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K andrew J. Nalbandian, Jr., An ) Individual; Gregory M. v. Lockheed Martin Corporation

September 1, 2011

29 U.S.C. §§ 1002(2)(A) AND 1002(35); AND ) DOES 1 THROUGH 50, INCLUSIVE,

The opinion of the court was delivered by: Lucy H. Koh United States District Judge


This is an action for retirement benefits pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1101 et seq. ("ERISA"). Before the Court are the parties' cross-3 motions for summary judgment. The Court held a hearing on the parties' motions on August 25, 2011. Having considered the parties' submissions and arguments, the Court GRANTS Defendants' 5 motion for summary judgment and DENIES Plaintiffs' motion for summary judgment. 6

Support of Plaintiffs' Motion (Moyles Decl.), Ex. 1, at 22-24. Mr. Nalbandian, Sr. worked well 10 past his retirement date, and received formal recognition as an outstanding engineer via his Decl.), Ex. 1, LMC 00029 (Certificate of Death). The central dispute in this case is whether Mr. Mr. Nalbandian, Sr. under Lockheed's employee retirement plan. 16

ERISA. The Plan is a defined benefits plan, in which a participant receives a fixed level of 20 retirement income based on the participant's years of service and compensation. See Roos Decl., 21

Ex. 2, LMC 296-99 (Art. V, "Amount of Benefit"). Unlike a defined contribution plan, the amount 22 of the benefit does not depend on the amount of a participant's contributions. See id. Instead, the 23

(Art. VII ("Pre-Retirement Surviving Spouse Benefits")); id., LMC 301(Art. VI(1) ("Automatic 25 and Optional Forms of Payment -- Joint and Survivor Annuity")). These benefits are required 26 under ERISA § 205(a)(2). See 29 U.S.C. § 1055 (a)(2). 27

28 beneficiaries of their choice. See Roos Decl., Ex. 2, LMC 302 (Art. VI(3)("Guaranteed Payments


Andrew J. Nalbandian, Sr. (Mr. Nalbandian, Sr.) was employed by Lockheed Martin Corporation (Lockheed) for forty two years. Dkt. No. 75, Declaration of Gina L. Moyles in 9

continued employment as a "Lockheed Fellow." Id. Mr. Nalbandian, Sr. passed away on February 22, 2009. Dkt. No. 71, Declaration of Kathleen Roos in Support of Defendants' Motion (Roos 13

Nalbandian, Sr.'s sons, Andrew and Gregory Nalbandian, are entitled to benefits as beneficiaries of 15

A. The Plan

Mr. Nalbandian, Sr. participated in the Lockheed Martin Corporation Salaried Employee

Retirement Program (Plan), a defined benefits program which the parties agree is governed by 19

Plan provides certain automatic benefits for spouses of deceased participants. See id., LMC 312-13 24

The Plan separately provides Participants with the option of designating non-spouse Option"). These non-spouse beneficiaries may receive the retirement benefits of a deceased 2 participant for either five or ten years after the participant's Benefit Commencement Date, 3 depending on the retirement plan selected by the participant. See id. If an unmarried participant 4 does not select an optional form of payment, the default form of payment is the Lifetime of the 5

Participant Only Option. See id., LMC 00303 (Art. VI(5)). The selection of a Guaranteed Option 6 is completely within the discretion of a Plan participant. Mr. Nalbandian, Sr. selected the 7 retirement payment option of "Life with 5 Year Guarantee," designating his sons, Andrew J. 8

The Plan defines "Benefit Commencement Date" as "[t]he effective date on which payment

10 of a Participant's retirement benefit commence in accordance with the terms of the Plan..." Id. at Nalbandian, Jr. and Gregory M. Nalbandian (Plaintiffs), as beneficiaries.

LMC 272 (Art. I(3)). For a Participant who continues working past his Normal Retirement Date

(e.g., past 65 years old), the Plan states that the participant "shall receive his retirement benefit on 13 the first day of the month following Termination of Employment." Id. at LMC 00296-97 (Art. 14

(2) resignation, (3) involuntary termination, or (4) eligibility for long term disability. Id. at 282 16

Art. V(3)(c) provides for other "benefits" paid to a Participant who continues working past

18 age 70.5, even while the Participant continues working. Id. at LMC 00297. These benefits are 19

Minimum Required Distributions, which are payable to Participants who have accumulated an 20 interest via their employment. See id., LMC 304-09(Art. VI-A); see also id., LMC 303-04 (Art. 21

401(a)(9). The Plan provides for payment of a deceased Participant's interest in Minimum 23

A(b)(2)("Death of a Participant Before Distribution Begins"); see also id., LMC 303-04 (Art. 25

VI(6)(e)). In the case of a surviving spouse, the payment occurs after the Participant would have 26 turned 70.5, but the Plan provides for this distribution to an heir in the absence of a surviving 27 spouse or designated beneficiary. See id. ."). Here, there is no dispute that Mr. Nalbandian, Sr. 28

V(3)(a)-(b)). The Plan defines "Termination of Employment" as occurring at the first of: (1) death, 15

(Art I(28)). Here, Mr. Nalbandian, Sr. terminated his employment on February 9, 2009. 17

VI(6)(e)). These Minimum Required Distributions are mandated by Internal Revenue Code § 22

Required Distributions to a spouse or designated beneficiary. See id., LMC 305 (Art. VI-24 was "receiving MRD [Minimum Required Distribution] payments through the end of the February 2009." Moyles Decl. Ex. 34, p. 2-3 (final denial letter).

5 term disability due to leukemia. Moyles Decl., Ex. 2, at 17-18, Ex. 3, NAL 00002. According to Plaintiffs, Mr. Nalbandian, Sr. could only remain on short term disability for six months, and 7 would have to terminate his employment on or around February 9, 2009. See Moyles Decl., Ex. 8; 8

On or about August 9, 2008, Mr. Nalbandian, Sr. told his son Andrew Nalbandian, Jr. that

10 he wanted to retire between January 1, 2009 and the early February expiration of his short term 11 disability. Declaration of Andrew J. Nalbandian, Jr. in Support of Motion (A. Nalbandian Decl.)

15, 2008, and thereafter, Lockheed sent him a pension estimate based upon a Benefit

Mr. Nalbandian, Sr. contacted Lockheed by phone on January 9 and January 22, 2009,

16 again seeking retirement information. See Moyles Decl., Exh. 5-6, 8. He was particularly 17 concerned that his employee medical coverage would run out on February 9, 2009, the first of three 18 consecutive days of scheduled chemotherapy. See Plaintiffs' MSJ at 3. A Lockheed employee, 19

Dana Robinson, explained that if Mr. Nalbandian, Sr.'s last day as an employee were February 9, 20 the earliest date that Mr. Nalbandian, Sr. could receive his retiree benefits ("benefits 21 commencement date") was March 1, 2009. Moyles Decl., Ex. 8, at 16-17. According to 22

Employment, which would have pushed up the Benefits Commencement Date. See Moyles Decl., 24

Mr. Nalbandian, Sr. received his retirement paperwork on January 29, 2009. See Moyles

Decl., Ex. 10. On February 5, 2009, he again contacted Lockheed to ensure that he would have 27 medical insurance between his scheduled Termination of Employment on February 9 and his 28

B. Mr. Nalbandian, Sr.

On August 9, 2008, Mr. Nalbandian, Sr. had to take leave from work, and went on short Plaintiffs' Motion for Summary Judgment (Plaintiffs' MSJ) at 3. 9

¶¶ 2-3. Mr. Nalbandian, Sr. requested retirement information from Lockheed around September 13

Commencement Date of February 1, 2009. See Moyles Decl., Ex. 4, LMC 938-43. 15

Plaintiffs, Ms. Robinson did not raise the possibility of adopting a January 2009 Termination of 23

Ex. 8. 25


Benefit Commencement Date on March 1. See Moyles Decl. Exh. 11, 14. The Lockheed employees in the Benefits Department that spoke to Mr. Nalbandian, Sr. were uncertain whether he 2 could still obtain a February 1 Benefit Commencement Date. One employee explained to Mr. 3

Benefit Commencement Date was uncertain. See Moyles Decl., Ex. 14, at 3-4. The employee also 5 explained that he thought Mr. Nalbandian, Sr. could receive medical coverage for his February 10 6 and 11, 2009 chemotherapy sessions. Id. 7

8 selected the payment option of "Life with 5 Year Guarantee," designating his sons, Andrew J. 9

LMC 00031-37 (Pension Benefit Election Form contained in the Administrative Record). Mr. 11 March 1, 2009 Benefit Commencement Date. 14

Lockheed later sent Plaintiffs a revised summary explaining that, because Mr. Nalbandian, Sr. had 17 died before his March 1, 2009 Benefit Commencement Date, no survivor benefits were payable to 18

Plaintiffs. On April 7, 2009, Lockheed sent Plaintiffs an Updated Benefits Summary indicating 19 that no survivor benefits would be paid, and instead Plaintiffs would receive $50,000 in life 20 insurance. See Moyles Decl., Exh. 21-23 (Lockheed internal correspondence and resulting 21

Updated Benefits Summaries). Lockheed denied Plaintiffs' request for benefits in April 20, 2009 23 letter, and denied Plaintiffs' appeal in a June 19, 2009 letter. See Moyles Decl., Ex. 28 (denial of 24 benefits request); Moyles Decl., Ex. 34 (denial of benefits appeal). Plaintiffs timely brought this 25 civil action against Lockheed and the Plan (Defendants), alleging claims under ERISA and 26 equitable estoppel. Before the Court are the parties' cross-motions for summary judgment. 27 28

Nalbandian, Sr. that a March 1 Benefit Commencement Date was guaranteed, while a February 1 4

Mr. Nalbandian, Sr. signed his retirement benefits paperwork on February 9, 2009 and Nalbandian, Jr. and Gregory M. Nalbandian (Plaintiffs), as beneficiaries. See Roos Decl., Ex. 1, 10 Nalbandian Sr.'s son, Andrew J. Nalbandian, Jr., helped his father complete the benefit package.

A. Nalbandian Decl. ¶ 6. Mr. Nalbandian, Sr. passed away on February 22, 2009, prior to his 13

On March 11, 2009, Lockheed sent Plaintiffs a tentative Benefits Summary indicating that Plaintiffs would receive survivor benefits as the beneficiaries of Mr. Nalbandian, Sr. However, 16 Benefits Summaries); Moyles Decl., Exh. 25-27. (Lockheed internal correspondence and resulting 22 4 benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or 5 to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. ...

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