Larson v. Northrop Corp.
| Citation | 21 F.3d 1164 |
| Decision Date | 29 April 1994 |
| Docket Number | No. 92-7104,92-7104 |
| Parties | , 73 A.F.T.R.2d 94-1970 Russell C. LARSON, Appellant, v. NORTHROP CORPORATION. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeal from the United States District Court for the District of Columbia (D.D.C. 88cv00899).
David U. Fierst, Washington, DC, argued the cause and filed the briefs for appellant.
Patricia G. Copeland, Washington, DC, argued the cause for appellee. With her on the brief were Daniel B. Stone and Charles B. Wayne, Washington, DC.
Before BUCKLEY and RANDOLPH, Circuit Judges, and LEVIN H. CAMPBELL, * Senior Circuit Judge, U.S. Court of Appeals for the First Circuit.
Opinion for the court filed by Senior Circuit Judge CAMPBELL.
Russell C. Larson, plaintiff-appellant, was continuously employed by George A. Fuller Company (the "Fuller Company") from March 10, 1959, until he retired on May 1, 1985. From December 1971 until February 27, 1981, the Fuller Company was a subsidiary and/or division of Northrop Corporation, defendant-appellee. Upon acquiring the Fuller Company in 1971, Northrop terminated the existing employees' retirement plan and replaced it with the Employees' Retirement Plan of George A. Fuller Company. The latter was an "employee pension benefit plan" as defined under the Employment Retirement Income Security Act (ERISA) of 1974. See 29 U.S.C. Sec. 1002(2) (1988). Effective January 1, 1972, Northrop purchased a group annuity contract from Prudential Insurance Company of America ("Prudential") to pay the benefits due under the pension plan it had terminated in 1971.
The Employees' Retirement Plan of George A. Fuller Company (hereinafter the "Plan") was continuously in effect while the Fuller Company was affiliated with Northrop. From the relevant effective date of ERISA until March 31, 1981, when it terminated the Plan, Northrop was a "plan sponsor" and a "fiduciary" of the Plan as those terms are defined in 29 U.S.C. Secs. 1002(16)(B), 1002(21) (1988). During the same period, Larson was a "participant" in the Plan within the meaning of 29 U.S.C. Sec. 1002(7) (1988). After terminating the Plan, Northrop purchased a group annuity contract from what is now known as Principal Mutual Life Insurance Company ("Principal") on December 21, 1981, to fund the Plan pension liabilities that were required by law to be satisfied upon the Plan's termination.
On April 1, 1988, more than six years after Northrop had purchased the group annuity contract from Principal, Larson brought this action in the United States District Court for the District of Columbia, alleging, inter alia, that Northrop had violated its fiduciary duty to comply with the terms of the Plan under ERISA, Sec. 404(a)(1)(D), 29 U.S.C. Sec. 1104(a)(1)(D) (1988), by failing to ensure that the group annuity contracts that it had purchased from Prudential and Principal 1 would pay an early retirement subsidy that had existed under the Plan. 2 Following discovery, Larson filed a motion for summary judgment on November 30, 1988. Northrop responded by submitting a cross-motion for summary judgment on December 23, 1988. By order dated March 30, 1992, the district court denied Larson's motion for summary judgment and granted Northrop's cross-motion for summary judgment on the grounds that Larson's claim was barred by the three-year statute of limitations contained in ERISA, Sec. 413, 29 U.S.C. Sec. 1113 (Supp. IV 1992), and, in the alternative, that Larson was not entitled to the early retirement subsidy under the Plan's terms. Larson v. Northrop Corp., No. 88-899, at 13, 1992 WL 249790 (D.D.C. Mar. 30, 1992) (). Larson appealed. We affirm.
The Employees' Retirement Plan of George A. Fuller Company provided that an employee who was at least 55 years old and who had accumulated ten or more years of vesting or credited service was eligible to receive pension benefits. Larson had, in fact, ten or more years of vesting or credited service, and was 55 years old, when he retired from the Fuller Company on May 1, 1985.
The "normal retirement date" under the Plan was the first day of the month after an employee's 65th birthday. An employee who retired on the "normal retirement date" was eligible to receive a "normal retirement benefit." The Plan, however, also allowed employees with ten or more years of vested or credited service to receive adjusted benefits as early as age 55. These early retirement benefits were reduced from the age 65 benefit. They were calculated in one of two ways, depending upon whether a Plan participant's employment terminated before or after the age of 55. If a Plan participant's employment terminated before the age of 55, he could, upon turning 55, receive adjusted pension benefits that were the actuarial equivalent of the age 65 pension benefits. If, on the other hand, a Plan participant's employment terminated at or after age 55, he could obtain pension benefits that were reduced 5% per year for each year benefit payments were made prior to age 65. This 5% annual reduction provided an employee with pension benefits that exceeded those available to an employee who received pension benefits that were adjusted on an actuarial basis. The difference between the 5% annual reduction and the actuarial reduction is called the early retirement subsidy.
Larson was 50 years old when, on February 27, 1981, Northrop sold the Fuller Company. He continued to work for Fuller. Northrop terminated the Plan on March 31, 1981. 3 So as to fund the Plan's pension liabilities, Northrop purchased a group annuity contract from Bankers Life, now Principal Mutual Life Insurance Co. Residual amounts held in trust to provide benefits under the Plan reverted to Northrop upon satisfaction of liabilities of the Plan required by law. 4
The group annuity contract acquired from Principal provided for an actuarial reduction for early pension benefits that commenced prior to a Plan participant's turning age 65. The contract provided for the 5% annual reduction only for participants who were already receiving pension benefits when the Plan was terminated. 5 Moreover, there was no provision in the contract with Principal for the early retirement subsidy--the difference between the 5% annual reduction stated in the Plan and the actuarial reduction generally provided for under the contract--except with respect to employees who were already receiving pension benefits at the time of the Plan's termination.
By letter dated February 24, 1982, Northrop informed Larson "that, as a result of the sale of the G.A. Fuller Company and Northrop's termination of the Employees' Retirement Plan of the G.A. Fuller Company, [he] had earned a vested benefit from that Plan." The letter also notified Larson that "this particular Plan covered service from January 1, 1972[,] up to the sale date of February 2, 1981," and that the pension benefits under the Plan had been insured with Principal. It further informed Larson that he would "be eligible for an annuity at age 65 in the amount of $387.10 per month on a Straight Life basis [and that he could] elect to collect [his] benefit as early as age 55, but the above amount [would] be reduced for such early collection." The letter did not inform Larson that the early retirement benefit would be based on the actuarial reduction, omitting the 5% annual reduction option.
Shortly before his 55th birthday, Larson requested Northrop to send him the information and forms necessary to commence his pension benefits on May 1, 1985, the date he planned to retire from the Fuller Company. Northrop provided Larson with this information in a letter dated March 26, 1985. The letter contained four attachments, two of which estimated the amount of Larson's pension benefits if he waited until he turned 65 to receive them, and two of which estimated the amount of Larson's pension benefits if he chose to begin them when he turned 55. Although Northrop's letter did not expressly say so, the age 55 pension benefits estimated in the attachments were based on an actuarial reduction, not a 5% annual reduction, from the age 65 benefit, and, therefore, did not include the early retirement subsidy. Larson read the letter and reviewed its attachments. On April 1, 1985, he wrote Northrop asking for the calculations upon which his age 65 benefits had been determined.
By letter dated July 16, 1985, Northrop repeated to Larson the amount of his early retirement benefits. Larson maintains that it was this July 16, 1985, letter that for the first time told him his early retirement benefits were being adjusted by the actuarial method rather than by the 5% annual reduction method. Larson waited until April 1, 1988, to bring this action against Northrop.
We review de novo the district court's granting of summary judgment for Northrop. "[W]e do not defer to the conclusions the [d]istrict [c]ourt drew from the record," but make our own determinations. Elcon Enters., Inc., v. Washington Metr. Area Transit Auth., 977 F.2d 1472, 1478 (D.C.Cir.1992) ().
The relevant ERISA statute of limitations is codified at 29 U.S.C. Sec. 1113 (Supp. IV 1992). It provides:
No action may be commenced under this subchapter with respect to a fiduciary's breach of any responsibility, duty, or obligation under this part, or with respect to a violation of this part, after the earlier of--
(1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission, the latest date on which the fiduciary could have cured the breach or violation, or
(2) three years after the earliest...
To continue reading
Request your trial
-
E.M. v. Shady Grove Reprod. Sci. Ctr. P.C.
...Motion for Summary Judgment." Wilson v. DNC Servs. Corp. , 417 F. Supp. 3d 86, 97 (D.D.C. 2019) (citing Larson v. Northrop Corp. , 21 F.3d 1164, 1173–74 (D.C. Cir. 1994) ). Even assuming that the Court should consider this effects theory, it is not a basis for summary judgment in E.M.’s fav......
-
Krukas v. AARP, Inc.
...claim in the context of whether the statute of limitations should be tolled. See Defs.' Mem. at 48 n.13 (citing Larson v. Northrop Corp. , 21 F.3d 1164, 1172 (D.C. Cir. 1994) ; Quick v. EduCap, Inc. , 318 F.Supp.3d 121, 143 (D.D.C. 2018) ; Woodruff v. McConkey , 524 A.2d 722, 728 (D.C. 1987......
-
Miele v. Pension Plan of New York State Teamsters
...Int'l Union v. Murata Erie North Am., Inc., 980 F.2d 889, 899 (3d Cir.1992); DeVito, 975 F.Supp. at 266; see also Larson v. Northrop Corp., 21 F.3d 1164, 1171 (D.C.Cir. 1994) (holding that alleged breach of fiduciary duty occurred when defendant entered annuity contract, not when plaintiff'......
-
Harris v. Koenig
...to `exclude suspicion and prevent inquiry.' Such concealment must rise to something `more than merely a failure to disclose.'" Larson, 21 F.3d at 1174 (emphasis in original) (quoting Schaefer v. Arkansas Med. Soc'y and Tr. of the Arkansas Med. Soc'y Pension Trust, 853 F.2d 1487, 1491 (8th C......