Opinion
Civil No. 00-005 (JRT/FLN)
September 30, 2002
Alan I. Silver, Bassford Lockhart Truesdell Briggs, Minneapolis, MN, Frederick L. Neff, Theresa A. Freeman, Neff Law Firm, P.A., Bloomington, MN, for plaintiff.
Aaron J. Schindel and Michael R. Marra, Proskauer Rose, LLP, New York, NY, Charles O. Lentz, Robins, Kaplan, Miller Ciresi, Minneapolis, MN, for defendants.
MEMORANDUM OPINION AND ORDER GRANTING MOTION FOR SUMMARY JUDGMENT
Plaintiff Steven Demarais ("Demarais") has sued his former employer, Prudential Insurance, as well as trustees and fiduciaries of the Prudential retirement plan (collectively, "Prudential"). This matter is now before the Court on Prudential's motion for summary judgment. Demarais's Second Amended Complaint alleges twelve counts. Demarais has consented to the dismissal of several of these counts. The following counts are now before the Court: Age Discrimination under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 612, et seq., 42 U.S.C. § 2000, et seq., and the Minnesota Human Rights Act ("MHRA"), Minn. Stat. § 363.03, (Count I); Retaliation under the ADEA and MHRA (Count II); Discrimination and Retaliation under the Employee Retirement Income Security Act ("ERISA") (Count III); Benefits Due under ERISA (Count IV); Breach of Fiduciary Duty under ERISA (Count VII); and Accounting (Count X). Prudential also seeks to dismiss defendant Art Ryan from the case. For the reasons discussed below, the Court will grant Prudential's motion for summary judgment.
BACKGROUND
This is Demarais's third lawsuit against Prudential. Demarais was employed by Prudential from 1985 through 1994, and then again for one week in March 1996. Both times, Demarais resigned. After resigning in 1994, Demarais sued Prudential for wrongful and constructive termination, age discrimination, breach of employment contract, and other employment-related torts. That case was resolved by a settlement agreement and general release (the "1996 Settlement Agreement"). As part of that agreement, Demarais was reinstated at Prudential and he released all claims against the company. Under the agreement, Prudential agreed to treat Demarais's past actual service with Prudential and his future service as "continuous service" for purposes of certain employee benefit plans.
Demarais returned to work at Prudential under the 1996 Settlement Agreement but resigned after only one week, claiming that the environment was discriminatory and "oppressive." He has not worked for Prudential since March 8, 1996. In January 1999, Demarais filed a second lawsuit against Prudential, alleging age discrimination, reprisal, and other unlawful conduct. This case was also settled, and the parties executed another settlement agreement and general release (the "1999 Settlement Agreement"). Under this agreement, Demarais waived and released all claims against Prudential arising through March 7, 1999, the effective date of the release. The release included claims under the ADEA, MHRA, ERISA, and other statutes. As part of the 1999 Settlement Agreement, Demarais agreed to cooperate with Prudential in any internal investigation or administrative, regulatory, or judicial proceeding. Such cooperation includes "appearing at [Prudential's] request to give testimony without requiring service of a subpoena or other legal process." (Planter-Smith Aff. Ex. B at 5.) Prudential agreed to reimburse Demarais for any costs connected with such cooperation.
The 1999 Settlement Agreement has an exception (the "waiver exception"), which provides that Demarais did not waive future claims for enforcement of: "the terms of [the 1999 Settlement] Agreement; vested pension, 401(k) plan, benefit plan or savings plan benefits, investments, insurance plan, or other contract or retired agent agreement." (Planter-Smith Aff. Ex. B at 2-3.)
Demarais's current action alleges that since the 1999 Settlement Agreement, Prudential has discriminated and retaliated against him for his previous lawsuits by miscalculating and reducing his pension benefits and fraudulently inducing him to take an early pension.
ANALYSIS I. Standard of Review
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "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 a judgment as a matter of law." Fed.R.Civ.P. 56. Only disputes over facts that might affect the outcome of the suit under the governing substantive law will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is not appropriate 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. Id. Summary judgment is to be granted only where the evidence is such that no reasonable jury could return a verdict for the nonmoving party. Id.
The moving party bears the burden of bringing forward sufficient evidence to establish that there are no genuine issues of material fact and that the movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The nonmoving party is entitled to the benefit of all reasonable inferences to be drawn from the underlying facts in the record. Vette Co. v. Aetna Casualty Surety Co., 612 F.2d 1076, 1077 (8th Cir. 1980). However, the nonmoving party may not merely rest upon allegations or denials in its pleadings, but it must set forth specific facts by affidavits or otherwise showing that there is a genuine issue for trial. Forrest v. Kraft Foods, Inc., 285 F.3d 688, 691 (8th Cir. 2002).
II. ADEA and MHRA Claims for Age Discrimination and Reprisal
Demarais alleges that Prudential discriminated and retaliated against him by: (1) failing to include certain sums when calculating his pension; (2) paying his pension late; (3) inducing him to collect his pension at age 55 instead of 65; and (4) violating the 1999 Settlement Agreement by failing to reimburse costs he incurred while cooperating with Prudential. Prudential argues that the first three claims are barred because they fall within the release in the 1999 Settlement Agreement. Prudential further argues that even if these claims have not been waived, Demarais has not demonstrated a prima facie case of discrimination. Finally, Prudential argues that Demarais's fourth claim is invalid because the expenses were not incurred at Prudential's request.
Under the 1999 Settlement Agreement, Demarais agreed to release all claims against Prudential, including those under ERISA, ADEA, and "any federal, state or local statute or ordinance prohibiting discrimination in employment." (Planter-Smith Aff. Ex. B at 2.) Demarais argues that this waiver does not apply here because his claims relate to matters that occurred after the 1999 Settlement Agreement took effect, and because they are specifically excluded from the release.
Demarais argues that Prudential's failure to pay him proper amounts and its inducements to accept early retirement all occurred after the Settlement Agreement's effective date, and therefore are not barred by the waiver. Although these events may have occurred after the settlement, the record shows that Demarais knew how his pension would be calculated and what his benefits would be in 1995, well before he signed the release. (See Schindel Dec. Ex. 8.) Therefore, any causes of action regarding Demarais's benefit calculation accrued at that time, and are barred under the 1999 Settlement Agreement.
Demarais next argues that his claims are not barred by the Agreement because they fall under the waiver exception. Demarais also contends that, at the very least, the Agreement is ambiguous as to whether it releases his claims. The Court interprets settlement agreements using general rules of contract construction. Gilbert v. Monsanto Co., 213 F.3d 695, 700 (8th Cir. 2000). The meaning of an unambiguous contract is a matter of law for the Court, but the meaning of an ambiguous contract term is a fact question for the jury. Porous Media Corp. v. Midland Brake, Inc., 220 F.3d 954, 959 (8th Cir. 2000). The parties disagree over the scope of the waiver exception, but this does not make it ambiguous.
The waiver generally releases all ERISA and discrimination claims. The waiver exception, however, excludes "any claim for enforcement of the terms of this Agreement, vested pension, 401(k) plan, benefit plan or savings plan benefits, investments, insurance plan, or other contract or retired agent agreement." (Planter-Smith Aff. Ex. B at 2-3.) Demarais argues that he is simply making a "claim for enforcement of the benefit plan." Prudential argues that the waiver does not release claims for enforcement of plan terms, but only preserves claims for vested benefits under the plan. The Court finds, upon reading the 1999 Settlement Agreement as a whole, that Prudential's interpretation is the only reasonable one. If Demarais' interpretation of the waiver exception prevailed, his release of ERISA and discrimination claims would be meaningless. The Court must avoid such a result. Opus Corp. v. International Business Machines Corp., 141 F.3d 1261, 1265 (8th Cir. 1998) ("[C]ourts must avoid an interpretation that would render a provision meaningless."). Therefore, the Court concludes that Demarais's ADEA and MHRA claims are barred by the release in the 1999 Settlement Agreement.
The Court in Hales v. Prudential Insurance Co., Civ. No. 00-2299, 2002 WL 1205634 (D.Minn. May 31, 2002) recently made a similar interpretation of a nearly identical contract term. Id. at *2.
Even if Demarais's claims were not barred, however, they would still be dismissed because Demarais has not made a prima facie showing of discrimination. To make a prima facie case of either discrimination or retaliation, Demarais must show a causal link between any adverse employment action and his membership in a protected group. Yates v. Rexton, Inc., 267 F.3d 793, 799 (8th Cir. 2001); Buettner v. Arch Coal Sales Col, Inc., 216 F.3d 707, 714 (8th Cir. 2000). Here, even if Prudential has not paid Demarais proper benefits, as he alleges, Demarais has not shown that such actions have anything to do with his age or his previous lawsuits. Demarais does allege that other Prudential employees made derogatory comments about him or his age. These, however, do not rise above the level of "stray remarks," and are insufficient to show the necessary discriminatory animus. See Aucutt v. Six Flags Over Mid-America, Inc., 85 F.3d 1311, 1315-16 (8th Cir. 1996).
Demarais has also not shown that Prudential's failure to reimburse him for certain costs he incurred while "cooperating" with the company violates the 1999 Settlement Agreement. The Agreement provides that Demarais would only be reimbursed for cooperation done "at [Prudential's] request . . . without requiring service of a subpoena or other legal process. . . ." (Planter-Smith Aff. Ex. B at 5.) The "cooperation" for which Demarais seeks reimbursement, however, was ordered by a federal court in the District of New Jersey. (See Schindel Dec. Ex. 11.) It is clear that the 1999 Settlement Agreement's reimbursement provisions do not encompass such activities. Therefore, Demarais's claims under the ADEA and MHRA must fail.
III. ERISA Claims A. Count III — ERISA § 510
Demarais also makes several claims under ERISA. Count III alleges discriminatory denial of benefits under ERISA § 510, 29 U.S.C. § 1140, claiming that Prudential fraudulently induced Demarais to begin drawing pension plan benefits at age 55 instead of age 65. The parties raise the question of whether this claim is barred because Demarais did not exhaust his administrative remedies. The Eighth Circuit has not addressed the question of whether exhaustion is required for claims under § 510, and federal courts are split on the matter. See Burds v. Union Pacific Corp., 223 F.3d 814, 817 (8th Cir. 2000) (noting conflicting authorities). The Court need not resolve this question, however, because even if Demarais had exhausted his administrative remedies, his claim under § 510 would still be dismissed.
First, as discussed above, Demarais's claims for discrimination and retaliation were released under the 1999 Settlement Agreement. Second, even if it were not released, the § 510 claim would fail because it has no support in the record. In order to maintain his claim under § 510, Demarais must make a prima facie showing of, among other things, a specific intent to deny him benefits to which he was entitled. Jefferson v. Vickers, Inc., 102 F.3d 960, 965 (8th Cir. 1996). Demarais alleges that Prudential discriminated against him by providing mistaken information, which led him to take his pension benefits ten years early at a lower level, thus reducing his overall level of benefits. Demarais made this decision after anonymously calling Prudential's 1-800 number for pension inquiries. The person on the other end of the line allegedly told Demarais that once he reached age 65, his pension benefits would be reduced by the amount he received in Social Security payments. Prudential concedes that this information was mistaken. Demarais argues that providing the information was discriminatory. Even though Demarais's decision may have been based on this faulty information, he provides no factual support for his allegation that Prudential tricked him into taking early disbursal. The evidence suggests that Prudential did not even know who Demarais was when it allegedly discriminated and retaliated against him. There is no evidence that Prudential intentionally deprived him of benefits, and this bars a claim under § 510. Erroneous information or miscalculations do not amount to intentional action.
Demarais also fails to state a claim with his allegation that Prudential did not properly credit him with "continuous service" under the 1996 Settlement Agreement. The Agreement provides that "Prudential shall treat Demarais's past actual service to Prudential and future actual service to Prudential as continuous service and shall provide all employee benefits predicated on such continuous service. . . ." (Planter-Smith Aff. Ex. A at 10.) Demarais argues that he should receive such credit for the time he was not working for Prudential, between 1994 and 1996. The Agreement clearly states, however, that Prudential would credit only Demarais's actual service with the company. It is undisputed that Demarais performed no actual service for Prudential between his first resignation on December 30, 1994 and his reinstatement on March 1, 1996. Consequently, he is entitled to no credit for this time, and his claim is without merit. For the reasons stated above, therefore, summary judgment will be granted as to Count III.
B. Count IV — ERISA § 502(a)(1)(B)
Count IV seeks benefits due under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). The parties again argue over whether Demarais was required to exhaust his administrative remedies under this provision. This question is academic, however, because even if Demarais had exhausted his remedies, this ERISA claim was also released under the 1999 Settlement Agreement. Therefore, it must be dismissed.
C. Count VII — ERISA § 502(a)(2)
Demarais's final ERISA claim alleges breach of fiduciary duty under § 502(a)(2), 29 U.S.C. § 1132(a)(2). Like Demarais's other ERISA counts, this claim was waived by the 1999 Settlement Agreement. Even if it was not waived, however, the claim would be without merit. Section 502(a)(2) allows a plan participant to bring an action for breach of fiduciary duty on behalf of the plan, but not on his own behalf. Conley v. Pitney Bowes, 176 F.3d 1044, 1047 (8th Cir. 1999); Wald v. Southwestern Bell Corp. Customcare Medical Plan, 83 F.3d 1002, 1005-06 (8th Cir. 1996). Demarais argues that his claim is on behalf of the plan, contending that insufficient plan contributions to him individually result in an overall loss to the plan. This argument is unavailing; plaintiffs suing Prudential in two other cases have made the same contention, and it has no more merit here than in those cases. See Hales v. Prudential Ins. Co., Civ. No. 00-2299, 2002 WL 1205634 at *2 (D.Minn. May 31, 2002); Willenbring v. Prudential Ins. Co., Civ. No. 01-531, 2001 WL 1202773 at *2 (D.Minn. Oct. 9, 2001). "The fact that the money damages [Demarais] is requesting would have passed through the fund on the way to [his] pocket is insufficient to raise the claim beyond one for individual damages." Hales, 2002 WL 1205634 at *2. Thus, even if Demarais's claim under ERISA § 502(a)(2) had not been waived, it is defective as a matter of law and must be dismissed.
IV. Claim for Accounting
Count X is a state common law claim for accounting, alleging that Prudential mishandled the benefit plan. ERISA preempts all state laws that "relate to" an employee benefit plan governed by ERISA. 29 U.S.C. § 1144(a); Tower Asphalt, Inc. v. Gordon, 840 F. Supp. 673, 674 (D.Minn. 1993). Because Demarais's claim for accounting clearly has a "connection or reference to" an ERISA plan, it is therefore preempted and is not properly before this Court. Id. (quoting Shaw v. Delta Air Lines, 463 U.S. 85, 97 (1983)).
V. Claim against Defendant Art Ryan
Prudential argues that Demarais has not asserted a valid claim against Ryan, who is the Chief Executive Officer of Prudential. The Court agrees. Demarais has not alleged how Ryan caused him any injury. Indeed, it appears that the Second Amended Complaint makes no allegations whatsoever against Ryan. Demarais has made no argument opposing dismissing Ryan as a defendant. Therefore, the Court will dismiss Ryan from this case.
ORDER
Based on the foregoing, all the records, files, and proceedings herein, IT IS HEREBY ORDERED that defendants' Motion for Summary Judgment [Docket No. 31] is GRANTED.
LET JUDGMENT BE ENTERED ACCORDINGLY.