Wentworth v. Digital Equipment CV-93-96-JD 11/28/95 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

John H. Wentworth

v. Civil No. 93-96-JD

Digital Equipment Corp.

O R D E R

The plaintiff, John H. Wentworth, brings this action under

the Employee Retirement Income Security Act of 1974 ("ERISA"),

et seg., against the defendant. Digital Equipment

Corporation ("Digital"), to recover benefits under the

defendant's severance plan. Before the court are the plaintiff's

motion for declaratory relief (document no. 25) and the

defendant's motion for summary judgment (document no. 30).

Background1

The plaintiff was hired in October 1976 and most recently

served as a Digital Services Unit Manager in the defendant's

Merrimack, New Hampshire, office. First Amended Complaint 55 4,

5. In December 1993, the plaintiff was informed that he had been

selected for involuntary termination under the defendant's

1The court's recitation of the facts relevant to the instant motion are either not now in dispute or have been alleged by the plaintiff. severance pay and benefits plan ("plan").

55 4, 14.

Employees were selected for termination according to certain

criteria involving an evaluation of the employee's past

performance as well as an assessment of the type and number of

jobs the defendant wished to continue to fund.

55 14, 15.

The plan entitled the plaintiff to receive more than $20,000 in

severance pay and benefits if he signed an agreement and a

release of claims against Digital before February 12, 1993.

5 47.

After learning of his selection for involuntary termination,

the plaintiff received a booklet entitled "Digital Transition

Financial Support Option Program (TFSO) -- Involuntary

Separation" ("TFSO summary"), which described the severance

benefits available to him under the plan. The TFSO summary

included a section entitled "TFSO and Your Benefit Claim Appeal

Process," which purported to outline the appeal process of the

plan. It stated:

If you believe that your rights have been violated under TFSO, you may file a written reguest for review which will act as a claim with the Plan Administrator within 60 days of the alleged violation. The administrator may be reached by writing [the U.S. Benefits Delivery Manager].

The Plan Administrator will decide whether to grant or deny your claim. You will receive a written reply advising you of the Plan Administrator's decision within 30 days after you file your reguest for review.

If your claim is denied, you will be given the particular plan provisions upon which the denial is based. This reply also will explain fully if there is any further action you may take to have your claim approved.

The reply also will inform you of an opportunity to request that the U.S. Employee Benefit Claim Appeal Committee review your denied claim. This request must be made in writinq within 60 days after you receive notice that your claim has been denied a final time.

TFSO summary at 18.

The plaintiff also at some point received a copy of the plan

document,2 which included a section containinq lanquaqe

substantially similar to that quoted above. Plan document art.

9. Appendix A to the plan document, entitled "Business Plan and

Selection Methodoloqy," described the means by which employees

could appeal their initial selection for involuntary termination:

Employees who object to the implementation of the selection process will be entitled to appeal the result with respect to themselves only to the U.S. Employee Benefits Manaqer under the Diqital Equipment Corporation Severance Pay and Benefits Plan, an ERISA severance plan, who can hear appeals from the selection results. The U.S. Employee Benefits Claim Appeal Committee will be the final appeal from any decision of the U.S. Employee Benefits Manaqer.

app. A, at 1.

At all times relevant to the dispute, the defendant's "open

door policy," which had been revised as recently as November

21he court uses the term "plan document" to refer to the written instrument by which the plan was created. The TFSO summary purported to be a summary of the plan document.

3 1991, was in effect. As it appeared in the Digital personnel

handbook, the policy provided:

It is the policy of Digital to provide a process for all employees that enables them to raise their problems and concerns to appropriate Digital resources, either inside or outside their organization, without fear of reprisal. It is also the Company's policy to reguire managers to provide clear, timely and final response to all issues raised by employees in accordance with this policy, or to elevate those issues to the appropriate resource within the Company. The overall objective of this policy is to continue to make Digital an outstanding place to work for all employees.

Affidavit of Carmelina Commito, August 5, 1994, attach. B

(Digital Personnel Policies and Procedures § 6.02 (November 4,

1991)). The company also distributed an intra-office brochure in

November 1991, entitled "An Enhanced Open Door Policy," which

included the following among its list of "Open Door Standards":

Open Door Managers will provide a written response to any issues, problems, suggestions, or concerns raised by an employee or will provide the employee with a status report with an expected completion date within 2 0 days.

Affidavit of John H. Wentworth, July 26, 1994 ("Wentworth

Affidavit"), Ex. A. The TFSO summary stated that employees could

exercise the open door policy during the nine weeks following

receipt of their notice of termination and that employees were to

"[c]ontact [their] TFSO Plan administrator to understand how to

gain access to the Open Door process." TFSO summary at 23

(anticipated guestions about the TFSO Program, no. 29).

4 On or about January 25, 1993, the plaintiff, who

sought to challenge his selection for termination rather than

accept the severance package, met with his open door policy

manager, John O'Donnell. The plaintiff expressed his concern

both verbally and in writing that the defendant had not followed

company procedure when selecting him for involuntary termination.

Wentworth Affidavit 55 45-46. However, O'Donnell did not inform

the plaintiff of other means of challenging his selection for

involuntary termination, and the plaintiff did not receive a

final response to his open door complaint before February 12,

1993, the deadline for accepting the severance package.

Supplemental Affidavit of John H. Wentworth, June 19, 1995,

55 6-11. The plaintiff never filed a claim with nor contacted

the plan administrator to appeal his selection for involuntary

termination. Affidavit of Anne Kiernan, Digital U.S. Benefits

Specialist, May 19, 1995.3 The plaintiff did not sign the

severance agreement and never received any severance benefits.

Wentworth Affidavit 55 40-48.

3The plaintiff repeatedly characterizes John O'Donnell as a "TFSO Administrator" and refers to his appeal to O'Donnell as an exercise of his rights under the defendant's "TFSO open door policy." These conclusory references are unsupported by the record. The plaintiff has adduced no evidence to challenge the plaintiff's affidavit indicating that O'Donnell was neither a plan administrator nor in any way connected with administering the appeal process under the plan. See Affidavit of Paul Cornelius, July 21, 1995.

5 Discussion

At the outset, the court must clarify the procedural

confusion that the plaintiff's pleadings have created. The

plaintiff's complaint seeks, inter alia, a "declaratory judgment

and ruling clarifying the plaintiff's right to plan benefits,

pursuant to ERISA § 5 0 2 ( a ) F i r s t Amended Complaint at 11.

Although § 502(a) permits beneficiaries to bring an action to

"clarify rights to future benefits under the terms of [an ERISA-

governed] plan,"

(a)(1)(B), the plaintiff's

"motion for declaratory relief" reguests declaratory relief under

(3), a provision that does not exist. Moreover,

to the extent that the plaintiff's "motion for declaratory

relief" is an attempt to amend or supplement the plaintiff's

first amended complaint, it has been filed in a manner

inconsistent with Rule 15. Despite these procedural

irregularities, however, the court has reviewed the allegations

and legal arguments advanced in the plaintiff's submissions and

considers them in conjunction with the plaintiff's objection to

the defendant's motion for summary judgment.

The defendant argues that it is entitled to summary judgment

because the plaintiff neither appealed his selection for

involuntary termination through the appropriate channels nor

signed the severance agreement before the applicable deadline.

6 and thereby forfeited his rights to receive severance benefits.

The plaintiff asserts that the defendant denied him a plan

benefit by failing to respond to his complaint under the Digital

open door policy, which the plaintiff contends was part of the

plan, and thus deprived him of his right to receive severance

benefits.4

The role of summary judgment is "to pierce the boilerplate

of the pleadings and assay the parties' proof in order to

determine whether trial is actually reguired." Snow v.

Harnischfeger Corp.,

(1st Cir. 1993) (guoting

Wynne v. Tufts Univ. Sch. of Medicine,

(1st

Cir. 1992), cert, denied, 113 S. C t . 1845 (1993)), cert. denied,

115 S. C t . 56 (1994). The court may only grant a motion for

summary judgment where 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

4The plaintiff appears to ground at least part of his theory of liability on his allegation that Digital breached its fiduciary obligations under ERISA § 509. See First Amended Complaint 5 53. However, his reliance on fiduciary liability is misplaced. The declaratory and eguitable relief that the plaintiff seeks is available without regard to the defendant's fiduciary responsibility. See

(a)(1)(B), (a)(3). Further, extracontractual damages based on breach of fiduciary duty, to the extent that the plaintiff seeks them, are not available to individual beneficiaries under § 509. See Massachusetts Mut. Life Ins. Co. v. Russell,

(1985) (recovery for violation of § 1109 inures to benefit of plan as whole).

7 material fact and that the moving party is entitled to a judgment

as a matter of law." Fed. R. Civ. P. 56(c). The party seeking

summary judgment bears the initial burden of establishing the

lack of a genuine issue of material fact. Celotex Corp. v.

Catrett,

(1986); Quintero de Quintero v.

Aponte-Rogue,

(1st Cir. 1992). The court

must view the entire record in the light most favorable to the

plaintiff, "'indulging all reasonable inferences in that party's

favor.'" Mesnick v. General Elec. Co.,

(1st

Cir. 1991) (guoting Griqqs-Ryan v. Smith,

(1st

Cir. 1990)), cert, denied, 112 S. C t . 2965 (1992). However, once

the defendant has submitted a properly supported motion for

summary judgment, the plaintiff "may not rest upon mere

allegation or denials of his pleading, but must set forth

specific facts showing that there is a genuine issue for trial."

Anderson v. Liberty Lobby, Inc.,

(1986) (citing

Fed. R. Civ. P. 56(e)).

ERISA reguires that all employee benefit plans be

established and maintained pursuant to a written instrument,

(a)(1) (West 1985), and communicated to

beneficiaries through a summary plan description ("SPD"),

§

1024 (West 1985 & Supp. 1995) . The written instrument

reguirement serves two of the primary goals of ERISA: informing employees of the benefits to which they are entitled, and

providing some degree of certainty in the administration of

benefits. See, e.g., Biqqers v. Wittek Indus.,

(4th Cir. 1993). These goals have formed the basis for courts'

strict adherence to, and refusal to modify, the express terms of

employee benefit plans. See, e.g.. Law v. Ernst & Young,

(1st Cir. 1992) (distinguishing between non-

actionable claims of estoppel based on oral representations that

modify benefit plans and actionable estoppel claims based on oral

representations that merely interpret existing terms of benefit

plans). Courts interpreting the provisions of ERISA-governed

benefits plans must use "common-sense canons of contract

interpretation," Rodriguez-Abreu v. Chase Manhattan Bank, N.A.,

(1st Cir. 1993) (guotation marks omitted), and

accept the plain meaning of unambiguous terms, Bellino v.

Schlumberger Technologies, Inc.,

(1st Cir.

1991) .

The policy goals reguiring strict adherence to the terms of

ERISA benefit plans also impose a restriction on the source of

terms that can form the contract between employer and

beneficiary. Absent fraud on the part of a fiduciary and

assuming the existence of an SPD or a plan document, materials

other than an SPD or a plan document cannot provide the terms of an employee benefit plan. See Aldav v. Container Corp. of Am.,

, 666 & n.15 (11th Cir. 1990), cert, denied,

(1991); Moore v. Metropolitan Life Ins. Co.,

(2d Cir. 1988). Where the SPD and plan document conflict, an

employee is entitled to rely on the terms of the SPD. E.g.,

McKniqht v. Southern Life & Health Ins. Co.,

(11th Cir. 1985); Kaiser Permanente Employees Pension Plan v.

Bertozzi,

(N.D. Cal. 1994); see also

Bachelder v. Communications Satellite Corp.,

(1st Cir. 1988).

The plaintiff's claim rests on his assertion that the

defendant denied him a benefit under Digital's severance plan --

an open door review of his selection for involuntary termination.

However, Digital promulgated its open door policy in its

personnel manual and in an intra-office brochure, rather than

through an SPD or a plan document. Further, the plaintiff has

not alleged fraud or the absence of an SPD or a plan document.

The court finds that the open door policy, as promulgated through

the Digital personnel manual and intra-office brochure, could not

have been a term of the employee benefit contract between the

plaintiff and the defendant.

However, the court also must look to the terms of the plan

to determine whether the plan included the open door policy.

10 Because the court finds the TFSO summary to be an SPD within the

meaning of

, it considers both the TFSO summary

and the plan document to discern the terms of the plan, resolving

any conflicts in favor of the TFSO summary.

The section of the TFSO summary entitled "TFSO and Your

Benefit Claim Appeal Process" and the analogous language in the

plan document clearly directed beneficiaries who felt that they

were denied their rights under the plan to contact the plan

administrator. The plaintiff has not argued that this section

permitted an aggrieved employee to file a claim through Digital's

open door policy. Accordingly, the court finds that this section

did not incorporate the defendant's open door policy.

The plaintiff argues that the specific appeals process set

forth in the TFSO summary applied only to beneficiaries who were

denied their rights to benefits, rather than those beneficiaries

who contested their selection for involuntary termination, and

that "the way initially to challenge being selected for TFSO

[was] through the TFSO Administrator and the open door review."

Plaintiff's Objection to Motion to Summary Judgment at 5. The

argument is unavailing. The plan document expressly stated that

employees wishing to challenge their selection for involuntary

termination were to do so through the plan administrator. This

reguirement was fully consistent with the appeal process set

11 forth in the TFSO summary, which at best was silent on the issue

of challenging the selection process for involuntary termination.

Moreover, the guestion-and-answer section of the TFSO summary

directed beneficiaries seeking to take advantage of the open door

policy to contact the plan administrator first. The court finds

that the plain language of the plan document reguiring that

appeals be lodged with the plan administrator is controlling, and

concludes that the plaintiff was not denied a plan benefit.

Because there is no genuine dispute that the plaintiff failed

either to contact the plan administrator or to sign the severance

agreement before the applicable deadline, the defendant is

entitled to judgment as a matter of law.

Conclusion

The defendant's motion for summary judgment (document no.

30) is granted. The plaintiff's motion for declaratory relief

(document no. 25) is moot. The clerk is ordered to close the

case.

SO ORDERED.

Joseph A. DiClerico, Jr. Chief Judge November 28, 1995 cc: Francis G. Murphy Jr., Esguire David C. Casey, Esguire Steven M. Gordon, Esguire

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