ar

E, Count VII and LX - ERISA Claims Regarding Profit Sharing Program

QSR argues that it is entitled to summary judgment on Counts VIII and IX because the
monthly bonus to which these counts refer has never been a retirement plan. QSR further argues
that Massaro has the burden of proof in establishing that the discretionary monthly bonuses paid
to some QSR employees was an ERISA-governed plan, and he has failed to meet his burden.
This Court agrees.

ERISA defines an employee pension plan as:

any plan, fund or program . . . established or maintained by an employer, . .

(which) by its expressed terms or as a result of surrounding circumstances . . . (i)

provides retirement income to employees; or (ii) results in a deferral of income by

employees for periods extending to the termination of covered employment or

beyond, regardless of the method of calculating the contributions made to the

plan, ... or the methods of distributing benefits to the plan.
29 U.S.C, § 1002(2)(A). Further, bonus plans, defined as “payments made by an employer to
some or all of its employees as bonuses for work performed,” 29 C.F.R. § 2510.3-2(c), are not
included in this definition. Because the record is devoid of information that would suggest the
Profit Sharing Program is an ERISA-governed benefit plan, this Court GRANTS summary
judgment in favor of QSR on Counts VIII and IX.
F. Counts X and XI - Promissory Estoppel and Breach of Contract Regarding Profit Sharing
Program

QSR moves for summary judgment on Counts X and XI, arguing that Massaro’s
promissory estoppel and breach of contract claims are barred by the integration clause of his

Employment Agreement and the parol evidence rule. For the reasons expressed above, see

supra note 10, this Court rejects QSR’s argument and finds that there are genuine issues of

-19-



ERISA by failing to provide him with benefits due under the QSR company-paid retirement plan
(the “Retirement Plan”) (Counts IV and V); (4) breached their promise that Massaro would
receive Retirement Plan benefits and are estopped from asserting that he is not a participant in
and entitled to benefits under the Retirement Plan (Count V1); (5) breached the Employment
Agreement between Massaro and the QSR/MED Defendants by failing to provide him with a
retirement plan and the benefits associated therewith (Count VI); (6) violated ERISA by failing
to provide him with benefits due under the QSR program that provided for the payment of
monthly bonuses (the “Profit Sharing Program”) (Counts VIL and LX); (7) breached their
promise that Massaro would receive Profit Sharing Program benefits and are estopped from
asserting that he is not a participant in and entitled to benefits under the Profit Sharing Program
(Count X); (8) breached the Employment Agreement by failing to provide Massaro with a profit
sharing program and the benefits associated therewith (Count XI); (9) defrauded Massaro (Count
XN); (10) breached the Employment Agreement by failing to provide Massaro with his eamed
sales commissions (Count XIII); (11) breached the Employment Agreement by failing to provide
him with thirty days written notice of termination and failing to pay him one year’s base salary
and one year’s commissions based on the highest consecutive twelve months of his employment
(Count XIV); and (12) violated the Illinois Wage Payment and Collection Act by failing to pay
him his earned vacation (Count XV). As to the Nationwide Defendants, Massaro claims that
they violated 29 U.S.C. § 1132(a)(1)(B) and (a)(3) when they, acting as alleged trustees or
fiduciaries, allegedly denied Massaro benefits from QSR’s 401{k) Plan (Counts | and II).

Each of the four QSR/MED Defendants move for summary judgment on all counts but

Count XIII (earned but unpaid sales commissions), and MED moves for summary judgment on

~13-



Events Leading to Massaro's Employment with OSR

From February 1994 to approximately March 1996, Massaro provided sales services to
QSR as an independent contractor through Barmascur International, Inc., of which Massaro was
a principal shareholder. As an independent contractor, Massaro was not cligible to receive, and
did not receive, QSR employec benefits. On February 1, 1996, Massaro entered into a Sales
Agreement by which he provided independent contractor sales representative services to MED.
The Sales Agreement did not require Massaro to solicit orders for MED over the entire Untied
States.

In March 1996, Massaro was offered employment with Helix Medical, Inc. (“Helix”), a
manufacturer of custom silicone rubber molded and extruded components and assemblies. At the
time Massaro was offered employment with Helix, Helix did not have a company-paid retirement
plan, but had a 401(k) plan in which Massaro could participate as an employee of Helix.
Following Massaro’s receipt of the offer of employment from Helix, on or around April 1, 1996,
Massaro informed the QSR/MED Defendants of his decision to accept Helix’s employment offer
and he informed them that he would no longer be able to provide sales services to QSR.
According to the QSR/MED Defendants, Massaro informed Kaiser that he would stop
performing independent contractor sales representative services for MED if QSR did not enter
into an employment agreement with Massaro prepared by Massaro and his attorneys
(“Employment Agreement”). According to Massaro, Kaiser thereafter told Massaro that Kaiscr
would like Massaro to accept employment with QSR and be responsible for the sale and
marketing of MED products. Massaro told Kaiser that as an employee of Helix, Massaro would

be eligible to participate in, and receive benefits associated with, Helix’s 401(k) plan. Massaro

4.



material fact regarding Counts X and XI. Summary judgment is therefore DENIED as these
counts.
G. Count XII - Fraud

In Count XII of the Amended Complaint, Massaro claims that QSR defrauded him in
connection with their unfulfilled promises concerning benefits he would receive upon
employment with QSR. As the facts determining the basis of this count are related or essentially
the same as the facts surrounding the promissory estoppel and breach of contract claims, this
Court finds that there are genuine issues of fact regarding the fraud claim as well. Therefore,
summary judgment is DENIED as to Count XII.
H. Count XIV - Breach of Contract Regarding Compensation Due upon Termination of
Employment Agreement

Count XIV is based on Massaro’s interpretation of the Employment Agreement. He
argues that the Employment Agreement provides for termination upon 30 days written notice,
payment to him of one year’s base salary, and one ycar’s commissions based on the highest
consecutive twelve months of Massaro’s employment. These terms, however, are containcd in
the early termination provision. Massaro further argues that this notice and payment provision is
not limited to termination of the Employment Agreement prior to April 1, 2001, but that it also
applies when the Employment Agreement terminates on April 1, 2001. Massaro’s argument is
bizarre. Il is true that the Employment Agreement provides that Massaro will work a minimum
of five years, and the parties could have chosen to extend his employment if they so desired.
They did not, however, and the clear meaning of the Employment Agreement is that Massaro’s

cmployment would end on April 1, 2001 unless QSR and Massaro agreed otherwise. Massaro’s

-20-



1, 11, TV, V, WIT, IX, XIV, and XV. Summary judgment is DENIED as to QSR on Counts Il, VJ,
VII, X, XT, and XII. In sum, QSR is the only defendant and the remaining counts against it are

Counts I, VI, VIL, X, XI, XI, and XII.

Enter:

David H. Coar
United States District Judge

Dated: September 12, 2002



“Against QSR for Violation of ERISA, 29 U.S.C. § 1132(a)(4) Failure to Provide Plan
Documents.” 29 U.S.C. § 1132(a)(4), however, is a subsection under “Persons empowered to
bring a civil action,” stating that an action may be brought “by the Secretary, or by a participant,
or beneficiary for appropriate relief in the case of a violation of 1025(c) of this title.” Sections
1024(b)(4) and 1132(c)(1) are the sections that cover the failure to provide plan documents, This
Court will not grant summary judgment against a plaintiff for the plaintiffs counsel’s mistake in
citing to the incorrect ERISA section when, as here, the Amended Complaint adequately puts
QSR on notice as to the conduct in question. Summary judgment, therefore, is DENIED as to
Count TIT.

C. Count VI - Promissory Estoppel Regarding Retirement Plan

In Count VI, Massaro claims that he reasonably relied to his detriment upon Kaiser’s oral
and written representations that Massaro was eligible to participate in the Retirement Plan, and
that QSR is estopped from asserting that Massaro is not a participant in, and not entitled benefits
under, an ERISA-governed (or, in the alternative, a non-ERISA) Retirement Plan.

QSR further argues that summary judgment should be granted on this count because
Massaro did participate in the existing QSR employee retirement benefit plan that included an
employer discretionary profit-sharing contribution feature and a 401(k) feature. As Massaro
points oul, however, he was told he would receive a company-paid retirement plan separate and
apart from the QSR 401(k) Plan. Further, Kaiser testified that the “retirement plan” to which the
QSR Handbook referred is not the same as the 401(k) Plan. Thus, Massaro has demonstrated a
genuine issue of fact concerning the existence of each element essential to his claim of

promissory estoppel regarding the Retirement Plan: (1) an ambiguous promise made by a party

-17-



regarding the disbursal of enrollment kits. Massaro disputes that the exhibits establish that QSR
was responsible for dispersing the kits, At all times, the Nationwide Defendants communicated
with QSR, as plan administrator, regarding the particulars of the Plan. QSR, in turn,
communicated with the Plan participants, If/when Massaro called NPS with a question regarding
the Plan, he was directed to contact QSR as the plan administrator.

Effective August 1, 1990, the Trustees of the 401(k) plan contracted with and directed
Nationwide Life to invest the funds of the 401(k) plan into a group annuity contract and the
Trustees selected a vanely of mutual fund options to be offered to participants. Contributions to
the Plan were then deposited with Nationwide and allocated to the funds selected by the
participants, Any transactions under the Plan were processed by Nationwide pursuant io QSR’s
instructions. Neither of the Nalionwide Defendants, however, had any discretion or authority to:
(a) select (i) the specific mutual fund into which a participant invested his or her deferred
compensation, or (ii) the percentages of the Plan funds directed to each mutual fund; and (b)
determine eligibility for bencfits under the Plan. QSR, as the plan administrator, had the sole
authority under the Plan to determine eligibility for benefits. Massaro even described
Nationwide Life’s role as “just a service that transferred the funds in and out of mutual funds and
money market funds and fixed funds.” Effective May 1, 1996, QSR amended its 401(k) plan
through the execution of the Adoption Agreement for Nationwide Life Insurance Company Basic
Non-Standardized 401(k) Profit Sharing Plan and Trust (“Adoption Agreement”). The QSR
Board of Directors exccuted the Adoption Agreement by Resolution on January 1, 1996. The
Resolution and Adoption Agreement specifically identify QSR as the plan administrator and

appointed Kaiser and Skuza as Trustees of the Plan, The Basic Plan bestowed upon QSR: “[the]

-9-



employment and supersedes all prior agreements; and that no amendment or modification of the
Employment Agreement shall be effective unless in writing executed by Massaro and by QSR’s
President. Art. TI, Sec. 7 of the Employment Agreement provides that Massaro shall receive
benefits as may be due him under QSR’s employee benefit programs. The Employment
Agreement does not state expressly that Massaro will be eligible for QSR’s paid medical, dental
and prescription services used by Massaro and his family,

Shortly after Massaro began his employment with QSR, Massaro received a copy of the
QSR Employee Handbook dated 4/1/92 (“Handbook”). QSR subsequently revised its Handbook
in 1997 (“Revised Handbook”). The Revised Handbook states that a company-paid retirement
plan is available for QSR employees. Kaiser never told anyone at QSR or at MED that Massaro
was not entitled to any of the benefits or programs reflected in the QSR Handbook or the MED
Handbook. The Handbook dated 4/1/92 provides that QSR provides a paid medical/dental plan
that covers medical, dental and prescription services used by the employee and his/her family.
Massaro chose not to participate in the QSR medical/dental plan and QSR agreed to pay Massaro
$250 per month towards his cost of a health plan.

During Massaro’s employment with QSR, he received the following benefits, which were
not stated expressly in his Employment Agreement but were stated in the QSR Handbook: a paid
$10,000 Term Life Insurance policy during his employment; paid holidays while he was an
employee; and paid vacation while he was an employee. Additionally, while the Employment
Agrecment states Massaro is to be paid his base salary in two weekly installments, Massaro’s pay

periods and pay day were weekly and on Fridays.’ There is no writing signed by Massaro and the

3 QSR sent Massaro’s checks to him in Illinois.

-6-



further stated that he was 46 years old and that, at this stage of his life, it was important to him to
have a retirement plan, a pension plan, and a profit sharing plan. Kasier then told Massaro that,
as an employee of QSR, Massaro would receive all the benefits provided to other QSR.
employees, including without limitation, an employee directed salary deferral 401(k) savings
plan by mean of which Massaro could direct a percentage of his salary on a tax-deferred basis
and receive employer contributions (“401 (k) Plan”), a company paid retirement plan
(“Retirement Plan”), a profit sharing program pursuant to which Massaro would be paid monthly
bonuses (“Profit Sharing Program”), and paid vacation. In connection with the Profit Sharing
Program, Kaiser told Massaro that “there are a lot of people walking around here that are getting
an extra thousand bucks a month.” Kaiser told Massaro that he and his family also were eligible
for the QSR paid medical/dental plan. Kaiser told Massaro that the benefits Massaro would
reccive from QSR would far exceed and be more advantageous than those benefits that Helix
offered him.
Massara’s Employment and Benefits with OSR

In any event, on April 4, 1996, Massaro and QSR executed the Employment Agreement
with no changes to the document prepared by Massaro and his attorneys. Art. I, Sec. 1 and Art.
TV, Sec. 3(a) of the Employment Agreement provide for a five-year term ending on April 1,
2001, unless, on the request or with the consent of QSR, Massaro continued his employment
beyond that date. Art. I, Sec. 1, and Art, IN], Sec. 1 of the Employment Agreement provides for
payments to Massaro if there is termination of the Employment Agreement. Art. III, Sec. 3 of the
Employment Agreement provides in part that the Employment Agreement: is the entire

agreement between Massaro and QSR with respect to the terms and conditions of Massaro’s

-5-



(Kaiser); (2) the party to whom the promise was made (Massaro) relics upon it; (3) the reliance is
expected and foreseeable by the party making the promise (Massaro accepts employment with
QSR over Helix); (4) the party to whom the promise is made in fact relies upon it to his injury,
and that the reliance was reasonable and justifiable. Sce M.T. Bonk Co. v. Milton Bradley Co.,
945 F.2d 1404, 1408 (7th Cir. 1991) citing Quake Constr,, Inc, v. American Airlines, Inc,, 141
TI).2d 281, 152 Ill, Dec, 308, 322, 565 N.E.2d 990, 1004 (1990).
Summary judgment is DENTED as to Count VI."°
D. Count VI - Breach of Contract Regarding Retirement Plan

As with Count VI, QSR argues that it is entitled to summary judgment on Count VII
because Massaro participated in the existing QSR employee retirement benefit plan and because
Massaro cannot rely on the Employee Handbook as it did not apply to him. As discussed above,
however, Massaro claims that he was promised that QSR would provide employee retirement
benefits in addition to the 401(k) Plan. Further, there is a genuinc issue of material fact as to
whether the Employee Handbook applied to Massaro. Upon acceptance of cmployment, Massaro
received an Employee Handbook, he received paid vacation according to the terms of the
Handbook and Defendants seek to enforce the vacation pay provisions of the Handbook against
Massaro, and Kaiser never told anyone not to issue the Handbook to him, Summary judgment is

therefore DENIED as to Count VI.

” QSR further argues that Massaro’s promissory estoppel claim is barred by the
integration clause of his Employment Agreement and the parol evidence rule. QSR overlooks,
however, that Art, II, Sec. 7 of the Employment Agreement clearly states that “Massaro shall
be considered a direct employee of the Company and receive benefits as may be due him under
the Company’s employee benefit programs.”

-18-



Administration of QSR's Employee Benefit Plan(s)

MED has never been the administrator or a trustee of an ERISA benefil plan. At all
relevant times, QSR was the plan administrator to QSR’s 401(k) plan, and Kaiser and Skuza
were the trustees for the Plan. Neither Kaiser nor Skuza has ever participated in the
administration of the QSR employee retirement benefit plan, nor have they ever provided
investment advice to the plan beneficiaries. On or about January 1, 1990, QSR, as the plan
administrator, entered a Service Agreement with NPS to provide limited third party
administrative (“TPA”) services under the Plan. NPS, an affiliate of Nationwide Life, ultimately
provided the limited TPA services upon Nationwide Life’s behalf. Among other services, the
Service Agreement provided that NPS would (1) track, maintain and report contributions and
investment performance of the individual participants’ accounts; (2) at the participants’
instructions, transfer participants’ funds into the various mutual funds offered by Nationwide
Life; and (3) complete and file certain forms to governmental agencies such as the Internal
Revenue Service (“IRS”), Pursuant to the Service Agreement and upon request by the plan
administrator, NPS provided enrollment kits, reports and semi-annual statements of accounts to
QSR for the individual participants. The enrollment kits included summary plan descriptions,
Enrollment and Payroll Deduction Forms, and Beneficiary Designation Forms.’ The Nationwide
Defendants assert that QSR was responsible, as plan administrator, for dispersing the enrollment

kits to the plan participants, and they attach copies of correspondence between NPS and QSR

® Massaro disputes that the Service Agreement expressly provides for those duties.
While Exhibit J to the Bigart Affidavit does not state the contents of the Enrollment Kits, it
states “Enrollment Kits (with Payroll authorization and Beneficiary Designation forms)”; that
letter does not establish that the Enrollment Kits on/y contained Payroll authorization and
Beneficiary Designation forms,

-8-



Minute Order Porm (06/¥3)

+

United States District Court, Northern District of Illinois

Name of Assigned Judge David H. Coar Sitting Judge If Other
‘or Magistrate Judge than Assigned Judge
CASE NUMBER 01 C6029 DATE 9/12/2002
CASE Jerry J. Massaro v. Quality Synthetic Rubber, Inc. et al.
TITLE

MOTION:

[ln the following box (2) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd purty plaintiff, and (b) state briefly the nature

of the motion being presented]

Defendants’ Motions for Partial Summary Judgment and Summary Judgment pursuant to Fed. R. Civ. P. 56

DOCKET ENTRY:

{1} ia) Filed motion of [ use listing in “Motion” box above.]

(2) a Brief in support of motion due

(3) qa Answer brief to motion due____. Reply to answer brief due.

{4) a Ruling/Hearing on set for at .

(5) im] Status hearing[held/continued to] [set for/re-set for] on set for at

@® a Pretrial conference[held/continued to] {set for/re-sct for) on setfor_ at

{7} qa Trial[set for/re-set for] on at H

(8) a [Bench/Jury trial] [Hearing) held/continued to at

(9) g This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OFRCP4(m) (General Rule 21 CFRCP41(a)(1) CFRCP41(a)(2).

(10) =< {Other docket entry] For the reasons stated in the attached Memorandum and Opinion Order, the
Nationwide Defendants’ motion for summary judgment [36-1] is GRANTED in ils entirety. The QSR/MED
Defendants’ motion for partial summary judgment [33-1] is GRANTED in part and DENIED in part. Summary
judgment is GRANTED in favor of Defendants MED, Skuza, and Kaiser on all counts, and in favor of the QSR.
on Counts 1, Li, 1V, V, VID, LX, XIV, and XV. Summary judgment is DENTED as to QSR 9 on Counts II, VI, VII,
X, XI, and XII. In sum, QSR remains as the only defendant the wl counts it are III, VI, VU,
X, XI, X11, and XTIL. {

dl) ff [For further detail see order attached to the original minute orden

No notices required, advised in open court

No notices required.
a S of notions

Document
Number

Notices mailed by judge's staff.
Notified counsel by telephone.
Docketing to mail notices.

Mail AQ 480 form. dacketing deputy initle

“a FJ ph -Bae

Copy tu judge/ragistrate judge,

date mailed notice
mds(Ie) courtroom

deputy’s
initials

Date/time received in
central Clerk's Office

railing deputy inivinis

ae)



Massaro and the QSR/MED Defendants dispute the facts surrounding the monthly bonus.
According to the QSR/MED Defendants, the monthly bonus that may be paid to some employees
of QSR has never been and is not a retirement plan. The monthly bonus that may be paid to
some employees of QSR is paid within approximately twelve to eighteen days after the close of
the prior month. An employee who began work for QSR in April 1996, if that cmployee were
eligible for the monthly bonus, would know or should have known before the end of May 1996
that he had not received a monthly bonus for April 1996.7 The QSR/MED Defendants assert, and
Massaro disputes, that non of the sales employees of QSR who are not or were not located in
Twinsburg, Ohio (including, without limitation, Massaro) has ever been eligible for or received
the monthly bonus. Although the QSR/MED Defendants assert that the QSR Handbook has
never applied and does not apply to the employees of QSR who are not or were not located in
Twinsburg, Ohio, Massaro received a Handbook shortly after execution of the Employment
Agreement. Further, the QSR/MED Defendants point to the Handbook as the source providing
the terms regarding Massaro’s vacation pay. Specifically, the Handbook provided that vacation
must be taken before December 31 of the same year and that an employee must take vacation to

qualify for vacation pay. The Handbook provides that the policies, benefits, rules and regulations

7 Massaro, however, disputes that he should have known before the end of May 1996
whether he received a monthly bonus for April 1996. He testifies that at no time was he told
that these benefits were paid out the month following the month in which services were
performed by the employee. Further, Massaro testifies that when he received his W-2 Wage
and Tax Statement for 1996, he saw that the “Pension plan” box was checked and he believed
that his profit sharing in the form of monthly bonuses was being deposited into the company-
paid Retirement Plan that Kaiser had promised him as a direct employee of QSR. Massaro
alleges he made numerous attempts to obtain information about the profit sharing program in
the form of monthly bonuses, but that QSR never responded to those requests.

-11-



power and discretion to construe the terms of the Plan and determine all questions arising in
connection with the administration, interpretation, and application of the Plan. Any such
determination by Administrator shall be conclusive and binding on all persons.”

NPS remained the TPA providing limited ministerial services and Nationwide Life
remained the provider of the group annuity contract that offered the mutual funds options into
which the Plan’s funds were contributed. Participants were permitted to self-direct their deferred
compensation. Massaro routinely took advantage of his ability to self-direct his investments.
Neither of the Nationwide Defendants offered investment advice to Massaro, All written
communication to Massaro concerning the Plan came from QSR as plan administrator, not the
Nationwide Defendants. In fact, when Massaro called NPS for information about the Plan, NPS
directed him to Vicki Horner, the representative of QSR, the plan administrator. Massaro
informed the Nationwide Defendants that he was not getting the 401(k) plan documents from
QSR. The Nationwide Defendants did not send him any 401(k) plan documents.

Effective January 3, 2000, QSR terminated the Service Agreement with Nationwide Life
and NPS ceased performing the limited TPA services for the Plan. Massaro has never requested
from either of the Nationwide Defendants that they release Massaro’s funds in the Plan, Nor has
QSR, the plan administrator, requested that the Nationwide Defendants release Massaro’s funds.

Disputes Concerning the ERISA Plan(s)

Massaro testificd that the 401{k) employee contribution and employer maich amounts
rcported to him are correct, although he disputes the small amount--$2.87--of the employer
contribution. During his employment with QSR, Massaro received money into the Employer

Discretionary Contribution Account of his 401(k) benefit.

~10-



President of QSR that memorializes this change to the Employment Agreement. The QSR
Handbook states that pay periods and pay day for QSR employees are weekly and on Fridays.
Massaro, as a QSR employee, performed dutics as an outside sales representative from
April 4, 1996 to April 1, 2001. Massaro performed his duties ouiside of QSR’s Twinsburg, Ohio
location. He controlled and directed the performance of his own work, but reported to Phil
Smith, who was the Chief Operating Officer. QSR currently has, and has only had, one
employee retirement benefit plan.‘ Il initially consisted of an employer discretionary contribution
of company profits. Because of business needs, no employer discretionary contribution of
company profits was made after the 1980s. A 401(k) feature was added to the QSR employce
retirement benefit plan in 1993-94.5 Kaiser testified that the “retirement plan” referred to in the
Employee Handbook is not the same as the 401(k) Plan. During the Massaro’s employment with
QSR, contributions from non-vested plan participants/former employees were distributed on a
pro-rata basis to the employer discretionary contribution accounts of participants in the QSR
employcc retirement benefit plan, including, without limitation, Massaro. The dollar amount

distributed to each of these participants was small.

‘4 Massaro disputes that QSR has had only one retirement plan, and he attaches a QSR
Employee Handbook from another year for support. The information in that handbook,
however, is exactly the same as the information in the handbook to which the QSR/MED
Defendants cite and does not indicate that a different retirement plan ever existed.

* The Nationwide Defendants assert that QSR developed a 401(k) plan for its
employees in September 1981. The date the plan commenced is irrelevant, however, for the
purposes of this motion for summary judgment on the liability issue.

-7-



employment terminated according to the terms of the Employment Agreement and the carly
termination provision did not apply. Summary judgment therefore is GRANTED in favor of
QSR on Count XIV.
1. Count XV - Violation of the Wage Payment and Collection Act

As basis for Count XV, Massaro argues that Phil Smith, Chief Operating Officer of QSR,
told Massaro that QSR and Massaro would “work something out” in connection with Massaro’s
inability to take all of his earned vacation prior to December 31 of any calendar year and that this
representation constiluted an amendment to the QSR Handbook provision that mandated
employees to take vacation after the adjustment of January | and before December 31 or that
same year. The QSR Handbook, however, also clearly stipulates that “no manager or
representative of the Company has the authority to enter into an agreement with me, oral or
written, that is contrary to the foregoing.” Summary judgment, therefore, is GRANTED as to

Count XV,

IV. Conclusion
For the foregoing reasons, the Nationwide Defendants’ motion for summary judgment is
GRANTED in its entirety. Further, this Court GRANTS in part and DENIES in part the
QSR/MED Defendants’ motion for summary judgment, Summary judgment is GRANTED in

favor of Defendants MED, Skuza, and Kaiser on all counts, and in favor of the QSR on Counts

-21-



“there must be evidence on which the jury could reasonably find for the [non-movant].”
Anderson, 477 U.S. at 250.
I. Factual Background!

The Parties

QSR and MED are Ohio corporations located in Twinsburg, Ohio, and they cngage in the
business of manufacturing precision, custom-molded products. Kaiser is an individual who is a
sharcholder and officer of both QSR and MED. Skuza is an individual who is a shareholder and
officer of both QSR and MED. Nationwide Life provided the group annuity contracts that
offered a selection of mutual funds and NPS provided limited third-party administrative services
for QSR’s 401(k) Plan. Massaro, an Illinois resident, is a former employee of QSR.? Aside from
the fact that QSR and MED have the same owners, directors, and officers (Kaiser and Skuza), the
two corporations have separate cmployees, separate payrolls, separate business records, and

different Employer Identification Numbers.

' Unless otherwise indicated by a showing of disagreement, the facts listed below are
either undisputed or deemed admitted by one of the parties because that party's response
pursuant to Local Rule 56.1 either 1) inappropriately denied the material fact by citing to an
exhibit that agreed with the statement of material fact, or 2) was unsupported by proper
citation that specifically referred to the record, affidavits, or other supporting materials relied
upon for disagreement, as required by Local Rule 56.1, which this Court strictly enforces.
Statements and responses that are not supported by the record, or that are supported with
citations to entire affidavits are disregarded. See Johnson v. Indopco, Inc., 887 F.Supp. 1092,
1095 (N.D. Ill. 1995). “[D]istrict courts are not obliged in our adversary system to scour the
record looking for factual disputes... .” Waldridge v. Am. Hoechst Corp. , 24 F.3d 918,
922 (7th Cir. 1994).

2 According to Kaiser, Massaro was also a former employee of MED. Massaro,
however, claims that he was not an MED employee.

3.



Count XII. Massaro agrees that summary judgment should be granted as to Counts IV and V.
The Nationwide Defendants move for summary judgment on Counts | and TI, which are the only
counts against them.

As a preliminary matter, this Court addresses the QSR/MED Defendants’ argument that
Skuza and Kaiser are entitled to summary judgment in their individual capacities. The record
establishes that Massaro never spoke with Skuza regarding the mattcrs at issue in this case.
Further, as to Kaiser’s alleged representations to Massaro, officers of a corporation are not
individually liable on a contract where there is no indication that the officer intended to be bound

personally. Wottowa Ins. Agency, Inc. v. Bock, 472 N.E.2d 411, 413 (Ill. 1984). There is no

indication that either Kaiser or Skuza intended to be bound personally in this case. Thus, the
Court GRANTS summary judgment as to Defendants Skuza and Kaiser in their individual
capacities on all counts. This Court now addresses each remaining count in turn.
A, Counts I and I - ERISA Claims for Benefits Due under the 401(k) Plan

Massaro alleges that the Defendants denied him benefits under the 401(k) Plan in
violation of the 401(k) Plan provisions and ERISA, 29 U.S.C. § 1132(a)(1)(B). This claim arose
out of an inadvertent transposition between the amounts of the employer and employee
contributions on a Form 5550, 2000 Annual Return/Report of Employee Benefit Plan for the
401(k) Plan, The original form filed by QSR reflects that, in 2000, the employer contributed an
amount of $692,302.00, while the employee contributed an amount of $207,390.00, and QSR
made a discrctionary Employer Profit Sharing Contribution to Massaro’s account from 1997 to

September 1, 2000 totaling only $2.67.* QSR filed an amended Form 5550, reflecting that the

5 Massaro submits inconsistent information about this amount. In his brief, he submits
he only received $2.67, but in his deposition, he mentions that the figure was $2.87. For the

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plan, the plaintiff may only bring suit against the Plan. Riordan v. Com. Edison Co., 128 F.3d
549, 551 (7th Cir. 1997); Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir.
1996). Suits against employers, however, have been permitted when the employer is also the
plan administrator, and the employer and the plan were otherwise closely intertwined. Sco Mein
y,.Carus Corp., 241 F.3d 581, 583 (7th Cir. 2001). The “administrator” is “the person
specifically so designated by the terms of the instrument under which the plan is operated.” 29
U.S.C. § 1002(16)(A)(i). In this case, because the Nationwide Life Defendants are not Massaro’s
employers, nor are they the plan administrator(s), they are entitled to summary judgment as a
matter of law.” Similarly, Massaro testified, and the evidence overwhelmingly demonstrates, that
Massaro was never an employee of MED, nor was MED ever an administrator or trustee of an
ERISA benefit plan. Thus, Massaro failed to establish liability as to MED and MED is entitled
lo summary judgment as a matter of law on all counts,
B. Count Lil - Claim for Failure to Provide Plan Documents

During Massaro’s employment with QSR, he allegedly made repeated oral and written
requests to the Defendants for copies of the plan documents for the 401(k) Plan, the Retirement
Plan, and the Profit Sharing Program. Despite these requests, QSR did not provide Massaro with
copies of the plan documents. QSR bases its motion for summary judgment on this count on

Massaro’s citing to the wrong ERISA subsection. Count III of the Amended Complaint states:

° In his response, Massaro attempts to suggest that the Nationwide Defendants are
liable under ERISA for failing to provide plan documents to him as required by this section.
However, Count III of the Amended Complaint is Massaro’s claim for failure to provide plan
documents and he did not name the Nationwide Defendants on that count. As it is
inappropriate for a plaintiff to attempt to amend his pleadings in a response to summary
judgment, and as the deadline to amend the pleadings expired in December 2001, this Court
grants summary judgment in favor of the Nationwide Defendants in its entirety.

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1. Summary Judgment Standard

Summary judgment is proper “if the pleadings, depositions, answers to interrogatorics
and admissions on file, together with the affidavits, if any, show that there is no genuine issuc as
to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.
R, Civ, P, 56(¢); Michael v. St. h_ County, et. al, 259 F.3d 842, 845 (7th Cir. 2001). A
genuine issue of material fact exists for trial when, in viewing the record and all reasonable
inferences drawn from it in a light most favorable to the non-movant, a reasonable jury could
return a verdict for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986),
Hedberg v. Indiana Bell Tel. Co., 47 F.3d 928, 931 (7th Cir. 1995).

Because the purpose of summary judgment is to isolate and dispose of factually
unsupported claims, the non-movant must respond to the motion with cvidence setting forth

specific facts showing that there is a genuine issue for trial. See Fed. R. Civ. P. 56(¢), Michael,

259 F.3d at 845; Albiero v. City of Kankakee, 246 F.3d 927, 932 (7th Cir. 2001). To successfully
oppose the motion for summary judgment, the non-movant must do more than raise a

“metaphysical doubt” as to the material facts, see Wolf v. Northwest Ind. Symphony Soc'y, 250

F.3d 1136, 1141 (7th Cir. 2001) (citation and quotation omitted), and instead must present
definite, competent evidence to rebut the motion, see Albiero, 246 F.3d at 932, Rule 56{c)
mandates the entry of summary judgment against a party “who fails to make a showing sufficient
to establish the existence of an element essential to that party's case, and in which that party will
bear the burden of proof at trial.” Celotex, 477 U.S. at 322. A scintilla of evidence in support of

the non-movant's position is not sufficient to oppose successfully a summary judgment motion;

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IN THE UNITED STATES DISTRICT COURT ' f

FOR THE NORTHERN DISTRICT OF ILLINOIS aa
EASTERN DIVISION Pa ve
JERRY J. MASSARO, ) —
) SEP iy,
Plaintiff, ) te
) No. 01. C6029
¥. ) fe
) HONORABLE DAVID H. COAR
QUALITY SYNTHETIC RUBBER, INC., et) “ih
al., )
)
Defendants. )
MEMORANDUM OPINION RDER

Plaintiff Jerry J. Massaro (“Massaro”) brings a 15-count complaint against Defendants
Quality Synthetic Rubber, Inc. (“QSR”), Medical Elastomer Development, Inc. (“MED”), Dennis
E. Kaiser (“Kaiser”), and Donald J. Skuza’s (“Skuza”) (collectively, the “QSR/MED
Defendants”) and Defendants Nationwide Life Insurance Company (“Nationwide Life”) and
Nationwide Pension Services (“NPS”) (collectively, the “Nationwide Defendants”) under ERISA
and various state laws for the alleged failure to perform duties required by contract and an
ERISA plan. Before this Court are the QSR/MED Defendants’ motion for partial summary
judgment and the Nationwide Defendants’ motion for summary judgment. For the following
reasons, the QSR/MED Defendants” motion for partial summary judgment is GRANTED in part
and DENIED in part and the Nationwide Defendants’ motion for summary judgment is

GRANTED in its entirety.

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of QSR do not create express or implied contractual terms, and are subject to change unilaterally
by the Company without notice.

Massaro’s QSR W-2 wage statement for 1996 indicates that he has a pension plan, and
his W-2 wage statements for 1998, 1999, and 2000 indicate that he has a pension plan and a
deferred compensation plan. During his employment with QSR, Massaro received no Retirement
Plan benefits and no Profit Sharing Program benefits. The Profit Sharing Program benefits were
separate from and different than the employer discretionary contributions provided by QSR under
the 401(k) Plan. Kaiser and Skuza were/are trustees of the 401(k) Plan. Massaro alleges, and the
QSR/MED Defendants dispute, that he made repeated written and oral requests, but never
received, copics of the plan documents for the 401(k) plan, the Retirement Plan, and the Profit
Sharing Program. Kaiser has no idea who was responsible for sending out information
concerning the 401(k) Plan and he never determined whether QSR or MED were sending out
notices concerning the 401(k) Plan.

Kaiser sent Massaro a letter dated March 29, 2001 that confirmed the expiration of
Massaro’s Employment Agreement on April 1, 2001. On June 19, 2001, Massaro filed this
action against the QSR/MED Defendants. On January 11, 2002, Massaro amended the complaint
and added the Nationwide Defendants.

LI. Discussion

As to the QSR/MED Defendants, Massaro claims that they: (1) violated ERISA by failing
to provide him with benefits due under the QSR 401(k) Savings and Profit Sharing Plan and
Trust (the “401(k) Plan”) (Counts J and I); (2) violated ERISA by failing to provide him with

401(k) plan documents in response to his written requests for the same (Count Ii); (3) violated

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correct amount of employer contributions was actually $207,390.00. Massaro argues, that
notwithstanding this correction, the discretionary Employee Profit Sharing Contribution appears
to be too low and urges this Court to deny summary judgment on Counts I and II. In the
alternative, Massaro requests that he be given 30 days to conduct discovery on this issue and that
the Court stay Defendants’ motion for summary judgment on Counts I and IL. This Court
disagrees,

Massaro is not claiming that the employer or employee contributions are incorrect,
Rather, he argues that he still has a claim for ERISA benefits duc under the 401(k) Plan (Count I)
and a claim for equitable relief to enforce the 401(k) Plan (Count II) because he may not have
received a sufficient employer discretionary contribution to his 401(k) Plan. It is undisputed,
however, that the dollar amounts distributed to each of the participants under the discretionary
employer contribution plan was small. It is further undisputed that no employer discretionary
contribution of company profits was made after the 1980s, This Court therefore GRANTS
summary judgment in favor of all the defendants on Counts I and II of the Amended Complaint.

Even if summary judgment were not granted as to QSR on Counts I and Tl, the
Nationwide Defendants and MED are entitled to summary judgment as a matter of law. Under
ERISA, a claim for denial of benefits cannot be brought against them as a third party
administrator. 29 U.S.C. § 1132(d)(2) provides that: “any money judgment . . . against an
employee benefit plan shall be enforceable only against the plan as an entity and shall not be
enforceable against any other person unless liability against such person is established in his

individual capacity under this title.” Generally, im a suit to recover benefils under an ERISA

purposes of deciding this motion for summary judgment, however, the actual amount of the
discretionary employer contribution is of no moment.

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