In addition to this Voluntary Plan, some evidence has been produced which indicates that as part of the OES process, Pylipow was asked to "explore" the possible use of involuntary severance plans. In the fall of 1994, Pylipow was requested by his "manager" to "get familiar with methods of downsizing a work force . . . ." (Pylipow Dep. at 34). In response to this request, Pylipow began to explore involuntary severance options which could be utilized in various areas of the company. Pylipow also discussed these involuntary severance options with in-house counsel. Pylipow, at the time he was researching possible involuntary severance plans, was unaware of the magnitude of any possible layoffs in the field sales force, first learning that information several weeks prior to his March 1995 vacation.
On February 3, 1995, Pylipow did present a severance proposal to the NAMT. The severance proposal was a comparison of involuntary severance packages at other companies with a proposal that Hallmark could utilize as soon as the divisions, including field sales, had completed their strategies for addressing work force reductions. The chart attached to the NAMT minutes of February 3, 1995 reflect that severance was only being considered at that point on an involuntary basis. There was no discussion at that meeting about a voluntary severance package. At this meeting, NAMT voted not to implement any involuntary plan because Hallmark was not certain that there would be a significant number of employee layoffs, and any consideration of an involuntary severance package was thus premature.
Ultimately, Hallmark did adopt an involuntary severance plan, entitled the Hallmark Marketing Corporation Field Sales Employee Severance Pay Plan ("Involuntary Plan"), after the adoption of the Voluntary Plan. Hupp distributed the first draft of the Involuntary Plan on April 3, 1995, along with the initial draft of the Voluntary Plan.
C. Plaintiff's Claim to Entitlement under the Voluntary Plan
In late April 1995, plaintiff became aware of the Voluntary Plan and wrote to Hallmark requesting that he be included in the Voluntary Plan.
By letter dated May 9, 1995, plaintiff was advised by Pylipow that he was not eligible for the Voluntary Plan. Pylipow enclosed a copy of the Summary Plan Description with his May 9 letter, and invited plaintiff to submit a letter explaining his claim pursuant to the Voluntary Plan's claims procedure. Plaintiff admits that he received Pylipow's May 9 letter and the Summary Plan Description.
On May 16, 1995, plaintiff wrote Pylipow a letter, setting forth his claim to benefits under the Voluntary Plan. In essence, plaintiff argued that as a life-long employee he should be entitled to participate in the Voluntary Plan due to the fact that Hallmark was considering the Voluntary Plan at the time he was still employed by Hallmark, especially in light of the fact that he had asked Herman whether Hallmark was considering any severance packages.
On June 5, 1995, Pylipow, acting as Plan Administrator, wrote plaintiff a letter in which he rejected plaintiff's claim to benefits under the Voluntary Plan. In his letter, Pylipow explained plaintiff's appeal rights under the Voluntary Plan. Plaintiff admits that he received this letter. Plaintiff did not appeal his claim to the Claims Board.
By letter dated February 16, 1996, counsel for plaintiff requested of Donald Hall and Pylipow that the prior decision be reconsidered. By letter dated March 14, 1996, plaintiff's counsel was advised by Hupp that plaintiff's renewed request was denied. In response, plaintiff filed suit against defendants in the Pennsylvania state courts, the law suit was subsequently removed to this Court.
In his Complaint, plaintiff asserts that the Voluntary Plan was under serious consideration prior to his retirement and/or prior to January 18, 1995, and that he was never advised of the pending Voluntary Plan. Plaintiff alleges he was improperly denied the right to participate in the Voluntary Plan and that defendants intentionally concealed information from him regarding the Voluntary Plan. As a result, plaintiff contends that he is entitled to benefits under the Voluntary Plan as well as damages and other relief for the following claims asserted under ERISA and state law: (1) Count I - discriminatory conduct under ERISA § 510, 29 U.S.C. § 1140; (2) Count II - breach of fiduciary duty under ERISA, 29 U.S.C. §§ 1104, 1109, 1132(a)(2); (3) Count III recovery of benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B); (4) Count IV - failure to provide information under ERISA, 29 U.S.C. §§ 1024(b), 1132(c); (5) Count V - state law fraud; and (6) Count VI - state law "other misrepresentation."
Defendants now move for summary judgment on Counts I-III and V-VI of plaintiff's Complaint pursuant to Federal Rule of Civil Procedure 56. In response, plaintiff argues that genuine issues of material facts exist as to each and every Count of his complaint; and as such, summary judgment is inappropriate. The Court will consider the parties' arguments seriatim.
II. Legal Standard
A reviewing court may enter summary judgment where there are no genuine issues as to any material fact and one party is entitled to judgment as a matter of law. White v. Westinghouse Electric Co., 862 F.2d 56, 59 (3d Cir. 1988). "The inquiry is whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one sided that one party must, as a matter of law, prevail over the other." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The evidence presented must be viewed in the light most favorable to the non-moving party. 862 F.2d at 59.
The moving party has the initial burden of identifying evidence which it believes shows an absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); Childers v. Joseph, 842 F.2d 689, 694 (3d Cir. 1988). The moving party's burden may be discharged by demonstrating that there is an absence of evidence to support the non-moving party's case. Celotex, 477 U.S. at 325. Once the moving party satisfies its burden, the burden shifts to the non-moving party, who must go beyond its pleading and designate specific facts by use of affidavits, depositions, admissions, or answers to interrogatories showing there is a genuine issue for trial. Id. at 324. Moreover, when the non-moving party bears the burden of proof, it must "make a showing sufficient to establish the existence of [every] element essential to that party's case." Equimark Commercial Fin. Co. v. C.I.T. Fin. Servs. Corp., 812 F.2d 141, 144 (3d Cir. 1987) (quoting Celotex, 477 U.S. at 322).
Summary judgment must be granted "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." White, 862 F.2d at 59 (quoting Celotex, 477 U.S. at 322). The non-movant must specifically identify evidence of record, as opposed to general averments, which supports his claim and upon which a reasonable jury could base a verdict in his favor. Celotex, 477 U.S. at 322. The non-movant cannot avoid summary judgment by substituting "conclusory allegations of the complaint . . . with conclusory allegations of an affidavit." Lujan v. National Wildlife Found., 497 U.S. 871, 888, 111 L. Ed. 2d 695, 110 S. Ct. 3177 (1990). Rather, the motion must be denied only when "facts specifically averred by [the non-movant] contradict "facts specifically averred by the movant." Id.
Holding the evidence in a light most favorable to plaintiff, the Court grants summary judgment in favor of defendants. There simply exist no genuine issues of material fact that would warrant sending this case to a jury. As a matter of law, defendants are entitled to judgment in their favor on Counts I-III and Counts V-VI. The Court's reasoning follows.
In Count II of his Complaint, plaintiff seeks recovery from the defendants based on the contention that Hallmark, as Plan Administrator under ERISA, breached its fiduciary duties under ERISA by failing to administer the Voluntary Plan solely in the interest of all participants, including himself.
In his Complaint, plaintiff contends that the defendants breached fiduciary duties to him through misrepresentations and omissions of material fact with respect to the Voluntary Plan based on plaintiff's allegations "that the [Voluntary] Plan was under serious consideration prior to [his] retirement and/or prior to January 18, 1995, however, [he] was never advised of the pending Plan." Defendants argue that they did not breach any fiduciary duties to plaintiff.
The Third Circuit has instructed that "'[a] plan administrator may not make affirmative material misrepresentations to plan participants about changes to an employee pension benefits plan. Put Simply, when a plan administrator speaks, it must be truthfully.'" Fischer v. Philadelphia Elec. Co., 96 F.3d 1533, 1538 (3d Cir. 1996) ("Fischer II ") (quoting Fischer v. Philadelphia Elec. Co., 994 F.2d 130, 135 (3d Cir. 1993) ("Fischer I ")). This rule of truthfulness is grounded in the "materiality of a plan administrator's misrepresentations." Id. This materiality standard is a mixed question of law and fact, focussing on whether "'there is substantial likelihood that [the misrepresentation] would mislead a reasonable employee in making an adequately informed decision about if and when to retire.'" Id. (quoting Fischer I, 994 F.2d at 135). Within the materiality inquiry there "'will be an inquiry into the seriousness with which a particular change to an employee pension plan is being considered at the time the misrepresentation is made.'" Id.
Thus, to maintain a claim for breach of fiduciary duty based on material misrepresentations or omissions regarding a proposed ERISA plan, the plan must have been under "serious consideration" at the time the misrepresentation was made. The Third Circuit has explained:
in any case where the misrepresentation in question is the statement that no change in benefits is under consideration, the only factor at issue is the degree of seriousness with which the change was in fact being considered.
Id. Under this scenario, the crux of the inquiry is serious consideration.
Serious consideration of a possible change to plan benefits is found to exist "when (1) a specific proposal (2) is being considered for purposes of implementation (3) by senior management with the authority to implement the change." 96 F.3d at 1539. To provide guidance to the district courts whom are charged with applying this "amorphous" standard of serious consideration, the Third Circuit in Fischer II expounded on the requirements of serious consideration in some detail.
With respect to the requirement that there exist a specific proposal, the Third Circuit stated that:
[a] specific proposal can contain several alternatives, and the plan as finally implemented may differ somewhat from the proposal. What is required, consistent with the overall test, is a specific proposal that is sufficiently concrete to support consideration by senior management for the purpose of implementation.