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SHERRY v. CENTRAL NATL. BANK OF CANAJOHARIE

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK


May 24, 1995

ROBERT E. SHERRY, Plaintiff,
v.
CENTRAL NATIONAL BANK OF CANAJOHARIE, Defendant.

The opinion of the court was delivered by: DAVID N. HURD

MEMORANDUM-DECISION and ORDER

 I. Introduction.

 This action was originally commenced in New York's Small Claims Court in the County of Montgomery on September 6, 1994. The complaint alleges a cause of action for breach of contract under state law.

 On September 26, 1994, the action was removed by the defendant to this court pursuant to the provisions of Title 28 U.S.C. §§ 1331 and 1441 upon payment of the $ 120.00 filing fee. Specifically, it was removed on the grounds that the action arose under the Employee Retirement Insurance Security Act ("ERISA"), Title 29 U.S.C. § 1001 et. seq. Defendant moved and plaintiff cross-moved for summary judgment pursuant to Federal Rules of Civil Procedure 56 - plaintiff claiming no issue of fact that a breach of contract occurred; and defendant claiming a failure to state a claim upon which relief may be granted.

 II. Summary Judgment Standard.

 A motion for summary judgment may be granted only when the moving party carries its burden of showing the absence of a genuine issue of material fact. Fed. R. Civ. P. 56; Goldman, Antonetti, Ferraiuoli, Axtmayer & Hertell, Partnership v. Medfit Int'l, Inc., 982 F.2d 686, 689 (1st Cir. 1993); Thompson v. Gjivoje, 896 F.2d 716, 720 (2d Cir. 1990) (citations omitted). "In assessing the record to determine whether there is a genuine issue as to any material fact, the trial court is required to resolve all ambiguities and draw all inferences in favor of the party against whom summary judgment is sought." LaFond v. General Physics Services Corp., 50 F.3d 165, 171 (2d Cir. 1995) (citing Gallo v. Prudential Residential Services, Ltd. Partnership, 22 F.3d 1219, 1224 (2d Cir. 1994)); see also Project Release v. Prevost, 722 F.2d 960, 968 (2d Cir. 1983). In other words, a motion for summary judgment pursuant to Fed. R. Civ. P. 56 shall be granted only "when the pleadings, evidence obtained through discovery, and affidavits show that there is no genuine issue as to any material fact, and that the moving party is entitled to summary judgment as a matter of law." Lang v. Retirement Living Pub. Co., 949 F.2d 576, 580 (2d Cir. 1991).

 "The judge's function is not . . . to weigh the evidence and determine the truth of the matter," Anderson v. Liberty Lobby, 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986), such "is the prerogative of the finder of fact." Murphy v. Provident Mutual Life Ins. Co., 923 F.2d 923, 930 (2d Cir. 1990) (Kearse, J., dissenting), cert. denied, 502 U.S. 814, 116 L. Ed. 2d 40, 112 S. Ct. 65 (1991). "The trial court's task at the summary judgment motion stage . . . is carefully limited to discerning whether there are any genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue-resolution." LaFond, 50 F.3d at 171 (quoting Gallo, 22 F.3d at 1224) (emphasis in original).

 Thus, once the moving party has met its burden, if the nonmoving party cannot produce sufficient evidence to support the jury verdict, summary judgment is proper. Liberty Lobby, 477 U.S. at 249. However, when the moving party has met the burden, the nonmoving party must do more than "simply show that there is some metaphysical doubt as to the material facts." Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986); see also Liberty Lobby, 477 U.S. at 247-48. At that point, the nonmoving party must come forward with specific facts showing that there is a genuine issue for trial. Id.

 In a case where both sides have moved for summary judgment, as is the case at bar, each side must sustain its burden of proving the absence of disputed issues of material fact in order to be successful.

 III. Facts.

 Robert Sherry was an employee at the Central National Bank in Canajoharie, New York ("Central") for several years. He joined the "Profit Sharing and 401-k Trusteed Plan" ("Plan") offered through his employer on July 20, 1987, and remained a participant in that Plan until his termination by Central on January 27, 1994, by which time he had become 100% vested in the plan.

 Plaintiff claims that after his termination, Central wrongly retained $ 257.01 of funds contributed to his Plan which plaintiff claims he is entitled to. Central argues that according to the terms of the Plan, the $ 257.01 constituted excess funds which were required to be forfeited under the conditions that were present at the time of his termination.

 IV. Discussion.

 The Internal Revenue Code limits the amount of contributions that may be made to an employee benefit plan during one year. The Internal Revenue Code refers to these contributions made during a one year interval as "annual additions." Section 415(c) sets this limit, stating in part:

 

(1) In general. Contributions and other additions with respect to a participant exceed the limitation of this subsection if, when expressed as an annual addition (within the meaning of paragraph (2)) to the participant's account, such annual addition is greater than the lesser of -

 

(A) $ 30,000, or

 

(B) 25 percent of the participant's compensation.

 26 U.S.C. § 415(c) (1995).

 Central calculated plaintiff's 415 Compensation as $ 17,176.41. (See Pl. Not. of Cross-Mot. Ex. P-5). This amount is the compensation amount sought in subsection (B) above. The resulting calculation from subsection (B) (i.e. 25% of that compensation) then works as a ceiling limitation; the maximum amount that may be contributed to a fund during any one year. Thus the higher the 415 Compensation, the higher the annual additions may be during that year until that ceiling reaches $ 30,000. *fn1"

  Central informed plaintiff by letter dated May 18, 1994, from Jean Ward, Personnel Manager, that after determining the maximum allowable annual additions by applying Internal Revenue Code § 415(c) (1) (B) to his 415 Compensation, and comparing that maximum to plaintiff's annual additions, n2 an excess of $ 257.01 in annual additions was shown to have been contributed. She informed the plaintiff that this amount had to be withdrawn. This was done on December 31, 1993, and put into a suspense account to be redistributed to him in the following year according to the terms of the Plan in order for him to fall within Internal Revenue Code § 415. (See Pl. Not. of Cross-Mot. Ex.s P-2, P-5). Subsequent to these funds being transferred to the suspense account, but prior to the redistribution of those funds, plaintiff was terminated from his employment. Since his termination preceded that redistribution, Central deemed those undistributed funds to be forfeited. n2 Central broke down plaintiff's "annual additions" for 1993 as follows: (a) Employee 401 (k) deferrals $ 2,457.09 (b) Employer matching contributions 409.54 (c) Employee elective deferral 842.24 (d) Employer non-elective contribution 842.24 TOTAL ANNUAL ADDITIONS $ 4,551.11

19950524

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