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”). 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 ERISA and their contractual rights. Before the Court

are several pending motions. This report and recommendation

addresses Plaintiffs’ motion for partial summary judgment (Docket

No. 53), which has been fully briefed. The motion for partial

summary judgment argues that certain of the claims for benefits

should be deemed approved under the terms of the plan(s) at issue. 

This motion has been referred to the Magistrate Judge for a Report

and Recommendation. 

 For the reasons that follow, the Magistrate Judge RECOMMENDS

that Plaintiffs’ Motion for Partial Summary Judgment (Docket No.

53) be denied. 

I. Facts

The facts in this paragraph, provided as general background,

are undisputed. Red Capital engages in mortgage and investment

banking activities. In 2004, National City Corporation

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("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 and that Defendants’

denial of benefits, among other actions, violated ERISA. 

One such plan 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).) 

The plan also provided for a “Protection Period” during which the

plan could not be “amended, modified or discontinued.” (Id. at

§15.) The Protection Period began on the “Effective Date,” which

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

ultimately results from discussions or negotiations involving the

Corporation or any of its officers or directors, the ‘Effective

Date’ of such Change in Control shall be the date uninterrupted

discussions or negotiations commenced.” (Id. at §2.1(i) & (u).) 

The Protection Period continued “through to the fifteenth month

anniversary of the Implementation Date.” (Id. at §2.1(m) & (u).) 

The National City Plan also provides that it is to be

administered by the Committee and grants “full power and

authority to interpret, construe and administer this Plan and its

interpretations and construction hereof,” and provides that

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actions made by the Committee in accordance with the plan shall

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

(Id. at §14.) However, the National City 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 Committee’s

receipt of the claim or (b) within 30 days of the

Committee’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.) One version of the National City Plan was

effective January 1, 2005. That is the version on the National

City Plan upon which Plaintiffs seek summary judgment as to Count

VII of the Complaint. 

One of the disputes between the parties is whether the

September 30, 2008 amendment to the National City Plan was

effective. In the discussion materials for a presentation by

Goldman, Sachs & Co. to National City dated September 29, 2008,

there is a page entitled “Potential Strategic Partners,” which

lists PNC as one of eight potential partners. (Docket No. 51,

Exh. 18D.) The next day, September 30, 2008, was the date that

the 2008 amendment to the 2005 National City Plan purportedly

took effect. The 2008 amendment eliminated several circumstances

under which severance benefits could be awarded under section

3.2. According to Defendants, the Effective Date was three days

after the amendment, on October 3, 2008. Defendants base this

date on an email that was sent from one PNC employee to another

in 2010 as a part of the investigation into Plaintiffs’ claims;

the email stated that PNC was “first notified that another

process was going to take place regarding NCC on October 3, 2008

and we signed a confidentiality agreement on October 5, 2008 to

enter the process.” (Docket No. 51, Exh. 36.) According to a

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PNC news release cited by Plaintiffs (which Defendants argue is

not part of the administrative record) as of October 24, 2008,

PNC and National City had announced that they had signed a

definitive agreement for PNC to acquire National City. (Docket

53, Exh. 19.) PNC ultimately acquired National City on December

31, 2008. 

Plaintiffs have also asserted claims in this litigation

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

Capital Plan"). Like the National City 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 plan also provided for a “Protection

Period” during which the plan could not be “amended, modified or

discontinued.” (Id. at §15.) The Protection Period began on the

“Effective Date,” which was defined as follows: “In the event a

Change in Control 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 Red

Capital Plan also 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.) However, 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

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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.) 

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. On March 30 and 31 of 2010,

Plaintiffs notified Defendants of their conditional

resignations.1

 

On March 31, 2010, Defendant Kerry Allen, as Plan

Administrator, sent each Plaintiff a memo with the subject line

“RE: Claims Submitted Under The Red Capital Group Management

Severance Plan (Effective July 1, 2008), The National City

Corporation Amended And Restated Management Severance Plan

(Effective September 30, 2008), and/or The National City

Corporation Amended And Restated Management Severance Plan

(Effective January 1, 2005).” (Docket No. 51, Exh. 9.) In this

memo, the Plan Administrator acknowledged Plaintiffs’ belief that

they may have severance claims, reported that PNC disagreed with

Plaintiffs’ belief and stated, “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.” (Id.) The memo

stated, “If you believe PNC’s position is incorrect, you are

entitled to file a claim under those plans with the Plan

Administrator and/or the relevant plan Committee.” (Id.) 

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. 

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However, the memo went on to state, “The Plan Administrator and

the respective plan Committee will treat your previous submission

as a ‘claim’ under the plans you designated, unless you notify me

that you wish to withdraw one or more of those claims.” (Id.) 

The Plan Administrator provided “official ‘Claims Forms’” with

the memo, the purpose of which was “to facilitate the claim

process” and to “enable the Plan Administrator and the respective

plan Committee to fully consider your claim based upon all of the

facts and circumstances.” (Id.) The Plan Administrator provided

a deadline for filling out the Claim Form(s) and supporting

documentation and explained that if the deadline were not met, “a

determination under the plans will be made based on the

information you previously submitted.” (Id.) The Plan

Administrator then went on to note that “The Plan Administrator

and the respective plan Committee have 90 days from the date of

your claim to review it, and 30 days after making a determination

to respond to you in writing.” (Id.)

Neither party asserts that any of the Plaintiffs withdrew

any claims referred to in the March 31, 2010 memo. 

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

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

51, Exh. 37.) Also in April, each Plaintiff submitted Official

Claim Forms. (Docket No. 51, Exhs. 15-29.) 

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

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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.) 

On June 16 and 24 of 2010 respectively, Plaintiffs Russi and

Jones initiated a second set of claims for severance benefits

under the Red Capital Plan 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 all of their claims based

on the acquisition of National City Corporation by PNC. (Docket

No. 51, Exhs. 38-42.) 

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On October 14, 2010, Plaintiffs filed notices appealing the

Plan Administrator’s August 18, 2010 decision denying their

claims. (Docket No. 59, Exh. T.) On November 8, 2010,

Plaintiffs Martin and Ziegler filed notices appealing the Plan

Administrator’s denial of their claims based on the Red-ORIX

transaction. (Id.)

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

received no response to their second 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 to Plaintiffs Jones

and Russi, denying their second claims and explaining that

Defendants did not believe those claims were good faith claims

that required a response. (Docket No. 51, Exhs. 43, 46.) The

reasons given for not treating the claims as good faith 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 claim to be without merit. (Id.) 

II. Summary Judgment Standard

Summary judgment is not a substitute for a trial when facts

material to the Court's ultimate resolution of the case are in

dispute. It may be rendered only when appropriate evidentiary

materials, as described in Fed. R. Civ. P. 56(c), demonstrate the

absence of a material factual dispute and the moving party is

entitled to judgment as a matter of law. Poller v. Columbia

Broadcasting Systems, Inc., 368 U.S. 464 (1962). The moving

party bears the burden of demonstrating that no material facts

are in dispute. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90

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S.Ct. 1598 (1970). That burden “may be discharged by

‘showing’-that is, pointing out to the district court-that there

is an absence of evidence to support the nonmoving party's case.” 

Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548,

2554 (1986). The evidence submitted must be viewed in the light

most favorable to the nonmoving party. Adickes, 398 U.S. 144, 90

S.Ct. 1598 (1970). Additionally, the Court must draw all

reasonable inferences from that evidence in favor of the

nonmoving party. United States v. Diebold, Inc., 369 U.S. 654

(1962). The nonmoving party does have the burden, however, after

completion of sufficient discovery, to submit evidence in support

of any material element of a claim or defense on which that party

would bear the burden of proof at trial, even if the moving party

has not submitted evidence to negate the existence of that

material fact. See Celotex Corp., 477 U.S. 317 (1986); Anderson

v. Liberty Lobby, Inc., 477 U.S. 242 (1986). Of course, since "a

party seeking summary judgment . . . bears the initial

responsibility of informing the district court of the basis for

its motion, and identifying those portions of [the record] which

it believes demonstrate the absence of a genuine issue of

material fact," Celotex, 477 U.S. at 323, the responding party is

only required to respond to those issues clearly identified by

the moving party as being subject to the motion. It is with

these standards in mind that the instant motion must be decided.

III. Analysis 

Plaintiffs’ motion for partial summary judgment seeks

judgment on Count VII and Count XI of their Complaint. Both

counts rely on language in the plans stating that a claim will be

deemed approved if it is not denied within a certain amount of

time. Count VII alleges that the Committee improperly denied

benefits to Plaintiffs because their March 2010 claims had

already been deemed approved under the terms of the 2005 National

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City Plan by the Committee’s failure to deny the claims within

the specified time frame. That count seeks benefits pursuant to

the 2005 version of the National City Plan. Count XI alleges

that the Plan Administrator improperly denied benefits to

Plaintiffs Russi and Jones because their claims had already been

deemed approved under the terms of the Red Capital Plan by the

Plan Administrator’s failure to deny those claims within the

specified time frame. That count specifies that it is referring

to the claims submitted by Plaintiffs Russi and Jones with

respect the Red-ORIX transaction. 

A. Whether the First Set of Claims Should Be Deemed

Approved Under the 2005 Version of the National City

Plan

The Supreme Court’s decision in Firestone Tire and Rubber

Co. v. Bruch, 489 U.S. 101 (1989), held that ERISA decisions

should be reviewed under a de novo standard of review unless the

benefit plan gives the administrator discretionary authority to

determine eligibility of benefits or to construe the terms of the

plan. In accordance with Firestone, the Ninth, Tenth and Third

Circuit Court of Appeals have applied a de novo standard of

review to claims that are denied or approved automatically after

a certain number of days has passed. See, e.g., Jebian v.

Hewlett-Packard Co. Employee Benefits Org. Income Prot. Plan, 349

F.3d 1098, 1106 (9th Cir. 2003) (considering a claim that was

deemed denied based on time limits in the relevant plan as well

as ERISA regulations, and holding that “[d]eemed denials are not

exercises of discretion. They are therefore undeserving of

deference under Firestone, and a de novo standard of review

applies”); Gilbertson v. Allied Signal, Inc., 328 F.3d 625, 631

(10th Cir. 2003) (considering a claim that was deemed denied by

operation of time limits in the ERISA regulations, and holding

“that when substantial violations of ERISA deadlines result in

the claim's being automatically deemed denied on review, the

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district court must review the denial de novo, even if the plan

administrator has discretionary authority to decide claims”);

Gritzer v. CBS, Inc., 275 F.3d 291, 296 (3d Cir. 2002) (“Where a

trustee fails to act or to exercise his or her discretion, de

novo review is appropriate because the trustee has forfeited the

privilege to apply his or her discretion;”); but see S. Farm

Bureau Life Ins. Co. v. Moore, 993 F.2d 98, 101 (5th Cir. 1993)

(considering a claim that was deemed denied by operation of time

limits in the ERISA regulations, and holding without explanation,

“[i]n our view, the standard of review is no different whether

the claim is actually denied or is deemed denied”). 

The Second Circuit decisions are not so clear cut. The

Second Circuit “[held] that a ‘deemed denied’ claim is entitled

to de novo review, and place[d] [itself] in harmony with Jebian,

Gilbertson, and Gritzer.” Nichols v. Prudential Ins. Co. of Am.,

406 F.3d 98, 109 (2d Cir. 2005). However, it subsequently

appeared to limit that holding to cases in which there was no

decision to which to defer. See Demirovic v. Bldg. Serv. 32 B-J

Pension Fund, 467 F.3d 208, 212 (2d Cir. 2006) (“In Nichols, the

insurer's inaction ‘le[ft] the court without any decision or

application of expertise to which to defer.’ Here, by contrast,

rather than go directly to court when the Fund failed to issue a

timely initial determination, Demirovic chose to appeal. She

then waited for and received a timely decision on her appeal. 

This eventual decision constitutes a final decision and exercise

of the Fund's discretion, to which we must defer. Accordingly,

we will apply arbitrary and capricious review to the Fund's

determination.” (citations and footnotes omitted)). 

The Sixth Circuit Court of Appeals has not ruled on the

precise issue before the Court here. In one pre-Firestone

decision, the Court of Appeals considered a claim that was deemed

denied based on a deadline set forth in ERISA regulations and

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held that the standard of review was no different whether the

appeal was denied or deemed denied. Daniel v. Eaton Corp., 839

F.2d 263, 267 (6th Cir. 1988). However, that decision did not

address a situation such as the one before the Court here where

the terms of the plan itself limited the Committee’s discretion. 

In addition, the Court of Appeals has noted that Daniel

articulated the prevailing pre-Firestone approach, but that postFirestone, it is clear that “discretion is not the norm, and

that, absent a grant of discretion, an administrator’s decision

will be reviewed de novo.” Anderson v. Great West Life Assurance

Co., 942 F.2d 392, 394 (6th Cir. 1991). A more recent Court of

Appeals decision, while recognizing Daniel, wrote (without

deciding) that “there is undeniable logic in the view that a plan

administrator should forfeit deferential review by failing to

exercise its discretion in a timely manner.” University Hosps.

of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 846 n.3 (6th

Cir. 2000), cited in Jebian, 349 F.3d at 1107. Accordingly, it

may be that Supreme Court’s decision in Firestone foreclosed the

reasoning in Daniel.2 Regardless, Daniel is distinguishable from

2

 This is supported by the reasoning of the Tenth Circuit,

which wrote: 

Firestone establishes de novo review as the default

standard for reviewing ERISA claims, with deferential

review only in those instances where an administrator's

decision is an exercise of “a discretion vested in them

by the instrument under which they act.” Firestone, 489

U.S. at 111, 109 S.Ct. 948 (emphasis in original)

(internal quotations omitted). Therefore, to be

entitled to deferential review, not only must the

administrator be given discretion by the plan, but the

administrator's decision in a given case must be a

valid exercise of that discretion. It follows that

where the plan and applicable regulations place

temporal limits on the administrator's discretion and

the administrator fails to render a final decision

within those limits, the administrator's “deemed

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the instant case because it was applying a “deemed approved”

provision in the regulations rather than in the plan at issue. 

Here, the National City Plan itself provides that claims for

severance benefits may be deemed approved if a determination is

not made within certain time constraints: 

If a notice of denial is not received by a Participant

within the lesser of (a) 120 days of the Committee’s

receipt of the claim or (b) within 30 days of the

Committee’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.

(Docket No. 51, Exhs. 1 & 3 at ¶5.2.) This provision, by its

language, provides for automatic approval of a claim, independent

of the merits of the claim, and without requiring any decisionmaking, discretionary or otherwise. Accordingly, any language in

the plan providing a general grant of discretion to the Committee

is constrained by the specific language of section 5.2 providing

for a default, non-discretionary approval of claims after certain

time periods. See, e.g., Jebian, 349 F.3d 1098, 1105-06 (9th

Cir. 2003) (“where the plan itself provides that a particular

procedural violation results in an automatic decision rather than

one calling for the exercise of the administrator's discretion,

that provision is as enforceable as the provision giving the

administrator discretionary authority under other

circumstances.”); see also Anderson, 942 F.2d at 395 (noting

that, consistent with the teachings of Firestone, an

denied” decision is by operation of law rather than the

exercise of discretion, and thus falls outside the

Firestone exception. When the administrator fails to

exercise his discretion within the required timeframe,

the reviewing court must apply Firestone's default de

novo standard.

Gilbertson v. Allied Signal, Inc., 328 F.3d 625, 631-32 (10th

Cir. 2003).

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administrator might be given “discretion with respect to some

decisions but not others”) cited in Shy v. Navistar International

Corp., — F.3d —, 2012 WL 6216370, at *3 (6th Cir. Dec. 14, 2012). 

Therefore, where, as here, there is a “deemed approved” provision

that operates automatically and not as a matter of discretion,

the Court exercises de novo review to determine whether the claim

should have been deemed approved in accordance with the plan

language. 

To determine whether the claims were denied within the time

period proscribed by section 5.2 of the plan, the Court must

first determine when the Committee received a “claim.” 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 each letter, was intended to serve as notice of a

change in circumstances and of an intent to pursue severance

benefits. Those letters were received some time before March 31,

2010, because on March 31, 2010, Defendant Kerry Allen, as Plan

Administrator, sent each Plaintiff a memo referring to and

responding to those letters. Plaintiffs contend that those March

15 and 16 letters were claims for purposes of section 5.2. 

In support of their argument, Plaintiffs point to

Defendants’ March 31, 2010 memo. The subject line of that memo

specifically referred to the “Claims Submitted” under the various

plans. In this memo, the Plan Administrator acknowledged

Plaintiffs’ belief that they may have severance claims and

reported that PNC disagreed with Plaintiffs’ belief. The memo

stated, “If you believe PNC’s position is incorrect, you are

entitled to file a claim under those plans with the Plan

Administrator and/or the relevant plan Committee.” However, the

memo went on to state, “The Plan Administrator and the respective

plan Committee will treat your previous submission as a ‘claim’

under the plans you designated, unless you notify me that you

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wish to withdraw one or more of those claims.” The Plan

Administrator stated that “The Plan Administrator and the

respective plan Committee have 90 days from the date of your

claim to review it, and 30 days after making a determination to

respond to you in writing.” In deciding to treat the March 15

and 16 letters as “claims,” and specifically noting that the

Committee would have to respond to the claims within the time set

forth in section 5.2, the Committee waived any formal

requirements for claims that were not met and resolved to treat

the letters as properly-filed claims. Neither party contends

that Plaintiffs withdrew any claims. Accordingly, it appears

that the claims were received by the Committee before March 31,

2010. 

Defendants argue that the claims should not be deemed

approved because Plaintiffs’ claims were not meritorious and were

“gotcha” arguments (by which Defendants mean Plaintiffs are

seeking to exploit a technicality).3 However, to the extent that

they are procedural or “gotcha” arguments, they are ones

permitted by the National City Plan, which provided for an

automatic procedural approval of the claims after a certain

amount of time had passed independent of the merits. 

Accordingly, if Defendants failed to deny the claims within the

time allotted, “the claim[s] shall be deemed to have been

approved,” regardless of whether Plaintiffs’ claim would have

been approved by the Committee. (Docket No. 51, Exhs. 1 & 2 at §

5.2.) For purposes of the “deemed . . . approved” language, it

is irrelevant whether Plaintiffs would have been successful in

3

 Merriam Webster defines “gotcha” as “an unexpected usually

disconcerting challenge, revelation, or catch; also: an attempt

to embarrass, expose, or disgrace someone (as a politician) with

a gotcha.” See http://www.merriam-webster.com/dictionary/gotcha.

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their claims, so Defendants’ argument about whether Plaintiffs

were terminated has no place in this discussion. 

Defendants also argue that the March 15 and 16 letters were

not claims, but rather that the subsequently-submitted “Claim

Forms” were the “claims” for purposes of determining when the

clock began to run under section 5.2. This is not supported by

the language of the National City Plan or by the language of the

March 31, 2010 letter. The National City Plan provides that the

clock begins to run on the Committee’s receipt “of the claim”

with a small “c” and does not define claim to mean claim form,

but merely says that a “Participant may make a claim for

severance benefits under this Plan by submitting a written

request to the Committee on the form supplied for this purpose.” 

(Docket No. 51, Exhs. 1 & 2 at § 5.1 (emphasis added).) In the

March 31, 2010 memo, the Plan Administrator distinguishes between

small “c” claims and capital “C” “Claim Forms.” The memo

provided that the March 15 and 16 letters were to be treated as

“claims” and that the “official ‘Claims Forms,’” if completed,

were for the purpose of “facilitat[ing] the claim process” and

“enabl[ing] the Plan Administrator and the respective plan

Committee to fully consider your claim based upon all of the

facts and circumstances.” The Plan Administrator explained that

the Claim Forms did not have to be completed and if they were

not, “a determination under the plans will be made based on the

information you previously submitted.” The Plan Administrator

then went on to set forth the amount of time the Committee had to

respond in writing. The Plan Administrator did not say that the

Committee had 90 days from the date of the “Claim Form” to review

it and then 30 days to respond, but rather said that the

Committee had 90 days from the “claim,” which is the same term

that the Plan Administrator applied to the March 15 and 16

letters.

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Because the letters were treated as claims, and the letters

were received by the Committee before March 31, 2010, the

Committee had to send a notice of denial and Plaintiffs had to

receive such notice at least by July 29, 2010 (120 days after the

Committee received the claims) in order to avoid the operation of

the “deemed approved” provision in the National City Plan. There

were no denials issued until August 18, 2010 at the earliest. 

Accordingly, as of July 29, 2010, the claims were deemed approved

by whichever version of the National City Plan was in effect at

that time. 

The motion for partial summary judgment specifically seeks

judgment on Plaintiffs’ claim that their claims were deemed

approved under the 2005 version of the National City Plan, so the

next relevant question is whether that version of the National

City Plan was in existence at the time. In denying Plaintiffs’

appeal, the Committee determined that the 2005 version of the

National City Plan did not exist during the relevant time period

because it had been amended by the 2008 version. The question of

whether the 2005 version of the National City Plan was

effectively amended, though implicating the question of whether

the claims can be deemed approved, does not fall within the

relatively straightforward time calculation of Section 5.1, so

there is still a question of what standard of review applies to

that determination. However, in light of the fact that either

the 2005 version or the 2008 version of the National City Plan

was in effect, and under either plan, the claims were deemed

approved as of July 29, 2010 at the latest, the subsequent

decisions by the Committee were unauthorized and are not entitled

to any deference. Accordingly, the question before the Court is

whether Plaintiffs have demonstrated as a matter of law that the

2005 version of the National City Plan was in effect in 2010. 

Defendants argue that the 2005 version of the National City

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Plan was properly amended by the 2008 version, and accordingly,

the 2005 version was not in effect after that date. Plaintiffs

argue that the Defendants’ attempt to enact the 2008 version of

the National City Plan was ineffective because the amendment

occurred during a “Protection Period.” Article 15 of the 2005

version of the National City Plan provides that it may be amended

or discontinued, but provides the following limitation: “This

Plan shall not, however, be amended, modified or discontinued

after the Effective Date until the later of the end of the

Protection Period or such time as all claims payable hereunder

have been fully discharged.” (Docket No. 51, Exh. 1 at § 15.) 

Both parties agree that the 2005 version of the National City

Plan could not have been amended during a Protection Period. The

parties dispute, however, the date on which the Protection Period

commenced, or in other words, which date was the Effective Date. 

The Effective Date is defined as follows “In the event a Change

in Control ultimately results from discussions or negotiations

involving the Corporation or any of its officers or directors,

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

uninterrupted discussions or negotiations commenced.” (Id. at §

2.1(i).) The Change in Control at issue here was the December

31, 2008 acquisition of National City by PNC. 

Plaintiffs argue that the “Effective Date and the resulting

limitation on Defendants’ ability to amend the 2005 Plan was

triggered no later than September 29, 2008,” the day before the

September 30, 2008 amendment. (Docket No. 53 at 15.) As

evidence, Plaintiffs point to a presentation made on September

29, 2008 by the investment banking firm of Goldman Sachs to

National City regarding potential transaction structures and

potential acquirers. (Docket No. 51, Exh. 18D.) Plaintiffs also

cite to a PNC news release stating that as of October 24, 2008,

PNC and National City Corporation had announced that they had

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signed a definitive agreement for PNC to acquire National City.

(Docket 53, Exh. 19.) 

Defendants dispute that the September 29, 2008 presentation

demonstrates what Plaintiffs claim it demonstrates, and

Defendants also dispute Plaintiffs’ interpretation of the plan’s

definition of “Effective Date.” Defendants argue that the

Effective Date was October 3, 2008, three days after the

September 30, 2008 amendment. (Docket No. 61 at 14.) That date

is based on an email from a PNC employee to another PNC employee

sent on August 2, 2010 that was then forwarded to the Plan

Administrator on September 29, 2010. That email states, “We were

first notified that another process was going to take place

regarding NCC on October 3, 2008 and we signed a confidentiality

agreement on October 5, 2008 to enter the process.” (Docket No.

51, Exh. 36.) Defendants also point out that the September 29,

2008 presentation refers to “potential strategic partners” and

was a part of a presentation involving several alternative plans,

only one of which involved selling the company. (Docket No. 61

at 16.) 

The plan language at issue is the following: 

“Effective Date”. In the event a Change in Control

ultimately results from discussions or negotiations

involving the Corporation or any of its officers or

directors, the “Effective Date” of such Change in

Control shall be the date uninterrupted discussions or

negotiations commenced.

(Docket No. 51, Exh. 1 at § 2.1(i).) Plaintiff argues that this

language should be interpreted to include discussions with the

investment banking firm of Goldman Sachs, even if the eventual

acquisition partner, PNC, was not a party to these discussions. 

Even if the Court accepts Plaintiffs’ interpretation of the plan,

Plaintiffs have failed to demonstrate that any discussions

between National City and Goldman Sachs that occurred on

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September 29, 2008 ultimately resulted in the Change in Control. 

Viewing the presentation in the light most favorable to the nonmoving party, the reference to potential sale partners including

PNC does not conclusively demonstrate that there were discussions

(much less ongoing discussions) between National City and Goldman

Sachs as to the potential sale to PNC as early as September 29,

2008, nor is there evidence that Goldman Sachs acted as an agent

for the sale so that any discussions between Goldman Sachs and

National City could result in a sale to PNC. These things may,

in fact, be true, but the current record does not establish them

to be so. 

While Plaintiffs mention in their briefs that they believe

they are entitled to discovery on this issue and others, their

motion for such discovery was filed separately and will be

addressed separately. Of course, in the absence of any facts

which such discovery might produce, the Court cannot grant

Plaintiffs’ summary judgment to the extent that such facts are

necessary in order to decide the summary judgment motion. 

Accordingly, because the Court is unable to determine as a

matter of law that the 2008 amendment was ineffective, Plaintiffs

have failed to demonstrate at this time that their claim should

be deemed approved pursuant to the 2005 version of the National

City Plan. The Court recommends that Plaintiffs’ motion for

partial summary judgment be denied as to Count VII.

B. Whether the Second Set of Claims Should Be Deemed

Approved Under the Red Capital Plan

Plaintiffs have also asserted claims in this litigation

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

Capital Plan"). Like the National City 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).) Also like the National City Plan, the Red

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Capital Plan provides that claims for severance benefits may be

deemed approved if a determination is not made within certain

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.) This provision, by its language, provides for

automatic approval of a claim, independent of the merits of the

claim, and without the exercise of any decision-making,

discretionary or otherwise. As discussed in the previous

section, where, as here, there is a “deemed approved” provision

that operates automatically and not as a matter of discretion,

the Court exercises de novo review to determine whether the claim

should have been deemed approved in accordance with the plan

language. 

The parties do not dispute that Plaintiff Russi submitted a

claim on June 16, 2010 and that Plaintiff Jones submitted a claim

on June 24, 2010. Further, Defendants do not dispute Plaintiffs’

argument that Defendants failed to respond to those claims within

the time proscribed in the Red Capital Plan. However, Defendants

contend that the claims cannot be deemed approved because the Red

Capital Plan was rescinded on April 16, 2010. 

Plaintiffs Jones and Russi argue that Defendants, by

responding to the other Plaintiffs’ claims under the Red Capital

Plan, have essentially admitted the plan’s continued viability

or, at least, Defendants’ obligation to respond. Plaintiffs have

cited no legal authority for this argument, and the Court is not

aware of any legal authority that supports this position. 

Defendants’ act of responding to other Plaintiffs’ claims cannot

create a contractual duty if none existed. 

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Plaintiffs also argue that the fact that Defendants directed

Plaintiffs to file claims in accordance with the claims process

estopped Defendants from claiming they had no obligation to

respond to Plaintiffs’ claims. Equitable estoppel may be

asserted in ERISA cases. Bloemker v. Laborers' Local 265 Pension

Fund, 605 F.3d 436, 440 (6th Cir. 2010) (recognizing that

equitable estoppel is a viable theory in ERISA cases involving

welfare plans and extending that to pension cases “where the

representation was made in writing and where the plaintiff can

demonstrate extraordinary circumstances”). However, the elements

of equitable estoppel must be met. Those elements are the

following: 

(1) there must be conduct or language amounting to a

representation of material fact; (2) the party to be

estopped must be aware of the true facts; (3) the party

to be estopped must intend that the representation be

acted on, or the party asserting the estoppel must

reasonably believe that the party to be estopped so

intends; (4) the party asserting the estoppel must be

unaware of the true facts; and (5) the party asserting

the estoppel must reasonably or justifiably rely on the

representation to his detriment.

Sprague v. Gen. Motors Corp., 133 F.3d 388, 403 (6th Cir. 1998)

(citation omitted). Plaintiffs have made no attempt to satisfy

those elements, and in particular have not demonstrated that they

justifiably relied upon the Defendants’ instructions to their

detriment. 

Lastly, Plaintiffs argue that Defendants’ attempt to rescind

the Red Capital Plan was ineffective. Like the National City

Plan, the Red Capital Plan could be amended or discontinued, but

it could not be amended or discontinued “after the Effective Date

until the later of the end of the Protection Period or such time

as all claims payable hereunder have been fully discharged.” 

(Docket No. 51, Exh. 3 at § 15.) Plaintiffs argue that

Defendants’ attempt to rescind the Red Capital Plan on April 16,

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2010 occurred during a Protection Period leading up to ORIX’s

acquisition of some of Red Capital’s assets in May 2010. 

Defendants argue that there was no Protection Period because the

May 2010 acquisition did not constitute a Change in Control under

the plan terms. Plaintiffs have failed to demonstrate that there

is no issue of material fact on this issue or that the Court can

determine, as a matter of law, that a Change in Control occurred

as defined in the Red Capital Plan. Absent that showing, the

Court cannot conclude for purposes of this motion for partial

summary judgment that the April 16, 2010 discontinuation of the

plan occurred during a Protection Period and was invalid. 

IV. Conclusion

For all the foregoing reasons, the Magistrate Judge

RECOMMENDS that the Motion for Partial Summary Judgment (Docket

No. 53) be DENIED. 

Defendants requested oral argument to the extent that oral

argument would assist the Court in analyzing the record. The

Court does not find that oral argument would assist the Court in

analyzing the record and accordingly does not recommend oral

argument. 

V.

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

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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

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

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