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Burns v. Marley Company Pension Plan for Hourly Employees at Stockton

April 30, 2009

DAVID R. BURNS, PLAINTIFF,
v.
THE MARLEY COMPANY PENSION PLAN FOR HOURLY EMPLOYEES AT STOCKTON, CALIFORNIA, THE ADMINISTRATIVE COMMITTEE OF MARLEY COMPANY PENSION PLAN FOR HOURLY EMPLOYEES AT STOCKTON, CALIFORNIA, SPX CORPORATION, SPX RETIREMENT AND WELFARE PLAN ADMINISTRATIVE COMMITTEE, SPX PENSION SERVICE, AND JP MORGAN CHASE BANK, N.A., BENEFITS PAYMENT SERVICES, DEFENDANTS.



The opinion of the court was delivered by: Charles P. Sifton (electronically signed) United States District Judge

MEMORANDUM OPINION AND ORDER

SIFTON, Senior Judge.

Plaintiff David R. Burns commenced this action on September 16, 2008, against the Marley Company Pension Plan for Hourly Employees at Stockton, California ("the Plan"), the Administrative Committee of the Marley Plan, the SPX Corporation ("SPX"), the SPX Retirement and Welfare Plan Administrative Committee ("SPX Administrative Committee"), the SPX Pension Service, and JP Morgan Chase Bank, N.A., Benefits Payment Services ("JP Morgan"). Plaintiff claims that defendants, in denying plaintiff's claim for disability retirement benefits, breached the duty of absolute loyalty they owed to plaintiff as his fiduciaries under § 404 of the Employee Retirement Income Security Program ("ERISA"), 29 U.S.C. § 1104. Plaintiff seeks money damages, injunctive relief, and costs. Presently before this Court is defendants' motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). For the reasons set forth below, defendants' motion is granted. Plaintiff is granted leave to amend his complaint within 30 days of the date of this memorandum opinion.

BACKGROUND

The following facts are drawn from the Complaint and the exhibits attached thereto, and are assumed to be true for the purposes of this motion.

Plaintiff is a resident of Nevada, and a participant in the defendant Plan. Compl. ¶ 3. On September 27, 1994, he was hired by the Marley Tooling Tower Company to work at its Stockton factory, where he continued to work until it closed in 2002. Id. ¶¶ 3, 6.

The defendant Plan was created by the Marley Company, which was the parent corporation of the Marley Cooling Tower Company (collectively, "Marley"), plaintiff's employer from his date of hire in 1994 until 2001, when Marley was acquired by defendant SPX. Id. ¶ 4. The Plan's 1993 Summary Plan Description names the Marley Company as the Plan administrator. Id. The Marley Company chooses the Plan Administrative Committee, which is endowed with discretionary authority to construe the terms of the Plan and to determine eligibility for benefits, pursuant to section 9.2 of the Plan. Id. ¶¶ 4-5; see also id. Ex. A (copy of 1993 Summary Plan Description) at 8.

Defendant JP Morgan is named as the Plan's trustee in the Summary Plan Description effective July 26, 2002. Id. ¶ 4. JP Morgan, as trustee, is the successor to Deutsche Bank, which on or about June 4, 1999, acquired the Bankers Trust Company, which had been named trustee in the Plan's 1993 Summary Plan Description. Id.

Defendant SPX is the successor to Marley. Id. ¶ 5. SPX is a publicly owned company whose shares are traded on the New York Stock Exchange, with its principal office in Charlotte, North Carolina. Id. According to the Plan's Summary Plan Description, effective July 26, 2002, defendant SPX Administrative Committee is the successor to defendant Marley Company Administrative Committee. Id.

Plaintiff worked continuously at the Stockton factory from September 27, 1994, to July 26, 2002. Id. ¶¶ 6-7. In late 2001 or early 2002, plaintiff was provided with a copy of a document on defendant SPX's letterhead captioned "UDI Master Pension Plan for Hourly Employees: Marley Cooling Tower Stockton Plant," and sub-captioned "Statement of Estimated Benefits as of December 31, 2001" (the "Pension Statement"). Id. ¶ 8. According to the Pension Statement, plaintiff was estimated to have 8.0833 years of "credited service" and 7 years of "vesting service"*fn1 as of December 31, 2001. Id.; see also id. Ex. B (copy of Pension Statement). The Pension Statement further explains that "[t]he data shown on this statement reflects information currently on file and hours earned through December 31, 2001. When you retire or terminate employment, your benefit is calculated based on your actual Years of Credited Service and may be higher or lower than the amount shown." Id. Ex. B (emphasis in original).

At a May 17, 2002 meeting convened by his employer, and in a letter dated July 26, 2002, plaintiff was informed that the Stockton factory was being closed. Compl. ¶ 10. In the following months, company representatives assured employees that they would be permitted to transfer to another SPX-affiliated facility. Id. ¶ 11. These assurances were made, in plaintiff's presence: (1) during a meeting on the Stockton plant closure; (2) during contract negotiations with union leaders; and (3) at a dinner held at the conclusion of negotiations after the union voted to accept the terms of the contract for plant closure. Id.

During the meetings concerning the plant closure, company representatives told union members that terminating employees would be credited for Pension Plan purposes with actual service through the date of plant closure, plus and additional 18 months of service. Id. ¶ 12. In addition, plaintiff, in particular, was told that he would be credited with 7 months for service through July 27, 2002, as well as the aforementioned 18 months of service. Id. ¶ 13. Plaintiff was therefore led to believe that, in addition to the 8.0833 years of credit referred to in the Pension Statement, he had an additional 25 months of credit, and therefore a total in excess of 10 years of credit. Id. ¶ 14.

On June 12, 2002, while working at SPX's water treatment plant, plaintiff slipped and fell into a contaminated sludge pit. Id. ¶ 15. As a consequence of this accident, plaintiff injured his right wrist, arm and hand, and his knee (including his anterior cruciate ligament). Id. ¶ 16. Plaintiff received medical treatment for his injuries, but alleges that the injuries ultimately rendered him "permanently and totally disabled." Id.

According to the Plan's 1993 Summary Plan Description, participants in the Plan are eligible for a disability pension if they "become permanently and totally disabled,"*fn2 and have "at least 10 years of service at the time [they] become disabled." Compl. ΒΆ 17; see also id. Ex. A (copy of 1993 Summary Plan Description) at 5. "Years of Credited Service" is defined as follows: "You earn a year of credited service for each calendar year during which you complete 1,500 hours of service. Also, you receive a partial year of credited service if you complete at least 1,000 but less than 1,500 hours of service in a calendar year." Id. Ex. A at 3. Plaintiff alleges that because he believed he had sufficient credits for a disability retirement pension, he declined to pursue the opportunity to transfer to another SPX-affiliated facility. Id. ...


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