Pearson v. Firstenergy Corp. Pension Plan

• Decision Date: 31 December 2014
• Docket Number: Case No. 5:14CV634.
• Citation: 76 F.Supp.3d 669
• Court: U.S. District Court — Northern District of Ohio
• Parties: Marc PEARSON, Plaintiff, v. FIRSTENERGY CORP. PENSION PLAN, et al., Defendants.

76 F.Supp.3d 669

Marc PEARSON, Plaintiff

v.FIRSTENERGY CORP. PENSION PLAN, et al., Defendants.

Case No. 5:14CV634.

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

Signed Dec. 31, 2014.

Daniel L. Bell, Akron, OH, for Plaintiff.

Christopher S. Williams, Jeffrey J. Lauderdale, Matthew A. Chiricosta, Calfee, Halter & Griswold, Cleveland, OH, for Defendants.

OPINION AND ORDER

SARA LIOI, District Judge.

Plaintiff Marc Pearson (“plaintiff” or “Pearson”) brought this action under the Employee Retirement Income Security Act (“ERISA”) against defendant FirstEnergy Corp. Pension Plan (“the Plan”) and defendant FirstEnergy Corp. Retirement Board, Plan Administrator (“the Plan Fiduciary”), asserting that he was improperly denied pension benefits. In his complaint, plaintiff raises three claims: (1) a denial of benefits claim, under 29 U.S.C. § 1132 ; (2) a breach of fiduciary duty claim, also under 29 U.S.C. § 1132 ; and (3) a refusal to provide information and documents claim, under 29 U.S.C. §§ 1024(b)(4) and 1132(c)(1)(B). Defendants move for dismissal of the breach of fiduciary duty claim and the refusal to provide documents claim (Doc. No. 9 [“MTD”] ). Plaintiff opposes the motion (Doc. No. 10 [“Opp.”] ), and defendants have filed a reply (Doc. No. 11 [“Reply”] ).

I. Background

According to the complaint, in mid–1998, Duquesne Light Company (“DLC”), a predecessor in interest to FirstEnergy Nuclear Operating Company (“FENOC”), recruited plaintiff for employment at its Beaver Valley generation plant. (Doc. No. 1 [“Compl.”] ¶ 7.) 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. It was plaintiff's understanding that he would receive a full pension from DLC upon attaining the age of 60, and that he would also receive a one-year severance package when he left the company. (Compl. ¶ 8.)

In July 1998, plaintiff commenced his employment with DLC, serving as the “Technical Assistant to the President, Generation Group and Chief Nuclear Officer.” (Id. ¶ 9, internal quotation marks omitted.) “In relation to his DLC employment, Pearson was promised and provided a ‘special retirement program’ by DLC, which DLC explained to Pearson[ ]was the vehicle for ensuring Pearson received two (2) years of service credit to be used to calculate his DLC pension.” (Id. ¶ 10.) The special retirement program required plaintiff to work for DLC for 5 years (until July 2003) in order to receive 10 years of service credit. (Id. ¶ 11.)

In 1999, DLC and FirstEnergy Corp. (“FE”) agreed to a transfer of certain power generating assets, including the Beaver Valley Power Station where plaintiff was employed. (Id. ¶ 14.) As part of the asset transfer, FE, through its subsidiary FENOC, provided written employment agreements to plaintiff and the other DLC employees affected by the transfer. The employment offer extended to plaintiff referenced the 2–for–1 service credit arrangement offered by DLC. Specifically, the agreement provided that if plaintiff was employed with FENOC until December 31, 2001, plaintiff would be vested with 7 years of service with FENOC. The agreement further provided that if plaintiff's employment with FENOC continued after December 31, 2001, plaintiff would earn service credit at the rate of 2 years for each year served, similar to the original agreement plaintiff had with DLC. (Id. ¶¶ 15–17.)

When negotiating with FENOC, plaintiff alleges that he advised FENOC that he had originally negotiated with DLC that he would reach 10 years of service credit upon his 5th anniversary with DLC (July 13, 2003). Plaintiff complained to FENOC representatives that the amount of service credit offered by FENOC would yield less than 10 years as of plaintiff's 5th anniversary. The FENOC representatives agreed with plaintiff that the current arrangement would only yield 9 years and 11 months of service credit as of July 13, 2003. Nonetheless, plaintiff was advised that the Plan contained an annual bonus that, even without the full 10 years of service, would earn plaintiff more than he would have earned under the DLC pension plan with 10 full years of service. (Id. ¶¶ 18–20.)

In late 2003, a restructuring at the Beaver Valley plant resulted in the reduction of the number of directors (the title held by plaintiff), and plaintiff entered into negotiations with FENOC regarding his separation package. Plaintiff accepted a separation package from FENOC, and his last day of employment was on or around November 22, 2003. In 2004, plaintiff signed a separation agreement, which provided for one year of separation pay. There is no dispute that plaintiff received his separation pay from FENOC. (Id. ¶¶ 21–22.)

Approximately six months after signing the separation agreement (still in 2004), plaintiff received a letter from FE informing plaintiff that he had met the pension plan requirements and would be receiving a full pension at age 60 due, in part, to the fact that plaintiff had achieved 10 years of eligible service credit. (Id. ¶ 23.) Beginning the following year (2005), plaintiff contacted the FE pension department on multiple occasions to determine the amount of his monthly pension benefit with FENOC at age 60. Each time he was advised that the pension department was too busy to make the calculation, and that the calculation would not be made until plaintiff was closer to his actual benefit commencement date in 2013. (Id. ¶¶ 24–25.)

It was not until January 25, 2013 that plaintiff was advised by letter from a representative of the Plan of the monthly pension amount. According to the letter, the amount was calculated assuming a benefit starting date of March 1, 2013. “Pearson took issue with FE's apparent effort to avoid the service credit enhancement it had promised him in 1999. In effect, FE wanted to apply the service credit enhancement to some pension plan previously unknown to Pearson, and short him his credit under the FE pension plan by not giving him credit for his service with DLC in addition to the credit for his service with FENOC. ” (Id. ¶¶ 27–28, emphasis in original.) Plaintiff objected by letter to the calculation of service credit. William Meader, who held himself out as the Plan Administrator, denied plaintiff's request for additional service credit under the Plan. (Id. ¶ 30.)

Plaintiff appealed Meader's decision to the Plan Fiduciary. In connection with his appeal, plaintiff sent an email to the Plan Fiduciary (via Meader) requesting “certain documents and information....” (Id. ¶ 53.) Meader refused to provide the requested material, which included “a copy of the Plan Fiduciary's prior decisions in the same or similar cases where a pension plan participant has alleged he was missing service credit under the Plan.” (Id. ¶ 54.) By letter dated September 25, 2013, the Plan Fiduciary issued its final denial decision to plaintiff. On March 23, 2014, plaintiff filed the present lawsuit. (Id. ¶ 32.)

In their motion to dismiss, defendants argue that plaintiff has “improperly attempted to re-package his benefits claim as one alleging a breach of fiduciary duty[.]” (MTD at 57.)¹ Under these circumstances, defendants insist that plaintiff's breach of fiduciary claim (count two) must be dismissed. They further assert that plaintiff cannot maintain his refusal to furnish documents claim (count three) because the documents plaintiff requested—copies of prior decisions involving appeals by other participants from service calculations under the Plan—are not among the categories of documents a plan or plan administrator is required to provide under ERISA. (Id. at 58.)

II. Standard of Review

In reviewing a complaint in the context of a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the court must construe the complaint in the light most favorable to the plaintiff and accept all well-pleaded material allegations in the complaint as true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Although a complaint need not contain “detailed factual allegations[,]” it does require more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action[.]” Id. at 555, 127 S.Ct. 1955. Thus, a complaint survives a motion to dismiss if it “contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quotation marks and citation omitted). And, “ ‘[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ ” Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 609 (6th Cir.2009) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.)

III. Discussion

A. Breach of Fiduciary Duty Claim

Plaintiff's complaint merely cites 29 U.S.C. § 1132 as the source for his denial of benefits claim (count one) and his breach of fiduciary claim. Section 1132(a)(1)(B) provides for a civil action by a plan participant or beneficiary “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan[.]” 29 U.S.C. § 1132(a)(1)(B). Section 1132(a)(3) provides for an action by a plan participant, beneficiary, or fiduciary “to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan,” or “to obtain other appropriate equitable relief to redress such violations or to enforce any provisions of this subchapter or the terms of the plan [.]” (internal numerals and letters omitted).

“A fiduciary must discharge his duties with respect to the plan ‘solely in the interest of the participants and beneficiaries.’ ” Haviland v. Metro. Life Ins. Co., 730 F.3d...