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Johnson v. Retirement Program Plan for Employees of Certain Employers at the U.S. Department of Energy Facilities at Oak Ridge

February 27, 2007


The opinion of the court was delivered by: Thomas A. Varlan United States District Judge



This civil action is before the Court on cross motions for summary judgment. In plaintiff's motion for summary judgment [Doc. 15], plaintiff argues that defendants are precluded under both law and equity from recouping overpayments made to him under defendants' retirement pension plan. Plaintiff seeks a declaratory judgment that defendants cannot recoup overpayments made to him and asks the Court to enjoin defendants from continuing to deduct such overpayments from his monthly pension benefits. In their motion for summary judgment [Doc. 20], defendants argue that the language of the pension plan at issue in this case, the law of ERISA, and the common law entitle them to recoup overpayments made to plaintiff and that doing so does not have an inequitable impact upon him.

The Court has carefully considered the pending motions for summary judgment, as well as the briefs submitted in support of and opposition to the pending motions [Docs. 16, 19, 24, 27-30]. For the reasons set forth herein, plaintiff's motion for summary judgment is denied and defendants' motion for summary judgment is granted.

I. Relevant Facts

Plaintiff, D. H. Johnson, retired from his job with Martin Marietta Energy Systems, Inc. ("Energy Systems") in Oak Ridge, Tennessee on January 1, 1995.*fn1 [Doc. 16 at 1; Doc. 19 at ¶ 1.] During his employment with Energy Systems, plaintiff participated in Energy Systems' pension plan, the Retirement Program Plan for Employees of Certain Employers at the U.S. Department of Energy Facilities at Oak Ridge, Tennessee (the "Plan," [Doc. 1, Ex. 1]), which is governed by the Employee Retirement Income Securities Act ("ERISA"), 29 U.S.C. § 1001, et seq. The Plan was later adopted by BWXT when it took over management of the Y-12 National Security Complex. [Doc. 1 at ¶ 3.] Defendants Maureen Williams and the Joint Administrative Committee act as the Plan Administrator on behalf of BWXT. [Id.]

Upon retirement, plaintiff began receiving monthly pension benefits from the Plan. [Doc. 16 at 2.] Pursuant to a Qualified Domestic Relation Order ("QDRO") plaintiff entered into on December 13, 1990 as a result of a divorce granted on October 12, 1990, plaintiff's ex-wife was to receive 50% of the retirement benefits accrued to him as of the date of their divorce. [Doc. 16 at 3; Doc. 19 at ¶ 11.] However, employees of Energy Systems miscalculated the amount of monthly pension benefits plaintiff's ex-wife was to receive under the QDRO, resulting in her receiving $244.29 per month as opposed to the correct amount of $824.75 per month. [Doc. 19 at ¶ 13.] Instead, plaintiff erroneously received those funds, beginning from the date of his first monthly pension benefit payout on January 1, 1995, and until defendants discovered the error in April of 2005. [Doc. 16 at 3; Doc. 19 at ¶ 17.] As a result, plaintiff was overpaid $70,362.75. [Doc. 16 at 3; Doc. 19 at ¶ 16.]

Upon discovering the mistaken overpayments made to plaintiff, defendants notified plaintiff of the error and informed him, both in writing and in a meeting with him, that his monthly pension benefits would be reduced to the proper amount of $1,499.96 per month and that the overpayment would be taken out of this new amount in installments of $500 per month beginning on September 1, 2005. [Doc. 16 at 3-4; Doc. 19 at ¶¶ 18, 20.] Plaintiff appealed defendants' decision to recover overpayments made to him, but that decision was ultimately upheld based upon defendants' determination that the Plan allowed for the recoupment of such erroneous overpayments. [Doc. 19 at 11-12.] Defendants did in fact reduce plaintiff's monthly pension benefits by $500 per month on September 1, 2005, and continue to make this monthly deduction. [Doc. 16 at 4.]

As a result, plaintiff filed this lawsuit on December 28, 2005, [Doc. 1], alleging that defendants' decision to collect overpayments from him is not authorized by the Plan or ERISA and should therefore be enjoined by the Court.

II. Standard of Review

In Wilkins v. Baptist Healthcare Systems, 150 F.3d 609, 617-20 (6th Cir. 1998), the Sixth Circuit established a district court's standard of review in ERISA matters. Under Wilkins, this Court has two possible standards of review. If the trustees of an employee benefits plan do not have discretion to determine eligibility for benefits or to construe the terms of the Plan, this Court is required to undertake a de novo review of the administrators' decision. Id. at 613. On the other hand, where a benefits plan vests discretion with the administrators, this Court may only disturb the administrators' decision if it finds the basis of such a decision to be arbitrary and capricious. Id. at 616 (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). Significantly, regardless of the standard of review applied to the administrators' decision, "in an ERISA claim contesting a denial of benefits, the district court is strictly limited to a consideration of the information actually considered by the administrator." Killian v. Healthsource Provident Admin., Inc., 152 F.3d 514, 522 (6th Cir. 1998) (citing Perry v. Simplicity Eng'g, 900 F.2d 963, 966 (6th Cir. 1990)).

The parties dispute the applicable standard of review in this case. Plaintiff argues that while "the Plan does confer discretionary authority on the Plan Administrator to make determinations concerning 'benefit eligibility' and 'the interpretation and construction of Plan provisions,' the arbitrary and capricious standard of review should not apply to the Plan Administrator's actions here, because the Plan Administrator acted outside the boundaries of her discretion." [Doc. 16 at 13.] Plaintiff contends that defendants did not interpret or construe the Plan in this instance because "there is no provision which addresses the issue of overpayment" and therefore went beyond the scope of the authority granted to them by the Plan by "adding terms to the Plan Document by executive fiat." [Id. at 14.] Defendants argue that the Plan Administrator cannot be construed to have not been interpreting the Plan simply because there is no express language in the Plan authorizing the recovery of an overpayment. [Doc. 19 at 22. Defendants further note that "[s]o long as the Plan itself is being interpreted, the abuse of discretion standard applies." [Id.]

In this case, the Plan states as follows:

The Plan Administrator shall have the exclusive and final responsibility and complete discretionary authority to control the operations, management and administration of this Plan (except Plan investments), with all powers necessary to enable it to properly carry out such responsibilities, including (but not limited to) the power to construe this Plan, to determine eligibility for benefits and to resolve all interpretive, equitable or other questions that arise under the Plan. The decisions of the Plan Administrator on all matters within the scope of its authority shall be final and binding. [Plan at ยง 15.4(d).] The plan language of the Plan explicitly vests the Plan Administrator, here, defendants BWXT, Mrs. Williams, and the Joint Administrative Committee, with the discretionary authority to determine eligibility for benefits ...

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