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NUNEZ v. MONTEREY PENINSULA ENGG.

November 7, 1994

JEANNE NUNEZ, RAYMOND PEREZ, and RICHARD MORGAN, Plaintiffs,
v.
MONTEREY PENINSULA ENGINEERING et al., Defendants.



The opinion of the court was delivered by: EDWARD A. INFANTE

 I. INTRODUCTION AND BACKGROUND

 This is an action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiffs Jeanne Nunez, Raymond Perez and Richard Morgan are each former employees of defendant Monterey Peninsula Engineering ("MPE"), which sponsors and administers defendant Monterey Peninsula Engineering Profit Sharing Plan (the "Plan") in which plaintiffs are, or were, participants. *fn1" Defendant Bart J. Bruno is president of MPE and is primarily responsible for administering the Plan. *fn2" The action was filed on July 16, 1993, and the pleadings were amended in March 1994.

 A. Plaintiffs' First Amended Complaint

 Plaintiffs' First Amended Complaint asserts four causes of action:

 1. First Cause of Action *fn3"

 Allegedly, in the late 1980's or early 1990's, defendants amended the Plan, without notice to its participants. Previously, Plan participants had been entitled to the option of receiving a lump sum benefit distribution immediately upon termination of their employment with MPE. Under the Plan amendment, participants are required to endure an 18-month waiting period before being entitled to distribution of benefits. *fn4" Plaintiffs contend that the amendment of the Plan so as to eliminate the immediate lump-sum benefit option violated the terms of the Plan, as well as ERISA and its accompanying regulations. *fn5" They seek an order requiring defendants to pay plaintiffs accrued interest for the period between plaintiffs' termination of employment until the respective dates each plaintiff's vested benefits were paid. *fn6"

 2. Second Cause of Action *fn7"

 Plaintiff Perez alleges, on information and belief, that "only a portion of the retirement funds to which he was entitled for his work on public works projects was contributed by MPE on his behalf and collected by the Plan". The remaining portion was allegedly allocated to the profit-sharing accounts of other employees, including defendant Bruno and his family. *fn8" Perez alleges that defendants' failure to collect, credit and properly allocate pension contributions on his behalf constituted a breach of their fiduciary obligations under ERISA and violated a host of other federal and state laws. *fn9"

 3. Third Cause of Action *fn10"

 Perez also alleges that MPE improperly failed to make any contributions to the Plan on his behalf for Plan year 1991, notwithstanding that he was employed on the last working day of the Plan year, November 27, 1991. *fn11" Allegedly, the Plan requires participants to be employed on the very last day of the Plan year, in this case November 30, 1991, regardless whether it falls on a weekend or a holiday. *fn12" Perez avers, however, that defendants never furnished him with a copy of a summary plan description, as ERISA requires. Had defendants done so he would have been informed of the specifics of the Plan's requirements and would have ended his employment effective three non-working days later. *fn13"

 4. Fourth Cause of Action *fn14"

 Finally, plaintiffs Nunez and Perez allege that, pursuant to ERISA regulations and prior to filing the lawsuit, they requested pertinent documents and information from defendants relating to Nunez's and Perez's entitlement to benefits. *fn15" Allegedly, defendants failed to timely comply with the requests in violation of ERISA and its regulations. *fn16"

 B. Defendants' Motion for Summary Judgment

 Defendants have presently moved for summary judgment, asserting (1) that plaintiffs lack standing to assert claims under ERISA because they are no longer "participants" in the Plan and (2) that "none of plaintiffs' causes of action have merit". *fn17" For the reasons which follow, the motion is granted in part and denied in part. Defendants are entitled to summary adjudication in their favor on the second and fourth, but not the first and third, causes of action of plaintiffs' First Amended Complaint.

 The material facts are undisputed. *fn18" Plaintiffs are all former employees of MPE who are, or were at the time of their employment, participants in the Plan. *fn19" Plaintiffs all terminated their employment during the 1990-91 Plan year, which ran from December 1990 through November 1991. *fn20" Plaintiffs do not intend to return to work with MPE and do not anticipate accruing additional benefits under the Plan. *fn21" Plaintiff's earned and received vested benefits under the Plan as follows: (1) Nunez, $ 5,686.07 distributed on November 23, 1993; (2) Perez, $ 8,440.16 on September 22, 1993; and (3) Morgan, $ 34,709.50 on November 5, 1993. *fn22"

 Defendant Bart Bruno is president and chairman of the board of directors of MPE. His two sons, Paul and James Bruno, are also officers and directors of MPE. MPE administers the Plan, and defendant Bart Bruno is the Plan's trustee. *fn23"

 The terms of the Plan are set forth in multiple documents: *fn24" (1) the Prototype Defined Contribution Plan and Trust; *fn25" (2) the Adoption Agreement; *fn26" and (3) a one-page Attachment A to the Plan, which became effective December 31, 1988 and was revised May 31, 1992. *fn27"

 Attachment A by its terms adopted a pair of "policy changes [which] have been deemed to be in keeping with the original intent of the profit sharing plan by the plan administrators". *fn28" One of these changes provided for payment of termination benefits to be made either five years after termination, upon the participant's fifty-second birthday, or death, whichever was earlier. *fn29" Prior to adoption of Attachment A at the end of 1988, MPE permitted a participant who terminated his or her employment to receive Plan benefits at the end of the Plan year in which the participant terminated his or her employment. *fn30"

  The five-year period has since been revised to eighteen months, *fn31" and plaintiffs' benefits were ultimately distributed after the lawsuit was filed, in partial settlement of the claims originally asserted by plaintiffs. *fn32" The parties' joint case management conference statement provides:

 
"The parties agree that plaintiffs shall be entitled to cash the disbursement checks recently issued to them by the MPE Plan without waiving their right to proceed against the defendants in this action, and that the plaintiffs' receipt of said checks does not preclude them from seeking greater benefits which may be due. Plaintiffs acknowledge that their receipt of such benefits may render moot one or more of their claims. "Plaintiffs agree that their receipt of benefits cuts off any accrual of interest on the amount received up to the date of receipt." *fn33"

 The terms of the Plan are summarized in a summary plan description ("SPD") but plaintiff Perez was never furnished with one by MPE. *fn34" Perez terminated his employment with MPE on November 27, 1991, the last work day of November preceding the Thanksgiving holiday weekend; he did so without being informed that if he terminated his employment effective three days later, on November 30, 1991, MPE would have been required to make a contribution to the Plan on his behalf. *fn35"

 On or about October 26, 1992, an attorney representing Nunez and Perez (among others) requested in writing (among other things) that defendant Bruno, on behalf of MPE, provide documents in response to 13 enumerated requests. *fn36" In response, MPE provided Nunez's and Perez's attorney with several documents "on or before" November 25, 1992: (a) a copy of the then-current summary plan description; (b) a copy of an SPD in existence prior to the then-current SPD; (c) a copy of the annual reports completed by the Plan during the years 1988-1991; (d) a copy of the then-current Plan; (e) a copy of the then-current adoption agreement; and (f) a copy of the then-current investment plan. *fn37" Unsatisfied with the response, Nunez's and Perez's counsel dispatched another letter to defendant Bruno, dated March 8, 1993, containing a "reiteration" of the document requests. *fn38" Paul Bruno sent a reply letter, dated March 23, 1993, claiming he had "scrupulously" attempted to provide all the items counsel was statutorily entitled to receive. *fn39"

 II. DISCUSSION

 A. Standard for Reviewing Summary Judgment Motion

 Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the 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).

 The standard for determining whether summary adjudication of a claim is appropriate is identical to that for evaluating a motion for judgment as a matter of law under Rule 50: "the trial judge must direct a verdict, if under the governing law, there can be but one reasonable conclusion as to the verdict". Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986). "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts, are jury functions, not those of a judge [when] he is ruling on a motion for summary judgment". Id., 106 S. Ct. at 2513. Hence, "the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor". Id.

 B. Plaintiffs' Standing to Bring ERISA Claims

 "ERISA carefully enumerates the parties entitled to seek relief [thereunder]". Franchise Tax Bd. v. Const. Laborers Vacation Trust for Southern California, 463 U.S. 1, 103 S. Ct. 2841, 2855, 77 L. Ed. 2d 420 (1983); see 29 U.S.C. § 1132(a). "The express grant of federal jurisdiction in ERISA is limited to suits brought by ...


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