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KELLY v. RETIREMENT PENSION PLAN FOR CERTAIN HOME OFFICE
July 11, 2002
THOMAS P. KELLY, PLAINTIFF,
RETIREMENT PENSION PLAN FOR CERTAIN HOME OFFICE, MANAGERIAL AND OTHER EMPLOYEES OF PROVIDENT MUTUAL, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Marvin Katz, District Judge
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Plaintiff Thomas Kelly ("Kelly") brings various claims against his
former employer, Provident Mutual Life Insurance Company ("Provident")
and its retirement plan, the Retirement Pension Plan for Certain Home
Office, Managerial and Other Employees of Provident Mutual. Kelly brings
a claim for pension credit for certain years of service; a claim for
disability retirement benefits; and claims of wrongful termination based
on age, disability, common-law retaliation, and breach of implied
After a bench trial, and upon consideration of the parties' pre-trial
and post-trial submissions, the court makes the following findings of
fact and conclusions of law:
Kelly has worked for Provident since 1981.
Prior to March 1, 1988, Kelly's employment was governed by various
written contracts specifying him as a "Special Agent" or an "Associate
Beginning March 1, 1988 Kelly was employed by Provident under written
contract as an Agency Manager. Kelly managed Agency 46, which was located
in Mt. Laurel, New Jersey and was established to market and sell
Provident insurance products.
An Agency Manager is required, inter alia, to travel offsite in order
to effectively recruit sales agents, to train and supervise field agents
and supervisors, and to conduct interviews for regulatory compliance
In March, 1993 Kelly injured his back in a snowmobile accident.
From immediately after the accident until October 4, 1993, Kelly was
physically absent from work and unable to do any work.
During his absence Kelly continued to receive salary payments from
During his absence Kelly began collecting long-term disability benefits
under Provident's long-term disability plan administered by UNUM Life
Insurance Company of America ("UNUM"). After Kelly returned to work, UNUM
discontinued his long-term disability benefits; Kelly eventually sued and
the parties settled in 1998, with the result that at least until the date
of this trial, Kelly continued to receive partial long-term disability
On October 4, 1993 Kelly began to work again on a very limited
By May or June of 1994, he was able to work approximately 30-34 hours a
week, a schedule that he maintained until he was terminated in 2000.
Kelly's injury precluded him from working the 60 hours per week that an
Agency Manager generally works. Before and after returning to work, Kelly
discussed his limitations on his working hours with Charles Cronin,
former Senior Vice President and a direct supervisor of Kelly's at that
time, who told him that such a reduction in hours was not a problem from
the company's perspective as long as Kelly managed to do his job.
As a result of his injury, Kelly was and remains unable to drive or sit
for extended periods of time, and the discomfort, pain and fatigue he
suffers is a constant distraction. His injury is a direct cause of his
inability to work at the pace and level that he worked at prior to having
the accident. Kelly is also limited in his ability to lift heavy
objects, ski, scuba dive, hike, golf, and perform general housework.
After returning to work until his termination in 2000, Kelly required
the assistance of Tom Leonards, a sales manager in his agency, to handle
most duties requiring offsite travel, especially recruitment. Kelly also
relied on Leonards to assist in other activities such as training and
Because they did not have faith in Leonards' abilities to recruit or
perform other managerial duties, Kelly's supervisors at times expressed
disapproval of the arrangement to Kelly and to Leonards. In 1997,
Leonards' salary was lowered as an incentive either for Leonards to
improve his recruiting skills or to encourage the replacement of Leonards
with a more skilled recruiter. However, Kelly either would not or could
not obtain a different recruiter, and personally made up the difference
in Leonards' salary when it was lowered by the company. Kelly's
supervisors were aware that Kelly wanted Leonards to continue recruiting
and that the arrangement remained ongoing despite
their disapproval. None
of Kelly's supervisors forced the arrangement to end, but rather the
supervisors tacitly permitted it to continue.
Kelly also required a clerical employee to assist him with any heavy
physical lifting, and requested and received from Provident a special
chair because of his back injuries.
In early January, 1999 Kelly was placed on probation. On February 22,
2000 Kelly was terminated as Agency 46 Manager. Kelly continues to work
30-32 hours per week as a sales agent for Provident.
Benefits Committee Decisions
Certain Provident employees are entitled to certain benefits under the
Retirement Pension Plan for Certain Home Office, Managerial and Other
Employees of Provident Mutual. Kelly introduced into evidence the version
of this document that was effective January 1, 1989 (the "Home Office
Plan"). Kelly did not assert at trial that that particular document in
fact governed the benefits decisions contested in this case, which were
made in 2000, but noted that he never received the appropriate documents
despite repeated requests made prior to and in connection with this
litigation. The Home Office Plan was the product of a merger of two
previously separate plans, the previous Retirement Pension Plan for Home
Office and Certain Other Employees and the Retirement Pension Plan for
Managers in Agency Offices Operated by the Company and Certain Other
Employees (the "Managers Plan").
The Home Office Plan has designated a Benefits Committee to exercise
certain powers and duties under the Plan, including discretionary
authority to make factual determinations and to resolve questions or
disputes relating to eligibility for benefits.
Because the plan vests the plan administrator or fiduciary the
discretionary authority to determine eligibility for benefits or to
construe the terms of the Plan, plaintiff may recover on his ERISA claims
only if the contested Benefits Committee's decisions were an abuse of
discretion. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115
(1989); Mitchell v. Eastman Kodak, 113 F.3d 433 (3d Cir. 1997).
Specifically, Kelly challenges the Benefits Committee's decisions to 1)
deny him pension credit for the years 1981 through March 1, 1988 and 2)
deny him a disability retirement date of either March, 1993 or February,
In order to find that a plan administrator's determination was an abuse
of discretion or arbitrary and capricious, the determination must be
found to have been "without reason, unsupported by the evidence or
erroneous as a matter of law." Mitchell, 113 F.3d at 439. Such a
determination must be made on the basis of the evidence that was before
the plan administrator when he made the decision being reviewed. Id. at
There is no dispute that from March 1, 1988 until his termination on
February 22, 2000, while Kelly was employed as an Agency Manager, he was
covered under the Home Office Plan and amended versions thereof.
However, by letter dated December 29, 2000, the Benefits Committee
denied Kelley's claim for credit for the years 1981 through March 1, 1988
for retirement benefit accrual purposes. This denial is the subject
matter of Count One in the instant litigation.
Section 3.2 of the Home Office Plan defines "Covered Employee" as,
inter alia, "an active, full-time Home Office employee (other than a
Regional Pension Manager, a Pension Consultant or a Pension Sales
Representative) on a regular annual salary basis as classified on the
Home Office payroll by the Home Office Administration," or "an active,
full-time Managerial Agency employee on a ...