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Crowell v. Bank of America Pension Plan for Legacy Companies

May 12, 2010

AMELIA PATRICIA CROWELL, PLAINTIFF,
v.
BANK OF AMERICA PENSION PLAN FOR LEGACY COMPANIES AND BANK OF AMERICA CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: James F. Holderman, Chief Judge

MEMORANDUM OPINION AND ORDER

Before this court is plaintiff Amelia Patricia Crowell's ("Crowell") "Motion to Spread the Record." (Dkt. No. 27.) For the reasons stated below, Crowell's motion is granted.

BACKGROUND

In this ERISA lawsuit, Crowell alleges that she is entitled to certain pension benefits from defendants Bank of America Pension Plan for Legacy Companies ("BAC Pension Plan") and Bank of America Corporation ("BAC") (together "Defendants"). (Dkt. No. 6 ("Am. Compl.") ¶ 4.) Crowell claims that her entitlement is based on (1) the terms of the BAC Pension Plan, (2) a subsequent course of mailings that modified the terms of the BAC Pension Plan, or (3) a theory of estoppel. (Am. Compl. ¶¶ 17-19.) On November 25, 2008, Defendants' "Benefits Appeals Committee" denied Crowell's claim to benefits on the grounds that Crowell was not a participant who accrued a benefit under the terms of the BAC Pension Plan. (Am. Compl. ¶¶ 10, 14.)

Through her "Motion to Spread the Record" (Dkt. No. 27), Crowell seeks to supplement the record with two letters she received in late 2009. (Dkt. No. 27, Ex. A ("11/5/2009 Letter") and Dkt. No. 33, Ex. A ("12/8/2009 Letter") (collectively "Letters").) These Letters are both addressed to Crowell from the "Bank of America Personnel Center" and they each state, "Our records indicate that you have a benefit due from the Bank of America Pension Plan." The Letters further note that Crowell's benefits "will automatically be paid to [her]" if she fails to contact the Bank of America Personnel Center by January 8, 2010.

ANALYSIS

1. Standard of Review

As the court explained in its February 22, 2010 order requesting further briefing, "[t]he question of whether to supplement the record depends, in large part, on the standard of review this court will be applying to Crowell's claim for benefits." (Dkt. No. 35 at 2.) Generally, "[t]he standard of review of a Plan Administrator's decisions regarding benefits depends on whether the Plan Administrator was given the discretion to make those decisions." Vallone v. CNA Fin. Corp., 375 F.3d 623, 629 (7th Cir. 2004). The Supreme Court has held that "a denial of benefits challenged under § 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." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). It has been consistently held that "there are no 'magic words' determining the scope of judicial review" in ERISA cases. Herzberger v. Standard Ins. Co., 205 F.3d 327, 331 (7th Cir. 2000). Rather, the focus is on whether the plan "contain[s] language that . . . indicates with the requisite if minimum clarity that a discretionary determination is envisaged." Id. If such notice is clear from the plan language, the appropriate review is the more deferential "arbitrary and capricious" standard. Black v. Long Term Disability Ins., 582 F.3d 738, 744 (7th Cir. 2009).

In this case, the BAC Pension Plan provides that "the Committee has, among its many powers, the full, conclusive and exclusive power and discretion to interpret and construe the terms and conditions of the Plan." (Dkt. No. 39, Ex. A § 9.1.) This language provides the very type of discretionary authority to the committee described by the Supreme Court in the Firestone Tire case "to construe the terms of the plan." Firestone, 489 U.S. at 115. Furthermore, the above-quoted language gives BAC employees adequate notice that "the plan administrator is to make a judgment largely insulated from judicial review." Herzberger, 205 F.3d at 332. In the words of the Seventh Circuit, the language of the BAC Pension Plan "communicate[s] the idea that the administrator . . . has the power to interpret the rules, to implement the rules, and even to change them entirely." Diaz v. Prudential Ins. Co. of Am.,424 F.3d 635, 639 (7th Cir. 2005).

Crowell argues that because the BAC Pension Plan does not contain the "safe harbor" language of Herzberger itis insufficient to confer discretionary authority. (Dkt. No. 40 ¶¶ 2-6.) This court disagrees. In Herzberger,the Seventh Circuit approved optional "safe harbor" language for ERISA agreements that would ensure the recognition of a deferential standard of review. Herzberger, 205 F.3d at 331. However, Herzberger specifically states that the "safe harbor" language it articulated is not mandatory and no "magic words" are necessary to find that a deferential arbitrary and capricious standard of review applies. Id. Because no specific words are necessary to convey "that a discretionary determination is envisaged," id. at 331, Crowell's "safe harbor" argument fails.

Crowell further argues that the language in the BAC Pension Plan "does not confer sufficient discretion to entitle Defendants to a deferential standard of review." (Dkt. No. 40 ¶ 11.) Crowell cites Diaz in support of this argument, but this court finds Diaz to be distinguishable. In Diaz, the Seventh Circuit noted that "the critical question is whether the plan gives the employee adequate notice that the plan administrator is to make a judgment within the confines of pre-set standards, or if it has the latitude to shape the application, interpretation, and content of the rules in each case." Diaz, 424 F.3d at 639-40. The Diaz court found that the plan administrator was constrained within the "confines of pre-set standards" where the plan language (requiring proof of continuing disability "satisfactory to [the insurer]") only provided discretion as to "what forms of proof must be submitted with a claim." Id. at 638-39 (emphasis in original). As discussed above, this court finds that the BAC Pension Plan clearly conveys that the plan administrator has broad discretion to interpret and construe the terms of the plan as a whole. The language of the BAC Pension Plan therefore confers sufficient discretion upon the plan administrator that this court must apply the "arbitrary and capricious" standard of review to any decision exercising this discretion.

Finally, Crowell contends that her post-filing receipt of the Letters, together with her "desperate hope" that the BAC Pension Plan had altered its position, constitute "extreme circumstances" requiring de novo review. (Dkt. No. 40 ¶ 18.) To the extent Crowell asserts that these circumstances should alter the court's review of the Benefits Appeals Committee's interpretation of the terms and conditions of the BAC Pension Plan, the court disagrees. Crowell cites two cases to support her position that "affirmative acts of fraud" constitute extraordinary circumstances requiring de novo review. (Id. ¶ 18-19 (citing Pell v. E.I. Du Pont de Nemours & Co., 539 F.3d 292, 303-04 (3rd Cir. 2008) and Lewalski v. Sanlo Mfg. Co., No. 3:08-cv-311, 2009 WL 1370950, at *14-18 (E.D. Ind. May 14, 2009)).) However, neither of these cases discuss the applicable standard of review or issues regarding supplementation of the record.

Because the language of the BAC Pension Plan clearly indicates that Defendants have reserved discretion "to interpret and construe the terms and conditions of the [BAC Pension] Plan," the court will apply the "arbitrary and capricious" ...


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