Snow v. Borden, Inc.

• Decision Date: 06 October 1992
• Docket Number: Civ. No. 91-420-P-C.
• Citation: 802 F. Supp. 550
• Parties: Georgette SNOW, Plaintiff, v. BORDEN, INC., Defendant.
• Court: U.S. District Court — District of Maine

802 F. Supp. 550

Georgette SNOW, Plaintiff, v. BORDEN, INC., Defendant.

Civ. No. 91-420-P-C.

United States District Court, D. Maine.

October 6, 1992.

Philip Moss, Portland, Me., for plaintiff.

Francis Jackson, Portland, Me., for defendant.

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

GENE CARTER, Chief Judge.

In this six-count action, Plaintiff seeks various benefits from Defendant under the Employee Retirement Income Security Act of 1974 "ERISA", 29 U.S.C. § 1002 et seq., and 26 M.R.S.A. § 625-B and 626 (1988), governing severance pay and cessation of employment. Defendant has filed a motion for summary judgment on all counts. Plaintiff has filed a motion for partial summary judgment on counts I-V.

A motion for summary judgment must be granted if:

The pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Fed.R.Civ.P. 56(c). The Court of Appeals for the First Circuit has recently articulated the legal standard to be applied in deciding motions for summary judgment:

The movant must adumbrate `an absence of evidence to support the nonmoving party's case.' Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). When that is accomplished, the burden shifts to the opponent to establish the existence of a fact issue which is both `material,' in that it might affect the outcome of the litigation, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975), cert. denied, 425 U.S. 904 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976), and `genuine,' in that a reasonable jury could, on the basis of the proffered proof, return a verdict for the opponent. Anderson, 477 U.S. at 248 106 S.Ct. at 2510; Oliver v. Digital Equipment Corp., 846 F.2d 103, 105 (1st Cir.1988). It is settled that the nonmovant may not rest upon mere allegations, but must adduce specific, provable facts demonstrating that there is a triable issue. `The evidence illustrating the factual controversy cannot be conjectural or problematic; it must have substance in the sense that it limits differing versions of the truth which a factfinder must resolve at an ensuing trial.' Mack v. Great Atlantic and Pacific Tea Co., 871 F.2d 179, 181 (1st Cir.1989). As the Supreme court has said:

There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.

Anderson, 477 U.S. at 249-59 106 S.Ct. at 2510-15.

Brennan v. Hendrigan, 888 F.2d 189, 191 (1st Cir.1989).

The Court now looks to the supporting papers on the motions and the citations to materials of evidentiary quality in support of the issues which the Court must consider as a basis for its action upon the motions.

FACTS

The Court finds the following facts to be undisputed on the record made on the motions. Plaintiff worked as an hourly nonunion employee for Defendant from 1979 until April 9, 1990, at its plant in Pine Point, Maine. On April 9, 1990, Plaintiff injured her back at work. Plaintiff never returned to work for Defendant after this date. She received worker's compensation reimbursement from April 10, 1990 until February 24, 1992 when she settled her claim for a lump sum payment under the Worker's Compensation Act.

Defendant maintains various benefit plans including the "Employment and Benefits Upon Termination Plan"¹ ("Termination Plan"), which covers severance pay, and the "Total Family Protection Plan" ("Protection Plan"), which explains available medical and disability benefits. Plaintiff was within the class of employees covered by both plans and both plans are governed by ERISA. A summary plan description ("SPD"), explaining the benefits available under the Termination Plan and the appropriate procedures for receiving such benefits, was distributed to all employees.²

In January of 1990, Defendant announced to its Pine Point plant employees that it would be closing that plant later that year. At that time, Defendant distributed a one-page document entitled "Employee Retention Plan" ("Retention Plan") to employees at the plant. The first paragraph of the Employee Retention Plan states:

The following is a summary of payments and benefits offered in order to encourage you to remain with Borden's until we are prepared to terminate operations in Pine Point. In order to receive these, you must continue to perform satisfactorily, continue working until released by the company, and sign the company's standard release form.

The Plan then explains specific benefits available for those employees who stay on, including a stay bonus, severance pay, transfer opportunities, medical/dental extension, and earned unused vacation. The Retention Plan gives no further explanation of how to accept the benefits contained in this document.

In February of 1990, Catherine Carol DeMarco, Defendant's Employee Relations Manager, met with Plaintiff to answer questions she had concerning the Retention Plan. Plaintiff never negotiated with the Defendant with respect to the Retention Plan. Plaintiff did not ask that Defendant change any of the terms or conditions upon which the benefits in the Retention Plan were based, nor did she ask for more favorable treatment than that offered in the Plan.

On December 28, 1990, Defendant sent Plaintiff a letter denying her long-term disability benefits as of October 15, 1990. The letter instructed Plaintiff that if she wished to appeal, she had sixty days in which to do so, and "the request for review must include medical documentation (not previously sent) from her attending physician substantiating total disability beyond the claim termination date." Plaintiff's attorney sent a letter dated February 22, 1991, appealing the denial of Plaintiff's benefits and enclosing a long-term disability claim form signed by Plaintiff's doctor on November 6, 1990, certifying her continued inability to work.

By letter dated March 14, 1992, Defendant wrote to Plaintiff's attorney and explained that if Plaintiff wanted to appeal the denial of her long-term disability claim, she should submit "additional medical documentation ... along with a written request for an appeal to this termination." Neither Plaintiff nor her attorney ever replied to Defendant's March 14th letter, nor did either furnish additional medical documentation or further appeal the denial of benefits.

Regarding her general medical benefits, Plaintiff resubmitted her outstanding medical bills for payment by Defendant on June 25, 1992. Some of these bills were paid by Defendant's insurance company on June 29 and 30, 1992.

Plaintiff has alleged claims for severance pay, vacation pay, and medical benefits under the Retention Plan,³ and long-term disability benefits under the Termination Plan.

COUNT I

Plaintiff argues that the Retention Plan circulated by Borden on or about February 1, 1990, is a welfare benefit plan and as such is governed by ERISA.⁴ This Court will first examine whether the Retention Plan creates any duty on Borden's part to furnish the benefits described therein under ERISA.

A. ERISA APPLICATION

ERISA provides a cause of action under federal law to any participant or beneficiary of a benefit plan to recover benefits due under the plan, if the plan falls within the statute. 29 U.S.C. § 1132(a)(1)(B). The statute covers pension plans, 29 U.S.C. § 1002(2)(A), and welfare benefit plans, 29 U.S.C. § 1002(1). Welfare benefit plans include any plan, fund or program established or maintained by an employer for the purpose of providing certain benefits to its employees or their beneficiaries.⁵ In this action, the parties disagree as to whether or not the Retention Plan constitutes a "plan, fund or program" or a summary plan description ("SPD")⁶ and thus as to whether or not the benefits described within are governed by ERISA.

It is well established that a "plan, fund or program" under ERISA is established if, from the surrounding circumstances, a reasonable person can ascertain the intended benefits, a class of beneficiaries, the source of financing, and procedures for receiving benefits. Williams v. Wright, 927 F.2d 1540, 1543 (11th Cir.1991) quoting Donovan v. Dillingham, 688 F.2d 1367 (11th Cir.1982). Under this analysis, whether or not the Retention Plan constitutes an ERISA plan requires a "reasonable person" inquiry, hence it is a question of fact for the factfinder and, on this record, is an outstanding genuine issue of material fact.

B. PLAINTIFF'S ELIGIBILITY

However, even if the disputed facts were resolved such that a factfinder could find that the Retention Plan constituted a "plan, fund or program" under ERISA, Plaintiff appears ineligible for the benefits enumerated in the Plan as a matter of law.

The first paragraph of the Retention Plan explicitly limits benefit eligibility:

The following is a summary of payments and benefits offered in order to encourage you to remain with Borden's until we are prepared to terminate operations in Pine Point. In order to receive these, you must continue to perform satisfactorily, continue working until released by the company, and sign this company's standard release form (emphasis added).

Plaintiff argues that these words do not render her ineligible for the benefits because receiving worker's compensation constitutes continued "employment" by the company. Defendant counters that the words "continue working" mean actively continuing to work and are not interchangeable with the status of being employed. Defendant further asserts that its clear purpose in constructing the Retention Plan was to encourage employees to actively continue working at the plant in order for...