Young v. Imo Industries, Inc.

541 F.Supp.2d 433

Paul F. YOUNG, Matteo J. Panarelli, and United Steel Workers of America, AFL-CIO, Plaintiffs, v. IMO INDUSTRIES, INC., Defendant.

Civil Action No. 94-12508-MBB.

United States District Court, D. Massachusetts.

March 31, 2008.

COPYRIGHT MATERIAL OMITTED

Lisa Bazemore, Joseph J. Costello, Jeffrey E. Fleming, Timothy P. O'Reilly, Amy L. Ventry, Morgan, Lewis & Bockius, Philadelphia, PA, Evan Miller, Jones Day, Washington, DC, Maureen Mulligan, Ruberto, Isreal & Weiner, Boston, MA, for Defendant.

Maydad D. Cohen, Betsy L. Ehrenberg, Warren H. Pyle, Pyle, Rome Lichten, Ehrenberg & Liss-Riordan, P.C., Boston, MA, for Plaintiffs.

MEMORANDUM AND ORDER RE: PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT (DOCKET ENTRY # 124); DEFENDANT IMO INDUSTRIES, INC.'S MOTION FOR SUMMARY JUDGMENT (DOCKET ENTRY # 126)

BOWLER, United States Magistrate Judge.

Pending before this court is a motion for summary judgment filed by plaintiffs Paul F. Young ("Young"), Matteo J. Panarelli ("Panarelli") and United Steelworkers of America, AFL-CIO ("the union") (collectively: "plaintiffs") and a motion for summary judgment filed by defendant Imo Industries, Inc. ("Imo"). After conducting a hearing on October 17, 2007, this court took the summary judgment motions (Docket Entry # # 124 & 126) under advisement.

STANDARD OF REVIEW

The standard of review of a summary judgment motion is well established. Summary judgment is appropriate "`if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Poulis-Minott v. Smith, 388 F.3d 354, 362 (1st Cir.2004) (quoting Rule 56, Fed.R.Civ.P.).

"A genuine issue of fact is one that a reasonable jury, on the record before the court, could resolve in favor of either party." Putnam v. Town of Saugus, 365 F.Supp.2d 151, 165 (D.Mass.2005) (internal quotation marks omitted); accord Velez-Rivera v. Agosto-Alicea, 437 F.3d 145, 150 (1st Cir.2006) (genuine means "`evidence about the fact is such that a reasonable jury could resolve the point in favor of the nonmoving party'"). A fact is material when "it is one that might affect the outcome of the suit under governing law." Velez-Rivera v. Agosto-Alicea, 437 F.3d at 150. Facts are viewed in the light most favorable to the nonmoving party with disputes resolved in favor of the nonmoving party. Merchants Ins. Co. v. United States Fid. & Guar. Co., 143 F.3d 5, 7 (1st Cir.1998); see Saenger Organization, Inc. v. Nationwide Insurance Licensing Associates, Inc., 119 F.3d 55, 56 (1st Cir.1997). Each summary judgment motion is reviewed separately and factual disputes are resolved in favor of the nonmoving party. See Saenger Organization, Inc. v. Nationwide Insurance Licensing Associates, 119 F.3d 55, 56 (1st Cir.1997).

BACKGROUND¹

On June 20, 1990, Boston Gear Works ("Boston Gear"), a division of Imo, entered into a Plant Closing Agreement ("PCA") with the union regarding the closing of the Boston Gear plant in Quincy, Massachusetts. (Docket Entry # 129). On December 16, 1994, plaintiffs initiated suit by filing a class action complaint alleging that Imo breached the terms of a 1989 Collective Bargaining Agreement ("CBA") between the union and Boston Gear under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185. The complaint also includes an estoppel claim and a claim alleging that Imo's unilateral change in retiree medical coverage violated section 502 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132.

After entering into a stipulation and agreement to settle and dismiss the claims ("the settlement agreement"), the district judge entered an order approving the settlement on April 2, 1999. On June 15, 2005, however, plaintiffs filed a motion for an order directing compliance with the settlement agreement and a final judgment ("motion for an order for compliance") alleging that Imo breached the settlement agreement. The parties jointly agreed to limit the current allegations that Imo breached the settlement agreement to eight claims set forth in a joint proposed discovery plan. (Docket Entry # 112).

After filing the initial compliant, the district judge conditionally certified the following class on August 16, 1995:

All persons formerly employed as production and maintenance employees by the defendant Imo Industries and its predecessors at the Boston Gear Works plant in Quincy, Massachusetts, who are now retired with a pension, and their spouses and eligible dependents of deceased persons formerly employed as production and maintenance employees by Imo Industries and its predecessors at its plant in Quincy, Massachusetts who retired with a pension.

(Docket Entry # 22). By definition, the class therefore included only Boston Gear employees already retired including those age 65 and older and potentially those under the age of 65.²

On June 8, 1998, the district judge issued a ruling denying a summary judgment motion filed by Imo. Noting that the PCA incorporates the language of the CBA concerning retiree medical benefits³ and that the PCA's applicability clause applies to employees listed in appendix A,⁴ the district judge determined that the PCA "on its face applies only to active employees listed in the Plant Closing Agreement Appendix." (Docket Entry # 66). Notably, the district judge found no ambiguity in the PCA. By "its terms" and "on its face," the PCA "applies only to active employees listed in" appendix A.⁵ (Docket Entry # 66).

Appendix A, which lists the active employees working as of May 16, 1990, includes a number of Boston Gear employees who had not retired as of May 16, 1990, as well as those who were not yet eligible to retire. (Docket Entry # 129, ¶ I; Docket Entry # 125, ¶ 66).⁶ When a number of these employees retired from Imo, the company did not notify them of any right to receive medical coverage.⁷ For example, Ralph Fabrizio is listed in appendix A and was an active employee in May 1990. He retired and began receiving a pension in September 2000. Imo did not, however, notify him at the time he retired about the ability to receive retiree medical benefits.

The PCA also provided pension benefits "in accordance with the provisions of [the CBA]" to all "employees listed on the active payroll and working as of May 16, 1990." (Docket Entry # 129). The PCA stated unequivocally that these employees "shall be vested." (Docket Entry # 129).

At the time of the PCA and prior to the settlement, the company's pension plan defined normal retirement age as age 65 or as age 60 with five years of participation in the plan. The pension plan distinguished between employees eligible to receive a retirement and those eligible for a "deferred vested pension." (Docket Entry # 131). Deferred vested pensions allowed a pension if the participant was not eligible to receive a retirement under the other provisions of the plan and had a break in service as well as five years of credited service. (Docket Entry # 131). Other categories of retirement allowed an employee to retire immediately at various ages, including ages under 65 (Docket Entry # 132, ¶¶ 4.3 & 4.5) depending upon the number of years of credited service.

The CBA also provided lifetime medical coverage to retired employees and their spouses and widows.⁸ The Imo retiree medical plan enrollment guide ("the medical enrollment guide" or "the enrollment guide") clarified that the company provided medical coverage only if the employee "received an immediate pension from the company and [was] participating in an Imo-sponsored medical plan on [his] last day as an active employee." (Docket Entry # 125, Ex. 4, emphasis added).⁹

The medical enrollment guide divided employees into two groups, those "under age 65" and those "age 65 or older," offering different plans to the two groups. (Docket Entry # 125, Ex. 4). Members in the age 65 and older group could choose from the Retiree Basic Plan or the Retiree Premium Plan. Members in the under age 65 group could choose a comprehensive medical plan. Both groups could also choose health maintenance organization ("HMO") "coverage, if available." (Docket Entry # 125, Ex. 4).

After the district judge issued the summary judgment ruling and with a looming trial date of August 12, 1998, the parties entered into negotiations that led to the settlement agreement. During negotiations, Imo's counsel¹⁰ proposed expanding the class conditionally certified by the court "to include those employees who are covered by the [PCA] but who had not yet retired at the time the class was certified. These individuals arguably are entitled to some form of medical coverage upon retirement and should therefore be included in the settlement." (Docket Entry # 132, Ex. E). Imo's counsel also suggested amending the class definition to exclude dependents other than spouses. He additionally insisted that class members "retain the right to substitute substantially similar coverage from other carriers." (Docket Entry # 132, Ex. E).

In a letter dated August 31, 1994, Imo's counsel outlined the "terms of the settlement." (Docket Entry # 132, Ex. F). He cautioned, however, that the terms must be approved by the class members and "will have to be memorialized in a formal settlement agreement" and submitted to the court for final approval. (Docket Entry # 132, Ex. F). A September 1, 1997 letter confirms that "plaintiffs have reached a tentative settlement." (Docket Entry # 132, Ex. F).

The parties filed the settlement agreement on December 3, 1998 (Docket Entry # 75) and the court approved the agreement on April 2, 1999. Captioned "Stipulation and Agreement of Settlement and Dismissal of All Claims," the agreement begins with several "whereas" paragraphs. The first whereas paragraph, relied upon by Imo as a means to create an ambiguity that the settlement...