The opinion of the court was delivered by: Hon. Jerome B. Simandle
This matter is before the Court on a motion by Defendant Total Petrochemicals USA, Inc., Pension Plan ("Defendant" or "The Plan") for summary judgment. [Docket Item 52.] The instant putative class action arises out of the Plaintiff Philip A. Dix's ("Plaintiff") election and receipt of a lump sum payment of his pension plan. Mr. Dix argues that his lump sum payment did not include the present value of any cost of living adjustments he would have received had he elected payment in the form of a monthly annuity. Consequently, after filing his administrative claim disputing this lump sum payment amount on December 7, 2009, Plaintiff brought this action, on behalf of himself and all others similarly situated, on June 23, 2010, against the Defendant pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(e), arguing that the Plan violated ERISA and several Internal Revenue Service regulations by failing to include cost of living adjustments in his lump sum pension payment. [Docket Item 1.]
The central issue presently before the court is whether Plaintiff's action was filed within the applicable statute of limitations period. The parties dispute which statute of limitations applies to this action as well as the accrual date of Plaintiff's claim.
For the reasons discussed below, the court concludes that a six-year statute of limitations applies and Plaintiff's cause of action accrued, at the latest, on November 14, 2003, when the Plan informed Mr. Dix of the final calculation of the disputed lump sum payment. His claim is time-barred because he did not file his administrative claim until December 7, 2009, outside the limitations period. Accordingly, the court will grant the Defendant's motion for summary judgment and dismiss Plaintiff's complaint.
Plaintiff Philip Dix filed this putative class action individually and on behalf of all others similarly situated. Plaintiff is a resident of New Jersey and began employment at Rohm & Haas Company ("Rohm & Haas") in 1967. (Def.'s Statement of Facts ¶ 1.) Plaintiff participated in the Rohm & Haas Pension Plan while he was employed with Rohm & Haas. (Def.'s Statement of Facts ¶ 2.) In 1994, Plaintiff received a Summary Plan Description ("SPD") from Rohm & Haas explaining his pension benefits. (Pl.'s Resp. to Def.'s Statement of Material Facts at ¶ 41.)
Subsequently, Plaintiff was employed by Elf Atochem, N.A., Inc. ("Elf Atochem") and ATOFINA Chemicals, Inc. ("Atofina") after corporate transactions and name changes. (Def.'s Statement of Facts ¶ 3.) Because Plaintiff's employer changed due to these corporate transactions, initially the Elf Atochem, N.A. Retirement Benefits Plan, later renamed ATOFINA Chemicals, Inc. Retirement Benefit Plan ("Atofina Plan"), and subsequently renamed the Arkema Inc., Retirement Benefits Plan, and ultimately the Total Petrochemicals USA, Inc. Pension Plan ("The Plan" or "Defendant") assumed the obligations of the Rohm & Haas Pension Plan as to Plaintiff and other participants. (Statement of Facts ¶ 4.)
On January 1, 2004, Plaintiff terminated his employment with Atofina by retiring under a special Early Retirement Incentive Program. (Statement of Facts ¶ 5, ¶ 8.) When Plaintiff retired, he was age 57 and 8 months. (Statement of Facts ¶ 6.) Under the Atofina Plan, "normal retirement date" was defined as "the first day of the month following the month in which the Employee attains age 65, or the date on which the Employee attains age 65 if such date is the first day of any calendar month." (Pl.'s Resp. to Def.'s Statement of Material Facts at ¶ 7; Def.'s Ex. 1, Atofina Chemicals, Inc. Retirement Benefits Plan at 4.) As part of the Early Retirement Incentive Program, the Plaintiff was permitted to retire early and take a pension and in addition, Plaintiff received an enhanced pension benefit that added 5 years to his age and/or years of credited service as well as additional supplements. (Rudd Decl., Ex. 2; Def.'s Statement of Material Facts ¶ 9.)
At the time Plaintiff terminated his employment, he was eligible for a pension benefit from the Atofina Plan, a portion of which was attributable to his prior employment at Rohm & Haas, and a portion of which was attributable to his later employment at Atofina. (Rudd. Dec. Ex. 2; Def.'s Statement of Material Facts ¶ 10.) Plaintiff had several options of how he could receive his Rohm & Haas pension benefit under the Atofina Plan, including different types of annuities or a lump sum payment. (Pl.'s Resp. to Def.'s Statement of Material Facts, ¶ 11.)
In a letter dated November 10, 2003, Plaintiff was informed by Defendant that his total lump sum payment was $505,495.00 with a payment date of January 1, 2004. (Pl.'s Ex. I.) This letter discussed the different payment options Plaintiff could elect to receive his Rohm and Haas pension, including annuities and a lump sum distribution. This letter also enclosed all the forms necessary for Plaintiff to elect his payment option, including a spousal consent form if he should elect a lump sum distribution. Id.
Plaintiff elected to receive his Rohm & Haas pension in the form of a lump sum payment, specifically, "a single payment of the actuarial equivalent present value of the benefit that [plaintiff] would otherwise be entitled to receive in the form of monthly annuity payments." (Pl.'s Resp. to Def.'s Statement of Material Facts ¶ 16.) In order to receive his pension in the form of a single lump sum payment, Plaintiff and his wife were required to sign a consent form. The consent form stated: I, Philip A. Dix (Participant), hereby consent, pursuant to Article IV of the ATOFINA Chemicals, Inc. Retirement Benefits Plan (the "Plan") to the Plan's distribution to me in a single payment of the actuarial equivalent present value of the benefit that I would otherwise be entitled to receive in the form of monthly annuity payments. I understand that by choosing my benefit in the form of a single payment, the Plan will be fully discharged of its obligations to me and to my spouse, and I (we) will have no right or entitlement to any future benefits from the Plan. (Pl.'s Resp. to Def.'s Statement of Material Facts ¶ 18; Pikofsky Dec. Ex. 5.) This consent form was executed by both Plaintiff and his wife before a notary public on November 14, 2003.
By November 24, 2003, Plaintiff received a Statement of Estimated Benefits that indicated his single lump sum payment from the Atofina Plan was estimated to be $505, 494.67. (Pl.'s Resp. to Def.'s Statement of Material Facts ¶ 17; Rudd Dec. Ex. 2.) This Statement of Estimated Benefits dated November 7, 2003, included a table explaining the "RandH accrued benefit" (Rohm and Haas Pension Plan) which specifically illustrated Plaintiff's various payment options for receiving his accrued benefit through different annuities or a lump sum. (Rudd Dec. Ex. 2.) Underneath this table, the following paragraph, with bolded language in the original, appears:
The portion of your pension benefit attributable to your RandH accrued benefit will be increased as of each March 31st subsequent to the later of your retirement or attainment of age 60. The amount of such increase will be the lesser of 3% or the increase in the CPI. You will not be entitled to this cost-of-living adjustment if you elect (with your spouse's written consent) to receive your RandH accrued benefit in the form of a lump sum.
Id. In addition to this Statement of Estimated Benefits, Plaintiff was provided with several prior statements of estimated benefits from July 31, 2001 through October 23, 2003, all of which included the above paragraph and bolded language. (Pl.'s Resp. to Def.'s Statement of Material Facts ¶ 17; Pikofsky Decl. Exs. 1-4.)
On November 24, 2003, Plaintiff and his wife signed a Retirement Benefits Request Form pursuant to the Early Retirement Incentive Program. (Rudd Decl. Ex. 2.) This signed form indicated Plaintiff elected to receive his Rohm & Haas benefit as a lump sum payment totaling $505,495.00. (Rudd Decl. Ex. 2.) This application was approved on December 17, 2003. (Rudd Decl. Ex. 2.)
The Atofina Plan sent a check for $505,495.00 to Prudential/Wexford Clearing Services ("Prudential") for deposit in Plaintiff's IRA account on January 2, 2004. (Pl.'s Ex. C.) Prudential received this check on January 12, 2004, after which it was credited to Plaintiff's IRA account. (Pl.'s Ex. C.)
Six years later, on December 7, 2009, Plaintiff filed an administrative claim with the Defendant complaining that his lump sum payment did not include the value of a cost-of-living adjustment ("COLA"). (Rudd. Decl. Ex. 2.) Specifically, Plaintiff made a "formal claim under the Total Petrochemicals USA, Inc., Pension Plan for miscalculation of his pension benefits." (Id. at 1.) Plaintiff argued that the "lump sum distribution the Atofina Plan paid Mr. Dix did not include the value of the COLA. . . . By failing to include the value of the COLA in Mr. Dix's lump sum distribution, the Plan failed to pay the present value of his normal retirement benefit, because the lump sum did not reflect the true value of the COLA-enhanced annuity he would otherwise have received at normal retirement age." (Rudd Ex. 2 at 3-4.)
The Defendant denied Plaintiff's administrative claim on April 5, 2010. (Pl.'s Resp. to Defendant's Statement of Material Facts ¶ 33; Rudd. Decl. Ex. 3.) On May 27, 2010, after corresponding with the Plan, Plaintiff filed an internal administrative appeal of the denial of his claim. (Pl.'s Resp. to Defendant's Statement of Material Facts ¶ 36; Rudd. Decl. Ex. 6.) On June 18, 2010, the Plan denied Plaintiff's appeal. (Pl.'s Resp. to Defendant's Statement of Material Facts ¶ 38; Rudd. Decl. Ex. 7.) Plaintiff received this denial on June 21, 2010. (Pl.'s Ex. F.)
Plaintiff then filed the instant lawsuit on June 23, 2010, on behalf of himself and all others similarly situated. [Docket Item 1.] In response, Defendant filed a motion to dismiss based on statute of limitations grounds. [Docket Item 11.] The court denied this motion because it incorporated documents outside the complaint and was procedurally improper. [Docket Item 19.] However, this denial was without prejudice to the Defendant refiling the motion as a motion for summary judgment. [Docket Items 19 and 20.] The parties then completed limited discovery on the statute of limitations issue. [Docket Item 23.] The Defendant then filed the instant motion for summary judgment arguing the complaint is untimely and barred by the statute of limitations. [Docket Item 52.]
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ.
P. 56(a). A dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is "material" only if it might affect the outcome of the suit under the applicable rule of law. Id. Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment. Id. The Court will view any evidence in favor of the nonmoving party and extend any reasonable favorable inferences to be drawn from that evidence to that party. Hunt v. Cromartie, 526 U.S. 541, 552 (1999). See also Scott v. Harris, 550 U.S. 372, 378 (2007) (The district court must "view the facts and draw reasonable inferences in the light most favorable to the party opposing the summary judgment motion.").
1. Applicable Statute of Limitations
The issue of the statute of limitations applicable to this action first arose on Defendant's motion to dismiss. In arguing this motion, both parties agreed that the longest applicable statute of ...