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Muff v. Iron Workers' Mid-America

United States District Court, N.D. Illinois, Eastern Division

November 25, 2016

JESSE MUFF, Plaintiff,
v.
IRON WORKERS' MID-AMERICA, PENSION AND SUPPLEMENTAL MONTHLY ANNUITY FUND, Defendants, DEBORAH SALVATORE, Intervenor-Defendant.

          MEMORANDUM OPINION

          CHARLES P. KOCORAS, District Judge

         Before the Court are the parties' cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure 56 (“Rule 56”). For the following reasons, Plaintiff Jesse Muff's (“Muff”) motion for summary judgment [22] is denied; Defendants Iron Workers' Mid-America Pension Fund's (the “Pension Fund”) and Supplemental Monthly Annuity Fund's (the “SMA Fund”) (collectively, “Defendants”) motion for summary judgment [20] is denied; and Defendant-Intervenor Deborah Salvatore's (“Salvatore”) motion for summary judgment [16] is denied.

         BACKGROUND

         The following facts are taken from the parties' statements and exhibits filed pursuant to Northern District of Illinois Local Rule 56.1 (“Local Rule 56.1 statement”). Salvatore did not file a separate Local Rule 56.1 statement; nor did she file an answer to Muff's 56.1(a)(3) statement of undisputed material facts. Yet, in her motion for summary judgment, she included a section labeled “Facts Not In Dispute, ” which contains a list of nine numbered facts with citations to the record. The Court assumes that this section was intended to serve as Salvatore's Local Rule 56.1 statement. The Court disregards any argument, conclusion, or assertion unsupported by the evidence in the record. The parties do not dispute the facts stated below unless otherwise noted.

         Randall Kitchens (“Kitchens”), Muff's uncle, “was a member of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers' Union Local 63” (“Iron Workers' Union Local 63”). Defendants “are multi-employer pension plans that offer retirement plans to employees who perform work for employers who are signed to collective bargaining agreements with Iron Workers' [Union] Local 63.” Both of these benefit plans are governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. Kitchens participated in the Pension Fund and the SMA Fund (collectively, “the Funds”) until his death on February 2, 2015. At the time of his death, Kitchens' designated beneficiary of his Pension Fund was entitled to “a total of $889.50 per month up to $33, 007.60” and the designated beneficiary of his SMA Fund was entitled to “a lump sum death benefit” of approximately $6, 220.98.

         In 1978, Kitchens met Salvatore. They were “romantically involved” for about a year. Many years later, in 2009, Kitchens and Salvatore rekindled their relationship. Subsequently, on or around April 28, 2011, Kitchens named Salvatore “his designated beneficiary for all benefits allowable through his membership in the” Iron Workers' Union Local 63. While this relationship lasted longer than the first, the couple eventually parted ways. On January 6, 2012, Kitchens replaced Salvatore, the named beneficiary of his Iron Workers' Union Local 63 death benefit, with Muff. He did so by completing a white card that he obtained from the local union hall and personally handing it to a representative there. “At the same time [that] an Iron Worker requests the white change of beneficiary card, ” two additional cards, one blue and one yellow, “are provided to union members at the union hall allowing beneficiary changes to different accounts.” However, “[u]nlike the white card, the blue and yellow cards must be mailed directly to” the Funds. Although Kitchens completed the white card on January 6, 2012, he did not complete the blue and yellow cards on the same day. The designated beneficiary of Kitchens' death benefit from the Iron Workers' Union Local 63 is not presently at issue; but, the parties dispute whether Salvatore is entitled to Kitchens' benefits from the Funds.

         On September 12, 2014, Kitchens remembered that he had not completed the blue and yellow cards, which would have removed Salvatore as the beneficiary on his pension benefits. Thus, Kitchens went to the union hall, obtained the blue and yellow cards, and took them home to complete them. The parties dispute whether the act of going to the union hall and obtaining the blue and yellow cards demonstrates that Kitchens intended to remove Salvatore as the designated beneficiary of his benefits.

         Ami Cutrone (“Cutrone”), Muff's former girlfriend, claims that she observed Kitchens complete the blue and yellow cards. The parties dispute whether “[t]he following day, Kitchens told Cutorne via telephone that he was headed to the post office to mail the completed blue and yellow cards.” However, the parties agree that later on that same day, “Kitchens texted Cutrone and said that he ‘[f]inally got that bitch out of [his] money, ' by which Cutrone understood that Kitchens mailed the completed blue and yellow cards.” No evidence has been presented “that Kitchens was ever informed of any issue related to the change of beneficiary for” his Pension Fund benefits or his SMA Fund benefits.

         Following Kitchens' death, on April 17, 2015, James Neuman (“Neuman”), the attorney for the Funds, informed Muff and Salvatore that Salvatore was the designated beneficiary to Kitchens' death benefits. Subsequently, Muff appealed “the decision that Salvatore was the beneficiary of Kitchens' death benefits.” Prior to the appeal hearing before the Appeals Review Committee of the Iron Workers' Mid-America Pension and Supplemental Monthly Annuity Fund (“Appeals Committee”)[1], Muff's attorney submitted a “Brief in Support of Jesse Muff” articulating his position that Kitchens intended to remove Salvatore as the designated beneficiary to his Pension Fund benefits and SMA Fund benefits.

         The Appeals Committee issued an opinion, which the Board of Trustees (the “Trustees”) approved, affirming the Administrator's designation of Salvatore as the recipient of Kitchens' death benefits. Consequently, on January 15, 2016, Muff filed the instant action against the Funds “seeking a declaratory judgment declaring him the designated beneficiary” of Kitchens' Pension Fund benefits and SMA Fund benefits. The Court then granted Salvatore's motion to intervene as a necessary party. Now before the Court are the parties' cross-motions for summary judgment.

         LEGAL STANDARD AND STANDARD OF REVIEW

         Summary judgment is appropriate when the movant establishes that “there is no genuine dispute as to any material fact and [that] the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine issue of material fact arises where a reasonable jury could find in favor of the non-movant based on the evidence of record. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “As with any motion for summary judgment, a court considering cross-motions for summary judgment will ‘constru[e] all facts, and draw[ ] all reasonable inferences from those facts in favor of the nonmoving party.'” Metropolitan Life Ins. Co. v. Unger, No. 14 CV 07586, 2016 WL 5477523, at * 4 (N.D. Ill. Sept. 29, 2016) (quoting Garofalo v. Vill. of Hazel Crest, 754 F.3d 428, 430 (7th Cir. 2014)).

         First, we must address the proper standard under which the Court will review the Appeals Committee's determination to affirm the Administrator's decision designating Salvatore as the recipient of Kitchens' death benefits. “Under ERISA, the default standard of review is de novo, unless the governing plan expressly gives the administrator the discretion to determine eligibility and to interpret the terms of the contract.” Mirocha v. Metro. Life Ins. Co., 56 F.Supp.3d 925, 931 (N.D. Ill. 2014); see also Tegtmeier v. Midwest Operating Engineers Pension Trust Fund, 390 F.3d 1040, 1045 (7th Cir. 2004). The plan documents that govern the SMA Fund state, “[a]ll questions or controversies . . . shall be submitted to the Trustees for decision . . . . The decision on review shall be binding . . . except to the extent that such decision may be determined to be arbitrary or capricious by a court.” Similarly, according to the plan documents governing the Pension Fund, “[t]he Trustees shall . . . be the sole judges of the standard of proof required in any case and the application and interpretation of this Plan; and decisions of the Trustees shall be final and binding.” Accordingly, because the Plans give discretion we apply the arbitrary and capricious standard in reviewing the Appeals Committee's decision.

         Applying this standard, a court defers to the plan administrator's determination. See Hackett v. Xerox Corp. Long-Term Disability Income Plan, 315 F.3d 771, 776 (7th Cir. 2003). “The reviewing court may not overturn the administrator's decision if it ‘makes a rational connection between the issues to be decided, the evidence in the case, the text under consideration, and the conclusion reached.'” Jackman Fin. Corp. v. Humana Ins. Co., No. 08 C 5784, 2010 WL 1178067, at *3 (N.D. Ill. Mar. 22, 2010) (quoting Exbom v. Cent. States Se. & Sw. Areas Health & Welfare Fund, 900 F.2d 1138, 1143 (7th Cir. 1990)). However, “[r]eview under the deferential arbitrary and capricious standard is not a rubber stamp and deference need not be abject.” Hackett, 315 F.3d at 774-75. “A court considers whether there was a reasonable basis for the administrator's determination; a court will not uphold the administrator's decision ‘when there is an absence of reasoning in the record to support it.'” Mirocha, 56 F.Supp.3d at 932 (quoting Holmstrom v. Metro. Life Ins. Co., 615 F.3d 758, 766 (7th Cir. 2010)). Moreover, ERISA mandates that “specific reasons for denial be communicated to the claimant and that the claimant be afforded an opportunity for full and fair review by the administrator.” Id. (quoting Tate v. Long Term Disability Plan for Salaried Emps. of Champion ...


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