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Chaborek v. Ford Component Sales LLC

United States District Court, E.D. Michigan, Southern Division

June 7, 2019

CORINNE M. CHABOREK, Plaintiff,
v.
FORD COMPONENT SALES LLC, Defendant.

          ORDER GRANTING DEFENDANT'S MOTION FOR JUDGMENT ON THE ADMINISTRATIVE RECORD AND DENYING PLAINTIFF'S CROSS-MOTION

          TERRENCE G. BERG UNITED STATES DISTRICT JUDGE

         Plaintiff Corinne Chaborek claims that Defendant Ford Component Sales improperly denied her benefits under an employee profit-sharing plan governed by the Employee Retirement Income Security Act (“ERISA”). Plaintiff initially filed a Complaint in Wayne County Circuit Court alleging breach of contract, unjust enrichment, promissory estoppel, and quantum meruit. ECF No. 1. Defendant removed the case to federal court where ERISA governs adjudication of the parties' dispute. Id. Plaintiff does not contest federal jurisdiction over the matter. Plaintiff's Reply to Defendant's Response to Plaintiff's Motion for Judgment on the Administrative Record, ECF No. 12 PageID.249. For the reasons below, Defendant's Motion for Judgment is GRANTED and Plaintiff's Cross-Motion is DENIED.

         I. Facts

         Plaintiff worked for Defendant Ford Components for over ten years, from August 2, 2002 until January 6, 2014. During 2013, Plaintiff participated in a “profit-sharing plan.” The profit-sharing plan is an employee pension plan subject to the requirements of ERISA.[1] Under the Plan, 50% of the profit-sharing award goes to the employee's savings plan (a 401(k) account), and 50% is awarded as a cash bonus. The parties agree that Plaintiff received the savings plan portion of her benefit for 2013. Response to Defendant's Motion for Judgment, ECF No. 9 PageID.132. But Plaintiff contends that she is also entitled to the cash portion of the profit-sharing plan that she earned during her final Performance Period, ending on December 21, 2013, in the amount of$18, 379.89.

         The terms of the Plan allow Defendant “full power and authority to interpret, administer, modify, suspend, and terminate the Plan” and permits Defendant to delegate that authority. The Plan terms also state that any participant “who terminates employment or is terminated by the Company for any reason other than Company-approved retirement, disability or death prior to the payment by the Company of the Award shall not be eligible for an Award under the Plan.” ECF No. 5 PageID.43.

         Plaintiff took medical leave under the Family Medical Leave Act (“FMLA”) beginning on October 1, 2013. That leave was set to expire on December 23, 2013. Prior to expiration, on December 16, 2013, Plaintiff extended her leave by submitting a note from her physician designating January 6, 2014 as her new return-to-work date. Defendant claims-and the administrative record supports-that despite the note indicating she would return on January 6, 2014, Plaintiff made no attempt to communicate with her employer until her attorney contacted Defendant on March 20, 2018.

         Because Plaintiff did not return to work on January 6, 2014 as scheduled, her FMLA leave expired. Defendant states that Plaintiff was terminated as “voluntary quit.” On February 3, 2014, Defendant sent Plaintiff a letter regarding the termination of Plaintiff's employment. This letter says that Plaintiff could still collect her award under the Plan if she agreed to sign a waiver and release agreement releasing any claims relating to her employment or termination. Administrative Record, ECF No. 5 PageID.55. The letter also requested that Plaintiff return company property in her possession. Id. Defendant maintains that the Plan did not require Defendant to pay Plaintiff the award, but Defendant offered to do so provided that she sign the waiver and release of claims. Although Plaintiff claims that Defendant issued, but did not send, a check for her award, Defendant maintains that it has never issued a check because Plaintiff did not sign the waiver and release of claims and did not return the company property in her possession. The record contains no evidence of an issued check for the cash portion of the benefit.

         II. Legal Standard

         The two issues presented in Plaintiff's Cross-Motion for Judgment receive different standards of review. First, the Court reviews de novo “the legal question of whether the procedure employed by a plan administrator in terminating benefits meets the requirements of § 1133.” Houston v. UNUM Life Ins. Co. of Am., 246 Fed.Appx. 293, 299 (6th Cir. 2007) (citing McCartha v. Nat'l City Corp., 419 F.3d 437, 444 (6th Cir. 2005). Therefore, on Plaintiff's first claim in her Cross-Motion, that Defendant's benefit and appeal denials were procedurally deficient under 29 U.S.C. § 1133, the Court employs de novo review.

         Parties disagree regarding which standard of review applies to the substantive benefit determination, the second claim in Plaintiff's Cross-Motion. Plaintiff argues that the Plan administrator's denial of her benefit should be reviewed de novo under McCartha, 419 F.3d at 444. Defendants argue the denial of benefits should be reviewed for whether it was arbitrary and capricious under Firestone Tire and Rubber Company v. Bruch, 489 U.S. 101, 115 (1989).

         Under McCartha, a denial of benefits is reviewed de novo “unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan” in which case the administrator's decision is affirmed if it is “rational in light of the plan's provisions.” McCartha, 419 F.3d at 441 (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Marks v. Newcourt Credit Group Inc., 342 F.3d 444, 456-57 (6th Cir. 2003) (internal quotations omitted)); accord Wilkins v. Baptist Healthcare Sys., 150 F.3d 609, 616 n.4 (6th Cir. 1998); Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 380 (6th Cir. 1996); Pransch v. The Guardian Life Insurance Co. of America, No. 16-10723, 2017 WL 4054174, at *1 (E.D. Mich. Sept. 14, 2017).

         Defendant argues that the Profit-Sharing Incentive Plan (“the Plan”), ECF No. 5 PageID.43, grants Defendant discretionary authority to determine eligibility for benefits and that the Court should review its decision under the arbitrary and capricious standard. The Court agrees.

         The Plan lists the Ford Component Sales Compensation Committee of the Board of Directors of the Company as the Plan Administrators. Id. The Plan also explicitly states that the Administrators “shall have full power and authority to interpret, administer, modify, suspend, and terminate the Plan.” Id.

         This language clearly confers discretion on the administrators, thereby warranting arbitrary and capricious review. See Marks v. New-court Credit Group, Inc., 342 F.3d 444, 457 (6th Cir. 2003) (applying arbitrary and capricious review where plan language gave the plan admin- istrator the power to “make the rules and regulations necessary to administer the Plan and . . . interpret the ...


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