendants
submitted the amended Plan documents to the IRS for a determination as to the tax-qualified
status of the Plan. Under the Internal Revenue Code, this procedure, and any subsequent
amendments enacted in order to satisfy IRS requirements, explicitly relate back to the effective
date of the original amendment. See 26 U.S.C. § 401(b) (“A stock bonus, pension, profitsharing, or annuity plan shall be considered as satisfying [certain IRS] requirements . . . for the
period beginning with the date on which it was put into effect . . .”); 26 C.F.R. § 1.401(b)-1
(providing a remedial period following the adoption of a plan amendment in which the plan may
correct provisions that would otherwise affect the plan’s tax-qualified status, and providing that
those amendments relate back to the original effective date of the original amendment); Rev.
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Proc. 2002-73 (allowing plans until September 30, 2003 to enact amendments to pre-approved
plans in order to comply with GUST). There is no case law to support Plaintiffs’ proposition that
a plan amendment is not effective until the plan receives an IRS tax qualification letter certifying
that the amended plan documents have been approved. See Faircloth v. Lundy Packing Co., 91
F.3d 648, 652-54 (4th Cir. 1996) (concluding that an IRS determination letter “does nothing to set
up or manage” a plan); Murphy v. Verizon Comms., Inc., 2010 WL 4248845, *8 (N.D. Tex. Oct.
18, 2010) (concluding that a “determination letter from the IRS . . . does not establish or manage
the plan” or “set out the parties’ rights or obligations”). Consequently, the Court concludes that
Feeny, Fields, Gutshall and Upton each vested under the 2002 Plan, rather than the 1987 Plan,
and are not members of the certified class.
b. Gayle Munson
In order to qualify for a benefit under the 1987 Plan, a beneficiary must be credited with
five years of service with a minimum of 1,000 hours of service each year. With respect to
Munson, Defendants have supplied a declaration from Kaemmerer, the Plan Administrator,
indicating that Munson only reached the 1,000 hour minimum threshold in four of the years that
she worked for United Refining. (Doc. 248). Defendants support Kaemmerer’s determination
with a worksheet indicating that the only years in which Munson worked at least 1,000 hours
were 1985, 1986, 1987 and 1988. (Doc. 248-2). In light of this unrebutted evidence, the Court
concludes that Munson did not vest under the 1987 Plan and does not meet the requirements of
the certified class.
4. Restitution Disputes
Plaintiffs challenge the restitution calculations performed by Defendants with respect to
Gary Berti, Janice Moore, Dennis Tuttle, Homer Morrison and Stephen Widmer. The source of
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this dispute primarily concerns an annuity contract that the Plan purchased from TransAmerica
in 1984. For Plan participants who were employed at United Refining prior to October 1, 1984,
a portion of their benefit under the Plan is funded from the TransAmerica annuity, while the
remainder is funded from the general assets of the Plan. Plaintiffs speculate that Defendants
have miscalculated the restitution amount owed to these individuals by failing to properly
account for the portion of the benefit funded by the TransAmerica annuity, resulting in an
artificially low unreduced benefit calculation. Specifically, Plaintiffs conjecture that Defendants
“appear to have calculated the amount of unreduced benefit payments a class member should
have received by dividing the benefit amount actually paid by the reduction factor (based on the
class member’s age at commencement) that was used to calculate that benefit.” (Doc. 247 at
p. 9). Plaintiffs supply sample calculations demonstrating that this formula would not result in
an accurate unreduced benefits calculation if the value of the TransAmerica annuity is not
properly accounted for. Id. at 9-10.
Defendants, in response, have supplied a declaration from Thomas DeFilippo, a principal
of Towers Watson, the entity that currently serves as the enrolled actuary for the Plan. (Doc.
249). In his declaration, DeFilippo indicates that Plaintiffs’ speculation as to the manner in
which the TransAmerica annuity is accounted for in the Plan’s benefits calculations is unfounded
and incorrect. Id. at ¶ 2. To the contrary, DeFilippo explicitly states that Defendants’
administrative practice has always been to offset the gross benefit amount by the amount of the
TransAmerica annuity before calculating the value of the unreduced monthly benefit. Id. As
such, Defendants are accurately capturing the value of that annuity and reflecting that value in
their calculation of the unreduced benefit amount. Id. at ¶¶ 3-4. In light of DeFillipo’s
explanation and his inherent familiarity with the calculation methods commonly utilized by the
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Plan to determine benefit amounts, the Court will adopt Defendants’ calculations with respect to
Berti, Moore, Tuttle, Morrison and Widmer.2
II.
ORDER
Upon consideration of Plaintiffs’ Motion for Clarification (Doc. 251), Defendants’
Motion for Attorneys’ Fees (Doc. 254), Plaintiffs’ Motion to Strike (Doc. 252), Defendants’
Cross-Motion to Substitute Declaration (Doc. 260) and the parties’ Joint Report concerning
remedies (Doc. 247), the Court hereby ORDERS the following:
1. Plaintiffs’ Motion for Clarification is DENIED.
2. Defendants’ Motion for Attorneys’ Fees is DENIED.
3. Plaintiffs’ Motion to Strike is DENIED.
4. Defendants’ Motion to Substitute is DENIED.
5. The certified class shall consist of the 193 individuals listed in Joint Exhibit 1 (and their
beneficiaries under the Plan).
6. Judgment hereby is entered in favor of each of the individual certified class members
listed in Joint Exhibit 2 in the amounts indicated.
7. Judgment hereby is entered in favor of Gary Berti, Janice Moore, Dennis Tuttle, Homer
Morrison, and Stephen Widmer in the amounts set forth in the calculations provided by
Defendants.
IT IS SO ORDERED.
March 24, 2014
s\Cathy Bissoon
Cathy Bissoon
United States District Judge
cc (via ECF email notification):
All counsel of record
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Plaintiffs additionally contend that Widmer is entitled to a large lump-sum back payment because he chose initially
to commence receiving benefits at his early retirement age, only to change his mind upon being informed that his
benefit would be actuarially reduced. However, this Court has already held that it would not award monetary relief
for participants who elected not to commence receiving benefits. Cottillion, 2013 WL 5936368 at *8.
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