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Cooper v. Peoples United Bank, N.A.

United States District Court, D. Vermont

March 15, 2018

Darlene Cooper, Plaintiff,
People's United Bank, N.A., Defendant.

          OPINION AND ORDER (DOC. 14)

          John M. Conroy, United States Magistrate Judge.

         Plaintiff Darlene Cooper commenced this civil action against Defendant People's United Bank, N.A. (PUB), seeking pension benefits that she allegedly accrued during her employment with Chittenden Bank from 1972 to 1985. (Doc. 1 at 1.) In Count One of her Complaint, Cooper claims that PUB, the successor-in-interest to Chittenden Bank, failed to “safeguard and disburse” her pension benefits as required by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461. (Id. at 2.) In Counts Two and Three, Cooper brings common law claims against PUB, asserting that PUB breached its duty to hold Cooper's pension in constructive trust and failed to act as bailee of the pension. (Id. at 2-3.)

         PUB now moves for summary judgment under Fed.R.Civ.P. 56, arguing that Cooper's ERISA claim is barred by her failure to exhaust her administrative remedies following PUB's March 2016 denial of her claim for benefits. (Doc. 14.) PUB further argues that ERISA preempts Cooper's common law claims. (Id.) Cooper opposes the Motion for Summary Judgment, asserting that her administrative remedies should be deemed exhausted because PUB did not follow its own claim procedures in denying Cooper's claim and, alternatively, that further administrative review would have been futile. (Doc. 26.) Cooper additionally claims that it would be premature to conclude that ERISA bars her common law claims at this early stage of the case. (Id.)

         Concluding that Cooper failed to exhaust her administrative remedies, that further administrative review would not have been futile, and that Cooper's common law claims are preempted by ERISA, the Court GRANTS PUB's Motion for Summary Judgment.

         Factual Background

         The following facts are taken from PUB's Motion for Summary Judgment (Doc. 14) and the attached exhibits (Docs. 14-1-14-7), Cooper's Opposition to the Motion for Summary Judgment (Doc. 26) and the accompanying documents (Docs. 26-1-26-3), and additional exhibits introduced by PUB during a December 1, 2017 hearing on the Motion for Summary Judgment.[1] (Doc. 35, Def.'s Exs. A-D.) The facts are undisputed except where noted[2] and, for the purposes of summary judgment, they are viewed in the light most favorable to Cooper. See Sledge v. Kooi, 564 F.3d 105, 108 (2d Cir. 2009).

         I. Cooper's Employment History

         A. Chittenden Bank Employment

         Cooper was employed by Chittenden Bank from 1972 to 1985. (Doc. 14 at 2; Doc. 26-3 at 1, ¶ 1.) Earnings records from the Social Security Administration confirm consistent employment at Chittenden Bank during this time frame. (Doc. 26-1 at 11; see also Doc. 14-7 at 2.) As an employee of Chittenden Bank, Cooper was entitled to participate in the Pension Plan for Employees of the Chittenden Corporation (the Chittenden Pension Plan or the Plan), as long as she satisfied certain age and service requirements described in detail below. (Doc. 14-4 at 9.)

         B. Vermont National Bank Employment

         In 1985, Cooper left Chittenden Bank to work for Vermont National Bank, where she worked from 1985 through 1995. (Doc. 14-7 at 2.) During her employment with Vermont National Bank, she participated in the Vermont National Bank pension plan (the Vermont National Plan), which was sponsored by its corporate parent Vermont Financial Services Corporation. (Doc. 14-6.)

         II. Subsequent Bank Acquisitions

         On May 28, 1998, Chittenden Bank acquired Vermont National Bank. (Doc. 14-7 at 3.) As part of this acquisition, on January 1, 2000, the Vermont National Plan was merged into the Chittenden Pension Plan. (Id.; Doc. 14-4 at 25-26, § 2.1(e).) Then, in January 2008, PUB acquired Chittenden Bank (Doc. 14-7 at 1), becoming the successor-in-interest to the merged Chittenden Pension Plan.3 (Doc. 1 at 1, ¶¶ 3, 4.) As successor-in-interest, PUB acts as administrator and trustee of the Chittenden Pension Plan and administers the accrued benefits due under the Plan, including the merged Vermont National Plan benefits. (Id. ¶ 6; Doc. 14 at 2.)

         III. Chittenden Pension Plan Eligibility

         A. Eligibility Requirements

         The eligibility requirements for the Chittenden Pension Plan are set forth in the Chittenden Pension Account Plan and the Summary Plan Description. (Docs. 14-4, 14-5.) The work hours required for an employee to begin accruing benefits are stated in Article II of the Chittenden Pension Account Plan, entitled “Membership and Service.” (See Doc. 14-4 at 25-37, §§ 2.1-2.5.) To be eligible to participate in the Plan, an employee must have completed 1, 000 service hours during the 12-month period following his or her employment date. (Id. at 27, § 2.2(a); Doc. 14-5 at 3.) Once an employee becomes a participant in the Plan, he or she receives a year of “eligibility service” for each calendar year the employee is credited with at least 1, 000 hours of service. (Doc. 14-4 at 29, § 2.3(a); Doc. 14-5 at 3.) If an employee completes five years of “eligibility service, ” he or she has a fully vested interest in the accrued benefit.[4] (Doc. 14-4 at 65, § 7.2(a)(ii); Doc. 14-5 at 5.)

         B. Cooper's Eligibility

         Because Cooper was separately employed by Chittenden Bank and Vermont National Bank prior to the merger of the Chittenden Pension Plan, her eligibility to receive accrued benefits under the Plan is based on her independent work for each bank. (Doc. 14-7 at 3.) As noted above, social security records show that Cooper worked for Chittenden Bank from 1972 to 1985. (Doc. 26-1 at 11; see also Doc. 14-7 at 2.) In her sworn affidavit, moreover, Cooper states that she “participated in a retirement plan offered by Chittenden Bank” and that she “remember[s] vesting in the pension plan.” (Doc. 26-1 at 1, ¶¶ 3, 4.) Further, she recalls that she “reach[ed] a milestone of having $10, 000 invested towards . . . retirement.” (Id. ¶ 5.) Aside from the social security records and her personal recollection, however, no documents in the record demonstrate that Cooper satisfied the eligibility requirements and accrued benefits while employed at Chittenden Bank. (See, e.g., Doc. 26-3 at 1, ¶ 2; Doc. 14-4 at 65, § 7.2(a)(ii).) By contrast, the record clearly demonstrates that Cooper participated in the Vermont National Plan, that she accrued benefits, and that PUB distributed those benefits. (See Doc. 14-7 at 3.)

         IV. Chittenden Pension Plan Claims Procedures

         A. Claims Procedures

         The Chittenden Pension Account Plan and the Summary Plan Description describe the claims procedures under the Plan. (Docs. 14-4, 14-5.) PUB, as the Plan Administrator, has the “exclusive right and discretionary authority . . . to interpret the Plan and decide matters arising hereunder in the administration and operation of the Plan.” (Doc. 14-4 at 94, § 11.6.) Under the claims procedures, a claimant seeking distribution of his or her accrued benefits generally begins by contacting the Plan Administrator's Human Resources (HR) department via telephone at least 180 days before the claimant wishes to receive benefits. (Doc. 14-5 at 14.) In response, the Plan Administrator provides a notice of benefits containing a computation of accrued benefits and requests that the claimant elect a method of benefit distribution. (Id. at 16.) The claimant then submits a formal claim for benefits, which must be in writing. (Id.; Doc. 14-4 at 92-93, § 11.4.) If a claimant disagrees with the accrued-benefits computation, the claimant must submit a claim in writing or electronically within 60 days after the claimant receives notice of the benefits. (Doc. 14-5 at 16.)

         If this claim for benefits is denied, the Plan Administrator is required to notify the claimant within 90 days of the denial, setting forth the reasons for the denial, specifically referencing the provisions of the Chittenden Pension Plan on which the denial is based, describing any additional materials that the claimant must submit to perfect the claim, and explaining the claims review procedure. (Doc. 14-4 at 92-93, § 11.4; Doc. 14-5 at 17.) If special circumstances apply, the Plan Administrator may take up to an additional 90 days to issue the denial, as long as the claimant has notice of the 90-day extension. (Doc 14-4 at 92-93, § 11.4; Doc. 14-5 at 17.) The Plan Administrator's denial is subject to administrative review, in order to afford the claimant an opportunity for a full and fair review. (Doc 14-4 at 92-93, § 11.4; Doc. 14-5 at 17-18.) After a denial, the claimant has 60 days to appeal the decision in writing to the HR Administrative Committee. (Doc 14-4 at 93; Doc. 14-5 at 17-18.) If the HR Administrative Committee affirms the denial, the claimant may then bring a civil action under § 502(a)-ERISA's civil enforcement section. (Doc. 14-5 at 18; see also 29 U.S.C. § 1132.) The claimant must exhaust this administrative review process prior to bringing any civil action. (Doc. 14-5 at 18.)

         B. Cooper's Efforts to Obtain Benefits

         On July 10, 2014, Cooper contacted PUB to inquire about her benefits under both the Chittenden Pension Plan and the Vermont National Plan. (Doc. 26 at 3; Doc. 26-1 at 3, ¶¶ 9, 10.) Cooper spoke to a “retirement specialist” who confirmed her eligibility for benefits under the Vermont National Plan. (Doc. 26-1 at 3, ¶¶ 9, 10; Doc. 14-7 at 2.) The specialist told Cooper that records concerning her participation in the Chittenden Pension Plan could not be located. (Doc. 26-1 at 3, ¶ 10.)

         Subsequently, on August 12, 2014, PUB sent Cooper a notice of benefits containing her accrued-benefits calculation and attaching a form prepared by PUB, titled “Application for Chittenden Pension Account Plan Benefit.” (See generally Doc. 35, Def.'s Ex. C.) PUB's benefits calculation indicated that Cooper's “Original Date of Hire” was May 13, 1985, the date that Cooper began working at Vermont National Bank.[5] (Id., Def.'s Ex. C at 2.) The benefits calculation did not show that Cooper had been employed at Chittenden Bank, nor did it indicate that she had accrued benefits as a result of her employment there. (Id.)

         On August 27, 2014, Cooper submitted her “Application for Chittenden Pension Account Plan Benefit, ” indicating in the form that she elected to receive her benefits as a single life annuity. (Id., Def.'s Ex. D.) That form application also contains the following language: “I make application for payment of my retirement benefit to which I am entitled to under the Chittenden Pension Account Plan.” (Id. at 6.) On October 1, 2014, PUB began distributing the benefits accrued during Cooper's employment at Vermont National Bank, but PUB did not distribute any benefits related to Cooper's work at Chittenden Bank. (Doc. 26-3 at 1, ¶ 7; Doc. 14-6 at 1.)

         During approximately the same time, Cooper continued to ask PUB for the benefits records from her employment with Chittenden Bank. (Doc. 26-1 at 2, ¶ 12.) According to her sworn affidavit, PUB representatives informed Cooper that, because “their records from that period were spotty, ” it was possible that Cooper's Chittenden Bank pension funds might have been transferred to John Hancock, a financial services company, or distributed to Cooper. (Id.) At some point, Kyle Gibb, one of PUB's employee benefits specialists, informed Cooper that several former Chittenden Bank employees faced similar problems with missing retirement information. (Id. ¶ 14.) Then, after searching for several months, on November 21, 2014, Gibb told Cooper in an e-mail that he had “exhausted all . . . research avenues” and that he could proceed no further with her claim until she provided documentation “showing a pension benefit is due to you for the pre-1985 time frame.” (Id. ¶ 15; id. at 6-7.) Cooper believed this e-mail was PUB's final decision denying her Chittenden Bank pension funds. (Id. at 2, ¶ 16.)

         Despite this belief, Cooper continued to contact PUB regarding the Chittenden Bank pension. (Id. at 2-3, ¶¶ 17-20.) Eventually, in April 2015, Peter Saxton, an employee benefits program manager for PUB, emailed Cooper to advise that he was reviewing her claim. (Id. at 3, ¶¶ 21-22; id. at 6.) After Saxton's review, Cooper was again informed that PUB had no record of Cooper's employment with Chittenden Bank nor of Cooper's participation in the Chittenden Pension Plan, and that the funds had likely been distributed to Cooper or used to purchase an annuity with John Hancock. (Id. at 3, ¶ 23.)

         Approximately five months later, on September 9, 2015, Cooper mailed a letter to the Internal Revenue Service (the IRS letter), along with a courtesy copy to PUB, seeking records related to her employment with Chittenden Bank and requesting an investigation into PUB's handling of her claimed pension funds. (Id. ¶ 25; Doc. 14-3.) On November 17, 2015, Nancy Stracuzzi, an employee benefits vice president for PUB, acknowledged receipt of the IRS letter as of September 24, 2015, and informed Cooper that PUB was treating it as a formal claim for benefits under the Chittenden Pension Plan's procedures. (See generally Doc. 14-6.)

         Following the claims procedure described above, Nancy Stracuzzi informed Cooper that a claims officer would provide a written notice either approving or denying Cooper's request for benefits within 180 days of September 24, 2015-the date PUB purportedly received the IRS letter.[6] (Id.) Stracuzzi also provided Cooper with a copy of the Chittenden Pension Plan's claims procedures. (Id.) Finally, Stracuzzi requested additional information from Cooper, including her credit history verifying her dates of employment with Chittenden Bank, her Social Security employment history, any correspondence relating to the Chittenden Pension Plan, and any Chittenden Pension Plan benefit statements or pension-benefit calculations. (Id.)

         C. ...

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