In re Qwest Savings Investment Plan Erisa Litigation

Full title: In re QWEST SAVINGS AND INVESTMENT PLAN ERISA LITIGATION

Court: United States District Court, D. Colorado

Date published: Sep 24, 2004

Civil Case No. 02-RB-464 (CBS), Consolidated with Civil Action No. 02-RB-470, Civil Action No. 02-RB-482., 02-RB-602, 02-RB-714 (D. Colo. Sep. 24, 2004)

Opinion

Civil Case No. 02-RB-464 (CBS), Consolidated with Civil Action No. 02-RB-470, Civil Action No. 02-RB-482., 02-RB-602, 02-RB-714.

September 24, 2004

ORDER ON DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT AGAINST PLAINTIFF PAULA SMITH

ROBERT BLACKBURN, District Judge

This matter is before me on the motion for partial summary judgment filed by defendants Qwest Communications International, Inc., and Qwest Asset Management, Inc.' [# 112], filed January 17, 2003. The matter is fully briefed. For the reasons outlined below, the motion granted in part and denied in part.

I. JURISDICTION

This plaintiff's claims arise under the Employee Retirement Income and Security Act (ERISA). 29 U.S.C. §§ 1001- 1461. I have jurisdiction over these claims under 29 U.S.C. § 1132(e)(1).

II. STANDARD OF REVIEW

I have considered the pleadings, discovery, and affidavits on file, together with the arguments advanced and authorities cited by the parties in their respective briefs. I have employed the analysis required by apposite law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10^th Cir. 1990); Redmon v. United States, 934 F.2d 1151, 1155 (10^th Cir. 1991); and Concrete Works, Inc. v. City County of Denver, 36 F.3d 1513, 1517 (10^th Cir. 1994).

Under FED. R. CIV. P. 56(c), summary judgment is proper only if the evidence, viewed in the light most favorable to the nonmoving party, demonstrates there is no genuine issue as to any material fact, and the moving party is entitled to summary judgment as a matter of law. Farthing v. City of Shawnee, Kan. 39 F.3d 1131, 1134 (10^th Cir. 1994). A "material" fact is one "that might affect the outcome of the suit under the governing law," Id. at 1135 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986)), and a "genuine" issue is one where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. (citing Id. ).

III. ANALYSIS

This case concerns the plaintiffs' claims that the defendants violated their duties under ERISA. The plaintiffs seek relief on behalf of the Qwest Savings Investment Plan (Plan) under 29 U.S.C. § 1132(a)(2). She also seeks "appropriate equitable relief" on behalf of herself individually under § 1132(a)(3). Defendants Qwest Communications International, Inc., and Qwest Asset Management (Qwest) seek partial summary judgment as to plaintiff Paula Smith's claims only. Several other defendants have joined in Qwest's motion. See docket numbers 136, 141, 142, 146.

I note that the motion for summary judgment was filed in response to the First Amended Consolidated Complaint [# 29], filed July 5, 2002. That complaint has been superceded by the Second Amended Consolidated Complaint [# 164], filed May 20, 2003. With regard to the issues raised in the motion for summary judgment, Smith and her claims take the same posture in the first and second amended complaints. I read the motion for summary judgment as if it is addressed to the claims in the Second Amended Consolidated Complaint.

Plaintiff Paula Smith was an employee of Qwest and its predecessor, US West, from 1980 until her layoff in June, 2001. In the course of her layoff from Qwest, Smith signed a release that expressly waived "any and all debts, obligations, claims, liability . . . demands, judgments and/or causes of action of any kind whatsoever" under ERISA "which you might have or assert" against the defendants "prior to the effective date" of the release." Motion for summary judgment, Exhibit A (Smith deposition), exhibit 3 (Release), p. 4. Qwest argues that Smith has validly waived any and all claims she may have had against the defendants under ERISA as of the day she signed the Release, which was July 19, 2001. Smith argues that the Release did not effectively release the ERISA claims she asserts in this case. The terms of the Release and the circumstances under which Smith signed the Release are not disputed. The only dispute is the extent to which the Release applies to the claims asserted by Smith in this case.

A. Knowing Voluntary Release

Both Qwest and Smith argue that the Release of Smith's ERISA claims must be shown to have been knowing and voluntary for the Release to be effective. Smith argues that a release of ERISA claims should be subject to heightened scrutiny when determining if the release is knowing and voluntary. Response, [# 140], filed February 18, 2003. Using Smith's proposed standard, I conclude that the Release was knowing and voluntary.

Smith argues that the nine factors outlined in Leavitt v. Northwestern Bell Telephone Co. should be applied to determine if she executed the release of her ERISA claims knowingly and voluntarily. 921 F.2d 160, 163 (8^th Cir. 1990). Those factors are (1) Smith's education and business experience; (2) Smith's input in negotiating the terms of the settlement; (3) the clarity of the release language; (4) the amount of time Smith had for deliberation before signing the release; (5) whether Smith read the release and considered its terms before signing it; (6) whether Smith knew of her rights under the plan and the relevant facts when she signed the release; (7) whether Smith was given an opportunity to consult with an attorney before signing the release; (8) whether Smith received adequate consideration for the release; and (9) whether Smith's release was induced by improper conduct by the defendants.

The undisputed facts in the record demonstrate that Smith was a well-educated and experienced employee when she was presented with the release. Motion for summary judgment, p. 2 (containing specific record citations). Smith received the release on June 29, 2001, and executed it on July 19, 2001. Id. Smith read the release before she signed it, and she understood the language in the release. Id. She does not claim that she had inadequate time to review the Release, or that she was coerced to sign the Release. Id. Smith was encouraged to consult an attorney and knew she could do so, but she chose not to consult an attorney. Id. In consideration for signing the Release, Smith received $40,000 in additional consideration to which she was not otherwise entitled, as well as six additional months of healthcare premiums paid by Qwest. Id.

Smith argues that the Release is not valid because its language is not clear as it relates to the ERISA claims in question, and because she was not aware of the facts which support her ERISA claims. I conclude that the broad language of the Release, including a specific mention of claims under ERISA, was sufficiently clear. A specific reference to the Plan or to specific bases for an ERISA claim is not necessary. To the extent Smith was unaware of the alleged facts that underlay her ERISA claims, that lack of awareness is not fatal to the release. A party may release existing claims and obligations, even if those claims or obligations have not yet come due or are unknown. See, e.g., Vitkus v. Beatrice Co., 11 F.3d 1535, 1540-41 (10^th Cir. 1993) (applying Illinois law); Fair v. International Flavors Fragrances, Inc., 905 F.2d 1114, 1115-16 (7^th Cir. 1990) (general release valid as to claims known to signing party, or claims that could have been discovered on reasonable inquiry). The Release covers "any and all . . . claims, liability, . . . and/or causes of action of any kind whatsoever . . . which (Smith) might have or assert" against the defendants. Motion for summary judgment, Exhibit A (Smith deposition), exhibit 3, p. 4. This language is broad enough to include claims not specifically known to Smith when she signed the release. To the extent Leavitt can be read to require specific knowledge of each claim subject to the Release, I disagree.

Finally, Smith notes briefly that she had no input into the terms of the Release, and argues that "whether the release was induced by improper conduct of any fiduciary is a matter yet to be determined." In light of the other relevant factors, outlined above, the fact that Smith did not have input into the terms of the Release does not make the Release invalid. There is no evidence in the record that any improper conduct induced Smith to sign the release. On this record, that factor is not relevant.

The undisputed facts in the record demonstrate that Smith signed the Release knowingly and voluntarily. Viewing the facts in the record in the light most favorable to the plaintiff, Qwest is entitled to judgment as a matter of law on the claims that are covered by the Release.

B. Scope of Release

To the extent Smith is seeking relief on behalf of the Plan under 29 U.S.C. § 1132(a)(2), I conclude that the Release does not cover such claims. The terms of the Release apply only to Smith's claims, not to the Plan's claims. There is no indication that Smith had any authority to release claims on behalf of the Plan. Based on the terms of the Release, Qwest is not entitled to summary judgment on Smith's claims seeking relief on behalf of the Plan under § 1132(a)(2).

To the extent Smith's individual claims are based on actions taken by the defendants after the date she signed the Release, July 19, 2001, Smith's claims are not affected by the Release. As the defendants note, the Release is not applicable to conduct that occurred after July 19, 2001. Defendants' reply, filed March 5, 2003, p. 7. Qwest does not seek summary judgment as to claims based on conduct that occurred after July 19, 2001.

On the other hand, I conclude that the release is effective as to Smith's ERISA claims for individual relief under 29 U.S.C. § 1132(a)(3) which are based on actions allegedly taken by the defendants prior to July 19, 2001. Based on the analysis above, these claims are covered by the Release, and Qwest is entitled to judgment as a matter of law on these claims.

C. Qwest Asset Management

In her response, Smith says "there is a factual dispute as to QAM's (Qwest Asset Management) status and therefore whether QAM is covered by the language of the release." Response, p. 3. She does not indicate the nature of this alleged factual dispute. The Second Amended Consolidated Complaint alleges that QAM was a wholly owned subsidiary of Qwest during all relevant times. Second Amended Consolidated Complaint, ¶ 18. The release covers claims against Qwest and "any present or former subsidiary or affiliated Company. . . ." Motion for summary judgment, Exhibit A (Smith deposition), exhibit 3, p. 4. Assuming the plaintiff's allegations to be true, QAM is covered by the release.

ORDERS

THEREFORE IT IS ORDERED as follows:

1) That the motion for partial summary judgment filed by defendants Qwest Communications International, Inc., and Qwest Asset Management, Inc.' [# 112], filed January 17, 2003, is DENIED as to plaintiff Paula Smith's claims seeking relief on behalf of the Plan under § 1132(a)(2); and

2) That the motion for partial summary judgment filed by defendants Qwest Communications International, Inc., and Qwest Asset Management, Inc.' [# 112], filed January 17, 2003, is GRANTED as to plaintiff Paula Smith's ERISA claims for individual relief under 29 U.S.C. § 1132(a)(3) which are based on actions allegedly taken by the defendants prior to July 19, 2001.