Opinion
Civil Action No. 3:98-CV-2296-D.
July 19, 2000.
MEMORANDUM OPINION AND ORDER
The court must decide in this ERISA action issues arising from a qualified domestic relations order ("QDRO") and must also determine whether the plan administrator is subject to penalties for failing to supply requested plan documents. The court denies both sides' motions for summary judgment for the reasons that follow.
Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001-1461.
I A
Plaintiff Barbara Elaine Johnston ("Johnston") sues defendants Capital Accumulation Plan of the Chubb Corporation, Chubb Son Inc. and Participating Affiliates (the "Plan"), Profit Sharing Committee of the Capital Accumulation Plan of the Chubb Corporation, Chubb Son Inc. and Participating Affiliates (the "Committee"), and The Chubb Corporation ("Chubb") (collectively, "the Plan Defendants"). The Plan is an ERISA employee pension benefit plan. The Committee is the Plan administrator. Chubb is the Plan sponsor. Johnston's former husband, defendant Robert Erwine Willson ("Willson"), was a Chubb employee and Plan participant.
The Plan is an "individual account plan" or "defined contribution plan" within the meaning of 29 U.S.C. § 1002(34).
Johnston also sued Willson. He defaulted, however, and on March 24, 2000 the court filed a Fed.R.Civ.P. 54(b) final judgment against him.
In 1989 Johnston and Willson divorced. As part of the division of their marital estate, they entered into an ERISA-qualified QDRO, signed by the state court on March 10, 1989. The QDRO provided for the assignment to Johnston, as alternate payee, of part of Willson' s retirement benefits in the Plan. The amount awarded Johnston — $20,912.50 — represented one-half of Willson's Plan benefits, to be adjusted thereafter by normal interest and appreciation. Johnston's attorney provided copies of the divorce decree and QDRO to Mary C. Marciano ("Marciano"), a Plan administrator, by March 15, 1989 certified letter. The Plan did not establish at that time a separate account for the Plan benefits assigned to Johnston.
The court has had some difficulty deriving the background facts from Johnston's motion because she has not complied with ND. Tex. Civ. R. 56.5(c). In her brief, Johnston cites defendants' answers to interrogatories by the answer number, see P. Mar. 1, 2000 Br. at 3-5, but does not, as Rule 56.5(c) requires, "include in [her] brief citations to each page of the appendix that supports each assertion that the party makes concerning the summary judgment evidence." (emphasis added). Even if the court were to disregard her failure to cite the appendix, the court has been unable on its own to locate some of the interrogatory answers that she cites. Although her appendix contains answers to interrogatories Nos. 1-6, see P. Mar. 1, 2000 App. 4-6, she cites several answers that are not included within the scope of Nos. 1-6, see P. Mar. 1, 2000 Br. at 3-5.
On March 28, 1997 Willson's employment with Chubb ended. At that time, he became eligible to receive a distribution of his Plan assets. On April 18, 1997 the Plan disbursed to Willson the sum of $216,841.16. This amount included investment earnings, gains, and losses for the period March 10, 1989 to March 28, 1997 on the portion of Willson's account that he had assigned to Johnston under the QDRO.
Johnston later brought the QDRO to the Marciano's attention. Marciano contacted Willson, who authorized her to transfer $20,912.50 from his Chubb ESOP account to establish an account for Johnston. On September 30, 1997 the Plan for the first time set up a separate account for Johnston. depositing in it the sum of $20,912.50. The Plan did not, however, credit Johnston for any investment earnings, gains, and losses that would have been realized on this sum for the period March 10, 1989 (the date of the QDRO) through September 30, 1997 (the date the Plan established the separate account). Johnston asked Marciano about the investment earnings that would have accrued had the separate account been established on March 10, 1989. The Plan denied Johnston's request for this additional sum on the grounds that Willson had no other assets in the Plan, the ESOP, or any other retirement account with Chubb, all investment earnings for the relevant period had been paid to Willson, and the QDRO conferred a credit on the Plan for payments due to Johnston that were paid to Willson.
From and after October 1, 1997, Johnston's account has been fully invested in a fund that is available under the Plan's terms.
According to Marciano, these earnings would have totaled $11,953.59.
By letter dated March 31, 1998 Johnston's attorney requested in writing that Marciano provide inter alia copies of the Plan document, the related summary plan description, the Plan's trust agreement, and the latest annual report on Form 5500. The return receipt shows that the letter was delivered April 6, 1998. The Committee did not produce the documents, however, until October 13, 1998 and October 21, 1998.
B
Johnston asserts two categories of claims. First, she alleges that the Plan Defendants violated the terms of the QDRO and of ERISA, and breached their fiduciary duties, in violation of 29 U.S.C. § 1056(d)(3)(G) and 29 U.S.C. § 1104, by failing or refusing to interpret and administer properly the QDRO in a manner consistent with its terms and the applicable provisions of ERISA. Johnston sues under 29 U.S.C. § 1132(a)(1)(B) and 29 U.S.C. § 1132(a)(3) to recover an amount equal to the portion of the Plan's investment earnings, gains, and losses for the period March 10, 1989 through September 30, 1997 that should have been allocated to her separate account under the Plan, and to enforce her rights under the terms of the QDRO as if it were part of the Plan.
Johnston posits, second, that the Committee violated 29 U.S.C. § 1024(b)(4) by refusing or failing, despite her proper request, to provide her copies of the Plan document, the related summary plan description, the Plan's trust agreement, and the latest annual report on Form 5500. She seeks a statutory penalty under 29 U.S.C. § 1132(c)(1) in the maximum amount of $100 per day.
Johnston also sues for attorney's fees, costs, and other relief to which she can show herself entitled.
Johnston moves for summazy judgment as to all her claims and defendants move for summary judgment concerning Johnston's QDRO-based causes of action. The parties have participated unsuccessfully in mediation, and the motions are now ripe for decision.
Although defendants' motion is styled as one for summary judgment, they do not seek relief concerning Johnston's claim based on the alleged failure to provide plan documents to her in a timely manner. Their motion should have been styled as a motion for partial summary judgment. See ND. Tex. Civ. R. 56.3(c) ("If a moving party seeks summary judgment on fewer than all claims or defenses, the motion must be styled as a motion for partial summary judgment.").
Johnston filed her motion on March 1, 2000. Defendants filed their motion on March 16, 2000. On April 25, 2000 the court deferred ruling on the motions so that the parties could participate in mediation. By June 8, 2000 notice, the mediator advised the court that the case did not settle.
II A
Johnston moves for summary judgment concerning her related claims that, pursuant to 29 U.S.C. § 1132(a)(1)(B) and 29 U.S.C. § 1132(a)(3), she is entitled to recover investment earnings, gains, and losses for the period March 10, 1989 through September 30, 1997 and to enforce her rights under the QDRO as if it were part of the Plan. Johnston contends that she has established as a matter of law, and without genuine and material factual dispute, that the Plan was obligated under the QDRO to establish a separate account for her in the amount of $20,912.50, that defendants are liable for breach of fiduciary duty, and that she is entitled to "normal interest and appreciation" thereon, that is, investment earnings, gains, and losses that would have accrued during the period March 10, 1989 through September 30, 1997 had the separate account been established.The Plan Defendants oppose Johnston's motion and move for summary judgment. They maintain that they, rather than Johnston, are entitled to prevail because the language of the QDRO relieves them of any liability for investment earnings due Johnston but disbursed to Willson. They argue that the QDRO appointed Willson as Johnston's trustee for the funds she seeks to recover, and that her claim lies against Willson as trustee. The Plan Defendants also contend that it is undisputed that the investment earnings that Johnston seeks were disbursed to Willson, and they posit that this distribution extinguished any duty to Johnston that the QDRO potentially imposed on them. They contend that if they were obligated under the QDRO to pay Johnston directly, they are now exculpated from additional liability to her under a proviso of the QDRO that states that "[a]ll payments made directly to ROBERT ERWINE WILLSON by CHUBB GROUP OF INSURANCE COMPANIES Capital Accumulation Plan shall be a credit against this order." The Plan Defendants also assert that to require them now to pay Johnston additional investment earnings would violate a proviso of the QDRO that states, "nor shall this order require the Plan to provide for increased benefits other than normal interest and appreciation."
Although the court need not address this contention, it disagrees with any reading of this clause that would excuse the Plan Defendants from liability by treating as "increased benefits" any amount that the Plan must pay to remedy non-performance of an obligation imposed by the QDRO. Instead, this proviso simply means that, under the QDRO, Johnston is to receive only the benefits that the Plan already provides its participants, plus normal interest and appreciation.
B
"[B]oth ERISA and case law require a plan administrator to follow the dictates of the QDRO. Once a plan administrator determines that a domestic relations order meets the criteria set forth in 29 U.S.C. § 1056(d)(3) and thus is `qualified,' he is required to act in accordance with the QDRO." Matassarin v. Lynch, 174 F.3d 549, 568 (5th Cir. 1999), cert. denied, ___ U.S. ___, 120 S.Ct. 934 (2000). "ERISA does not require, or even permit, a pension fund to look beneath the surface of the order. Compliance with the QDRO is obligatory[.]" Id. (quoting Blue v. UAL Corp., 160 F.3d 383, 385 (7th Cir. 1998)).The QDRO at issue is akin to an agreed judgment. Under Texas law
[a]n agreed judgment has the same effect as any court judgment. When a judgment is rendered by consent it has neither less nor greater force or effect than it would have had it been rendered after litigation, except to the extent that the consent excuses error and operates to end all controversy between the parties. An agreed judgment should be construed in the same manner as a contract. Thus, the court will examine and consider the entire instrument so that none of the provisions will be rendered meaningless.
Gulf Ins. Co. v. Burns Motors, Inc., ___ S.W.3d ___, 43 Tex. Sup.Ct. J. 647, 2000 WL 424040, at *4 (Tex. Apr. 20, 2000) (citations omitted). See Sanderlin v. Sanderlin, 929 S.W.2d 121, 122 (Tex.Civ.App. 1996, writ denied) (holding in case of agreement incorporated into divorce decree that "[a]n agreed judgment is both a contract and a judgment and is interpreted under the rules of contract construction."); Rivera v. Office of Attorney Gen., 960 S.W.2d 280, 283 (Tex.App. 1997, no writ) ("Since the prior support judgment is in the nature of an agreed judgment, it must be interpreted as a contract and the interpretation thereof is governed by the laws relating to contracts.").
Even if federal, rather than Texas, law applies to this ERISA case, federal law is substantially the same. The court interprets an unambiguous provision of a court order as a matter of law. See United States v. ITT Contimental Baking Co., 420 U.S. 223, 236 (1975) (holding that consent decrees and orders should be construed in same manner as contracts); Walker v. United States Dep't of Housing Urban Dev., 912 F.2d 819, 825 n. 9 (5th Cir. 1990). The terms of an unambiguous court order are interpreted according to their plain meaning and are enforced as written. Certain Underwriters at Lloyd's of London v. C.A. Turner Constr. Co., 112 F.3d 184, 186 (5th Cir. 1997).
There are several well-settled Texas principles of contract interpretation that apply to the instant dispute. An unambiguous contract — one that can be given a certain or definite meaning or interpretation — is construed by the court as a matter of law. DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999). Determining whether a contract is ambiguous is also a question of law for the court. Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 458 (Tex. 1997). The fact that the parties advance conflicting interpretations of a contract does not make it ambiguous. See Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 134 (Tex. 1994).
"Under Texas law, the court's primary concern when interpreting a contract is to ascertain the parties' true intentions as expressed in the instrument." Bank One, Tex., N.A. v. FDIC, 16 F. Supp.2d 698, 707 (N.D. Tex. 1998) (Fitzwater, J.). "To achieve this objective, the court should examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless." Id. "No single provision taken alone will be given controlling effect; rather, all the provisions must be considered with reference to the whole instrument." Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). "No phrase, sentence, or section of a contract should be isolated and considered apart from the other provisions." Trinity Professional Plaza Assocs. v. Metrocrest Hosp. Auth., 987 S.W.2d 621, 625 (Tex.App. 1999, writ denied). A court also "must recognize that the parties to a writing will not include a clause in the writing unless they intend it to have some effect." Praeger v. Wilson, 721 S.W.2d 597, 601 (Tex.App. 1986, writ ref'd n.r.e.). "A construction of the writing which renders a clause meaningless is unreasonable and, therefore, is not preferred by the court." Id.
C
The QDRO provides as follows (for ease of reference, the court has inserted in brackets, and cites in its analysis below, paragraph numbers that are not contained in the QDRO):
Johnston maintains that the Plan Defendants are relying on a QDRO that is "wholly irrelevant." Defendants acknowledge that they attached the wrong document to their motion, but contend "the controlling language in the two QDROs is identical," Ds. Apr. 21, 2000 Rep. Br. at 2 n. 1. The court agrees. The version on which defendants rely states "any retirement benefits" rather than "any of the Plan benefits" (emphasis added), and "payments made . . . by CHUBB GROUP OF INSURANCE COMPANIES Retiremeni Plan and Trust" rather than "payments made . . . by CHUBB GROUP OF INSURANCE COMPANIES Capital Accumulation Plan." (emphasis added). Because the versions that the parties have submitted are the same in all material respects, the court's reasoning and the parties' arguments are not affected.
[1] This Qualified Domestic Relations Order assigns a portion of the benefits payable in the CAPITAL ACCUMULATION PLAN ("the Plan") CHUBB GROUP OF INSURANCE COMPANIES to BARBARA ELAINE JOHNSTON in recognition of the existence of her marital rights in ROBERT ERWINE WILLSON'S Capital Accumulation Plan benefits as defined by Texas law in Berry v. Berry, 647 S.W.2d 945 (Tex. 1983).
[2] Participant in the Plan is ROBERT ERWINE WLLLSON, whose last known mailing address is Sutton Place Apartments, £ 220, 18600 Dallas North Parkway, Dallas, Texas 75252, whose birth date is February 27, 1944, and whose social security number is 585-05-7031.
[3] Alternate Payee is BARBARA ELAINE JOHNSTON, whose last known mailing address is 1600 Heritage Drive, £ 316, McKinney, Texas 75069 and whose social security number is 497-44-6224.
[4] On the date of this divorce, Participant's accrued community benefit in the Plan equals $41,825.
[5] As part of a just and right division of the estate of the parties, the Court assigns and grants to Alternate Payee from the Plan the sum of $20,912.50 to be received in the same manner Petitioner is authorized to receive said benefits. Alternate Payee may elect any form of payment of then-available benefits when said benefits are eligible for distribution from the Plan.
[6] This Qualified Domestic Relations Order is not intended to require the Plan to provide any type or form of benefits or any option not otherwise provided by the Plan, nor shall this order require the Plan to provide for increased benefits other than normal interest and appreciation.
[7] The benefits hereby assigned to Alternate Payee shall be paid to Alternate Payee notwithstanding Participant's anticipated continued employment with CHUBB GROUP OF INSURANCE COMPANIES.
[8] All benefits payable under the Plan other than those payable to BARBARA ELAINE JOHNSTON shall be payable to ROBERT ERWINE WILLSON in such a manner and form as ROBERT ERWINE WILLSON may elect in his sole and undivided discretion, subject only to the Plan requirements.
[9] BARBARA ELAINE JOHNSTON is ORDERED AND DECREED to report any of the Plan payments received on any applicable income tax return. The Plan trustee is authorized to issue a Form W-2P on any direct payments made to BARBARA ELAINE JOHNSTON.
[10] ROBERT ERWINE WILLSON is designated a constructive trustee for receiving any of the Plan benefits under CHUBB GROUP OF INSURANCE COMPANIES Retirement Plan and Trust due to BARBARA ELAINE JOHNSTON but paid to ROBERT ERWINE WILLSON. ROBERT ERWINE WILLSON is ORDERED AND DECREED to pay the benefit defined above directly to BARBARA ELAINE JOHNSTON within three days after receipt by ROBERT ERWINE WILLSON. All payments made directly to ROBERT ERWINE WILLSON by CHUBB GROUP OF INSURANCE COMPANIES Capital Accumulation Plan shall be a credit against this order.
Because the parties have filed cross-motions for summary judgment, the court, for clarity, will refer to each appendix by the date it was filed.
D
Applying Texas contract law principles, the court now interprets the QDRO as a matter of law to determine Willson's and Johnston's objective intentions as expressed in the instrument.The order provides in ¶ 1 that it assigns to Johnston a portion of the benefits payable in the Plan in recognition of the existence of her marital rights in Willson's Plan benefits, as defined by Texas law in Berry v. Berry, 647 S.W.2d 945 (Tex. 1983). In Berry the Texas Supreme Court noted that it had already decided in an earlier case — Herring v. Blakeley, 385 S.W.2d 843, 845 (Tex. 1965) — that an employee's interest in a retirement plan is community property to which the nonemployee spouse is entitled to one-half the value, as of the date of divorce. Berry, 647 S.W.2d at 946. In Herring the Supreme Court awarded the spouse one-half the value of the former husband's interest in the plans, as of the date of the divorce. Herring, 385 S.W.2d at 848 (cited in Berry, 647 S.W.2d at 946). Accordingly, ¶ 1 of the QDRO assigns to Johnston, as of the date of the divorce, "a portion of the benefits payable in the [Plan]."
Under Texas law, "[tihe laws existing at the time a contract is made become a part of the contract and govern the transaction." Wesselly Energy Corp. v. Jennings, 736 S.W.2d 624, 626 (Tex. 1987). The parties explicitly defined Johnston's marital rights in the Plan according to Texas law defined in Berry.
Paragraph 4 quantifies the value of the accrued community benefit as $41,825.00, and ¶ 5 assigns and grants to Johnston, from the Plan, the sum of $20,912.50. This sum is "to be received in the same manner Petitioner is authorized to receive said benefits." Id. ¶ 5 (emphasis added). Paragraph 5 also confers on Johnston the right to "elect any form of payment of then-available benefits when said benefits are eligible for distribution from the Plan." (emphasis added).
The QDRO states in ¶ 6 that it "is not intended to require the Plan to provide any type or form of benefits or any option not otherwise provided by the Plan, nor shall this order require the Plan to provide for increased benefits other than normal interest and appreciation." (emphasis added).
The present nature of the grant and assignment made in the earlier paragraphs is corroborated in ¶ 7, which refers to "[t]he benefits hereby assigned to [Johnston]," and states that benefits "shall be paid to [her] notwithstanding [Willson's] anticipated continued employment." Paragraph 8 refers to "[a]ll benefits payable under the Plan other than those payable to [Johnston]," reflecting that payments will be made directly to her. Additionally, Johnston is obligated under ¶ 9 to "to report any of the Plan payments received on any applicable income tax return," and "[t]he Plan trustee is authorized to issue a Form W-2P on any direct payments made to [her]." (emphasis added). Both provisos would be unnecessary were payments not to be made directly to Johnston under the terms of the QDRO.
Reading ¶¶ 1-9 together, the QDRO unambiguously provides that, as of March 10, 1989, the Texas court assigned and granted to Johnston the sum of $20,912.50, together with normal interest and appreciation accrued thereafter under the Plan; allowed Johnston to elect any form of payment of then-available benefits when they are eligible for distribution; provided that benefits would be paid to Johnston without regard to whether Willson remained employed with Chubb; and contemplated that available benefits would be paid directly to Johnston.
The court now considers ¶ 10, which lies at the heart of the parties' dispute. Two related principles of Texas law must be observed in this process. First, the court must consider all the provisions of the QDRO in an effort to harmonize and give effect to all its provisions. It must not isolate and consider ¶ 10 apart from the balance of the QDRO, and must not give it controlling effect. Second, the court must not interpret ¶ 10 in a manner that fails to give it effect or that renders it meaningless, because parties do not include a clause in a writing unless they intend it to have some effect.
The first sentence of ¶ 10 designates Willson as constructive trustee for any Plan benefits "due to" Johnston "but paid to" Willson. Neither ¶ 10 in particular nor the QDRO as a whole designates Willson as the normal payee for benefits that are due Johnston. There is no indication that the parties intended that the Plan, as a matter of course or of unbridled discretion, would pay Willson benefits that were due to Johnston. Instead, ¶ 10 contemplates that if the Plan pays Willson, he receives such payments as Johnston's constructive trustee. The second sentence of ¶ 10 augments the first sentence by providing a self-executing remedy. If Willson receives benefits due to Johnston, he must pay them directly to her within three days.
The third sentence of ¶ 10 also addresses what will occur if the Plan pays to Willson benefits that are due to Johnston. It states that "[a]ll payments made directly to ROBERT ERWINE WILLSON by CHUBB GROUP OF INSURANCE COMPANIES Capital Accumulation Plan shall be a credit against this order." In other words, if the Plan pays Willson benefits that are due Johnston, the Plan is not also obligated to pay Johnston the same benefits.
Johnston argues that if the document is so interpreted, any plan administrator could disregard a QDRO and distribute to the participant the full value of the account, leaving the alternate payee to fend for herself. This argument lacks force. The first sentence of ¶ 10 — to which Willson and Johnston agreed without any apparent input from the Plan — explicitly contemplates that the Plan might "pa[y] to" Willson benefits that were in fact "due to" Johnston. If ¶ 10 allows the Plan administrator to "disregard" the QDRO, this is the result of an agreement that Willson and Johnston struck. Moreover, as the court has stated above, and explains below, the QDRO should not be interpreted to grant the Plan unfettered authority intentionally to pay Willson benefits to which Johnston is entitled. Under the court's interpretation of the QDRO, the Plan administrator does not have the right deliberately to disregard Johnston's right to direct payment of benefits.
Johnston also reasons that the reference in the third sentence of ¶ 10 to "a credit against this order" is to the order contained in the second sentence of ¶ 10 — that is, the requirement that Willson pay the Plan benefit to Johnston within three days after receipt — rather than to the QDRO itself. She differentiates between the lower case "order" used in the third sentence and the uppercase term "Order." The court disagrees. Johnston's interpretation would be illogical because it would mean that Willson was required by the second sentence of ¶ 10 to pay Johnston within three days of his receipt of a Plan payment due her, only to be entitled by the third sentence of ¶ 10 to a credit against any amount that the Plan paid directly to him.
Johnston also argues that the third sentence of ¶ 10 was "clearly drafted erroneously" and should read "[a]ll payments made directly to BARBARA ELAINE JOHNSTON by CHUBB GROUP OF INSURANCE COMPANIES Capital Accumulation Plan shall be a credit against this order" (emphasis added) rather than "[a]ll payments made directly to ROBERT ERWINE WILLSON by CHUBB GROUP OF INSURANCE COMPANIES Capital Accumulation Plan shall be a credit against this order." (emphasis added). Johnston cites Texas state court opinions in which similar QDROs were entered.
There are at least two problems with this argument. First, such a proviso is unnecessary. Paragraph 10 clearly addresses payments "due to" Johnston "but paid to" Willson. If a benefit is not "paid to" Willson, ¶ 10 is simply not concerned with it. And there is no need to give anyone a credit for payments made to Johnston because ¶ 10 does not even apply to such payments. Second, Johnston has not asserted that this error in ¶ 10 was the result of a mutual mistake. Therefore, she must necessarily rely on a unilateral mistake, but has made no attempt to establish that she is entitled to relief on this basis.
Under Texas law, "[e]quity may permit rescission based on a unilateral mistake only when: (1) the mistake is of so great a consequence that to enforce the contract would be unconscionable; (2) the mistake relates to a material feature of the contract; (3) the mistake occurred despite ordinary care; and (4) the parties can be placed in status quo, i.e., the rescission must not prejudice the other party except for the loss of the bargain." Cigna Ins. Co. of Tex. v. Rubalcada, 960 S.W.2d 408, 412 (Tex.App. 1998, no writ).
Notwithstanding the fallacies in Johnston's arguments, the court cannot accept the Plan Defendants' reasoning. They read ¶ 10 in virtual isolation to support an almost unfettered right to make payments to Willson, immune from liability if they do so. They appear to reason as follows: the Plan paid Willson the funds that Johnston seeks to recover; this disbursement extinguished any duty to Johnston that the QDRO potentially created; the QDRO appointed Willson as Johnston's trustee; Willson must pay those funds to Johnston; and the Plan Defendants are entitled to a credit for all payments made to Willson. This interpretation would excuse the Plan Defendants from liability to Johnston in circumstances that the QDRO manifestly does not intend. For example, the Plan could with impunity intentionally disregard its obligation to pay Johnston and instead pay Willson. Reading the QDRO as a whole, however, it is apparent that Willson and Johnston intended that Johnston receive on March 10, 1989 an assignment of $20,912.50; that this sum would increase through normal interest and appreciation; that she could elect any form of payment of available benefits when they are eligible for distribution from the Plan; that the benefits were assigned without regard to whether Willson remained employed with Chubb; and that the parties intended that available benefits would be paid directly to Johnston. See QDRO ¶¶ 5-7, 9. Willson and Johnston did not intend by ¶ 10 to vest the Plan with the authority intentionally to pay Willson rather than Johnston, thereby overriding several other provisos that conferred on Johnston a right to direct payment. Cf. id. ¶ 5 ("the Court assigns and grants to [Johnston] from the Plan the sum of $20,912.50 to be received in the same manner Petitioner is authorized to receive said benefits. [Johnston] may elect any form of payment of then-available benefits when said benefits are eligible for distribution from the Plan."); 7 (providing that "[t]he benefits hereby assigned" to Johnston shall be paid notwithstanding Willson's anticipated continued employment with Chubb); 9 (ordering Johnston to report any of the Plan payments received on any applicable income tax return, and authorizing Plan trustee to issue Form W-2P on any direct payments made to Johnston). To interpret ¶ 10 as do the Plan Defendants is to disregard the balance of the QDRO, which is impermissible. See, e.g. Priem v. Shires, 697 S.W.2d 860, 865 (Tex.App. 1985, no writ) ("We may not interpret the single provision in question to so distort the other express provisions and the whole tenor and effect of the parties' contract.") (citing Coker, 650 S.W.2d at 393).
The court is addressing here the issue of liability under the QDRO as distinguished from the separate question whether such conduct would constitute a breach of fiduciary duty.
The most reasonable interpretation of ¶ 10 is that it is a safety valve that governs payments of Johnston's benefits that, through unintended error, the Plan makes to Willson. Paragraph 10 explicitly contemplates that the Plan might pay to Willson benefits that are due to Johnston. Read together with the other paragraphs of the QDRO, it reflects the parties' intention that if this occurs, Willson will receive such funds in his capacity as Johnston's constructive trustee and will become obligated to pay them to her within three days of receipt, and the Plan will be entitled to a credit for such payments against its obligation to Johnston. Accordingly, although ¶ 10 neither makes Willson the normal payee of benefits due to Johnston nor grants the Plan a license to pay Willson despite the assignment to Johnston, it does protect the Plan against unintentional errors.
E
Having so interpreted the QDRO, the court cannot grant summary judgment in favor of Johnston or the Plan Defendants. Because neither side proffered the interpretation of the QDRO that the court now adopts, neither has addressed in the relevant context the question whether the Plan Defendants acted inadvertently in paying Willson rather than Johnston. If Johnston establishes that they did not act inadvertently, she is entitled to recover normal interest and appreciation on the sum of $20,912.50 for the period March 10, 1989 to September 30, 1997. If she fails to meet this burden, she must look to Willson, as her constructive trustee, for recovery.
F
The court declines to grant summary judgment concerning Johnston's breach of fiduciary duty claim because there are unsettled questions that impact the merits of this cause of action. Without suggesting a view on the following matters, the court sets out a nonexclusive list of unresolved questions that may bear on whether the Plan Defendants can be held liable for such a breach. If Johnston seeks by this claim to recover investment earnings, gains, and losses that were due for the period March 10, 1989 through September 30, 1997, but the court later holds that the Plan Defendants are entitled to a credit under ¶ 10 of the QDRO for payments made in error to Willson, can Johnston recover such relief under a breach of fiduciary duty theory? If neither Johnston nor the Plan Defendants properly interpreted the QDRO, can the Plan Defendants be held liable for breach of fiduciary duty? Can the Plan Defendants be held liable if the QDRO specifically contemplated that the Plan might mistakenly pay Willson benefits due to Johnston, and awarded the Plan a credit for any such payments? Can Johnston prevail on a breach of fiduciary duty theory based on the Plan's failure until September 30, 1997 to establish a separate account? The court therefore denies both sides' motions for summary judgment to the extent they relate to Johnston's breach of fiduciary duty claim.
III
Johnston next asserts that she is entitled to recover from the Committee, pursuant to 29 U.S.C. § 1132(c)(1), a $100 per day penalty for violating 29 U.S.C. § 1024(b)(4) by refusing or failing, despite her proper request, to provide her a copy of the Plan document, the related summary plan description, the Plan's trust agreement, and the latest annual report on Form 5500. She maintains that she should recover this penalty because neither Chubb nor the Committee produced the required documents until after she filed suit.
The Committee has introduced evidence from Marciano, however, that it never received the request and that Marciano first became aware of it on September 28, 1998. See Ds. Mar. 20, 2000 App. 8. There are several factors that a court considers when exercising its discretion whether to impose a penalty. See, e.g., Hamilton v. Mecca Inc., 930 F. Supp. 1540, 1556 (S.D. Ga. 1996) ("In determining whether to assess a penalty under this provision, courts generally consider factors such as bad faith or intentional conduct on the part of the administrator, the length of the delay, the number of requests made and documents withheld, and the existence of any prejudice to the participant or beneficiary."). Obviously, a genuine issue of material fact regarding when the Committee actually received the request bears significantly on the court's assessment of the Committee's conduct and the exercise of the court's discretion. Moreover, the court is unable, based on the summary judgment record alone, adequately to assess the other relevant factors. The court therefore denies Johnston's motion for summary judgment as to this claim.
* * *
For the reasons set out, the court denies the motions for summary judgment.
SO ORDERED.