Lybecker v. The Prudential Insurance Company of America et al, No. 2:2013cv00231 - Document 70 (E.D. Wash. 2015)
Court Description: ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT - granting 46 Motion for Summary Judgment; and denying 50 Motion for Summary Judgment. Signed by Senior Judge Lonny R. Suko. (CC, Case Administrator)
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Lybecker v. The Prudential Insurance Company of America et al Doc. 70 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF WASHINGTON 8 9 ELSIE I. LYBECKER, a single woman, NO. ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT vs. 11 12 CV-13-0231-LRS Plaintiff, 10 UNION PACIFIC CORPORATION, 13 14 Defendants. 15 BEFORE THE COURT are the following cross-motions: 16 17 18 19 20 21 Defendant Union Pacific Corp.’s (“Union Pacific”) Motion for Summary Judgment (ECF No. 46); and Plaintiff’s Motion for Summary Judgment (ECF No. 50). held on December 4, 2014. A telephonic hearing was Jaime Cole and Thomas Christina participated on behalf of the Defendant Union Pacific; 22 Arthur Bistline and Mark Ellingsen participated on behalf of 23 Plaintiff Lybecker. 24 took the cross-motions under advisement. The Court has 25 considered the oral and written arguments of counsel. 26 /// 27 /// 28 ORDER – 1 At the close of the hearing, the Court Dockets.Justia.com 1 2 I. Undisputed Material Facts Plaintiff brought this action under the Federal 3 Employee Retirement Income Security Act of 1974 ("ERISA"), 4 29 U.S.C. § 1001, et seq. Plaintiff’s claim is based solely 5 on the statutory penalty provision she asserts against Union 6 Pacific under ERISA §502(c)(1)(B), 29 U.S.C.§1132(c)(1)(B). 7 Daniel J. Angel ("Angel"), was an employee of Defendant 8 Union Pacific Railroad Company. Prior to 2004, Angel had 9 been married and divorced twice. Prior to 2002 and during 10 all material times thereafter, Angel had four children, two 11 who were biological children (Clayton and Natasha) and two 12 who were adopted children (Roger and Kevin). 13 period beginning in 2002 and through at least 2014, both of 14 Angel's former wives were living. 15 16 17 18 19 20 21 During the Prior to and at the time he went missing, Plaintiff and Angel had a relationship and maintained a residence together in Spokane, although Angel had moved out about six months before his disappearance. On January 1, 2002, and for a considerable period before that date, Angel was eligible to contribute to the Union Pacific Corporation Thrift Plan ("Thrift Plan"). On September 28, 2002, Angel named Plaintiff the sole death 22 beneficiary of any undistributed portion of his Thrift Plan 23 account. On May 31, 2004, and for a considerable period 24 before that date, Angel was eligible to elect to participate 25 in a variety of welfare benefit plans subject to ERISA under 26 the Flexible Benefits Program for Full Time Salaried and 27 28 ORDER – 2 1 Full-Time Hourly Employees of Union Pacific. 2 welfare benefit plans was the Life and Accident Insurance 3 Program (the “subject plan”), and coverage was issued and 4 administered by Prudential Insurance Company of America 5 (“Prudential”).1 6 plan was the ability of the participant to secure an 7 insurer's promise to make a payment on account of the 8 participant's death while covered under the plan, and the 9 right of the participant to name the payee at any time 10 11 One of these A benefit of participating in the subject before death. All aspects of claims administration under the subject 12 plan were handled exclusively by Prudential. 13 specified for distribution of the death benefit, the person 14 most recently named to receive the life insurance policy 15 16 17 18 19 20 21 proceeds receives the proceeds. At the time A change of death beneficiary was effective as of the date it was signed if and only if it was made on a form created by Prudential and Prudential receives the signed form. On May 31, 2004 Angel named Plaintiff as the beneficiary under the Life Insurance Plan, on a Prudential form. Angel had elected to participate in the Life 22 Insurance Plan and the amount of Angel's basic and 23 supplemental life coverage was $481,000.00. Angel's basic 24 and supplemental Accidental Death coverage was $567,000.00. 25 26 27 Defendant Prudential was dismissed on February 28, 2014. ECF No. 44. 28 ORDER – 3 1 1 On November 14, 2004, Angel's boat was found drifting 2 on Lake Pend Orielle in Idaho with no one on board. 3 November 15, 2004, Kootenai County Sheriff’s Department 4 interviewed Plaintiff during the course of the 5 investigation. 6 told her it would take seven (7) years to obtain a death 7 certificate in Idaho. 8 accuracy of this information. 9 On Plaintiff testified that the investigator She apparently did not question the On November 16, 2004, the Sheriff's Department placed 10 its investigation into Angel's disappearance on the inactive 11 list and registered Angel as a missing adult on the NCIC 12 database until the fall of 2012. 13 At all times surrounding the events underlying this 14 action, i.e., after November 14, 2004, Union Pacific's Human 15 16 17 18 19 20 21 Resources Department had a Human Resources Service Center ("the Service Center"). Employees of the Service Center had access to information regarding the identity of death beneficiaries, if any, of the Thrift Plan. Employees of the Service Center, however, did not have access to information regarding the identity of the death beneficiaries, if any, of the Group Life/AD&D Plan.2 22 If a Union Pacific employee's Thrift Plan beneficiary 23 did not contact the Service Center with regard to an 24 employee who had been reported deceased by the employee's 25 coworker, supervisor, or family member, the practice of the 26 27 28 ECF No. 65 at 19-20. 2 ORDER – 4 1 Service Center employees was to contact the beneficiary. The 2 purpose of the contact was to inform the beneficiary that he 3 or she was the death beneficiary of the employee's Thrift 4 Plan account. 5 On December 16, 2004, Union Pacific wrote to Plaintiff 6 indicating that she was the beneficiary of Angel's Thrift 7 Plan, but that to process the account, she needed a death 8 certificate. 9 inform her that she was the beneficiary of Angel's life Plaintiff contends that Union Pacific did not 10 insurance policy nor that Prudential was the insurance 11 company that provided the life insurance policy. Union 12 Pacific notes that only Prudential had information about 13 death beneficiaries of life/AD&D coverages, because 14 beneficiary designation forms and beneficiary designation 15 16 17 18 19 20 21 change forms were effective only if received by Prudential and employees were not required to send these forms to Prudential through Union Pacific. According to Plaintiff, after Angel’s disappearance, Prudential refused to inform Lybecker of the identity of the beneficiary of Angel’s life insurance policy because no death certificate had been issued for Angel. 3 22 In 2009, a Union Pacific employee Mary Estrada spoke 23 with Plaintiff by telephone about the letter she (Mary 24 25 ECF No. 48-7, Cole Declaration, Exhibit G (copy of a letter dated March 25, 2013, from Plaintiff’s counsel to Prudential. 3 26 27 28 ORDER – 5 1 Estrada) had sent to Plaintiff dated September 18, 2009. 2 This letter was written to inquire why Plaintiff had not 3 applied for a distribution of Angel's Thrift Plan Account. 4 Plaintiff told Mary Estrada that she could not get a death 5 certificate until seven years after Angel's disappearance. 6 Plaintiff testified that Union Pacific called her each year 7 about Angel's Thrift Plan account "[b]ecause I was the 8 executor of the estate." 9 Plaintiff states she called Union Pacific, although the 10 dates are not certain, to discuss the 2009 correspondence. 11 Plaintiff states Shawna Smith from Union Pacific would not 12 disclose any information, though, because there was no death 13 certificate. 14 15 16 17 18 19 It is undisputed that Plaintiff did not make any written request to Union Pacific for information or documents relating to the subject plan until after she obtained counsel in the fall of 2012. ECF No. 65 at 21. record provides that Plaintiff allegedly made two oral requests, however, in November and December 2004. 20 21 The On June 14, 2012, Plaintiff filed a Petition in the District Court for the First Judicial of Idaho (In the 22 Matter of Daniel James Angel), consistent with earlier 23 information regarding the 7 year time frame to obtain a 24 death certificate. Plaintiff requested a judgment declaring 25 Angel deceased after seven and a half years missing. 26 /// 27 28 ORDER – 6 1 On August 15, 2012, Plaintiff retained counsel. 2 August 21, 2012, Plaintiff's counsel's paralegal sent an 3 email to Union Pacific to follow up with an email to Shawna 4 Smith regarding Angel's 401(k) distribution for Plaintiff. 5 On September 11, 2012, Plaintiff's counsel's paralegal 6 emailed Shawna Smith at Union Pacific requesting assistance 7 on receiving policy details as she had a "dilemma with 8 Prudential and MetLife." 9 On On September 11, 2012, an Amended Petition for 10 Declaratory Relief was filed on Plaintiff's behalf in Matter 11 of Angel in Idaho state court. 12 Plaintiff named Prudential as a defendant, alleging that 13 Prudential "is an insurance company who issued a life 14 insurance policy on Daniel James Angel." 15 16 17 18 19 20 21 In the Amended Petition, On or about September 17, 2012, Shawna Smith from Union Pacific informed Plaintiff’s counsel that Prudential was the life insurance provider. On October 15, 2012, the Idaho state court entered its original Order on the merits in Matter of Angel. On October 23, 2012, the Idaho state court entered an amended order declaring Angel legally dead. On or about October 29, 2012, Ms. Shawna Smith of Union 22 Pacific communicated with Plaintiff’s counsel that Union 23 Pacific would accept the Declaratory Judgment in place of 24 the death certificate to process Angel's account. 25 In fall of 2012, Plaintiff submitted her claim to 26 Prudential for the life insurance and accidental death 27 28 ORDER – 7 1 benefits. 2 obtained Thrift Plan account balance information from Union 3 Pacific. 4 distribution of Angel's account balance under the Thrift 5 Plan. 6 for Angel was forwarded to Ms. Shawna Smith of Union 7 Pacific. 8 9 10 On or about October 30, 2012, Plaintiff’s counsel On November 6, 2012, Plaintiff authorized the On November 14, 2012, a copy of the Death Certificate On November 14, 2012, Prudential received the beneficiary form, death certificate, sheriff’s investigation records, and the obituary of Angel. ECF. No. 48-7 at 5. 11 On November 29, 2012, Prudential informed Plaintiff 12 that it received a Group Life Accidental Insurance Claim. 13 Prudential further indicated that it could not make a 14 determination of the cause of Angel’s death because the 15 16 17 18 death certificate state “undetermined.” Prudential stated that the file was being transferred to Prudential’s Special Investigation Unit and that a determination should be made within thirty (30) days. Id. 19 20 21 On December 5, 2012, Prudential made the Basic Life and Optional Life benefits of the policy available to Plaintiff in the amount of $405,000. Id. 22 On December 6, 2012, Plaintiff’s counsel received 23 notice directly from Rebecca Wanner (Senior Client Services 24 Specialist for Prudential in Record Keeping Services)that 25 Prudential had paid Plaintiff Basic Life and Optional Life 26 /// 27 28 ORDER – 8 1 Benefits on December 5, 2012, but that the Accidental Life 2 Insurance Benefits required a more extensive investigation. 3 On or about December 10, 2012, Prudential made the 4 balance of the Basic Life and Optional Life Benefits policy 5 available to Plaintiff in the total sum of $76,000. On December 26, 2012, Prudential again informed 6 7 Plaintiff that it could not make a determination of the 8 cause of Angel’s death because the death certificate stated 9 “undetermined” and that the file was being transferred to 10 Prudential’s Special Investigation Unit and that a 11 determination should be made within thirty (30) days. Id. 12 On January 23, 2013, Prudential once again informed 13 Plaintiff that it could not make a determination of the 14 cause of Angel’s death because the death certificate stated 15 16 17 18 19 20 21 “undetermined.” Prudential indicated that the file was being transferred to Prudential’s Special Investigation Unit and that a determination should be made within thirty (30) days. Id. By letter dated January 31, 2013, Prudential denied that it had to pay the Accidental Death Benefits for Angel in the amount of $567,000 on the ground that the manner of 22 his death had been ruled undetermined and no proof existed 23 of bodily injury. Id. 24 On February 21, 2013, Union Pacific provided the 25 Summary Plan Description to Plaintiff’s counsel, which 26 identified Prudential as the life insurance carrier. 27 28 ORDER – 9 On February 25, 2013, Plaintiff’s counsel advised 1 2 Prudential in writing that Prudential was, allegedly, 3 unreasonably and intentionally denying payment of 4 Plaintiff’s claim. 5 claim be approved for payment by March 1, 2013, and that 6 Prudential pay a portion of Plaintiff’s legal fees. Id. 7 March 8, 2013, Prudential paid the Accidental Life Insurance 8 Benefit in the amount of $567,000. 9 Plaintiff’s counsel demanded that the On On March 25, 2013, Plaintiff’s counsel wrote to 10 Prudential regarding Ms. Lybecker’s dispute with Prudential, 11 and enclosing a draft complaint. 12 part, that payment of the death benefits and acknowledgment 13 that Plaintiff was entitled to accidental death benefits 14 "does not include attorney's fees nor does it address 15 16 stated, in interest on Ms. Lybecker 's money to which she is clearly entitled." 17 The letter also stated: Ms. Lybecker will file the proposed complaint attached to this correspondence if you do not agree to pay her the sum of $350,000 in addition to the sums due under the Accidental Death portion of the insurance policy. The sum of $350,000 is roughly double the amount of interest on the two paid benefits which were due to my client at least by November of 2005 which was one year after the date Mr. Angel disappeared. It is doubled because Prudential likely earned a rate of return on my clients money which more than doubled the rate utilized to calculate the interest owed . . . 18 19 20 21 22 23 24 25 26 /// 27 28 The letter ORDER – 10 1 The draft complaint sent to Prudential would have named 2 Prudential as the sole defendant in an action seeking a 3 single, unliquidated sum of money, which amount couldn't be 4 determined. 5 Prudential be ordered to pay over either the profits earned 6 by Prudential on the sums wrongfully withheld by Prudential, 7 or the prejudgment interest on the sums wrongfully withheld 8 by Prudential, whichever sum is greater.) 9 ECF No. 15-16 (The draft complaint asked that On May 20, 2013, before the instant action was filed, 10 Prudential paid Plaintiff an additional amount of 11 $389,917.97 as an "interest adjustment", which amount was 12 more than $39,000 higher than the amount Plaintiff had 13 demanded. 14 death/accidental death benefits to which Plaintiff deemed 15 16 17 18 19 20 21 Prudential paid Plaintiff the full amount of herself entitled, plus interest, totaling $1,437,917.97. On June 18, 2013, Plaintiff brought this action by filing her Complaint in federal court, listing both Union Pacific and Prudential. Plaintiff’s Complaint and her First Amended Complaint, however, alleged that Prudential, and Prudential alone, wrongfully delayed payment to her of $1,048,000 in death benefits ("As the direct and proximate 22 result of Prudential’s conduct complained of herein, 23 Prudential retained funds which rightfully belonged to 24 Plaintiff ..."). ECF Nos. 1, 27. 25 On January 16, 2014, Plaintiff filed her written 26 request for an order dismissing Prudential from this action, 27 28 ORDER – 11 1 without prejudice and with each party paying its own costs. 2 In support of the motion, it was represented that “...prior 3 to this action, Prudential paid Plaintiff all benefits, with 4 interest, that were owing to her . . ." (ECF No. 40 at 1-2). 5 II. Plaintiff’s Motion for Summary Judgment As to Her Requesting Statutory Penalties Against Union Pacific 6 As limited by her Amended Complaint, Plaintiff seeks a 7 8 9 10 11 12 13 14 15 statutory penalty against Union Pacific under ERISA § 502(c)(1)(B) based on two allegations: 1)that Plaintiff became a plan participant on June 7, 2004 4; and 2) that Union Pacific refused Plaintiff’s oral request for information regarding the subject plan. (ECF No. 27 at 6.) Plaintiff argues the penalties commenced on the first date that Plaintiff requested the information, which she suggests could be determined at trial. ECF No. 27 at 6, 16 Plaintiff’s Amended Complaint. 17 Amended Complaint, Plaintiff alleges that she is entitled to 18 judgment against Union Pacific for the sum of the statutory 19 penalty from the date on which she first orally requested 20 information on the subject plan to February 21, 2013, for a 21 total penalty of $349,910 (based on the statutory penalty of 22 $110/day as provided by 29 U.S.C. § 1132(c). Id. at 6-7. 23 In the next paragraph of the Defendant Union Pacific, in its cross-motion and 24 opposition to Plaintiff’s summary judgment, asserts that 25 since at least January 16, 2014, Plaintiff has lacked 26 27 Angel named Lybecker as beneficiary of his life insurance policy on June 7, 2004. ECF No. 51-2, Ex. E. 28 ORDER – 12 4 1 statutory and Article III standing to pursue this action 2 against Union Pacific. 3 Plaintiff was never a "participant" in the subject plan, as 4 the term “participant” is defined for purposes of ERISA. 5 Further, Union Pacific asserts, Plaintiff was not a 6 "participant" or "beneficiary" (as those terms are 7 defined in ERISA) on June 18, 2013, the date this action was 8 commenced. 9 Union Pacific contends that Defendant states that if Plaintiff called the Union 10 Pacific Service Center in November, 2004, as she claims to 11 have done, Plaintiff would have been told that she was the 12 beneficiary of Angel's Thrift Plan account, even if she did 13 not yet have a death certificate for Angel. 5 If Plaintiff 14 had inquired about the subject plan, she would have been 15 16 17 18 referred to Prudential, the sole claims administrator of that plan and the sole source of information regarding beneficiaries named by participants in the without regard to whether she had a death certificate. 6 19 20 21 subject plan, Union Pacific’s final point of contention is that before June 19, 2013, Plaintiff had received every benefit due to her under the subject plan, with what Plaintiff calls 22 /// 23 /// 24 25 Defendant’s Statement of Facts Nos. 38-43, 62. 5 26 27 Defendant’s Statement of Facts, Nos. 8-9, 11-13, 45-49, 62, 65. 28 ORDER – 13 6 1 "fair rate."7 On or after June 19, 2013, Plaintiff had no 2 cause of action against former defendant Prudential, the 3 sole claims administrator of the subject plan, and lacked 4 standing to bring any claim against Prudential. 8 5 III. Summary Judgment Standard To withstand a motion for summary judgment, the 6 7 opposing party must set forth specific facts to show that 8 there is a genuine issue of material fact in dispute. 9 Fed.R.Civ.P. 56(e). A dispute about a material fact is 10 genuine "if the evidence is such that a reasonable jury 11 could return a verdict for the nonmoving party." Anderson v. 12 Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 13 L.Ed.2d 202 (1986). All facts in the record and inferences 14 drawn therefrom must be viewed in the light most favorable 15 16 17 18 to the nonmoving party. In the absence of genuine issues of disputed fact, "the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). 19 IV. DISCUSSION 20 21 The parties' cross-motions for summary judgment raise the following two issues: (1) whether Plaintiff has standing 22 to pursue her claims; and (2) whether UPC is subject to a 23 24 Defendant’s Statement of Facts Nos. 14-15, 65-66, 68-70, 74-75, 76-77. 7 25 26 Defendant’s Statement of Facts Nos. 14-15, 66-67, 69, 8 27 70. 28 ORDER – 14 1 penalty under ERISA § 502(c)(1) for its failure to timely 2 produce documents. 3 in turn. Each of these issues will be addressed 4 A. Ms. Lybecker Does Not Have Standing 5 To bring an ERISA cause of action for a statutory 6 penalty, a party must have statutory standing. See § 7 1132(a)(l)-(10); Harris v. Provident Life and Accident Ins. 8 Co., 26 F.3d 930, 933 (9th Cir. 1994). 9 “participant” or a “beneficiary” is entitled to request plan Under ERISA, only a 10 documents under 29 U.S.C. § 1132(c)(1) and seek penalties 11 for the failure of their production. Harris, 26 F.3d at 933. 12 1. 13 Union Pacific asserts that in November 2004, Plaintiff 14 15 16 17 Plaintiff Was Not a Participant in the Subject Plan was not a "participant" in the subject plan for purposes of requesting or receiving documents or information under ERISA. ERISA has only one statutory definition of "participant" for use throughout the Act: 18 19 20 21 22 23 29 The term "participant" means any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit. U.S.C. § 1002(7). 24 Plaintiff concedes that she is neither a current nor a 25 former employee of Union Pacific. The Ninth Circuit case law 26 has noted that the statutory definition of "participant" is 27 28 ORDER – 15 1 sufficiently clear and only employees can be ERISA 2 “participants.” 3 898 F.2d 1432, 1434 (9th Cir. 1990). 4 not have been a participant in the subject plan when any 5 alleged oral requests for information were made. 6 Harper v. American Chambers Life Ins. Co., Thus, Plaintiff could In June 2013, Plaintiff Was Neither a Participant Nor a Beneficiary 2. 7 8 9 10 11 12 13 14 15 16 UPC argues that Plaintiff has no statutory standing to bring this action for a penalty claim against UPC because §1132(a)(l)(A) provides that a civil action may be brought by a participant or beneficiary only, as determined when the action is brought. Subsection 1132(c)(l)(B) is the only provision that confers authority for a penalty based on a failure to supply documents following a request(specifically a written request) by a participant (or by a beneficiary if the beneficiary is in pay status). 17 A plaintiff cannot meet either statutory definition 18 unless the plaintiff "is or may become eligible to receive a 19 benefit" under the plan in issue. 29 U.S.C. § 1002(7), (8). 20 However, at the pleading stage, a plaintiff who alleges a 21 "colorable claim" of entitlement to a plan benefit is 22 treated (at least provisionally) as satisfying the 23 applicable definition for purposes of the standing 24 requirement under Section l132(a). 25 Rubber Co. v. Bruch, 489 U.S. 101, 117-18 (1989). 26 Firestone Tire and Union Pacific asserts that at the beginning of this 27 case, Plaintiff relied on her claim against Prudential as 28 ORDER – 16 1 the source of her “participant” status asserting that she 2 had a “colorable claim” to life insurance plan benefits 3 because she was entitled to “the greater of the profits 4 Prudential earned on her money or interest on that money.” 5 This prayer for relief standing alone is not sufficient to 6 satisfy the definition of “participant” or “beneficiary” 7 under the colorable claim test because such claim must be 8 for a benefit (and not solely interest or penalty) under the 9 plan. Before June 18, 2013, Plaintiff had received every 10 benefit due to her under the subject plan, with what 11 Plaintiff calls "fair rate” for interest on the money 12 Prudential earned on that benefit paid fully but not timely. 13 14 15 16 17 18 19 20 21 Plaintiff does not dispute that the Ninth Circuit has never held that payment of interest is a "benefit" for purposes of statutory standing analysis under Section 1132(a)(l). The Court finds no case law to support the view that interest is considered a “benefit” in the ERISA sense of the word. When this action commenced, Plaintiff did not have any claim to any further payments from Prudential. The record shows that any claim Plaintiff may once have had against Prudential was extinguished in May 2013, before 22 Prudential’s dismissal and before this action was commenced. 23 See “Order Re Motion to Dismiss Defendant Prudential,” ECF 24 No. 44. 25 In conclusion, the Court finds that only a colorable 26 claim to an additional plan benefit might have supported a 27 28 ORDER – 17 1 finding of Plaintiff’s status as a "participant" or 2 "beneficiary" for purposes of ERISA's exclusive 3 jurisdictional provisions in Section 1132(a)(1)-(3). It 4 follows that Plaintiff lacks standing. 5 entitled to judgment as a matter of law dismissing 6 Plaintiff's claim. See 29 U.S.C. §1132(a)(1)(A). Union Pacific is 7 3. 8 Even if Plaintiff were a participant or beneficiary at 9 Written Request Never Made by Plaintiff the time of the commencement of the action, which the Court 10 finds she was not, Plaintiff failed to make a written 11 request for documents. 12 Plaintiff seeks a statutory penalty against Union 13 Pacific only for an alleged failure to satisfy the 14 requirements of 29 U.S.C. § 1132(c)(l)(B), and based on two 15 16 17 oral requests allegedly made by Plaintiff to Union Pacific in 2004. One relevant statute, 29 U.S.C. § 1132(c)(l)(B), reads: 18 (c) Administrator's refusal to supply requested information; penalty for failure to provide annual report in complete form (1) Any administrator (B)who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary (unless such failure or refusal results from matters reasonably beyond the control of the administrator) by mailing the material requested to the last known address of the requesting participant or beneficiary within 30 days after such request may in the court's discretion be personally liable to 19 20 21 22 23 24 25 26 27 28 ORDER – 18 such participant or beneficiary in the amount of up to $100 a day9 from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper. 1 2 3 4 Another relevant statute, 29 U.S.C. §1025(a) sets 5 6 forth the writing requirement for participants (which 7 Lybecker was not)and beneficiaries: 8 (a) Requirements to provide pension benefit statements 9 (1) Requirements 10 11 12 13 14 15 16 17 18 19 20 (A) Individual account plan The administrator of an individual account plan (other than a one-participant retirement plan described in section 1021(i)(8)(B) of this title) shall furnish a pension benefit statement-(i) at least once each calendar quarter to a participant or beneficiary who has the right to direct the investment of assets in his or her account under the plan, (ii) at least once each calendar year to a participant or beneficiary who has his or her own account under the plan but does not have the right to direct the investment of assets in that account, and (iii) upon written request to a plan beneficiary not described in clause (i) or (ii). 29 U.S.C. § 1025(a) [emphasis added.] 21 Plaintiff concedes that she did not make written 22 request for the information. However, Lybecker argues she 23 made oral request for the information and because she became 24 a plan “participant” as of June 7, 2004 (when Angel named 25 /// 26 27 See 29 C.F.R. § 2575.502c–1 (increasing the per diem penalty from $100 to $110). 28 ORDER – 19 9 1 her a beneficiary of the subject plan), she was not required 2 to make a written request for information. ECF No. 15 at 3. 3 Union Pacific argues that the duty to provide documents 4 within 30 days of a participant's or beneficiary's request 5 does not arise under §1132(c)(l)(B) except under specified 6 circumstances. See § 1132(c)(l)(B). One of those specified 7 circumstances is that the plan administrator has failed to 8 provide documents or information within 30 days of receipt 9 of a written request for the documents or information. 10 Id. The Court finds that the reasoning set forth in 11 Porcellini v. Strassheim Printing Co., Inc., 578 F.Supp. 605 12 (E.D.Pa.1983) and Anderson v. Mortell, 722 F.Supp. 462 13 (N.D.Ill.1989), is sound and directly applicable to the 14 present action, since, in her amended complaint, Plaintiff 15 16 17 18 19 20 21 asks the court to impose the statutory penalty in § 1132(c) against Union Pacific for technical violations of ERISA. The Court agrees with Union Pacific’s position that § 1132(c) is inapplicable because Lybecker failed to comply with the statute's requirement that requests for such information be made in writing and directed to the plan administrator. Porcellini, 578 F.Supp. at 611. Union Pacific did not 22 receive the requests in writing and Prudential (not Union 23 Pacific), was the plan administrator of the subject plan 24 involved. 25 The court declines to tinker with ERISA's complex 26 regulatory scheme. ERISA has been referred to as a 27 28 ORDER – 20 1 “comprehensive and reticulate” legislative scheme designed 2 to promote the integrity of this country's private pension 3 plans and to protect the vested expectations of plan 4 participants and beneficiaries. See Nachman Corp. v. Pension 5 Benefit Guaranty Corp., 446 U.S. 359, 100 S.Ct. 1723, 64 6 L.Ed.2d 354 (1980); see also Pompano v. Michael Schiavone & 7 Sons, Inc., 680 F.2d 911, 914 (2d Cir. 1982), cert. denied, 8 459 U.S. 1039, 103 S.Ct. 454, 74 L.Ed.2d 607 (1982) 9 (“ERISA's purpose is to secure guaranteed pension payments 10 to participants by insuring the honest administration of 11 financially sound plans.”). By adopting § 1025(a) Congress 12 has clearly manifested an intent to make plan participants 13 or beneficiaries make requests in writing. 14 construes the language of § 1025(a) to give effect to 15 legislative intent.10 16 17 18 19 20 21 B. Thus, the court Statutory Penalty Will Not Be Imposed on UPC ERISA contains a disclosure provision that requires a plan administrator to, “upon written request of any participant or beneficiary, furnish a copy of the latest updated summary plan description, and the latest annual report, any terminal report, the bargaining agreement, trust 22 agreement, contract, or other instruments under which the 23 24 See H.R.Rep. No. 533, 93d Cong., 1st Sess. 12 (1973), reprinted in 1974 U.S.Code Cong. & Admin. News 4639, 5042. Furthermore, the use of the word “shall” is mandatory in statutory construction in the absence of any contrary intention expressed in the statute. C. Sands and N. Singer, 2A Sutherland Stat. Const. § 57.03 at 643–44 (4th ed. 1984). 10 25 26 27 28 ORDER – 21 1 plan is established or operated.” 29 U.S.C. § 1024(b)(4). 2 Section 1132(c)(1)(B) gives teeth to this disclosure 3 obligation, rendering a noncompliant administrator liable 4 for up to $110 per day for failing to produce requested plan 5 documents within 30 days of the request. Mondry v. Am. 6 Family Mut. Ins., 557 F.3d 781, 793 (7th Cir.2009); 29 7 C.F.R. § 2570.502c–1. A penalty is not mandatory, and the 8 amount, if any, is left to the court's discretion. Fenster 9 v. Tepfer & Spitz, Ltd., 301 F.3d 851, 858 (7th Cir.2002). 10 To trigger this discretionary power to impose 11 penalties, a beneficiary must establish that the plan 12 administrator “was required to make available the requested 13 information, that the [beneficiary] requested the 14 information, and that the administrator failed to provide 15 16 17 18 19 20 21 the information.” Kleinhans v. Lisle Sav. Profit Sharing Trust, 810 F.2d 618, 622 (7th Cir.1987). The Court found above that Plaintiff did not have a colorable claim to have supported finding that Plaintiff was a "participant" or "beneficiary" for purposes of ERISA's exclusive jurisdictional provisions in §1132(a)(1)-(3). Having found that Ms. Lybecker is not a participant or 22 beneficiary of the Plan, she lacks standing to bring this 23 claim under § 1132. See Crotty v. Cook, 121 F.3d 541, 544 24 (9th Cir.1997). 25 Even if this Court had found that Plaintiff did have 26 standing, based on the unique facts associated with this 27 28 ORDER – 22 1 case, any untimely production of plan documents was 2 complicated by the fact that Ms. Lybecker unreasonably 3 relied on information provided by law enforcement that she 4 could not obtain Angel’s death certificate for 7 ½ years. 5 See ECF No. 48-6, Ex. F at 2, Petition. 6 argument could be made that the statutory penalty under § 7 1132(c)(1) would not apply as such delay by the plan 8 administrator (Prudential not Union Pacific) had causes 9 other than the result of bad faith. Finally, in determining 10 whether to impose a statutory penalty, the Court would look 11 at the significance of any prejudice and harm to Plaintiff 12 from a plan administrator’s failure to timely produce the 13 plan documents. 14 from Prudential, who was voluntarily dismissed without 15 16 17 18 19 20 21 Therefore, a viable Plaintiff received more than she requested prejudice from this case. V. Conclusion Plaintiff cannot satisfy requirements of §1132(a)(1)A) and as such cannot trigger the Court’s §11132(c) "penalty power." Thus, Article III's "redressability" requirement is not satisfied in Plaintiff’s claim against Union Pacific. It follows that Plaintiff 22 cannot establish Article III standing to pursue her claim 23 against Union Pacific. Accordingly, 24 IT IS ORDERED that: 25 1. Defendant Union Pacific’s Motion For Summary 26 Judgment, ECF No. 46, filed on October 15, 2014, is GRANTED. 27 28 ORDER – 23 1 Plaintiff’s claim(s) are dismissed against Defendant Union 2 Pacific with prejudice. 3 4 5 2. Plaintiff’s Motion For Summary Judgment, ECF No. 50, filed October 15, 2014, is DENIED. IT IS SO ORDERED. The District Court Executive is 6 directed to enter this Order; enter judgment consistent with 7 this order; and CLOSE FILE. 8 DATED this 12th day of January, 2015. 9 10 s/Lonny R. Suko 11 LONNY R. SUKO SENIOR UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER – 24
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