Sluimer v. Verity Inc
| Decision Date | 20 May 2010 |
| Docket Number | No. 09-15128.,09-15128. |
| Citation | 606 F.3d 584 |
| Parties | Hugo SLUIMER, Plaintiff-Appellee,v.VERITY, INC., a corporation; The Northern Verity Inc. Change in California, Control and Severance Benefit San Francisco Plan, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Gregory L. Doll, Doll Amir & Eley LLP, Los Angeles, CA, for the appellants.
William Reilly, Rimac Martin, PC, San Francisco, CA, for the appellee.
Appeal from the United States District Court for the Northern District of California, Susan Illston, District Judge, Presiding. D.C. No. 3:08-cv-01220-SI.
Before: PROCTER HUG, JR., PAMELA ANN RYMER and M. MARGARET McKEOWN, Circuit Judges.
We affirm for the reasons stated by the district court in its published opinion at 628 F.Supp.2d 1099 (N.D.Cal.2008), attached as Appendix A.
AFFIRMED.
APPENDIX A
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
HUGO SLUIMER, Plaintiff,
v.
VERITY INC, and THE VERITY, INC., CHANGE IN CONTROL AND SEVERANCE BENEFIT PLAN, Defendants.
The parties have filed cross-motion for summary judgment, and defendant has filed a motion to dismiss. Argument on the matter was heard on July 18, 2008. Having considered the arguments of the parties and the papers submit, the Court hereby DENIES defendant's motion and GRANTS IN PART plaintiff's motion for summary judgment.
This case raises the question of whether a former employee was properly denied benefits under a plan governed by the Employee Retirement Income Security Act (“ERISA”). The parties do not dispute the following facts. Plaintiff Hugo Sluimer was employed by defendant Verity, Inc., a computer software provider, from 1990 until december 2005, when defendant was acquired by Autonomy Company. In anticipation of a possible acquisition, defendants Verity created, in April 2005, a “Change in Control and Severance Benefit Plan” (“Plan”), which provided that if a Plan participant experienced a “covered termination” following a change in control, the participant would receive benefits such as a cash severance, accelerated stock option vesting, and continued medical benefits. See generally Kanter Decl. at ex. A. The Plan defined a “covered termination” as either an involuntary termination without cause or a voluntary termination after “a substantial reduction in the Participant's duties or responsibilities.” Id. at ex. a, §§ 2(g) & (f). The Plan labeled this latter termination a “constructive termination.” Id. On May 4, 2005, defendants informed plaintiff that he would be considered a participant in the Plan. Plaintiff confirmed his participation and both parties signed a notice indicating that plaintiff would not be eligible for any cash severance under the plan and that his entitlement to a cash severance would be determined under Dutch Law “without reference to the Plan.” Kanter Decl. at ex. B.
After Autonomy acquired defendant Verity, plaintiff was informed that he was at risk of termination unless suitable alternative position was identified. On January 5, 2006, Autonomy's chief operating officer, Andrew Kanter, contacted plaintiff and informed him that there likely would not be a similar position available for him at Autonomy; a few hours later, plaintiff's access to his company email address was terminated. Plaintiff, however, continued to receive his base salary for the next few months. on March 23, 2006, Kanter sent plaintiff a letter alerting him to an alternative position at Neurodynamics, an entity controlled by Autonomy. The letter did not contain many details about the new position, and over the next months or so plaintiff attempted to learn more about the position to determined whether it was comparable to his former position. Plaintiff now alleges, and defendant does not dispute, that the new position would have meant a significant reduction in the amount of revenue for which plaintiff was responsible, the number of employees plaintiff had managed, and the variety of duties and responsibilities with which plaintiff had been charged.
On april 19, 2006, plaintiff filed a lawsuit in a court in the netherlands seeking a cash severance benefit under Dutch law (not under the Plan).1 On June 7, 2006, the Dutch court issued an order declaring that the new position was not an “alternative suitable position,” terminating the employment relationship between plaintiff and defendant, and awarding plaintiff a cash severance of roughly one million euros.
During the pendency of the Dutch proceeding, sought a determination from the Verity plan administrator that he was entitled to benefits under the Plan. Plaintiff's letter of May 1, 2006, asked for a confirmation that he was addressed to Jack Landers, who plaintiff believed was the plan administrator. Kanter, not Landers, responded to plaintiff on May 3, 2006, stating that plaintiff was not entitled to benefits under the Plan because he had been offered “immediate reemployment” within the meaning of the Plan, had not confirmed in writing that he would be subject to Autonomy's confidentiality and non-compete agreements, as required by the Plan, and had not executed a waiver and release of claims against Autonomy, as required by the Plan. Kanter sent another letter on July 6, 2006, confirming that plaintiff's application for benefits had been denied. This letter stated the same grounds for denial as the May 3rd letter, but added that plaintiff had not suffered a “constructive termination” within the meaning of the Plan. On July 13, 2006, plaintiff requested a review of this decision and raised arguments regarding each of Kanter's grounds for denying benefits. On September 29, 2006, Kanter announced that he had reviewed the prior decision and it was upheld. Kanter also informed plaintiff that he had assumed the duties of the plan administrator because landers had recently left the company.
On February 29, 2008, plaintiff filed the instant action against Verity and the Plan. Plaintiff's complaint argued that he had been constructively terminated and thus entitled to benefits under the Plan, such as the accelerated vesting of stock options and continued medical benefits. Plaintiff also sought statutory penalties under § 502(c)(1) of ERISA for defendant's failure to produce documents related to the plan administrator's decision. Now before the Court are the parties' cross-motion for summary judgment, as well as defendant's motion to dismiss the complaint.
Summary judgment is proper “if the pleadings' depositions, answer to interrogatories, and admission on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law.” Fed R. Civ. p. material fact See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party, however, has no burden to negate or disprove matters on which the non-moving party will have the burden of proof at trial. The moving party need only point out to the Court that there is an absence of evidence to support the non-moving party's case. See id. at 325, 106 S.Ct. 2548.
The burden then shifted to the non-moving party to “designate specific facts showing that there is a genuine issue for trial.' ” Id. at 324, 106 S.Ct. 2548 (quoting Fed.R.Civ.P.(e)). To carry this burden, the non-moving party must “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). “The mere existence of a scintilla of evidence ... will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
In deciding a motion for summary judgment, the evidence is viewed in the light most favorable to the non-moving party, and all justifiable inferences are to be drawn in its favor; Id. at 255, 106 S.Ct. 2505. “Credibility determination, the weighing Of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge [when she] is ruling on a motion for summary judgment,” Id.
Currently before the Court is defendant's motion to dismiss or, in the alternative, motion for summary judgment, as well as plaintiff's motion for summary judgment. Defendant ask the Court to uphold the decision of the plan administrator deny plaintiff's claims for benefits under the Plan, while plaintiff ask the Court to find that he is eligible and entitled to receive. As an initial matter, the Court DENIES defendant's motion to dismiss. As discussed below, the Court also GRANTS plaintiff's motion for summary judgment and DENIES defendant's motion for summary judgment.
A threshold issue disputed by the parties is whether the Court should review Kanter's decision de novo or under the abuse of discretion standard. the Supreme Court has held that denials of benefits under ERISA are reviewed de novo by the district court “unless the benefits plan gives the administrator or fiduciary discretionary authority to determined eligibility for the benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). “[F]OR a plan to alter the standard of review from the default of de novo to the more lenient abuse of discretions, the plan must unambiguously provide discretion to the administrator.” Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir.2006)(en banc)(citing Kearney v. Standard Ins. Co., 175 F.3d 1084, 1090 (9th Cir.1998)). The parties do not dispute that the plan provides the administrator with...
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