United States District Court, M.D. Pennsylvania
ROBERT D. MARIANI, District Judge.
In this lawsuit, Plaintiff Thomas Hendrian brings federal claims under ERISA against his former employer and its pension plan. Presently pending before the Court is Defendants' motion for summary judgment. For reasons set forth below, the motion is denied.
II. PROCEDURAL HISTORY
Plaintiff Thomas Hendrian commenced this action on March 26, 2013, by filing a complaint against Defendants AstraZeneca Pharmaceuticals, LP, and AstraZeneca Defined Benefit Pension Plan. (Doc. 1). Hendrian alleges federal causes of action under the Employee Retirement Income Security Act of 1974. Defendants filed an answer on May 28, 2013. (Doc. 7). On February 10, 2014, Defendants moved for summary judgment. (Doc. 18). Supporting materials were submitted the same day. ( Id. ). Plaintiff timely filed opposition materials on February 28, 2014. (Docs. 19, 20). Defendants submitted a reply brief on March 17, 2014. (Doc. 21).
III. STATEMENT OF UNDISPUTED FACTS
The following statement of undisputed facts is drawn from Defendants' statement of facts (Doc. 18-2), Plaintiffs counterstatement of facts (Doc. 19), and the underlying documents. The facts are set forth in the light most favorable to Plaintiff, the non-moving party.
Plaintiff Thomas Hendrian was employed by Defendant AstraZeneca Pharmaceuticals LP as a sales representative until termination of his employment in February of 2009. (Doc. 18-2, ¶ 1). Due to his age and years of service, Hendrian was immediately eligible for early retirement benefits under the terms of the AstraZeneca Defined Benefit Pension Plan (the "Plan"). (Doc. 18-2, ¶ 2). In October of 2009, Hendrian notified the AstraZeneca Benefits Center of his intent to receive benefits commencing January 1, 2010. (Pl. Dep., pp. 30:19-31:8, Doc. 19-2, Ex. A). At the time, Hendrian believed that Mercer was the plan administrator, and that when dealing with the AstraZeneca Benefits Center he was actually dealing with Mercer. ( Id. at 31:18-32:17). On October 13, the AstraZeneca Benefits Center sent Hendrian a Benefit Notice and Election Package. ( Id. ; Election Package, Doc. 18-3, Ex. C).
The Election Package explained the various forms of benefits options available to Hendrian. ( Id. ). The cover letter advised that the included benefit calculations could differ from the final benefit calculation depending on Hendrian's final pay, his last day of employment, and actuarial assumptions. ( Id. at 1). The letter further advised Hendrian that he would be notifled of any resulting change in benefits no later than six months after his last day of employment. ( Id. ). The Election Package included a section entitled "Explanation of Pension Options" that informed Hendrian the "Legacy Zeneca Pension Plan benefit formula" had been used to calculate his benefits. ( Id. at 8). That section instructed Hendrian to refer to the Summary Plan Description for additional details on provisions affecting his benefits. ( Id. ).
After discussing and comparing the various forms of benefits with his wife, Mari Hendrian, Hendrian made a decision based on his need for fixed income and his desire to protect his wife should he predecease her. (Pl. Dep., p. 33; M. Hendrian Dep., p. 12:1-6, Doc. 19-3, Ex. B). When making his election, Hendrian never performed an exact benefit calculation that took into account the actuarial variables. (Pl. Dep., p. 38). Instead, Hendrian evaluated the options and checked the calculations in the Benefits Package by verifying the accuracy of employment data used to derive the benefit estimates. ( Id. ). Hendrian never looked at the actual Plan documents or discussed his benefits with anyone at AstraZeneca prior to making his election. ( Id. at 39-41).
Hendrian ultimately elected the "Level Income with Social Security at Age 65 with 100% Joint and Survivor Annuity" form of benefit. (Pl. Dep., pp. 32-33). He did so by signing and returning the "Pension Options Form." (Pension Options Form, Doc. 18-3, Ex. D). The Pension Options Form stated that Hendrian's rights and benefits were contingent upon the terms and conditions of the Plan and that his completion of the form did not guarantee an entitlement to benefits under the Plan. ( Id. ). That form reiterated that the stated benefit amounts had been determined under the Legacy Zeneca Pension Plan benefit formula and were subject to a final recalculation. ( Id. ). Under the selected form of benefit payment, Hendrian's estimated monthly benefits were $3, 828.67 until age 65 and $1, 745.67 thereafter with a $2, 439.41 monthly annuity payment to Ms. Hendrian in the event he predeceased her. ( Id. ). On January 8, 2010, the AstraZeneca Benefits Center informed Hendrian that benefits would commence in the above stated amounts. (Verification Letter, Doc. 18-3, Ex. F). Hendrian thereafter began to receive monthly payments in the amount of $3, 828.67. (Doc. 18-2, ¶ 10).
In 2010, AstraZeneca hired a consulting firm to conduct compliance and operational reviews of the Pension Plan to make sure that Mercer was administering the Plan in accordance with its terms. (Wersinger Dep., p. 7, Doc. 18-3, Ex. G). In April of 2011, these reviews uncovered a number of overpayments and underpayments. ( Id. at 7-8). The following year, Mercer implemented a program designed to check the accuracy of its pension calculations. ( Id. at 10). In June of 2012, that program identified problems with the calculations of certain Level Income Option benefits. ( Id. at 11-12). Contrary to the terms of the Plan, the actuarial equivalence factor used to calculate Hendrian's benefits was based on a 5% interest rate rather than historic bond yields. ( Id. ; Doc. 18-3, Ex. A, § 1.2, Am. No. 3).
In a letter dated October 9, 2012, the AstraZeneca Benefits Center notified Hendrian that his benefits had been miscalculated resulting in a $72.18 monthly overpayment. (Overpayment Notification, Ex. 18-3, Ex. I). The survivor benefit payable to Mari Hendrian was not changed. ( Id. ). The letter informed Hendrian that he could either return the cumulative overpayment amount of $2, 309.61 by November 5 or allow his future payments to be further reduced. ( Id. ). In a response addressed to the AZ Benefits Center, Hendrian disputed his liability for any overpayments and objected to any reduction in his monthly benefits. (Doc. 18-3, Ex. K). On November 5, 2012, AstraZeneca rejected Hendrian's objection but allowed him an additional thirty days to submit a check for the entire amount of the overpayment. (Doc. 18-3, Ex. L). Hendrian retained counsel and appealed the matter to the AstraZeneca Administration Committee by letter dated November 30, 2012. (Doc. 18-3, Ex. M). The appeal was denied on January 24, 2013 and Hendrian's monthly payments were reduced. (Doc. 18-3, Ex. O; Doc. 19-14). Hendrian commenced this lawsuit two months later. (Doc. 1).
IV. STATEMENT OF DISPUTED FACTS
The parties dispute whether Hendrian relied on the $72 per month overpayment. (Doc. 19, ¶ 24). In deposition, Hendrian testified that when he agreed upon the terms of the pension, he relied upon AstraZeneca for correct figures. (Pl. Dep., p. 56:7-15). For instance, Hendrian relied upon the estimates provided in his election package in order to compare the various options and determine which made the most financial sense. ( Id. at 28-29, 33-34, 38:10-14, 56:7-15). Hendrian also indicated that he elected not to seek other employment in reliance upon his pension estimate, but may have done so had his estimate been different. ( Id. at 77-78, 81). Finally, Hendrian testified that he spent the entire $3, 828 each month on household and other expenses, and that he adjusted those expenses in reliance upon receiving that amount. ( Id. at 65-66).
Following the reduction of benefits, however, Hendrian could not identify any specific expenses that he had to eliminate or that he has been unable to pay. ( Id. at 81-82, 95). Hendrian was also unable to identify anything that he would have done differently had he received an accurate estimate of his benefits in 2009. ( Id. ). While Hendrian testified it was possible that he may have sought other employment had his pension estimate been different, he had no job opportunities at the time of his retirement and he was unable to state whether a $75 difference in monthly benefits would have changed his employment decisions. ( Id. at 78, 81). Hendrian also stated that he is not currently seeking employment. ( Id. at 73). Mari Hendrian, for her part, neither made any specific purchases nor incurred any future obligations in reliance upon their monthly benefit. (M. Hendrian Dep., p. 13:1-11). Nor did Ms. Hendrian alter her expenditures, forgo consumption, or otherwise reorganize her finances following the reduction of their monthly benefit. ( Id. at 15-16).
V. STANDARD OF REVIEW
Through summary adjudication, the court may dispose of those claims that do not present a"genuine dispute as to any material fact." Fed.R.Civ.P. 56(a). "As to materiality, ... [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The party moving for summary judgment bears the burden of showing the absence of a genuine issue as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. ct. 2548, 2552, 91 L.Ed. 265 (1986). Once such a showing has been made, the nonmoving party must offer specific facts contradicting those averred by the movant to establish a genuine issue of material fact. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 3188, 111 L.Ed.2d 695 (1990). "Inferences should be drawn in the light most favorable to the non-moving party, and where the non-moving party's evidence contradicts the movant's, then the non-movant's must be taken as true." Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992), cert. denied 507 U.S. 912 (1993).
A. Denial of Benefits (Count I)
Hendrian's first claim is an action for benefits under section 502(a)(1)(8) of ERISA. Section 502(a)(1)(8) confers on plan participants a right of action to recover benefits due, enforce rights, or clarify the right to future benefits under the terms of an employee pension benefit plan. 29 U.S.C. § 1132(a)(1)(8). In order to recover under this provision, a plan participant must demonstrate that he has a right to benefits that is legally enforceable under the plan and that ...