DISCUSSION
I. Motion to Strike

As an initial matter, the Plaintiff moves to strike numerous
exhibits and statements contained in Defendant’s Memorandum in
Support of Summary Judgment and Rule 56.1 Statement of Uncontested
Facts. The Plaintiff contends that these materials, which were
generated in the course of settlement discussions, may not be
admitted as evidence pursuant to Fep. R. Evip. 408, and therefore
may not be considered by this Court in ruling on the current motion
for summary judgment. Rule 408 is not an absolute ban on all
evidence regarding settlement negotiations. Rule 408 explicitly
states that “[{t]his rule does not require exclusion when evidence
is offered for another purpose, such as . . . negativing a
contention of undue delay. . . .” Courts have routinely admitted
evidence of offers or agreements to compromise for purposes of
rebuttal, for purposes of impeachment, or to show the defendant's
knowledge and intent. See, Bankcard America, Inc. v. Universal
Bankcard Systems, Inc., 203 F.3d 477, 484 (7th Cir. 2000).
Rule 408’s spirit and purpose must always be considered in its
application. Central Soya Co. v. Epstein Fisheries, Inc., 676 F.2d
939, 944 (7th Cir. 1982). It would be an abuse of Rule 408 to
allow a plaintiff during compromise negotiations to complicate and
delay resolution of the matter, point to that delay as evidence of

the defendant’s bad faith, and then prevent the defendant from


decision. There was no claim denial at issue here, only a dispute
over the issuance of a COBRA notice. Since there was no claim
denial as contemplated in the statute, no obligation exists on the
part of the administrator to provide an explanation (i.e.,
“pertinent documents"), and thus no basis for imposing liability
pursuant to § 1132(c) exists. See Kleinhans v. Lisle Sav. Profit
Sharing Trust, 810 F.2d 618, 624 (7th Cir. 1987). Safeway’s
failure to respond to this letter is simply not a basis for
imposing liability under 29 U.S.C. § 1132(c) (1).
CONCLUSION

For the reasons set forth above, Plaintiff's Motion to Strike

is denied and Defendant's Motion for Summa Judgment is granted.

The case is dismissed pursuant to : . P. 56.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Date: 4 lad AG BOO
f


full year being paid for by Safeway. After some confusion over the
proper mailing address, Ms. Thompson did finally receive her COBRA
benefits package by November 2000.
MOTION FOR SUMMARY JUDGMENT
Standard

Summary judgment is appropriate where “the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled
to judgment as a matter of law.” fFerp. R. Civ. P. 56(c). The court
must “review the record in the light most favorable to the
nonmoving party and draw all reasonable inferences in that party’s
favor.” Vanasco v. National-Louis University, 137 F.3d 962, 964
(7th Cir. 1998). Nevertheless, the party who bears the burden of
proof on an issue may not rest on the pleadings, but must
affirmatively demonstrate that there is a genuine issue of material
fact that requires trial. Warsco v. Preferred Technical Group, 258
F.3d 557, 563 (7th Cir. 2001). A genuine issue of material fact is
not shown by the mere existence of “some alleged factual dispute
between the parties,” Anderson v. Liberty Lobby, [nc., 477
U.S. 242, 247 (1986), or by “some metaphysical doubt as to the
material facts.” Matsushita Electric Industrial Company v. Zenith

Radio Corp., 475 U.S. 574, 586 (1986).


explaining its actions because settlement discussions were
involved. Bankcard America, Inc., 203 F.3d at 484. The materials
submitted by the Defendant will only be considered to the extent
they are offered to rebut the Plaintiff’s allegations of undue
delay and bad faith. The Plaintiff's Motion to Strike is therefore
denied.
II. Motion for Summary Judgment

A. Count I - Violation of 29 U.S.C. § 1161

Plaintiff seeks to recover statutory damages under 29 U.S.C.
§ 1132(c) (1) for the Defendant’s failure to provide timely a COBRA
notice of beneficiary’s rights as required under ERISA. 29 U.S.C.
§ 1166(a) (4). Under § 1132(c){1), this Court may, in its
discretion, award damages to the Plaintiff of up to $110 a day for
every day the Defendant was in violation of the statute. However,
an employer's procedural violations of ERISA entitle employees to
monetary relief only in exceptional cases. Jackson v. E.J. Brach
Corp., 176 F.3d 971, 979 (7th Cir. 1999). The employer must have
acted in bad faith, actively concealed the benefit plan, or
otherwise prejudiced their employees by inducing their reliance on
a faulty plan summary before recovery for procedural violations is
warranted. Kreutzer v. A.O. Smith Corp., 51 F.2d 739, 743 (7th
Cir, 1991).

In her brief, the Plaintiff defines bad faith as “a refusal to

fulfill some duty . . . prompted by . . . some interested or


PB.

,

f > “fy + Form (0607)
OX United States District Court, Northern District of Ilinois

Kame of Assigned Judge i Sitting Judge if Other
or Magistrate Judge Harry D. Leinenweber than Assigned Judge
CASE NUMBER 01 C 3260 DATE 3/29/2002
CASE Jacqueline M. Thompson, et al vs. Safeway, Inc., et al
TITLE
Lin the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MoTION: of the motion being presented.]
DOCKET ENTRY:
(i) o Filed motion of [ use listing in “Motion” box above.]
(2) a Brief in support of motion due
(3) a Answer brief to motion due Reply to answer briefdue_
(4) Oo Ruling/Hearing on set for at
(5) q Status hearing[held/continued to] [set for/re-set for] on set for at
(6) a Pretrial conference[held/continued to] [set for/re-set for] on set for at :
(7) a Trial[set for/re-set for] on
{8) og [Bench/Jury trial] [Hearing] held/continued to at
(9) oOo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
OFRCP4(m) O General Rule21 OFRCP41(a)(1)  FRCP41(a)(2).
co) sl [Other docket entry] | ENTER MEMORANDUM OPINION AND ORDER: Plaintiff's Motion to
Strike is denied and Defendant’s Motion for Summary Judgment is granted. The case is dismissed
pursuant to Fed. R. Civ. Procedure 56.
dl) @ [For further detail see order attached to the original minute order.]
No notices required, advised in open court, Document
. Number
No hiotices required umber of noties
Notices mailed by judge's staff,
Notilied counsel by telephone. APR 2 £2002
VY | Docketing to mail notices,
Y | Mail AO.450 form tocsepbfray nas
Copy lo jiudge/magistrate judge.
war
central Clerk's Office availing deputy initials



sinister motive.” Pl’s Memorandum at 4. The record before the
Court does indicate that it took considerable time for Safeway to
resolve the problem and issue a COBRA notice. However, the record
also indicates that this delay was almost certainly exacerbated by
the overly shrill and adversarial approach Plaintiff’s counsel took
early on in his interactions with Safeway’s counsel. The then
ongoing merger between Dominick’s and Safeway also provides a
reasonable basis for the original inadvertent delay in sending out
the COBRA notice. While the Plaintiff certainly endured great
aggravation in pursuing her case, there is simply nothing before
the Court to indicate that the Defendant acted in bad faith in its
original failure to send out the COBRA notice and the subsequent
delay in addressing the situation.
B. Count II - Violation of 29 U.S.C. § 1025

ERISA authorizes the imposition of a penalty of up to $110 per
day for a plan administrator’s refusal or failure to comply with a
document request which the administrator is required to produce
under the Act. See 29 U.S.C. § 1132(c) (1). Plaintiff’s counsel
sent a letter to Safeway on September 22, 2000 requesting “all
pertinent documents that may relate to [Jacqueline M. Thompson’s]
Benefits Package.” The letter further states that “(t]his request
is made pursuant to 29 U.S.C. 1132 et seq. and 29 C.F.R. 2560.503
et seq.” However, those regulations only require a plan

administrator to provide documents pertinent to a claim denial


IN THE UNITED STATES DISTRICT core j ki Ep
FOR THE NORTHERN DISTRICT OF ILLINOIS* _
EASTERN DIVISION
PAR 2 S:90ute

JACQUELINE M. THOMPSON, and ,
CAITLYN J. THOMPSON, by her dudes Harry, Ds Leinenwebier
mother and next friend, Ss District Cours
JACQUELINE M. THOMPSON,
Plaintiffs, Case No. 01 C 3260
v. Hon. Harry D. Leinenweber

SAFEWAY, INC. and DOMINICK’S

SUPERMARKETS, INC., ONCKETED

Defendants. APR ~
2 2002

MEMORANDUM OPINION AND ORDER

Before the Court is Defendant Safeway Inc.’s (“Safeway”) and
Dominick’s Supermarkets Inc.’s (“Dominick’s”) Motion for Summary
Judgment and Plaintiff Jacqueline Thompson’s (“Thompson”) Motion to
Strike Portions of Defendants’ Motion for Summary Judgment.

BACKGROUND

When newly-minted law school graduates are sworn in as members
of the Illinois bar, they are inevitably reminded of Abraham
Lincoln’s advice to young lawyers:

Discourage litigation. Persuade your neighbors to

compromise whenever you can. Point out to them how the

nominal winner is often the real loser - in fees,

expenses, and waste of time. As a peacemaker, the lawyer

has a superior opportunity of being a good man. There

will always be enough business. Never stir up

litigation.

Unfortunately, this advice appears to have gone unheaded in this

case.


Jacqueline Thompson worked for Dominick’s, a Safeway
subsidiary, as a pharmacist for. three months during the summer of
1999, before returning to law school. Thompson and her daughter
ceased thereafter to be eligible for coverage under Dominick’s
health benefits plan as of December 25, 1999. When coverage ended,
the Defendant by its own admission failed to send Thompson a COBRA
notice informing her of the right to continue coverage for herself
and her daughter at her own expense. Safeway contends that this
was an inadvertent error due at least in part to the administrative
difficulties created by the merger of Dominick’s and Safeway’s
computerized human resources information systems during the second
half of 1999. Thompson offers no evidence to the contrary.

In April 2000, Thompson learned of the loss of her health
benefits coverage. She wrote to Safeway’s General Counsel in July
2000 asserting numerous legal claims, including a claim that
Safeway failed to send her a COBRA notice within 30 days of the
date her coverage terminated. She threatened to file complaints
with the EEOC, U.S. Department of Labor, the IRS, the Illinois
Department of Insurance and the Illinois Department of Labor if
Safeway did not cure the problem within five days. This letter
immediately transformed a simple administrative problem into a
full-blown legal battle. After several months of exchanging
requests and ultimatums, Safeway sent a COBRA packet to Ms.

Thompson providing her with retroactive health benefits, with one