IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

Craig S. Jones, et al., 

Plaintiffs, 

v. Case No. 2:11-cv-380

Kerry A. Allen, Plan JUDGE MICHAEL H. WATSON

Administrator, et al., Magistrate Judge Kemp

Defendants. 

REPORT AND RECOMMENDATION

Plaintiffs are five individuals who were employed by Red

Mortgage Capital, Inc., Red Capital Markets, Inc., Red Capital

Advisors, LLC, or Red Capital Community Development Company, LLC,

(collectively “Red Capital”). On May 3, 2011, Plaintiffs filed

this action against Red Capital, certain severance plans, a plan

administrator, and a company that acquired Red Capital, alleging

that those Defendants wrongly denied them benefits and otherwise

infringed on their rights under the Employee Retirement Income

Security Act (“ERISA”), 29 U.S.C. §1001, et seq, and their

contractual rights. The motion before the Court here is

Defendants’ Motion for Judgment on the Administrative Record

(Docket No. 60), in which Defendants moved for an entry of

judgment on the administrative record, seeking judgment in their

favor on all claims except the retaliation claim in Count II. 

This motion has been fully briefed and referred to the Magistrate

Judge for a Report and Recommendation. 

For the reasons that follow, the Magistrate Judge RECOMMENDS

that Defendants’ Motion for Judgment on the Administrative Record

(Docket No. 60) be granted in part and denied in part as follows:

granted as to Counts I, III, IV, V, VI, VII, VIII, IX, X, and

XIII of the Complaint, and denied without prejudice as to Counts

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 1 of 31 PAGEID #: <pageID>
XI and XII of the Complaint.

I. Facts

The following background facts are undisputed. Red Capital

engages in mortgage and investment banking activities. In 2004,

National City Corporation ("National City") acquired Red Capital. 

On December 31, 2008, Defendant the PNC Financial Services Group,

Inc. ("PNC") acquired National City, and assumed responsibility

for the administration of certain benefit plans. In May of 2010,

certain of the business operations and assets of Red Capital were

acquired by an investment group led by ORIX USA Corp. (“ORIX”). 

Plaintiffs were all senior executives at Red Capital from at

least 2003 until some point in 2010. Plaintiffs sought severance

benefits from Defendants, and Defendants denied their requests

and appeals. Plaintiffs filed this action asserting that they

were entitled to severance benefits pursuant to several plans or

agreements and that Defendants’ denial of benefits, among other

actions, violated ERISA. 

A. Severance Benefits Plans and Agreements

The first of the severance benefits plans at issue is the

National City Corporation Amended and Restated Management

Severance Plan ("National City Plan"). This plan covered certain

executives of National City and its subsidiaries, including Red

Capital, and it provided for the award of severance benefits if

National City incurred a “Change in Control.” (Docket No. 51,

Exhs. 1 & 2 at §§ 1.2 & 2.1(d).) One version of the National

City Plan was effective January 1, 2005. On September 30, 2008,

there was an amendment to the National City Plan. In its August

16, 2013 Opinion and Order, the Court upheld the Committee’s

determination that the 2008 Amendment to the National City Plan

was valid. (Docket No. 125 at 20-23.) 

Article 3 of the National City Plan provides that

Participants will be entitled to benefits in certain situations

2

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 2 of 31 PAGEID #: <pageID>
in which a Participant’s employment terminates during a

“Protection Period” following a “Change in Control” of National

City:

3.1 In the event the Surviving Entity terminates

the Participant’s employment during the Protection

Period, the Participant will be entitled to the

severance compensation provided by Article 4; . . . 

3.2 The Participant may terminate employment with

the Surviving Entity during the Protection Period with

the right to severance benefits as provided in Article

4 upon the occurrence of one or more of the following

events (regardless of whether any other reason for such

termination exists or has occurred, including without

limitation other employment): 

(a) A reduction in the Participant’s Base Salary;

or The Surviving Entity of the Participant requires the

Participant to have his principal location of work

changed, to any location which is excess of 50 miles

from the location thereof immediately prior to the

Change in Control.

(Docket No. 51, Exh. 2 (2008 version of National City Plan).) 

The 2005 version of the National City Plan included additional

circumstances in which a participant could terminate employment

and still be eligible for benefits, but the 2008 amendments

eliminated those provisions. 

Plaintiffs have also asserted claims in this litigation

pursuant to the Red Capital Group Management Severance Plan ("Red

Capital Plan"). The Red Capital Plan provided severance benefits

to certain Red Capital executives upon a “Change in Control.” 

(Docket No. 51, Exh. 3 at §§ 1.2 & 2.1(d).) The Red Capital Plan

defined “Change in Control” as “the sale of all or a substantial

amount of the assets and liabilities of RED by Corporation to a

non-affiliate. For purposes of this Plan substantial amount

shall mean a [sic] least 90% of RED’s assets and liabilities. . .

.” (Id. at § 2.1(d).) Following a Change in Control, there

would be a “Protection Period” beginning on the “Effective Date,”

which was defined as follows: “In the event a Change in Control

3

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 3 of 31 PAGEID #: <pageID>
ultimately results from discussions or negotiations involving

RED, the ‘Effective Date’ of such Change in Control shall be the

date uninterrupted discussions or negotiations commenced.” (Id.

at §2.1(i) & (s).) The Protection Period continued “through to

the fifteenth month anniversary of the Implementation Date.” 

(Id. at §2.1(m) & (s).) The plan provided that the plan could

not be “amended, modified or discontinued” during the Protection

Period. (Id. at §15.) 

Article 3 of the Red Capital Plan provides for certain

situations in which termination of a Participant’s employment

during a Protection Period entitled a Participant to benefits: 

3.1 In the event the Surviving Entity terminates

the Participant’s employment during the Protection

Period, the Participant will be entitled to the

severance compensation provided by Article 4; . . . 

3.2 The Participant may terminate employment with

the Surviving Entity during the Protection Period with

the right to severance benefits as provided in Article

4 upon the occurrence of one or more of the following

events (regardless of whether any other reason for such

termination exists or has occurred, including without

limitation other employment): 

(a) A significant adverse change in the nature or

scope of the authority, powers, functions,

responsibilities or duties attached to the position

with the Surviving Entity that the Participant held

immediately prior to the Effective Date; 

(b) A change in compensation reasonably likely to

yield a reduction in the aggregate of the participant’s

Base Salary and incentive pay received from the

Surviving Entity; 

(c) A reduction in the Participant’s Base Salary; 

. . . 

(e) A determination by the Participant (which

determination will be conclusive and binding upon the

parties hereto provided it has been made in good faith

and in all events will be presumed to have been made in

good faith unless otherwise shown by the Corporation by

clear and convincing evidence) that a change in

circumstances has occurred following a Change in

Control, including, without limitation, a change in the

scope of the business or other activities for which the

4

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 4 of 31 PAGEID #: <pageID>
Participant was responsible immediately prior to the

Change in Control, which has rendered the Participant

substantially unable to carry out, has substantially

hindered Participant’s performance of, or has caused

Participant to suffer a substantial reduction in, any

of the authorities, powers, functions, responsibilities

or duties attached to the position held by the

Participant immediately prior to the Effective Date,

which situation is not remedied within 10 calendar days

after written notice to the Surviving Entity from the

Participant of such determination; 

. . . 

(Docket No. 51, Exh. 3 at §§ 3.1 & 3.2.)

The Red Capital Plan provides that it is to be administered

by the Plan Administrator and grants “full power and authority to

interpret, construe and administer this Plan and its

interpretations and construction hereof,” and provides that

actions made by the Committee in accordance with the plan shall

be “binding and conclusive on all persons for all purposes.” 

(Id. at §14.) The Red Capital Plan also provides that claims for

severance benefits may be deemed approved if a determination is

not made within the following time constraints: 

If a notice of denial is not received by a Participant

within the lesser of (a) 120 days of the Plan

Administrator’s receipt of the claim or (b) within 30

days of the Plan Administrator’s or its designee(s)’s

making its determination with respect to the

Participant’s claim, the claim shall be deemed to have

been approved.

(Id. at § 5.2.) 

In addition to the National City Plan and the Red Capital

Plan, Plaintiffs have also alleged that there was an unwritten

severance agreement. In briefing the motion for judgment on the

administrative record, both parties have referred to this alleged

5

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 5 of 31 PAGEID #: <pageID>
agreement as the “2006 Severance Guaranty,” although Defendants

contest its existence or continued existence. The evidence in

the administrative record that one or both parties has pointed to

as relevant to understanding the facts surrounding the 2006

Severance Guaranty is the following: 

• On April 14, 2006, John Adams (the Chairman and CEO of Red

Capital Advisors, LLC) sent Steve Cummings (a senior

executive for National City) a draft severance plan, which

was to “put a temporary change of control agreement in place

to protect our folks [Red Capital employees] given that it

is taking a while for National City to put its revised plan

in place.” The key issues that the temporary agreement was

to cover were to ensure that Red Capital employees who

should be covered by the existing National City Plan might

“be at risk due to erroneous categorization” and to ensure

that a small group of about 10 Red Captial Employees was to

get “2 times coverage.” (Docket No. 51, Exh. 28, Attachment

K.)

• On July 10, 2006, John Adams sent Steve Cummings another

email explaining, among other items, that he recognized that

National City would be redrafting its severance plan soon,

that National City and Red Capital had agreed to certain

terms but had not documented the agreement because they had

expected to do so by amending the Plan, and that “the

understanding described herein will be more fully and

completely documented when the Plan is redrafted.” The

email also noted the same concern as in the April email

about certain Red Capital employees being without

protection, and this email attached a list of employees who

“shall be entitled to Severance Compensation” whether or not

they were technically coded correctly, and a list of

employees entitled to twice the amount that would otherwise

be paid pursuant to the terms of the Plan. Finally, this

email noted that “[t]he definition of ‘Change in Control’

shall be interpreted to also include a change in control of

Red, including the sale of all or substantially all assets

owned by Red.” (Docket No. 51, Exh. 28, Attachment M.)

• The next day Steve Cummings replied that he would share the

list of employees with others and would look into some of

the employee grades. He further wrote, “[t]he goal is to

redraft all of the National City Management Severance Plans

as soon as ‘final’ 409(A) regulations are available.” On

July 27, 2006, John Adams asked if he could tell the

employees identified as ones who should receive benefits

6

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 6 of 31 PAGEID #: <pageID>
that they are covered, and the next day Steve Cummings

replied that if John Adams were to let those individuals

know, he should “make sure [to] convey the intent and that

the plan will be developed this fall pending 409(A) final

regulations. . . .” (Docket No. 51, Exh. 28, Attachment N.)

• On September 22, 2006, Plaintiff Steven Russi emailed Jeff

Tengel and copied others regarding the Change of Control

Protection. He wrote that he was providing “additional

background and information regarding the change in control

protections we briefly discussed earlier this week.” He

wrote, “[w]e have long been in agreement with Steve Cummings

and Phil Rice regarding the proper approach for extending

National City’s Management Severance Plan to Red employees. 

At this point, our goal is to confirm that the individuals

we have identified in the attached schedule are entitled to

receive compensation under the Management Severance Plan at

the rate of either one or two times the relevant

compensation amounts, as those amounts are calculated in the

Plan. Further, we want to be sure that any sale of Red

would also trigger our rights under the Plan given that any

transaction of that nature would perhaps pose greater

uncertainty for Red employees than would the sale of

National City as a whole.” Mr. Russi also wrote that the

previous emails were ambiguous about whether the protections

would only kick in once the amendments had been made and

that he wanted confirmation that the employees were

protected since the amendments were taking such a long time. 

(Docket No. 51, Exh. 28, Attachment O.)

• On September 25, 2006, Steve Cummings emailed Jeff Tengel

and copied others regarding the change in control

discussion. He wrote that “we verbally agreed to provide

change in control protection for several key business

leaders at Red Capital in lieu of employment agreements. 

Our goal was to provide change-in-control protection while

eliminating the need for complex employment agreements and

the ‘single’ trigger change in control arrangement that was

part of the operating agreement at Provident. Our

recommendation was to provide change in control protection

consistent [sic] the National City Management Severance Plan

with respect to structure, ‘double’ triggering events, and

protection period. Our thinking at the time is that the

group would consist of a subset of Red’s Executive Committee

and the protection would be worth 2x base and bonus for this

group. . . . Due to regulation changes . . . we have not

been in a position to finalize the Red Capital Change-inControl provisions nor update the National City Management

Severance Plan versions.” He wrote that the agreement would

7

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 7 of 31 PAGEID #: <pageID>
be finalized when all the versions of the National City

Management Severance Plan could be updated, and he

reaffirmed their commitment to honor this agreement in the

interim. On September 28, 2006, Jeff Tengel forwarded that

email to William Roberts and wrote, “[w]e are precluded from

executing a side agreement . . . . In the interim, John

Couture has provided verbal assurances that we will honor

the spirit of the agreement absent documentation.” Docket

No. 51, Exh. 28, Attachment P.)

Plaintiffs have brought claims pursuant to this 2006 Severance

Guaranty in addition to claims pursuant to the written Severance

Plans. 

B. Events Surrounding Plaintiffs’ Claims

There is no dispute that PNC’s December 31, 2008 acquisition

of National City constituted a “Change in Control” as defined by

the National City Plan, which triggered a Protection Period that

“‘ran until March 31, 2010.'” (Docket No. 60 at 6 (citing Compl.

at ¶ 175).) 

By February and March of 2010, PNC was in active discussions

about selling Red Capital. On March 15 and 16, 2010, each of the

Plaintiffs sent a letter to representatives of Defendants PNC and

Red Capital Group, which, according to the letters, were intended

to serve as notice of a change in circumstances and of an intent

to pursue severance benefits. The Purchaser "interpreted [these

letters] as precursors to litigation against PNC or Red Capital

or both." (Docket No. 37, Exh. 1 at ¶3.) Mr. Russi averred that

on March 17, 2010, the Purchaser extended "offers of continuing

employment" to all of Red Capital's management employees except

for Mr. Russi, the other four Plaintiffs in this case, and one

other employee who had given notice the day before of their

intent to assert their rights under the Plans. Defendants do

not dispute this and have offered an affidavit describing the

offers of continued employment as follows: 

[Following the receipt of the March 16, 2010 letters,]

the investor group authorized the distribution to all

8

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 8 of 31 PAGEID #: <pageID>
personnel whom the investors hoped to employ a document

entitled "Offer of Continued Employment," with a

release incorporated therein, or "Confirmation of

Employment," with a release agreement attached. These

documents were intended to allow us to identify those

employees who wanted to remain with the post-closing

entity and who, in order to do so, were willing to

release any claims they might have or thought they had

against PNC, ORIX, Red Capital, or any of their

affiliates. These releases were not limited to claims

under severance plans, but rather applied to all

employment-related claims.

(Docket No. 37, Exh. 1 at ¶4.)

On March 30 and 31 of 2010, Plaintiffs notified Defendants

of their conditional resignations.1 (Docket 51, Exhs. 10-14.) 

On March 31, 2010, the last day of the National City Plan

Protection Period, Defendant Kerry Allen, as Plan Administrator,

sent each Plaintiff a memo acknowledging Plaintiffs’ belief that

they may have severance claims, reporting that PNC disagreed with

Plaintiffs’ belief and stating, “PNC further contends that, if

you resign your employment, you will not be entitled to and will

not be paid any severance or displacement benefits.” (Docket No.

51, Exh. 9.) The March 31, 2010 memo also encouraged the

Plaintiffs to submit their claims on Official Claim Forms, which

Plaintiffs did in April. (Docket No. 51, Exhs. 15-29.) The

claims on the Official Claim Forms that sought benefits arising

from the change in control when PNC acquired National City, shall

be referred to as the “First Set of Claims.”

On April 16, 2010, PNC issued a notice that it was

discontinuing and terminating the Red Capital Plan. (Docket No.

51, Exh. 37.)

1

 The parties do not dispute that Plaintiffs continued to

come to work after the “conditional” resignations, and Plaintiffs

knew that PNC believed those “conditional” resignations to be

ineffective. 

9

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 9 of 31 PAGEID #: <pageID>
In May of 2010, certain of the business operations and

assets of Red Capital were acquired by an investment group led by

ORIX USA Corp. (“ORIX”). On May 25, 2010, Plaintiff Russi

emailed John Johnson, Chief Legal Counsel for Employment at PNC,

telling Mr. Johnson that he believed severance benefits should

have been paid to him under the Red Capital Plan based on the

sale of certain assets of Red Capital to ORIX. (Pls.’ Mot. Summ.

J., Exh. 15.) Mr. Johnson replied to that email on May 26, 2010,

stating that “it is PNC’s position that you are not eligible for

benefits under the RED Capital Group Management Severance Plan

(Effective July 1, 2008). If you believe an additional claim

needs to be filed, I believe you know the process by which you

may do so.” (Id.) Plaintiff Russi replied the same day

requesting information about the structure of the transaction

selling assets of Red Capital to ORIX, and then emailed again the

following day stating that he assumed PNC did not intend to

provide him factual information regarding the sale or the basis

for denying severance benefits, but rather required him to file a

claim and await the Plan Administrator’s decision. (Id.) Mr.

Johnson replied to those emails on June 3, 2010 and explained

that, among other reasons, PNC believed Plaintiff Russi was not

eligible for benefits under the Red Capital Plan because (1)

there was no Change in Control as defined by the Red Capital

Plan, (2) Plaintiff Russi had not been terminated as of the date

he filed his first claim, and (3) on the date of Plaintiff

Russi’s termination from employment, the Red Capital Plan was no

longer in existence. (Pls.’ Mot. Summ. J., Exh. 16.) He ends

his email by writing, “If you believe you have a valid claim

under the plan that you have not already filed, however, I

encourage you to follow the process established by the plan to

resolve disputes thereunder. If you need new [sic] claim form,

you can obtain one from Kerry Allen.” (Id.) 

10

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 10 of 31 PAGEID #: <pageID>
On June 16 and 24 of 2010 respectively, Plaintiffs Russi and

Jones initiated a second set of claims (the “Second Set of

Claims”) for severance benefits under the Red Capital Plan. This

time, the claims were based on the sale of certain business

operations and assets of Red Capital Group to ORIX. (Docket No.

51, Exhs. 33 & 30.) 

On August 18, 2010, the Plan Administrator notified each

Plaintiff that the Committee had denied the First Set of Claims. 

(Docket No. 51, Exhs. 38-42.)2 On September 15 and October 14,

Defendants denied Mr. Martin and Mr. Zeigler’s Second Set of

Claims. (Docket No. 51, Exhs. 44 & 47.) 

On October 14, 2010, Plaintiffs filed notices appealing the

Plan Administrator’s August 18, 2010 decision denying their First

Set of Claims. (Docket No. 51, Exhs. A-E; Docket No. 59, Exh.

T.) On November 8, 2010, Plaintiffs Martin and Ziegler filed

notices appealing the Plan Administrator’s denial of their Second

Set of Claims. (Docket No. 51, Exhs. G & J; Docket No. 59, Exh.

T.)

On December 7, 2010, Plaintiffs Russi and Jones, having

received no response to their Second Set of Claims, notified

Defendants of their belief that Defendants’ failure to respond

within 120 days caused those claims to be deemed approved

pursuant to section 5.2 of the Red Capital Plan. (Docket No. 51,

Exh. 48.) On December 17, 2010, Defendants responded, and denied

the Second Set of Claims of Jones, Poling, and Russi, explaining

that Defendants did not believe those claims were good faith

claims that required a response. (Docket No. 51, Exhs. 43, 45 &

46.) The reasons given for not treating the claims as good faith

2 While the denials to each Plaintiff are not identical, they

are substantially the same. Unless the language at issue differs

from claim to claim, the Court will provide the page citation for

the denial addressed to Mr. Jones (Docket No. 51, Exh. 38). 

11

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 11 of 31 PAGEID #: <pageID>
claims were the following: (1) Defendants contended that the Red

Capital Plan ceased to exist as of April 16, 2010, and (2)

Defendants contended that Plaintiffs Russi and Jones had not

severed their employment with PNC at the time the claim forms

were submitted. (Id.) Defendants also explained additional

reasons why they believed the claims to be without merit. (Id.) 

Also on December 17, 2010, the Second-Level Claim and Appeal

Committee denied Plaintiffs’ Notice of Appeal of the First Set of

Claims. (Docket No. 51, Exhs. K-O.)

On February 11, 2011, Plaintiffs Jones, Poling, and Russi

appealed the denial of their Second Set of Claims. (Docket No.

51, Exhs. F, H & I.)

On April 8, 2011, the Second-Level Claim and Appeal

Committee denied Plaintiffs’ Jones, Poling, and Russi’s appeal of

the Second Set of Claims. (Docket No. 51, Exhs. P-R.)

II. Relevant Procedural History

The Court will not set forth the entire procedural history

here, but only describe some of the motions that will be referred

to in this Report and Recommendation. 

On August 24, 2012, Plaintiffs filed a motion for partial

summary judgment on Counts VII and XI (Docket No. 53). 

Plaintiffs argued that pursuant to the terms of the Plans,

Plaintiffs' claims were "deemed approved" based on the failure of

Defendants to issue a decision within the time provided by the

Plans. Plaintiffs also argued that the Court ought to conclude

as a matter of law that the 2005 version of the National City

Plan is the controlling plan and remains in full force and

effect. On November 5, 2012, the Court referred the motion for

partial summary judgment to the Magistrate Judge for issuance of

a report and recommendation (Docket No. 70). On February 7,

2013, the Magistrate Judge issued a Report and Recommendation

recommending that the motion for partial summary judgment be

12

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 12 of 31 PAGEID #: <pageID>
denied (Docket No. 84). Plaintiffs and Defendants filed

objections to the Report and Recommendations (Docket Nos. 91, 93,

94). On August 16, 2013, the Court sustained Defendants'

objections and employed different reasoning for denying

Plaintiffs' motion for partial summary judgment than that

recommended by the Magistrate Judge (Docket No. 125). As a

result of the Court's reasoning, the Court denied the Plaintiffs'

objections as moot. (Id.) 

In ruling on the motion for partial summary judgment, the

Court made determinations relevant to the pending motion for

judgment on the administrative record. Those rulings will be

discussed in the analysis section below. 

On September 27, 2012, Defendants moved for an entry of

judgment on the administrative record, seeking judgment in their

favor on all claims except the retaliation claim in Count II

(Docket No. 60). This motion, which is the motion before the

Court here, has been referred to the Magistrate Judge for a

Report and Recommendation (Docket No. 131).

In Plaintiffs’ response to this motion, they also moved to

compel discovery and supplement the record. This Court ruled on

the motion to compel discovery and supplement the record,

granting it in part and denying it in part. Plaintiffs have

objected to that order, the parties have briefed the objections,

and the Court has not ruled on those objections at this time. 

Defendants have also filed motions for protective orders that are

currently pending. 

Defendants have also filed a “Motion for Leave to File

Instanter a Supplemental Brief in Support of Defendants’ Motion

for Judgment on the Administrative Record” (Docket No. 126) and a

Motion for Joinder in that brief (Docket No. 128). Plaintiffs

responded that they do not oppose leave to file such a brief or

join such a brief, although they reserve the right to file

13

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 13 of 31 PAGEID #: <pageID>
responses to the supplemental briefs (Docket No. 130). The

proposed brief address the claims brought pursuant to the Red

Capital Plan.

III. Standard

As a general rule, “a denial of benefits challenged under §

1132(a)(1)(B) is to be reviewed under a de novo standard unless

the benefit plan gives the administrator or fiduciary

discretionary authority to determine eligibility for benefits or

to construe the terms of the plan.” Firestone Tire & Rubber Co.

v. Bruch, 489 U.S. 101, 115 (1989). When a plan gives the

administrator or fiduciary discretionary authority to “construe

and interpret the plan . . . a court reviews the administrator’s

decision on the eligibility of benefits under the ‘arbitrary and

capricious’ standard.” Daft v. Advest, Inc., 658 F.3d 583,

594-95 (6th Cir. 2011). Because the determination of whether

review should be de novo or under the arbitrary and capricious

standard depends on the terms of the plan at issue, there will be

a separate discussion of the standard of review for each plan. 

Defendants briefed the issue of whether the plans are “top

hat plans” under ERISA, arguing that the plans are not “top hat

plans” and even if they were, that arbitrary and capricious

review would apply. In response, Plaintiffs state by way of

footnote that they “assume arguendo that the deferential standard

of review applies and proceed to address certain issues on the

merits,” while they reserve their right to argue in later briefs

that de novo review applies. (Docket No. 72 at 19.) 

Accordingly, Plaintiffs have not demonstrated that any of the

plans at issue are top hat plans, and for purposes of this motion

the Court will assume that the plans are not top hat plans. 

Under either “arbitrary and capricious” review or de novo

review, “a court's review of a plan administrator's decision . .

. is confined to the evidence in the administrative record.” 

14

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 14 of 31 PAGEID #: <pageID>
Daft v. Advest, Inc., 658 F.3d 583, 594-95 (6th Cir. 2011)

(citations omitted). A court’s review of a procedural challenge

to the administrator’s decision, as opposed to the substance of

the administrator’s decision, may consider evidence not presented

to the plan administrator: 

The district court may consider evidence outside of the

administrative record only if that evidence is offered

in support of a procedural challenge to the

administrator's decision, such as an alleged lack of

due process afforded by the administrator or alleged

bias on its part. This also means that any prehearing

discovery at the district court level should be limited

to such procedural challenges.

Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 430 (6th Cir.

2006) (quoting Wilkins v. Baptist Healthcare System, Inc., 150

F.3d 609, 619 (6th Cir. 1998)). A motion to compel is pending,

and the resolution of that motion may be relevant to certain

challenges to the administrative procedure, but there are several

issues on the merits that are appropriate for resolution now. 

IV. Analysis

Defendants seek an entry of judgment in their favor on all

claims based on the Administrative Record except for Count II

(the retaliation claim). In their briefs, the parties organize

their argument by the plans or alleged plans at issue rather than

going through the counts in the complaint in numerical order, and

this Report and Recommendation will do the same. 

A. Claims Relating to the National City Plan

The first issue, which relates to Counts VII, VIII, IX, X,

and XIII of the Complaint, is whether Plaintiffs are entitled to

any benefits under the National City Plan. 

1. Standard of Review under the National City Plan

The Court’s August 16, 2013 Opinion and Order considered the

language of the National City Plan in light of the claims and

facts, and the Court determined that standard of review for the

15

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 15 of 31 PAGEID #: <pageID>
National City Plan was a heightened form of review for arbitrary

and capricious error. (See Docket No. 125 at 10-19 (citations

omitted).) 

Under an “arbitrary and capricious” standard of review, the

Court will uphold the administrator's decision “if it is the

result of a deliberate, principled reasoning process and if it is

supported by substantial evidence.” Glenn v. MetLife, 461 F.3d

660, 666 (6th Cir. 2006) (internal quotations and citations

omitted) aff'd sub nom. Metro. Life Ins. Co. v. Glenn, 554 U.S.

105 (2008). However, the review “does not require us merely to

rubber stamp the administrator's decision.” Glenn, 461 F.3d at

666 (internal quotations and citations omitted). Rather, courts

are required to review the “evidence and the opinions on both

sides of the issues.” Id. at 666 (internal quotations and

citations omitted). 

As the Court’s August 16, 2013 Opinion and Order noted,

because the same entity funds the plan and makes benefits

determinations, a heightened form of arbitrary and capricious

review applies. See, e.g., Curry v. Eaton Corp., 400 F. App'x

51, 58 (6th Cir. 2010) (“Notwithstanding the deference afforded a

plan administrator under arbitrary-and-capricious review, courts

must evaluate potential conflicts of interest and consider them

as factors in determining whether the decision to deny benefits

was arbitrary and capricious. . . . In such cases, the

arbitrary-and-capricious standard still applies, but application

of the standard should be shaped by the circumstances of the

inherent conflict of interest.”) (citations omitted).

2. Analysis of National City Plan Claims

The first of the National City Plan Claims, Count VII,

sought a determination that the Committee failed to respond to

claims under §5.2 of the National City Plan within the time

permitted and that under the terms of the National City Plan the

16

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 16 of 31 PAGEID #: <pageID>
claims were deemed approved. The Court already considered Count

VII in its August 16, 2013 Opinion and Order and denied

Plaintiffs’ motion for judgment on that count. While the motion

before the Court in that Opinion and Order was styled as a motion

for partial summary judgment, the Court construed Plaintiffs’

motion as one for judgment on the administrative record. Based

on the administrative record, the Court determined that the

Committee’s determination that Plaintiffs’ March and April 2010

submissions were not “claims” and, therefore, were not subject to

§ 5.2's “deemed approved” provision was a reasoned determination

and the Court would not disturb it. Accordingly, judgment is

appropriate in Defendants’ favor and against Plaintiffs as to

Count VII of the Complaint. 

The remaining Counts claiming benefits pursuant to the

National City Plan allege that Plaintiffs are entitled to

benefits on the merits because the Plan provides that

participants are entitled to benefits if certain circumstances

occur following a change in control. Plaintiffs sought benefits

under both the 2005 and 2008 versions of the National City Plan. 

The Committee denied all claims for benefits under either version

of the National City Plan. 

In its denial of Plaintiffs’ claims for benefits pursuant to

the 2005 version of the National City Plan, the Committee

determined that “the 2005 National City Plan ceased to exist in

September 2008. . . . any claims for benefits to which you

believe that you are entitled are properly brought only under the

terms of the 2008 National City Plan.” (Docket No. 51, Exh. 38

at 4.) In its August 16, 2013 Opinion and Order, the Court,

while not determining whether or not it would approve of the

Committee’s determination that the 2005 National City Plan ceased

to exist, did decide that the Committee’s determination that the

2008 Amendment to the National City Plan was valid was a reasoned

17

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 17 of 31 PAGEID #: <pageID>
determination. Accordingly, all claims will be analyzed pursuant

to the language of the 2008 National City Plan. (Docket No. 125

at 23.) 

Counts VIII, IX, and X rely on language that was in the 2005

version of the National City Plan but that was eliminated in the

2008 version of that Plan. The Court has determined that the

Committee’s decision that the 2008 amendment to the National City

Plan was effective was a reasoned decision (Docket No. 125 at

23), and accordingly, judgment is appropriate in Defendants’

favor and against Plaintiffs as to Counts VIII, IX, and X. 

Count XIII of the Complaint relies on a provision of the

National City Plan that was not eliminated by the 2008 amendment. 

In Count XIII Plaintiffs allege that they were entitled to

benefits pursuant to § 3.1 of the Plan because they were

“effectively terminated from employment March 17, 2010 when Red

Capital, at the direction of the Investor Group, notified them

that they were not considered for continued employment with the

Investor Group following the closing of the Red-Orix

Transaction.” (Docket No. 2 at ¶ 381.) Because the Protection

Period arising from PNC’s acquisition of National City extended

until March 31, 2010, if Plaintiffs were terminated on March 17,

2010, they would be entitled to severance compensation. However,

if they were terminated after March 31, 2010, they would not be

entitled to severance compensation. 

The Committee specifically considered Plaintiffs’ argument

that “the terms of the 2008 National City Plan entitle

[Plaintiffs] to benefits because [they] experienced a reduction

in [their] base salary coupled with incentive pay, leading to

[their] constructive discharge during the ‘protection period.’”

(Docket No. 51, Exh. 38 at 2.) The Committee did not discuss the

concept of constructive discharge, but rather concluded: “our

records indicate, and you do not dispute, that you were

18

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 18 of 31 PAGEID #: <pageID>
terminated from employment effective as of the close of business

on June 26, 2010.” (Docket No. 51, Exh. 38 at 3.) Plaintiffs

appealed this decision, arguing again for constructive

termination, specifically arguing that by extending offers of

employment to employees who did not give the Committee notice of

an intent to claim severance benefits, Defendants effectively

notified Plaintiffs of their termination from active employment

by virtue of their lack of an employment offer. (Docket No. 51,

Exhs. A-E.) In their denial of Plaintiffs’ appeal, the Committee

reasoned as follows:

The Committee took note of the text of Section 3.1 of

the 2008 National City Plan upon which you assert your

claim for benefits on behalf of Mr. Ziegler. Section

3.1 of the 2008 National City Plan concerns eligibility

for benefits only upon an involuntary termination of

employment (other than for cause or upon death or

disability) during the “Protection Period.” The

Committee determined that Section 3.1 of the 2008

National City Plan does not provide benefits upon

anything less than an actual separation from service. 

Accordingly, the Committee concluded that your claim

for benefits on behalf of [Participant] on account of

his having been “effectively terminated” on March 17,

2010 does not entitle him to benefits under Section 3.1

of the 2008 National City Plan. Moreover, PNC’s

records reflect, and you have not disputed, that his

involuntary termination from employment – that is, his

actual separation from service - occurred as of the

close of business on June 26, 2010. Because this date

occurred nearly three months after the end of the 2008

National City Plan’s “Protection Period,” no severance

benefits are due to him under its terms.

(Docket No. 51, Exhs. K-O at 9 (footnote omitted).) 

The Committee’s decision was not based upon disputed facts,

but rather an interpretation of the National City Plan and

whether Section 3.1 allowed benefits in instances of constructive

termination or, as the Committee concluded, whether the National

City Plan “does not provide benefits upon anything less than an

actual separation from service.” Because there is no dispute

19

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 19 of 31 PAGEID #: <pageID>
that the actual separation from service occurred after the

Protection Period, the only question is whether the Committee’s

interpretation of Section 3.1 as requiring actual separation from

service satisfies the heightened form of review for arbitrary and

capricious error that applies here. 

Section 3.1 entitles a Participant to benefits “[i]n the

event the Surviving Entity terminates the Participant's

employment during the Protection Period” unless certain

exceptions apply. This language does not, on its face, include

constructive termination. In addition, section 3.2 specifies the

only circumstances under which a Participant may terminate

employment with the right to severance benefits. Read together,

it is reasonable to interpret those provisions as setting forth

the only instances when something other than actual termination

by the employer entitles a Participant to benefits. See Caldwell

v. PNC Fin. Servs. Grp., Inc., 835 F. Supp. 2d 510, 522-23 (S.D.

Ohio 2011) (interpreting the same National City Plan and the same

provisions of the Plan and determining that the Appeal

Committee’s interpretation of the Plan language as excluding

constructive termination was “the only reasonable interpretation

as a matter of law”); see also Marks v. Newcourt Credit Grp.,

Inc., 342 F.3d 444, 459 (6th Cir. 2003) (deciding that

administrators’ decision that the plan required actual

termination or resignation rather than constructive termination

was not arbitrary and capricious).3 Accordingly, the Committee’s

3 The Court of Appeals in Marks also noted that there was a

specific showing required to demonstrate constructive discharge

that had not been met in that case:

At any rate, Marks could not demonstrate that he was

constructively discharged: “In order to demonstrate

constructive discharge, an employee must show that

working conditions were so unpleasant and unreasonable

that a reasonable person in the employee's shoes would

20

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 20 of 31 PAGEID #: <pageID>
interpretation of Section 3.1 as requiring actual, not

constructive, termination is rational and reasonable in light of

the Plan provisions. Accordingly, judgment is appropriate in

Defendants’ favor and against Plaintiffs as to Count XIII.

B. Claims Relating to the Red Capital Plan

The second issue, which relates to Counts XI and XII of the

Complaint, is whether Plaintiffs are entitled to any benefits

under the Red Capital Plan. 

1. Standard of Review under the Red Capital Plan

The Court’s August 16, 2013 Opinion and Order also

considered the language of the Red Capital Plan in light of the

claims and facts. The Court noted that the Red Capital Plan

contains “the same grant of discretion in Article 14 as the

National City Plan except it grants the Plan administrator, not

the Committee, the authority to determine claims and construe the

terms of the plan.” (Docket No. 125 at 10-19 (citations

omitted).) However, the Court undertook a de novo review of “the

threshold question of whether the Red Capital Plan was

terminated.” (Docket No. 125 at 27.) The de novo standard of

review applies to factual conclusions of plan administrators

unless the plan explicitly vests fact-finding discretion in the

plan administrator. Rowan v. Unum Life Ins. Co. of America, 119

F.3d 433, 436 (6th Cir. 1997). “This de novo standard of review

have felt compelled to resign.” Welsch v. Empire

Plastics, Inc., No. 99-3420, 215 F.3d 1328, 2000 WL

687678, **4 (6th Cir. May 19, 2000) (citing Wilson v.

Firestone Tire & Rubber Co., 932 F.2d 510, 515 (6th

Cir. 1991)). Marks neither claims that he felt

compelled to resign before October 1, 1998, nor alleges

that his working conditions were unpleasant.

Marks, 342 F.3d at 459. Likewise, Plaintiffs here have not

demonstrated that conditions satisfied that definition of

“constructive discharge.” 

21

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 21 of 31 PAGEID #: <pageID>
applies to the factual determinations as well as to the legal

conclusions of the plan administrator.” Wilkins v. Baptist

Healthcare Sys., Inc., 150 F.3d 609, 613 (6th Cir. 1998) (citing

Rowan, 119 F.3d at 435); JAMES F. JORDEN ET AL., HANDBOOK ON ERISA

LITIGATION §201(A) (3d ed. 2007) (“[W]hen the factual circumstances

are undisputed, the existence of an ERISA plan is a question of

law to be reviewed de novo.”). 

2. Analysis of Red Capital Plan Claims

Count XI alleges that Plaintiffs Russi and Jones’ Second Set

of Claims, which were based on the alleged Change in Control

resulting from the ORIX transaction, were deemed approved

pursuant to section 5.2 of the Red Plan. (Docket No. 2 at ¶361.) 

However, those claims were submitted after PNC issued a notice of

termination of the Red Capital Plan effective April 16, 2010. 

(Docket No. 51, Exh. 37.) 

Count XII alleges that the Red-Orix Transaction constituted

a Change in Control for purposes of the Red Plan, and that

Plaintiffs’ Separation from Service on April 30, 2010 occurred

during the Protection Period arising from that Change in Control. 

(Docket No. 2 at ¶¶ 369, 371 & 372.) That count alleges that

Plaintiffs are entitled to benefits under Section 3.1 of the Red

Plan as a result of the separation during the alleged Protection

Period and that, accordingly, Defendants unlawfully denied

benefits. (Docket No. 2 at ¶¶369-74.) 

Because Counts XI and XII both involve the ORIX Transaction,

the claims at issue in both Counts are the Second Set of Claims,

which were filed in June of 2010. (The First Set of Claims

addressed only the alleged Change in Control based on PNC’s

acquisition of National City.) 

The Committee denied Plaintiffs’ Second Set of Claims. 

(Docket No. 51, Exhs. 43-47.) In denying those claims, the

Committee based its denial, in part, on the April 16, 2010

22

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 22 of 31 PAGEID #: <pageID>
discontinuance and termination of the Red Capital Plan, which

Plaintiffs argue was an invalid termination. The Committee

determined that, because the Plan ceased to exist as of April 16,

2010, the Committee had no obligation to respond to the claims

filed after that date. Accordingly, a threshold question is

whether the April 16, 2010 discontinuance and termination of the

Red Capital Plan was valid. 

In its August 16, 2013 Opinion and Order, the Court

considered whether the termination of the Red Plan was valid or

whether it occurred during a Protection Period as defined by the

Red Plan. (Docket No. 125 at 27-19.) The Court determined that

it did not have enough information to determine whether PNC

properly terminated the Red Capital Plan on April 16, 2010. The

Court further declined to remand to the Committee until after the

motion for discovery and motions for judgment on the

administrative record had been considered. As the District Court

has not ruled on the objections to the Order granting in part and

denying in part the motion for discovery, and as there are two

motions for protective orders still pending, the Court recommends

denying the motion for judgement on the administrative record as

to Counts XI and XII without prejudice to refile a motion on that

issue after the resolution of the discovery objections and

motions. 

C. Claims Relating to the 2006 Severance Guaranty

The third issue, which relates to Counts I, III, IV, V, and

VI of the Complaint, is whether Plaintiffs are entitled to any

benefits under the 2006 Severance Guaranty. 

1. Standard of Review under the 2006 Severance Guaranty

The continued existence of the 2006 Severance Guaranty is

disputed, and that question must be resolved as a mixed question

of fact and law. The de novo standard of review applies to

factual conclusions of plan administrators unless the plan

23

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 23 of 31 PAGEID #: <pageID>
explicitly vests fact-finding discretion in the plan

administrator. Rowan v. Unum Life Ins. Co. of America, 119 F.3d

433, 436 (6th Cir. 1997). “This de novo standard of review

applies to the factual determinations as well as to the legal

conclusions of the plan administrator.” Wilkins v. Baptist

Healthcare Sys., Inc., 150 F.3d 609, 613 (6th Cir. 1998) (citing

Rowan, 119 F.3d at 435); JAMES F. JORDEN ET AL., HANDBOOK ON ERISA

LITIGATION §201(A) (3d ed. 2007) (“[W]hen the factual circumstances

are undisputed, the existence of an ERISA plan is a question of

law to be reviewed de novo.”). Accordingly, the Court will

examine de novo the question of whether there was a 2006

Severance Guaranty. 

If the 2006 Severance Guaranty exists, the Court must

determine whether there is evidence of any delegation of

authority for administering and interpreting the unwritten 2006

Severance Guaranty in order to determine whether the abuse of

discretion or de novo standard applies. See, e.g., 2 ERISA

Practice and Litigation § 11:53 (“In some benefit claim disputes,

the absence of a written plan document, insufficient plan

language, or defects in the claim procedure, may result in de

novo judicial review of a benefit denial.”) The only evidence

that either party cites to suggest that the unwritten 2006

Severance Guaranty intended to delegate authority to the Plan

Administrator is the language of the subsequently adopted Red

Capital Plan.4 However, the Court is not persuaded that the

4

 Ironically, the party that has pointed to this evidence

is the Plaintiffs, and they have pointed to this evidence for

other purposes. Plaintiffs have asserted claims under the 2006

Severance Guaranty based upon language in the Red Capital Plan. 

In their Complaint, Plaintiffs write in a footnote: “Because

National City failed to adopt a written plan with the agreed

terms of the 2006 Severance Guaranty, Plaintiffs’ references to

specific sections of the 2006 Severance Guaranty are to the Red

Plan as modified to reflect the agreed terms of the 2006

24

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 24 of 31 PAGEID #: <pageID>
language adopted approximately two years later, some of which

Plaintiffs claim contradicted the parties’ intent, can be relied

on as credible evidence of a delegation of authority. The

parties have pointed to no other evidence in the administrative

record demonstrating such a delegation of authority, and

accordingly, in the absence of such clear delegation it appears

that de novo review would be the appropriate standard for

interpreting the terms of the 2006 Severance Guaranty. 

2. Existence of 2006 Severance Guaranty

The email exchanges set forth in the fact section of this

Report and Recommendation demonstrate that National City and Red

Capital did agree upon an unwritten policy regarding the

provision of change-in-control benefits to certain Red Capital

Employees. Defendants’ primary argument to the contrary seems to

be that the policy was never “adopted,” but the emails expressly

acknowledge a policy to provide for Red Capital employees in the

event of a change in control. 

The parties do not dispute that, if such a policy existed,

it would qualify as an ERISA plan. (See Docket No. 60 at 30-31.) 

Whether a policy qualifies as an ERISA plan is a question of fact

“to be answered in light of all the surrounding circumstances and

facts from the point of view of a reasonable person.” Kolkowski

Severance Guaranty.” (Docket No. 2 at n.3.) As a result,

Plaintiffs’ claims pursuant to the 2006 Severance Guaranty adopt

language from Sections 3.2 and 5.2 of the Red Capital Plan as

well as the definition of the Protection Period. (Docket No. 2

at, e.g., ¶¶ 83, 86, 111.) Accordingly, Plaintiffs take the

position that the Red Capital Plan essentially set forth the

terms of the 2006 Severance Guaranty except for the terms that

contradicted that Guaranty. If Plaintiffs’ position were

accepted, the question before the Court would be whether the Red

Capital Plan language at Article 14, which provided the Plan

Administrator discretion in interpreting and administering the

Plan, correctly codified the understanding of the 2006 Severance

Guaranty or whether that was contradictory to that Guaranty. 

25

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 25 of 31 PAGEID #: <pageID>
v. Goodrich Corp., 448 F.3d 843, 847 (6th Cir. 2006) (citations

omitted). A severance plan such as this one may be an employee

benefit welfare plan as long as “it requires ‘an ongoing

administrative program to meet the employer's obligation.’” 

Kolkowski, 448 F.3d at 848-49 (6th Cir. 2006) (citations

omitted). In particular, the Court of Appeals “has used two

particular factors to determine . . . if ERISA governs: 1)

whether the employer has discretion over the distribution of

benefits, and 2) whether there are on-going demands on an

employer's assets.” Id. “[I]f to determine benefits the

employer must analyze each employee's particular circumstances in

light of the appropriate criteria, the severance plan is probably

an ERISA plan.” Id. (citations omitted). Here the 2006

Severance Guaranty would only permit benefits in the event of a

change in control, which included the sale of all or

substantially all assets owned by Red Capital, which itself

involved a determination by the Committee. Accordingly, the

discussion below treats the 2006 Severance Guaranty as an ERISA

plan. 

3. Continued Existence of 2006 Severance Guaranty

The next question is the continued existence of the 2006

Severance Guaranty. Plaintiffs raised claims pursuant to the

2006 Severance Guaranty in their First Set of Claims. Defendants

denied those claims, concluding that the parties all intended

that the 2006 Severance Guaranty (if one existed) would redraft

or update the then-existing National City Plan and that in

accordance with that intent, the National City Plan was amended

twice and the Red Capital Plan was executed in 2008. (Docket No.

51, Exhs. 38-42.) Defendants then concluded, “[e]ven assuming

that the Committee could have concluded that an Interim Plan [the

2006 Severance Guaranty] existed at some prior point in time, the

terms of any such Interim Plan would have been superseded by one

26

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 26 of 31 PAGEID #: <pageID>
or more of these later-executed Plans.” (Id.) This

interpretation of the 2006 Severance Guaranty and impact of the

amendments of the National City Plan and adoption of the Red

Capital Plan are reviewed here de novo.

The existence of a 2006 Severance Guaranty would not

preclude its amendment or even termination, because employers and

plan sponsors are “generally free under ERISA, for any reason at

any time, to adopt, modify, or terminate welfare plans” or

pension benefit plans. Coomer v. Bethesda Hosp., Inc., 370 F.3d

499, 508-09 (6th Cir. 2004) (quoting Curtiss-Wright Corp. v.

Schoonejongen, 514 U.S. 73, 78 (1995)). In fact, the 2006

Severance Guaranty specifically contemplated that it would be

amended or replaced by written plans. All of the email exchanges

in the Administrative Record acknowledge the interim nature of

the Guaranty, while acknowledging that the goal would be to

incorporate the protections of the 2006 Severance Guaranty into

the amendments to the National City Plan. (See Docket No. 51,

Exh. 28, Attachments K (“temporary change of control agreement .

. . to protect our folks given that it is taking a while for

National City to put its revised plan in place”); M (“the

understanding described herein will be more fully and completely

documented when the Plan is redrafted”); N (“make sure [to]

convey the intent and that the plan will be developed this fall

pending 409(A) final regulations. . . .”); P (“In the interim,

John Couture has provided verbal assurances that we will honor

the spirit of the agreement absent documentation”)). 

Furthermore, neither party has argued that Plaintiffs had a

vested right to benefits under the 2006 Severance Guaranty. 

Understanding that the 2006 Severance Guaranty contemplated

that it would be replaced or amended by written documents, and

that it could be replaced or amended by written documents, the

next question is whether one or both of the written plans did so. 

27

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 27 of 31 PAGEID #: <pageID>
In their briefing, Defendants argue that the language of the

National City Plan disclaims the existence of any unwritten

plans. This argument was not a part of the Committee’s denial of

the First Set of Claims, but it was a part of the Committee’s

explanation of its denial of the appeal of the First Set of

Claims. Defendants argue that section 1.3 of the National City

Plan provided that it was the only plan under which a claimant

could seek benefits for a change in control of National City. 

That argument is inconsistent with the language of section 1.3,

which does not say anything about being the only Plan, but rather

states that the severance compensation provided “shall be the

sole severance compensation a Participant will be entitled to

from the Surviving Entity as a result of Change in Control.” As

Plaintiffs have pointed out, that language directly speaks to the

possibility of “double dipping” rather than renouncing all other

plans. However, the absence of an integration clause or a merger

clause does not necessarily mean that the 2006 Severance Guaranty

continued to exist after the amendment to the National City Plan

and the creation of the Red Capital Plan. 

The key elements of the 2006 Severance Guaranty that

appeared in the emails in the Administrative Record were

providing change-in-control benefits to certain Red Capital

employees who would not otherwise be covered by the National City

Plan, providing double compensation for select employees, and

ensuring that Change in Control was defined to include the sale

of all or substantially all assets owned by Red. The first

appears to have been resolved either through the amendments to

the National City Plan or through the administrative

categorization of the employees, because both parties agree that

Plaintiffs are covered by the current National City Plan, as well

as the Red Capital Plan. In addition, the Red Capital Plan was

written specifically to cover the employees set forth on Exhibit

28

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 28 of 31 PAGEID #: <pageID>
A to that Plan, which was nearly identical to the list of

employees that the 2006 Severance Guaranty was intended to

protect. (Docket No. 51, Exh. 3 at §2.1(o) & Exh. A thereto.)

The parties have not addressed whether the National City Plan and

Red Capital Plans provide double compensation for certain

individuals, but those plans certainly define the level of

compensation that would be awarded to participants who were

entitled to severance compensation. The final key element of the

2006 Severance Guaranty was addressed in the Red Capital Plan,

which provides that a Change in Control “means the sale of all or

a substantial amount of the assets and liabilities of RED by

Corporation to a non-affiliate. . . .” (Docket 51, Exh. 3

§2.1(d).) Accordingly, given that the Red Capital Plan and the

amended National City Plan cover the subject matter included in

the 2006 Severance Guaranty, it is apparent that the Red Capital

Plan and the amendments to the National City Plan were an attempt

to codify or amend the 2006 Severance Guaranty. 

When a written policy attempts to codify an oral one, it

would be incorrect to give “more value to the informal oral

policy than to the more recent written” Plan. Gordon v. Barnes

Pumps, Inc., 999 F.2d 133, 137 (6th Cir. 1993). Furthermore,

“[i]t is well-established that the written terms of a plan may

not be modified or superseded by oral assurances or other

extrinsic evidence.” Gordon, 999 F.2d at 137; see also Nester v.

Allegiance Healthcare Corp., 162 F. Supp. 2d 901, 908 (S.D. Ohio

2001) (holding that the “formal written plan trumps any prior

representations that [Defendant] may have made to the Plaintiffs

regarding their entitlement to transition benefits”). 

Accordingly, even if the Red Capital Plan contradicts the terms

of the 2006 Severance Guaranty, the written Red Capital Plan

controls. The 2006 Severance Guaranty no longer exists because

it has been amended or superceded by the Red Capital Plan. 

29

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 29 of 31 PAGEID #: <pageID>
Plaintiffs’ breach of contract claim pursuant to the 2006

Severance Guaranty also fails, because it is pre-empted by ERISA. 

See, e.g., Gordon, 999 F.2d at 137; Nester, 162 F. Supp. 2d at

903-04. Plaintiffs have made no arguments to the contrary. 

Accordingly, Plaintiffs cannot prevail on any of their

claims under the 2006 Severance Guaranty, and judgment is

appropriate in Defendants’ favor and against Plaintiffs as to

Counts I, III, IV, V, and VI. 

V. Conclusion

For all the foregoing reasons, the Magistrate Judge

RECOMMENDS that the Motion for Judgment on the Administrative

Record (Docket No. 60) be granted in part and denied in part as

follows: granted as to Counts I, III, IV, V, VI, VII, VIII, IX,

X, and XIII of the Complaint, and denied without prejudice as to

Counts XI and XII of the Complaint.

VI.

If any party objects to this Report and Recommendation, that

party may, within fourteen (14) days of the date of this report,

file and serve on all parties written objections to those

specific proposed findings or recommendations to which objection

is made, together with supporting authority for the objection(s). 

A judge of this Court shall make a de novo determination of those

portions of the report or specified proposed findings or

recommendations to which objection is made. Upon proper

objections, a judge of this Court may accept, reject, or modify,

in whole or in part, the findings or recommendations made herein,

may receive further evidence or may recommit this matter to the

magistrate judge with instructions. 28 U.S.C. §636(b)(1).

The parties are specifically advised that failure to object

to the Report and Recommendation will result in a waiver of the

right to have the district judge review the Report and

Recommendation de novo, and also operates as a waiver of the

30

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 30 of 31 PAGEID #: <pageID>
right to appeal, the decision of the District Court adopting the

Report and Recommendation. See Thomas v. Arn, 474 U.S. 140

(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981). 

The parties are further advised that, if they intend to file

an appeal of any adverse decision, they may submit arguments in

any objections filed, regarding whether a certificate of

appealability should issue. 

/s/ Terence P. Kemp 

United States Magistrate Judge

31

Case: 2:11-cv-00380-MHW-TPK Doc #: 132 Filed: 10/22/13 Page: 31 of 31 PAGEID #: <pageID>