Adams v. Brink's Company

• Decision Date: 03 June 2005
• Docket Number: No. 2:02CV00044.,2:02CV00044.
• Citation: 372 F.Supp.2d 854
• Parties: Jimmy ADAMS, et al., Plaintiffs, v. THE BRINK'S COMPANY, et al., Defendants.
• Court: U.S. District Court — Western District of Virginia

Page 854

372 F.Supp.2d 854

Jimmy ADAMS, et al., Plaintiffs, v. THE BRINK'S COMPANY, et al., Defendants.

No. 2:02CV00044.

United States District Court, W.D. Virginia, Big Stone Gap Division.

June 3, 2005.

COPYRIGHT MATERIAL OMITTED

Charlie Richard Jessee, Jessee & Read, P.C., Abingdon, VA, William S. Lockett, James A. Holifield, Jr., Kennerly, Montgomery & Finley, P.C., Knoxville, TN, for Plaintiffs.

Robert Martin Rolfe, Elena E. Ellison, Hunton & Williams, Richmond, VA, John A. Lucas, James S. Chase, Hunton & Williams, Knoxville, TN, for Defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

SARGENT, United States Magistrate Judge.

This case involves the claims of 123 plaintiffs against their current or former employer, Paramont Coal Corporation, ("Paramont"), its current parent company, the Brink's Company, ("Brink's"), the Brink's Company Pension-Retirement Plan, ("the Brink's Plan"), and the Administrative Committee for Brink's Company Pension-Retirement Plan, ("the Administrative Committee"). The plaintiffs seek declaratory and equitable relief as well as damages under various claims related to the administration of the Brink's Plan. Jurisdiction over this matter is based upon federal question jurisdiction, see 28 U.S.C. § 1331, under the Employee Retirement Income Security Act of 1974, ("ERISA"), 29 U.S.C. § 1001 et seq. The case is before the undersigned magistrate judge by consent of the parties pursuant to 28 U.S.C. § 636(c)(1).

Plaintiffs originally filed their Complaint in the United States District Court for the Eastern District of Tennessee on December 19, 2001. The Complaint sought recovery based on claims alleging breach of contract, estoppel, the creation of an informal plan, the reduction of accrued benefits and breach of fiduciary duty. In response, the defendants filed a motion to dismiss for failure to exhaust administrative remedies and a motion to dismiss based upon improper venue, or, in the alternative, to transfer venue to the Western District of Virginia. The court denied both motions to dismiss, but granted the defendants' motion to transfer.

Defendants filed their Answer to the Complaint in the Western District of Virginia on April 4, 2002. (Docket Item No. 23.) On September 6, 2002, the defendants filed a Motion For Summary Judgment seeking dismissal as a matter of law of all plaintiffs' claims. (Docket Item No. 36.) By Memorandum Opinion and Order entered November 18, 2003, the court granted in part and denied in part the defendants' Motion For Summary Judgment. (Docket Item No. 85.) As a result, the court granted summary judgment in favor of the defendants on the plaintiffs' claims alleging breach of contract, estoppel, the creation of an informal plan and the reduction of accrued benefits. The court denied the defendants' Motion For Summary Judgment on the plaintiffs' claims alleging breach of fiduciary duty.

By agreed order entered August 20, 2004, the parties consented to the transfer of this case to the undersigned magistrate judge. (Docket Item No. 108.) By agreed order entered October 7, 2004, the parties agreed to sever the claims of five of the 123 plaintiffs to be tried to the court first. (Docket Item No. 112.) The remaining breach of fiduciary claims of those five plaintiffs, Christopher Brooks Addington, Jack Blanton, Alton Lawson Jr., Ricky D. Meade and Donald Ratliff, were tried to the court February 22 to March 1, 2005. Based on the evidence presented, the court now issues its formal findings of fact and conclusions of law.

I. SUMMARY OF EVIDENCE

At trial, the parties submitted a number of stipulated facts to the court. The parties stipulate that The Pittston Company, ("Pittston"), changed its name to The Brink's Company, and the Pension-Retirement Plan of The Pittston Company and its Subsidiaries changed its name to The Brink's Company Pension-Retirement Plan in 2003. The parties agree, therefore, that any references to "Pittston" and "Brink's" would be interchangeable and would refer to The Brink's Company. The parties further agree that any references to the "Brink's Plan" or the "Pittston Plan" would be interchangeable and would refer to the Brink's Company Pension-Retirement Plan.

The parties agree that Pyxis Resources, ("Pyxis"), then a subsidiary of Pittston, acquired Paramont on July 7, 1986, and that Pyxis was a Participating Company in the Pittston Plan since before January 1, 1988. The parties further agree that, at the time of its acquisition by Pyxis, Paramont's employees all were participants in one of two identical defined-benefit pension plans, the Salaried Employees' Pension Plan of Paramont Coal Corporation or the Hourly Employees' Pension Plan of Paramont Coal Corporation, (Exhibits 105 and 106 respectively) (collectively, "the Paramont Plans"). The Paramont Plans did not require any employee contributions and provided a maximum monthly retirement benefit of $350 for 20 years of service with Paramont. Under the Paramont Plans, all Paramont employees, regardless of their salary, earned the same retirement benefit for the same years of service.

The parties have stipulated that Exhibits 496 to 505 contain complete and authentic copies of the Pittston Plan in effect as of the dates indicated. The Pittston Plan also is a defined-benefit plan. Under the Pittston Plan, a Participant's retirement benefits are calculated based on multiplying a percentage of an Average Salary by the number of years of "Benefit Accrual Service." Section 4.04 of the December 11, 1987, and the January 1, 1989, Plans, (Exhibits 499 and 500, respectively), states: "Service Prior to Participation. The Board [of Directors] shall determine to what extent Benefit Accrual Service shall be credited to any Participant for service for any Subsidiary or Division prior to the date such Subsidiary or Division became a Company."

On September 9, 1988, Pittston's Board of Directors amended the 1987 Plan to allow the Administrative Committee to adopt amendments to the Plan. On November 18, 1988, the Administrative Committee amended the 1987 Plan to add Exhibit G. Exhibit G merged the Paramont Plans into the Pittston Plan effective January 1, 1989. Exhibit G is entitled "Special Provisions Applicable to Former Participants in the Pension Plans of Paramont Coal Corporation." The initial paragraph of Exhibit G states: "In connection with such mergers, the provisions of this Exhibit G shall apply, effective January 1, 1989, notwithstanding any provisions elsewhere in the Plan to the contrary." Exhibit G further states in part:

(ii) The accrued pension benefit of each Paramont Participant under the Plan in respect of periods of service prior to January 1, 1989 shall be determined solely in accordance with the provisions of the Paramont Plan in which he was a Participant, as in effect immediately prior to January 1, 1989, based solely on his "Benefit Service" (as defined in such Paramont Plan) on December 31, 1988 or any earlier date on which the Paramont Participant ceases to be an employee of Paramont Coal Corporation....

(iii) The accrued pension benefit of each Paramont Participant in respect of periods of service as an employee of Paramont from and after January 1, 1989 ... shall be determined solely in accordance with the provisions of the Plan....

This court previously found that the language of Exhibit G is clear and unambiguous and does not provide for the inclusion of plaintiffs' years of service with Paramont prior to January 1, 1989, in the calculation of their retirement benefits under the Pittston Plan. See Adams v. The Pittston Company, Civ. No. 2:02cv00044, Docket Item No. 80 (W.D.Va. July 28, 2003) (Report and Recommendation), Docket Item No. 85 (W.D.Va. Nov. 18, 2003) (Order adopting Report and Recommendation) and Docket Item No. 130 (W.D.Va. Jan. 18, 2005) (Memorandum Opinion on Plaintiffs' Motion for Reconsideration).

The parties agree that, as of December 11, 1987, the Pittston Plan provided a single life annuity normal retirement pension benefit equal to the sum of 2.1 percent of the employee's Average Salary multiplied by his number of years of Benefit Accrual Service not to exceed 25 plus 1 percent of his Average Salary multiplied by his number of years of Benefit Accrual Service in excess of 25 less 1.25 percent of his Social Security Benefit multiplied by his number of years of Benefit Accrual Service not to exceed 40, ("Pittston Plan Old Formula"). In other words, a single life annuity at normal retirement under the Pittston Plan Old Formula = (.021)(FAE)(BAS up to 25) + (.01)(FAE)(BAS over 25) — (.0125)(SS)(BAS up to 40) where FAE = Average Salary, BAS = Benefit Accrual Service and SS = Social Security Benefits.

The parties also agree that, as of March 7, 1990, the Pittston Plan provided a single life annuity normal retirement pension benefit equal to the sum of 2.1 percent of the employee's Average Salary multiplied by his number of years of Benefit Accrual Service not to exceed 25 plus 1 percent of his Average Salary multiplied by his number of years of Benefit Accrual Service in excess of 25 less .55 percent of his Covered Compensation Base (up to his Final Covered Compensation) multiplied by the number of years of Benefit Accrual Service (including fractions thereof) not to exceed 35, ("Pittston Plan New Formula"). In other words, a single life annuity at normal retirement under the Pittston Plan New Formula = (.021)(FAE)(BAS up to 25) + (.01)(FAE)(BAS over 25) — (.0055)(CCB up to FCC)(BAS up to 35) where FAE = Average Salary, BAS = Benefit Accrual Service, CCB = Covered Compensation Base and FCC = Final Covered Compensation.

Through 1998, the Pittston Plan provided Annual Benefit Statements to each of the Pittston Plan Participants. These Annual Benefit Statements included an estimate of a participant's future Pittston Plan retirement benefit assuming the participant continued to work at a Pittston Plan Participating Company until his Normal...