and he left those documents for his successor." Gramm Dep. at 41-42 & 43-44 (attached to Def. Ex. BB). Moreover, Bell Atlantic distributed early retirement materials to all Bell Atlantic managers, including those on rotation at Bellcore. Def. Ex. DD at 33, 64-65; Def. Ex. O at 13. In addition, and most important, Gramm concedes that as of November 1992 he was aware that under the 1992 FMP the early retirement discount was not waived and that it applied to him. Def. Ex. U P 14.
However, regardless of whether or not Gramm in fact had received written documentation advising him that his pension calculation would be subject to an early retirement discount, it is undisputed that defendants informed Gramm that his 100% cash-out amount would be discounted. Gramm received verbal confirmation of the discount (20) twenty days before his effective retirement date and only (8) eight days after he was told that he could retire under the 1992 FMP -- i.e., even though he had missed the December 7, 1992 deadline and filed the application on December 15. Moreover, when Geraldine Bell from the Claims Committee informed Gramm of the miscalculation on March 11, 1993, she also told him that he did not have to proceed with retirement and that he would be able to continue in Bell Atlantic's employ. Nevertheless, with full knowledge (as of March 15, 1993) that he would receive $ 488,885.57 rather than $ 543,203.54, Gramm chose not to change his plans and proceeded to execute formally his FMP Early Retirement Application on April 1, 1993. Therefore, given that Gramm knew before he retired that he would not receive $ 543,203.54 as his lump-sum distribution, he has not demonstrated to the Court the requisite reasonable detrimental reliance for an estoppel claim.
However, assuming, arguendo, that Gramm could prove that he reasonably and detrimentally relied upon the 100% cash-out figure of $ 543,203.54, his equitable estoppel claim fails because he cannot establish the defining element of an equitable estoppel claim under ERISA -- "extraordinary circumstances." See Kurz 96 F.3d at 1553 ("extraordinary circumstances" require a showing of "affirmative acts of fraud or similarly inequitable conduct by an employer" such that it appears that the employer sought to profit at the expense of its employees.); see also Jordan, 914 F. Supp. at 1191 ("reviewing the applicable precedent of our [Third Circuit] Court of Appeals, nothing short of demonstratable bad faith, affirmative misrepresentation or concealment of ERISA pension benefits or rights with knowledge that the participants or beneficiaries might be misled has sufficed to demonstrate the necessary 'extraordinary circumstances.'")
Here, Gramm has presented no evidence which supports an inference of bad faith and/or fraudulent conduct on the part of any defendant. Gramm claims that Bell Atlantic's "repeated" misrepresentations of his lump-sum cash-out amount rise to the level of bad faith to support a finding of "extraordinary circumstances". However, these alleged misrepresentations stem from the recirculation of a single document which Gramm happened to receive on three separate occasions: (1) when he received his first pension calculation via facsimile on November 23, 1992; (2) when he received the same document in the mail on December 17, 1992; and (3) when, in response to Gramm's inquiry about the IRS 415 Limits, the Claims Committee added the 415 Limits to the identical pension calculation summary sheet and sent it back to Gramm. Thus, Gramm has not presented a case of "repeated misrepresentations" by the defendants but rather the recirculation of a single document. In short, the miscalculation of Gramm's 100% cash-out amount was a simple, albeit unfortunate, mistake, which is devoid of any "extraordinary circumstances." Most important, Gramm learned of the discount calculation before he chose to retire. Finally, Gramm argues that he could not have returned to his position at Bellcore after making public his decision to retire on March 3; however, there is no evidence in the record to support this claim other than Gramm's bald assertions during his deposition. In sum, Gramm cannot recover under a principle of equitable estoppel against the defendants.
Accordingly, Gramm's equitable estoppel claim against the defendants is dismissed and summary judgment on this claim is granted to the defendants.
2. Breach of Fiduciary Duty
Although employers are not subject to ERISA's fiduciary duties, plan administrators under ERISA are required, among other things, "to discharge [their] . . . duties 'solely in the interests of the participants and beneficiaries."' Fischer, 994 F.2d 130 at 132 (quoting 29 U.S.C. § 1104(a)(1)); see also Bixler v. Cent. Pa. Teamsters Health-Welfare Fund, 12 F.3d 1292, 1299 (3d Cir. 1993). Indeed, "once an ERISA beneficiary has requested information from an ERISA fiduciary who is aware of the beneficiary's status and situation, the fiduciary has an obligation to convey complete and accurate information material to the beneficiary's circumstance." Id. at 1300.
However, a mistake in calculating pension benefits does not constitute willful misconduct or bad faith sufficient to support a breach of fiduciary duty claim. See Kuehl v. Chrysler Pension Plan, 895 F. Supp. 1147, 1155 (E.D. Wis. 1995) (dismissing plaintiff's breach of fiduciary duty claim based on alleged reliance on an erroneous credited service determination in taking early retirement because a breach of fiduciary duty requires wilful or bad faith conduct and all plaintiff could show was a mistake); see also Burke v. Latrobe Steel Co., 775 F.2d 88, 91 (3d Cir. 1985) ("Trustees do not breach their fiduciary duties by interpreting the [benefits] plan in good faith, even if their interpretation is later determined to be incorrect."); Bernatowicz v. Colgate-Palmolive Co., 785 F. Supp. 488, 494 (D.N.J. 1992) (Plaintiffs "have neither alleged nor produced any evidence of bad faith by [Defendant] . . . Plaintiffs here are attempting to take advantage of [Defendant's] mistake which, upon discovery, was quickly corrected."), aff'd, 981 F.2d 1246 (3d Cir. 1992); Totoro v. H.A. De Hart & Son. Inc., 1994 U.S. Dist. LEXIS 3970, No. CIV.A.92-3499, 1994 WL 114562, *4 (D.N.J. March 29, 1994) ('if a fiduciary makes a representation based upon a good faith, albeit erroneous interpretation [of the plan], ERISA's fiduciary provisions are not violated."), aff'd, 39 F.3d 1171 (3d Cir. 1994).
As with the analysis of equitable estoppel, the Court finds that a mistake in calculating pension benefits does not constitute the willful misconduct or bad faith sufficient to support a breach of fiduciary duty claim. Rather, the record makes clear that at all times the defendants acted in good faith, albeit at first mistakenly, when they provided Gramm with information about his retirement benefits. Accordingly, Gramm's breach of fiduciary duty claim is dismissed and summary judgment on this claim is granted to the defendants.
3. Money Damages
In Mertens v. Hewitt Assocs., 508 U.S. 248, 255-60, 124 L. Ed. 2d 161, 113 S. Ct. 2063 (1993), the Supreme Court concluded that money damages -- as opposed to equitable relief -- are not recoverable under 29 U.S.C. § 1132(a)(3) of ERISA. Rather, Section 1132(a)(3) authorizes a court to award only traditional forms of equitable relief, such as an injunction or an order providing for the restitution of ill-gotten gains from a breach of fiduciary duty. Id. at 256 ("equitable relief' refers "to those categories of relief that were typically available in equity (such as injunction, mandamus, and restitution, but not compensatory damages)."); see also Varity Corporation v. Howe, 516 U.S. 489, 116 S. Ct. 1065, 1076, 134 L. Ed. 2d 130 (1996) ("compensatory and punitive damages are not 'equitable relief' within the meaning of subsection three [--i.e., section 1132(a)(3) of ERISA.]"); In re Unisys Corp. Retiree Medical Benefit "ERISA" Litigation, 57 F.3d 1255, 1269 (3d Cir. 1995)
("retirees are not entitled to money damages for a breach of fiduciary duty.")
The same analysis regarding damages recoverable under section 1132(a)(3) of ERISA applies to claims for possible adverse tax ramifications which plaintiffs may seek for a breach of fiduciary duty claim under ERISA. Kemmerer v. ICI Americas Inc., 70 F.3d 281, 289 (3d Cir. 1995) ("it is difficult to see how such damages [adverse tax consequences arising out of a plan termination] can be regarded as claims for equitable relief under section 1132(a)(3).")
In this case, all of the relief Gramm prays for in his Complaint constitutes legal, not equitable, relief. In Count I, he seeks $ 54,37.97, representing the difference between the 100% lump-sum cash-out amount upon which he claims to have relied and the corrected pension calculation that he received on March 15, 1993. Although Gramm recognizes that he is entitled to recover equitable relief under Section 1132(a)(3)(B) of ERISA, he claims that the compensatory, money damages he seeks are "appropriate equitable relief" because the sums he requests are designed to restore him to the status quo ante. Pla. Brief at 24-26 (citing In re Uniys Corp., 57 F.3d at 1269 (deeming "equitable" plaintiff-retirees' request for restitutionary reimbursement for back benefits and restoration of the status quo by rescinding the retirees' retirement agreements)). In short, under the guise of equitable relief, Gramm is attempting to convince this Court to treat him as though he timely filed his FMP application, as though he was entitled to a lump-sum pension of $ 543,203.54 and as though this were a case where repeated and systematic misrepresentations were made to Gramm by individuals throughout Bell Atlantic and its various affiliates and/or related entities. However, given that Gramm did not file his FMP application on time and that all the evidence in this case shows that, although Gramm was given incorrect information, he was treated fairly and in accordance with Plan documents, Gramm is not entitled to recover monetary relief under Section 1132(a)(3) of ERISA.
In Count II of the Complaint, Gramm seeks to recover the $ 6,339.00 in additional taxes that he claims he would not have had to pay but for defendants' alleged delays in deciding that he could retire under the 1992 FMP. However, the same analysis applies to his claim for adverse tax consequences as applies to his claim for monetary relief. These are consequential damages which are simply unavailable under Section 1132(a)(3) of ERISA, regardless of how one characterizes the payment. Kemmerer, 70 F.3d at 289 ("it is difficult to see how such damages [adverse tax consequences arising out of a plan termination] can be regarded as claims for equitable relief under section 1132(a)(3).")
For the reasons stated above, defendants' motion for summary judgment is granted and plaintiff's cross-motion for summary judgment is denied.
JOSEPH A. GREENAWAY, JR., U.S.D.J.
Dated: November 5, 1997
This matter having been opened to the Court on a motion for summary judgment by Morgan Lewis & Bockius LLP, attorneys for defendants Bell Atlantic Management Pension Plan, Bell Atlantic Corporation, Bell Atlantic Network Services, Inc. and Bell Atlantic Separation Pay Plan and a cross-motion for summary judgment by Arthur C. Hopkins, Jr., attorney for plaintiff Walter P. Gramm; and the Court having considered the submissions of the parties, and good cause appearing,
IT IS on this 5th day of November, 1997,
ORDERED that defendants' motion for summary judgment be and hereby is granted; and
IT IS FURTHER ORDERED that plaintiff's cross-motion for summary judgment be and hereby is denied; and
IT IS FURTHER ORDERED that a copy of this Order be served on all parties within seven (7) days of the date of this Order.
JOSEPH A. GREENAWAY, JR., U.S.D.J.