Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Dowman v. Chubb Corporation

United States District Court, D. New Jersey

June 11, 2018

CHUBB CORPORATION, et al, Defendants.


          PETER G. SHERIDAN, U.S.D.J.

         Plaintiffs Jonathan Needham and Walter Dowman appeal the Magistrate Judge's February 6, 2018 order, which denied Plaintiffs' request for limited discovery. The Court affirms the decision of the Magistrate Judge for the reasons set forth herein.


         This matter arises from a dispute over ERISA benefits between Plaintiffs and Defendants The Chubb Corporation, Bellemead Development Corporation, Halifax Plantation Golf Management, Inc., and the Retirement Administrative Committee. Both Needham and Dowman are employed at Halifax, a golf club located in Florida, and work as general manager and golf pro, respectively. (Complaint at ¶¶ 4-5, 8). Halifax is a wholly-owned subsidiary of Bellemead, which itself is a wholly-owned subsidiary of Chubb, a New Jersey-based property and casualty insurance firm. (Id. at ¶¶ 6-8).

         Plaintiffs contend that Chubb has created "sham" corporations "to wrongfully exclude employees from participating in the ERISA benefits plan offered to [Bellemead] and Chubb employees." (Id. at ¶ 8). According to the Complaint, Bellemead, as a real estate management company, managed Halifax's business operations. (Id. at ¶ 12). Specifically, "[Halifax] officers and/or directors were mainly management level employees of [Bellemead] or Chubb. Through these officers and directors, [Bellemead] and Chubb controlled the operations and management of [Halifax]." (Id. at ¶ 26). Plaintiffs also claim that "[Bellemead] employees worked right alongside [Halifax] employees, in some instances perform[ed] the exact same jobs under the direction and supervision of [Bellmead] management." (Id. at ¶ 15). According to the Complaint, when Plaintiff Needham was hired by Halifax in 1993, his "new hire coversheet" identified him as both a Bellemead and Halifax employee. (Id.). Similarly, while Plaintiff Bowman was considered a Halifax employee, he received his paychecks from Chubb. (Id. at ¶ 13).

         Apparently, from 1992 to February 1998, Halifax employees, including Plaintiffs, were paid by Bellemead. (ECF No. 32-1, "Bernstein Declaration" at 3). "Bellemead issued Plaintiffs' W-2 Forms, and their paychecks included the Chubb logo but listed Bellemead as the payor." (Id.). Beginning in March 1998, Halifax created its own payroll system, which paid their employees directly and, the following year, created the Halifax Plantation 401(k) Profit Sharing Plan & Trust, which Plaintiffs are participants of. (Id.).

         In March 2014, Needham was named President of Halifax. (Id. at ¶ 20). The following month, he learned that Bellemead employees were entitled to Chubb-sponsored employee plans that were not available to Halifax employees. (Id. at ¶¶ 21-23). Specifically, Bellemead employees were entitled to enroll in the Chubb Capital Accumulation Plan (hereinafter, "CCAP") and Employee Stock Ownership Plan (hereinafter, "pension plan"). (Id. at ¶ 23).

         Upon discovering these plans, on July 1, 2015, Plaintiffs submitted a claim with Chubb's Employee Benefits Committee (hereinafter, the "Committee"), declaring that they "were entitled to the rights and benefits of the [CCAP] or [the pension plan]." (Bernstein Dec. at 4). The Committee, as the plan administrator for both plans, and with vested discretionary authority, reviewed Plaintiffs' claim. (Id.). On December 29, 2015, the Committee denied Plaintiffs' claims for benefits. (Complaint at ¶ 34; ECF No. 32-3, "Dec. 29, 2015"). In this denial letter, the Committee explained to Plaintiffs that under both the CCAP and pension plan, only Eligible Employees and Participating Employers were entitled to participate in either plan. (Id.). However, because Halifax is not a Participating Employer, they were not entitled to benefits under either plan. In addition, the letter explained:

Regardless of whether Halifax employees are or were under the review, supervision and control of [Bellemead] or of Chubb, or whether they are deemed to be or reclassified as employees of [Bellemead] or another Affiliate of [Bellemead] or Chubb, such characterization or reclassification does not create an entitlement of benefits if Halifax is not a Participating Employer.


         On February 12, 2016, Plaintiffs appealed the Committee's adverse benefit determination. (Complaint at ¶ 34). Five months later, July 12, 2016, the Committee affirmed its denial of benefits. (Id. at ¶ 35; ECF No. 32-4 "July 12, 2016 Letter"). Again, the letter explained that while Plaintiffs were both employees of a Chubb subsidiary, because Halifax was not a Participating Employer under either plan, they were not entitled to benefits. (Id.). In addition, for the period before March 1998, during which Plaintiffs were paid on Bellemead's payroll, the Committee determined that they were still ineligible to participate in either plan. (Id. at 7). While Plaintiffs were on the payroll of a participating employer, Bellemead, the Committee explained:

[T]hat determination does not complete the Committee's analysis. The person must also receive "Compensation from the Employer." "Compensation" is defined in Section 1.10 as "the aggregate remuneration received by an Employee ... for Service with an Employer..." Section 1.9 defines "Service with an Employer" as "any period of employment... as an Employee of an Employer."
The language in these sections of the Pension Plan, in the Committee's view, reflect the bedrock requirement that an individual can be eligible to participate in the Pension Plan only if he receives Compensation from a participating Employer for services provided to that Employer.

(Id. at 7-8). The Committee next reviewed Plaintiffs' employment records, which included Halifax's "Weekly Timesheet Reports", "Salary Control Report, " "Employees by Department and Payroll" Report, "Employees by Department & Date Hired" Report, and "Employees by Department and Payroll" report. (Id. at 8). With ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.