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Marrs v. Motorola

May 15, 2008


The opinion of the court was delivered by: Magistrate Judge Susan E. Cox


Plaintiff, Michael Marrs, on behalf of himself and the class members (collectively referred to as "Marrs"), claims that defendants (collectively "Motorola") violated the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq., when they terminated his long-term disability benefits, as well as his benefits under the Motorola Post-Employment Health Benefits Plan, and his service credit under the Motorola, Inc. Pension Plan.*fn1 Marrs argues that at the time he qualified for benefits while working at Motorola, his benefit plan promised that no amendments could change the plan in a way that would adversely affect his right to continue receiving benefits. Motorola argues, however, that Marrs's benefits were not vested and that the company could amend the plan to cap benefits for plaintiff's condition, and others like him, at any time. Presently before the Court are Marrs's motion for summary judgment [dkt 71] and Motorola's cross-motion for summary judgment [dkt 73]. For the following reasons, Motorola's motion is granted and Marrs's motion is denied.

I. Background*fn2

Marrs was employed as an executive by Motorola for several years before he ceased working on January 31, 1997, due to a bipolar affective disorder.*fn3 At that time Marrs began receiving short-term and, thereafter, long-term disability benefits pursuant to Motorola's 1997 Disability Income Plan ("the 1997 Plan"). The 1997 Plan did not contain any limit on the amount of time an employee with Marrs's condition, unable to return to work, could receive continued benefits. If an employee met the 1997 Plan's definition of "Disabled" or "Disability," defined below, that employee received disability income benefits under the Plan until age 65 or death, whichever came first:

the ongoing and continuous inability of the Participant to engage in any Substantial and Gainful Employment by reason of meeting a medically determinable physical or mental impairment that can be expected to be of a long-continued and indefinite duration.*fn4 Because Marrs was deemed totally disabled, Marrs continued receiving benefits for over seven years. However, effective January 1, 2003, Motorola amended the 1997 Plan to cap benefits for participants disabled due to mental, nervous, alcohol or drug-related conditions. Specifically, subsection 6.5 of the new amended plan, Motorola's 2003 Disability Income Plan ("the 2003 Plan") provided:

The lifetime aggregate maximum Long Term Disability Benefit for a Participant's Long Term Disability(ies) for which the primary diagnosis is a Mental, Nervous, Alcohol, Drug-Related Condition is twenty-four (24) months...*fn5 Motorola classified Marrs's disability as one fitting into this category. This new provision, therefore, capped Marrs's receipt of disability benefits to 24 months. In September 2002, Motorola informed plan participants of the amendment and on December 31, 2004 Marrs's benefits ceased.*fn6

Marrs appealed the application of the amendment to Motorola's administrative committee. On February 11, 2005 the plan administrator denied Marrs's final appeal.*fn7 With the aid of counsel Marrs requested, and received, permission to file an extraordinary second level appeal.*fn8 Marrs again challenged the application of the January 1, 2003 amendment to Marrs and on August 19, 2005 Marrs's second appeal for long-term disability benefits was denied.*fn9 On September 21, 2005, after exhausting his pre-suit appeals, Marrs filed the present action. On October 23, 2006, Marrs filed his amended complaint claiming an ERISA violation and requesting that he, and the other class members, be restored all benefits as of January 1, 2005. On September 25, 2007 the parties stipulated to certify the following class:

All persons who, prior to January 1, 2003, became entitled to long term disability benefits on account of a mental, nervous, alcohol or drug related "Disability," within the meaning of the Motorola Disability Income Plan, who were eligible for benefits under the Motorola Post-Employment Health Benefits Plan by virtue of their entitlement to long term disability benefits, and/or who received additional pension service accruals under Section 6.3(b) of the Motorola, Inc. Pension Plan by virtue of their entitlement to long term disability benefits and whose benefits and pension service accrual under those plans were terminated as a result of the January 1, 2003 amendments to the Motorola disability Income Plan, which imposed a twenty-four month limit on the duration of benefit payments for mental, nervous, alcohol, and drug related ("MNAD") disabilities.

The present motions followed.

II. Standard for Summary Judgment

To prevail on a motion for summary judgment under Federal Rule of Civil Procedure 56, a party must present evidence that demonstrates the absence of a genuine issue of material fact.*fn10 The party seeking summary judgment must identify the portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes shows an absence of a genuine issue of material fact.*fn11 The moving party is not required to disprove the opponent's case but, rather, must establish a lack of evidentiary support for the non-moving party's position.*fn12 Summary judgment is appropriate where the evidence "'would require a directed verdict for the moving party.'"*fn13 When considering cross-motions for summary judgment, a court is "obliged to view all facts and draw all reasonable inferences in a light most favorable to the party against whom the motion under consideration is made."*fn14

III. Analysis

Marrs maintains that under the 1997 Plan he received, essentially, a vested disability insurance benefit and Motorola therefore violated ERISA when it capped his particular benefits to 24 months. Though regrettably, the Court disagrees that Marrs ever had a vested interest in his disability benefit. Rather, Marrs simply had a benefit that Motorola was free take away at any time, which it did pursuant to amended terms in the 2003 Plan.

The Court must first address what standard of review to apply to the denial of disability benefits under ERISA. Whether a de novo standard or a more deferential standard is applied depends upon the language in the Plan. "Benefit determinations are reviewed de novo unless the trustees of the plan have discretionary authority to determine eligibility."*fn15 When a plan ...

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