Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Clark v. Feder

March 22, 2010

DENISE M. CLARK, PLAINTIFF,
v.
FEDER, SEMO & BARD, P.C., ET AL., DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

Denise Clark brings this action pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., against the law firm Feder, Semo & Bard ("Feder Semo"), the Feder Semo Retirement Plan and Trust ("Retirement Plan" or "Plan"), and two former trustees of the Retirement Plan, Joseph Semo and Howard Bard. Contending that defendants improperly denied her the full value of her retirement benefits, Clark asserts a claim for individual benefits pursuant to 29 U.S.C. § 1132(a)(1)(B), and a derivative claim for breach of fiduciary duty pursuant to 29 U.S.C. § 1132(a)(2). Before the Court is defendants' motion for summary judgment, on which the Court heard oral argument on February 22, 2010. Upon careful consideration of the parties' memoranda, the applicable law, and the entire record herein, and for the reasons set forth below, the Court will grant in part and deny in part defendants' motion.

BACKGROUND

I. Factual Background

Clark worked as an attorney at Feder Semo for almost ten years, beginning in 1993. Second Am. Compl. ¶ 3. She became a "Class A" shareholder of the firm in March 2000, and in October 2000, she became the firm's managing partner. Second Am. Compl. ¶ 3. She held this position until she left the firm in July 2002. Second Am. Compl. ¶ 3.

While at Feder Semo, Clark was a "participant" in the firm's Retirement Plan. Second Am. Compl. ¶ 3; see also 29 U.S.C. § 1002(7) (defining "participant"). Feder Semo was both the "plan sponsor" and "plan administrator" of the Retirement Plan. Second Am. Compl. ¶¶ 4-5; see also 29 U.S.C. § 1002(16)(A) (defining "plan administrator"); id. at § 1002(16)(B) (defining "plan sponsor"). The Plan was a type of "defined benefit plan" termed a "cash balance plan." See Defs.' Mem. in Supp. of Mot. for Summ. J. ("Defs.' Mem.") [Docket Entry 41], Defs.' Statement of Undisputed Material Facts ("Defs.' SOF"), Exhibit 6 (Feder, Semo & Bard Retirement Plan and Trust Summary Plan Description ("Summary Plan Description")), P0226. This type of plan "defines benefits for each Participant by reference to the Participant's hypothetical account." Id.*fn1 Based on the value of this account, Feder Semo would calculate an individual's retirement benefits.

Under the terms of the Retirement Plan, retirement benefits were distributed primarily as a "straight life annuity," for which regular monthly payments would be made to the participant after the participant reached retirement age. See id. at P0229. Nevertheless, the Plan permitted participants to waive the straight life annuity, and instead receive retirement benefits as "a lump sum payment or . . . installments over a designated period of time." Id. Participants who waived the annuity would obtain benefits equal to the actuarial equivalent of their straight life annuity. Id.

As plan administrator, Feder Semo retained the authority to "determine all questions relating to the eligibility of an Employee to participate in the Plan," to "compute . . . the amount and kind of benefits to which any Participant shall be entitled," to "carry[] out the funding policy and the method of funding," and to interpret provisions of the Retirement Plan. Feder Semo Retirement Plan Terms at Sec. 12.2. The firm also had the power to amend the Retirement Plan, see id. at Sec. 14.1, and to terminate the Retirement Plan at any time, see id. at Sec. 14.3. Moreover, pursuant to the Retirement Plan, Feder Semo was required to make the contributions necessary "to maintain the Plan on a sound actuarial basis and to meet minimum funding standards as prescribed by any applicable law." Id. at Sec. 4.1.

Exercising its authority under the Retirement Plan, Feder Semo amended or otherwise changed the Retirement Plan throughout its life. Several of those changes are relevant to the claims Clark asserts in this action. First, in October 1998 the firm changed the way it classified employees for purposes of crediting their accounts. See Pl.'s Opp'n to Defs.' Mot. for Summ. J. ("Pl.'s Opp'n") [Docket Entry 58], Pl.'s Statement of Undisputed Material Facts ("Pl.'s SOF"), Exhibit 103 (Amendments to the Feder, Semo Retirement Plan), P0064-0066 (Third Amendment to the Feder Semo Retirement Plan). This amendment created four groups of employees, each of which received a different annual credit to their hypothetical account -- termed an account credit. The account credit was expressed as a percentage of an employee's yearly compensation:

Group A: All participants who were Class A shareholders of the firm and who were born prior to January 1, 1950, received a credit of 45% of that individual's yearly salary.

Group B: All participants who were Class A shareholders of the firm and who were born after January 1, 1950, received a credit of 20% of that individual's yearly salary.

Group C: All participants who were either Class A or Class B shareholders of the firm and who were born after January 1, 1950, received a credit of 10% of that individual's yearly salary.

Group D: All participants who were not shareholders of the firm received a credit of 8% of that individual's yearly salary.

Id. at P0065-0066. Thus, by its plain terms, the amendment indicated that Class A shareholders who were born after January 1, 1950, could be classified in either Group B or Group C.

Second, Feder Semo corrected this ambiguity in a 2003 restatement to the 1998 amendment. See Pl.'s SOF, Exhibit 139 (Deposition of William Anspach ("Anspach Dep.")), 84:12-86:10. After 2003, Group B comprised "all participants who are Class A shareholders . . . and who were born on or after January 1, 1950." Feder Semo Retirement Plan Terms at Sec. 5.1(d). Group C comprised "all participants who are shareholders . . . and are not covered by Groups A or B." Id. In other words, after the 2003 restatement, Class A shareholders born on or after January 1, 1950, could be classified only in Group B.

Third, in September 2003 Feder Semo amended the Retirement Plan to freeze the accrual of future retirement benefits. Second Am. Compl. ¶ 11; see also Defs.' SOF, Exhibit 10 (Decl. of Mark C. Nielson ("Nielson Decl.")), ¶ 4 & Exhibit A (Sept. 5, 2003 amendment freezing Retirement Plan).

Fourth, in July 2005 the firm changed when an individual could obtain his or her retirement benefits. See id. at ¶ 7. Prior to July 2005, a former employee who had not yet reached retirement age could obtain his benefits only on the five-year anniversary of his termination of employment. Second Am. Compl. ¶ 8. The July 2005 amendment, however, permitted employees who were shareholders of Feder Semo on or before December 31, 2004, to take their distributions immediately. See Nielson Decl. at ¶ 7. The firm adopted this amendment in part because the firm had lost its largest client in July 2005, "caus[ing] immediate concern with regard to the future viability of the Firm." Id. at ¶ 6.

Finally, in September 2005 Feder Semo terminated the Retirement Plan. See id. at ¶ 8. "Th[e] decision was made after it became clear . . . that the Firm would have to cease providing professional services to the public as of September 30, 2005." Id. Although the firm ceased the active practice of law, it apparently continues to exist as a corporation. Second Am. Compl. ¶ 4.

In early September 2005, Feder Semo notified Clark that it had suspended the Retirement Plan's distribution restrictions, and provided her with a distribution form and a summary of her benefits. See Defs.' SOF, Exhibit 9 (Record of Clark's Benefit Appeal), D0001-D0009 (Sept. 2, 2005 letter from Feder Semo to Denise Clark). The distribution form ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.