Glencoe v. Teachers Insurance and Annuity Ass'n
| Decision Date | 12 October 1999 |
| Docket Number | No. Civ.A. 2:99-0015.,No. Civ.A. 2:99-0115.,Civ.A. 2:99-0015.,Civ.A. 2:99-0115. |
| Citation | 69 F.Supp.2d 849 |
| Court | U.S. District Court — Southern District of West Virginia |
| Parties | Catherine L. GLENCOE, Plaintiff, v. TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation, Defendant. |
William H. Scharf, Charleston, WV, for plaintiff.
Clement D. Carter, Carter & Young, Clarksburg, WV, Sean F. Murphy, David R. Weiser, McGuire, Woods, Battle & Boothe, McLean, VA, for defendant.
Pending is Defendant's Motion for Summary Judgment. For the reasons stated below, the motion is GRANTED.
Our Court of Appeals has often stated the settled standard and shifting burdens governing the disposition of a motion for summary judgment:
Rule 56(c) requires that the district court enter judgment against a party who, "after adequate time for ... discovery fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial," To prevail on a motion for summary judgment, the [movant] must demonstrate that: (1) there is no genuine issue as to any material fact; and (2) it is entitled to judgment as a matter of law. In determining whether a genuine issue of material fact has been raised, we must construe all inferences in favor of the [the nonmovant]. If, however, "the evidence is so one-sided that one party must prevail as a matter of law," we must affirm the grant of summary judgment in that party's favor. The [nonmovant] "cannot create a genuine issue of fact through mere speculation or the building of one inference upon another," To survive [the motion], the [nonmovant] may not rest on [his] pleadings, but must demonstrate that specific, material facts exist that give rise to a genuine issue. As the Andersen Court explained, the "mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff[.]"
Harleysville Mut. Ins. Co. v. Packer, 60 F.3d 1116, 1119-20 (4th Cir.1995) (citations omitted); Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir.), cert. denied, 513 U.S. 813, 115 S.Ct. 67, 68, 130 L.Ed.2d 24 (1994); see also Cabro Foods, Inc. v. Wells Fargo Armored Service Corp., 962 F.Supp. 75, 77 (S.D.W.Va.1997); Spradling v. Blackburn, 919 F.Supp. 969, 974 (S.D.W.Va.1996).
Thompson Everett, Inc. v. National Cable Advertising, L.P., 57 F.3d 1317, 1323 (4th Cir.1995). It is through this analytical prism the Court evaluates Defendant's motion.
Catherine Glencoe's father was a professor at West Virginia State College. He died in March of 1991, leaving Plaintiff as the sole beneficiary of life insurance policies and retirement annuities purchased from Defendant, Teachers Insurance and Annuity Association of America ("TIAA"). This dispute arises out of the disposition of these annuities and life insurance policies to Ms. Glencoe.
It is undisputed that after Glencoe's father died, TIAA contacted Glencoe regarding the annuities purchased by her father. She received a number of documents from TIAA that explained her rights with respect to the annuities and policies. One of the documents received was a "silver booklet" that contained the following language:
Benefit Payment Information
Current federal tax law establishes required minimum distribution dates for survivor benefits from 403(b) annuity contracts when the annuity owner dies before beginning annuity income. In general, for non-spouse beneficiaries, your benefits must be totally distributed by December 31 of the fifth year following the annuity owner's death. This requirement does not have to be met if you begin receiving periodic payments — under an income method that doesn't guarantee payments beyond your life expectancy — by December 31 of the year following the year in which the original annuity owner died.
(Mem. in Supp. of Def.'s Mot. for Summ.J., Ex. 1, Dep.Ex. 8.) The booklet also contained the following disclaimer:
The tax information is based on our current understanding of the law. We cannot give tax advice for individual situations or guarantee final tax results. For more detailed tax information and advice, please consult your personal tax advisor.
(Id.)
Glencoe alleges that she contacted TIAA regarding the minimum distribution requirements mentioned in the "Benefits Payment Information" section of the booklet. Glencoe claims TIAA informed her that she had the following three options only: (1) withdraw the funds in one lump sum, (2) purchase an annuity that would not guarantee payment after her death, or (3) withdraw the funds over a five-year period. TIAA disputes that this advice was given. Nevertheless, construing the facts in a light most favorable to Glencoe, as the Court must, the Court accepts as true Glencoe's allegations for the purpose of this motion.
Glencoe contacted TIAA several times in an attempt to more clearly understand her rights under the insurance policies and annuities. Glencoe also enlisted the assistance of her mother, Sharon Steorts, who is a licensed attorney. Steorts contacted TIAA on Glencoe's behalf in order to ascertain what distribution options were available to Glencoe. Through their communications with TIAA, both Glencoe and her mother determined that Glencoe could not leave the money in the deceased's accounts, and therefore Glencoe had to exercise one of the three distribution options listed above.
Glencoe contacted a Certified Public Accountant ("CPA") in order to assess the tax consequences of the various distribution options. The CPA informed Glencoe she would incur the greatest tax liability if she received a lump sum payment. Based on Glencoe's reluctance to purchase an annuity that would not guarantee payment after her death, the CPA recommended she withdraw the funds over a five-year period.
Glencoe also further consulted with her mother and a financial investment advisor about her investment options. After consulting these various sources, Glencoe eventually elected to withdraw the total amount of the annuities over a five-year period. Glencoe withdrew approximately twenty percent of the funds each year in an effort to minimize the tax consequences of these withdrawals. Glencoe received payments of $33,300 in 1992, $41,246 in 1993; $38,644 in 1994, and $36,901 in 1995. In 1992, shortly after Glencoe received her first distribution, she quit her job and began caring for her ailing grandmother. During this time, Glencoe invested a portion of the withdrawn money and used the remainder for her own living expenses. She remained unemployed until she began working part-time for her mother in 1995. Currently, she is employed full-time with the United States Department of Labor.
After receiving her fourth distribution, Glencoe somehow concluded she could have kept the funds in the accounts without penalty so long as she withdrew only small amounts each year. She has since instituted this action, claiming that she was denied benefits under the annuities and insurance policies and, in the alternative, that TIAA breached its fiduciary duty by providing inaccurate information regarding her investment options. The parties both moved to consolidate this case with another identical case, and by an Order dated March 2, 1999, this case, civil action number 2:99-0015, was consolidated with civil action number 2:99-0115. Defendant now moves for summary judgment.
Plaintiff pursues two alternate theories of this case. First, she asserts a claim for damages incurred because TIAA allegedly provided her with inaccurate information. In the alternative, she asserts a claim on behalf of the retirement accounts for damages the accounts suffered because of Defendant's alleged breach of fiduciary duty. The Court addresses the claims in reverse order.
Although the complaint appears to assert claims only on behalf of Plaintiff Glencoe, Plaintiff now argues at the summary judgment stage she is also bringing a claim on behalf of the annuities and insurance policy plans. Plaintiff characterizes these claims as derivative suits brought by herself, as a beneficiary, on behalf of the plans. See 29 U.S.C. § 1132(a)(3). She argues that Defendant breached its fiduciary duty to the plans by improperly distributing the funds to Plaintiff. Plaintiff seeks complete restoration of the distributed funds to the accounts as a remedy for Defendant's alleged breach.
The parties agree that the Employee Retirement and Income Security Act ("ERISA") governs this dispute. ERISA provides a private cause of action for beneficiaries when a fiduciary has breached its duty to the plan. See 29 U.S.C. § 1132(a)(3). A fiduciary is liable to the plan for any loss to a plan as a result of a breach of fiduciary duty. See 29 U.S.C. § 1109(a) () Here, however, Defendant has breached no duty to the plan.1 The only arguable loss suffered by the plan resulted from TIAA distributing payments to Glencoe at her studied and informed request. Certainly this distribution can not breach a fiduciary duty. The Court concludes Defendant has not breached any duty to the plan by distributing benefits to Plaintiff pursuant to her request.
Plaintiff also asserts a claim for damages she suffered individually...
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