Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-02482/USCOURTS-casd-3_09-cv-02482-4/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1104 Recovery of Benefits to Employee

---

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

')' 13 (..4 to: 10 

:o:c~ ("'U;,: T ~ r c J~' C...;1"'(; ,I', 

DEPUTY 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

STANLEY HOFFMAN, Individually, and on 

behalf ofthe Estate of PHYLLIS 

HOFFMAN, 

Plaintiff, 

vs. 

AMERICAN SOCIETY FOR TECHNIONISRAEL INSTITUTE OF TECHNOLOGY, 

INC.; et aI., 

Defendants. 

CASE NO. 09-CV -2482 BEN (KSC) 

ORDER: 

(1) GRANTING DEFENDANTS' 

MOTION FOR PARTIAL 

SUMMARY JUDGMENT RE: 

SEVERANCE BENEFITS [Docket 

No. 61] 

(2) DENYING PLAINTIFF'S 

CROSS-MOTION FOR PARTIAL 

SUMMARY JUDGMENT RE: 

SEVERANCE BENEFITS [Docket 

No. 60] 

Presently before the Court are Defendants' Motion for Partial Summary Judgment Re: 

Severance Benefits (Docket No. 61) and Plaintiff s Cross-Motion for Partial Summary Judgment Re: 

Severance Benefits (Docket No. 60). For the reasons stated below, Defendants' Motion for Partial 

Summary Judgment is GRANTED and Plaintiffs Cross-Motion for Partial Summary Judgment is 

DENIED. 

BACKGROUND 

In 1991, Phyllis Hoffman, Plaintiff Stanley Hoffman's late wife, began to work for Defendant 

American Society for Technion-Israel Institute ofTechnology, Inc. ("ATS") as the Director ofthe San 

Diego Chapter. (Casino Decl., Exh. 7, at 33-34.) ATS sponsored, administered, and partially funded 

- 1 - 09CV2482 

Case 3:09-cv-02482-BEN-KSC Document 96 Filed 01/24/13 Page 1 of 6
1 

2 

3 

4 

5 

6 

7 

8 

9 

the Employee Benefit Plan (the "Plan") providing full-time employees benefits for health, life, and 

disability and self-funded retirement and severance benefits. (See id., Exh. 1.) ATS notified 

employees ofthese benefits through a document entitled Personnel Practices Code. (See id.) 

In November 2007, Ms. Hoffinan became seriously ill and required hospitalization. (ld., Exh. 

8, at81.) From November 2007 to February 29,2008, ATS continued to pay Ms. Hoffinanher salary 

using her accumulated vacation and sick leave as well as helped her to apply for long-term disability 

benefits throughATS's Plan. (ld., Exhs. 5, 6,10.) On February 29, 2008, Ms. Hoffinan left her fulltime employment with ATS because ofher health issues. (ld., Exh. 11, at 87.) Ms. Hoffinan began 

to receive long-term disability benefits throughATS's Plan on March 1,2008. (ld., Exh. 9, at 82-85.) 

lOInMarch 2008, ATS asked Ms. Hoffinan to assist them in transitioning to a new Director of 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

the San Diego Chapter. A TS and Ms. Hoffinan entered into an agreement in which ATS agreed to pay 

Ms. Hoffinan 20% ofher previous salary as well as her Cobra premiums in exchange for Ms. Hoffinan 

providing ATS six hours per week to assist with the transition. (ld., Exh. 3.) The agreement stated 

that "due to illness disability," Ms. Hoffinan would be "unable to continue in [her] position as San 

Diego Chapter Director." (Id.) 

In September 2008, Ms. Hoffinan was diagnosed with terminal cancer and advised that she had 

three months to live. (Id., Exh. 7, at 61-62.) In October or November 2008, Ms. Hoffinan's attorney 

made demand for severance benefits under the Plan. (Id., Exhs. 12, 13, at 96-97.) Her attorney was 

advised that ATS did not owe her severance benefits because she had "retired or voluntarily 

terminated" her employment. (Id., Exh. 16, at 104-09.) Ms. Hoffinan continued to work for A TS for 

several hours per week until December 31, 2008. (ld., Exh. 3, Exh. 7, at 57-58.) On February 26, 

2009, Ms. Hoffinan died at the age of67. 

On November 5, 2009, Plaintiff filed suit individually and on behalf of the estate of Ms. 

Hoffinan. (Docket No.1.) The First Amended Complaint (the operative complaint) names ATS, 

Metropolitan Life Insurance Company, First Reliance Standard Life Insurance Company, and the 

- 2- 09CV2482 

Case 3:09-cv-02482-BEN-KSC Document 96 Filed 01/24/13 Page 2 of 6
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

American Society for Technion-Israel Institute ofTechnology, Inc. Group Life Insurance Benefit Plan I 

as defendants. (Docket No. 27.) The First Amended Complaint alleges four claims: (1) life insurance 

benefits under 29 U.S.C. § 1132(a)(I)(B); (2) denial of severance benefits under 29 U.S.C. 

§ 1 132(a)(1 )(B); (3) life insurance benefits under 29 U.S.C. § 1132(a)(3)(equitable estoppel); and (4) 

life insurance benefits under 29 U.S.C. § 1 132(a)(3)(surcharge). (ld.) On August 21,2012, the third 

and fourth claims were dismissed. (Docket No. 55.) 

Presently before the Court are Defendants ATS's and American Society for Technion-Israel 

Institute of Technology, Inc. Group Life Insurance Benefit Plan's Motion for Partial Summary 

Judgment Re: Severance Benefits and Plaintiffs Cross-Motion for Partial Summary Judgment Re: 

Severance Benefits. Being fully briefed, the Court finds the Motions suitable for detennination on the 

papers without oral argument, pursuant to Civil Local Rule 7.I.d.1. 

LEGAL STANDARD 

Summary judgment must be granted where the record shows ''there is no genuine dispute as 

to any material fact and the movant is entitled to judgment as a matter oflaw." FED. R. ClV. P. 56(a); 

see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party must "persuade the 

court that there is no genuine issue ofmaterial fact." Nissan Fire & Marine Ins. Co., Ltd v. Fritz Cos., 

Inc., 210 F.3d 1099, 1102 (9th Cir. 2000). 

This matter is governed by the Employee Retirement Income Security Act of 1974 ("ERISA") 

as an employee benefit plan. Plaintiffs claim falls under 29 U.S.C. § 1132(a)(I)(B), which allows a 

beneficiary to bring an action "to recover benefits due to him under the tenns ofhis plan." 

A denial ofbenefits challenged under § l132(a)(1 )(B) is reviewed by the court under a de novo 

standard unless the benefit plan gives the administrator discretionary authority to detennine eligibility 

for benefits or to construe the tenns ofthe plan. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 

115 (1989). Under a de novo standard of review, courts "decide for themselves what a term ofthe 

trust means instead ofdeciding whether the plan administrator was reasonable in how it construed the 

term." Kearney v. Standard Ins. Co., 175 F.3d 1084, 1088 (9th Cir. 1999). Plaintiff argues that the 

1 The American Society for Technion-Israel Institute ofTechnology. Inc. Group Life Insurance 

Benefit Plan was erroneously named as the American Technion Society Employee Benefit Plan in the 

First Amended Complaint. 

-3- 09CV2482 

Case 3:09-cv-02482-BEN-KSC Document 96 Filed 01/24/13 Page 3 of 6
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

applicable standard ofreview is de novo, and Defendants do not dispute this. (Def. Opp. [Docket No. 

74] at 2; Def. Mot. [Docket No. 61] at 4.) Accordingly, this Court will review the Plan 

Administrator's denial of benefits under a de novo standard ofreview. 

When applying a de novo standard ofreview, courts first look to the "explicit language ofthe 

agreement to determine, if possible, the clear intent of the parties" when disputes regarding the 

interpretation ofan ERISA plan arise. Richardsonv. Pension Plan ofBethlehem Steel Corp., 112 F.3d 

982,985 (9th Cir. 1997) (internal quotation marks omitted). "Terms in an ERISA plan should be 

interpreted in an ordinary and proper sense as would a person ofaverage intelligence and experience." 

Id. However, "ambiguouscontracttermsareconstruedagainstthedrafter." Kerinv. Us. PostaIServ., 

116 F .3d 988, 992 (2d Cir. 1997). A term is ambiguous ifit is susceptible to two or more reasonable 

meanings. Kunin v. Benefit Trust Life Ins. Co., 910 F.2d 534,539 (9th Cir. 1990). In addition, "[t]he 

intended meaning of even the most explicit language can, of course, only be understood in the light 

ofthe context that gave rise to its inclusion." Richardson, 112 F3d at 985 (internal quotation marks 

omitted). 

DISCUSSION 

Both Defendants' Motion for Partial Summary Judgment Re: Severance Benefits and Plaintiff s 

Cross-Motion for Partial Summary Judgment Re: Severance Benefits seek summary judgment on the 

second claim, which challenges the Plan Administrator's decision to deny Ms. Hoffman severance 

benefits under 29 U.S.C. § 1132(a)(1)(B). Whether Ms. Hoffman was eligible for severance benefits 

turns on whether Ms. Hoffman's decision to leave full-time employment was a "voluntary 

resignation." 

The provision regarding severance benefits in the Personnel Practices Code reads: 

14. 	 TERMINATION OF EMPLOYMENT 

D. 	 An employee who shall have completed the probationary period [90 days], 

whose employment terminates for any reason other than malfeasance, 

retirement or voluntary resignation shall be entitled to the following 

severance pay, in addition to full pay up to the end ofactual employment and 

payment for accrued, unused vacation days up to a maximum to 20 days: 

-4-	 09CV2482 

Case 3:09-cv-02482-BEN-KSC Document 96 Filed 01/24/13 Page 4 of 6
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

Exempt Employees - two weeks' salary for each full year employed, up to 

a maximum of26 years of employment (52 weeks salary), 

Non-Exempt Employees - one week's salary for each full year employed, 

up to a maximum of 26 years of employment (26 weeks salary). 

Except for persons employed less than the probationary period, severance 

payment for partial years shall be prorated. 

(Casino Decl., Exh. 1, at 7 (emphasis added).) As the Director of the San Diego Chapter, Ms. 

Hoffman was an exempt employee. (Id. at 3.) 

Ms. Hoffman's decision to discontinue her employment because of her illness is a voluntary 

resignation. The Plan excludes severance benefits for "malfeasance, retirement or voluntary 

resignation." Each of these exclusions pertains to a specific act by the employee that results in the 

termination ofthe employment relationship. "Voluntary resignation," therefore, refers to an act by the 

employee that severs the employment relationship, without any affirmative action by the employer. 

Because Ms. Hoffman left her employment with ATS due to health issues and there is no evidence that 

ATS caused Ms. Hoffman to leave her employment, Ms. Hoffinan's decision to sever her full-time 

employment relationship with ATS was a "voluntary resignation" within the cornmon meaning ofthe 

term. 

Plaintiff argues that Ms. Hoffman did not voluntarily resign as the Director of the San Diego 

Chapter because she left employment against her will, due to her illness. First, Plaintiff points to 

Webster's Ninth New Collegiate Dictionary, which defines "voluntary" as "proceeding from the will 

or from one's own choice or consent; done by design or intention." Although Ms. Hoffman may not 

have wished to leave her employment at ATS, she nonetheless voluntarily decided to terminate the 

employment relationship, without any affirmative action by ATS. 

Second, Plaintiff argues that the Plan anticipates that an employee who leaves employment due 

to disability may also receive severance benefits. Plaintiff points to the provision ofthe Plan that states 

that disability benefits will be reduced by "any amounts that are paid under your Employer's sick 

leave, annual or personal leave, severance, or other salary continuation program (but not vacation pay) 

and any wages that are payable by your Employer." (Casino Decl., Exh. 21, at 143.) This provision, 

-5- 09CV2482 

Case 3:09-cv-02482-BEN-KSC Document 96 Filed 01/24/13 Page 5 of 6
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

however, does not establish that an employee who leaves employment due to a disability may receive 

severance benefits. In this context, severance may be paid due to the employer's termination of the 

employment relationship, rather than the employee's voluntary decision to terminate the employment 

relationship. 

Accordingly, Ms. Hoffman's decision to leave full-time employment was a "voluntary 

resignation." Ms. Hoffman did not qualify for severance benefits under 29 U.S.C. § 1132(a)(1)(B). 

As this issue is dispositive, the parties' remaining arguments need not be addressed. 

CONCLUSION 

For the reasons stated above, Defendants' Motion for Partial Summary Judgment Re: 

Severance Benefits is GRANTED and Plaintiffs Cross-Motion for Partial Summary Judgment Re: 

Severance Benefits is DENIED. 

IT IS SO ORDERED. 

DATED: January 2013 

- 6- 09CV2482 

Case 3:09-cv-02482-BEN-KSC Document 96 Filed 01/24/13 Page 6 of 6