Lerra v. Monsanto Co.

• Decision Date: 01 September 1981
• Docket Number: Civ. A. No. 80-95-G.
• Citation: 521 F. Supp. 1257
• Parties: Rose LERRA, Plaintiff, v. MONSANTO CO., Defendant.
• Court: U.S. District Court — District of Massachusetts

521 F. Supp. 1257

Rose LERRA, Plaintiff, v. MONSANTO CO., Defendant.

Civ. A. No. 80-95-G.

United States District Court, D. Massachusetts.

September 1, 1981.

Thornton E. Lallier, Rowley, Mass., for plaintiff.

Richard F. McCarthy, Richard E. Bennett, Willcox, Pirozzolo & McCarthy, Boston, Mass., for defendant.

MEMORANDUM AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

GARRITY, District Judge.

The plaintiff, Rose Lerra, is the widow of a formerly retired Monsanto employee, Joseph Lerra, Sr. The basic allegation of her complaint is that through the fault of Monsanto, her husband had unwittingly selected a "single life annuity" method of payment of his accrued retirement benefits, thereby depriving her of payments she would have received after her husband's death if he had chosen a "50% joint and survivor annuity" (J&S) method. The plaintiff, in her amended complaint, alleges that she is entitled either to a reformation of her husband's election agreement with Monsanto such that she will collect payments as though her husband had selected a 50% J&S annuity option, or to damages equal to the sum of the payments she would receive if her husband had selected the 50% J&S annuity. The defendant moved for summary judgment on all four counts of the amended complaint on March 25, 1981. The plaintiff then moved to strike portions of the affidavits submitted by the defendant in support of its motion on April 21, 1981. We heard oral argument on both of these motions on August 24, 1981, and ruled on the plaintiff's motion to strike at the hearing. After considering the briefs and oral arguments of the parties, we grant the defendant's motion for summary judgment on all counts.

The material facts, as to which we find there is no dispute, are as follows. Joseph Lerra, Sr., the plaintiff's husband, began his employment with the defendant, Monsanto, at its Everett, Massachusetts plant sometime in September, 1945. There is no evidence of the various services Joseph Lerra, Sr. performed for Monsanto throughout his employment, but at the time of his retirement he worked as a janitor at the Everett plant. Sometime in January or February of 1976, Joseph Lerra, Sr. approached Elizabeth Hawk-Muston, who was the personnel representative at the plant, to discuss his possible early retirement because of his heart condition. On July 19, 1976, Mr. Lerra again met with Hawk-Muston, while his early retirement application was still pending company approval, to review his retirement benefit options. Mr. Lerra signed an election form that day choosing a "single life annuity" option. Ms. Hawk-Muston then sent Mr. Lerra a letter dated July 22, 1976, in which she asked Mr. Lerra to confirm his selection of a single life annuity by returning to her a form with his signature. On July 26, 1976, Mr. Lerra signed and returned the confirmation of his selection.

Mr. Lerra's retirement was approved, and he left Monsanto's Everett plant in October, 1976. On various occasions in August, 1977, Joseph Lerra, Sr. told his two sons that his wife, the plaintiff, was "taken care of for life," and that "Ma will get $175 per month for life." Mr. Lerra died on December 14, 1977, at which time the plaintiff, Rose Lerra, discovered that her husband had selected a single life annuity, and not a joint and survivor annuity as she had believed. At the time Joseph Lerra was making his retirement selections, in July of 1976, Rose Lerra states in her affidavit that "Joe wanted to talk about it. I didn't want to talk about death, so I avoided it." Mrs. Lerra brought suit against Monsanto on December 11, 1979.

Count I alleges that Monsanto's personnel representative, Ms. Hawk-Muston, misrepresented the company's pension benefit program to Mr. Lerra, thereby causing him to elect a "single life annuity" which left the plaintiff, his wife, without pension payments after his death. Under Massachusetts law,

to recover in an action of deceit the plaintiff must prove as to the misrepresentation: (1) that it was as to a matter of fact, which may include a belief or an intention, made by the defendant or his agent; (2) that it was made with the intention to induce another person to act upon it; (3) that it was made with knowledge of its untruth, or was made of a fact susceptible of actual knowledge with recklessness as to its truth or falsehood, or was the utterance of a half truth, which in effect is a lie, or was the failure to disclose known facts when there was a duty, original or supervening, to disclose; (4) that it was intended that it should be acted upon, as it was, and (5) that damage resulted therefrom.

Simpson & Alperin, Summary of Basic Law, 14A, Massachusetts Practice & 1791 (1974).

We find that the defendant's motion for summary judgment must be granted as to Count I, because plaintiff's complaint and supporting affidavits fail to show a prima facie case of deceit.

First, Rose Lerra has brought this action in her individual capacity only. In this circumstance, the complaint must show some misrepresentation, made either directly or indirectly to Mrs. Lerra. Two paragraphs of Count I relate to Monsanto's alleged misrepresentation:

¶ 12. That Elizabeth Muston, as an authorized employee of Monsanto, did advise, knew or should have known, the pension-insurance programs and so misrepresented to Joseph Lerra that he should take a single life annuity and forego the lifetime survivor's benefit under his pension insurance program.

....

¶ 15. That relying upon Elizabeth Muston's advice, Joseph Lerra signed a single annuity option for a single lifetime benefit and still believed that he still had a "5 year free ride" with lifetime benefits to his widow and so stated it publicly up to the time of his death.

While it is true that one may be charged with fraud or deceit even though he is not a party to the transaction into which a complainant is induced to enter, Nash v. Minnesota Title Ins. & Trust Co., 1895, 163 Mass. 574, 40 N.E. 1039, the complaint does not allege that Mrs. Lerra was induced to do or refrain from doing anything by virtue of any representation made to her husband. In fact, Mrs. Lerra testifies that she refused even to discuss the selection of retirement options with her husband.

The complaint and supporting affidavits further show no indication of fraudulent intent on the part of Monsanto or its agent, Ms. Hawk-Muston. The representations that Mrs. Lerra complains of must appear to have been made for the purpose of influencing her, and the intent that she act or refrain from acting upon those representations. Hunnewell v. Duxbury, 1891, 154 Mass. 286, 28 N.E. 267; Fogg v. Pew, 10 Gray Mass. 409. There is no allegation, nor evidence that any representation was made either directly or indirectly to Mrs. Lerra, with or without the necessary fraudulent intent.

There is no evidence or allegation of the necessary scienter on the part of the defendant to make any misrepresentation remediable. At best, paragraph 15 of Count I could be construed to allege a concealment of the fact that the election of a single life annuity deprived Mr. Lerra's spouse, the plaintiff, of pension payments upon her husband's death. Since the very definition of a single life annuity excludes the possibility of there being any payments to a survivor of the annuitant, this allegation is tantamount to alleging that the defendant concealed the definition of a single life annuity. Assuming that the complaint could be construed to allege that such a concealment was an indirect misrepresentation to Mrs. Lerra, and that Monsanto intended her to rely on this concealment, there must also be some showing that the concealment was accompanied by knowledge of the true definition and with the intent to deceive. French v. Vining, 1869, 102 Mass. 132; Tryon v. Whitmarsh, 1840, 1 Met. Mass. 1. There is no evidence or allegation that Ms. Hawk-Muston concealed the true nature of a single life annuity with the intent to deceive anybody. In fact, paragraph 8 of the complaint alleges:

That Monsanto's employee, Elizabeth Muston, who worked in the personnel department during 1976 in Everett, Massachusetts, did not have extensive knowledge at the time of the pension-insurance and disability programs or their procedures.

Thus, proof of this allegation would exonerate the defendant from liability under Count I.

Second, even if Mrs. Lerra were suing in the capacity of administratrix of Joseph Lerra's estate, there could be no recovery for misrepresentation here. The complaint still fails to allege the necessary elements of intent and scienter, even though Joseph Lerra's reliance could be proven.

Count II, based on contract principles, alleges that Ms. Hawk-Muston and Joseph Lerra both misunderstood the single life annuity option, and therefore made a "mutual mistake of fact" about the subject of Mr. Lerra's election. The mistake concerns a change in the 1976 retirement plan made to conform with the requirements of ERISA. In particular, 29 U.S.C. § 1055(e) requires that a married employee be given the option to elect out of a 50% joint and survivor annuity if a plan provides for payment by annuity. Monsanto's 1976 plan allows such an election in sections 9.1(a) and (b), 9.2. Section 9.1(a) states that "A participant who has a spouse on the date as of which such payments commence and who has not made an election in accordance with subparagraph (b) below or subsection 9.2 shall receive payments in the form of a joint and survivor annuity ...." (emphasis added). The 1971 Plan, which the 1976 Plan supersedes, had provided in Article II, section 5:

If an Employe who has ten or more years of Credited Service or a Retired Employe who retired early pursuant to Section 2 ..., or a Disabled Retired Employe who retired pursuant to Section 3 ... dies after attaining age 50 and prior to the earliest of:

(a) his Normal Retirement Date (b) the effective date elected by him under any one of the Optional

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