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Shook v. Avaya Inc.

September 16, 2009


The opinion of the court was delivered by: David Stewart Cercone United States District Judge

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Plaintiffs, Richard Shook ("Shook") and Karen A. Shook ("Karen")(collectively "Plaintiffs") filed this action against Defendant, Avaya, Inc. ("Avaya") under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., alleging a breach of fiduciary duty pursuant to 29 U.S.C. §§ 1132 and 1109*fn1 . The parties have filed cross- motions for summary judgment, responses have been filed and the motions are now before the Court.


Avaya is the sponsor and administrator of the Avaya, Inc. Pension Plan (the "Plan"). Plaintiffs' Statement of Undisputed Material Facts ("Pl. SUMF") ¶ 1. Shook is a former employee of Avaya, and a participant in the Plan. Id. ¶ 3. Shook was employed by Western Electric, a subsidiary of AT&T, Inc., from January 8, 1974, until February 26, 1982. During that time, Shook was a member of the Communications Workers of America Union (the "CWA"). Id. ¶ 5. Shook was employed by Octel Communications ("Octel") as a field service engineer from December 19, 1988 until August 31, 1998. Id. ¶ 6. Octel was purchased by Lucent Technologies ("Lucent") in 1997. Id. ¶ 7. From September 1, 1998 until he was laid off in October of 2005, Shook was employed by Lucent and Avaya*fn2 . Id. ¶ 9. During this time, Shook was a member of the CWA. Id. ¶ 8.

In September of 1998, Lucent entered into a Memorandum of Understanding with the CWA and the International Brotherhood of Electrical Workers (the "IBEW") which in relevant part stated: "[p]rior Octel service will count for eligibility toward vacation and sickness disability absence . . . [p]rior Octel shall count toward eligibility under the Pension Plan. For pension calculation purposes, a [Technical Assistance Coordinator or Field Service Coordinator]'s pension service date shall be no earlier than September 1, 1998." Administrative Record ("AR") p. 0286; Pl. SUMF ¶ 11 (Emphasis Added). By correspondence dated October 18, 1999, Shook was advised: "Since Octel is not a participant in the Lucent Technologies, Inc. Management Pension Plan . . . , your service will not be included in your Net Credited Service [NCS]*fn3 date. Accordingly, your [NCS] date will be 9/1/98." Pl. SUMF ¶ 13.

After filing a grievance, Shook received a letter from the Pension Service Center dated April 7, 2000, that stated in relevant part: ". . . for eligibility for vacation and for benefits under the [Lucent] Sickness and Accident Disability Benefit Plan . . . [in accordance with the] Memorandum of Understanding entered between Lucent and the CWA . . . it has been determined that your [Recognition of Prior Service] date will be effective retroactive to September 29, 1999. . . Your supervisor will need [this] information to determine your eligibility for vacation and benefits under the Lucent Technologies Inc. Sickness and Accident Disability Plan." AR p. 0237; Pl. SUMF ¶ 14 (Emphasis Added). On November 21, 2000, Shook received a letter the Pension Service Center that indicated his adjusted NCS date was 10/30/1980, for "eligibility for disability benefits and vacation." Pl. SUMF ¶ 15.

Based upon the November 21st letter, Shook met with his union representative to discuss possible layoffs at Avaya, and that, based on the NCS date of 10/30/80, Shook would be able to retire in November of 2005 with twenty-five (25) years of credited service, the requisite needed to receive a full pension. Id. ¶ 16. Shook contends that he and his wife used the November 21st letter as a basis for deciding that Karen should retire in November of 2003. Shook, however, did not request an estimate of his pension benefits prior to Karen's retirement. Shook Dep. pp. 36-37. Instead, Shook talked to co-workers and did his own calculations regarding his estimated pension benefits. Shook Dep. p. 37.

Shook did not request a Pension Plan Worksheet until December of 2004 when he learned he was going to be laid off. Id. ¶ 17. The worksheet he received from the Plan Administrator confirmed Shook's understanding that his NCS date was October 30, 1980, and as a result, his pension benefit would be $1,469.25. Id. The worksheet, entitled "About Your Benefit From the Pension Plan," was based on benefit service of twenty-four (24) years and four (4) months, and contained a clear disclaimer that the Avaya Plan controls in the event of any inconsistency between the pension benefit calculation and the Plan provisions. Pl. SUMF ¶ 18; Plaintiffs' Complaint Ex. D. Avaya discovered that the December 14th pension benefit calculation had incorrectly included Shook's Octel service, and thirteen (13) days later, sent Shook a revised pension benefit calculation. Pl. SUMF ¶ 18. The revised Pension Plan Worksheet, dated December 27, 2004, listed Shook's benefit service as fourteen (14) years and seven (7) months and a monthly benefit of $880.54. Pl. SUMF ¶ 18; Administrative Record ("AR") pp. 0259-0260.


Pursuant to FED. R. CIV. P 56(c), summary judgment shall be granted when there are no genuine issues of material fact in dispute and the movant is entitled to judgment as a matter of law. To support denial of summary judgment, an issue of fact in dispute must be both genuine and material, i.e., one upon which a reasonable fact finder could base a verdict for the non-moving party and one which is essential to establishing the claim. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). When considering a motion for summary judgment, the court is not permitted to weigh the evidence or to make credibility determinations, but is limited to deciding whether there are any disputed issues and, if there are, whether they are both genuine and material. Id. The court's consideration of the facts must be in the light most favorable to the party opposing summary judgment and all reasonable inferences from the facts must be drawn in favor of that party as well. Whiteland Woods, L.P. v. Township of West Whiteland, 193 F.3d 177, 180 (3d Cir. 1999), Tigg Corp. v. Dow Corning Corp., 822 F.2d 358, 361 (3d Cir. 1987).

When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In the language of the Rule, the nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." FED. R. CIV. P 56(e). Further, the nonmoving party cannot rely on unsupported assertions, conclusory allegations, or mere suspicions in attempting to survive a summary judgment motion. Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir.1989) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). The non-moving party must respond "by pointing to sufficient cognizable evidence to create material issues of fact concerning every element as to which ...

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