Jarosz v. Am. Axle & Mfg., Inc.

• Decision Date: 11 March 2019
• Docket Number: 12-CV-39S
• Citation: 372 F.Supp.3d 163
• Parties: Richard JAROSZ, Carole Archambeault, Eugenia Bellere, Robert Brandon, John Czech, Gerald Dixon, Robin Glover, Patrick Higgins, Wallace Jaroszewski, Todd Kendzierski, Donna Lichtenthal, Michael LoGrasso, William McDonell, Robert Osborne, Anne Osika, Kathy Perkovich, Tammy Santana, Gail Schalberg, William Severino, James Short, Michael Stowell, Kenneth Ziolkowski, and Susan Wise, Plaintiffs, v. AMERICAN AXLE & MANUFACTURING, INC., Hourly-Rate Associates Pension Plan, and American Axle & Manufacturing, Inc., Defendants.
• Court: U.S. District Court — Western District of New York

372 F.Supp.3d 163

Richard JAROSZ, Carole Archambeault, Eugenia Bellere, Robert Brandon, John Czech, Gerald Dixon, Robin Glover, Patrick Higgins, Wallace Jaroszewski, Todd Kendzierski, Donna Lichtenthal, Michael LoGrasso, William McDonell, Robert Osborne, Anne Osika, Kathy Perkovich, Tammy Santana, Gail Schalberg, William Severino, James Short, Michael Stowell, Kenneth Ziolkowski, and Susan Wise, Plaintiffs,

v.AMERICAN AXLE & MANUFACTURING, INC., Hourly-Rate Associates Pension Plan, and American Axle & Manufacturing, Inc., Defendants.

12-CV-39S

United States District Court, W.D. New York.

Signed March 11, 2019

Filed March 12, 2019

Robert L. Boreanaz, Lipsitz Green Scime Cambria LLP, Buffalo, NY, for Plaintiffs.

Catherine Grantier Cooley, Hodgson Russ, Buffalo, NY, for Defendants.

DECISION AND ORDER

WILLIAM M. SKRETNY, United States District Judge

I. INTRODUCTION

In this action, the plaintiffs, each of whom is a qualified participant in the Defendant American Axle & Manufacturing, Inc. Hourly-Rate Associates Pension Plan ("the Plan"), allege that Defendants violated the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 etseq. by reducing their pension payments due under the Plan by the amount of certain workers' compensation payments they received. They also assert related causes of action.

Presently before this Court are the parties' cross motions for summary judgment. (Docket Nos. 61, 62.) For the reasons that follow, the motions are granted in part and denied in part.

II. BACKGROUND

A. Facts¹

1. The Plaintiffs

The plaintiffs were all members of The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW") at the time they retired from Defendant American Axle & Manufacturing, Inc. ("American Axle"). (Plaintiffs' Statement of Facts Not in Genuine Dispute ("Plaintiffs' Statement"), Docket No. 62-9, ¶¶ 1, 46.) Some plaintiffs previously worked for General Motors Corporation ("GM") before continuing on with American Axle after it bought two of GM's plants in March 1994—Bellere, Brandon, Czech, Glover, Jaroszewski, Lichtenthal, LoGrasso, McDonell, Schalberg, Short, and Wise—while the others worked only for American Axle after its purchase of the plants—Jarosz, Archambault, Dixon, Higgins, Kendzierski, Osborne, Osika, Perkovich, Santana, Severino, Stowell, and Ziolkowski.² (Plaintiffs' Statement, ¶¶ 3, 45; Defendants' Statement of Undisputed Facts ("Defendants' Statement"), Docket No. 61-68, ¶¶ 11, 12, 17, 18, 23, 32, 50, 61, 68, 75, 76, 82, 87, 88, 95, 101, 111, 121, 122, 127, 128, 133, 134, 139, 140, 147, 152, 153, 158, 167, 168, 176, 177.)

Both GM and American Axle provided pension plans to their employees negotiated as part of various collective bargaining agreements. (Plaintiffs' Statement, ¶¶ 2, 4-12; Defendants' Response to Plaintiffs' Statement of Facts Not in Genuine Dispute ("Defendants' Response"), Docket No. 66-1, ¶¶ 2, 4-12.) While the parties disagree as to the relevance and impact of those agreements (see id. ), they agree that the pension plan at issue here is the "Restatement of the American Axle & Manufacturing, Inc. Hourly-Rate Associates Pension Plan" (again, "the Plan"), which is found in the record at docket numbers 61-4 and 61-5. (Plaintiffs' Statement, ¶ 13; Defendants' Response, ¶¶ 13, 21.) The parties further agree that the language of the Plan provision at issue—Deductions for Workers Compensation—has not changed throughout the various agreements between American Axle and the UAW between 1994 and 2008. (Plaintiffs' Statement, ¶¶ 10, 14-16, 25; Defendants' Response, ¶¶ 10, 14-16, 25.)

2. The Plan

There is no dispute that the Plan is an employee pension benefit and defined benefit plan under ERISA. (Defendants' Statement, ¶ 1; Plaintiffs' Statement, ¶ 43.) American Axle has been the sponsor and administrator of the Plan since 1994. (Defendants' Statement, ¶¶ 2, 3; Plaintiffs' Statement of Disputed Facts ("Plaintiffs' Response"), Docket No. 65-1, ¶ 3; Plaintiffs' Statement, ¶¶ 27, 44; Defendants' Response, ¶ 27.) American Axle delegated day-to-day administration of the Plan to GM from 1994 to 1997, after which it undertook direct administration of the Plan itself. (Plaintiffs' Statement, ¶ 27; Defendants' Response, ¶ 27.)

American Axle administers the Plan through a Management Benefits Committee ("MBC") and funds it with irrevocable contributions to a trust fund, which is managed by a third-party trustee—SEI Private Trust Company. (Defendants' Statement, ¶¶ 4-6; Plaintiffs' Response, ¶ 4; Plaintiffs' Statement, ¶ 22; Defendants' Response, ¶ 22.) The MBC is comprised of American Axle executives. (Plaintiffs' Statement, ¶ 22; Defendants' Response, ¶ 22.)

The Plan vests the MBC with

discretionary authority to determine all questions arising in the administration, application and interpretation of the Plan including the authority to correct any defect or reconcile any inconsistency or ambiguity in the Plan and the authority to determine a Participant's, beneficiary's or other individual's right to participate in the Plan, eligibility to receive a benefit from the Plan, and the amount of that benefit.

(Defendants' Statement, ¶ 4; Plaintiffs' Response, ¶ 4; Plaintiffs' Statement, ¶ 22; Defendants' Response, ¶ 22.)

At issue is the provision of the Plan that governs how receipt of workers' compensation payments affects monthly benefits payable under the Plan. (Plaintiffs' Statement, ¶ 17; Defendants' Response, ¶ 17.) That provision provides as follows:

Deductions for Workers Compensation . In determining the monthly benefits payable under this Plan, a deduction shall be made unless prohibited by law, equivalent to all or any part of Workers Compensation (including compromise or redemption settlements) payable to such associate by reason of any law of the United States, or any political subdivision thereof, which has been or shall be enacted, provided that such deductions shall be to the extent that such Workers Compensation has been provided by premiums, taxes or other payments paid by or at the expense of the Corporation, except that no deduction shall be made for the following:

(a) Workers Compensation payments specifically allocated for hospitalization or medical expenses, fixed statutory payments for the loss of any bodily member, or 100% loss of use of any bodily member, or payments for loss of industrial vision.

(b) Compromise or redemption settlements payable prior to the date monthly pension benefits first become payable.

(c) Workers Compensation payments paid under a claim filed not later than two years after the breaking of seniority.

(Defendants' Statement, ¶ 8.)

The parties agree that for purposes of subsection (c), retirement constitutes a break of seniority under the Plan. (Plaintiffs' Statement, ¶ 18; Defendants' Response, ¶ 18.)

3. Defendants' Decision to Deduct Workers' Compensation Payments from Pension Payments

Each plaintiff filed a workers' compensation claim before they retired from American Axle. (Plaintiffs' Statement, ¶ 47.) And each plaintiff, at one point or another, received his or her resulting workers' compensation payments and his or her pension payments simultaneously without any offset. (Plaintiffs' Statement, ¶ 48.)

In December 2005, Plaintiff Susan Wise began receiving monthly pension payments under the Plan. (Defendants' Statement, ¶ 190.) At that same time, Wise was also receiving workers' compensation payments from a claim that she filed before she retired from American Axle. (Defendants' Statement, ¶ 185.)

About seven months later, on July 10, 2006, American Axle sent Wise a letter indicating that it would begin offsetting her monthly pension payment by the full amount of her monthly workers' compensation payment in line with the "Deductions for Workers Compensation" provision set forth above.³ (Defendants' Statement, ¶ 191; Letter to Susan Wise, Docket No. 61-37.) The letter did not inform Wise of her right to appeal American Axle's decision or describe the available appeal procedures. (Plaintiffs' Statement, ¶ 30; Defendants' Response, ¶ 30; Letter to Susan Wise, Docket No. 61-37.)

Because Wise's monthly workers' compensation payment exceeded her monthly pension payment, she received no pension payments under the Plan, but she continued to receive all other benefits available to her, such as health, dental, vision, and life insurance. (Defendants' Statement, ¶¶ 191, 192.) When Wise's workers' compensation case was closed in 2007 and she stopped receiving monthly workers' compensation payments, American Axle reinstated the full amount of her monthly pension payments under the Plan. (Defendants' Statement, ¶¶ 193, 194; Plaintiffs' Statement, ¶ 31.)

As a result of Wise's case, the UAW became aware in August 2006 that American Axle was interpreting the "Deductions for Workers Compensation" provision to require an offset for workers' compensation payments received from workers' compensation claims filed before a Plan participant retired. (Defendants' Statement, ¶ 196.) Before that time, American Axle had never applied such an offset.

In early 2009, American Axle audited all Plan participants to identify those who were receiving monthly pension payments and workers' compensation payments from claims filed before their retirement (i.e., prior to the breaking of seniority). (Defendants' Statement, ¶ 197.) It then notified the UAW on March 12, 2009, that, effective April 1, 2009, it would begin offsetting pension payments in the amount of workers' compensation payments under the "Deductions for Workers Compensation" provision of the Plan. (Defendants' Statement, ¶ 198.)

Thereafter, on March 23, 2009, American Axle sent letters to each plaintiff (and others) notifying them that, effective April 1, 2009, their pension payments under the Plan would be offset by the amount of any workers' compensation payments they received. (Defendants' Statement, ¶ 199; Plaintiffs' Statement, ¶ 35.) The letter sent to lead plaintiff Richard...