Opinion
No. C2-00-246
September 16, 2002
OPINION AND ORDER
This matter is before the Court for consideration of the defendant's Second Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. (Doc. #41). The plaintiffs brings this claim under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., on behalf of themselves and those similarly situated. (the "Plaintiff Class"). The Court exercises jurisdiction pursuant to 28 U.S.C. § 1331.
For the reasons set forth below, Defendant's Motion is GRANTED.
I. BACKGROUND FACTS
In June of 1993, Defendant Denison Hydraulics, Inc. ("Denison") and the Plaintiff Class' union, the International Association of Machinists and Aerospace Workers AFL-CIO (the "Union"), engaged in collective bargaining agreement negotiations for the production and maintenance employees at Denison's Marysville, Ohio facility. (Stipulation I, ¶ 2). In connection with those negotiations, Denison and the Union agreed to terminate the defined benefit portion of the employee pension plan covering active employees in the bargaining unit and replace it with a 401(k)-type plan entitled the Denison Hydraulics, Inc. Hourly Employee Pension Plan (the "Plan"). (Id., ¶ 2 and Ex. 2). In addition, Denison and the Union agreed to amend the pension plan to provide that all employees previously covered by the defined benefit provisions could receive either a lump sum distribution or an annuity upon the termination of the Plan. (Id.).
Previously, the participants who accrued benefits that exceeded $3,500.00 were not permitted to receive a lump sum payment. (Stipulation I, ¶ 2).
In conjunction with the amendment and subsequent termination of the Plan, various notices were sent to Plan participants. Such notices informed the participants that the Plan was about to be amended. The notices also described that the Plan had filed with the Internal Revenue Service ("IRS") and the Pension Benefit Guaranty Corporation ("PBGC")for approval of the termination. (Id., ¶ 12 and Ex. 11). On August 26, 1993, the Plan was officially amended. (Id., ¶ 13 and Exs. 12, 13). On October 25, 1993, the Plain officially terminated. (Id., ¶ 16).
On January 27, 1994, the IRS issued a favorable determination letter conceiving the Plan's termination. (Id. ¶ 17 and Ex. 17). Accordingly, between March 7, 1994 and June 13, 1994, payments were made to the Plan's participants in accordance with the amendments to the Plan. (Id. ¶¶ 18, 19 and Ex. 18, 19; Stipulation II, ¶ 39).
II. PROCEDURAL HISTORY
The Plaintiff Class brings this action against several individual defendants and against Denison and the "Plan" for violations of ERISA, 29 U.S.C. § 1113, 1132 and 1370. All of the defendants previously filed a motion for summary judgment, (Doc. #30), that was limited to the defenses of statute of limitations and failure to exhaust administrative remedies. (Doc. #28). The defendants prevailed as to the statute of limitations defense regarding two of the three claims asserted in the Plaintiff Class' Amended Complaint. (Doc. #37). The third Count of the Amended Complaint, alleging improper termination of the Plan in violation of ERISA § 4041, 29 U.S.C. § 1341 ("Section 1341"), was found by the Court to have been timely filed. (Id.). ERISA § 4070(a), 29 U.S.C. § 1370 (a) ("Section 1370"), permits a participant of a pension plan who is adversely affected by a violation of certain provisions of ERISA, including Section 1341, to enjoin or obtain other appropriate equitable relief to enforce the provision at issue.
III. STANDARD
The procedure for considering whether summary judgment is appropriate is set forth in Federal Rule of Civil Procedure 56(c), which provides:
The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.
The evidence must be viewed in the light most favorable to the nonmoving party. Adickes v. Kress Co., 398 U.S. 144, 158-59 (1970). Summary judgment will not lie if the dispute about a material fact is genuine; "that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is appropriate however, if the opposing party 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. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Matsushita Electronic Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986). The Sixth Circuit Court of Appeals has recognized that Liberty Lobby, Celotex, and Matsushita have effected "a decided change in summary judgment practice," ushering in a "new era in summary judgments. Street v. J.C. Bradford Co., 886 F.2d 1472, 1476 (6th Cir. 1989). The court in Street identifies a number of important principles in new era summary judgment practice. For example, complex cases and cases involving state of mind issues are not necessarily inappropriate for summary judgment. Id. at 1479.
In addition, in responding to a summary judgment motion, the nonmoving party "cannot rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact, but must `present affirmative evidence in order to defeat a properly supported motion for summary judgment.'" Id. (quoting Liberty Lobby, 477 U.S. at 257). The nonmoving party must adduce more than a mere scintilla of evidence in order to overcome the summary judgment motion. Id. It is not sufficient for the nonmoving party to merely "show that there is some metaphysical doubt as to the material facts." Id. (quoting Matsushita, 475 U.S. at 586). Moreover, "[t]he trial court no longer has the duty to search the entire record to establish that it is bereft of a genuine issue of material fact." Id. That is, the nonmoving party has an affirmative duty to direct the court's attention to those specific portions of the record upon which it seeks to rely to create a genuine issue of material fact.
IV. ANALYSIS
The Plaintiff Class claims that the Plan was improperly amended so that benefit amounts payable upon the termination of the Plan were calculated using an incorrect combination of interest rates and mortality tables which unlawfully resulted in a smaller payout. Plaintiffs' contend that the Plan was improperly terminated under Section 1341 in that the Plan did not have sufficient assets to satisfy all benefit liabilities if the payout amounts had been properly computed. Plaintiffs claim that lump sum payments calculated under the pre-amendment interest rates and mortality tables would have prevented the Plan from containing sufficient assets to satisfy its benefit liabilities. Under such circumstances, a defined benefit plan may only be voluntarily terminated if additional funds are infused into the Plan in an amount sufficient to satisfy all of the Plan's liabilities. 29 U.S.C. § 1341 (b)(1)(D).
The defendants claim, and it is undisputed, that each member of the Plaintiff Class received the amount to which he or she was entitled under the amended Plan upon its termination. Thus, the defendant's argue, the Plan's assets at the time of the final distribution were sufficient to cover the Plan benefit liabilities, in compliance with Section 1341 of ERISA.
The Court agrees.
Section 1341 in pertinent part provides:
(b) Standard termination of single-employer plans.
(1) General requirements. A single-employer plan may terminate under a standard termination only if —
(D) when the final distribution of assets occurs, the plan is sufficient for benefit liabilities (determined as of the termination date).29 U.S.C. § 1341 (b)(1)(D).
In the case subjudice, the Plaintiff Class does "not contest that the lump sum amounts paid to each member of the Plaintiff Class were in accordance with the terms of the Plan, as amended." (Stipulation II, ¶ 39). That is all this statute requires. Section 1341 of ERISA required that on October 25, 1993, the date the Plan terminated, the Plan had sufficient funds to cover the Plan liabilities under the amended Plan in effect at termination. The Plaintiffs do not deny the interest rate used to compute benefits was one expressly authorized by the PBGC. Similarly, no claim is made that the mortality table used to compute benefits was unlawful, inaccurate, or otherwise unfair. Finally, no claim is made that the Plan was unlawfully amended. Benefits were paid out in accordance with the Plan. Thus, the Court concludes that the defendants terminated the Plan in compliance with Section 1341 of ERISA.
V. CONCLUSION
Based on the foregoing, the defendants' Motion for Summary Judgment is GRANTED. (Doc. #41). The Clerk is DIRECTED to enter judgment for the defendants and against the Plaintiff Class.