Liston v. Unum Corp. Officer Severance Plan, 01-CV-80-P-S.

• Decision Date: 17 July 2002
• Docket Number: No. 01-CV-80-P-S.,01-CV-80-P-S.
• Citation: 211 F.Supp.2d 222
• Parties: Catherine LISTON, Plaintiff, v. UNUM CORPORATION OFFICER SEVERANCE PLAN, et al., Defendants.
• Court: U.S. District Court — District of Maine

211 F.Supp.2d 222

Catherine LISTON, Plaintiff, v. UNUM CORPORATION OFFICER SEVERANCE PLAN, et al., Defendants.

No. 01-CV-80-P-S.

United States District Court, D. Maine.

July 17, 2002.

Lawrence C. Winger, Attorney at Law, Portland, ME, for Catherine F. Liston.

Geraldine G. Sanchez, Byrne J. Decker, Pierce, Atwood, Portland, ME, for defendants.

ORDER

SINGAL, District Judge.

A former officer of UNUMProvident Corporation sued her former employer, its severance plan, and the plan administrator to recover benefits allegedly due pursuant to the plan's "Change of Control" provisions. Presently before the Court are Plaintiff's Motion for Additional Discovery (Docket # 35) and Defendants' Motion for Summary Judgment (Docket # 27). For the following reasons, the Court DENIES Plaintiff's Motion and GRANTS Defendants' Motion.

I. LEGAL STANDARD

The Court will grant a motion for summary judgment if the record discloses that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). An issue is "genuine" if it could be resolved in favor of the nonmoving party by a rational fact finder drawing reasonable inferences. See, e.g., Ward v. Massachusetts Health Research Inst., 209 F.3d 29, 32 (1st Cir.2000). A fact is "material" if it could affect the outcome of the case under governing law. See, e.g., Hinchey v. NYNEX Corp., 144 F.3d 134, 140 (1st Cir.1998). The following facts are undisputed.

II. FACTS

Plaintiff Catherine Liston is a former officer of UNUM Corporation ("UNUM"), a Delaware corporation. As an officer, she participated in Defendant UNUM Corporation Officer Severance Plan (the "Plan"). UNUM adopted the Plan, in part, to provide a financial safety net for its officers whose jobs were "eliminated" as a result of a "change of control" of the company, such as a merger. The Plan defined "job elimination" arising from a change of control as any of the following:

The significant adverse reduction or alteration in the nature and status (other than title) of the officer's position, duties or responsibilities immediately prior to or within 365 days of the change in control;

The lack of any re-employment opportunity that would utilize the officer's professional skills and abilities;

The involuntary termination of the officer for reasons other than performance failure or for cause; [or]

The failure or inability of UNUM Corporation to obtain a satisfactory agreement to assume and agree to honor the terms of this subsection following a change in control.

(See Def.Mot. for Sum.J. at ex. 2, p. 11 (Docket # 27).)

The Plan gave the company the ability to amend its provisions, but required that "[a]ny such amendment, termination, change, elimination, or substitution ... be approved in writing by the Senior Vice President of Human Resources of UNUM Corporation." (Id. at p. 12.) However, it limited UNUM's ability to make amendments around the time of a "change of control":

With respect to the Change of Control provision, such provision may be amended unless such amendment occurs within 12 months of a Change of Control. Further, any other amendment of the Plan that occurs within 12 months of a Change of Control may not operate to reduce any of the benefits that would otherwise be provided under the Change of Control provision absent such an amendment.

(See id.)

The Plan Administrator, Defendant Robert Cornett, oversaw the Plan. Short of making amendments, the Plan granted him "full discretion to make determinations as to the right of any person to a benefit in this Plan ... to construe and interpret the terms of this Plan, decide questions of eligibility, and determine the amount and time of payments of any benefits due...." (See id. at 10.) An Amendment to the Plan adopted February 23, 1999, further gave him explicit "discretionary authority to control and manage the operation and administration of the Plan," including "construing and interpreting terms" and "making rules and regulations." (See id. at ex. 2(A).)

On June 30, 1999, UNUM merged with Provident Companies, Inc., creating a new company, Defendant UNUMProvident Corporation. The parties agree that this amounted to a "change of control" as defined by the Plan. UNUMProvident adopted the Plan, and Cornett continued as Plan Administrator. Shortly after the merger, he issued an "Administrative Rule" purporting to define some of the terms in the Plan's Change of Control provision. In pertinent part, the Administrative Rule read

1. A significant adverse reduction or alteration in the nature and status (other than title) of the officer's duties or responsibilities means any one of the following:

• a loss of the officer's position where no opportunity exists to work at either the purchaser . . ., the vendor . . ., or the survivor of a merger ... other than a project assignment;

• a loss of the officer's position where the only opportunity to work at either the purchaser . . ., the vendor . . ., or the survivor of a merger ... involves a position with skills and abilities outside of the skills and abilities the officer utilizes in his or her current position;

• a change in the officer's position from a manager or director of a major unit to an individual contributor in that unit or another unit; or • a reduction of more than 10% of the base salary the officer was receiving immediately prior to the change in control.

* * * * * *

2. An officer who declines a reemployment opportunity in a comparable position which does not require the officer to relocate to a place of employment more than 50 miles from his or her location immediately prior to the change in control shall not be considered involuntarily terminated by reason of job elimination.

3. An officer who accepts a reemployment opportunity in a comparable position regardless of whether such position requires him or her to relocate to a place of employment more than 50 miles from his or her location immediately prior to the change in control, shall not be considered involuntarily terminated by reason of job elimination.

4. A "comparable position" means a position within the same functional area which requires similar skills and abilities the officer utilizes in his or her current position and does not result in a reduction of more than 10% of the base salary he or she was receiving immediately prior to the change in control . . .

5. A "reemployment opportunity" means a reemployment opportunity with UNUM ... or the survivor of a merger involving UNUM....

(Id. at ex.2(D).)

Pre-merger, Liston worked as the "Vice President of LTD Benefits" in UNUM's Portland, Maine, office. After the merger, Liston continued working in a similar position for the new company, but with the title of "Vice President, Portland Customer Care." Liston believed, however, that the new position differed from her former position in several important respects. Her workdays grew longer, and she traveled more frequently. She lost discretion to make strategic decisions, and to approve certain expenses and salary promotions for her subordinates. Finally, the company limited its reimbursement for her calls home when she was on the road. Some of the changes were not specific to Liston, but reflected a company-wide shift in managerial policy.

Liston viewed the changes as a "significant adverse reduction or alteration in the nature and status" of her employment. Accordingly, in March 2000 she submitted a request to UNUMProvident for benefits due under the Plan's Change of Control clause. UNUMProvident refused, informing Liston by letter dated April 4, 2000, that after the merger she had been offered a "comparable position" with the company that precluded a benefits award. "Your contention," UNUMProvident continued, "that there has been a reduction in decision-making authority and less strategic focus in your role, even if true, does not constitute a significant adverse alteration in the nature and status of your position." The letter invited Liston to provide additional facts that might support her benefit request.

Liston, represented by counsel, appealed the decision to the Plan's "Review Committee" by letter dated June 2, 2000. In her appeal, she described changes in her position she felt warranted a grant of severance benefits. She detailed a threefold increase in her travel requirements during the first quarter of 2000; an increase in her weekly hours worked by roughly twenty hours per week, with increased weekend and evening work as well; and a decrease in the strategic decision-making responsibilities in her job, accompanied by a loss of authority to make salary and expense decisions regarding her subordinates.

The Review Committee denied Liston's appeal in a two-page letter dated June 13 2000. The Committee explained that it was denying benefits because Liston had been offered a "comparable position," and because changes in travel requirements, work hours and company-wide expense and financial control procedures "do not constitute a job elimination according to the Plan." Again, UNUMProvident invited Liston to produce additional information that might support her claim request, and informed her of her right to appeal the Committee's decision to the Benefit Administrative Committee (the "BAC"), a body headed by Cornett.

On August 3, 2000, Liston appealed the Committee's decision to the BAC. She reiterated her earlier arguments, and suggested that the company's grant of benefits to five former UNUM officers, whom she named, entitled her to benefits as well. On August 28, 2000, Liston and her attorney met with Cornett and presented her case. Several months later, in early November 2000, the BAC met to consider Liston's appeal. In making its decision, it took into account all of the arguments Liston had made in her letters to the company. It also considered the argument that other UNUMProvident officers had received benefits under the Plan's Change of Control...