211 F. Supp.2d 222 (2002) | Cited 0 times | D. Maine | July 17, 2002


A former officer of UNUMProvident Corporation sued her formeremployer, its severance plan, and the plan administrator torecover benefits allegedly due pursuant to the plan's "Change ofControl" provisions. Presently before the Court are PlaintiffsMotion for Additional Discovery (Docket # 35) and Defendants'Motion for Summary Judgment (Docket # 27). For the followingreasons, the Court DENIES Plaintiffs Motion and GRANTSDefendants' Motion.


The Court will grant a motion for summary judgment if therecord discloses that there is no genuine issue as to anymaterial fact and the moving party is entitled to judgment as amatter of law. Fed.R.Civ.P. 56(c). An issue is "genuine" if itcould be resolved in favor of the nonmoving party by a rationalfact finder drawing reasonable inferences. See, e.g., Ward v.Massachusetts Health Research Inst., 209 F.3d 29, 32 (1st Cir.2000). A fact is "material" if it could affect the outcome ofthe case under governing law. See, e.g., Hinchey v. NYNEXCorp., 144 F.3d 134, 140 (1st Cir. 1998). The following factsare undisputed.


Plaintiff Catherine Liston is a former officer of UNUMCorporation ("UNUM"), a Delaware corporation. As an officer, sheparticipated in Defendant UNUM Corporation Officer SeverancePlan (the "Plan"). UNUM adopted the Plan, in part, to provide afinancial safety net for its officers whose jobs were"eliminated" as a result of a "change of control" of thecompany, such as a merger. The Plan defined "job elimination"arising from a change of control as any of the following:

The significant adverse reduction or alteration in the nature and status (other than title) of the officer's position, duties or responsibilities immediately prior to or within 365 days of the change in control;

The lack of any re-employment opportunity that would utilize the officer's professional skills and abilities;

The involuntary termination of the officer for reasons other than performance failure or for cause; [or]

The failure or inability of UNUM Corporation to obtain a satisfactory agreement to assume and agree to honor the terms of this subsection following a change in control.

(See Def.Mot. for Sum.J. at ex. 2, p. 11 (Docket # 27).)

The Plan gave the company the ability to amend its provisions,but required that "[a]ny such amendment, termination, change,elimination, or substitution . . . be approved in writing by theSenior Vice President of Human Resources of UNUM Corporation."(Id. at p. 12.) However, it limited UNUM's ability to makeamendments around the time of a "change of control":

With respect to the Change of Control provision, such provision may be amended unless such amendment occurs within 12 months of a Change of Control. Further; any other amendment of the Plan that occurs within 12 months of a Change of Control may not operate to reduce any of the benefits that would otherwise be provided under the Change of Control provision absent such an amendment.

(See id.)

The Plan Administrator, Defendant Robert Cornett, oversaw thePlan. Short of making amendments, the Plan granted him "fulldiscretion to make determinations as to the right of any personto a benefit in this Plan . . . to construe and interpret theterms of this Plan, decide questions of eligibility, anddetermine the amount and time of payments of any benefitsdue. . . ." (See id. at 10.) An Amendment to the Plan adoptedFebruary 23, 1999, further gave him explicit "discretionaryauthority to control and manage the operation and administrationof the Plan," including "construing and interpreting terms" and"making rules and regulations." (See id. at ex. 2(A).)

On June 30, 1999, UNUM merged with Provident Companies, Inc.,creating a new company, Defendant UNUMProvident Corporation. Theparties agree that this amounted to a "change of control" asdefined by the Plan. UNUMProvident adopted the Plan, and Cornettcontinued as Plan Administrator. Shortly after the merger, heissued an "Administrative Rule" purporting to define some of theterms in the Plan's Change of Control provision. In pertinentpart, the Administrative Rule read

1. A significant adverse reduction or alteration in the nature and status (other than title) of the officer's duties or responsibilities means any one of the following:

• a loss of the officer's position where no opportunity exists to work at either the purchaser . . ., the vendor . . ., or the survivor of a merger . . . other than a project assignment;

• a loss of the officer's position where the only opportunity to work at either the purchaser . . ., the vendor . . ., or the survivor of a merger . . . involves a position with skills and abilities outside of the skills and abilities the officer utilizes in his or her current position;

• a change in the officer's position from a manager or director of a major unit to an individual contributor in that unit or another unit; or

• a reduction of more than 10% of the base salary the officer was receiving immediately prior to the change in control.

2. An officer who declines a reemployment opportunity in a comparable position which does not require the officer to relocate to a place of employment more than 50 miles from his or her location immediately prior to the change in control shall not be considered involuntarily terminated by reason of job elimination.

3. An officer who accepts a reemployment opportunity in a comparable position regardless of whether such position requires him or her to relocate to a place of employment more than 50 miles from his or her location immediately prior to the change in control, shall not be considered involuntarily terminated by reason of job elimination.

4. A "comparable position" means a position within the same functional area which requires similar skills and abilities the officer utilizes in his or her current position and does not result in a reduction of more than 10% of the base salary he or she was receiving immediately prior to the change in control . . .

5. A "reemployment opportunity" means a reemployment opportunity with UNUM . . . or the survivor of a merger involving UNUM. . . .

(Id. at ex. 2(D).)

Pre-merger, Liston worked as the "Vice President of LTDBenefits" in UNUM's Portland, Maine, office. After the merger,Liston continued working in a similar position for the newcompany, but with the title of "Vice President, PortlandCustomer Care." Liston believed, however, that the new positiondiffered from her former position in several important respects.Her workdays grew longer, and she traveled more frequently. Shelost discretion to make strategic decisions, and to approvecertain expenses and salary promotions for her subordinates.Finally, the company limited its reimbursement for her callshome when she was on the road. Some of the changes were notspecific to Liston, but reflected a company-wide shift inmanagerial policy.

Liston viewed the changes as a "significant adverse reductionor alteration in the nature and status" of her employment.Accordingly, in March 2000 she submitted a request toUNUMProvident for benefits due under the Plan's Change ofControl clause. UNUMProvident refused, informing Liston byletter dated April 4, 2000, that after the merger she had beenoffered a "comparable position" with the company that precludeda benefits award. "Your contention," UNUMProvident continued,"that there has been a reduction in decision-making authorityand less strategic focus in your role, even if true, does notconstitute a significant adverse alteration in the nature andstatus of your position." The letter invited Liston to provideadditional facts that might support her benefit request.

Liston, represented by counsel, appealed the decision to thePlan's "Review Committee" by letter dated June 2, 2000. In herappeal, she described changes in her position she felt warranteda grant of severance benefits. She detailed a threefold increasein her travel requirements during the first quarter of 2000; anincrease in her weekly hours worked by roughly twenty hours perweek, with increased weekend and evening work as well; and adecrease in the strategic decision-making responsibilities inher job, accompanied by a loss of authority to make salary andexpense decisions regarding her subordinates.

The Review Committee denied Liston's appeal in a two-pageletter dated June 13, 2000.The Committee explained that it was denying benefits becauseListon had been offered a "comparable position," and becausechanges in travel requirements, work hours and company-wideexpense and financial control procedures "do not constitute ajob elimination according to the Plan." Again, UNUMProvidentinvited Liston to produce additional information that mightsupport her claim request, and informed her of her right toappeal the Committee's decision to the Benefit AdministrativeCommittee (the "BAC"), a body headed by Cornett.

On August 3, 2000, Liston appealed the Committee's decision tothe BAC. She reiterated her earlier arguments, and suggestedthat the company's grant of benefits to five former UNUMofficers, whom she named, entitled her to benefits as well. OnAugust 28, 2000, Liston and her attorney met with Cornett andpresented her case. Several months later, in early November2000, the BAC met to consider Liston's appeal. In making itsdecision, it took into account all of the arguments Liston hadmade in her letters to the company. It also considered theargument that other UNUMProvident officers had received benefitsunder the Plan's Change of Control provision, even though Listonhad not. The BAC briefly discussed the case of each officerListon had named.

In a detailed ruling dated December 1, 2000, the BAC deniedListon's appeal. It explained that Liston's pre-merger andpost-merger jobs were similar enough to warrant denial ofbenefits. It contended that the changes in travel, work hoursand discretionary authority did not constitute a significantadverse reduction or alteration in the nature and status of herjob. It further denied that the officers who had receivedbenefits were similarly situated to Liston, and maintained thattheir cases were therefore irrelevant to hers. The BAC's denialof Liston's request was the company's final decision as to hercase.

In response, Liston filed a two-count Complaint in this Courtpursuant to 29 U.S.C. § 1132(a)(1)(B) and (c)(1).1 In herpretrial discovery requests, Liston asked the Court forpermission to discover all of UNUMProvident's records relatingto other "similarly situated" officers who had sought benefitsafter the merger. The Court, by Order of the United StatesMagistrate Judge, permitted Liston to discover any informationrelated to other benefits claims the BAC had considered decidingher case, but refused to allow her to discover the details ofother claims the BAC had not addressed at the November 2000meeting. (See Docket # 18). Discovery closed in mid-April2002. UNUMProvident, the Plan, and Cornett subsequently movedfor summary judgment (Docket #27).


As required by Local Rule 56, Defendants filed a Statement ofMaterial Facts with their Motion (Docket # 28). Liston, in turn,filed a timely response (Docket # 31), and an Opposing Statementof Material Facts (Docket #32). Liston's Opposing Statement didnot present any new facts. The UNUM Defendants filed a replybrief addressing Liston's legal arguments on May 30, 2002(Docket #33). The Court took the Motion under advisement as ofthat date.

On June 6, 2002, Plaintiff filed a "Supplemental Statement ofMaterial Facts" (Docket # 36), followed by a "SecondSupplemental Statement of Material Facts" (Docket # 37) twoweeks later. Neither of these Statements wasaccompanied by a legal brief explaining the relevance of thefacts cited, or why the facts could not have been submitted inPlaintiffs Opposing Statement. The filing of these statementsrepresents a fundamental failure to comply with the provisionsof Local Rule 56, and for that reason the Court will ignorethem. See Currier v. Town of York, No. 01-CV-68-P-C, 2002 WL1146773 at *5 (Me. May 30, 2002); Mulkern v. CumberlandCounty, No. 00-CV-382-P-C, 2001 WL 1519409 at *15 n. 44 (Me.Nov. 30, 2001).2

Around the same time, Plaintiff also moved for additionaldiscovery regarding "similarly situated" officers atUNUMProvident, and for an in camera inspection of anunredacted version of the minutes of the BAC's November 2000meeting regarding Plaintiffs benefit claim (Docket # 35). Theserequests are also untimely. See Local Rule 16.2(e). Moreover,the Magistrate Judge has already ruled upon the issue of"similarly situated" officers, and the Court sees no reason toreopen it. (See Magistrate Judge's Order, March 19, 2002(Docket # 18).)


Plaintiff alleges that the Plan Administrator exceeded hisdiscretionary powers by interpreting the Plan narrowly, and bydenying her severance benefits under this narrow interpretation.She brings her claim pursuant to section 1132(a)(1)(B) of thefederal Employee Retirement Income Security Act (ERISA).29 U.S.C. § 1132(a)(1)(B). The parties agree that the Plan isgoverned by ERISA.

A. Standard of Review

The district court in an ERISA benefits review caseessentially acts as an appellate body. Courts review benefitsdecisions by plan administrators de novo, unless the benefitsplan at issue grants the administrator discretion to makebenefits decisions. See Firestone Tire & Rubber Co. v. Bruch,489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989); Terryv. Bayer Corp., 145 F.3d 28, 37 (1st Cir. 1998) (citingRecupero v. New Eng. Tel. & Tel. Co., 118 F.3d 820, 827 (1stCir. 1997)). If a plan grants that discretion, courts review themerits of a benefits determination only for "abuse ofdiscretion," or for arbitrariness and capriciousness.3Firestone, 489 U.S. at 115, 109 S.Ct. 948. Likewise, if a plangrants the administrator discretion to interpret or construe theplan, courts review the interpretations only for abuse ofdiscretion. Id.; Terry, 145 F.3d at 40.

Plaintiff concedes that the Plan nominally grants DefendantCornett discretion, as Plan Administrator, to interpret andconstrue the Plan's provisions, and to make benefitsdeterminations. Plaintiff argues, however, that Cornett'sdiscretion is circumscribed by the Plan's amendment provisions,which limit how and when the company may substantively alter thePlan. She insists that the amendment provisions pertaining tochanges of control prevent the Plan Administrator frominterpreting plan terms around the time of a merger, or at leastthat they make it unclear whether he has the authority to do so.This limitation on the Administrator's discretion, Plaintiffscontends, entitles the Court to engage in de novo review of hisactions.

This simply is not the case. The Plan does not delegate anyability to amend the Plan to the Plan Administrator. Itrequires, instead, that the Senior Vice President of HumanResources approve any fundamental change. Amendment of the Plan,plainly, is not the Administrator's job. Nonetheless, he clearlyand unambiguously possesses the discretion to interpret itsprovisions, in a reasonable manner, any time he chooses.Therefore, pursuant to Firestone, the Court reviews theAdministrator's decision for abuse of discretion.

B. Scope of Record on Judicial Review

The Court considers only the administrative record indetermining whether the Administrator abused his discretion.(See Magistrate Judge's Order, March 19, 2002 (Docket # 18));Chambers v. Family Health Plan Corp., 100 F.3d 818, 823-24(10th Cir. 1996) (collecting cases); De Dios Cortes v. MetLife,Inc., 122 F. Supp.2d 121, 129-30 (P.R. 2000).

C. Cornett's Interpretation of Plan Terms

In his Administrative Rule of July 6, 1999, the PlanAdministrator interpreted the Plan's Change of Control provisionto deny benefits to any officer who suffered a job loss, but wasoffered a "comparable position" with the company. Plaintiffargues that this Rule effectively amended the Change of Controlprovision, substantively altering the Plan language so as topreclude Plaintiffs benefit award. The Plan forbids amendingPlan language so as to adversely affect benefit eligibilitywithin one year of a change in control. It also requires thatany amendment be approved by UNUMProvident's Senior VicePresident of Human Resources.

In an abuse of discretion review, the question before theCourt is whether Defendant Cornett's interpretation followsreasonably from the language of the Plan. See Terry, 145 F.3dat 40; Canis v. Coca-Cola Enters., Inc., 49 F. Supp.2d 73, 82(R.I. 1999). "It is irrelevant whether this Court agrees withthe [interpretation] or whether the employee offers a competingreasonable interpretation. To uphold the administrator, thisCourt need only find that the [interpretation] was reasonable."Canis, 49 F. Supp.2d at 82.

Read without the benefit of Defendant Cornett'sinterpretation, the Plan's Change of Control provision defines"job elimination," in pertinent part, as either (1) a"significant adverse reduction or alteration in the nature orstatus (other than title)" of an officer's job, or (2) "thelack of any re-employment opportunity" with the company.Although these two phrases are written in the disjunctive,taking the second in isolation results in a nonsensicaldefinition. A "lack of re-employment opportunity," by itself,could not possibly amount to "job elimination." Otherwise, anofficer would be entitled to collect benefits without adiminution in the responsibilities of his current job, so longas he had no re-employment prospects with the company should hisemployment be terminated.

The Administrative Rule seeks to avoid this absurdity bycombining the two definitions of "job elimination." For benefitsto be paid, any "significant adverse reduction or alteration inthe nature or status (other than title)" of the officer's workresponsibilities must be accompanied by a "lack ofre-employment opportunity." The company does not consider areduction or alteration in the responsibilities of an officer'sjob significant if the company offers the officer another"comparable position." Thus, an officer remains ineligible forbenefits after a merger unless the company fails to offer her orplace her in a position in the same geographic area, at roughlythe same salary, utilizing the same job skills and abilities.

Plaintiff protests that this interpretation effectively amendsthe Plan, because the plain language of the Change of Controlprovision suggests that the two definitions of "job elimination"should be read disjunctively. Plaintiffs preferred constructionwould permit an officer to quit her job and begin collectingbenefits once a "significant adverse reduction or alteration"occurs, regardless of her "re-employment opportunities." Whileit is true that a disjunctive reading is suggested by thelanguage of the Plan, the Court will not enforce Plaintiffspreferred reading so long as Defendant Cornett's interpretationis reasonable. See Terry, 145 F.3d at 40; Canis,49 F. Supp.2d at 82.

The Court finds that it is. The Plan Administrator actedwithin his discretion in interpreting the Plan so as to avoid anonsensical reading of "lack of re-employment opportunity." Hisreading is consistent with the purpose of the plan to providebenefits to "officers who are involuntarily terminated," and isfairly suggested by the Plan language, if not explicitly stated.Thus, a "job elimination" under the Plan requires that anofficer not be offered a comparable position with the companyafter a change of control.

D. Cornett's Benefits Determination

Having determined that the Administrator's interpretation ofthe Plan is reasonable, the Court reviews his application of thefacts of this case to the Plan's language for abuse ofdiscretion. Firestone, 489 U.S. at 115, 109 S.Ct. 948.Plaintiff argues that the Administrator erred in finding thatthe diminution in her work responsibilities, and the increase inher travel and work hour requirements were not "significantadverse reduction[s] or alteration[s] in the nature or status"of her employment. Her argument is handcuffed, however, by theAdministrator's reasonable interpretation of the plan. A"significant adverse reduction or alteration," according to theAdministrator, represents (1) a "loss of the officer's position"without the offer of a "comparable position;" (2) a demotionfrom managerial to non-managerial work; or (3) a greater thanten percent reduction in wage.4

The Plan Administrator determined that Plaintiffs job changesdid not fall into any of these categories. The Court does notfind this decision arbitrary and capricious. The job did notentail a change of location for Plaintiff, and her wage did notdecline. Although Plaintiff contends that her strategic andfiscal decision-making responsibilities dwindled, theadministrative record lacks detail as to the severity of thisdecline. Absent such information, the Court will not find thatthe Administrator abused his discretion by deciding that thereduction was not severe enough to eliminate Plaintiffs job. Asfor the remainder of Plaintiffs complaints — that her hours andtravel increased, and that she received less reimbursement forcalls home — the Court will not disturb the Plan Administrator'sjudgment that such increases are in line with what UNUMProvidentdemands of all officers, absent a contrary showing fromPlaintiff. Because she has made none, the Court finds theAdministrator's determination is within the bounds of hisdiscretion.


For the foregoing reasons, the Court DENIES Plaintiffs Motionfor Additional Discovery and GRANTS Defendants' Motion forSummary Judgment.


1. The parties later stipulated to dismissal of the §1132(c)(1) claim (Docket # 30).

2. On June 25, 2002, Defendants filed a Motion to StrikePlaintiff's "Supplemental" statements of material fact (Docket #40). The Motion is now moot.

3. Courts treat "abuse of discretion" and "arbitrary andcapricious" review as one-and-the-same. See Terry, 145 F.3d at37 n. 6.

4. The latter two definitions are redundant with the first. A"comparable position" is defined as one utilizing the sameskills and abilities, and paying a similar wage.

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