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Durand v. Hanover Insurance Group, Inc.

United States District Court, Sixth Circuit

December 17, 2013

JENNIFER A. DURAND, et al., Plaintiffs,


JAMES D. MOYER, Magistrate Judge.

This matter is before the court on the plaintiffs' motion for relief under Rule 54(b) of the Federal Rules of Civil Procedure. The plaintiffs request that the court enter a final judgment on its orders dismissing the "post-2003" claims of two of the three plaintiffs, Walter Wharton and Michael Tedesco.[1] The defendants vigorously oppose the motion. For reasons stated below, the court will grant the plaintiffs' request for relief.

A. Background

The plaintiffs, Jennifer Durand, Walter Wharton, and Michael Tedesco, are former employees of the defendant, Hanover Insurance Group, and participants in Hanover's pension plan, The Allmerica Financial Cash Balance Pension Plan, which is also named as a defendant. The plaintiffs allege the defendants have underpaid their pension benefits and file suit to recover benefits due, pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. ยง 1132(a)(1)(B).

The plaintiffs seek certification of an overall class and two subclasses of plan participants who received early lump-sum distributions of their retirement benefits between March 1, 1997 and August 17, 2006.[2] The plaintiffs seek certification under Rule 23(b)(1) and (2). The overall "lump-sum class" is represented by Durand. The lump-sum class is further comprised of two subclasses, which are delineated according to the plan amendments of March 1997 and January 2004. Wharton represents "subclass A, " participants who received lump-sum distributions between January 1, 2004 and August 17, 2006. James A. Fisher represents "subclass B, " participants who received lump-sum distributions between March 1, 1997 and March 12, 2002. The plaintiffs aver the Wharton subclass is comprised of about 1, 700 members, and the remaining overall class and subclass, represented by Durand and Fisher, number 2, 975 members.[3]

In a Memorandum Opinion, entered March 31, 2011 (DN 71), and a Memorandum and Order, entered January 6, 2012 (DN 78), the court dismissed Wharton and Tedesco's claims, which were added to the action by an amended complaint in December 2009, on grounds of the applicable statute of limitations. These added claims challenge, in essence, the 2004 plan amendment which changed the future interest crediting rate to the 30-year Treasury rate, (as set forth in Section 417(e) of the Internal Revenue Code), from the 1997 plan's provision for a variable, 401(k)-style rate, referred to as "investment experience crediting."[4]

In due course, the parties tendered an agreed order of class certification, and the defendants moved for partial summary judgment on Wharton's remaining claims. In a Memorandum Opinion and Order entered October 2, 2013 (DN 102), the court granted the defendants' motion and dismissed the claims of Wharton, individually, and as a putative class representative, on grounds which included the statute of limitations.[5] The court concluded that the 2004 plan governs the parties' dispute because the amended terms satisfy an ERISA regulatory safe harbor and because Wharton's claim for a split calculation of future interest credits under both the 2004 plan and the 1997 plan is in essence a cutback claim, which the court previously dismissed as time-barred.[6]

The remaining claims for adjudication, at present, are the whipsaw and fiduciary claims, which are set forth in the original complaint, filed in March 2007, of the plaintiff Durand, individually, and as a class representative. In short, Durand claims the defendants miscalculated her pension benefit, by using a uniform projection rate in a whipsaw calculation for future interest credits, rather than using an individualized projection rate, based on the 1997 plan provision for "investment experience crediting." Durand's claims do not challenge the 2004 plan terms.

B. Standard for Immediate Appeal

Rule 54(b) of the Federal Rules of Civil Procedure provides that in an action involving multiple claims or parties, a district court may direct entry of a final judgment on any claim before full adjudication of all claims if it determines there is no just reason for delay. The determination lies within the sound discretion of the district court, although general practice disfavors piecemeal appellate review. Curtiss-Wright Corp. v. General Elec. Co., 446 U.S. 1, 8 (1980).

The district court must first conclude that it is dealing with a final judgment and then examine several factors in determining whether there is no just reason for delay - an inquiry which requires consideration of judicial administrative interests as well as the equities involved. Lowery v. Federal Exp. Corp., 426 F.3d 817, 821 (6th Cir. 2004) (quoting Curtiss-Wright , 446 U.S. at 8. The Court of Appeals for the Sixth Circuit lists these factors: 1) the relationship between the adjudicated and unadjudicated claims; 2) the possibility that the need for review might or might not be mooted by future developments in the district court; 3) the possibility that the reviewing court might be obliged to consider the same issue a second time; 4) the presence or absence of a claim or counterclaim which could result in set-off against the judgment sought to be made final; and 5) miscellaneous factors such as delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims, expense, and the like. Id., (quoting General Acquisition, Inc. v. GenCorp, Inc., 23 F.3d 1022, 1030 (6th Cir. 1994) (internal quotations omitted)). This analysis boils down to "whether the needs of the parties' outweigh the efficiency of having one appeal at the conclusion of the case in its entirely, and it must spell out its reasons for concluding that prompt review is preferable." Id.

C. Analysis

The plaintiffs state that because the court's dismissal of Wharton and Tedesco's claims ends the case at the district court level for these plaintiffs and the 1, 700 current and former Allmerica participants they seek to represent, these claims should be certified for immediate appeal. The plaintiffs further contend the outcome of the surviving claims of plaintiff and class representative Durand (and class representative Fisher) has no bearing on the merits of the dismissed claims and that certifying the dismissal orders for immediate appeal will avert potentially duplicative discovery and trial proceedings.

The defendants oppose immediate certification because, they argue, the proposed appeal would involve whipsaw, fiduciary-duty and statute-of-limitation issues that remain in this case, including the interpretation and analysis of the 1997 plan, and that the claims are so entangled or overlapping, that the risk of a dual adjudication, with ...

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