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

October 1, 2009


The opinion of the court was delivered by: 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: (1) 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(a)(1), by failing to provide plaintiff with accurate information about the Plan; and (2) failed to furnish plaintiff with a summary plan description in violation of Section 104(b)(1) of ERISA, 29 U.S.C. § 1024(b)(1).*fn1 Plaintiff seeks equitable relief, including: (a) directing the Plan to determine whether Plaintiff is totally and permanently disabled; and (b) if the plan determines that he is totally and permanently disabled, making a limited and temporary reformation of the Plan for the sole purpose of permitting Plaintiff to be paid benefits based on his nine years of earned credit. By Order dated April 30, 2009, the undersigned granted defendants' December 23, 2008 motion for Judgment on the Pleadings pursuant to Rule 12(c), and granted plaintiff leave to replead his claims in an amended complaint to be filed within 30 days of the date of the memorandum opinion. See Burns v. Marley Co. Pension Plan for Hourly Employees at Stockton, Cal., No. 08-CV-3763 (CPS), 2009 WL 1193474 (E.D.N.Y. Apr. 30, 2009). Plaintiff's Amended Complaint was filed on June 1, 2009.*fn2

Presently before this Court is defendants' motion to dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, defendants' motion is granted.


The following facts are drawn from the Amended 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. Am. Compl. ¶ 3. On September 27, 1994, he was hired by the Marley Company (renamed Marley Cooling Technologies in 2005)("Marley") to work at its Stockton factory, where he continued to work until July 26, 2002. Id. ¶¶ 7, 10.

The defendant Plan was created by Marley. Id. ¶ 4. The Plan's 1993 Summary Plan Description ("SPD") names the Marley 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. ¶ 6. 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. ¶ 4. 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 ¶ 5. 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 at the Stockton factory from September 27, 1994, to July 26, 2002. Id. ¶¶ 7-10. In 2001, soon after SPX acquired Marley, the company convened a "safety luncheon." Id. ¶ 15. At the luncheon, food was served, and workers were provided with small gifts as an award for the extended period in which there were no reports of accidents or claims for Workers' Compensation benefits. Id. ¶ 16. The luncheon was presided over by the highest officers of SPX with direct responsibility for the operation of the factory: Anthony Calestini, the plant manager, and Robert Griffith, its superintendent. Id. ¶ 17. At the meeting, plaintiff and the other workers present were handed their paycheck and a statement concerning their benefits. Id. 18. Plaintiff received 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. ¶ 19. According to the Pension Statement, plaintiff was estimated to have 8.0833 years of "credited service" and 7 years of "vesting service"*fn3 as of December 31, 2001. Id. ¶ 20; see also id. Ex. C (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. C (emphasis in original).

Plaintiff alleges that notwithstanding the limiting language in the document, he believed that SPX had arrived at the number 8.0833 "by using a sophisticated computer designed to make not estimates, but highly accurate calculations," and believed the figure was an accurate reflection of plaintiff's pension credit. Id. at 21.

At a May 17, 2002 meeting convened by his employer, plaintiff was informed that the Stockton factory was being closed. Compl. ¶ 26. During the meeting, employees were informed of a Special Separation Plan ("SSP") pursuant to which workers who resigned and agreed to waive certain rights would be provided with additional benefits either in the form of a single payment or an annuity. In the following months, company representatives assured employees that if they did not choose to accept the SSP, they would be permitted to transfer to another SPX-affiliated facility. Id. ¶ 27. 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 employees that terminated employees would be given full pension credit for 2002,*fn4 despite the plant closure. Id. ¶ 28. Plaintiff alleges that he knew that, pursuant to the collective bargaining agreement between Marley and plaintiff's union, Millmen's Local #1618 ("CBA"), he would be provided 18 months additional pension credit if he became disabled "due to industrial injury." Id. See also Ex. D (copy of CBA). As a result, plaintiff alleges that he believed that he would have sufficient credits to qualify for a total and permanent disability pension in the event that an industrial injury prevented him from continuing to work. Id. ¶ 29.

On June 12, 2002, while working at SPX's water treatment plant, plaintiff slipped and fell into a contaminated sludge pit. Id. ¶ 30. As a consequence of this accident, plaintiff injured his right wrist, arm and hand, and his knee (including his anterior cruciate ligament). Id. Plaintiff was able to return to work, but alleges that he continued to suffer impaired functioning and pain from his injuries. During the approximately six weeks between the accident and the plant's closure, plaintiff had several conversations with two upper-level managers about the pain and limitations caused by the accident. Id. ¶ 33. During that same period, SPX reduced the number of workers at the plant to five men, including plaintiff, who comprised the machine maintenance staff. Plaintiff alleges ...

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