IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

NINAN CHACKO, §

§

Plaintiff, §

§

VS. § NO. 4:04-CV-886-A

§

SABRE, INC., ET. AL, §

§

Defendants. §

MEMORANDUM OPINION

and

ORDER

Came on for consideration the motion of defendants, Sabre,

Inc.; Sabre, Inc. Severance Plan; Manager, Corporate Employee

Relations of Sabre, Inc., as Plan Administrator of Sabre, Inc.

Severance Plan ("Plan Administrator"); Benefits Administration

Committee of Sabre, Inc.; Michael Haefner, David Schwarte, and

Eric Speck, as members of the Benefits Administration Committee

of Sabre, Inc.; Benefits Administration Committee of Sabre, Inc.

Appeal Committee; Joseph V. Libonati, as Chairman-Appeals

Committee of Sabre, Inc.; Sabre, Inc. Executive Severance Policy

for Senior Vice Presidents; and, Senior Vice President of

Compensation, Benefits & Equity of Sabre, Inc., as Plan

Administrator and Named Fiduciary of Sabre, Inc. Severance Policy

for Senior Vice Presidents, (collectively, "defendants"), for

summary judgment. The court, after having considered the motion,

the response of plaintiff, the reply of Sabre, the evidentiary

material submitted by the parties in support of their respective

positions, the record, and the legal authorities provided by the

 

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2

plaintiff during the telephone conference between the court and

the attorneys on October 3, 2005, concludes that the motion

should be granted, except as to the request for attorneys' fees.

I.

Plaintiff's Complaint 

Plaintiff, Ninan Chacko, ("Chacko") filed his original

complaint on November 26, 2004. On May 16, 2005, Chacko filed an

amended complaint that remains his active pleading. He asserts

claims for: (1) wrongful denial of benefits under § 502(a)(1)(B)

of the Employee Retirement Income Security Act ("ERISA"), 29

U.S.C. § 1132(a)(1)(B); (2) discrimination for the purpose of

interfering with the exercise of rights under an employee benefit

plan in violation of ERISA § 510, 29 U.S.C. § 1140; and (3)

penalties for failure to supply plan information pursuant to

ERISA § 502(c), 29 U.S.C. § 1132(c).

II.

Grounds for the Motion

Defendants move for summary judgment on the following

grounds:

1. As to the claim for wrongful denial of benefits,

defendants urge that (a) there is no evidence that the denial of

benefits was an abuse of discretion by the Plan Administrator,

(b) the claim fails with respect to any defendant who did not

exercise actual control with regard to the challenged benefits

determination, and (c) Chacko had no vested rights to the

severance benefits he seeks;

 

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2. As to the claim for discrimination, defendants urge that

Chacko has offered no evidence of intent to improperly interfere

with a right to benefits to which he was otherwise entitled; and

3. As to the claim for penalties, defendants urge that (a)

Chacko was provided a copy of the requested plan documents within

thirty days of each such request, and (b) any documents not

produced to Chacko were either beyond the document production

requirements of ERISA § 502(c) or were not requested by Chacko.

In addition, defendants seek summary rulings awarding them

attorneys' fees and costs under 29 U.S.C. § 1132(g)(1). 

III.

Summary Judgment Principles

A party is entitled to summary judgment on all or any part

of a claim as to which there is no genuine issue of material fact

and as to which the moving party is entitled to judgment as a

matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 247 (1986). The moving party has the initial

burden of showing that there is no genuine issue of material

fact. Anderson, 477 U.S. at 256. The movant may discharge this

burden by pointing out the absence of evidence to support one or

more essential elements of the non-moving party's claim "since a

complete failure of proof concerning an essential element of the

nonmoving party's case necessarily renders all other facts

immaterial." Celotex Corp. v. Catrett, 477 U.S. 317, 323-25

(1986). Once the moving party has carried its burden under Rule

56(c), the non-moving party must do more than merely show that

 

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there is some metaphysical doubt as to the material facts. 

Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.

574, 586 (1986). The party opposing the motion may not rest on

mere allegations or denials of pleading, but must set forth

specific facts showing a genuine issue for trial. Anderson, 477

U.S. at 248, 256. To meet this burden, the nonmovant must

"identify specific evidence in the record and articulate the

'precise manner' in which that evidence support[s] [its]

claim[s]." Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994). 

An issue is material only if its resolution could affect the

outcome of the action. Anderson, 477 U.S. at 248. Unsupported

allegations, conclusory in nature, are insufficient to defeat a

proper motion for summary judgment. Simmons v. Lyons, 746 F.2d

265, 269 (5th Cir. 1984).

 

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The court is treating the stipulated facts recited in the joint

pretrial order as part of the summary judgment record.

5

IV.

Undisputed Evidence

The following is an overview of the evidence pertinent to

the motion for summary judgment that is undisputed in the summary

judgment record.1

A. Chacko's Involuntary Termination and the Competing

Severance Package.

Prior to September 29, 2003, Chacko had been employed by

Sabre, Inc., for nearly thirteen years. On that date Chacko was

informed that his position as a senior vice president with Sabre,

Inc., was being involuntarily terminated, effective at a future

date. As of September 29, 2003, Sabre, Inc., had in effect a

Severance Plan ("Severance Plan") providing the terms and

conditions upon which Sabre, Inc., would grant involuntarily

terminated employees severance benefits. The Severance Plan

provided for twenty-six weeks of salary benefits, paid in a lump

sum, conditioned upon the execution by the terminated employee of

an agreement and general release, in a form determined by Sabre,

Inc., that releases all causes of action and claims against the

employer and related parties ("AGR").

On September 30, 2003, Sabre, Inc., informed Chacko that he

would be offered severance benefits that were the equivalent of

benefits contemplated by a plan that became effective October 1,

2003, titled "Sabre Inc. Executive Severance Policy for Senior

Vice Presidents" (the "Executive Plan") rather than the benefits

 

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contemplated by the Severance Plan. The Executive Plan provided

(a) for thirty-two weeks of salary benefits, not payable in a

lump sum, but, rather, over an eight-month period, and (b) that

Sabre, Inc., would only pay severance benefits if the employee

first signed an AGR containing non-compete and non-solicitation

provisions ("Expanded AGR"). Sabre, Inc., provided a proposed

Expanded AGR to Chacko, which he declined to sign. 

B. The Severance Plan is Amended, and Chacko Separates from

Sabre.

On October 7, 2003, the Severance Plan was amended to

include a requirement that, as a condition to the receipt of

benefits, the beneficiary sign the equivalent of the Expanded

AGR, and that, at the discretion of Sabre, Inc., severance

benefits may be paid either in a lump sum or in periodic

installments ("Amended Plan"). On October 17, 2003, Chacko

separated from Sabre, Inc. 

C. Chacko Applies for a Severance Package Under the Terms

of the Severance Plan and His Subsequent Administrative

Appeal.

On November 3, 2003, Chacko submitted a claim for severance

benefits. He said that he would sign the AGR, and demanded

payment of benefits in a lump sum. In his claim for benefits

Chacko requested copies "of all documents governing the operation

of the Severance Plan, copies of the latest annual report (Form

5500 Series) filed by the Severance Plan with the U.S. Department

of Labor, and any summary plan descriptions." Defs.' App. at 59. 

On November 6, 2003, Chacko's claim for benefits was denied. Not

only did the Plan Administrator conclude that the execution of an

 

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Expanded AGR was required because of the terms of the Amended

Plan, it also took the position that the Severance Plan always

authorized the Plan Administrator to condition benefits on the

execution of the Expanded AGR. A copy of the Amended Plan was

enclosed with the denial letter, along with a copy of the most

recent Form 5500 filing. 

D. Chacko's Administrative Appeal.

By letter dated December 30, 2003, Chacko indicated he

wished to appeal the November 6, 2003, denial of benefits. He

requested copies of certain documents, including "[c]opies of all

plan documents . . . in effect from January 1, 1999 until October

7, 2003," documents "reviewed or relied upon by the plan

administrator in making the initial adverse determination to

deny" his claim, and documents "considered . . . in the course of

making Mr. Chacko's benefit determination." Defs.' App at 73. 

On January 6, 2004, Chacko was provided with various

documents, including copies of the Severance Plan, and the

Amended Plan. On January 9, 2004, Chacko appealed to the Benefit

Appeals Committee, reiterating his objection to the requirements

that he sign the Expanded AGR and receive payment of severance

benefits over eight months as opposed to in a lump sum. Chacko's

appeal was denied on March 10, 2004.

 

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 In his amended complaint, Chacko alleged that "Defendants

wrongfully denied him benefits under the General Severance Plan and

VP Severance Plan [i.e., the Executive Plan]." Am. Compl. at 9, ¶

19. However, Chacko clarified in his response that he "does not

contest his lack of entitlement to benefits under the VP Severance

Plan [i.e., the Executive Plan]." Pl.'s Resp. at 4 n.1. Apparently,

Chacko now realizes that he never made a claim under the Executive

Plan, only the Severance Plan. 

8

V.

Analysis

A. Claim For Improperly Denied Benefits Under ERISA

§ 502(a)(1)(B).

Chacko asserts that he was wrongfully denied benefits under

the Severance Plan.2 ERISA § 502(a)(1)(B) provides that:

A civil action may be brought . . . by a

participant or beneficiary . . . to recover

benefits due to him under the terms of his

plan, to enforce his rights under the terms

of the plan, or to clarify his rights to

future benefits under the terms of the plan.

29 U.S.C. § 1132(a)(1)(B). Defendants argue in their motion that

Chacko is not due any benefits under the Severance Plan because

it was superseded by the Amended Plan. Defendants assert that

there is no evidence showing that the Plan Administrator's

factual determinations were not fully supported by the

administrative record, or that the Plan Administrator's

interpretation of either Plan was an abuse of discretion. Thus,

defendants' motion puts the burden on Chacko to adduce summary

judgment evidence that would support his claim that defendants

wrongfully denied him severance benefits. For the reasons stated

below, the court concludes that there is no summary judgment

evidence to support Chacko's claim for wrongful denial of

benefits. 

 

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 Section 7, entitled "Plan Administrator's Discretion," states: 

Final determination of all benefits will be made in

accordance with the written terms of this severance plan. 

The Plan Administrator shall have the discretionary

authority to determine all questions concerning an

employee's eligibility for benefits and the amount of

benefits payable (if any), to determine and resolve all

questions (factual or otherwise) relating to the severance

plan , and to interpret, in the Plan Administrator's sole

discretion, any and all terms of the severance plan.

Defs.' App. at 54.

9

1. Standard of Review.

A denial of ERISA benefits by a plan administrator

challenged under ERISA § 502(a)(1)(B) is reviewed by the court

under a de novo standard unless the plan gives the administrator

"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). Defendants correctly assert

that the Severance Plan grants such authority.3 Defs.' App. at

92.

Where, as here, the administrator is vested with such

discretionary authority, the administrator's interpretation of

the plan is reviewed under an abuse of discretion standard. 

Gosselink v. AT&T, Inc., 272 F.3d 722, 726 (5th Cir. 2001).

Therefore, the court's task as to the legal determinations is

two-fold: "First, a court must determine the legally correct

interpretation of the plan. If the administrator did not give

the plan the legally correct interpretation, the court must then

determine whether the administrator's decision was an abuse of

discretion." Wilbur v. Arco Chem. Co., 974 F.2d 631, 637 (5th

 

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 Had Chacko actually been terminated on September 29, 2003, the

court would be inclined to agree with his contention that he was

wrongfully denied severance benefits. See Cirulis v. Unum Corp., 321

F.3d 1010 (10th Cir. 2003).

10

Cir. 1992). With regard to any factual determinations made by

the administrator during the course of Chacko's appeal, the court

will also review these under an abuse of discretion. See

Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc., 168 F.3d

211, 213 (5th Cir. 1999).

2. The Plan Administrator's Factual Determination as

to Date of Termination of Employment Was Not an

Abuse of Discretion.

In reaching its decision, the Plan Administrator found as a

fact that Chacko's employment was terminated on October 17, 2003. 

Chacko disputes that finding. He contends the date of

termination was September 29, 2003. And, he alleges that, if he

was terminated on that date, then his claim to severance benefits

would have vested prior to the creation of the Amended Plan.4

Yet, when Chacko made his administrative appeal, he did not

dispute that he was terminated on October 17, 2003. In fact, he

conceded in his benefits appeals letter that "October 17, 2003

[was] the official date of Mr. Chacko's termination." Pl.'s App.

at 47. Inasmuch as there is nothing in the record to suggest

that the Plan Administrator abused its discretion when it found

that Chacko was terminated on October 17, 2003, the court accepts

that finding as undisputed.

3. The Amended Plan Controls.

 

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 In relevant portion, Section 8 stated that: 

Participants have no vested right to benefits under the

severance plan. Sabre may amend or terminate the

severance plan at any time. Amendment or termination may

be prospective or retroactive in the discretion of the

Company. Amendment or termination shall be by action of

the Benefits Administration Committee . . . and shall be

effective on the date specified therein.

Defs.' App. at 54. 

11

So long as an employer follows ERISA's procedures for

amending a severance plan, see 29 U.S.C. § 1102(b)(3), the

employer generally is afforded wide latitude, see Wise v. El Paso

Natural Gas, 986 F.2d 929, 935 (5th Cir. 1993) ("ERISA simply

does not prohibit a company from eliminating previously offered

benefits that are neither vested nor accrued"). The Severance

Plan gave Sabre, Inc., the right unilaterally to amend the plan

at any time.5

Severance plans are welfare plans under ERISA. In

establishing ERISA, "Congress evidenced its recognition of the

need for flexibility in rejecting the automatic vesting of

welfare plans." Wise, 986 F.2d at 935 (quoting Moore v.

Metropolitan Life Ins. Co., 856 F.2d 488, 492 (2d Cir. 1988)). 

Chacko's rights under any version of Sabre, Inc.'s severance

plans did not vest when he learned of his intended termination in

September 2003. See Whittenmore v. Schlumberger Tech. Corp., 976

F.2d 922, 923 (5th Cir. 1992) (upholding severance plan

amendments executed after beneficiaries learned of employer's

decision to eliminate their positions via divestiture). Because

he had no vested right under any severance plan until he was

 

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 The amended language stated that: 

Sabre pays severance to [involuntarily terminated

employees] EXCEPT when 

. . . .

An employee who is otherwise eligible for severance fails

to execute an Agreement and General Release (AGR) in a

form determined by Sabre that releases all causes of

action and claims against Sabre and related parties and

may include non-competition/or non-solicitation

provisions, as well as any other provisions Sabre deems

necessary in it sole discretion. 

Defs.' App. at 152 (emphasis in original).

12

terminated in October 2003, to avoid applicability of the Amended

Plan Chacko would have to show some abnormality with the

amendment process itself. 

The record shows that the amendment procedures prescribed by

the Severance Plan were followed. After the amendment was

executed, Chacko was notified. See Curtis-Wright Corp. v.

Schoonejongen, 514 U.S. 73, 84 (1995). In sum, the Amended Plan

became effective before Chacko's employment terminated. 

Chacko has presented no evidence that rebuts or otherwise

challenges the evidence upon which the Plan Administrator based

his decision that the Amended Plan required the execution of the

Expanded AGR.6 It clearly does contain such a requirement. 

Also, Chacko had no right to demand payment in a lump sum because

under the Amended Plan whether severance benefits were paid in a

lump some or periodically was left to Sabre, Inc.'s discretion. 

Therefore, the court concludes the Plan Administrator's decisions

that the Amended Plan applied and that its terms required the

Expanded AGR and authorized the periodic payment of benefits are

 

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In its relevant portion, Section 510 reads as follows: 

It shall be unlawful for any person to discharge, fine,

suspend, expel, discipline, or discriminate against a

participant or beneficiary for exercising any right to

which he is entitled under the provisions of an employee

benefit plan . . . or for the purpose of interfering with

the attainment of any right to which such participant may

become entitled under the plan . . . .

29 U.S.C. § 1140. 

13

legally accurate. Certainly those decisions were not

unreasonable.

B. Discrimination Claim Under ERISA § 510.

The court now considers whether Chacko has proffered any

summary judgment evidence in support of his claim against

defendants under ERISA § 510, 29 U.S.C. § 1140.7 The Fifth

Circuit has stated that "[t]o sustain a valid § 510 claim, an

employee must show: (1) prohibited (adverse) employer action (2)

taken for the purpose of interfering with the attainment of (3)

any right to which the employee is entitled." Bodine v.

Employers Cas. Co., 352 F.3d 245, 250 (5th Cir. 2003). From the

following, the court concludes that there is no summary judgment

evidence to support Chacko's claim for discrimination under

§ 510. 

1. There is no Evidence of Discriminatory Action.

Chacko has failed to adduce summary judgment evidence

showing any specific discriminatory intent on the part of

defendants. The fact that Sabre, Inc., amended the plan is

insufficient because "ERISA does not broadly prevent an employer

 

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from 'discriminating' in the creation, alteration or termination

of employee benefits plans." McGann v. H & H Music Co., 946 F.2d

401, 408 (5th Cir. 1991). Since Chacko was not entitled to any

ERISA benefit at the time the plan was amended, it is flawed to

suggest that the amendment was itself discriminatory. See

Curtis-Wright Corp., 514 U.S. at 78. Even assuming there was a

connection between Chacko's termination and the amendment of the

Severance Plan, there is no fact from which an improper

discriminatory purpose could reasonably be inferred. 

 

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 Section 502(c) states, in relevant part, that a plan

administrator 

who fails or refuses to comply with a request . . . within

30 days after such request may in the court's discretion

be personally liable to such participant or beneficiary in

the amount of up to $100 a day from the date of such

failure or refusal, and the court may in its discretion

order such other relief as it deems proper.

29 U.S.C. § 1132(c)(1)(B).

15

2. There is no Evidence of Improper Interference.

Chacko's facts also do not show that defendants' actions

were designed to interfere with his attainment of benefits. In

fact, Chacko could have received a severance package had he

simply performed the condition precedent: execution of the

Expanded AGR. Thus, Chacko fails on this second prong as well. 

3. Chacko Was Not Entitled to Benefits.

Finally, Chacko was never entitled to any benefit under the

Severance Plan that would make § 510 applicable. Chacko could

only become "entitled pursuant to an existing, enforceable

obligation assumed by [Sabre]." McGann, 946 F.2d at 405. None

of the evidence highlighted by Chacko demonstrates that such an

obligation on the part of any of the defendants ever had, or ever

would, exist. 

C. Penalties Claim Under ERISA § 502(c)(1)(B).

In his third claim Chacko seeks penalties under ERISA

§ 502(c)(1)(B), 29 U.S.C. § 1132(c)(1)(B), for defendants'

alleged failure timely to furnish copies of the Severance Plan

and the Executive Plan within 30 days following a written request

on November 3, 2003.8 As a civil penalty provision, the court

 

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In response to Chacko's document request of November 3, 2003,

defendants responded by furnishing a copy of the Amended Severance

Plan. Since the ERISA § 104(b)(4) only requires Sabre to "furnish a

copy of the latest updated summary plan description," it would appear

Sabre complied. Thus, the court does not find any grounds for

penalties with regard to the November 3, 2003, request. Next, Chacko

claims he requested a copy of the Executive Plan on December 30,

2003. The record shows that the Executive Plan was not specifically

requested. In addition, since Chacko never made a claim under the

Executive Plan it is entirely reasonable for the Plan Administrator

not to produce a copy of it. 

16

must strictly construe ERISA § 502(c). See Fisher v.

Metropolitan Life Ins. Co., 895 F.2d 1073, 1077 (5th Cir. 1990). 

The court will not impose penalties unless Chacko specifically

requested the information that he claims was not provided. See

Matassarin v. Lynch, 174 F.3d 549, 570 (5th Cir. 1999). There is

no summary judgment evidence of the bad faith required to recover

statutory penalties.9

D. Attorneys' Fees and Costs.

Finally, defendants seek costs of action and attorneys' fees

pursuant to ERISA § 502(g)(1), 29 U.S.C. § 1132(g)(1).

Rule 54(d)(1) of the Federal Rules of Civil Procedure

provides that, "[e]xcept when express provision therefor is made

either in a statute of the United States or in these rules, costs

other than attorneys' fees shall be allowed as of course to the

prevailing party unless the court otherwise directs . . . ." In

a sense, § 502(g)(1) is an "express provision" as contemplated by

Rule 54(d)(1) inasmuch as it is a statutory directive that gives

the court discretion to tax costs of action against either party. 

The court has concluded that costs of action should be taxed

against plaintiff in favor of defendants.

 

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Rule 54(d)(2) of the Federal Rules of Civil Procedure

contemplates that a request for recovery of attorneys' fees, such

as defendants are making, be made by a motion. Typically, the

motion would be made post-judgment. However, the court knows of

no reason why the motion cannot be made as part of a motion for

summary judgment. Therefore, the court interprets the contents

of defendants' motion as asking the court to make a discretionary

ruling, based on the record that now exists, as to whether an

award of attorneys' fees should be made in favor of defendants

against plaintiff and, if so, the amount that should be awarded. 

After having considered the factors the Fifth Circuit has

directed be considered, see Iron Workers Local No. 272 v. Bowen,

624 F.2d 1255, 1266 (5th Cir. 1980), the court has concluded that

defendants should not be awarded attorneys' fees against

plaintiff.

VI.

Plaintiff's Motion for Partial Summary Judgment

In addition to the motion of defendants for summary

judgment, the court has before it for decision a motion filed by

Chacko for partial summary judgment on the issue of penalties

under 29 U.S.C. § 1132(c)(1)(B). For reasons given above, the

court concludes that Chacko's motion should be denied.

VII.

O R D E R

For the reasons discussed herein, 

 

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The court ORDERS that all claims asserted by Chacko against

defendants in the captioned action be, and are hereby, dismissed.

The court further ORDERS that plaintiff's motion for partial

summary judgment be, and is hereby, denied.

The court further ORDERS that defendants recover from Chacko

costs of court incurred by them, but that they be denied any

recovery of attorneys' fees.

SIGNED October 5 , 2005.

 /s/ John McBryde 

JOHN McBRYDE

United States District Judge

 

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