United States District Court, W.D. Kentucky, Bowling Green Division
BERNICE F. GREENE, Plaintiff,
DR. OLES B. DROBOCKY, DMD MS, and DROBOCKY ORTHODONTICS, PSC, Defendants.
MEMORANDUM OPINION AND ORDER
THOMAS B. RUSSELL, Senior District Judge.
This matter comes before the Court upon Plaintiff Bernice F. Greene's Motion to alter or amend judgment pursuant to Rule 59(e) of the Federal Rules of Civil Procedure. (Docket No. 195.) Defendants Dr. Oles B. Drobocky, DMD MS, and Drobocky Orthodontics, PSC, ("the Practice"), have responded, (Docket No. 199), and Greene has replied, (Docket No. 200). Also before the Court is Drobocky's motion for attorneys' fees, (Docket No. 197), to which Greene has responded, (Docket No. 197), and Drobocky has replied, (Docket No. 205). Fully briefed, both matters stand ripe for adjudication. For the reasons set forth below, the Court will DENY both Greene's motion, (Docket No. 196), and Drobocky's motion, (Docket No. 197).
As reflected in the Court's earlier memoranda, this case arises from a dispute concerning the retirement benefits to which Greene was entitled pursuant to her employment at Drobocky's orthodontic practice. In 2002, the practice implemented a Defined Benefits Plan offering in order to allow employees to save for retirement. Greene stated that when she was hired as a scheduling coordinator and executive assistant, Drobocky informed her that she was included in the Plan, that she could begin vestment after only one year, and that she would become fully vested after five years of service. Greene alleged that although Drobocky later informed her that she would be removed from the Plan due to her age, he assured her, "I will take care of you." ( See Docket No. 70 at 3.) According to Greene, she understood Drobocky to mean that he would compensate her retirement at the same value as she would have received under the Plan. Drobocky disputed Greene's characterization, arguing instead that she had been informed of her exclusion from the Plan and that he had made no representation that he would fund her retirement.
When a 2006 benefit statement listed Greene as a Plan participant, Drobocky informed the thirdparty plan administrator, PennSys, that this was a mistake. PennSys then removed Greene from the Plan via a handwritten alteration of the Adoption Agreement, which added "Executive Assistant" to the list of excluded job titles. The change was made by typeset correction to subsequent Plan documents.
When Drobocky closed out the Plan in 2010, the majority of the practice's employees opted to cash out. Greene, who coordinated payroll and processed certain PennSys paperwork, then learned how much other employees received from the cash out and began to understand how much she could have realized had she participated in the Plan. She voluntarily terminated her employment from the Practice in December 2011.
In the instant lawsuit, Greene contended that she was not "taken care of" as promised, but received only a $6, 000.00 payment to her IRA account. She alleged violations of the Age Discrimination in Employment Act (ADEA), the Employee Retirement Income Security Act (ERISA), and the Kentucky Wage and Hour Statute; she also raised claims of fraud by the inducement, fraud by omission, breach of contract, and equitable estoppel. (Docket No. 70.) The Court granted summary judgment to Drobocky on all claims except for fraud by the inducement. Greene's fraud by the inducement case was tried before a jury, which found for Drobocky. ( See Docket No. 193.) She now challenges this verdict, arguing that the Court should vacate its entry of summary judgment for Drobocky on the breach of fiduciary duty claim under ERISA. In the alternative, Greene argues that the Court should retry her case. Meanwhile, Drobocky seeks attorneys' fees pursuant to 29 U.S.C. § 1132(g)(1), which provides that "in any action under this subchapter... by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." The Court will address each of the parties' motions in turn.
I. Motion to alter or amend judgment
A court may grant a motion to alter or amend pursuant to Federal Rule of Civil Procedure 59(e) "if there is a clear error of law, newly discovered evidence, an intervening change in controlling law or to prevent manifest injustice." GenCorp v. Am. Int'l, 178 F.3d 804, 834 (6th Cir. 1999) (internal citations omitted). Courts typically will consider additional evidence accompanying a Rule 59(e) motion only when it has been newly discovered; "to constitute newly discovered evidence, the evidence must have been previously unavailable." Id. Importantly, a Rule 59(e) motion does not provide plaintiffs another opportunity to argue the merits of their case. Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374(6th Cir. 1998).
a. Breach of fiduciary duties pursuant to ERISA
Greene first contends that the Court erroneously determined that Drobocky was not a fiduciary and that it improperly dismissed her claim for breach of fiduciary duty. She points to Curtis-Wright Corp. v. Schoonejongen, 514 U.S. 73 (1995), in support of her argument. Curtis-Wright interpreted Section 402(B)(3) of ERISA, 29 U.S.C. § 1102(b)(3), which requires that each employee benefit plan provide "a procedure for amending such plan, and for identifying the persons who have authority to amend the plan." The Supreme Court ultimately held that even a statement declaring that the company reserves the right to amend the plan at any time satisfies this requirement, broad though it may be. In so determining, the Court emphasized that it did not suggest that plan beneficiaries may not prove "that unfavorable plan amendments were not properly adopted and are thus invalid." Id. at 84. Rather, so long as the company abides by the amendment procedures established by the plan, it has satisfied its fiduciary duty. Greene argues that here, Drobocky failed to follow the Plan's amendment procedures, instead "fraudulently alter[ing] the terms of the plan" by persuading a PennSys employee to alter the Plan document. ( See Docket No. 196 at 5.)
However, Greene fails to address the case law upon which the Court relied in its earlier memorandum opinion. Contrary to Greene's argument, even if Drobocky "amended" the Plan without informing her, the would-be amendment would not necessarily give rise to a breach of fiduciary duty claim. As the Court has explained, a claim for breach of fiduciary duty cannot be grounded upon amending or modifying a plan. Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 443-44 (1999) ("Plan sponsors who alter the terms of a plan do not fall into the category of fiduciaries.... When employers undertake those actions, they do not act as fiduciaries, but are analogous to the settlors of a trust.") (citations omitted). The Court noted that an "employer's act of amending its plan" does not constitute "an exercise of fiduciary duty." Id. at 444. The relevant precedents distinguish the duties of a settlor from those of the fiduciary of a trust and place the act of amending a plan squarely among the duties of the former. See Lockheed Corp. v. Spink, 517 U.S. 882, 889-90 (1996) (finding that when employers modify a plan they are analogous to settlors of a trust rather than fiduciaries); Campbell v. BankBoston, 327 F.3d 1, 6 (2003) ("The act of amending the terms of a plan is not one to which a fiduciary duty applies.").
Curtis-Wright does not discredit the case law upon which the Court relied. Although the Supreme Court noted that ERISA plaintiffs may raise claims for improper plan amendments, such claims are distinct from those for breach of fiduciary duty. The Court will not depart from the clear precedent indicating that no breach ...