Karbosky v. BASF Corp., 89-70195.

• Decision Date: 28 February 1991
• Docket Number: No. 89-70195.,89-70195.
• Parties: Anna KARBOSKY, Michael Manyak, Jr., and Stephen G. Panson, Plaintiffs, v. BASF CORPORATION, a Michigan corporation, formerly known as BASF Wyandotte Corporation, and Wyandotte Chemicals Corporation, Defendant.
• Court: U.S. District Court — Western District of Michigan

757 F. Supp. 813

Anna KARBOSKY, Michael Manyak, Jr., and Stephen G. Panson, Plaintiffs, v. BASF CORPORATION, a Michigan corporation, formerly known as BASF Wyandotte Corporation, and Wyandotte Chemicals Corporation, Defendant.

No. 89-70195.

United States District Court, E.D. Michigan, S.D.

February 28, 1991.

John A. Lygizos, John A. Lygizos, P.C., Detroit, Mich., for plaintiffs.

Robert A. Marsac, Karen E. Bridges, Wise & Marsac, Detroit, Mich., for defendant.

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S SEPTEMBER 20, 1990 MOTIONS FOR SUMMARY JUDGEMENT AS TO ANNA KARBOSKY, MICHAEL MANYAK, JR., AND STEPHEN G. PANSON

GADOLA, District Judge.

FACTS

Plaintiff Karbosky began her employment as an hourly employee with defendant on July 18, 1944. She became a salaried employee on August 1, 1953. Karbosky took special retirement on April 1, 1988. Karbosky's retirement benefits were calculated pursuant to the terms and conditions contained in the Retirement Income Plan for Salaried Employees of BASF Wyandotte Corporation, effective July 1, 1987 (the "1987 Plan").

Plaintiff Manyak began his employment with defendant on February 20, 1950. He took special retirement on August 31, 1985. Manyak's retirement benefits were calculated pursuant to the terms and conditions contained in the Retirement Income Plan for Salaried Employees of BASF Wyandotte Corporation, effective July 1, 1984 (the "1984 Plan").

Plaintiff Panson began his employment with defendant on July 31, 1950. He took special retirement on December 31, 1986. Panson's retirement benefits were calculated pursuant to the terms and conditions contained in the Retirement Income Plan for Salaried Employees of BASF Wyandotte Corporation, effective July 1, 1986 (the "1984 Plan").

The claims of the three plaintiffs are virtually identical; therefore, for the remainder of this opinion they will be dealt with as a group. The only difference in the plaintiffs' claims is that plaintiff Karbosky claims that the defendant misrepresented to her, prior to her retirement, the amount of her retirement benefit. However, in its motion for summary judgment, defendant asserted, and plaintiff did not refute, that "the benefits counselor who prepared this draft the Pension Estimate Sheet with the mistake mistakenly calculated Karbosky's salaried employment date as July 18, 1944, rather than August 1, 1953." Defendant's brief at p. 7.

Defendant has maintained retirement benefit plans for its salaried employees since 1950. On January 1, 1950 defendant adopted the Basic Retirement Income Plan for Salaried Employees (the "Basic Plan"). All contributions to the Basic Plan were made by the defendant on a percentage of the participant's earnings. Effective June 1, 1950 the defendant adopted the supplemental Retirement Income Plan for Salaried Employees (the "Supplemental Plan"). Contributions to the Supplemental Plan were made by the employee.

In 1961, the Basic Plan and the Supplemental Plan were merged and became known collectively as the Retirement Income Plan for Salaried Employees ("The Plan"). Eligible salaried employees were still given the option to make contributions to The Plan to enhance their ultimate retirement benefits. On May 1, 1965 the contributory feature of The Plan was eliminated. Although employee contributions were no longer permitted, credit was given for contributions previously made. If an employee chose to withdraw his contributions, his retirement benefit would be calculated as if such contributions had never been made. Following enactment of ERISA (January 1, 1975), the defendant made substantial changes to The Plan to comply with the comprehensive legislative and administrative requirements of ERISA, the IRS and the Social Security Administration. The Plans in effect at the time plaintiffs retired were the 1984 and 1987 Plans. The 1984 and 1987 Plans were employer-sponsored benefit programs governed by ERISA and formally adopted pursuant to a resolution of the Board of Directors.

The monthly retirement benefit of plaintiffs under the 1984 and 1987 Plans were determined on the basis of two formulas (Formula I and Formula II). The formulas were designed to take into account all of an employee's years of service as well as any contributions made to the Supplemental Plan. The 1984 and 1987 Plans required that calculations be made under both formulas and that the formula yielding the higher benefit be used in determining an employee's monthly retirement benefit. In simple terms, Formula I does not include, in an employee's credited service, years in which an employee could have contributed to the Supplemental Plan but did not. On the other hand, Formula II utilized all of an employee's years of service in determining the monthly retirement benefit.

Coincident with the 1950 adoption of the Basic Plan and the Supplemental Plan, the defendant prepared Summary Plan Descriptions ("SPD's") for its salaried employees. The SPD's explain the nature and substance of The Plans in clear, simple terms, including eligibility requirements, available benefits, how benefits are calculated, the effect of contributions to the Supplemental Plan, and the effect of contribution withdrawals. Any changes in benefit calculations or formulas were explained in the SPD's. The SPD's were made available to all salaried employees prior to the enactment of ERISA. After the enactment of ERISA, copies of all SPD's were distributed to every eligible participant. Plaintiff acknowledges that he received SPD's from the defendant beginning in about 1974. (Sutter Dep., pp. 42-53).

Plaintiffs failed to contribute to the Supplemental Plan. As a result of their failure to contribute to the Supplemental Plan, plaintiffs' retirement benefits were calculated to reflect such failure to contribute to the Supplemental Plan. Plaintiffs' retirement benefit were calculated under both Formula I and II. The benefit calculation under Formula II yielded a higher sum than under Formula I. Despite the fact that plaintiffs had failed to contribute to the Supplemental Retirement Plan, the benefit calculations under Formula I yielded a higher sum than under Formula II.

STANDARD OF REVIEW

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment may be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." "A fact is `material' and precludes grant of summary judgment if proof of that fact would have the effect of establishing or refuting one of the essential elements of the cause of action or defense asserted by the parties, and would necessarily affect the application of appropriate principles of law to the rights and obligations of the parties. Citation omitted. Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984) (quoting Black's Law Dictionary 881 (6th Ed.1979)). The Court must view the evidence in a light most favorable to the nonmovant as well as draw all reasonable inferences in the nonmovant's favor. See United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Bender v. Southland Corp., 749 F.2d 1205, 1210-11 (6th Cir.1984).

The movant bears the burden of demonstrating the absence of all genuine issues of material fact. See Gregg v. Allen— Bradley Co., 801 F.2d 859, 861 (6th Cir. 1986). The initial burden on the movant is not as formidable as some decisions have indicated. The moving party need not produce evidence showing the absence of a genuine issue of material fact: rather, "the burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). Once the moving party discharges that burden, the burden shifts to the nonmoving party to set forth specific facts showing a genuine triable issue. Fed.R.Civ.P. 56(e); Gregg, 801 F.2d at 861.

To create a genuine issue of material fact, however, the nonmovant must do more than present some evidence on a disputed issue. As the United States Supreme Court stated in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986),

There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the nonmovant's evidence is merely colorable, or is not significantly probative, summary judgment may be granted.

Id. at 249-50, 106 S.Ct. at 2511. (Citations omitted); See Catrett, 477 U.S. at 322-23, 106 S.Ct. at 2552; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). The standard for summary judgment mirrors the standard for a directed verdict under Fed.R.Civ.P. 50(a). Anderson, 477 U.S. at 250, 106 S.Ct. at 2511. Consequently, a nonmovant must do more than raise some doubt as to the existence of a fact; the nonmovant must produce evidence that would be sufficient to require submission to the jury of the dispute over the fact.

ANALYSIS

Discovery is complete and the matter is before the court on defendant's motions for summary judgment. Plaintiffs argue that under the Plans they were not given credit for all of their years of service. Plaintiffs also argue that defendant abused its impact of contributing or not contributing to the Supplemental Plan. Finally, plaintiffs argue that defendant abused its discretion by failing to amend the Plan in 1984. In its motions for summary judgment, defendant argues that these claims are without merit and subject to summary disposition. The court finds that as a matter of law plaintiffs have failed to state a claim. Accordingly, the court will grant defendant's motions for summary judgment.

A. Years of...