Summary
finding that plaintiff's claim for disability retirement benefits was properly denied because the application was untimely
Summary of this case from Plain v. AT T Corp.Opinion
No. C-99-20996 RMW
June 5, 2002
Crisostomo G. Ibarra Law Offices of Crisostomo G. Ibarra, San Francisco, CA., Attorney for Plaintiff.
John F. Penrose Fisher Phillips LLP., Oakland, CA., Attorney for Defendant.
JUDGMENT
The court issued its Findings of Fact and Conclusions of Law on June 5, 2002. Based upon those findings and conclusions, judgment is hereby entered in favor of defendant and against plaintiff, and plaintiff will take nothing by way of her complaint.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
An evidentiary hearing was held in this matter on July 25, 2001 and August 2, 2001. The purpose of the hearing was to resolve the question of whether plaintiff Phyllis Hunter's application for disability retirement benefits was properly denied as untimely by Lockheed Martin Corporation ("Lockheed"), as Administrator and Fiduciary of the Lockheed Martin Corporation Retirement Plan ("the Plan"). The parties agreed that if the court found the application timely, it should enter judgment remanding the matter to Lockheed to determine whether plaintiff was disabled under the terms of the Plan. If, however, the court found the application was properly denied as untimely, it would enter judgment affirming the Lockheed's denial of the application. The court has considered the evidence presented and heard the arguments of counsel. The court now issues its findings of fact and conclusions of law.
Factual Background
Phyllis Hunter worked for Lockheed from December 4, 1978 until she was laid off effective January 8, 1993. She was hired as an hourly employee and promoted to a salaried employee on December 7, 1985. She became an hourly employee again on July 4, 1992 and remained such until her layoff on January 8, 1993.
Ms. Hunter first applied for benefits on August 21, 1998. That application was denied as untimely, because she did not apply within her period of continuous service. Plaintiff appealed the denial by her counsel's letter dated October 19, 1998, which stated in part:
Throughout her employment at Lockheed, Ms. Hunter was not provided by anyone at Lockheed with any information regarding disability retirement benefits including her 10 last six months of employment there.
Ms. Hunter's last date of employment included a disabling physical and emotional condition. Ms. Hunter thereafter for over one year was not in any emotional condition to formally request for disability benefits.
No evidence had been presented to Lockheed prior to or with her counsel's letter supporting Ms. Hunter's physical or emotional condition. After receipt of the letter, Lockheed denied Ms. Hunter's appeal on July 2, 1999.
Lockheed's Retirement Plan
Under Lockheed's Retirement Plan for hourly employees, Ms. Hunter had until January 8, 1995 to apply for disability benefits. The Plan in effect from the date of Ms. Hunter's layoff through her period of continuous provides in relevant part:
[A] member who:
(1) has ten (10) or more years of Continuous Service, and
(2) has not yet reached sixty-five (65) years of age, and
(3) has been totally and permanently disabled . . . for a period of six (6) consecutive months during the period of Continuous Service, and
(4) submits a written application for disability retirement benefits during the period of Continuous Service by Filing with The Committee, and
(5) . . . shall be eligible for a Disability Retirement Benefit. . . .
Sec. 5.04 — Disability Retirement Benefit, Lockheed Retirement Plan for Certain Hourly Employees as Amended and Restated Effective December 25, 1989 (emphasis added). Continuous service runs for two years after layoff. Id. at Sec. 3.01 — Definition of Continuous Service. Ms. Hunter did not apply for disability benefits until August 21, 1998, over two years after her period of continuous service ended.
Hunter's Contentions
Ms. Hunter essentially makes three arguments as to why her claim for benefits should not be considered untimely. First, she says she was never provided with a Summary Plan Description or other written or verbal information about any possible disability retirement benefits, and, therefore, the time period for filing was never triggered. Second, she contends that her medical condition tolled the commencement of the time period for filing. Third, she argues that even if she had received Lockheed's plan documents or the Summary Plan Description, they are inadequate in that they do not describe the circumstances that could result in tolling the filing period.
Standard of Review
At the time of Ms. Hunter's layoff and through her following period of continuous service, the applicable plan gave the Benefit Plan Committee the "discretion necessary" to determine benefit eligibility and "full discretion to construe and interpret the terms and provisions of this Plan." Id. at Sec. 13.03 — Responsibilities of Named Fiduciaries. Therefore, under ERISA the court reviews the decision to deny benefits on an abuse of discretion standard and based upon the record before the administrator. Friedrich v. Intel Corp., 181 F.3d 1105, 1109 (9th Cir. 1999) ("When an ERISA plan administrator is given discretion to determine benefits eligibility, courts must review the decision denying benefits under the deferential abuse of discretion standard."). Ms. Hunter has offered no evidence "tending to show that the fiduciary's self-interest caused a breach of the administrator's fiduciary obligations to the beneficiary" and justifying a less deferential standard. Id.
However, even if a de novo standard of review is applied and Ms. Hunter's additional evidence considered, the Plan's decision is supported by a preponderance of the evidence. See Dishman v. UNUM Life Ins. Co. of Am,, 269 F.3d 974, 985 (9th Cir. 2001).
Distribution of Summary Plan Descriptions
Ms. Hunter contends that she was never provided a Summary Plan Description or other documentation informing her about her right to apply for disability retirement benefits. She supports her position by the testimony of Emma McAdams, Evelyn Miller, Jack Kellum and Lourdes Leffler, all former Lockheed employees, who claimed that they either did not receive, or did not remember receiving, documents explaining employees' rights to disability retirement benefits. Although each of the witnesses exhibited some hostility toward Lockheed or a close relationship with Ms. Hunter, each appeared basically honest. However, their testimony was not persuasive as to what documents they received because they did not remember what documents they had received from Lockheed and had not been employed by Lockheed for some time before they were asked by plaintiff whether they had received summary plan descriptions or other documents describing disability retirement benefits.
Lockheed presented the testimony of Reiko Pang who has been employed by Lockheed since 1983 and worked as a clear-in clerk from 1983 to 1986. Newly hired employees met with her. She explained that it was the practice of Lockheed to provide summary plan descriptions to all new employees. Lockheed's practice also involved personally distributing summary plan descriptions to all employees whenever they changed status from hourly to salaried or salaried to hourly.
Doretta Schuyler, the current Manager of the Employee Benefits Section of the Human Resources Department at Lockheed, testified that she has been with Lockheed since 1984 and that she became familiar with Lockheed's policies and practices with respect to employee benefits including the distribution of summary plan descriptions. She confirmed the testimony of Ms. Pang that Lockheed distributed summary plan descriptions on an employee's commencement of employment and on a change in an employee's status.
Although the summary plan description in effect on Ms. Hunter's date of employment did not make clear that applications for disability benefits had to be made during a period of continuous service, the summary plan description in effect at the time she went from a salaried employee to an hourly employee on July 4, 1992 clearly states in the section entitled "Applying for Retirement Benefits" that "[a]pplication [for disability retirement] must be made during a period of continuous service." A Plan for Your Retirement (Lockheed Retirement Plan for Hourly Employees), at 30. 29 U.S.C. § 1021 requires a summary plan description to be furnished to each participant. The plan administrator is required to use measures "`reasonably calculated to ensure actual receipt of the material by plan participants." 29 C.F.R. § 2520.104b-1(b)(1). In the instant case, the court finds that Lockheed's practice as established by the testimony of Ms. Pang and Ms. Schuyler was reasonably calculated to ensure actual receipt of the summary plan descriptions. In fact, the court finds based upon the evidence of Lockheed's practice, the change of Ms. Hunter's status in 1992, and the paperwork she did receive concerning benefits that it is more likely true than not true that Ms. Hunter received the summary plan descriptions. Therefore, the court finds that Ms. Hunter's claim that she did not receive notice of the time limit for filing for benefits is not a basis for excusing her tardy filing.
The summary plan description for salaried employees in effect on December 7, 1985 when Ms. Hunter became a salaried employee also states that "[a]pplication [for disability retirement] must be made during a period of continuous service." A Plan for Your Retirement (Lockheed Retirement Plan for Salaried Employees), at 30.
Tolling of Claim Period Based Upon Medical Condition
Ms. Hunter claims that the time period for filing should be equitably tolled because of her medical condition. The parties have not cited any Ninth Circuit case applying equitable tolling in a case involving a claim for ERISA benefits. However, there is no apparent reason that the doctrine should not apply. Nevertheless, a showing of exceptional circumstances, such as institutionalization or adjudged mental incompetence of the litigant, is required. See Grant v. McDonnell Douglas Corp., 163 F.3d 1136, 1138 (9th Cir. 1998). Here, even if Ms. Hunter's medical records are considered despite the fact they were not provided to Lockheed, Ms. Hunter is not entitled to equitable tolling. Although Ms. Hunter was suffering from a variety of medical conditions, she was far from institutionalized or mentally incompetent.
There was a period of approximately 25 days when Ms. Hunter was hospitalized as the result of a seizure. She should be considered incompetent for that period of time. However, applying equitable tolling for that period does not account for the long delay in applying for benefits.
Failure to Explain Equitable Tolling Circumstances
Ms. Hunter's last argument is that even if she had received Lockheed's plan documents or the summary plan description, they are inadequate in that they do not describe the circumstances that could result in the tolling of the filing period. How this alleged failure is causally related to Ms. Hunter's late filing is unclear. More importantly, the court is not aware of any case suggesting that an ERISA plan must explain equitable tolling. Ms. Hunter's claim is without merit.Conclusion
The court, although sympathetic to Ms. Hunter's situation, concludes that her claim was properly denied as untimely. This conclusion is reached whether an abuse of discretion or a de novo standard of review is applied. Judgment will be entered in favor of defendant and against plaintiff, and plaintiff will take nothing by way of her complaint.