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Motorola Solutions Inc. v. Xerox Business Services, LLC

United States District Court, S.D. New York

March 24, 2017



          LAURA TAYLOR SWAIN United States District Judge

         In this breach of contract action, Motorola Solutions, Inc. (“Motorola”) alleges that Xerox Business Solutions, LLC (“Xerox”) erroneously paid out retiree benefits under Motorola's Post-Employment Health Benefits Plan (the “Plan”) in violation of Xerox's contractual obligations as a claims administrator for the Plan. Motorola now moves for summary judgment on its breach of contract claim and on Xerox's affirmative defenses. Xerox cross-moves for dismissal of the breach of contract claim.

         The Court has jurisdiction of this action pursuant to 28 U.S.C. § 1332.

         The Court has reviewed carefully the parties' submissions. For the following reasons, Motorola's motion for summary judgment is granted with respect to Xerox's Sixth and Ninth affirmative defenses and is denied in all other respects. Xerox's motion is denied in its entirety.


         Unless otherwise indicated, the following facts are undisputed.[1]On or about December 19, 2002, Motorola entered into a Human Resources Services Agreement (the “Agreement”) with Xerox's predecessor in interest, Affiliated Computer Services, Inc. (“ACS”) (Pl. 56.1 ¶ 1; see also Forsberg Decl. Ex. 2, docket entry no. 89-2.) It is undisputed that Xerox administered the Plan pursuant to the Agreement. (Def. Resp. to Pl. 56.1 ¶ 6-7; see also Forsberg Decl. ¶ 6.) Under the Plan, Motorola, as the fiduciary of the Plan and Plan Administrator, was authorized to delegate administrative authority to a third-party or “Claims Administrator, ” which is defined by the Plan as the “entity or entities, as set forth in the SPD [i.e. Summary Plan Description], that Motorola has retained to decide eligibility, claims for benefits and appeals on denied claims under the Plan, pursuant to powers and authorities delegated as contemplated by [the Plan provisions permitting the delegation of responsibilities].” (Pl. 56.1 ¶¶ 3, 10.) Xerox admits that it was retained by Motorola as a “Claims Administrator, ” but denies that it was given responsibility for determining eligibility for benefits under the Plan. (See id. ¶¶ 8-9.) Xerox's witnesses allege that Motorola made eligibility determinations and provided the relevant information to Xerox. (See, e.g., Def. Resp. to Pl. 56.1 ¶ 8.)

         Section 3.6(b) of the Agreement (“Employee Information”) provided, inter alia, that “[Motorola] shall provide, or cause [Motorola's] Third Party Providers and, where applicable, [Motorola's] Affiliates, to provide to [Xerox] the employee data and job applicant data and all other data necessary for [Xerox] to perform the Services, including information as to the benefits eligibility of employees and status of each plan participant (and any dependent or beneficiary) . . . .” Section 3.6(d) (“Accuracy of Customer Data”) provided that “[Motorola] shall be solely responsible for the accuracy and completeness of any information, materials or data that [Motorola], its Affiliates or any TPP provides to [Xerox], and for the accuracy and completeness of transmission to [Xerox] of such information, materials or data.” Section 3.1 of the Agreement (“Services”) recites that the respective responsibilities of Xerox and Motorola in connection with the services to be provided under the Agreement were to be set forth in Exhibits attached to the Agreement, “(in particular, Exhibits 3.1 and 3.1A) and any applicable Change Order.” Written “Change Orders, ” executed in accordance with the “Change Control” provisions of Section 3.5 of the Agreement, were required to effect changes to the services provided under the Agreement. Section 1.4(i) of the Agreement provides that references to the “Agreement” include the Exhibits and Schedules thereto; Section 1.4(h) provides that, in the event of inconsistency, ambiguity or conflict, Change Order terms prevail over those in the body of the Agreement, and Agreement terms prevail over the terms of an Exhibit.

         The parties entered into an October 11, 2006, Change Order implementing a Statement of Work, effective January 1, 2006. That Statement of Work (“2006 SOW, ” Forsberg Decl. Ex. 7) provides a line-item breakdown of Plan-related responsibilities as among ACS (Xerox's predecessor), Motorola and Third Party providers. The line items assigned to ACS, under the heading “Membership Services/Enrollment, ” included:

38. Sort, determine eligibility and transfer of signed plan participant forms to TP 42. ACS is the source and system of record for eligibility (e.g. ClaimFacts)
43. Transmit required eligibility information to Tps (e.g. Vision VSP, Humana)

         Under the heading “HIPAA notification, administration, and privacy, ” the 2006 SOW assigns ACS responsibility for the following:

57. Verify eligibility using separation data from Motorola HR employment system feed (e.g. SAP)

         Under the heading, “The Motorola plans themselves impose the following responsibilities on the plan administrator, ” ACS is identified as:

397. Primary party to construe and interpret the plan, decide all questions of fact and questions of eligibility and determine the amount, manner, and time ...

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