Graham v. Pactiv Corp. Benefits Committee

• Decision Date: 22 January 2004
• Docket Number: No. CIV.A. 3:03CV169.,CIV.A. 3:03CV169.
• Parties: David GRAHAM, Plaintiff, v. PACTIV CORPORATION BENEFITS COMMITTEE, and Pactiv Retirement Plan, Plan No. 031, Defendants.
• Court: U.S. District Court — Eastern District of Virginia

301 F.Supp.2d 483

David GRAHAM, Plaintiff, v. PACTIV CORPORATION BENEFITS COMMITTEE, and Pactiv Retirement Plan, Plan No. 031, Defendants.

No. CIV.A. 3:03CV169.

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

January 22, 2004.

COPYRIGHT MATERIAL OMITTED

Lisa K. Lawrence, Esquire, Susan G. Smith, Esquire, Todd M. Gaynor, Esquire, Lawrence & Associates, Richmond, VA, for Plaintiff.

Jay P. McElligott, Jr., Esquire, McGuireWoods LLP, Richmond, VA, for Defendants.

MEMORANDUM OPINION

PAYNE, District Judge.

On February 19, 2003, David Graham ("Graham") filed this action against defendants Pactiv Retirement Plan, Plan No. 031 (the "Pactiv Plan") and the Pactiv Corporation Benefits Committee (the "Pactiv Benefits Committee"), seeking redress for several alleged violations of the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. The Pactiv Plan is a detailed employee benefits plan governed by ERISA. The Pactiv Plan is funded by the employees of various companies, including the Packaging Corporation of America ("PCA") which was Graham's employer when he retired in 2001. The Pactiv Benefits Committee is a board of individuals that act as fiduciaries for the Pactiv Plan. In addition, the Pactiv Benefits Committee functions as administrator for the Pactiv Plan.

Count One of Graham's Complaint alleges that the Defendants violated ERISA by failing to provide Graham with the full amount of benefits to which he is entitled. Count Two alleges that the Defendants should be estopped from denying Graham certain benefits under the Pactiv Plan. Count Three seeks damages against the Defendants under ERISA 29 U.S.C. § 1332(c)(1) which provides that, if an administrator fails to provide requested information within thirty days, it may be liable to the participant in the amount of up to $100 per day. Count Four alleges that the Defendants breached their fiduciary duties under ERISA. After the conclusion of discovery, the Defendants filed a motion for summary judgment pursuant to Fed. R. Civ. Pro. 56. For the reasons stated below, the motion is granted.

STATEMENT OF FACTS

The facts in this case span a forty-year time period and involve several corporate reorganizations, several pension plans and numerous communications between several parties. Hence, a somewhat detailed recitation of the facts is necessary to an understanding of the issues that control resolution of the motion for summary judgment.

I. The Background of Graham's Employment and the Creation of the Pertinent Pension Plan

Graham began working for the Dixie Container Company ("Dixie") in 1960 at its Richmond, Virginia plant. Initially, Graham worked as an hourly production employee. Dixie, however, eventually promoted Graham to a salaried position, at which time he became an active salaried participant in the Dixie Container Pension Plan (the "Dixie Plan").

In the early 1990s, PCA, then a subsidiary of Tenneco Incorporated ("Tenneco"), acquired Dixie. As a result of this acquisition, on January 1, 1992, all Dixie employees became employees of PCA.¹ When the acquisition of Dixie by PCA took effect on January 1, 1992, the former active salaried employees of Dixie, including Graham, became eligible to participate in the Tenneco Incorporated Retirement Plan (the "Tenneco Plan").²

On January 1, 1994, the assets and liabilities of the Dixie Plan were merged into the Tenneco Plan. The merger resulted in the addition of Special Appendix XLIV to the Tenneco Plan document. Special Appendix XLIV provided that the Dixie Plan was frozen on December 31, 1991 and that affected former Dixie employees became participants in the Tenneco Plan as of January 1, 1992. Special Appendix XLIV further provided that affected former salaried employees of Dixie had an accrued benefit under the Tenneco Plan equal to their benefits under the then-frozen Dixie Plan plus the benefits accrued thereafter under the separate Tenneco Plan. As a result of the 1994 merger of the Dixie Plan and the Tenneco Plan, Graham received a copy of the 1995-1996 Tenneco Summary Plan Description ("SPD"). See generally 29 U.S.C. § 1022(a) ("A summary plan description of any employee benefit plan shall be furnished to participants and beneficiaries."). He did not, however, receive a copy of Special Appendix XLIV.

Then, effective April 1, 1999, Tenneco sold its corrugated container business to Madison Dearborn Partners, which retained the name PCA. This asset sale included the Richmond plant. On November 4, 1999, the remaining packaging operations of Tenneco were spun-off as a separate corporation named Pactiv Corporation.³ On April 12, 1999, Tenneco, PCA, and Pactiv Corporation entered into an employee benefit plan arrangement. As a result of this arrangement, PCA salaried employees, such as Graham, continued to participate in the Tenneco Plan which was renamed the Pactiv Plan. In addition to this name change, the Tenneco, PCA, and Pactiv Corporation arrangement resulted in the creation of the Pactiv Plan Document, which specifically preserved all benefits and services under the terms of the Tenneco Plan, unless such benefits and services were expressly modified in the Pactiv Plan. It is undisputed that the Pactiv Plan made no changes in Graham's pension benefits.

As was true with the Tenneco Plan, an SPD summarized the Pactiv Plan. Graham, however, did not receive a copy of either the Pactiv Plan Document or the Pactiv SPD at the time of the Tenneco spin-off.

II. Graham's Decision to Retire

Graham continued his employment with PCA into the new century. In early 2001, however, Graham began to contemplate retirement. To this end, on January 11, 2001, Graham telephoned the Pactiv Benefits Center in order to obtain a pension estimate. Hewitt Associates ("Hewitt"), an independent entity retained by the Pactiv Benefits Committee, maintains and staffs the Pactiv Benefits Center, providing information about the Pactiv Plan to its members.⁴ In response to Graham's request for specification of his retirement benefits, Hewitt sent him a Pension Estimate Statement, dated January 12, 2001, which, among other pension options not here relevant, described a single life annuity of $1,107.43 per month. See Def. Ex. M-13. This estimate set forth an assumed retirement date of August 1, 2002 and explicitly stated that it was based on ten years and seven months of participation in the Tenneco/Pactiv Plan.⁵ Graham took no action at this time.

On June 11, 2001, both Graham and his wife, Anita Graham ("Mrs.Graham"), again seeking pension information, communicated by telephone with the Pactiv Benefits Center.⁶ The Pactiv Benefits Center recorded and later transcribed this conversation. During this telephone conversation, a Hewitt representative stated that a Benefit Estimate Form would be prepared and mailed to Graham. The Hewitt employee also suggested that, if Graham wanted a more immediate estimate, he should resort to Hewitt's automated phone system. Taking this advice, Graham placed a telephone call to the automated system later that same day. The computer recording provided Graham with an estimated single life annuity payment of $2,734.11 per month commencing on October 1, 2001, an amount more than double the estimate made in the previous communication on January 11, 2001. Graham placed several more calls to the automated system on June 11, 2001; in fact, all told, Graham called the system seven times that day. In each call, the automated system provided Graham with a single life annuity pension estimate in the neighborhood of $2,700 per month.

Three days later, on June 14, 2001, Graham and his wife again telephoned the Pactiv Benefits Center and spoke to a Hewitt representative. Again, Hewitt recorded and later transcribed this conversation. Mrs. Graham informed the Hewitt representative that she and her husband had yet to receive the Benefit Estimate Form that they had been promised on June 11. Mrs. Graham also indicated that, although her husband was considering retirement, he did not want to retire thinking that he would receive $2,700 per month from his pension only to later learn that this figure was erroneous. Mrs. Graham stated:

[W]hat we're trying to find out is ... to make sure how much money he's going to get a month before he did file his [retirement] paperwork because that's why we wanted it in writing ... what he's going to get a month so that we can make sure that he can go ahead and retire because financially we don't want him to walk out and then if these figures be incorrect and then they send us a check for $800 or $900.

Def. Ex. M-16 (ellipses in original). The Hewitt representative, however, again estimated that a single life annuity for Graham would yield approximately $2,700 per month. The representative also stated that this estimate was based on thirty-five years of participation with the Pactiv Plan. Id.

On June 22, 2001, Graham and his wife called the Pactiv Benefit Center two times; and, again, these conversations were recorded and later transcribed.⁷ During the second conversation of June 22, Mrs. Graham repeatedly asked whether the amount of the pension could change, stating: "I just don't want something to happen and ... You know what I am saying? And somebody comes back and say, `Oh, well we made a mistake. You should get less than that. You're only going to get half than that.'" Def. Ex. M-19 (ellipses in original). The Hewitt representative, however, assured Mrs. Graham that once Graham submitted his retirement papers, the amount would be "locked in." Id. Moreover, the Hewitt representative assured Mrs. Graham that her husband had accrued the maximum amount of benefits to which he was entitled; and that, even if Graham did not retire for several more years, he would not receive a larger pension.⁸

Ultimately, Graham received a Pension Election Authorization Form from Hewitt dated June 25, 2001. See Pls. Ex. 5. He signed it on July 1,...