Opinion
Civil Action No. 3:00-CV-1887-D.
June 11, 2003.
MEMORANDUM OPINION AND ORDER
The instant cross-motions for summary judgment in this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001-1461, principally present questions concerning the interpretation of a Qualified Domestic Relations Order ("QDRO") and of an amendment to an ERISA-qualified pension plan. Because the court holds that plaintiff is not entitled to the relief she seeks, it grants defendants' motion and denies plaintiff's motion. The court also directs plaintiff to demonstrate that she is maintaining claims for breach of fiduciary duty and interference with protected rights that are broader than her action for plan benefits.
I
Plaintiff Sandra M. Krusos ("Krusos") and Emmerick Joe Pavlas, Jr. ("Pavlas") were divorced in 1991. During their marriage, Pavlas was an employee of defendant Atlantic Richfield Company ("ARCO") and a participant in the Atlantic Richfield Retirement Plan II (the "Plan"), an ERISA-qualified pension plan. Krusos was an alternate payee under the Plan. ARCO is the Plan Administrator.
In some pertinent documents — including the Qualified Domestic Relations Order in question — Krusos is referred to by her former name, Sandra Marie Pavlas. See, e.g., P. Jan. 17, 2003 App. 405. Krusos was born "Sandra Marie Sinkule." Id. at 484. The court will refer to her throughout this memorandum opinion as "Krusos."
Incident to their divorce, they entered into a QDRO under which Krusos was entitled to "fifty percent (50%) of the [Pavlas'] present accrued benefit" in the Plan. P. Jan. 17, 2003 App. 406. The QDRO provided that Krusos could receive benefits in whatever form the Plan allowed, cash out the benefits at the time of Pavlas' earliest possible retirement, receive payments of benefits even after Pavlas' death, and would receive cost of living increases proportionate to her share of the accrued benefits. The QDRO contained the following provision that is the center of this litigation:
Because the parties have filed appendixes in support of their own summary judgment motion and in opposition to the other side's motion, the court for clarity will refer to the appendix by the date it was filed rather than by whether it was filed in support of the side's own motion or in opposition to the other side's motion.
If [Pavlas] elects to retire from the Plan before normal retirement age and by reason of that early retirement the Plan provides an early retirement subsidy, then [Krusos'] benefit shall be recomputed to provide [Krusos] with fifty percent (50%) of that portion of the subsidy attributable to the total accrued benefit on the date of divorce.Id. at 407.
On September 12, 1991 — before the state court signed the QDRO on September 30, 1991 — ARCO modified the Plan by adding Amendment 3 in connection with a planned reduction in force ("RIF"). ARCO's Board of Directors adopted Amendment 3 on July 22, 1991, "effective as of August 1, 1991." Ds. Dec. 4, 2002 App. 25. Amendment 3 provided "enhanced retirement provisions" for those "notified in writing by [ARCO] between August 1, 1991 and December 31, 1991 that he or she will be terminated from employment, due to the [ARCO] 1991 Reduction in Force[.]" Id. Employees terminated for other reasons received no retirement plan enhancement. Recipients were required to have a termination date of on or before December 31, 1992.
Amendment 3 enhanced a Plan participant's benefits by increasing the Plan member's age and service to the company by five years for purposes of computing Plan benefits. As such, an employee retiring at age 55 with 15 years of service to the company would receive the same benefits as he would were he retiring as a 60-year-old with 20 years of service. This benefit is referred to as a "5-and-5 benefit."
Sometime after the state court signed the QDRO but before ARCO terminated Pavlas' employment, ARCO notified him that his employment would be terminated as part of the RIF. ARCO discharged Pavlas on December 6, 1991, and he then became fully qualified for the retirement enhancements effected by Amendment 3.
Krusos argues that there is a genuine issue of material fact regarding the precise date on which Pavlas was terminated. Because the evidence would only permit the trier of fact to find that he was discharged in December 1991, and because a termination at any time during that month results in the same decision in this case, this fact alleged issue is immaterial.
In 1998 Pavlas elected to begin receiving Plan benefits. The Plan paid him 50% of the benefits he had accrued as of September 30, 1991 — the date the couple divorced — and 100% of the benefits provided him under Amendment 3. Krusos also elected in 1998 to take her retirement benefits under the Plan, and she received 50% of the benefits Pavlas had accrued as of September 30, 1991.
In November 2000 Krusos filed a claim for benefits under the Plan with the ARCO Claims Administrator, complaining of the difference in benefits that she and Pavlas were receiving. The Claims Administrator later denied the claim, concluding on various grounds that the Plan benefits had been properly divided. Krusos appealed the decision to the Appeals Administrator, who denied the appeal. This lawsuit followed.
Krusos seeks to recover on three causes of action: unpaid ERISA benefits, breach of fiduciary duty, and interference with protected rights. Krusos and defendants have filed cross-motions for summary judgment.
Krusos does not identify in her complaint the specific ERISA provisions on which she bases her claims. The court will discuss below the ones on which she appears to rely.
Krusos has also filed January 8, 2003 and January 17, 2003 motions to strike. Because in reaching its decision the court has not considered the evidence that is the subject of these motions, it denies the motions as moot. Krusos has also filed a January 11, 2003 motion for leave to supplement her reply to defendants' response to her motion for summary judgment. The court grants the motion but notes that the affidavit attached to the supplement does not affect the court's decision on the merits.
II
The court decides first whether Krusos is entitled under the terms of the QDRO to 50% of the enhanced retirement benefits that Pavlas received under Amendment 3.A
"[B]oth ERISA and case law require a plan administrator to follow the dictates of the QDRO. Once a plan administrator determines that a domestic relations order meets the criteria set forth in 29 U.S.C. § 1056(d)(3) and thus is `qualified,' he is required to act in accordance with the QDRO." Matassarin v. Lynch, 174 F.3d 549, 568 (5th Cir. 1999). "ERISA does not require, or even permit, a pension fund to look beneath the surface of the order. Compliance with the QDRO is obligatory[.]" Id. (internal quotation marks omitted) (quoting Blue v. UAL Corp., 160 F.3d 383, 385 (7th Cir. 1998)).
The court reviews the Plan Administrator's interpretation of the QDRO de novo. "[A] QDRO, unlike [a] Plan, is a separate, judicially approved contract . . ., which the Plan administrator has no special discretion to interpret. Although we allow a plan administrator discretion to determine whether an agreement constitutes a QDRO under the plan, we otherwise review de novo a plan administrator's interpretation of the meaning of a QDRO." Id. at 563.
ARCO carried out its function as Plan Administrator through a Claims Administrator and an Appeals Administrator. For clarity, the court will refer throughout to the actions of the "Plan Administrator."
Where, as here, the QDRO is unambiguous, the court interprets it as a matter of law. See DeWitt County Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999). "Under Texas law, the court's primary concern when interpreting a contract is to ascertain the parties' true intentions as expressed in the instrument." Bank One, Tex., N.A. v. FDIC, 16 F. Supp.2d 698, 707 (N.D. Tex. 1998) (Fitzwater, J.). "To achieve this objective, the court should examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless." Id. "No single provision taken alone will be given controlling effect; rather, all the provisions must be considered with reference to the whole instrument." Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). "No phrase, sentence, or section of a contract should be isolated and considered apart from the other provisions." Trinity Prof'l Plaza Assocs. v. Metrocrest Hosp. Auth., 987 S.W.2d 621, 625 (Tex.App. 1999, writ denied). A court also "must recognize that the parties to a writing will not include a clause in the writing unless they intend it to have some effect." Praeger v. Wilson, 721 S.W.2d 597, 601 (Tex.App. 1986, writ ref'd n.r.e.). "A construction of the writing which renders a clause meaningless is unreasonable and, therefore, is not preferred by the court." Id.
Krusos maintains that the court should apply federal common law rather than state law in interpreting the contract. Because she recognizes that federal common law, even if applicable, would draw from analogous state common law, see P. Dec. 4, 2002 Br. at 15, the court need not decide this question.
B
Krusos contends that Amendment 3 confers an early retirement subsidy within the meaning of the QDRO. She maintains that it is commonly understood that an early retirement subsidy is a provision that grants early retirement benefits "greater than the actuarial equivalent of the normal retirement benefit." P. Dec. 4, 2002 Br. at 19 (quoting Bellas v. CBS, Inc., 221 F.3d 517, 525 (3d Cir. 2000)). Krusos avers that the 5-and-5 benefit is such an early retirement benefit because it provides greater benefits than Pavlas would otherwise have received on retirement, even given the actuarial adjustments. She argues that the Plan Administrator's deposition confirms that ARCO considered these types of benefits to be early retirement subsidies.ARCO appears to agree on the definition of an early retirement subsidy, but it does not acknowledge that an increase in years of service and age constitutes such a subsidy. ARCO characterizes Amendment 3 as "an enhanced retirement benefit," primarily because it is not connected to early retirement. "The Enhanced Retirement Benefit was given to Pavlas only because he met the requirements of Amendment 3 for additional benefits." Ds. Dec. 4, 2002 Br. at 10. ARCO also argues that the enhanced benefits were not awarded by reason of early retirement, as required by the QDRO.
C
The operative provisions of the QDRO state:
As part of a just and right division of the estate of the parties, the Court awards, assigns, and grants to [Krusos] fifty percent (50%) of [Pavlas'] present accrued benefit. [Krusos] shall have the right to elect to receive benefit payments on or after the date on which [Pavlas] attains (or would have attained) the "earliest retirement age" as that term is defined by the Internal Revenue Code of 1986, § 414(p)(4) (but taking into account only benefits actually accrued as of the date of divorce). [Krusos] shall have the right to elect any form of benefits permitted by the Plan as of the date [Krusos] elects to begin receiving benefits, other than a joint and survivor annuity. If the Plan pays cost-of-living increases at any date after [Krusos] begins to receive benefits from the Plan, [Krusos] shall also receive a share of each increase, which share shall be in the proportion that the accrued benefit awarded herein to [Krusos] including her share of previous cost-of-living increases hereunder bears to the total accrued benefit ([Krusos'] accrued benefit and [Pavlas'] accrued benefit) on the date the cost-of-living increase is granted.
If [Pavlas] elects to retire from the plan before normal retirement age and by reason of that early retirement the Plan provides an early retirement subsidy, then [Krusos'] benefit shall be recomputed to provide [Krusos] with fifty percent (50%) of that portion of the subsidy attributable to the total accrued benefit on the date of divorce.
If [Krusos] begins receiving benefit payments under the Plan before the death of [Pavlas], [Pavlas'] subsequent death shall have no effect on [Krusos'] benefits, and those benefits shall continue to be paid over the lifetime of [Krusos] or in such other form as [Krusos] may have elected under the Plan, notwithstanding the death of [Pavlas].
If [Pavlas] dies before retirement and before benefit payments to [Krusos] under the Plan begin, [Krusos] shall be treated as the surviving spouse of [Pavlas] with regard to the preretirement survivor annuity attributable to the benefits actually accrued as of the date of divorce. [Pavlas] shall elect a form of benefit that provides the qualified preretirement survivor annuity as set forth under section 417 of the Internal Revenue Code of 1986, as amended. This award to [Krusos] shall not preclude the Plan from paying a preretirement survivor annuity attributable to benefits accrued after the date of divorce to [Pavlas'] subsequent spouse, if any, or other designated beneficiary permissible under the Plan at the time of [Pavlas'] death.
P. Jan. 17, 2003 App. 406-08 (emphasis added).
The court will assume that the 5-and-5 benefit that Amendment 3 created is a retirement subsidy. It need not, therefore, distinguish between an "enhanced retirement benefit" and an "early retirement subsidy." Even so, Krusos is not entitled to 50% of the 5-and-5 benefit effected by Amendment 3 because ARCO did not grant this benefit "by reason of . . . early retirement," as required by the QDRO. Instead, ARCO conferred this additional benefit as part of a severance package that was part of the RIF.
ARCO provided the 5-and-5 benefit to Plan members
[w]ho [were] notified in writing by [ARCO] between August 1, 1991 and December 31, 1991 that [they] w[ould] be terminated from employment, due to the [ARCO] 1991 Reduction in Force . . . with a termination date on or before December 31, 1992, as determined by [ARCO][.]
Ds. Dec. 4, 2002 App. 25. This was not a voluntary program under which Pavlas elected early retirement and obtained a subsidy for doing so. He was laid off and given severance in the form of additional retirement benefits. The 5-and-5 benefit was a form of employment compensation that was conferred regardless whether he decided to retire early from the Plan. Pavlas would have received the benefit even had he retired at the normal retirement age. Therefore, it is clear that the benefit did not accrue "by reason of . . . early retirement," as is required by the QDRO.
Krusos asserts that she and Pavlas intended to divide any retirement benefits that Pavlas received from ARCO. See, e.g., P. Dec. 4, 2002 App. 127 ("Mr. Pavlas and I intended that we would share 50-50 in any benefits received from ARCO[.]"). This contention appears overbroad in view of the clear possibility that the entirety of the benefits from the Plan would not be distributed equally upon retirement. For example, if Pavlas had continued working for ten years after the divorce, the benefits resulting from the ten extra years of service would not have been divided equally between them. According to the QDRO, Pavlas would have received 100% of the benefits from the additional ten years of service.
Because Pavlas did not receive the retirement subsidy under Amendment 3 "by reason of . . . early retirement," but as a result of his involuntary termination under the RIF, Krusos is not entitled to 50% of the benefits the Plan paid Pavlas under Amendment 3.
III A
The court considers next Krusos' contention that she is entitled to 50% of the benefits under Amendment 3 on the ground that the benefits accrued before September 30, 1991, the date of the couple's divorce.
ARCO adopted Amendment 3 on September 12, 1991, before the state district court signed the divorce decree and QDRO on September 30, 1991. The Amendment became effective retroactively on August 1, 1991. See Ds. Dec. 4, 2002 App. 25 ("[T]he [Plan] is hereby amended effective as of August 1, 1991."). Krusos argues that the effective date of Amendment 3 constitutes the date of accrual of benefits and, because adoption of the amendment predates the divorce, the benefits conferred by Amendment 3 should be divided evenly as a division of present benefits. Defendants maintain that the benefits conferred by Amendment 3 did not accrue until Pavlas was discharged on December 6, 1991, after the date of the divorce. They argue that Pavlas had no right to the 5-and-5 benefits until the eligibility requirements in Amendment 3 were satisfied, i.e., the date his employment was terminated.
As the court explains supra at note 3, even if Pavlas was not discharged on December 6, 1991, it is undisputed that he was terminated after the September 30, 1991 effective date of his divorce from Krusos.
B
The court must first determine the standard of review. Defendants posit that an abuse of discretion standard applies because the court is reviewing the Plan Administrator's denial of a claim based upon an interpretation of the Plan rather than an interpretation of the QDRO. The court agrees.
Where a plan grants a plan administrator the discretion and authority to interpret the plan, the court must review the administrator's decision under an abuse of discretion standard. See Chevron Chem. Co. v. Oil, Chem. Atomic Workers Local Union 4-447, 47 F.3d 139, 142-43 (5th Cir. 1995) (holding that abuse of discretion standard applied because plan language granted authority to control and manage administration and operation of plan and empowered the plan administrator to make rules, regulations, and interpretations and take other action deemed appropriate); Batchelor v. Int'l Bhd of Elec. Workers Local 861 Pension Retirement Fund, 877 F.2d 441, 443 (5th Cir. 1989) (holding that plan trustees had discretion where plan provided them full and exclusive authority to determine all questions of coverage and eligibility and full power to construe provisions of Agreement).
The Plan provides that, "[s]ubject to the limitation of provisions of this Plan, the Administrator shall from time to time establish such rules for the administration of the Plan as the Administrator may deem desirable." Ds. Dec. 4, 2002 App. 22. Furthermore, the Plan Administrator has "full discretion and final authority to determine eligibility for benefits and to construe the terms of the Plan." Id. at 23. Because the Plan Administrator had the express authority to construe the terms of the Plan, the court must defer to its decisions to the extent they are Plan constructions.
When reviewing administrator decisions under an abuse of discretion standard, the court engages in a two step process. First, it determines whether the administrator gave the Plan a legally correct interpretation. Second, it decides whether the incorrect decision constitutes an abuse of discretion. See Wildbur v. ARCO Chem. Co., 974 F.2d 631, 637 (5th Cir. 1992); Pickrom v. Belger Cartage Serv., Inc., 57 F.3d 468, 471 (5th Cir. 1995); Kennedy v. Electricians Pension Plan, IBEW No. 995, 954 F.2d 1116, 1121 (5th Cir. 1992). If the administrator's legal interpretation of the plan was correct, the inquiry ends, because a legally correct interpretation of a plan cannot constitute an abuse of discretion. If the plan administrator incorrectly interpreted the plan, the court must then evaluate whether it abused its discretion in denying the claim. In so doing, the court assesses (1) whether the administrator gave the plan a uniform construction, (2) whether the interpretation is consistent with a fair reading of the plan, and (3) whether different interpretations of the plan will result in unanticipated costs. Pickrom, 57 F.3d at 471.
The abuse of discretion standard also applies to factual determinations. Sweatman v. Commercial Union Ins. Co., 39 F.3d 594, 597-98 (5th Cir. 1994) ("[F]or factual determinations under ERISA plans, the abuse of discretion standard of review is the appropriate standard") (internal quotation marks omitted) (quoting Pierre v. Conn. Gen. Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir. 1991)). "Consequently, district courts in the Fifth Circuit review under an abuse of discretion standard a plan administrator's factual determinations and determinations made pursuant to a plan that gives the administrator discretionary authority to determine eligibility or interpret the terms of the plan." Id. at 598. "In applying the abuse of discretion standard, [the court] analyze[s] whether the plan administrator acted arbitrarily or capriciously." Id. at 601 (internal quotation marks omitted) (quoting Salley v. E.I. DuPont de Nemours Co., 966 F.2d 1011, 1014 (5th Cir. 1992)).
C
Amendment 3 provides, in relevant part:
37.1 The rights and benefits under this Plan of persons who meet the eligibility requirements set forth below shall be governed by the Plan, except as provided in this Section 37. Such persons described in the preceding sentence are referred to in this Section 37, where appropriate, as "Eligible Members".
37.2 Eligibility
The provisions of this Section 37 shall apply to a Member:
(a) Who is notified in writing by the Company between August 1, 1991 and December 31, 1991 that he or she will be terminated from employment, due to the [ARCO] 1991 Reduction in Force, as described under subparagraph (i) hereof, with a termination date on or before December 31, 1992, as determined by [ARCO]:
(i) The [ARCO] 1991 Reduction in Force is the program described in the memorandum of J. S. Morrison to the Board of Directors, dated July 22, 1991 and the Specification Statement to the Resolutions of the Board of Directors of [ARCO] of July 22, 1991. Termination of employment pursuant to this program shall be at the direction, and by written notification, of [ARCO], and shall exclude:
(1) Any termination from employment due to misconduct of the Employee;
(2) Any termination from employment with [ARCO] of an Employee who is retained in employment with a purchaser of assets or stock of [ARCO] due to an agreement between [ARCO] and such Purchaser; and
(3) Any termination from employment of an Employee, who, having been notified that he is to be retained in employment with [ARCO] in at least an equivalent grade, at a different geographical location of [ARCO] which requires a change of residence, rejects such relocation and consequently terminates employment.
(b) Who is accruing Membership Service for benefit accrual purposes in the Plan at the time his employment is terminated;
(c) Who is not represented by a collective bargaining agent, or, if represented by a collective bargaining agent, such agent has negotiated the benefits of this section;
(d) Who has neither previously elected and received, nor is entitled to, the benefits provided pursuant to Amendments No. 19, No. 23 or No 35 of Predecessor Plan; and
(e) Who has not elected the benefits provided under the Atlantic Richfield Special Termination Allowance Plan pursuant to Section 4.4 of such Plan.
Ds. Dec. 4, 2002 App. 25-27.
The Plan Administrator denied Krusos' claims for additional benefits, in part because the benefits of Amendment 3 did not accrue until the date of Pavlas' termination, which occurred after the date of divorce:
[T]he [Plan] Administrator confirmed that the Pavlas QDRO divided the [Plan] benefits accrued as of September 30, 1991. That accrued benefit was indeed divided 50/50 between Mr. Pavlas and Ms. Krusos. As of that date, Mr. Pavlas had not accrued any enhanced retirement benefits. First, the plan was not amended until after that date to provide for enhanced retirement benefits. Second, Mr. Pavlas did not accrue enhanced benefits until [ARCO] terminated his employment several months later.
Ds. Dec. 4, 2002 App. 52. Although the Plan Administrator's letter contained some errors, primarily that the appropriate amendment — Amendment 3 — was amended before the date the QDRO was signed, see id. at 61 ("Second, the Appeals Administrator is sorry for the typographical errors in my claim denial letter and assures you the proper plan sections were reviewed by the original Claims Administrator and the Appeals Administrator."), the Plan Administrator clearly concluded that benefits under Amendment 3 did not accrue until Pavlas' termination on December 6, 1991. This interpretation of Amendment 3 is correct.
It is logical that accrual of benefits would not occur until Pavlas was actually eligible for and entitled to the benefits conferred by Amendment 3. "[A]n employee's accrued benefit at any particular point in time is what a fully vested employee would be entitled to receive under the terms of the plan if employment ceased at that particular point in time." Ashenbaugh v. Crucible Inc., 1975 Salaried Retirement Plan, 854 F.2d 1516, 1524 (3d Cir. 1988). Pavlas was not entitled to Amendment 3 benefits until ARCO notified him of his termination under the 1991 RIF and he had in fact been terminated. If Pavlas was never notified of his termination, or if he had been notified but was subsequently fired for, say, misconduct (disqualifying him under § 37.2(a)(i)(1) of Amendment 3), Pavlas would not have been eligible for the 5-and-5 benefits conferred by Amendment 3. Krusos' contention that Pavlas was entitled to the benefits as of the date of divorce, or that such benefits accrued as early as August 1, 1991, lacks force.
In arguing for an August 1 accrual date, Krusos cites one Fifth Circuit opinion and one Treasury Department Tax Decision. She relies primarily on the Fifth Circuit's decision in Harms v. Cavenham Forest Industries, Inc., 984 F.2d 686 (5th Cir. 1993). Harms, however, is inapposite. In Harms the court was concerned that an acquiring company would, after acquisition, eliminate contingent severance benefits that had been conferred to employees by the acquired company in anticipation of the takeover. The acquiring company attempted to remove the plan amendment conferring termination benefits before terminating employees so that employees from the old company could be removed without additional costs. The anti-cutback provisions of ERISA, 29 U.S.C. § 1054(g), prohibit reduction of accrued benefits, i.e., changing the rules of the game midstream. The Fifth Circuit relied upon the fact that ERISA specifically prohibits cutting back, through plan amendment, retirement subsidies that were conferred "to a participant who satisfies ( either before or after the amendment) the preamendment conditions for the subsidy." § 1054(g) (emphasis added) (quoted in Harms, 984 F.2d at 692). In that case, after the post-takeover amendment, the employees satisfied the condition in the pre-takeover plan that they be terminated. These anti-cutback issues are not present in this case. In Harms the Fifth Circuit invalidated what ERISA specifically prohibited — tactics that are not involved in the present case. The Harms panel did not adopt a general rule regarding when benefits accrue, and its decision does not therefore guide the resolution of today's case.
Krusos next quotes a 1991 Internal Revenue Service ("IRS") commentary on new regulations to support choosing a retroactive accrual date.
Many commentators requested clarification of the treatment of early retirement window benefits. The final regulations clarify that these benefits are taken into account in determining most valuable accrual rates but provide a simplified testing method under which employees who will be eligible by the end of the window period are treated as eligible as of the first day of the window period.
Nondiscrimination Requirements for Qualified Plans, 56 Fed. Reg. 47,524-01, 47,531 (Sept. 19, 1991). Krusos argues that the 5-and-5 benefit is an early retirement window benefit, as the Plan Administrator admitted by deposition. See P. Dec. 4, 2002 Br. at 24. The IRS statement, however, does not relate to the circumstances of this case. This evaluation of accrual dates by the IRS is simply to identify which retirement plans discriminate among employees based on pay:
This document contains final regulations under section 401(a)(4) of the Internal Revenue Code of 1986. They interpret the section 401(a)(4) requirement that contributions or benefits provided under a tax-qualified retirement plan not discriminate in favor of highly compensated employees. This section and the minimum coverage requirements of section 410(b) form a coordinated nondiscrimination rule that prohibits a tax-qualified retirement plan from being designed or operated to favor highly compensated employees.56 Fed. Reg. 47,524-01, 47,524. Through regulation, see 26 C.F.R. § 1.401(a)(4)-1 et seq., the IRS created complicated procedures for evaluating the discriminatory nature of retirement plans. As a result, it was necessary to choose certain default rules to simplify the evaluation of discrimination. These IRS formulae in no way require, or even suggest, that in situations similar to the present case, where a straightforward approach to accrual makes sense, courts and plan administrators should adopt a more tortured understanding of the accrual of benefits. The court agrees with the Plan Administrator's interpretation of Amendment 3 that the 5-and-5 benefit did not accrue until Pavlas was notified of his termination and was discharged under the RIF.
Even if the Plan Administrator did not interpret Amendment 3 correctly, Krusos has not demonstrated that the interpretation was an abuse of discretion. Krusos does not argue that the Plan was interpreted inconsistently, unfairly, or in a manner that produced unanticipated costs. See Wildbur, 974 F.2d at 637-38.
The court holds that the Amendment 3 benefits accrued to Pavlas when he was notified of his termination and was discharged under the RIF, which occurred after the effective date of the divorce. The Plan enhancement benefits were therefore not to be distributed equally between Pavlas and Krusos as a "present accrued benefit" under the QDRO.
IV
The court now turns to Krusos' remaining claims. Relying on the same facts that she asserts to allege her cause of action for unpaid benefits, Krusos brings claims for breach of fiduciary duty, Compl. § V, and interference with protected rights, id. § VI. The court must decide as a threshold matter whether these claims are permitted, given the availability of adequate remedies under Krusos' claim for benefits.
The court will address both claims together. Although the cases that the court cites refer to preclusion of breach of fiduciary duty, not interference with protected rights, claims where other remedies are available, the reasoning applies equally to both. Interference with protected rights claims under 29 U.S.C. § 1140, are governed and brought as civil actions under § 1132, just as are breach of fiduciary duty claims. See 29 U.S.C. § 1140 ("The provisions of section 1132 of this title shall be applicable in the enforcement of this section."); Heimann v. Nat'l Elevator Indus. Pension Fund, 187 F.3d 493, 504-05 (5th Cir. 1999); Held v. Mfrs. Hanover Leasing Corp., 912 F.2d 1197, 1203 (10th Cir. 1990) (noting that claims under § 1140 are brought under § 1132(a)(3) for injunctive relief, and recognizing that claim for equitable relief under § 1140 was separate from claim for benefits because relief for denial of benefits was not adequate to repair unlawful discharge). Moreover, § 1132(a)(3) is not limited in terms to breach of fiduciary duty claims.
A
29 U.S.C. § 1132(a) primarily provides three different forms of relief. Section 1132(a)(1) enables a plan participant or beneficiary to sue for plan benefits. Section 1132(a)(2) provides relief for a plan participant or beneficiary who seeks changes or reparations to a plan as a whole, not for payment of specific benefits or harm to her as an individual. See McDonald v. Provident Indem. Life Ins. Co., 60 F.3d 234, 237 (5th Cir. 1995) (discussing § 1109 claims, which are the only ones that can be brought under § 1132(a)(2)). Section 1132(a)(3) provides equitable relief "to enjoin any act or practice which violates any provision of th[e] subchapter or the terms of the plan, or to obtain other appropriate equitable relief to redress such violations or to enforce any provisions of th[e] subchapter or the terms of the plan." 29 U.S.C. § 1132(a)(3). Krusos sues in count one of her complaint for benefits under § 1132(a)(1), but presumably does not seek relief under § 1132(a)(2) because she is not asserting a violation affecting the Plan as a whole. It is unclear, however, whether her breach of fiduciary duty and interference with protected rights claims should be treated as independent § 1132(a)(3) claims or merely as alternate grounds for a claim for unpaid benefits under § 1132(a)(1).B
In Tolson v. Avondale Industries, Inc., 141 F.3d 604 (5th Cir. 1998) ("Tolson II"), the Fifth Circuit quoted and affirmed the district court's opinion that "personal recovery by beneficiaries under § 1132(a)(3) is generally not proper when the basis of the claim is simply the denial of benefits under the terms of a policy." Tolson v. Avondale Indus, Inc., 1997 WL 539919, at * 7 (E.D. La. Aug. 29, 1997) ("Tolson I")). "[A]n ERISA plaintiff may bring a private action for breach of fiduciary duty only when no other remedy is available under 29 U.S.C. § 1132." Rhorer v. Raytheon Eng'rs Constructors, Inc., 181 F.3d 634, 639 (5th Cir. 1999) (citing Varity Corp. v. Howe, 516 U.S. 489, 515 (1996) ("Thus, we should expect that where Congress elsewhere provided adequate relief for a beneficiary's injury, there will likely be no need for further equitable relief, in which case such relief normally would not be `appropriate.'")). The availability of a remedy for obtaining such benefits precludes as a matter of law a breach of fiduciary duty claim that seeks the same benefits. As the Fifth Circuit held in Tolson II:
Because this relief was available and, indeed, utilized, it would be inappropriate for the Court to fashion any further equitable relief under Section 1132(a)(3).Tolson II, 141 F.3d at 610. The fact that the court is denying Krusos' claim for benefits does not mean that she can maintain a cause of action for benefits under the rubric of a breach of fiduciary duty claim. That the claim was denied does not remove it as an adequate remedy to the alleged harm. See Tolson II, at 610 ("The simple fact that Tolson did not prevail on his claim under section 1132(a)(1) does not make his alternative claim under section 1132(a)(3) viable."). Thus Krusos cannot recover based on breach of fiduciary duty or interference with protected rights claim where "[t]he alternative claim is essentially the same as the principal demand in that both seek the recovery of denied benefits." Tolson I, 1997 WL 539919, at *8.
It appears from reading Krusos' complaint that the only remedy she seeks is recovery of unpaid benefits and attorney's fees and costs that would be available under § 1132(a)(1). The complaint does contain in the prayer for relief a request for unspecified "further relief, both general and special, at law or in equity, to which Mrs. Krusos may be justly entitled." Compl. at 7 (prayer ¶ H). This language does not of itself suggest that Krusos is requesting separate equitable relief apart from Plan benefits. And the balance of the complaint contains no clear indication that Krusos is suing defendants for equitable relief to remedy a breach of fiduciary duty or interference with protected rights. Her causes of action for breach of fiduciary duty and interference with protected rights are therefore subject to dismissal because they are precluded as duplicate claims for benefits. See Rhorer, 181 F.3d at 639 ("Indeed, it is readily apparent from Rhorer's complaint that her claim to recover plan benefits is the predominate cause of action in this suit. Accordingly, because § 1132(a)(1)(B) affords Rhorer an avenue for legal redress, she may not simultaneously maintain her claim for breach of fiduciary duty."); Constantine v. Am. Airlines Pension Benefit Plan, 162 F. Supp.2d 552, 557 (N.D. Tex. 2001) (Mahon, J.) ("Plaintiff's breach of fiduciary duty claim is merely a disguised claim for failure to pay benefits. The only damages Plaintiff seeks to recover are benefits allegedly due her, along with interest, reasonable attorney's fees and costs."). To the extent that this is her intent, these claims are dismissed as well.
C
Although it appears doubtful that Krusos is seeking relief under these claims that is broader than her cause of action for benefits under § 1132(a)(1), Krusos maintains in her summary judgment response brief that her breach of fiduciary duty claim is not coterminous. See P. Jan. 17, 2003 Br. at 36-37. Her contention is dubious because it lacks any predicate in the allegations of her complaint. Nevertheless, to avoid overlooking a claim for breach of fiduciary duty or interference with protected rights that remains in this case, and bearing in mind that such a claim, if made, cannot result in recovery of unpaid Plan benefits, the court will give Krusos the opportunity to demonstrate that she has alleged a viable breach of fiduciary duty and/or interference with protected rights claim for equitable relief.
She does not make the same argument concerning her claim for interference with protected rights. See P. Jan. 17, 2003 Br. at 37; see also P. Dec. 4, 2002 Br. at 33-37.
* * *
For the reasons set out, defendants' motion for summary judgment is granted and Krusos' motion is denied. Within 20 days of the date this memorandum opinion and order is filed, Krusos must submit a brief that substantiates her contention that she is seeking equitable relief under a breach of fiduciary duty claim or interference with protected rights claim that is broader than her claim for Plan benefits, or she must notify the court by letter that she concedes that she is not seeking such relief. If she concedes that the claims are not broader or fails to demonstrate that they are, the court will dismiss the case based on today's opinion.
Such a concession, of course, will not preclude her from appealing today's decision and the judgment based thereon.
The court will decide the question without inviting briefing from defendants unless it concludes that such briefing would assist the court. If it invites defendants to file a brief, it will permit Krusos to reply to that brief.