Moyle v. Liberty Mut. Ret. Benefit Plan

• Citation: 985 F.Supp.2d 1247
• Decision Date: 01 July 2013
• Docket Number: Case No. 10cv2179–GPC(MDD).
• Parties: Geoffrey MOYLE, an individual; Pauline Arwood, an individual; Thomas Rollason, an individual; and Jeannie Sanders, an individual, on behalf of themselves, Plaintiff, v. LIBERTY MUTUAL RETIREMENT BENEFIT PLAN; Liberty Mutual Retirement Plan Retirement Board; Liberty Mutual Insurance Group, Inc., a Massachusetts company; Liberty Mutual Insurance Company, a Massachusetts company, Defendants.
• Court: U.S. District Court — Southern District of California

985 F.Supp.2d 1247

Geoffrey MOYLE, an individual; Pauline Arwood, an individual; Thomas Rollason, an individual; and Jeannie Sanders, an individual, on behalf of themselves, Plaintiff,

v.LIBERTY MUTUAL RETIREMENT BENEFIT PLAN; Liberty Mutual Retirement Plan Retirement Board; Liberty Mutual Insurance Group, Inc., a Massachusetts company; Liberty Mutual Insurance Company, a Massachusetts company, Defendants.

Case No. 10cv2179–GPC(MDD).

United States District Court,

S.D. California.

July 1, 2013.

Alex M. Tomasevic, Craig McKenzie Nicholas, Matthew B. Butler, Mei–Ying M. Imanaka, Tracy J. Jones, Andrew Cole Myers, Nicholas and Butler LLP, San Diego, CA, Jack B. Winters, Jr., Law Offices of Winters and Associates, San Diego, CA, for Plaintiff.

Jennifer L. Santa Maria, Jackson Lewis, LLP, San Diego, CA, Ashley Bryan Abel, Julia M. Ebert, Robert M. Wood, Jackson Lewis LLP, Greenville, SC, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT

GONZALO P. CURIEL, District Judge.

Before the Court are the parties' cross-motions for summary judgment, their oppositions and their replies. On June 7, 2013, the Court held a hearing. (Dkt. No. 247.) Matthew Butler, Esq. and Andrew Myers, Esq. appeared on behalf of Plaintiffs and Ashley Abel, Esq. and Jennifer Santa Maria, Esq. appeared on behalf of Defendants. Based on the parties' briefs, supporting documentation and applicable law, the Court GRANTS Defendants' motion for summary judgment; and DENIES Plaintiffs' motion for partial summary judgment.

Procedural Background

Prior to the filing of the instant case, on March 14, 2005, Plaintiff Geoffrey Moyle (“Moyle”) filed a complaint in this Court against Golden Eagle Insurance Corporation (“GEIC” or “New Eagle”) and Liberty Mutual Insurance Company (“LMIC”).¹ (Case No. 05cv507–DMS(WMC), Dkt. No. 1). On August 23, 2005, Moyle filed a first amended complaint adding Defendant Liberty Mutual Retirement Benefit Plan (“Plan”). On November 14, 2005, District Judge Dana Sabraw granted Defendants' motion to dismiss for failure to exhaust administrative remedies. ( Id., Dkt. No. 32.) Plaintiff appealed and on August 23, 2007, the Ninth Circuit affirmed the district court's dismissal requiring Plaintiff to exhaust. Moyle v. Golden Eagle Ins. Corp., 239 Fed.Appx. 362 (9th Cir.2007).

On January 26, 2008, Moyle filed a claim with Liberty Mutual. (Administrative Record (“AR”) 783–86.) On July 18, 2008, Plaintiff Thomas Rollason filed a claim. (AR 639–43.) On August 21, 2008, Plaintiff Pauline Arwood filed a claim. (AR 1016–20.) Lastly, on December 4, 2008, Plaintiff Jeannie Sanders filed her claim. (AR 1511–16.)

On April 23, 2008, Moyle's claim and subsequently Rollason, Arwood and Sanders' claims for benefits were initially denied by John R. St. Martin, Manager of Pension and Savings, Benefits at Liberty Mutual. (AR 712–718 (“Moyle”); 590–96 (“Rollason”); 991–97 (“Arwood”); 1497–1503 (“Sanders”)).

On June 20, 2008, Plaintiffs sought review of the initial decision and all four claims were consolidated for purposes of the administrative appeal. (AR 426.) On October 23, 2009, Plaintiffs' appeals were denied by Helen Sayles, Senior Vice President of HR & Administration, on behalf of the Retirement Board. (AR 4365–4414.)

After having exhausted administrative remedies, on October 19, 2010, Plaintiffs Moyle, Arwood, Rollason, and Sanders filed the instant class action complaint against Defendants Liberty Mutual Retirement Benefit Plan (“Plan”); Liberty Mutual Retirement Benefit Plan Retirement Board (“Board”); Liberty Mutual Group, Inc. (“LMGI”); and Liberty Mutual Insurance Company (“LMIC”). (Dkt. No. 1.) On October 21, 2010, Plaintiffs filed a first amended complaint. (Dkt. No. 3.) On April 25, 2011, District Judge Dana Sabraw denied Defendants' motion to dismiss the second and third claims; granted in part motion to dismiss improperly named Defendants; denied Defendants' motion to dismiss the first claim as to Plaintiff Moyle and granted Defendants' motion to strike demand for trial by jury. (Dkt. No. 18.) On September 14, 2011, the Court granted Plaintiffs' motion for leave to file a second amended complaint. (Dkt. No. 41.) On September 20, 2011, Plaintiffs filed a second amended complaint. (Dkt. No. 47.)

After briefing by the parties on Plaintiffs' motion for class certification, on April 10, 2012, District Judge Sabraw certified the class as to the first, second, and fourth causes of action to be:

all former employees of Golden Eagle Insurance Company who are or were employed by Liberty Mutual Group Inc. and/or Liberty Mutual Insurance Company starting October 1, 1997, who participated or are participating in the Liberty Mutual Retirement Benefit Plan and who were or will be denied credit for all years of service with Old Golden Eagle for the purposes of calculating all benefits owed to them under the Plan from October 1, 1997 to the present.

(Dkt. No. 113 at 19.)

On April 24, 2012, Defendants filed a petition for permission to appeal the Court's order granting class certification to the Ninth Circuit. (Dkt. No. 120.) In the meantime, the Court denied Defendants' motion for reconsideration and granted their motion for stay pending appeal. (Dkt. No. 126.) On July 11, 2012, the Ninth Circuit denied Defendants' petition for permission to appeal. (Dkt. No. 128.)

On October 12, 2012, the case was transferred to the undersigned judge. (Dkt. No. 174.) On October 17, 2012, Plaintiffs filed a third amended complaint against Defendants Liberty Mutual Retirement Benefit Plan (“Plan”); Liberty Mutual Retirement Benefit Plan Retirement Board (“Board”), the Plan administrator; Liberty Mutual Group, Inc. (“LMGI”), the Plan sponsor; and Liberty Mutual Insurance Company (“LMIC”), the entity that purchased OGE, and established GEIC and is a subsidiary of LMGI. (Dkt. No. 178.) The third amended complaint alleges four causes of action: payment of benefits under the Plan pursuant to 29 U.S.C. § 1132(a)(1)(B); equitable relief under 29 U.S.C. § 1132(a)(3); violation of 29 C.F.R. § 2560.503–1(h)(2)(i); and violation of 29 C.F.R. § 2520.102–3( l ) and 29 C.F.R. § 2520.102–2(a).

On January 3, 2013, Defendants filed a motion for summary judgment on all four causes of action. (Dkt. No. 212.) On the same day, Plaintiffs filed a motion for partial summary judgment on the second and fourth causes of action and on certain of Defendants' affirmative defenses. (Dkt. No. 213.) On March 8, 2013, both parties filed their respective oppositions to the motions for summary judgment. (Dkt. Nos. 232, 233.) On April 5, 2013, replies by both parties were filed. (Dkt. Nos. 239, 241.)

Factual Background

Plaintiffs Geoffrey Moyle, Pauline Arwood, Thomas Rollason, and Jeannie Sanders are four former employees of Golden Eagle Insurance Company (“Old Golden Eagle” or “OGE”). (Dkt. No. 233–2, Undisputed Fact No. 2.) On January 31, 1997, the Superior Court of San Diego County placed OGE into conservatorship proceedings under the supervision of the California Insurance Commissioner. ( Id., Undisputed Fact No. 5.) The court approved the sale and transfer of certain OGE assets and liabilities to LMIC on May 30, 1997. ( Id.) On October 1, 1997, pursuant to a Rehabilitation Agreement with the State-appointed conservator, LMIC purchased certain assets of OGE and formed and incorporated a new entity, Golden Eagle Insurance Corporation, (“New Golden Eagle” or “GEIC”), as a subsidiary of LMIC. ( Id., Undisputed Fact No. 6.) Article 5.1(c) of the Rehabilitation Agreement states:

As to the employees of [OGE] who become employees of New Eagle or another Subsidiary of LMIC by reason of the transactions contemplated by this Agreement ... [s]uch employees shall be provided benefits which are at least comparable to those offered by [OGE] and shall be credited for all prior years of service with [OGE] ... for purposes of eligibility, vesting and early retirement subsidies under the LMIC Retirement Benefit Plan ... provided, that such period of service with [OGE] will not be credited for purposes of benefits accruals under the LMIC Thrift Incentive Plan and Retirement Benefit Plan....

( Id., Undisputed Fact No. 7; AR 3035–36.) OGE did not offer a traditional defined benefit pension plan to its employees. ( Id., Undisputed Fact No. 9.) As former employees of OGE, Plaintiffs had the opportunity to participate in a 401(k) Plan and profit-sharing plan. ( Id., Undisputed Fact No. 10.) OGE did not offer any other retirement plans, such as a defined benefit pension plan funded by the employer with benefit accruals based on years of service. ( Id., Undisputed Fact No. 11.) OGE did not contribute any assets to the Plan at issue in this case and Plaintiffs did not make any contributions to the Plan. ( Id., Undisputed Fact No. 12.)

Plaintiffs claim Defendants sought to retain Old Golden Eagle employees and advised them that if they remained in their positions, they would be eligible to participate in the Plan with credit for their years of service with Old Golden Eagle in addition to their continued time of employment after the acquisition. While Defendants argue that they stated that Old Golden Eagle employees would receive prior service credit for the years of service with Old Golden Eagle under the Plan for purposes of eligibility, participation, vesting, early retirement benefits and spouse's death benefits, they did not expressly state one way or another whether Old Golden Eagle employees would be credited for purposes of calculating pension benefit accrual under the Plan. Plaintiffs remained in their positions after the acquisition and later retired. Upon retirement, their pension benefits were calculated based only on their years of service after the acquisition in October 1997. It is undisputed that years of service with Old Golden Eagle were credited under the Plan for purposes of eligibility, participation, vesting,...