Pearson v. Firstenergy Corp.

• Decision Date: 08 February 2016
• Docket Number: CASE NO. 5:14-cv-634
• Parties: MARC PEARSON, PLAINTIFF, v. FIRSTENERGY CORP. PENSION PLAN, et al., DEFENDANTS.
• Court: U.S. District Court — Northern District of Ohio

MARC PEARSON, PLAINTIFF, v. FIRSTENERGY CORP. PENSION PLAN, et al., DEFENDANTS.

CASE NO. 5:14-cv-634

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

February 8, 2016

JUDGE SARA LIOI

MEMORANDUM OPINION

Before the Court is defendants' motion for summary judgment on Counts One and Two of the First Amended Complaint and/or judgment on the administrative record on Count One (Doc. No. 40 ("MSJ/JAR")). Plaintiff opposes the motion (Doc. No. 44 (Memorandum in response ["Opp'n"])), and defendants have filed a reply (Doc. No. 46 ("Reply")). Plaintiff has also sought leave to file a sur-reply, instanter (Doc. No. 47 (Motion to File Sur-Reply ["Mot. Sur-Reply"])). Plaintiff's motion for leave is granted, and, for the reasons set forth below, defendants' motion for summary judgment and/or judgment on the administrative record is also granted.

I. BACKGROUND

In 1998, Duquesne Light Company ("DLC") recruited plaintiff Marc Pearson ("plaintiff" or "Pearson") to work at its Beaver Valley generation plant. Because a change in employment would require plaintiff to relocate his family and abandon his consulting business, plaintiff negotiated an arrangement whereby he would obtain ten (10) years of pension credit at DLC after five (5) years of employment "(which he was informed by DLC and understood would get him a full pension from DLC as of age 60) and a one-year severance package." (Doc.No. 32 (First Amended Complaint ["FAC"]) ¶ 8.) The agreement also provided for a generous allotment of vacation time.¹ (Doc. No. 39 (Deposition of Marc Pearson ["Pearson Dep."]) at 568.)

By a letter dated July 8, 1998, DLC promised Pearson a "special retirement program," which DLC explained to Pearson was the way it would ensure he received the negotiated two-for-one service credit arrangement when calculating his DLC pension. (FAC ¶ 10; Doc. No. 40-20 (MSJ/JAR, Ex. B, at 1038.²) Pearson was advised by DLC that the two-for-one service credit formula would be applied to all of his DLC pension benefits. (Doc. No. 44-7 (Declaration of Plaintiff Marc Pearson ["Pearson Decl."]) ¶ 3.) It was Pearson's understanding that, in order to receive the promised ten (10) years of service credit under the DLC pension plan, he would have to work for DLC for five (5) years (until July 2003). (FAC ¶ 11.)

At the time Pearson began his employment with DLC, in July 1998, as the "Technical Assistant to the President, Generation Group and Chief Nuclear Officer[,]" he was 45 years of age. (Id. ¶ 9.) Pearson worked for DLC until 1999 when defendant FirstEnergy Corp. ("FE") began a process by which it eventually acquired (through defendant First Energy Nuclear Operating Company ("FENOC")) 100% ownership of the Beaver Valley plant. The acquisition occurred via an "asset swap" with DLC in which FE and DLC exchanged full ownership of certain then-jointly owned assets. (Pearson Dep. at 573.) According to Pearson, during this process, FENOC contacted certain DLC management employees who were then working at theBeaver Valley plant—including Pearson—to determine if they wanted to continue to work at the plant as FENOC employees. (Id. 573-74.)

The first offer letter plaintiff received from FE was dated July 29, 1999. (Doc. No. 39-1 (July 29, 1999 Offer Letter ["1^st Offer Letter"]) at 705.) With respect to plaintiff's pension agreement with DLC, the letter provided:

You will receive the FirstEnergy benefits programs that are available to comparable non-union employees at FirstEnergy. However, based on your special pension benefit agreement with DLC, a modification as to how you are treated under the FirstEnergy pension benefit is as follows: If you are an employee of the Company as of December 31, 2001, your Company service for the purposes of calculating the supplemental pension benefit will be increased to seven (7) years. Additional pension service after that date will be determined in a manner consistent with other FE employees. This grant of additional service does not change the 5-year vesting requirement which in your case will be met on July 13, 2003.

(Id.)

At his deposition, plaintiff testified that he was disappointed when he received the first offer letter because it did not appear to take into account "the contract" he had with DLC. (Pearson Dep. at 579-80.) He set up a meeting with two employees of the Human Resources Department at FE—Steve Mileski and Bob Mucci—to further discuss the matter. (Id. at 580.) During the meeting, plaintiff discussed with the FE employees three aspects of the offer letter: (1) that it did not mention the severance agreement Pearson had negotiated with DLC; (2) that it did not include vacation time; and (3) that the "pension write-up was not the same as" the agreement with DLC. (Id.) With respect to the severance agreement, plaintiff advised Mileski and Mucci that it had to be added to the offer letter. As to vacation, plaintiff states that he was assured that whatever vacation he had with DLC would be carried over to his employment with FENOC. (Id.)

According to plaintiff, the three men spent the majority of the meeting talking about his pension benefits. (Id. at 581.) Plaintiff raised the fact that he did not believe that the terms contained in the offer letter assured him that he would receive the "two-for-one" service credit arrangement he had negotiated with DLC. Mucci essentially confirmed Pearson's conclusion. Mucci explained that, by December 31, 2001, plaintiff would have 7 years of service, by the end of 2002 he would add another year, and that by July, 2003 (the vesting date), Pearson would have another one-half year of service, giving him 8.5 years of credit. Plaintiff responded by complaining, "[t]hat doesn't give me 10 [years,]" noting that even if the additional time before the switch over to FE was included, he would only have 9 years and 9 months service by July, 2003. (Id. at 581-83.) The FE employees explained that the FE pension program was different, and that FE could not calculate the benefits the way it had been done at DLC. (Id. at 586.) Nonetheless, Mileski assured plaintiff that the way FE calculated bonuses would more than make up for any reduction in pension benefits. (Id. at 583.) Plaintiff concedes that he agreed to this because everyone associated with the plant was very busy with the switch over, and he did not want to deal with it, and because he did not plan on leaving FE in 2003. He, therefore, told Mileski, "Sounds good to me." (Id. at 583-84.)

Following the meeting, plaintiff received a second offer letter. This second written correspondence, dated August 23, 1999, indicated that its purpose was to "clarify the transition of certain entitlements granted to you by the Duquesne Light Company (DLC) . . . ." (Doc. No. 39-1 (Aug. 23, 1999 Offer Letter ["2^nd Offer Letter"]) at 706.) Unlike the earlier letter, this document specifically referenced severance and vacation benefits, but it contained the same language relative to pension benefits that was in the first letter. (Id.) Plaintiff concedes that thelanguage explaining the pension benefits, identical in both letters, was neither unclear nor ambiguous. (Pearson Dep. at 606-07³.)

Plaintiff made a handwritten addition to the August 23, 1999 letter. Immediately above his signature agreeing to the transition terms "as described" in the letter, plaintiff wrote:

Additionally, as discussed between Lew Myers and Marc Pearson on 8/30/99 when this letter was received, it is understood that FirstEnergy Corp. will enter into a contract with Marc Pearson when direstiture [sic] actually occurs. It is also understood that the severance package (one-year salary) will continue to exist, especially through the pension vesting date of July 13, 2003.

(2^nd Offer Letter at 707.) Plaintiff, however, did not handwrite any remarks about the pension benefits language. (See id.)

Pearson began his employment with FENOC shortly after receiving, and signing, the second offer letter. Later that year (November 1999), non-union employees of the Beaver Valley plant received a newsletter from FE welcoming the former DLC employees to the "FirstEnergy family[,]" and summarizing the various benefits to which they were entitled as FENOC employees. (Doc. No. 37-2 (November 1999 Newsletter ["1999 Newsletter"]) at 350.) During this same time period, all executive level employees—including plaintiff—received a document that contained a summary of the benefits available to executive level employees. (Doc. No. 37-4 (Summary of Compensation and Benefits Programs Available to Executive Level Employees ["Executive Letter"]), beginning at 362.) Among the benefits identified and discussed in the Executive Letter, was the Supplemental Pension Benefit mentioned in the offerletters.⁴ (Id. at 367.) Mileski offered un-contradicted deposition testimony to the effect that he, and the human resources department of FE, always endeavored to ensure that these types of documents accurately reflected the benefits available to employees, and further confirmed that the information in the Executive Letter was accurate. (Doc. No. 37 (Deposition of Steve Mileski ["Mileski Dep."]) at 263-67, 303-04.)

In October 2002, each FE employee received a personalized "FirstEnergy Compensation and Benefits Statement[,]' which "detail[ed each employee's] current plan features and how the value of [the employee's] benefits ha[d] grown." (Doc. No. 39-4 (2002 Personalized Annual Compensation and Benefits Statement ["2002 Ben. Stm."]) beginning at 723 and cover letter at 724.) Plaintiff remembered receiving this document, which provided that his age 65 accrued pension monthly benefit, as of September 1, 2002, was $1,069.00. (Id. at 731; Pearson Dep. at 619, 621.) While plaintiff thought this number would have been correct for a "normal employee," he assumed that his monthly accrued amount was higher because of his former arrangement with DLC.⁵ (Id. at 621-22.) Even though the document (and the letter attached...