Hoak v. Plan Adm'r of the Plans of NCR Corp.

• Decision Date: 29 March 2019
• Docket Number: CIVIL ACTION NO. 1:15-CV-03983-AT
• Citation: 389 F.Supp.3d 1234
• Parties: Jon HOAK, Anthony Fano, Allan Quick, and Patricia Giering, on behalf of themselves and all those similarly situated, Plaintiffs, v. PLAN ADMINISTRATOR OF the PLANS OF NCR CORPORATION, Defendants.
• Court: U.S. District Court — Northern District of Georgia

389 F.Supp.3d 1234

Jon HOAK, Anthony Fano, Allan Quick, and Patricia Giering, on behalf of themselves and all those similarly situated, Plaintiffs,

v.PLAN ADMINISTRATOR OF the PLANS OF NCR CORPORATION, Defendants.

CIVIL ACTION NO. 1:15-CV-03983-AT

United States District Court, N.D. Georgia, Atlanta Division.

Signed March 29, 2019

Garrett R. Broshuis, Michael E. Klenov, Christopher A. Hoffman, Korein Tillery, LLC, St. Louis, MO, Timothy S. Rigsbee, Jeffrey O. Bramlett, Bondurant Mixson & Elmore, LLP, Atlanta, GA, for Plaintiffs.

Gregory F. Jacob, Matthew J. Sheehan, O'Melveny & Myers, Washington, DC, Mark E. Berghausen, O'Melveny & Myers LLP, Menlo Park, CA, Jeremy U. Littlefield, Rachel Frazier Gage, Robbins Ross Alloy Belinfante Littlefield LLC, Atlanta, GA, for Defendants.

ORDER

AMY TOTENBERG, UNITED STATES DISTRICT JUDGE

They say that "breaking up is hard to do;" it leaves your "heart in misery."¹ And Tammy Wynette says "D-I-V-O-R-C-E" is "H-E double L," as she sings:

I spell out all the hurtin' words

And turn my head when I speak

'Cause I can't spell away this hurt

That's drippin' down my cheek.²

This action brought pursuant to the Employee Retirement Income Security Act ("ERISA") asks this Court to say whether divorceé Plaintiffs Patricia Giering and Nancy Parin are entitled to benefits under their ex-husbands' retirement plans.

It is before the Court on Plaintiffs' Motion for Partial Summary Judgment [Doc. 87], Defendant's Cross-Motion for Partial Summary Judgment [Doc. 93], Plaintiffs' Conditional Rule 56(d) Motion (to Defer Ruling on the Pending Summary Judgment Motions) [Doc. 106], and Defendant's Motion to Strike certain amendments to Plaintiffs' Second Amended Complaint [Doc. 90].

I. INTRODUCTION

Plaintiffs filed this ERISA class action on behalf of themselves and former participants in NCR Corporation's "top hat" retirement plans.³ Plaintiffs are former NCR executives or spouses of executives who participated in one of NCR's nonqualified retirement plans. These plans allegedly promised NCR executives that upon retirement they would receive monthly or bi-weekly annuity payments for the remainder of their lives and provided for surviving "eligible" spouses to be paid a portion of participants' annuities following the participants' death.

According to Plaintiffs, NCR improperly terminated the Plans to avoid making annuity payments. Instead, NCR paid out benefits in lump sums to plan participants, reducing the benefits plan participants would have received over the life of their annuity. NCR also adopted an interpretation of "Eligible Spouse" contrary to the plan language to exclude from benefits those spouses who were married to the participants when their plans commenced but got divorced before NCR terminated the plans. Plaintiffs filed suit against the Plan Administrator of the Plans of NCR Corporation⁴ challenging (1) the alleged improper termination of the plans in Count I, (2) the alleged improper use of a discount rate to calculate lump sum payments that were not actuarially equivalent to their annuities in Count II, and (3) the alleged improper interpretation of the plan to require that "Eligible" spouses be married to plan participants when NCR terminated the plans in Count III.

The parties have each moved for summary judgment on Count III of Plaintiffs' Second Amended Complaint that challenges Defendant's interpretation of "Eligible Spouses" to deny benefits to spouses who were married to participants on the date benefits commenced but who had divorced prior to the date of termination of the plans. Plaintiffs seek judgment in their favor on the question whether they are "eligible spouses" under the terms of NCR's Senior Executive Retirement Death and Disability Plan ("SERP"), and therefore are entitled to a spousal benefit under the SERP. Defendant has cross-moved, seeking judgment in its favor, asserting that Plaintiffs failed to exhaust administrative remedies as required before asserting their claim in Count III in this Court.

II. PROCEDURAL BACKGROUND

Plaintiffs originally brought this action as a putative class action on behalf of former plan participants and spouses. The only named plaintiffs were plan participants. No spouses were named as plaintiffs in the original complaint. In response to Defendant's first motion to dismiss, the Court dismissed Plaintiffs' claim in Count III without prejudice for lack of standing because the original complaint contained no allegations from which the Court could reasonably infer that Plaintiffs — as opposed to their "eligible" spouses, or ex-spouses — suffered a cognizable injury as a result of NCR's elimination of the accrued benefits of spouses who were married to participants when benefits commenced under the plans, but who divorced participants prior to the plan termination and payment of lump sums. (Doc. 26 at 38, citing Compl. ¶ 106.) Because the Plan participants are not the beneficiaries of the spousal death benefit survivor annuity under the express terms of the Plans at issue, the Court noted that "Section 1132(a)(1)(B) would not provide Plaintiffs Hoak, Fano, and Quick the right to assert a claim as to those benefits but would provide their ‘Eligible Spouses’ with a statutory cause of action as to their right to those benefits." (Id. at 31.) The Court allowed Plaintiffs to file an amended complaint.

In response to the Court's Order, Plaintiffs filed an Amended Complaint adding a claim for spousal benefits on behalf of Patricia Giering, the former spouse of an NCR executive, as a named Plaintiff. Defendant moved to dismiss Patricia Giering's claim in Count III of the Amended Complaint on the basis that she had failed to exhaust her administrative remedies. Defendant contended that (1) Patricia Giering never filed a claim with the Plan Administrator seeking payment of spousal benefits, and (2) her former spouse John Giering (in seeking the payment of an additional benefit for himself) did not purport to bring a claim for benefits on Patricia Giering's behalf as her authorized representative.

The Court denied the Defendant's motion, finding evidence in the administrative record indicating that: (a) John Giering, who made a claim for benefits also asserted Patricia Giering's rights to her vested interest in the spousal death benefits in the form of a lump sum payment upon termination of the plan, (b) the Plan Administrator interpreted John Giering to make such a claim, and (c) the Plan Administrator expressly made a determination that Patricia Giering, as John's former spouse, was not entitled to the benefits because she was not an "Eligible Spouse" under its interpretation of the Plan language. The Plan Administrator never asked whether John Giering was authorized as Patricia's representative to assert a claim to benefits on her behalf and never asked John Giering to submit a written authorization prior to making its determination of Patricia Giering's "eligible spouse" status and denying her entitlement to the benefit. To the extent Patricia Giering was herself required to separately pursue an administrative claim as to her eligibility for post-termination plan benefits, the Court found that such an endeavor would be futile under the circumstances presented here and that Patricia Giering was therefore excused from ERISA's exhaustion requirement with respect to the eligible spouse claim. (Order, Doc. 70 at 13-14.)

Plaintiffs moved for class certification of their claims. The Court granted Plaintiffs' motion to certify a class and subclass with respect to Counts I and II, but denied the motion to certify a class with respect to Count III – the eligible spouse claim. The Court found that class certification of Count III was not appropriate in light of the information presented by Defendant, unchallenged by Plaintiffs, that only two former spouses, Patricia Giering and Nancy Parin, were denied benefits based on Defendant's interpretation of the "Eligible Spouse" Plan language. The Court therefore allowed Plaintiffs to amend their complaint to add Nancy Parin, Plaintiff Allan Quick's ex-wife, to join as a named plaintiff along with Plaintiff Giering for adjudication of their individual claims. (Order, Doc. 83 at 30-31.)

The day after filing their Second Amended Complaint to assert the eligible spouse claim on behalf of Nancy Parin, Plaintiffs Giering and Parin moved for summary judgment on Count III seeking a declaration that Defendant's interpretation of the term "eligible spouse" is invalid and that they are entitled a spousal benefit under SERP.

III. Defendant's Motion to Strike Portions of the Second Amended Complaint

Defendant has filed a Motion to Strike Certain Unauthorized Amendments to Plaintiffs' Second Amended Class Action Complaint [Doc. 90]. Defendant asserts that Plaintiffs were granted a limited right of amendment only "to add Quick's former spouse to pursue claims as an eligible spouse," but the Second Amended Complaint "made numerous additional allegations and requests for relief, including some concerning issues having nothing to do with spousal claims." (Def.'s Mot. to Strike at 1-2.) Defendant notes that it "consents to and will answer, most of the additional alterations made by Plaintiffs. Defendant does not consent, however, to the several changes that Plaintiffs have made seeking to alter and expand the Complaint's request for relief concerning non-spousal claims." (Id. at 2.) Because Plaintiffs were required to seek permission for these amendments "which are highly objectionable at this point in the litigation, after a class has already been certified," Defendant requests that the Court strike the additions that Plaintiffs have "improperly made to paragraph 6 of the Second Amended Complaint and to the Prayer for Relief." (Id. )

While the Prayer for Relief is a repeat of Paragraph 6, for ease of discussion, a red-lined version of both Paragraph 6 and the Prayer for Relief are shown below:

5.6. As set forth below, the Court should:

(a) Ce

...