914 F.Supp. 1180 (W.D.Pa. 1996), C. A. 94-0930, Jordan v. Federal Exp. Corp.

Docket Nº:C. A. 94-0930
Citation:914 F.Supp. 1180
Party Name:Jordan v. Federal Exp. Corp.
Case Date:January 18, 1996
Court:United States District Courts, 3th Circuit
 
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Page 1180

914 F.Supp. 1180 (W.D.Pa. 1996)

Capt. John Paul JORDAN, Plaintiff,

v.

FEDERAL EXPRESS CORPORATION, Administrator, Fixed Pension Plan for Seaboard World Airline Pilots, Flying Tiger Line, Inc. Variable Annuity Pension Plan for Pilots, Federal Express Corporation Employees' Pension Plan, Defendants.

Civil Action No. 94-0930.

United States District Court, W.D. Pennsylvania.

Jan. 18, 1996

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Ronald G. Backer, Rothman Gordon, Pittsburgh, PA, Daniel M. Katz, Katz and Ranzman, Washington, DC, for plaintiff.

James P. Hollihan, Robert J. Waine, Manion, McDonough and Lucas, Pittsburgh, PA, Elizabeth C. Smith, Federal Express Corporation, Memphis, TN, for defendants.

MEMORANDUM OPINION

LEE, District Judge.

Before the Court are Plaintiff's Motion for Summary Judgment and for Injunctive, Declaratory and Monetary Relief (Document No. 13) and Defendants' Motion for Summary Judgment (Document No. 16). The parties have submitted comprehensive memoranda, affidavits, and extensive documentary material in support of their motions.

Background

Capt. John Paul Jordan, plaintiff, was employed continuously as an airline pilot from May 1965 until his disability retirement in 1989. His career began with Seaboard World Airlines, Inc. ("Seaboard") where, in the 1960s, he became a participant in its Fixed Pension Plan for Seaboard World Airline Pilots (the "Seaboard Plan"), a defendant. Following Seaboard's acquisition by and merger with Flying Tiger Line, Inc. ("Flying Tiger"), plaintiff also became a participant in the Flying Tiger Line, Inc. Variable Annuity Pension Plan for Pilots ("Flying Tiger Plan"), also a defendant. 1

Sometime after July 1989, defendant Federal Express Corporation ("Fed Ex") acquired Flying Tiger, and the defendant Federal Express Corporation Employees' Pension Plan ("Fed Ex Plan") became the administrator for both the Seaboard Plan (which merged into the Fed Ex Plan) and the Flying Tiger Plan (which remained a separate and distinct plan, although administered by the Fed Ex Plan).

In 1988, Capt. Jordan was on long-term sick leave from Flying Tiger which informed him by letter of October 12, 1988, that after he exhausted his sick leave and vacation pay, he "may be eligible to go on disability retirement." Letter of Nadine Harding, Manager Crew Administration, to Capt. Jordan, October 12, 1988, Exhibit A, Statement of Material Facts as to Which Plaintiff Contends There is No Genuine Issue (Document No. 15). By said letter, Flying Tiger also informed plaintiff that to become eligible for disability retirement benefits, he would have to document "a disqualifying medical condition which precludes the issuance of an FAA medical certificate" and outlined the process for applying for disability retirement, including that plaintiff submit a written request at least 60 days prior to his last "date on the payroll." Id. Benefits would "commence the first day of the month following satisfaction of the three items listed above [ i.e., written, signed request; documentation from plaintiff's FAA medical examiner; and supporting medical documentation] and the exhaustion of sick leave and vacation." Id.

On March 14, 1989, plaintiff sent his "written request to activate the process of disability retirement approximately (60) days before the expiration of my long term sick leave." Id., Exhibit B, Plaintiff's letter to Gloria Dickey, Employee Benefits Office, March 14, 1989. Plaintiff's letter enclosed an F.A.A. letter of a "pending status subject to additional review" which, however, was not an official FAA medical disqualification, and he requested "initiation of the disability retirement process in the event that I am subsequently denied a medical certificate. I will keep you informed of this matter." Id.

On June 3, 1989, plaintiff sent the Flying Tiger Plan a letter from his "FAA medical examiner ... as per the specifications of item (2) of [Ms. Harding's] letter of October 12, 1988" and a letter from his attending physician addressing item (3). Defendants' Supplemental Appendix (Document No. 23), App. No. 24, Plaintiff's letter to Ms. Harding, June 3, 1989. On June 5, 1989, the Flying

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Tiger Plan responded to Capt. Jordan's request for "Disability Retirement effective June 1, 1989." Id., Exhibit C, letter of Maria Baduria, Benefits Administrator, June 5, 1989. Said letter attached, inter alia, an Option Election Form and a Spousal Consent Form, and provided certain information to plaintiff regarding his options, including the following:

Monthly Benefit Payable from the Fixed and Variable Plans

Straight Life Option $6,769.29 $75.26
Joint and Survivor 50% $6,109.08 $71.55
Joint and Survivor 100% $5,576.79 $63.12

Id. Additionally, the Flying Tiger Plan advised plaintiff that if he opted for the Straight Life Option payable to him for his life only, he must select that option on the form provided and he and his wife, Linda E. Jordan, would have to execute and return the Spousal Consent Form along with proofs of age. Ms. Baduria's letter further stated that under the provisions of the Flying Tiger Plan, "Disability Retirement would commence the first day of the month following or coincident with approval of disability, exhaustion of all sick pay and vacation, receipt of your FAA Letter of Denial and your request for disability benefits." Id. Plaintiff also was given a telephone number to contact if he had any questions. Id. Plaintiff returned the "necessary paperwork" by letter dated July 26, 1989, attaching his election of options and spousal consent forms executed on July 24, 1989, selecting the "Joint and Survivor 50% Option" (the "Option"). Id., Exhibit D, Plaintiff's letter to Ms. Harding. On August 22, 1989, the Fed Ex Plan approved plaintiff's disability retirement and directed its insurance carrier to commence payments immediately, retroactive to June 1, 1989. Id., Exhibit E, letter of Ms. Baduria to Union Mutual Life Insurance Company, August 22, 1989. Plaintiff received his first disability retirement check for June, July and August 1989, from the insurance company by letter of September 5, 1989. Id., Exhibit F, letter of Ms. Wendy Berry to plaintiff, September 5, 1989. Section 7.3 of the Seaboard Plan and Section 6.3 of the Flying Tiger Plan each provide: "Subsequent to a Member's Retirement Date the election of this Option [ i.e., the Joint and Survivor Option] cannot be rescinded nor can the designation of the joint annuitant be changed." Appendix to Defendants' Motion for Summary Judgment (Document No. 18), App. No. 1 (Seaboard Plan) and App. No. 22 (Flying Tiger Plan). The parties do not dispute that, prior to plaintiff's election designation, the Pension Plans' administrators did not specifically inform plaintiff or his spouse that his election of the Option was irrevocable or that his designation of the joint annuitant could not be changed thereafter. Moreover, defendants do not seriously dispute plaintiff's assertion that, at no time after the 1980 Flying Tiger acquisition of Seaboard and prior to his election of the Option and commencement of disability benefits, had the Pension Plans distributed to plaintiff any summary plan description or booklet which mentioned the irrevocability of election of options, nor do the parties dispute that plaintiff made no specific request for information regarding the revocability or irrevocability of his election designation. Plaintiff and Linda Jordan separated in late 1990 and divorced on October 30, 1991. Patricia A. Jordan (who is older than Linda and, thus, presumably no greater a "drain" on the pension funds, actuarially speaking) and plaintiff were wed on December 17, 1991. Under the terms of their property settlement, Linda Jordan agreed to relinquish all claims to plaintiff's retirement benefits under his retirement plans, including the joint and survivor annuity. (The property settlement has not been made part of the record.) In January 1992, Capt. Jordan notified the Fed Ex Plan to substitute Patricia A. Jordan for Linda E. Jordan as his joint annuitant, which request was denied, but he was advised he could submit a Qualified Domestic Relations Order ("QDRO") certified by the state court if he wished to extinguish Linda Jordan's interest in the joint and survivor annuity. Plaintiff's Statement of Material Facts, Ex. H, letter of Loren E. Jensen, Fed Ex Plan Manager, February 3, 1992. Page 1185 Subsequently, plaintiff obtained and forwarded a QDRO to the Fed Ex Plan, and again requested Fed Ex either substitute Patricia Jordan as his joint annuitant under the Option he elected or consider it rescinded and increase his monthly benefits to the higher level corresponding to the Straight Life Option. The Fed Ex Plan denied said request although, on November 24, 1992, it complied with the QDRO and "extinguished" Linda Jordan's survivor benefit, leaving plaintiff with the monthly benefits under the Option, but with no designated joint annuitant. Plaintiff thereafter retained attorneys and appealed the Fed Ex Plan's decision. Defendants submit that representatives of the Pension Plans had informed plaintiff and his domestic relations attorney following his retirement but before he executed the QDRO, that his election of options and designation of beneficiaries was irrevocable and that perhaps it would be wise to leave Linda Jordan intact as his joint annuitant and negotiate with her for some other consideration viz a viz the property settlement. Affidavit of Shellie Weaver, Defendants' App. No. 9; Affidavit of Attorney David J. Kohloff, Defendants' App. No. 12. Plaintiff disputes the factual basis for and legal relevancy of these assertions...

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