New v. Verizon Communications, Inc.

• Decision Date: 20 November 2008
• Docket Number: No. 06 C 2562.,06 C 2562.
• Parties: Larry NEW, Plaintiff, v. VERIZON COMMUNICATIONS, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

635 F.Supp.2d 773

Larry NEW, Plaintiff, v. VERIZON COMMUNICATIONS, INC., Defendant.

No. 06 C 2562.

United States District Court, N.D. Illinois, Eastern Division.

November 20, 2008.

COPYRIGHT MATERIAL OMITTED

Larry New, Winfield, IL, pro se.

Jon Zimring, Duane Morris LLP, Chicago, IL, for Defendant.

OPINION AND ORDER

CHARLES R. NORGLE, District Judge.

Before the Court is the Defendant Verizon Communications, Inc.'s ("Verizon") motion for summary judgment against Plaintiff Larry New ("New"). For the following reasons, the motion is granted.

I. BACKGROUND

A. FACTS

The following facts are taken from the administrative record and the documents appended thereto. From December 2000 until May 6, 2004, New worked as a senior network engineer with MCI, Inc. ("MCI"), which Verizon now owns. During that time, MCI maintained a contract to provide telecommunications services to BP Amoco ("BP Contract") and, in that regard, established a distinct branch of employees whose sole function was to service the BP Contract, This branch was known internally as the MCI & BP Amoco Professional Services Organization and referred to as the "PSO." MCI assigned New to work in the PSO unit.

On July 21, 2002 MCI filed for bankruptcy protection under Chapter 11. As part of the bankruptcy, MCI sought to restructure the BP Contract. Accordingly, MCI and BP Amoco entered into an amended General Services Agreement ("GSA"), through which the employees assigned to service the BP contract—the PSO employees—would no longer serve as MCI employees. Rather, three scenarios existed for the PSO employees. See Shopfner Ltr., Def.'s Rule 56.1 Statement, Ex. 3 at 7. Approximately fourteen employees would receive offers from BP Amoco, who agreed to match their MCI salary and benefits. Id. Approximately thirty-eight employees would be offered employment from a third-party vendor, who, in turn, would continue to service the BP Contract in place of MCI. Id. Any employees left over would be terminated and would not receive offers from either BP Amoco or the third-party vendor. Id. The parties ultimately chose a company called "Getronics" as the third-party vendor to service the BP Contract.

On May 6, 2004, pursuant to the GSA, MCI terminated New's employment, along with fifty-six other MCI employees who worked in the PSO unit. The next day, on May 7, 2004 Getronics interviewed and hired New and many other employees from MCI pursuant to the GSA. According to company correspondence, the PSO employees' transition to Getronics was understood as a "`same desk' conversion" and that "the job duties and responsibilities for the transitioning employees under the [GSA were] expected to remain the same," Def.'s Rule 56.1 Statement, Ex. 3 at 7-8, although New denies that they did.

On June 3, 2004, in light of his termination from MCI, New sent a letter to MCI's Severance Plan Committee (the "Severance Committee") that requested a review of his claim for eligibility of severance pay. Id. at 43. The Severance Committee, in response, referenced MCI's Severance Plan and Summary Plan Description ("MCI Plan") to determine New's eligibility to receive severance payments. There, under a section entitled "Eligibility for Severance Benefits," the MCI Plan stated:

You will not be eligible for Severance Benefits if your employment ends because your division, plan, location or other business unit is sold (by stock sale, asset sale or otherwise), leased, outsourced, or subcontracted to another entity, or merged into another entity and you become employed by such entity in a substantially similar position within 30 days of such event.

MCI Plan, Ex. 3 at 32-33. The Severance Committee determined that under its restructuring agreement with BP Amoco New's business unit had been outsourced to Getronics and that New became employed in a substantially similar position with Getronics within thirty days of the outsourcing. See Denial Letter, Ex. 3 at 161. As a result, New fell into the category of employees that were not entitled to severance benefits; therefore, in a letter dated September 30, 2004, MCI denied his claim. Id.

On November 18, 2004 New appealed the Severance Committee's decision. In a thirteen-page letter in support of his appeal, New raised a number of issues with regard to the Severance Committee's administration of MCI's severance plan. See New Appeal, Ex. 3 at 73-85. For instance, New disagreed with the Severance Committee's determination that his business unit was, in fact, outsourced. New pointed out that prior to receiving the Severance Committee's denial letter he previously had not heard the term "outsource" to describe his leaving MCI to become an employee of Getronics. New also claimed that MCI repeatedly refused to provide him with various documents that he requested in light the denial of benefits. Id. at 78-82. Finally, New expressed confusion about assurances made by unidentified persons with MCI's severance hotline that he would be entitled to benefits. On this point, New explained that on several occasions he spoke with MCI's hotline representatives, who suggested that New was qualified to receive severance payments under the MCI Plan. In light of these assurances, New explained in his letter that the Severance Committee's decision to deny him benefits caught him by surprise. But, aside from New's representations, the details of New's phone calls to the MCI severance hotline remain a mystery.

On January 6, 2005 the Severance Committee denied New's appeal, citing the MCI Plan's eligibility statement and explaining that New is ineligible to receive severance benefits because his employment with MCI ended and he was subsequently employed by Getronics in a similar position. With that, New turned to the federal court.

B. PROCEDURAL HISTORY

New, operating pro se, initially filed his complaint in this Court on May 8, 2006 and thereafter filed an amended complaint on November 17, 2006. In his amended complaint, New asserted three claims against Verizon. He first alleges a violation of § 502(a)(1)(B) of the Employment Retirement Income Security Act ("ERISA") for the company's wrongful denial of severance benefits under the MCI Plan. New further alleges a violation of ERISA, 29 U.S.C. § 1132(c), for MCI's failure to provide him with all of the documents that he requested in a timely fashion during the administrative process. Finally, New alleges a state-law "breach of implied contract" claim based on MCI's denial of severance benefits in spite of the assurances made by MCI's hotline representatives.

On August 23, 2007 the Court granted Verizon's motion to strike several paragraphs of the amended complaint, which the Court deemed immaterial pursuant to FED. R. CIV. P. 12(f). These included any factual details surrounding New's prior employment at MCI, allegations regarding the MCI bankruptcy and allegations regarding communications with individuals on the Severance Committee, On August 26, 2008 Verizon moved for summary judgment. Verizon's motion is fully briefed and before the Court.

II. DISCUSSION

A. STANDARD OF DECISION

Summary judgment is proper when there is no showing of a genuine issue of material fact in the pleadings, depositions, answers to interrogatories, admissions on file and affidavits, and where the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). "A genuine issue of material fact arises only if sufficient evidence favoring the nonmoving party exists to permit a jury to return a verdict for that party." Sides v. City of Champaign, 496 F.3d 820, 826 (7th Cir. 2007) (quoting Brummett v. Sinclair Broad. Group, Inc., 414 F.3d 686, 692 (7th Cir.2005)). In determining whether a genuine issue of material fact exists, all facts are construed in favor of the nonmoving party, who, in this case, is New. See Squibb v. Mem'l Med. Ctr., 497 F.3d 775, 780 (7th Cir.2007). But the court's favor toward the nonmoving party does not relieve that party of the obligation to "do more than simply show that there is some metaphysical doubt as to the material facts," Waukesha Foundry, Inc. v. Indus. Eng'g. Inc., 91 F.3d 1002, 1007 (7th Cir. 1996) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)).

Summary judgment "is the put up or shut up moment in a lawsuit, when a party must show what evidence it has that would convince the trier of fact to accept its version of the events." Steen v. Myers, 486 F.3d 1017, 1022 (7th Cir.2007) (quoting Hammel v. Eau Galle Cheese Factory, 407 F.3d 852, 859 (7th Cir.2005)), The mere existence of some alleged or possible factual dispute will not defeat an otherwise properly supported motion for summary judgment, as speculation will not suffice. Amadio v. Ford Motor Co., 238 F.3d 919, 927 (7th Cir.2001); see also Borcky v. Maytag Corp., 248 F.3d 691, 695 (7th Cir. 2001).

B. ERISA—DENIAL OF SEVERANCE BENEFITS

Verizon first argues that New's ERISA claim for denial of severance benefits fails as a matter of law because the MCI Plan Administrator made a rational determination, in its discretion, that the PSO had been outsourced, which led to the rejection of New's severance claim. In response, New asserts that the MCI Plan Administrator's determination that the PSO had been outsourced was unfounded and therefore wrong. As a result, New maintains that the administrator abused its discretion in rejecting his claim for severance. The issue for this Court to decide, then, is whether the MCI Plan Administrator's decision to deny New's claim for severance was reasonable, in light of the administrator's determination that the PSO had been outsourced. The Court finds that it was.

But before the Court reaches that issue, it must first determine whether the MCI Plan confers discretion to the Plan Administrator in interpreting the plan's provisions and in determining a claimant's eligibility for benefits. If it does, then the Court must review...