MEMORANDUM AND ORDER
David Berger filed suit in this Court against the Xerox Corporation
Retirement Income Guarantee Plan ("RIGP") and Patricia Nazametz, as the
administrators of an employee benefit plan under ERISA. Berger seeks
equitable relief, including restitution, for the Plan's alleged violation
of ERISA and the Internal Revenue Code and for the alleged implementation
of treasury regulations. Berger terminated his employment before a
normal retirement age pursuant to a Voluntary Reduction in Force
program. Berger alleges that the lump sum distribution of pension
benefits that he received when he retired early was less than the present
value of his minimum benefits at normal retirement age. On February 7,
2001, the Court certified a class consisting of all RIGP participants who
received a lump sum distribution after January 1, 1990 (Doc. 88). On
January 10, 2001, Magistrate Judge Gerald B. Cohn entered an Order
granting Plaintiffs' motion to add an additional named plaintiff, Gerry
Tsupros, finding that Tsupros is similarly situated to Berger.
The parties have filed cross motions for summary judgment as to Counts
I, II and III of Plaintiffs' First Amended Complaint (Docs. 56 and 78).
On January 4, 2001 and July 3, 2001, the Court heard oral argument on the
motions. In addition, the parties have submitted voluminous briefs and
exhibits for the Court's consideration. For the following reasons, the
Court denies Defendants' motion for summary judgment and grants
Plaintiffs motion for summary judgment as to liability on Counts I and
II. The Court grants Defendants' motion for summary judgment as to Count
III with Plaintiffs being given leave to amend.
II. Summary Judgment Standard
Summary judgment is proper where the pleadings and affidavits, if any,
"show that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law."
FED. R. CIV.
P. 56(c); Oates v. Discovery Zone, 116 F.3d 1161, 1165 (7th Cir.
1997)(citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). The
movant bears the burden of establishing the absence of fact issues and
entitlement to judgment as a matter of law. Santaella v. Metropolitan
Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997)(citing Celotex, 477
U.S. at 323). The Court must consider the entire record, drawing
reasonable inferences and resolving factual disputes in favor of the
non-movant. Regensburger v. China Adoption Consultants, Ltd.,
138 F.3d 1201, 1205 (7th Cir. 1998)(citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986)).
In response to a motion for summary judgment, the non-movant may not
simply rest upon the allegations in his pleadings. Rather, the
non-moving party must show through specific evidence that an issue of
fact remains on matters for which he bears the burden of proof at trial.
Walker v. Shansky, 28 F.3d 666, 670-71 (7th Cir. 1994), aff'd, 51 F.3d 276
(citing Celotex, 477 U.S. at 324). In reviewing a summary judgment
motion, the Court does not determine the truth of asserted matters, but
rather decides whether there is a genuine factual issue for trial. Celex
Group, Inc. v. Executive Gallery, Inc., 877 F. Supp. 1114, 1124 (N.D.
Ill. 1995). The "mere existence of a scintilla of evidence in support of
the plaintiff's position will be insufficient to show a genuine issue of
material fact." Weeks v. Samsung Heavy Industries Co., Ltd., 126 F.3d 926,
933 (7th Cir. 1997)(citing Anderson, 477 U.S. at 252). No issue remains
for trial "unless there is sufficient evidence favoring the non-moving
party for a jury to return a verdict for that party. If the evidence is
merely colorable, or is not sufficiently probative, summary judgment may
be granted." Anderson, 477 U.S. at 249-50 (citations omitted). Accord
Starzenski v. City of Elkhart, 87 F.3d 872, 880 (7th Cir. 1996), cert.
denied, 519 U.S. 1055 (1997); Tolle v. Carroll Touch, Inc., 23 F.3d 174,
178 (7th Cir. 1994).
Because this case is brought under ERISA, federal common law principles
govern. GCIU Employer Retirement Fund v. Chicago Tribune Co., 66 F.3d 862,
864-65 (7th Cir. 1995)(citing Phillips v. Lincoln Nat. Life Ins. Co.,
978 F.2d 302, 307 (7th Cir. 1992)). These principles direct a court to
construe terms of ERISA plans "in an ordinary and popular sense as would
a person of average intelligence and experience." Swaback v. Ameritech,
103 F.3d 535, 540-41 (7th Cir. 1996). In addition, a court reviews
questions of law de novo, regardless of whether the plan vests the plan
administrator with discretion. E.g., Williams v. Midwest Operating
Eng'rs Welfare Fund, 125 F.3d 1138, 1140 (7th Cir. 1997), overruled on
other grounds, Mers v. Marriott Int'l Group Accidental Death and
Dismemberment Plan, 144 F.3d 1014 (7th Cir. 1998). The issues presented
in this case involve questions of law and not plan interpretation. This
Court's review of those issues is de novo and not under an arbitrary and
III. Factual Background