United States District Court, D. Massachusetts
BRIAN O'SHEA and MICHAEL O'SHEA, in his personal capacity, on his own behalf as Plan Beneficiary, and on behalf of other Plan Beneficiaries MEGHAN O'SHEA, JOHN O'SHEA, and COLLEEN O'SHEA, Plaintiffs,
UPS RETIREMENT PLAN, UNITED PARCEL SERVICE OF AMERICA, INC., UPS RETIREMENT PLAN ADMINISTRATIVE COMMITTEE, and DOE DEFENDANTS 1, 2, and 3, Defendants
For Brian O'Shea, through his Executor Michael O'Shea, Michael O'Shea, In his personal capacity, on his own behalf as Plan Beneficiary, and on behalf of Brian O'Shea Other Plan Beneficiaries, Meghan, John & Colleen O'Shea, Plaintiffs: Stephen D. Rosenberg, LEAD ATTORNEY, The Wagner Law Group, Boston, MA.
For UPS Retirement Plan, United Parcel Service of America, Inc., UPS Retirement Plan Administrative Committee, Defendants: J. Timothy McDonald, LEAD ATTORNEY, PRO HAC VICE, Thompson Hine LLP, Atlanta, GA; James F. Radke, Murtha Cullina LLP, Boston, MA.
FINDINGS OF FACT AND RULINGS OF LAW
WILLIAM G. YOUNG, UNITED STATES DISTRICT JUDGE.
Brian O'Shea (" O'Shea" ) worked as an employee of the United Parcel Service (" UPS" ) for nearly four decades. After falling ill, he elected to retire and chose a retirement plan that would guarantee monthly payments to his children for ten years. Although he stopped working on January 8, 2010, he was to remain an active employee of UPS until February 28 due to his accrual of vacation days. Unfortunately, O'Shea died on February 21, one week before the date on which his retirement annuity was slated to start. Under the terms of UPS's retirement plan (the " Plan" ), the committee in charge of pension decisions denied O'Shea's children any retirement benefit payments on the ground that O'Shea was not actually retired at the time of his death. Following an internal appeal, O'Shea's son Michael (the " Plaintiff" ) now sues UPS, the UPS Retirement Plan, the UPS Retirement Plan Administrative Committee (the " Committee" ), and three unnamed individuals (collectively, the " Defendants" ) in his personal capacity and as executor of O'Shea's estate, alleging violations of the Employee Retirement Income Security Act (" ERISA" ). The parties agreed to resolve the suit at a case stated hearing.
This case began when the Plaintiff filed his complaint before this Court on February 20, 2014. Compl., ECF No. 1. The Defendants moved to dismiss Count II of the complaint (regarding an alleged breach of fiduciary duty) with prejudice on May 27, 2014. Mot. Dismiss Count II Compl. With Prejudice, ECF No. 12; Defs.' Mem. Supp. Mot. Dismiss Count II Compl. With Prejudice, ECF No. 13. The Defendants also filed their answers to the complaint
that same day. Answer Defs. UPS Retirement Plan & UPS Retirement Plan Admin. Committee, ECF No. 14; Answer Def. United Parcel Service Am., Inc., ECF No. 15. The Plaintiff filed a memorandum in opposition to the motion to dismiss on July 1, Pl.'s Opp'n Defs.' Mot. Dismiss Count II Compl., ECF No. 20; the Defendants replied on July 11, Defs.' Reply Mem. Supp. Their Mot. Dismiss Count II With Prejudice, ECF No. 23; and the Plaintiff filed a sur-reply on July 28, Pls.' Sur-Reply Defs.' Mot. Dismiss, ECF No. 27. On July 31, 2014, this Court heard oral argument and granted the Defendants' motion to dismiss Count II. Elec. Clerk's Notes, July 31, 2014, ECF No. 31.
At that same hearing, the parties agreed to have Count I of the complaint -- a claim for benefits under ERISA -- resolved at a case stated hearing. Tr. 9:14-11:4, ECF No. 32; see also Joint Mot., ECF No. 36; Consent Parties, ECF No. 41. On November 6, 2014, the Defendants filed with this Court copies of the Plan, Notice Filing Plan Related Docs. Def. UPS Retirement Plan, Ex. A, UPS Retirement Plan (" UPS Plan" ), ECF No. 39-1;  the Summary Plan Description (the " Summary" ), Notice Filing Plan Related Docs. Def. UPS Retirement Plan, Ex. B, UPS Retirement Plan Summary Plan Description (" UPS Summary" ), ECF No. 39-7; and the administrative record of the Plaintiff's initial claim and the internal appeal of that claim's denial, Admin. Claim File (" UPS Admin. R." ), ECF No. 40. The Plaintiff filed a motion for judgment as a case stated, a memorandum in support of this motion, and a statement of material facts on December 5, 2014. Pls.' Mot. J. Case Stated, ECF No. 43; Pls.' Mem. Supp. Mot. J. Case Stated (" Pl.'s Mem." ), ECF No. 44; Pls.' Statement Undisputed Material Facts Supp. Case Stated Mem. (" Pl.'s Facts" ), ECF No. 45. The same day, the Defendants filed a motion for judgment and an accompanying memorandum in support. Mot. J. Count I Compl., ECF No. 46; Defs.' Mem. Supp. Mot. J. (" Defs.' Mem." ), ECF No. 47. On December 19, each side filed a response in opposition to the other side's motion. Pls.' Opp'n Defs.' Mot. J. (" Pl.'s Opp'n" ), ECF No. 48; Defs.' Resp. Opp'n Pls.' Mot. J. (" Defs.' Opp'n" ), ECF No. 49. The Defendants also filed a response to the Plaintiff's statement of undisputed material facts. Defs.' Conditional Resp. Pl.'s Statement Undisputed Material Facts Supp. Case Stated Mem. (" Defs.' Facts" ), ECF No. 51. The case stated hearing took place on January 8, 2015. Elec. Notice Hr'g, ECF No. 54.
II. FINDINGS OF FACT
A. Terms of the Plan
For the sake of convenience, all the relevant terms (and portions thereof) of the Plan that are discussed in this memorandum are reproduced here. The two most salient provisions are in bold.
Section 4.1 - Application for Benefits. Each Participant shall make written application to the Committee, or its designated representative, for Retirement Benefits, other than a Disability Benefit,
under this Plan at least sixty (60) days, but not more than ninety (90) days, prior to the first day of the month on which the benefits applied for are to be paid, on a form or forms to be provided by the Committee for this purpose.
Section 4.3 - Early Retirement Benefit for Final Average Compensation Formula and Pre-2006 Motor Cargo Formula. A Participant who attains his Early Retirement Date while in the active employ of an Employer Company and all Related Employers, and who retires at any time thereafter and prior to his Normal Retirement Date, may elect to receive an Early Retirement Benefit in an amount determined under Section 5.2(b), commencing on the first day of any month coincident with or immediately following his termination of employment with an Employer Company and all Related Employers, provided he has complied with the application provisions of Section 4.1.
Section 5.2(b)(ii) - Early Commencement. A Participant who is eligible for an Early Retirement Benefit under [the preceding subsection] may commence such benefit at any time on or after he terminates employment with all Employer Companies and Related Employers and before his Normal Retirement Date provided that the amount of such benefit shall be reduced for early commencement in accordance with [numerous guidelines].
Section 5.4 - Benefit Payment.
(b) Election out of Normal Form of Benefit or Qualified Joint and Survivor Annuity. In lieu of the Normal Form or the Qualified Joint and Survivor Annuity, a Participant who is eligible for an annuity form of benefit, may elect, at any time within the 90-day period ending on the Annuity Starting Date, to waive the Normal Form or the Qualified Joint and Survivor Annuity in favor of one of the Actuarial Equivalent Optional Forms of Benefit described below.
(d)(iii) Single Life Annuity with 120-Month Guarantee. Under the Single Life Annuity with 120-Month Guarantee, a reduced monthly benefit shall be paid to the Participant for his lifetime, with a guarantee of 120 monthly payments. If the Participant dies after the Annuity Starting Date but before receiving 120 monthly payments, the monthly payments shall be paid to the Participant's Beneficiary, until the Participant and his Beneficiary have received a total of 120 monthly payments .
Section 5.6 - Preretirement Survivor Annuity.
(a) Final Average Compensation Formula or Pre-2006 Motor Cargo Formula. If a vested Participant dies prior to his Annuity Starting Date, his Spouse or Domestic Partner will be entitled to receive a Preretirement Survivor Annuity for that portion of his benefit attributable to the Final Average Compensation Formula and Pre-2006 Motor Cargo Formula commencing:
(i) if the Participant dies after attaining his Earliest Commencement Age, as of the first day of the month coincident with or next following the date of the Participant's death; and
(ii) if the Participant dies on or before attaining his Earliest Commencement Age, as of the first day of the month coincident with or next following the date the Participant would have attained his Earliest Commencement Age[.]
(b) Amount of Preretirement Survivor Annuity for Final Average Compensation Formula or Pre-2006 Motor Cargo Formula. The Preretirement Survivor
Annuity to which the Participant's surviving Spouse or Domestic Partner shall be entitled hereunder shall be equal to, for a surviving Spouse, the amount which would have been payable to the Participant's Spouse under the Qualified Joint and Survivor Annuity or, for a Domestic Partner, the Joint and 50% Survivor Annuity[.]
Section 9.3 - Power to Establish Regulations. The Committee shall establish rules and regulations for the administration of the Plan and the Committee. Except as otherwise herein expressly provided, the Committee shall have the exclusive right to interpret the Plan and decide any matters arising in the administration and operation of the Plan, and any interpretations or decisions so made shall be conclusive and binding on all persons; provided, however, that all such interpretations and decisions shall be applied in a uniform manner to all Employees and Participants similarly situated.
UPS Plan 38, 44, 60, 62, 64, 82. There are also three relevant provisions in the Summary:
Single Life Annuity With 120-Month Guarantee
The Single Life Annuity with 120-Month Guarantee pays you a reduced monthly benefit for your life with a guarantee of payments for a period of 10 years. If you die before the 10-year guarantee period ends, your beneficiary continues to receive the same benefit amount for the remainder of the guarantee period. If you live beyond the guarantee period, you continue to receive payments for your lifetime. However, since you outlived the guarantee period, your beneficiary will not receive a benefit after your death.
If You Die Before You Retire
If you die after you become vested in your Plan benefit but before your retirement benefit begins, your surviving spouse or surviving Domestic Partner (determined as of the date of your death) may receive a monthly benefit from the Plan.
Your spouse or Domestic Partner will be eligible to receive 50% of the benefit you were entitled to receive under the Qualified Joint and Survivor Annuity (Joint and 50% Survivor Annuity for a Domestic Partner) as if you had terminated your employment on the date of your death or actual termination, if earlier. Your spouse's or Domestic Partner's ...