Helton v. AT&T, Inc.

• Decision Date: 16 September 2011
• Docket Number: Case No. 1:10–CV–0857.
• Citation: 805 F.Supp.2d 234
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Francine HELTON, Plaintiff, v. AT & T, INC., el al., Defendants.

805 F.Supp.2d 234

Francine HELTON, Plaintiff,

v.AT & T, INC., el al., Defendants.

Case No. 1:10–CV–0857.

United States District Court, E.D. Virginia,Alexandria Division.

Sept. 16, 2011.

John Rankin Ates, Ates Law Firm PC, Patricia A. Smith, Law Offices of Patricia A. Smith, Alexandria, VA, Allison C. Pienta, Stephen R. Bruce Law Offices, Washington, DC, for Plaintiff.

Katherine Anne Goetzl, Michelle Pretlow Thomas, Littler Mendelson PC, Washington, DC, for Defendants.

MEMORANDUM OPINION AND ORDER

GERALD BRUCE LEE, District Judge.

THIS MATTER is before the Court on the three-day nonjury trial for Plaintiff Francine Helton's claims against Defendants AT & T Inc. and AT & T Pension Benefit Plan (“Plan”) for pension benefits. This case concerns Defendants' alleged failure to notify Plaintiff of a change in the Plan's early retirement eligibility policy, resulting in Plaintiff's alleged loss of eight years of monthly payments to which she was entitled.

On August 8, 2010, Plaintiff filed her Complaint in this action, asserting the following claims: (1) improper denial of retroactive benefits (Count I); (2) violations of ERISA's disclosure requirements (Count II); (3) breach of fiduciary duty to keep beneficiaries informed (Count III); and (4) failure to provide requested information (Count IV). Plaintiff requested both equitable and compensatory relief. Specifically, she requested that the Court: (1) declare that the AT & T Employees' Benefit Committee abused its discretion in denying Ms. Helton's claims for retroactive benefits when AT & T failed to disclose until September 2009 that Ms. Helton was entitled to receive an unreduced pension benefit beginning in November 2001 at the age of 55; (2) declare that AT & T breached its duties under ERISA § 102, 29 U.S.C. § 1022, to understandably disclose changes in the eligibility requirements in a summary of material modification (“SMM”) or an updated summary plan description (“SPD”) and to distribute those summaries to participants with deferred vested pensions like Ms. Helton who were affected by the changes; (3) declare that AT & T breached its fiduciary duties in ERISA § 404, 29 U.S.C. § 1104, to keep beneficiaries informed; (4) declare that AT & T has unlawfully failed to produce requested documents as required by ERISA § 502(c)(1) and 29 C.F.R. 2560.503–1; (5) order AT & T to pay $121,563.90 to Ms. Helton ($1,279.62 per month between November 2001 and September 2009), plus interest on the monthly payments from the date each payment was due; (6) order AT & T to pay Ms. Helton $110 per day from the date of its refusal to supply requested records in accordance with ERISA § 502(c)(1), 29 C.F.R. 2560.503–1 and 29 C.F.R. 2575.502c–1; (7) award such other relief as the Court deems appropriate to ensure receipt of all retirement benefits and other amounts required to give effect to the Court's declarations; and, finally, (8) order Defendants to pay Plaintiff's attorneys' fees and expenses.

On June 3, 2011, Defendants moved for summary judgment on all counts. After granting Plaintiff's request for more discovery and allowing for supplemental briefing pursuant to Federal Rule of Civil Procedure 56(d), by Order dated August 10, 2011, 805 F.Supp.2d 223, 2011 WL 3702400 (E.D.Va.2011) the Court granted in part and denied in part Defendants' Motion for Summary Judgment. Specifically, the Court granted Defendants' Motion for Summary Judgment as to Plaintiff's claim for failure to provide requested information (Count IV) and denied Defendants' Motion for Summary Judgment as to Plaintiff's three other claims (Counts I–III).

Based on these remaining claims, the following issues are before the Court. The first issue is whether the Plan abused its discretion in denying Plaintiff's claim for pension benefits from when became eligible when she turned 55 years old (Count I) after finding that Plaintiff had been properly notified of the change in the Plan's eligibility requirements. The Court holds that the Plan abused its discretion in denying Plaintiff's claim because it did not engage in a reasoned and principled decision-making process, and the determination is not supported by substantial evidence. The second issue is whether Defendants failed to comply with ERISA's disclosure requirements (Count II) because she was not properly notified of the material changes to the Plan in a timely manner. The Court holds that Defendants failed to comply with ERISA's disclosure requirements because they failed to employ a method of distribution that was reasonably calculated to ensure actual receipt in sending out the requisite disclosures of the material changes to the Plan. The third issue is whether Defendants breached their fiduciary duty (Count III) by failing to keep Ms. Helton informed of changes to the Plan. The Court holds that Defendants breached their fiduciary duty by failing to respond to or correct Ms. Helton's apparent misunderstanding when she asked whether it was correct that she was not eligible to receive benefits until age 65. However, the Court holds that Plaintiff is not entitled to monetary damages as a remedy because double recovery of retroactive benefits is not appropriate equitable relief for Defendants' violation.

I. STANDARD OF REVIEW

In a non-jury case, the court must make specific findings of fact and separately state its conclusions of law. Fed.R.Civ.P. 52(a)(1). The trial judge has a function of finding the facts, weighing the evidence, and choosing from among conflicting inferences and conclusions those which he considers most reasonable. Penn–Texas Corp. v. Morse, 242 F.2d 243, 247 (7th Cir.1957) (citation and internal quotation marks omitted). The trial judge has the inherent right to disregard testimony of any witness when satisfied that the witness is not telling the truth, or the testimony is inherently improbable due to inaccuracy, uncertainty, interest, or bias. Id. (citation and internal quotation marks omitted); see Columbus–Am. Discovery Grp. v. Atl. Mut. Ins. Co., 56 F.3d 556, 567 (4th Cir.1995) (internal quotation omitted) (stating that that factfinder is in a better position to make judgments about the reliability of some forms of evidence, including evaluation of the credibility of witnesses). It is the duty of the trial judge sitting without a jury to appraise the testimony and demeanor of witnesses. See Burgess v. Farrell Lines, Inc., 335 F.2d 885, 889 (4th Cir.1964).

To satisfy the demands of Rule 52(a), a trial court must do more than announce statements of ultimate fact. United States ex rel. Belcon, Inc. v. Sherman Const. Co., 800 F.2d 1321, 1324 (4th Cir.1986) (citation omitted). The court must support its rulings by spelling out the subordinate facts on which it relies. Id.

The language of Rule 52 has been construed

not to require a court to make findings on all facts presented or to make detailed evidentiary findings; if the findings are sufficient to support the ultimate conclusion of the court they are sufficient. Nor is it necessary that the trial court make findings asserting the negative of each issue of fact raised. It is sufficient if the special affirmative facts found by the court, construed as a whole, negative each rejected contention. The ultimate test as to the adequacy of the findings will always be whether they are sufficiently comprehensive and pertinent to the issues to provide a basis for decision and whether they are supported by the evidence.

Darter v. Greenville Cmty. Hotel Corp., 301 F.2d 70, 75 (4th Cir.1962). This rule does not require that the trial court set out findings on all the myriad factual questions that arise in a case. Golf City, Inc. v. Wilson Sporting Goods, Co., 555 F.2d 426, 433 (5th Cir.1977). As to whether findings of fact are sufficient depends upon the particular facts of each individual case, and no general rule can govern. Darter, 301 F.2d at 75.

II. FINDINGS OF FACT

A. MS. HELTON'S EMPLOYMENT WITH AT & T

Plaintiff Ms. Francine Helton was born in October 1946. Ms. Helton began working for AT & T on June 30, 1980. Plaintiff has had the same home address in Arlington, Virginia since at least 1987. As of January 1, 1997, Plaintiff was on the active roll of a participating company in the Plan. In approximately April 1997, Plaintiff took an unpaid leave of absence along with vacation time to open a restaurant called Flavors. Ms. Helton opened her restaurant on April 19, 1997, which she has run since then with the help of her two sons. Plaintiff did not return to work after her leave of absence. Ms. Helton testified that, at the request of AT & T, she submitted a letter of resignation effective May 31, 1997, formalizing her termination with the company. During the time she was out on leave or vacation, she was still employed by AT & T. Ms. Helton's employment records have since been destroyed.

At that time, Plaintiff was a participant in AT & T's pension plan, which was established and is maintained by AT & T, and which provides retirement income to its employees. Ms. Helton was a deferred vested pensioner of the Legacy AT & T Management Program of the AT & T Pension Benefit Plan because her employment ended when she was age 50, and she did not have 25 years of service at the company. Moreover, because she did not have 20 years of service, under the terms of the Plan, she was not eligible to begin receiving even a substantially reduced pension before age 65.

Plaintiff did not request any information about her pension benefits at the time she left AT & T because she “always understood” that she would not be eligible to receive pension benefits until she reached age 65. This was general knowledge she had from when she joined the Plan and from the Plan's summary materials. However, in 1997, Defendants introduced a Special Update to the Plan, which included a change to the “pay-base average period” used to calculate benefits and which allowed participants to elect their benefits at age 55...