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Reddy v. Schellhorn

March 8, 2006

MEDAPATI REDDY, PLAINTIFF,
v.
JOAN A. SCHELLHORN AND LASALLE BANK CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER

Plaintiff Medapati Reddy, a participant in the ABN AMRO North America, Inc. Consumer & Commercial Clients Shared Services Severance Plan (the "Plan"), brought this action against Defendant Joan A. Schellhorn, as plan administrator, for failing to provide Plaintiff with a copy of the Plan document upon written request as required by section 104(b)(4) the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1024(b)(4) (2005). Plaintiff requests the maximum $110 per day statutory penalty for each day Defendant failed to provide the Plan. The parties have filed cross-motions for summary judgment.

FACTUAL BACKGROUND

The relevant facts, based on the parties' Local Rule 56.1 statements and attachments, are as follows.*fn1

LaSalle Bank Corporation ("LaSalle") employed Plaintiff from July 1, 1999 until April 12, 2002, when LaSalle eliminated Plaintiff's position. Pl.'s Local Rule 56.1 Statement of Material Facts to Which there is No Genuine Issue (hereinafter, "Reddy LR 56.1 Stmt.") ¶ 3. Upon his termination on April 12, 2002, Plaintiff was offered nine weeks' severance pay if he signed a waiver and release, id. at ¶ 6, and he received a copy of the ABN AMRO North America, Inc. Consumer & Commercial Clients Shared Services Severance Pay Plan Summary Plan Description (the "SPD"). See Def.'s LR 56.1 Stmt.¶ 6.*fn2 The SPD contains the following disclaimer:

This Summary Plan Description is merely an explanation and should not be relied upon other than as a general summary of the features of the Plan. Your rights are governed by the terms of the Plan document itself. You should refer to the Plan document for complete information for any rights and obligations you have under the Plan.

See SPD, Ex. A to Appendix to Plaintiff's Mem. of Law in Opp'n to Def.'s Summ. J. Motion and Reply Brief in Support of His Summ. J. Motion and as Part of Plaintiff's Decl (hereinafter, "Reply App.").*fn3 On April 29, 2002, Plaintiff executed the waiver and release agreement, and began receiving severance payments. Reddy LR 56.1 Stmt. ¶ 8--10. Plaintiff received approximately four and a half weeks of severance pay, calculated from the day he was laid off, before LaSalle stopped paying Plaintiff for allegedly failing to return a company-owned laptop computer as required by the Plan. Id. at ¶ 11; see also June 4, 2002 McPhereson/Reddy Letter, Ex. B to Reply App. (letter communicating decision to suspend severance pay). On October 1, 2002, Plaintiff filed an unrelated discrimination charge against LaSalle with the Illinois Department of Human Rights, alleging that LaSalle fired Plaintiff in retaliation for "openly complaining about unlawful discrimination on the basis of my national origin, India." Reddy LR 56.1 Stmt. ¶ 13; Charge of Discrimination, Ex. D to Reply App., at 1.

On August 22, 2003, Plaintiff sent Defendant a letter appealing LaSalle's decision to suspend his severance pay and requesting a copy of the "original Plan document." Reddy LR 56.1 Stmt.¶ 14.*fn4 This letter quotes extensively from the SPD, asserting that Defendant had violated specific Plan provisions by suspending Plaintiff's severance pay. See August 22, 2003 Reddy/Schellhorn Letter, Ex. E to Reply App. Plaintiff wrote to Defendant again on September 27, 2003, notifying her that he had not received a response to his August 22, 2003 letter. Id. at ¶ 15. Defendant responded by letter dated October 31, 2003, requesting proof that Plaintiff had returned his laptop computer, but not including a copy of the requested Plan document. Id. at ¶ 16. On November 7, 2003, Plaintiff responded that he had returned the laptop upon termination (asserting as proof the fact that LaSalle had commenced payment, id. at ¶ 17), but did not reiterate his prior request for the Plan document. See November 7, 2003 Reddy/Schellhorn Letter, Ex. H to Reddy LR 56.1 Stmt., at 1. Plaintiff did reference his earlier correspondence in the subject-heading of the November 7, 2003 letter, however. Id. ("Ref . . . My Letter Dt: 08/22/03"). Defendant did not respond to Plaintiff's letter, prompting another letter on April 26, 2004 asking Defendant to reinstate Plaintiff's severance pay and again requesting a copy of the "original Plan Document." Reddy LR 56.1 Stmt. ¶ 18.

In a letter dated May 4, 2004, Defendant informed Plaintiff that a member of LaSalle's legal department would respond to Plaintiff's letter and provide a copy of the "Shared Services Pay Plan."

See id. at ¶ 19; May 4, 2004 Schellhorn/Reddy Letter, Ex. J to Reply App. On July 1, 2004, Plaintiff filed a complaint against LaSalle with the Illinois Human Rights Commission based upon his October 1, 2002 discrimination charge. Reddy LR 56.1 Stmt.¶ 20. Defendant, and not a representative of LaSalle's legal department, followed up her previous letter on July 9, 2004, denying Plaintiff's appeal to reinstate his severance pay and enclosing another copy of the SPD. Id. at 21. The parties did not correspond further before Plaintiff filed this action on February 3, 2005 alleging that Defendant Schellhorn and LaSalle failed to meet their obligations under ERISA § 1024(b)(4). Id. at 24.*fn5

This suit brought a swift response. On February 15, 2005, Defendant's attorney sent Plaintiff an unsigned copy of the "ABN AMRO North America, Inc. Consumer & Commercial Clients Shared Services Severance Pay Plan Document" (the "Plan Document"). See id. at ¶ 25; February 15, 2005 Chmiel/Reddy Letter, Ex. O to Reddy LR 56.1 Stmt. The letter explained that Defendant did not have access to official plan records because of a fire that had occurred at LaSalle's offices on December 6, 2004. See Reddy LR 56.1 Stmt. ¶¶ 22, 25. Defendant's attorney sent Plaintiff a signed copy of the Plan Document on March 4, 2005 after Defendant regained access to her office on February 28, 2005. See Def.'s LR 56.1 Stmt. ¶ 17; March 4, 2005 Chmiel/Reddy Letter, Ex. P to Reply App., at 1.*fn6 On April 20, 2005, Plaintiff filed a second discrimination charge against LaSalle, this time alleging that LaSalle retaliated for Plaintiff's original discrimination charge by denying his appeals to reinstate his severance pay. See April 20, 2005 Discrimination Charge, Ex. R to Reply App.

DISCUSSION

A. Defendant Violated ERISA's Disclosure Requirements

ERISA requires plan administrators to provide, upon a participant's written request, copies of plan descriptions "or other instruments under which the plan is established or operated." See 29 U.S.C. ยง 1024(b)(4); see also Lowe v. SRA/IBM Macmillan Pension Plan, No. 01 C 58, 2003 WL 1565841, *2--3 (N.D. Ill. Mar. 25, 2003)(section 1024 violated where defendant failed to provide plaintiff ...


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