Erickson v. Hillsboro Med. Ctr.
| Docket Number | 3:22-cv-01208-HZ |
| Decision Date | 22 August 2023 |
| Parties | MARITTA ERICKSON, Plaintiff, v. HILLSBORO MEDICAL CENTER and TRANSAMERICA RETIREMENT ADVISORS, LLC, Defendants. |
| Court | U.S. District Court — District of Oregon |
Megan E. Glor John C. Shaw Megan E. Glor, Attorney at Law PC Attorneys for Plaintiff
Brian T. Kiolbasa Attorneys for Defendant Hillsboro Medical Center
Stanton R. Gallegos Markowitz Herbold PC Attorneys for Defendant Transamerica Retirement Advisors, LLC
This matter is before the Court on Defendant Hillsboro Medical Center's Motion for Entry of Judgment Under Rule 52, ECF 30; Plaintiff's Motion for Summary Judgment, ECF 31; and Defendant Transamerica Retirement Advisor's Motion for Entry of Judgment Under Rule 52, ECF 34. For the reasons that follow the Court grants in part and denies in part Hillsboro Medical Center's Motion for Entry of Judgment, grants in part and denies in part Plaintiff's Motion for Summary Judgment, and grants Transamerica Retirement Advisor's Motion for Entry of Judgment.
Plaintiff Maritta Erickson began working as a registered nurse with Defendant Hillsboro Medical Center (“HMC”)[1] on October 20, 1986. Plaintiff was a participant in the Tuality Healthcare Retirement Plan (the “Frozen Plan”)[2] from November 1, 1987, through August 31, 2012, at which time the Frozen Plan was amended to freeze participation and benefit accruals. Plaintiff was a participant in the Tuality Healthcare Cash Balance Pension Plan (the “Cash Balance Plan”) from September 1 2012, through May 31, 2020. Plaintiff retired from HMC on June 15, 2020.
On June 24, 2020, Plaintiff wrote to HMC and Defendant Transamerica Retirement Advisors (“TRA”) asserting that HMC erred in the calculation of her retirement benefits under the Frozen Plan. Specifically, Plaintiff asserted HMC failed to properly credit her with a “year of benefit service” for each of four years: 1996, 1997, 2000, and 2001. On June 26, 2020, Plaintiff sent a second letter to HMC and TRA noting she had received employer-matched benefits from her 403(b) retirement account[3] in 1996, 1997, 2000, 2001, therefore, she believed she also met the Frozen Plan 1,000-hour threshold to be credited with a year of benefit service in each of those years. Plaintiff attached some of her paystubs and asserted they suggested that Defendants failed to include Plaintiff's “low census”[4] hours when calculating Plaintiff's hours of service for the years in question.
On September 24, 2020, HMC advised Plaintiff that it had “treat[ed] [her] inquiry as a formal claim for benefits” pursuant to ERISA and had reviewed the Frozen Plan documents, Plaintiff's pay records, and Plaintiff's 403(b) contribution records. Tr 266.[5] HMC noted Plaintiff's 403(b) records indicated she did not receive employer-matched benefits in 1996, 1997, 2000, or 2001 because she did not have 1,000 hours of service in those years. In addition, records in HMC's “HR information system” either matched the paystubs Plaintiff provided or “exceeded the number of low census hours on [Plaintiff's] paystubs,” but “in no instance did the paystubs [Plaintiff] provided reflect low census hours that [HMC's] records did not,” therefore, HMC could not establish that Plaintiff's low census hours were incorrect. Tr. 267. Finally, HMC's records reflected Plaintiff had 959.71 hours of service in 1996, 937.92 hours of service in 1997, 934.25 hours of service in 2000, and 749.50 hours of service in 2001. Tr. 266. Plaintiff, therefore, did not have 1,000 hours of service entitling her to a year of benefit service under the Frozen Plan in any of those years. Accordingly, HMC denied Plaintiff's claim for retirement benefits for years 1996, 1997, 2000, and 2001.
Plaintiff requested copies of the documents related to her 403(b) contributions; copies of the policies and procedures relating to “how [HMC] counted vacation, sick, standby and low census toward the accumulation of the hours necessary to meet both employee match and pension accumulations of the 1000 hours”; “a breakdown of all of [her] hours by pay period from 1986 to 2020”; and an independent review of the denial. Tr. 273-74. On December 24, 2020, HMC provided Plaintiff with the requested documents and advised Plaintiff that it had begun the requested independent review.
On January 28, 2021, the HMC Fiduciary Committee conducted an independent review of the denial of Plaintiff's claim. On February 5, 2021, HMC advised Plaintiff that the fiduciary committee concluded HMC's denial was appropriate. Specifically, HMC's conclusion that Plaintiff did not have 1,000 hours of service in 1996, 1997, 2000, or 2001 and, therefore, was not entitled to a year of benefit service for any of those years was correct. Tr. 437-38. HMC advised Plaintiff that the independent review decision was “final and binding” and that Plaintiff had the right to bring “legal action under ERISA Section 502(a).” Tr. 438.
On April 9, 2021, TRA advised Plaintiff that during an audit of its benefit calculation system it discovered that the monthly amount of retirement benefits that Plaintiff had been receiving under the Frozen Plan had “been overstated [by $258.09 per month][6] since the commencement of [her] benefits on July 1, 2020.” Tr. 167. TRA explained: “The portion of your Normal Retirement Benefit derived from your employment through December 31, 1987 was incorrectly applied as an annual value instead of a monthly value, causing your overall benefit to be overstated.” Tr. 167. TRA advised HMC of the overpayment and was directed “to adjust [Plaintiff's] monthly benefit payments,” but Plaintiff would not be required to return the overpaid amounts to the Frozen Plan. Id.
On April 26, 2021, Plaintiff wrote HMC disputing TRA's calculations. HMC treated Plaintiff's letter as a formal claim for benefits. On May 20, 2021, HMC denied Plaintiff's claim explaining:
Tr. 180. HMC also noted that § 8.4 of the Frozen Plan stated, “In the event a Participant or Beneficiary receives an overpayment from the Plan, the Plan Administrator shall make reasonable efforts to recover the overpayment . . . includ[ing], but . . . not limited to, [repayment or] reducing future Plan benefits payable to the Participant or Beneficiary.” Id. HMC did not request that Plaintiff repay the overpayments, but instead reduced Plaintiff's future monthly benefit payment to the corrected amount.
On August 9, 2021, Plaintiff appealed the pre-1988 plan benefits claim to HMC. Tr. 18485. On October 8, 2021, the HMC fiduciary committee denied Plaintiff's appeal. The fiduciary committee noted that Article IV of the Frozen Plan set out the benefit formulas, TRA's internal audit revealed that Plaintiff had been overpaid due to a calculation error in applying the Frozen Plan formula, and the Frozen Plan provided authority for HMC to reduce Plaintiff's pre-1988 benefits in order to remedy the overpayment. Tr. 244-46. HMC advised Plaintiff that the independent review decision was “final and binding”; that Plaintiff had the right to bring “legal action under ERISA Section 502(a)”; and that Tr. 246.
On August 16, 2022, Plaintiff filed an action in this Court against HMC and TRA asserting claims for payment of benefits, enforcement of the terms of the Frozen Plan, and clarification of future benefit rights pursuant to ERISA, 29 U.S.C. §§ 1132(a)(1)(B) and 1132(a)(3).
On May 26, 2023, HMC and TRA filed Motions for Entry of Judgment Under Rule 52 and Plaintiff filed a Motion for Summary Judgment, The Court took the matter under advisement on June 23, 2023.
The parties agree the standard of review in this matter is abuse of discretion rather than de novo. The parties, however, disagree as to the proper procedural mechanism to bring the dispute before the Court. As noted, Defendants filed Motions for Entry of Judgment pursuant to Federal Rule of Civil Procedure 52. Plaintiff filed a Motion for Summary Judgment under Federal Rule of Civil Procedure 56.
Whether the Court proceeds under Rule 52 or 56 “depends on what standard of review the court applies.” Rabbat v Standard Ins. Co., 894 F.Supp.2d 1311, 1311 (D. Or. 2012). The Ninth Circuit has held that “in an ERISA benefits case, [when] the court's review is for abuse of discretion, summary judgment is a proper ‘conduit to bring the legal question before the district court.'” Id. (). See also Harlick v. Blue Shield of Ca., 686 F.3d 699, 706 (9th Cir. 2012)(“In the ERISA context, a motion for...
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