New v. Verizon Communications, Inc.New v. Verizon Communications, Inc.
OPINION AND ORDER
Bеfore the Court is the Defendant Verizon Communications, Inc.’s (“Verizon”) motion for summary judgment against Plaintiff Larry New (“New”). For the following reasons, the motion is granted.
*776 I. BACKGROUND
A. Facts
The following facts are taken from the administrative record and the documents appended thereto. From December 2000 until May 6, 2004, New worked as a senior network engineer with MCI, Inc. (“MCI”), which Verizon now owns. During that time, MCI maintained a contract to provide telecommunications services to BP Amoco (“BP Contract”) and, in that regard, established a distinct branch of employees whose sole function was to service the BP Contract, This branch was known internally as the MCI & BP Amoco Professional Services Organization and referred to as the “PSO.” MCI assigned New to work in the PSO unit.
On July 21, 2002 MCI filed for bankruptcy protection under Chapter 11. As part of the bankruptcy, MCI sought to restructure the BP Contract. Accordingly, MCI and BP Amoco entered into an amended General Services Agreement (“GSA”), through which the employees assigned to service the BP contract — the PSO employees — would no longer serve as MCI employees. Rather, three scenarios existed for the PSO employees. See Shopfner Ltr., Def.’s Rule 56.1 Statement, Ex. 3 at 7. Approximately fourteen employees would receive offers from BP Amoco, who agreed to match their MCI salary and benefits. Id. Approximately thirty-eight employees would be offered employment from a third-party vendor, who, in turn, would continue to service the BP Contract in place of MCI. Id. Any employees left over would be terminated and would not receive offers from either BP Amoco or the third-party vendor. Id. The parties ultimately chose a company called “Getronics” as the third-party vendor to service the BP Contract.
On May 6, 2004, pursuant to the GSA, MCI terminated New’s employment, along with fifty-six other MCI employees who worked in the PSO unit. The next day, on May 7, 2004 Getronics interviewed and hired New and many other employees from MCI pursuant to the GSA. According to сompany correspondence, the PSO employees’ transition to Getronics was understood as a “ ‘same desk’ conversion” and that “the job duties and responsibilities for the transitioning employees under the [GSA were] expected to remain the same,” Def.’s Rule 56.1 Statement, Ex. 3 at 7-8, although New denies that they did.
On June 3, 2004, in light of his termination from MCI, New sent a letter to MCI’s Severance Plan Committee (the “Severance Committee”) that requested a review of his claim for eligibility of severance pay. Id. at 43. The Severance Committee, in response, referenced MCI’s Severance Plan and Summary Plan Description (“MCI Plan”) to determine New’s eligibility to receive severance payments. There, under a section entitled “Eligibility for Severance Benefits,” the MCI Plan stated:
You will not be eligible for Severance Benefits if your employment ends because your division, plan, location or other business unit is sold (by stock sale, asset sale or otherwise), leased, outsourced, or subcontracted to another entity, or merged into another entity and you become employed by such entity in a substantially similar position within 30 days of such event.
MCI Plan, Ex. 3 at 32-33. The Severance Committee determined that under its restructuring agreement with BP Amoco New’s business unit had been outsourced to Getronics and that New became employed in a substantially similar position with Getronics within thirty days of the outsourcing. See Denial Letter, Ex. 3 at 161. As a result, New fell into the category of emрloyees that were not entitled to severance benefits; therefore, in a letter *777 dated September 30, 2004, MCI denied his claim. Id.
On November 18, 2004 New appealed the Severance Committee’s decision. In a thirteen-page letter in support of his appeal, New raised a number of issues with regard to the Severance Committee’s administration of MCI’s severance plan. See New Appeal, Ex. 3 at 73-85. For instance, New disagreed with the Severance Committee’s determination that his business unit was, in fact, outsourced. New pointed out that prior to receiving the Severance Committee’s denial letter he previously had not heard the term “outsource” to describe his leaving MCI to become an employee of Getronics. New also claimed that MCI repeatedly refused to provide him with various documents that he requested in light the denial of benefits. Id. at 78-82. Finally, New expressed confusion about assurances made by unidentified persons with MCI’s severance hotline that he would be еntitled to benefits. On this point, New explained that on several occasions he spoke with MCI’s hotline representatives, who suggested that New was qualified to receive severance payments under the MCI Plan. In light of these assurances, New explained in his letter that the Severance Committee’s decision to deny him benefits caught him by surprise. But, aside from New’s representations, the details of New’s phone calls to the MCI severance hotline remain a mystery.
On January 6, 2005 the Sеverance Committee denied New’s appeal, citing the MCI Plan’s eligibility statement and explaining that New is ineligible to receive severance benefits because his employment with MCI ended and he was subsequently employed by Getronics in a similar position. With that, New turned to the federal court.
B. Procedural History
New, operating
pro se,
initially filed his complaint in this Court on May 8, 2006 and thereafter filed an amended complaint on November 17, 2006. In his amended complaint, New asserted three claims against Verizon. He first allegеs a violation of § 502(a)(1)(B) of the Employment Retirement Income Security Act (“ERISA”) for the company’s wrongful denial of severance benefits under the MCI Plan. New further alleges a violation of ERISA,
On August 23, 2007 the Court granted Verizon’s motion to strike several paragraphs of the amended complaint, which the Court deemed immaterial pursuant to
II. DISCUSSION
A. Standard of Decision
Summary judgment is proper when there is no showing of a genuine issue of material fact in the pleadings, depositions, answers to interrogatories, admissions on file and affidavits,, and where the moving party is entitled to judgment as a matter of law.
Summary judgment “is the put up or shut up moment in a lawsuit, when a party must show what evidence it has that would convince the trier of fact to accept its version of the events.”
Steen v. Myers,
B. ERISA — Denial of Severance Benefits
Verizon first argues that New’s ERISA claim for denial of severance benefits fails as a matter of law because the MCI Plan Administrator made a rational determination, in its discretion, that the PSO had been outsourced, which led to the rejection of New’s severance claim. In response, New asserts that the MCI Plan Administrator’s determination that the PSO had been outsourced was unfounded and therefore wrong. As a result, New maintains that the administratоr abused its discretion in rejecting his claim for severance. The issue for this Court to decide, then, is whether the MCI Plan Administrator’s decision to deny New’s claim for severance was reasonable, in light of the administrator’s determination that the PSO had been outsourced. The Court finds that it was.
But before the Court reaches that issue, it must first determine whether the MCI Plan confers discretion to the Plan Administrator in interpreting the plan’s provisions and in determining a claimant’s eligibility for benefits. If it does, then the Court must reviеw the Plan Administrator’s decision to deny New severance benefits under a more deferential standard. It is well established that a challenge to the denial of benefits under
Here, The MCI Plan expressly states:
A committee appointed by the Company’s most senior human resources officer *779 (the “Committee”) administers the Plan. The Committee serves as the “Plan Administrator” and “Named Fiduciary” for the Plan, as those terms are defined under the Employee Retirement Income Security Act (“ERISA”).
The Committee has the power to implement, apply, interprеt and construe the Plan in its sole and absolute discretion. The Committee’s powers include, among other things, the construction of all Plan provisions and the determination of eligibility for all benefits under the Plan. The Committee may appoint delegates, including any subcommittees, that it deems appropriate to assist it in performing its duties under the Plan.
Def.’s
Under the arbitrary and capricious standard, “the administrator’s decision will only be overturned if it is ‘downright unreasonable,’ ” and not merely incorrect.
Williams,
The MCI Plan Administrator reviewed New’s appeal and informed New of the Severance Committee’s decision in a letter dated January 6, 2005. There, the Plan Administrator upheld the denial of benefits and explained that after a careful and independent review of New’s claim New was ineligible for severance as a result of his employment with Getronics, Although it is not explicitly stated, it is clear from the letter that the Plan Administrator based his decision on several relevant documents, including the MCI Plan, New’s employment records, the previous denial letter and the General Services Agreement between MCI and BP Amoco. The Plan Administrator specifically quoted the passage from the MCI Plan that he deemed *780 relevant to his decision and demonstrated why that passage was relevant, given MCI’s arrangement with BP Amoco and its affect on the PSO employees. In this way, the Plan Administrator not only adequately considered the factors relevant to his decision, but he made a rational connection between the intеrpretive issue— New’s eligibility for severance — and the relevant documents. This is more than sufficient under the discretionary standard of review.
Moreover, there is nothing in the record to support New’s argument that the Plan Administrator’s determination that the PSO employees had been “outsourced” was arbitrary and capricious. Given the agreement between BP Amoco and MCI, the Plan Administrator’s interpretation seems consistent with the generally understood meaning of the word “outsource,” The GSA contained a number of caveats that governed Getronic’s offer of employment to MCI employees. For instance, Exhibit D to the GSA, which the parties’ titled the “PSO Termination Plan,” authorized BP Amoco to contract with a third-party vendor, so that that third-party vendor could offer employment to MCI employees.
See
Def.’s
In this light, the Court cannot say that the Plan Administrator’s conclusion that the PSO employees were оutsourced was “downright unreasonable.” And, even if the Plan Administrator’s interpretation was a mistake, this alone is not enough to show that the decision was arbitrary and capricious. The record in this case contains substantial evidence supporting the Plan Administrator’s conclusion that New and his colleagues were outsourced, and thus ineligible to receive severance benefits under the MCI Plan. There simply is nothing in the record to support New’s argument that the Plan Administrator’s decision was made in bad faith, or otherwise. At most, New’s arguments as to whether he was “outsourced” show a different, plausible interpretation of the Plan documents, but they do not overcome the “high hurdle” of the arbitrary and capricious standard.
Jacobs v. Xerox Corp., Long Term Disability Income Plan,
C. ERISA — Failure to Turn-Over Requested Documents
New further contends that he is entitled to civil penalties pursuant to
ERISA section 1024(b)(4) outlines the documents that plan administrators are required to disclose to claimants pursuant to
The administrator shall, upon request of any participant ... furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated.
New, however, asserts that MCI violated
As a final thought, and in abundance of caution, the Court acknowledges that no evidence exists that supports the argument that MCI was somehow neglectful or deceitful in declining to comply with New’s request for immaterial documents. It is well-settled that even in the event an administrator violates
Again, MCI turned over to New the MCI Plan, the company’s code of еthics, a copy of New’s claim letter and a redacted version of the amended GSA. These documents are those under which the MCI Plan was either established or operated. MCI simply chose not to provide New with the slew of immaterial documents that he requested. Regardless, there is no dispute MCI complied with
D. Common Law — Breach of Implied Contract
New brings his final claim for severаnce benefits under a state-law theory of breach of implied contract. In response, Verizon finds no reason to challenge the merits of New’s claim, but rather points out that ERISA preempts separate state-law causes of action arising out of the administration of an ERISA plan.
See Leipzig v. AIG Life Ins. Co.,
Through his state-law claim for breach of implied contract, New seeks to recover severance benefits and to otherwise enforce his rights under the MCI Plan. To do so, instead of relying on the terms of the Plan itself, New bases his claim on statements made orally to him by persons affiliated with MCI’s severance hotline. New, in essence, claims that these statements created an implied contract that entitled him to severance benefits established under the MCI Plan. And, according to New, the damage award remains the same. In the event New succeeds in proving that an implied contract existed, which is still an open issue, New requests that MCI pay him severance benefits under the MCI Plan. As such, there is no question that New’s state-law claim relies on and relates to the existence of the MCI Plan, which the Court would ultimately have to interpret in adjudicating New’s claim and in assessing his damages. New’s claim for breach of implied contraсt is therefore preempted.
See Collins v. Ralston Purina Co.,
Nevertheless, assuming that ERISA preemption does not apply, New’s claim for breach of implied contract would ultimаtely fail. In Illinois, in order to prove an implied contract the party asserting the contract must show the same elements as an express contract, as well as a
*783
meeting of the minds and a mutual intent to contract.
See, e.g., Nissan N Am. v. Jim M’Lady Oldsmobile, Inc.,
In support оf his claim, New states that a “reasonable man would likely think he is qualified for severance” after having been told by unidentified individuals that he qualifies for severance under the MCI Plan. Pl.’s Resp. to Def.’s Memo, at 22. But this “reasonable belief,” based on hearsay statements, does not establish the existence of an implied contract. New fails to present any admissible evidence by way of deposition testimony, affidavits, declarations, documents, admissions or other communications tо support the basic elements of an express contract between two parties, much less an implied contract between himself and MCI. On the evidence presented, there was no meeting of the minds; there was no intent to be bound; and there was no mutual assent. In the end, there is nothing in the record, aside from New’s self-serving arguments, from which a reasonable jury could draw an inference that an implied contract existed between the parties. Summary judgment is warranted for this reason alone.
See Praefke Auto Elec. & Battery Co., Inc. v. Tecumseh Products Co., Inc.,
III. CONCLUSION
For the reasons stated above, Defendant Verizon Communications Inc.’s Motion for Summary Judgment against Plaintiff Larry New is granted in its entirety.
IT IS SO ORDERED.