Kollman v. Hewitt Associates, LLC

• Decision Date: 14 May 2007
• Docket Number: No. 05-5207.,No. 06-1558.,No. 05-5018.,05-5018.,05-5207.,06-1558.
• Citation: Kollman v. Hewitt Associates, LLC, 487 F.3d 139 (3rd Cir. 2007)
• Parties: Gerald E. KOLLMAN v. HEWITT ASSOCIATES, LLC; Rohm and Haas Company; Rohm and Haas Benefits Administrative Committee. Rohm and Haas Company; Rohm and Haas Benefits Administrative Committee, Appellants. Gerald E. Kollman, Appellant v. Hewitt Associates, LLC; Rohm and Haas Company; Rohm and Haas Benefits Administrative Committee. Gerald E. Kollman v. Hewitt Associates, LLC; Rohm and Haas Company; Rohm and Haas Benefits Administrative Committee, Appellants.
• Court: U.S. Court of Appeals — Third Circuit

487 F.3d 139

Gerald E. KOLLMAN v. HEWITT ASSOCIATES, LLC; Rohm and Haas Company; Rohm and Haas Benefits Administrative Committee.

Rohm and Haas Company; Rohm and Haas Benefits Administrative Committee, Appellants.

Gerald E. Kollman, Appellant v. Hewitt Associates, LLC; Rohm and Haas Company; Rohm and Haas Benefits Administrative Committee.

Gerald E. Kollman v. Hewitt Associates, LLC; Rohm and Haas Company; Rohm and Haas Benefits Administrative Committee, Appellants.

No. 05-5018.

No. 05-5207.

No. 06-1558.

United States Court of Appeals, Third Circuit.

Argued: January 8, 2007.

Filed: May 14, 2007.

Raymond A. Kresge (Argued), Cozen O'Connor, Philadelphia, PA, for Appellants/Cross-Appellees.

Kevan F. Hirsch (Argued), Daniel R. Utain, Kaplan, Stewart, Meloff, Reiter & Stein Blue Bell, PA, for Appellee/Cross-Appellant.

Before SLOVITER and RENDELL, Circuit Judges, and IRENAS, District Judge.^*

OPINION OF THE COURT

SLOVITER, Circuit Judge.

I. Summary

Gerald Kollman, who was an employee of Rohm and Haas Company at the time at issue, sought to ascertain the amount of lump sum pension to which he would be entitled if he were to retire. He accessed the computer website prepared and maintained for that purpose by Hewitt Associates, LLC and received an incorrect figure. That figure, $522,043.30, had not been reduced by the amount of the Qualified Domestic Relations Order ("QDRO") that was owing to Kollman's former wife. Kollman was notified of the correct pension amount some two months later. In the interim, he had signed the retirement papers. He concedes he is not entitled to the difference from Rohm and Haas. Instead, he makes two claims: a claim against Rohm and Haas that it violated the Employee Retirement Income Security Act of 1974 ("ERISA") by failing to provide him with a copy of the company's Plan and Summary Plan Description ("SPD") within thirty days of his letter requesting certain documents, and a claim against Hewitt for professional malpractice because of the failure of the website to provide the correct pension amount. Kollman prevailed on the first claim, and Rohm and Haas appeals. Hewitt prevailed on the second claim, and Kollman cross appeals.¹

II. Facts and Procedural Posture

Kollman was employed by Rohm and Haas as a Field Research and Development Manager in Rohm and Haas' Agro-Fresh unit in Springhouse, Pa., and was a beneficiary of the Rohm and Haas Company Retirement Plan (the "Plan"). Rohm and Haas outsourced most of the administrative services associated with the Plan to Hewitt which undertook to perform the day-to-day Plan administration. In his second amended complaint, Kollman referred to Hewitt as the agent for Rohm and Haas.

One of Hewitt's functions was the calculation of proper retirement benefits. Hewitt created and maintained a website that allowed Rohm and Haas employees to go on-line and access information providing them with estimates of their retirement benefits. The website is not part of the Plan, but a distinct and separate service that Hewitt provides for Rohm and Haas and Plan beneficiaries.

Rohm and Haas announced a Severance Benefit Package ("SBP") for employees who voluntarily retired by December 31, 2002. On October 31, 2002, Kollman logged on to the website maintained by Hewitt to obtain a statement of his pension benefits calculation. Kollman was aware that a portion of his pension was earmarked for his former wife but, as noted above, the website's calculation that he would receive a lump sum of $522,043.30 if he decided to accept the SBP failed to account for Kollman's obligations under the QDRO. The calculation provided by the website made it seem as though the lump sum figure had already been adjusted for the QDRO.

Kollman verified the calculation on the website and by telephone, and alleges that he elected to retire on December 31, 2002 based on those representations.² It was not until January 6, 2003 that he was advised that he was entitled to a pension of $419,917.72, the original amount of $522,043.30 reduced by the QDRO offset of $102,125.28. The correct amount was confirmed by a Pension Benefit Statement that Kollman received on January 7, 2003. Kollman's subsequent efforts to appeal through the internal administrative mechanism were unsuccessful³ and he does not seek any relief here from that decision.

Shortly after Kollman initiated his internal appeal, see footnote 3, his counsel sent a letter dated February 18, 2003 to Hewitt requesting that Hewitt produce the following:

1. All tape recordings of telephone calls between Kollman and Hewitt from December 1, 2002 through the present;

2. All available printouts of or electronically stored data on benefits projections for Kollman from October 1, 2002 through the present;

3. All documents of any nature which relate, reflect or refer the QDRO adjustment to Kollman's benefits wherever such documents were generated, created or stored;

4. All pension benefits paperwork generated by Hewitt for Kollman in December of 2002 and January 2003, including any drafts thereof;

5. All internal communications and documents, including electronic mail, which relate, reflect or refer to Kollman or his benefits which have been generated by Hewitt from December 1, 2003⁴ through the present; and

6. All communications between Hewitt and Rohm & Haas which relate, refer or reflect to Kollman of his benefits.

App. at 804-05.

On March 20, 2003, Hewitt responded to Kollman's attorney's February 18, 2003 request for documents, stating that it performed certain administrative services for Rohm and Haas regarding their defined benefits plan, but that "Hewitt is not the Plan Administrator." App. at 810. The letter further stated that "[w]ith respect to Mr. Kollman's request for documents, under Section 2560.503-1 of the Department of Labor Regulations on Claim Procedure, request for documentation should be addressed to the Plan Administrator." Id. Thereupon, by letter dated April 28, 2003, Kollman's counsel requested from the plan administrator, Rohm and Haas Benefits Administrative Committee ("BAC"), "all documents, records, and other information relevant to [Kollman's] claim for benefits," including the same information requested in the February 18, 2003 letter. App. at 812. However, it was not until June 26, 2003 that outside counsel for defendants produced the Plan, the updated SPD and the "administrative record" for Kollman's claim that included the severance agreement that Kollman signed in December 2002. See Kollman v. Hewitt Assocs., No. Civ. A. 03-2944, 2005 WL 2746659, at *4 (E.D.Pa. Oct. 18, 2005).

Kollman initially filed this action against Hewitt under state law, claiming damages for negligent misrepresentation, negligence, promissory estoppel and breach of contract. The District Court, by order dated September 23, 2003, dismissed the complaint as preempted under ERISA, but gave Kollman leave to file an amended complaint raising a claim under ERISA. Kollman v. Hewitt Assocs., No. Civ. A. 03-2944, 2003 WL 22331870, at * 1 (E.D.Pa. Sept. 22, 2003). Kollman amended the complaint to state three counts. The amended complaint now included a claim, Count I, against Rohm and Haas under ERISA § 502(c)(1), 29 U.S.C. § 1132(c)(1), that quoted from federal regulations relating to ERISA claims procedure; Count II asserted a state law claim against Hewitt for professional malpractice; Count III asserted an ERISA equitable estoppel claim against Hewitt. The District Court dismissed Count II, the claim against Hewitt for professional malpractice, by order entered April 14, 2004 on the ground of ERISA preemption. That order is the subject of Kollman's counterclaim.

Kollman filed a second amended complaint against Rohm and Haas asserting a claim for breach of its fiduciary duty that the District Court construed as arising under ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D), inter alia, for failure to produce "relevant" documents as required by ERISA § 502(c)(1), 29 U.S.C. § 1132(c)(1). App. at 218. Following discovery, defendants' motions to dismiss and motions for summary judgment, the District Court, by order dated August 11, 2005, dismissed Kollman's equitable estoppel claim and held that there were genuine issues of material fact with respect to Kollman's claim for damages under § 502(c)(1) of ERISA, 29 U.S.C. § 1132(c)(1), based on failure to provide documents required by the Plan. On August 24, 2005, the Court held a short non-jury trial and found that Rohm and Haas was liable for statutory penalties of $9,800 under § 502(c)(1) for violation of § 104(b)(4) of ERISA. Rohm and Haas appeals from that order.

III.

Statutory Penalty Under Section 502(c)(1) of ERISA, 29 U.S.C. § 1132(c)(1)

Section 502(c)(1) of ERISA imposes a statutory penalty of up to $100 a day on any plan administrator who fails to provide to a plan participant or beneficiary any information that is required by the subchapter of the statute. That provision states:

Any administrator . . . who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary . . . by mailing the material requested to the last known address of the requesting participant or beneficiary within 30 days after such request may in the court's discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day . . . .

29 U.S.C. § 1132(c)(1).

The relevant subchapter provisions referred to in § 502(c)(1) are ERISA § 104(b)(4), 29 U.S.C. § 1024(b)(4), and ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D). Under § 104(b)(4) of ERISA,

The administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary plan description[,] and the latest annual report, any terminal report, bargaining agreement, trust agreement, contract, or other instruments under which the plan was established or operated.

29 U.S.C....