The opinion of the court was delivered by: SCHEINDLIN
SHIRA A. SCHEINDLIN, U.S.D.J.:
Nine former executives of Cluett Peabody & Co. ("Cluett") bring this diversity action against West Point-Pepperell, Inc. ("West Point"), of which Cluett was once a subsidiary and division. Plaintiffs contend that West Point, in the face of a hostile takeover attempt, reduced the lump sum payments of deferred compensation due Plaintiffs under an employee benefit plan by wrongfully changing the discount rate applicable to those payments. Plaintiffs seek damages for breach of contract and fiduciary duty for West Point's failure to pay Plaintiffs their full deferred compensation benefits. Plaintiffs also state claims in connection with releases they executed in conjunction with their lump sum payments. They seek both damages, alleging that the releases were fraudulently induced, and rescission, alleging that the releases were the product of unilateral or mutual mistake. By Opinion and Order dated August 2, 1995 ("August 2 Opinion"), this Court granted in part and denied in part the parties' cross-motions for partial summary judgment on Plaintiffs' breach of contract and rescission claims.
PLAINTIFFS' MOTION FOR REARGUMENT
Plaintiffs presently move, pursuant to Rule 3(j) of the Civil Rules of this Court, for leave to reargue the portion of the August 2 Opinion which denied them summary judgment with respect to the discount rate applicable to their lump sum payments. Plaintiffs' motion for reargument asserts, inter alia, that the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq. ("ERISA"), governs the Court's interpretation of the contract terms at issue in this case. The Court did not address this possibility in its August 2, 1995 Opinion.
Upon reconsideration of the summary judgment motions, the Court finds that Plaintiffs are entitled to partial summary judgment on their contract claims. Accordingly, Plaintiffs' motion for reargument is granted. See Park South Tenants Corp. v. 200 Central Park South Assocs., L.P., 754 F. Supp. 352, 354 (S.D.N.Y.) (motion for reargument may be granted where court has overlooked matters which might have materially influenced earlier decision), aff'd, 941 F.2d 112 (2d Cir. 1991).
Because the Court: (1) must partially reverse the outcome of the August 2 Opinion; (2) finds, upon reconsideration of the motions in light of all relevant authority now brought to its attention, that portions of its prior analysis were erroneous; and (3) decided issues in the August 2 Opinion which no longer need be decided,
the Court hereby withdraws the August 2 Opinion. For the reasons stated in this Opinion and Order, Defendants' motion for partial summary judgment is denied, and Plaintiffs' motion for partial summary judgment is denied in part and granted in part.
PARTIES' CROSS-MOTIONS FOR PARTIAL SUMMARY JUDGMENT
The parties' submissions establish the following undisputed facts. See generally Statements Pursuant to Local Rule 3(g) ("3(g) Statements"). The Court has included specific citations to the record only in the few instances in which the parties' submissions raise issues of fact.
The Plaintiffs are former executives of Cluett, a company which West Point acquired in 1986. West Point is a Georgia corporation which conducts business in textile, apparel and bed and bath products. Cluett was merged into West Point in January 1989 and operated as a division thereof until March 1990, when West Point sold Cluett to Bidermann Industries, Inc.
Defendant D. Michael Roark was Vice President of Human Resources for Cluett at all relevant times until 1986, and then Vice President of Human Resources for West Point until May 1989. At all relevant times, Defendant C. Powers Dorsett was West Point's Vice President, Secretary and General Counsel, and a member of the Cluett Retirement Plan Committee. He also served as a member of the Board of Directors of Cluett from January 1986 to December 1988. At all relevant times, Defendant Barry F. Shea was Assistant Treasurer and then Treasurer of West Point and a member of the Cluett Retirement Plan Committee.
In 1975, Cluett established for its senior executives an employee benefit program known as the Executive Permanent Insurance Program ("EPI Program"). The EPI Program consists of certain retirement and life and health insurance benefits, including a deferred compensation agreement which provides supplemental pension benefits. The Plaintiffs are participants in the EPI Program and are parties to a deferred compensation agreement under that program.
The term "Actuarial Equivalent" means, with respect to . . . Deferred Compensation . . . [a] benefit provided under the terms of this Agreement which has the same present value as the Accrued Benefit. For the purpose of establishing whether a benefit is the Actuarial Equivalent of another benefit the actuarial assumptions contained in Cluett's Employee Retirement Plan shall be employed for so long as that Plan remains in existence and if such Plan is no longer in existence, the actuarial assumptions last used by such Plan shall be used.
Affidavit of Robert J. Hausen, attorney for Plaintiffs ("Hausen Aff."), Ex. E. P 4A(1)(c) (EPI Amendment).
3. The Cluett Pension Plan
The parties agree that the Cluett Employee Retirement Plan ("Cluett Pension Plan," "Plan") was a defined benefit plan duly qualified under ERISA. The Plan document sets forth the following with respect to actuarial assumptions:
"Actuarial Equivalent" means an amount of equal value when computed on the basis of interest, mortality and other tables as shall be adopted from time to time by the Committee on the advice of the Actuary, the current factors being as specified below:
1. Mortality Table. The 1978 GAM table (which is the 1971 Group Annuity Mortality Table projected to 1978 with Scale E). An average of male and female rates will be used.
2. Interest Rate. 5% per annum compounded annually.
Hausen Aff. Ex. F § 1.3 (Cluett Pension Plan). Cluett amended the Pension Plan in 1983 to include this statement of the current applicable factors. Prior to 1983, Section 1.3 of the Plan consisted of the above-quoted language, absent the portion commencing, "the current factors being as specified below."
The Cluett Pension Plan gives the Cluett Committee the authority to "adopt" or "determine" the actuarial assumptions applicable to the Plan:
Interest, mortality and other tables . . . shall be adopted from time to time by the Committee on the advice of the Actuary . . .
[The] decisions and the records of the Committee shall be conclusive and binding upon the Company, Participants, and all other persons having any interest under the Plan. The Committee . . . shall determine from time to time the percentum rate or rates of interest to be used as the basis for calculations required in connection with the [Cluett Pension] Plan. As an aid to the Committee, the Actuary appointed by the Committee shall make annual actuarial valuations of the assets and liabilities of the [Cluett Pension] Plan and shall certify to the Committee the tables and rate or rates of interest which he would recommend for use by the Committee.
The Cluett Pension Plan confers the right to "amend" the Plan to the Cluett Board of Directors ("Cluett Board"):
The Board of Directors reserves the right at any time, and from time to time, to modify or amend in whole or in part any or all of the provisions of the [Cluett Pension] Plan, but no such amendment shall substantially change the rights to benefits which, prior to such amendment, have become fixed or matured by retirement, termination or death . . . .
Id. § 11.1. The Plan also provides that the Cluett Board's amendment authority is exclusive: "The Company acting through the Board of Directors shall have the sole authority to . . . amend or terminate, in whole or in part, the Plan . . . ." Pls.' Comp. of Non-Case Auths. Cited in Pls.' Mem. in Supp. of Mot. to Rearg. ("Pls.' Supp. Authorities") Ex. D § ...