United States District Court, District of Columbia
RONALD E. PECK, Plaintiff,
SELEX SYSTEMS INTEGRATION, INC., et al., Defendant.
MEMORANDUM OPINION [DKTS. ## 45, 50]
RICHARD J. LEON UNITED STATES DISTRICT JUDGE.
Plaintiff Ronald E. Peck ("Peck" or "plaintiff) brought this suit against defendant SELEX Systems Integration, Inc. ("SELEX") in D.C. Superior Court, alleging three contract claims arising from plaintiffs employment termination. SELEX removed the case to this Court on January 17, 2013 on the grounds that Count IPs claim for plaintiffs accrued Plan benefit, pled in the original complaint as a common law breach of contract claim, arose under ERISA. Notice of Removal Ex. A; Am. Notice of Removal [Dkts. ## 1-1, 6]. On January 28, 2013, SELEX moved to dismiss Count II on ERISA preemption grounds. Defs.' Mot. to Dismiss [Dkt. # 8]. On February 19, 2013, plaintiff voluntarily dismissed that claim with prejudice. Stipulation of Dismissal of Count II with Prejudice [Dkt. #11]. Pursuant to the Court's order allowing amendment, plaintiff filed his Amended Complaint on January 28, 2014, adding new defendant Selex Sistemi Integrati, Inc. Key Employee Deferred Compensation Plan ("the Plan") (together "defendants"), and including an ERISA claim as Count II. Min. Order, Jan. 28, 2014; Am. Compl. [Dkt. #33]. Currently before the Court are Defendants' Motion for Summary Judgment on Count II of Plaintiff s Amended Complaint [Dkt, # 44], and Plaintiffs Motion for Summary Judgment [Dkt. # 45]. Upon consideration of the pleadings, record, and relevant law, I find that defendants are entitled to summary judgment on Count II, and that there are genuine issues of material fact as to the remaining counts. Therefore, defendants' motion is GRANTED, plaintiffs motion is DENIED, and Count II is dismissed with prejudice.
Defendant SELEX Systems Integration, Inc. is an Overland Park, Kansas-based company producing aviation navigation, landing, and surveillance systems. Defs.' Statement of Uncontroverted Facts ¶ 1 ("Defs.' SOF"); PL's Statement of Undisputed Material Facts ("PL's SOF") ¶ 1. Plaintiff Ronald Peck worked as an at-will employee in various positions for SELEX and its predecessor entities from April 1997 until September 2012. Defs.' SOF ¶¶ 2-3; PL's SOF ¶ 2. Each of Peck's positions resulted from a change in his assigned role initiated by SELEX. Defs.' SOF ¶ 6. Peck held various positions in technical and/or quality roles at SELEX's offices in Kansas from April 1997 until 2008. Defs.' SOF ¶ 5; PL's SOF ¶ 3. In March 2008 Peck accepted a posifion as Vice President of Business Development, responsible for marketing and sales in the U.S. market, also at SELEX's Kansas offices. PL's SOF ¶ 4. By letter dated July 30, 2008, Peck was informed SELEX had established a Key Employee Deferred Compensation Plan ("the Plan") and that he was a participant therein. PL's SOF ¶ 5. SELEX opened a D.C. office in early 2010. PL's SOF ¶ 7. At some point between August 2010 and October 2011 Peck assumed the position of Vice President of Strategy and Product Planning, essentially a marketing role. Defs.' SOF ¶ 9; PL's SOF ¶¶ 7, 10. For approximately one year before October 2011, Peck "commuted" from the Kansas City area to SELEX's Washington D.C. office on a weekly basis. Defs.' SOF ¶ 8; PL's SOF ¶ 7. In October 2011 Peck his wife moved to the Washington D.C. area where Peck continued to work out of the D.C. office. Defs.' SOF ¶¶ 9-10; PL's SOF ¶¶ 7, 10.
On August 23, 2012, SELEX Chief Executive Officer Mike Warner met with Peck and informed him that, based on Warner's assessment of Peck's performance, Peck would no longer have his position in D.C. but was being offered the position of Vice President of Quality Control and Business Improvement back in the Kansas office, based on his background in the quality area. Defs.' SOF ¶¶ 13, 15; PL's SOF ¶¶ 17-18. In a letter dated August 29, 2012, CEO Warner explained that waiting for further development in Peck's marketing abilities would jeopardize SELEX's business initiatives and SELEX needed to enhance its quality and business practices to keep pace with the growth of its programs. Defs.' SOF ¶ 14; PL's SOF ¶ 21.
Peck declined SELEX's offer for him to assume the position of Vice President of Quality Control and Business Improvement-initially by phone on August 29, 2012, and in a letter dated September 3, 2012-because he did not want to return to Kansas at that time and he did not believe it was the right step for him from a career standpoint. Defs.' SOF ¶ 20; PL's SOF ¶ 21. By letter dated September 14, 2012, SELEX informed Peck that although no "cause" was needed because he was an at-will employee, it regarded his refusal of the assignment to the position of Vice President of Quality Control and Business Improvement as cause for termination of employment, and allowed him two weeks to cure his refusal of the assignment. Defs.' SOF ¶ 22; Ex. I (Sept. 14, 2012 Letter from Warner to Peck); PL's SOF ¶¶ 23, 25. Peck still did not accept the assignment. Defs.'SOF ¶23; PL's SOF ¶21.
SELEX terminated Peck's at-will employment for cause, effective September 30, 2012, based on what it considered to be his "voluntary and deliberate or intentional refusal to perform [his] material duties and obligations of his employment with SELEX." Defs.' SOF ¶¶ 24-25; Ex. J (Oct. 1, 2012 Letter from Warner to Peck); PL's SOF ¶¶ 22-23. In terminating Peck for "cause, " SELEX relied on its definition therefore found in its Key Employee Deferred Compensation Plan ("Plan") at Section 1.2.6(i). Defs.' SOF ¶ 26; Ex. K (Plan). By the Plan's terms, the Administrative Committee has "discretionary authority and responsibility to interpret and construe the Plan and to determine all factual and legal questions under this Plan, including but not limited to the entitlement of Participants and Beneficiaries, and the amounts of their respective interests." Defs.' SOF ¶ 27; Ex. K.
On or about April 5, 2013, Peck submitted a claim for benefits under the Key Employee Deferred Compensation Plan. Defs.' SOF ¶ 30; Ex. L; PL's SOF ¶ 33. On June 21, 2013, the Key Employee Deferred Compensation Plan's Administrative Committee (the CEO, CFO, and Human Resources Director) timely denied Peck's claim for benefits and informed Peck of his right to appeal that decision. Defs.' SOF ¶ 31; PL's SOF ¶ 33. On July 11, 2013, Peck sent an appeal to the Key Employee Deferred Compensation Plan Administrative Committee. Defs.' SOF¶32; PL's SOF ¶ 33. On September 6, 2013, the Key Employee Deferred Compensation Plan Administrative Committee timely denied plaintiffs appeal. Defs.' SOF ¶ 33; PL's SOF ¶ 33.
Summary judgment is appropriate when the pleadings and the record demonstrate that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "A fact is material if it 'might affect the outcome of the suit under the governing law, ' and a dispute about a material fact is genuine 'if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Steele v. Schafer, 535 F.3d 689, 692 (D.C. Cir. 2008) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986)). The moving party bears the initial burden of demonstrating the absence of a genuine dispute of material fact. See Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). Once the moving party has met its burden, the nonmoving party must "designate specific facts showing there is a genuine issue for trial" to defeat summary judgment. Id. at 324 (quotation marks omitted). The nonmovant's opposition, however, may not rest upon the mere allegations or denials of the pleadings, but must be supported by affidavits or other competent evidence. Id. Thus, by pointing to the absence of evidence sufficient to establish the existence of an element essential to the nonmovant's case, a moving party may succeed on summary judgment. Id. at 325. The court "must view the evidence in the light most favorable to the nonmoving party and . . . draw all reasonable inferences in favor of the nonmoving party." Grosdidier v. Broad. Bd. of Governors, Chairman, 709 F.3d 19, 23-24 (D.C. Cir. 2013) (quotation marks omitted).
Peck challenges defendants' denial of his accrued deferred compensation Plan benefit. He brings suit pursuant to 29 U.S.C. § 1132(a)(1)(B), which provides a cause of action for an ERISA plan participant like Peck "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan."
A. Standard of Review.
Before reaching the merits, the parties dispute the applicable standard of review. Defendants argue that the Court's review is limited to determining, on the basis of the evidence available to the Administrative Committee, whether the Committee acted arbitrarily and capriciously in reaching its decision. Defs.' Mem. 4-5 (citing Pettaway v. Teachers Ins. & Annuity Ass 'n of Am., 644 F.3d427, 433 (D.C. Cir. 2011)). InFirestone Tire & Rubber Co. v. Bruch, the Supreme Court held that a denial of benefits challenged under ERISA § 1132(a)(1)(B) is to be reviewed under a de novo standard "unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan" in which case the deferential arbitrary and capricious standard applies. 489 U.S. 101, 115 (1989). The Firestone standard is "one of reasonableness." Pettaway, 644 F.3d at 435 (quotation marks omitted). The "essential inquiry" is whether the Administrative ...