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Pronti v. CNA Financial Corp.

November 28, 2007


The opinion of the court was delivered by: Garnett Thomas Eisele United States District Court

G. THOMAS EISELE, SENIOR DISTRICT JUDGE, sitting by designation*fn1


Before the Court is Defendants' Motion for Summary Judgment presenting the issue of whether Plaintiff Thomas J. Pronti ("Pronti") is entitled to additional retirement benefits under an employee retirement benefits plan. After a review of the parties' submissions, the record in this case and careful consideration of the issues presented thereby, the Court concludes that the Defendants are entitled to judgment as a matter of law.


From March 1983 through October 7, 1994, Plaintiff Pronti was employed by Continental Insurance Company ("CIC") as a trial attorney working in CIC's Albany, New York office. While employed by CIC, Pronti's pension benefits were governed by the Retirement Plan of the Continental Corporation (the "CIC Plan"). While Pronti was employed by CIC, he held himself out as a member of the law firm "Moran & Pronti" in order to avoid identifying CIC in litigation. Richard Moran was also employed by CIC as the managing trial attorney for the Albany office. On October 7, 1994, CIC closed its Albany office, at which time the employment of Pronti and Moran ceased. At that point, Pronti had earned enough credit in the CIC Plan to be a vested plan participant entitled, upon meeting certain age requirements, to retire with a benefit under the CIC Plan.

Following the employment separation, Pronti and Moran worked out an arrangement whereby Pronti and Moran became outside "panel counsel" for CIC. Pronti and Moran continued to work out of the same office under the same law firm name of "Moran & Pronti" and most of their legal work was for CIC (and post-merger, for CNA).

Effective May 10, 1995, CIC merged with CNA Financial Corporation ("CNA"). As the surviving entity of the merger, CNA assumed responsibility for the obligations of CIC, including the CIC Plan. In 1996, CNA decided it wanted to operate a "staff counsel" office out of Albany to handle the cases that Pronti and Moran had been handling as outside panel counsel. CNA offered Pronti and Moran employee staff counsel positions. Pronti and Moran returned to their previous employment relationship, this time with CNA rather than CIC, and continued to use their firm name of "Moran & Pronti."

Pronti alleges that the pension benefit was of prime concern to him and Moran in determining whether to resume an "in house" position with CNA. However, Pronti could not recall having any discussions with Ralph Alio, who hired him, or anyone else from CNA about the status of his pension benefits if he accepted the staff counsel position. Instead, Pronti relied upon Moran to negotiate the terms of employment with CNA for both of them.

Moran had discussions with various CNA representatives to negotiate said terms. When Ralph Alio, CNA Vice President/Regional Counsel, was unable to address concerns raised by Moran about their pension status, Mr. Alio referred Moran to CNA's Human Resources division. Moran spoke with Maria Bover, during which conversations Moran attempted to determine whether they "would be getting full credit for the years with Continental in the CNA plan" when their retirement benefits were calculated. (Moran depo. at 43). Moran understood Ms. Bover to explain during a telephone conversation that he and Pronti would be considered rehires and that they would get "full pension benefits and credits for the years [they] had with Continental in the CNA plan, and it was not going to be x years in the Continental plan and x years in the CNA plan with one check for your Continental years, one check for the CNA years" but "[i]t would be stacked and there was going to be a check from the CNA pension plan." (Moran depo. at 44-45).

Moran asked Ms. Bover to send him something to verify their conversation. In response, Ms. Bover faxed Moran an e-mail dated March 27, 1996. The e-mail reads:

From: Bover, Maria

To: Racansky, Charles Subject: CIC rehire Date: Wednesday, March 27, 1996 1:35 p.m.

I have two possible hires who were RIF'd at CIC in October, 1994 when CIC closed down the legal office in Albany, N.Y. CNA is now going to open an office and we want to hire the CIC ATTY's.

Would they be rehires or new hires?

If rehired, what do they get on vesting, vacations, sick days and saving plan participation?

From: Racansky, Charles

To: Bover, Maria Subject: RE: CI rehire Date: Wednesday, March 27, 1996 4:14 pm

They should be coded as rehires, class code 102. As per our policy on rehires, the only service credit that they would receive would be for our Pension and Savings Plans. Their actual service credit would depend on their participation in the CIC programs prior to their termination. No service can be credited on any other CNA benefit plan. (Def.'s Exh. 4).

Moran shared the e-mail from Ms. Bover with Pronti. Moran also explained the terms of the employment offer to Pronti, which included a salary of $90,000 and a pension that was ...

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