Lopez-Aponte v. Puerto Rico Tel. Co.

MAYRA LOPEZ-APONTE, Plaintiff, v. PUERTO RICO TELEPHONE CO, Defendant.

Civil No. 13-1763 (SEC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

March 31, 2017

OPINION AND ORDER

Before the Court is Defendant Puerto Rico Telephone Co.'s motion for summary judgment, Docket # 42, and Plaintiff Mayra Lopez-Aponte's response in opposition, Docket # 60. Defendant's motion is granted.

I. Factual and Procedural Background

Plaintiff's tenure at the Puerto Rico Telephone Company (PRTC) lasted for thirty-one years. She was discharged on September 3, 2010 because she never returned to work after taking sick leave for a whole year. At the time of termination, she was 49 years old and worked as a Banking Processes Supervisor.

Plaintiff alleges that in September 2012 she attempted to file an application for retirement benefits under PRTC's Retirement Plan for Salaried Employees (Retirement Plan) and PRTC's Lump Sum Retirement Plan (the Lump Sum Plan). But according to Plaintiff, an officer at PRTC's Benefits and Compensation Department refused to accept her application because the plans were being amended. She also says that she requested copies of the plans but that PRTC refused to provide them for the same reason. See Docket # 62-2.

A year later, Plaintiff filed a breach of contract claim in state court alleging that PRTC was trying to reduce her retirement benefits by 45%. She also brought a claim for $11,341.72 in accrued vacation leave under the Puerto Rico Minimum Wage, Vacation and Sick Leave Act, Law 180 of July 27, 1998, P.R. Laws Ann. Tit. 29 § 250 et sec. (Law 180), and a Puerto Rico law claim for emotional damages stemming from PRTC's denial of the retirement benefits. Docket # 1-1, ¶¶ 8, 10 & 15.

PRTC timely removed the action arguing that the Retirement Plan and the Lump Sum Plan are covered by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA), thus providing this court with jurisdiction to entertain Plaintiff's claims for retirement benefits under these plans. After several proceedings, PRTC moved for summary judgment arguing that Plaintiff: (1) failed to exhaust administrative remedies; (2) is not yet entitled to receive the benefits under the plans as a matter of law; (3) is not entitled to payment for accrued vacation because she was an exempt employee; and (4) that her tort claim is pre-empted by ERISA. Docket # 42.

In response, Plaintiff filed an underdeveloped, poorly written, and confusing brief based mainly on PRTC's failure to respond to her discovery requests. See Docket # 60. For example, despite alleging in her complaint that she is entitled to pension benefits, which are provided by the Retirement Plan, she perplexingly argued that she was not a participant of that plan and thus, did not have to exhaust administrative remedies. In fact, she asserted that the Retirement Plan "under ERISA is a sham that does not exist or is not operational." Id., p. 4. Still, she correctly pointed out that the copy of the Retirement Plan that PRTC submitted in support of its motion was not the one in effect at the time of her termination because it contained amendments approved in December 2012, more than two years after she was discharged. For this reason, the Court denied the motion without prejudice and gave PRTC the opportunity to file the Retirement Plan in effect on the date of Plaintiff's discharge. PRTC obliged and Plaintiff filed a brief in opposition raising arguments she had not raised in her initial opposition to summary judgment.

Plaintiff now concedes that the Retirement Plan is subject to ERISA and instead argues that she did not have to exhaust administrative remedies because PRTC closed its doors to this avenue by failing to accept her application. Docket # 89, p. 3. She also posits that the Lump Sum Plan is not a "plan" within the meaning of ERISA.

II. Standard of Review

Summary judgment is appropriate only if the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A dispute is genuine if a "reasonable fact-finder could resolve in favor of either party and a material fact is one that could affect the outcome of the case." Flood v. Bank of Am. Corp., 780 F.3d 1, 7 (1st Cir. 2015). At this stage, it is axiomatic that courts "may not weigh the evidence," Casas Office Machs., Inc. v. Mita Copystar Am., Inc., 42 F.3d 668 (1st Cir.1994), and must construe the record in the "light most flattering" to the nonmovant. Soto-Padró v. Public Bldgs. Authority, 675 F.3d 1 (1st Cir. 2012). A court must similarly resolve all reasonable inferences in favor of the non-moving party. Tolan v. Cotton, 134 S.Ct. 1861, 1863 (2014) (per curiam).

Once the movant properly configures a summary-judgment motion, the burden shifts onto the nonmovant—or "the party who bears the burden of proof at trial," Geshke v. Crocs, Inc., 740 F.3d 74, 77 (1st Cir. 2014)—to "point to competent evidence and specific facts to stave off summary judgment." Tropigas de P.R., Inc. v. Certain Underwriters at Lloyd's of London, 637 F.3d 53, 56 (1st Cir. 2011). So the nonmovant cannot rest on conclusory allegations and improbable inferences. Advanced Flexible Circuits, Inc. v. GE Sensing & Inspection Technologies GmbH, 781 F.3d 510, 516 (1st Cir. 2015). Neither "effusive rhetoric," Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir. 1997), nor "arguments woven from the gossamer strands of speculation and surmise," RTR Technologies, Inc. v. Helming, 707 F.3d 84, 93 (1st Cir. 2013), suffice to forestall the entry of summary judgment. Failure to shoulder this burden "allows the summary judgment engine to operate at full throttle." Lawton v. State Mut. Life Assur. Co., 101 F.3d 218, 223 (1st Cir. 1996).

III. Applicable Law and Analysis

Congress enacted ERISA "to protect employees from a 'patchwork scheme' of employee benefit regulations, and safeguard the financial integrity of employee benefit funds over the long term." Rodowicz v. Massachusetts Mut. Life Ins. Co., 192 F.3d 162, 170 (1st Cir. 1999), as amended (Nov. 3, 1999) (quoting Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 12, 15-16 (1987)). Whether a plan is subject to ERISA depends on "the nature and extent of an employer's benefit obligations" under the plan. O'Connor v. Commonwealth Gas Co., 251 F.3d 262, 267 (1st Cir. 2001). "If they require an ongoing administrative scheme that is subject to mismanagement, then they will more likely constitute an ERISA plan; but if the benefit obligations are merely a one-shot, take-it-or-leave-it incentive, they are less likely to be covered." Id. The crucial factor in determining if a plan is covered by ERISA is whether the employer intended "to provide benefits on a regular and long term basis." Rodowicz, 192 F.3d at 170, (parenthetically quoting Wickman v. Nw. Nat. Ins. Co., 908 F.2d 1077, 1083 (1st Cir. 1990)).

Plaintiff argues that the Lump Sum Plan is not covered by ERISA because it is a one-shot payment which she claims is easily calculated by using simple arithmetic. Docket # 89, p. 4. She grounds her argument on the First Circuit's decision in O'Connor, where the court held that a personnel reduction program, whose primary component was a severance bonus for employees who opted for early retirement, was not an ERISA plan. In so doing, the court considered, among other things, that the program provided a one-time lump sum payment, calculated by simple arithmetic and offered during a narrow (five-week) window of opportunity, to incentivize the voluntary resignation of their employees. 251 F.3d at 267-268. This type of plan, the court said, did not require the employer to "make a long-term financial commitment to any employee who chose to participate." Id., quoting Rodowicz v. Mass. Mut. Life Ins. Co., 192 F.3d 162, 191 (1st Cir. 1999).

Plaintiff's attempt to equate her case to O'Connor fails. The Lump Sum Plan is not part of a program offered only during a narrow window designed to incentivize early retirement. And despite its name, it does not offer only a one-time payment to all retiring employees. Indeed, for employees like Plaintiff, who have had a long employment history with PRTC and whose benefits exceed $3,500, the general rule is that they receive "an actuarially equivalent single life annuity," or "an actuarially equivalent joint and 50% survivor annuity" if the employee is married. Docket # 45-5, pp. 16-17. The actuarial equivalent factors are based on the applicable interest rate and the applicable mortality table specified in 26 U.S.C. § 417(e)(3). Id., p. 28. Thus, for employees like Plaintiff, simple arithmetic is not enough to calculate the amount of benefits available under the Lump Sum Plan.

Furthermore, the Lump Sum Plan plainly establishes an ongoing administrative scheme. It lists an Administrator with fiduciary obligations, and provides a framework for filing claims and appeals, both of which factor in favor of ERISA coverage. See Rodowicz, 192 F.3d at 171-172. Under its terms, employees seeking their benefits must apply directly to the Plan Administrator and the benefits are paid from a trust fund established for that purpose, Docket # 45-5, pp. 6-7, 21; not from the company's general assets. Rosario-Cordero v. Crowley Towing & Transp. Co., 46 F.3d 120, 124 (1st Cir. 1995); compare with Gautier-Figueroa v. Bristol-Myers Squibb Puerto Rico, Inc., 845 F. Supp. 2d 444, 456 (D.P.R. 2012) (the practice of payments "originated from the Company's general assets...points to the Company's involvement—as opposed to the Plan Administrator—in the clerical task of administrating and paying such simple payments"); see also Belanger v. Wyman-Gordon Co., 71 F.3d 451, 454 (1st Cir. 1995) ("ERISA's substantive protections are intended to safeguard the financial integrity of employee benefit funds, to permit employee monitoring of earmarked assets, and to ensure that employers' promises are kept.")....