Ludwig v. NYNEX Service Co., 90 Civ. 5459 (JMC).

• Decision Date: 16 November 1993
• Docket Number: No. 90 Civ. 5459 (JMC).,90 Civ. 5459 (JMC).
• Citation: 838 F. Supp. 769
• Parties: Roy A. LUDWIG, Plaintiff, v. NYNEX SERVICE COMPANY, A WHOLLY OWNED SUBSIDIARY OF NYNEX CORPORATION; NYNEX Management Pension Plan; NYNEX Corporation Savings Plan for Salaried Employees; NYNEX Management Medical Plan; NYNEX Dental Plan; NYNEX Management Vision Care Plan; NYNEX Sickness and Accident Disability Plan; NYNEX Long Term Disability Plan for Salaried Employees; NYNEX Group Life Insurance Plan; NYNEX Corporation Voluntary Contribution Plan, Defendants.
• Court: U.S. District Court — Southern District of New York

838 F. Supp. 769

Roy A. LUDWIG, Plaintiff, v. NYNEX SERVICE COMPANY, A WHOLLY OWNED SUBSIDIARY OF NYNEX CORPORATION; NYNEX Management Pension Plan; NYNEX Corporation Savings Plan for Salaried Employees; NYNEX Management Medical Plan; NYNEX Dental Plan; NYNEX Management Vision Care Plan; NYNEX Sickness and Accident Disability Plan; NYNEX Long Term Disability Plan for Salaried Employees; NYNEX Group Life Insurance Plan; NYNEX Corporation Voluntary Contribution Plan, Defendants.

No. 90 Civ. 5459 (JMC).

United States District Court, S.D. New York.

November 16, 1993.

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MEMORANDUM AND ORDER

CANNELLA, District Judge.

Defendants' motion to amend their answer is granted. Fed.R.Civ.P. 15(a). Defendants' motion for summary judgment is granted. Fed.R.Civ.P. 56(c).

BACKGROUND

Plaintiff Roy A. Ludwig brought this action under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§ 1001-1461 (1988 & Supp. II 1990) hereinafter ERISA, against the defendants¹ to recover pension distributions and other employee benefits allegedly due plaintiff under employee benefit plans administered by the defendants, and to obtain a declaratory judgment regarding his portability rights with respect to such plans. Plaintiff also seeks relief under the state common-law theories of promissory estoppel and breach of contract. Plaintiff asserts that federal subject matter jurisdiction over these state-law claims is founded upon diversity and pendent jurisdiction.²

Plaintiff claims that, as a retiree from American Telephone and Telegraph Company hereinafter AT & T, he was entitled to the continued receipt of pension and other benefits³ after commencing employment with NYNEX.⁴ Defendants, in turn, argue that they were obligated under the Mandatory Portability Agreement⁵ to treat Ludwig's pension as portable, that is, to carry forward his prior service credits from AT & T. Defendant NYNEX thus suspended payments to Ludwig in August 1989 upon its determination of his portability status. Defendants now move for summary judgment dismissing Ludwig's claims.

Viewed in the light most favorable to the plaintiff, the facts of this case are as follows. Plaintiff Roy A. Ludwig, a domiciliary of New Jersey,⁶ commenced employment with New York Telephone on March 4, 1957. Ludwig worked with New York Telephone until November 30, 1983, eventually advancing to a management position in the network department of this firm as a special service design engineer. On December 1, 1983, Ludwig began employment with AT & T, where he continued to work until his retirement therefrom on May 31, 1988. At AT & T, Ludwig held the position of regional telecommunications manager and possessed expertise in the specific fields of design engineering and contract regulation work.⁷

During July and August 1988, Ludwig had conversations with two different employees of NYNEX during which he discussed career opportunities with the firm. Ludwig first met with Lawrence J. Chu, then employed as a management employee of NYNEX. Ludwig alleges that Chu, as a personal friend of plaintiff, initiated this meeting for the purpose of discussing Ludwig's potential employment as an "associate director" with NYNEX.⁸ Shortly thereafter, Ludwig met with Charles White on July 21, 1988, then employed as a staff director in the personnel department at NYNEX, for the purpose of interviewing Ludwig for an associate director position with the firm. At this interview, Ludwig alleges that he specifically told White that if he were hired by NYNEX, he did not wish to be considered a portable employee insofar as this status would entail the carrying forward of his prior service credits from AT & T, and would therefore result in the suspension of his pension and other employee benefits that he was receiving from AT & T. Ludwig also alleges that he told White that he would not accept employment with NYNEX unless he were treated as a nonportable employee, and that he further made this position known to White through his refusal, at that time, to sign a release acknowledging his eligibility for portability rights. According to plaintiff, White told Ludwig that all new employees, whether or not eligible for portability, signed the release and that this action constituted a mere matter of procedure without substantive effect. See Ludwig Aff. at 5. Ludwig further alleges that, at this meeting, White demonstrated an understanding of Ludwig's concerns and evinced an appreciation of the ramifications that would ensue through any determination of plaintiff's portability status. Ludwig, however, does not allege that White, at this interview of July 21, 1988, made any statement to Ludwig, either affirmative or hypothetical, concerning whether Ludwig would indeed be considered a non-portable employee for the purpose of determining his pension rights in the event that Ludwig were to become employed by NYNEX.⁹

Despite his alleged refusal to sign the release at the time of the interview, plaintiff, approximately eleven days thereafter, did just that.¹⁰ On or about August 1, 1988, Ludwig signed the release, dated it August 1, 1988, and mailed it to White.¹¹

Plaintiff further alleges that on August 15, 1988, he received a written offer of employment¹² for the position of associate director with NYNEX.¹³ Although the writing provided for a starting date of August 22, 1988, Ludwig commenced his employment with NYNEX on August 18, 1988. Under the terms of this employment agreement, Ludwig was to be paid an annual salary of $49,700.00.¹⁴

On or about August 22, 1988, Ludwig completed a number of forms for NYNEX's personnel department. The remarks written thereon by NYNEX's employees regarding Ludwig's employment status described plaintiff alternatively as a "new hire," a "new hire from AT & T," or possessing prior "Bell Service." Ludwig Aff., Exh. E. Ludwig does not allege that, at the time of completing these forms, any employees of NYNEX made any representations to him regarding the portability of his pension.¹⁵

Ludwig alleges that on two separate occasions subsequent to his commencement of employment with NYNEX, he received telephone calls from Charles White during which White asked Ludwig if he wanted his pension to be portable. The first occasion occurred near the end of September 1988, and the second transpired in either late November or early December 1988. On both occasions, Ludwig alleges that he emphatically told White that he did not want his pension to be portable. On the second occasion, plaintiff alleges that in response to White's inquiry, Ludwig asked White why he continued to call regarding this matter, to which White responded that somebody else had directed him to do so.

Between August 18, 1988 and June 30, 1989, NYNEX treated Ludwig as a "new hire" without providing him with any prior service credit, contingent or otherwise, to reflect his prior employment with AT & T. (Thus, during this time period, Ludwig received the pension benefits from AT & T described supra,) In its answer, defendant NYNEX admits that an employee who claimed entitlement to portability would, as a matter of company policy, receive one year of net credited service conditional upon the later determination of such employee's portability status. One year's net credited service would entitle such employee to a company contribution under the NYNEX Management Medical Plan, participation in the NYNEX Corporation Savings Plan for Salaried Employees, additional paid vacation time, and telephone concession service.¹⁶ NYNEX further admits that between August 18, 1988 and June 30, 1989, plaintiff was coded in NYNEX's personnel records with a net credited service date of August 18, 1988.¹⁷ As a result of this treatment as a non-portable employee, plaintiff did not receive these employee benefits to which he otherwise would have been entitled had he been regarded as an employee eligible for portability of service credit.¹⁸ One practical ramification of this is illustrated through plaintiff's allegation that, on March 29, 1989, he was refused participation in the NYNEX Savings Plan for Salaried Employees on the basis that, according to NYNEX personnel records, he had less than one year of net credited service.¹⁹

On June 27, 1989, the defendants formally determined that plaintiff was eligible for portability of service credit under the Mandatory Portability Agreement, and, on or about that same date, forwarded a request to AT & T for the transfer, from AT & T to NYNEX, of the pension assets attributable to Ludwig's pension account with AT & T.²⁰ See Ludwig Aff., Exh. B, at 65-66 (deposition of Charles White). Plaintiff was not informed, at this time, of the defendants' determination and subsequent action. Plaintiff alleges in his affidavit that he first learned of the defendants' decision in early July 1989 upon being alerted by Larry Chu that the NYNEX payroll office had received notice to change his net credited service date to 1957 to reflect his prior service with New York Telephone and AT & T.²¹

Between the time that he was informed of the defendants' portability decision and his receipt of his final pension check from AT & T, Ludwig spoke with two separate NYNEX employees regarding his rights and the eventual suspension of his pension benefits. On or about July 13, 1989, Ludwig spoke with Deborah Tyler, the staff manager for pension administration on the staff of the Secretary of the NYNEX Employees' Benefits Committee. Ludwig alleges that Tyler did not inform him that he could appeal the portability decision. Shortly thereafter, Ludwig spoke with Elizabeth B. Flaherty, an attorney who worked for the NYNEX Legal Department, who, according to plaintiff, advised him that NYNEX was complying with the applicable portability laws. Plaintiff further alleges that Flaherty did not advise him of any appeal procedures.

Plaintiff alleges that he received his last pension...