United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
A. FITZWATER, SENIOR JUDGE.
move for summary judgment in this ERISA and breach of
contract action. The principal questions presented are
whether the plan administrator abused her discretion in
denying plaintiff Raymond Romo (“Romo”) benefits
under an employee severance plan and whether Romo can prove
that defendants breached other contractual equity awards. For
the reasons that follow, the court grants defendants'
motion and dismisses this action by judgment filed today.
worked as an accountant in the waste management industry for
over 30 years. In 2013 Romo began working for IESI MD
Corporation (“IESI”), which was an operating
subsidiary of Progressive Waste Solutions, Ltd.
(“Progressive”), as a district controller. After
one year, Romo was promoted to the position of area
controller. Romo's responsibilities included managing and
providing analytical support for internal operations and
external transactions, overseeing internal control processes
and budgeting, and supervising other controllers and
2016 Progressive merged with defendant Waste Connections US,
Inc. (“Waste Connections”), and IESI became an
operating subsidiary of Waste Connections. Prior to the
merger, Romo was designated as a participant in several
retention and incentive plans. Four of these plans are at
issue in the instant case: the 2014 President's Award
(“President's Award”); the 2015 Long Term
Incentive Plan (“2015 LTIP”); the 2016 Long Term
Incentive Plan (“2016 LTIP”); and the 2016 IESI
Change in Control Severance Plan - Tier II (“Severance
Plan”). The Severance Plan is an ERISA plan designed by
defendant Progressive Waste Solutions of TX, Inc.
(“Progressive TX”) to provide severance
protection for certain employees if their employment ended
during a fixed protection period (February 2016 through June
the merger, Romo continued to work for IESI, but his title
changed to division controller, and he directed the
accounting and supporting financial functions for a
13-district area. To assist with the transition to Waste
Connections, Romo's new direct supervisor, Doug McDonald
(“McDonald”), sent another Waste Connections
division controller to support and train Romo and his team.
By the end of 2016, Romo had “become comfortable”
with Waste Connections' policies and procedures. Ds. App.
subset of the policies and procedures that Romo
understood-and stressed to his staff-was the importance of
complying with reporting deadlines. Despite this
understanding, Romo missed multiple reporting deadlines.
McDonald spoke with Romo in January 2017 about missing
deadlines and Romo told McDonald that his team was making a
commitment to meet their deadlines, but Romo missed at least
one deadline after this conversation.
similar time, Waste Connections was in the process of selling
its assets in the Washington, D.C. market as part of the
original plan of merger with Progressive. The Washington,
D.C. districts were part of Romo's 13-district area, and
he was asked to assist with the due diligence. Romo complied
and completed the due diligence requirements, as well as his
regular job functions, without receiving additional,
requested support. The transaction closed in mid-February
the divestiture of the Washington, D.C. districts, Romo was
still responsible for managing accounting functions related
to that transaction. A portion of the accounting functions
involved reconciling and closing general ledger accounts,
and, while performing those functions, Romo identified a cash
balance of approximately $400, 000 in a zero-balance account.
Romo knew that the balance was unacceptably high and that it
should have been reconciled. Despite this knowledge and the
fact that the balance sheet for the Washington, D.C.
districts was not complete, Romo signed off on the February
2017 balance sheet as complete. And the next month-again
without reconciling the variance in the account-Romo signed
off on the March 2017 balance sheet as complete. During this
time, Romo did not ask for assistance and he did not note or
otherwise maintain documentation about the variance.
April 2017 Romo, McDonald, and other Waste Connections
executives toured the Eastern Region. While on the region tour,
McDonald discovered the variance in the zero-balance account.
McDonald began investigating the discrepancy and asked Romo
for his documentation supporting the cash transfers that were
wired during the process of apportioning payments between
Waste Connections and the buyer of the Washington, D.C.
districts. According to McDonald, no supporting documentation
existed for the wires, which made it impossible to properly
reconcile the account. McDonald, Romo, and an assistant
region controller left the tour in an attempt to determine
why the account was not balanced. Ultimately, after spending
part of two days working on the account reconciliation,
Romo's employment was terminated.
months later, in July 2017, Romo's counsel sent a demand
letter to IESI in which he requested payment of benefits
under the President's Award, 2015 LTIP, 2016 LTIP
(collectively, the “Equity Incentive Plans”), and
the Severance Plan. Per the terms of the Severance Plan, upon
receipt of a written demand for benefits, IESI had 90 days to
determine whether benefits should be granted. Prior to the
expiration of 90 days, in October 2017, Susan Netherton, the
plan administrator (“Plan Administrator”),
notified Romo's counsel that she had been appointed by
IESI to serve as the Plan Administrator for purposes of
making the benefits determination. The Plan Administrator
also informed Romo's counsel that she was extending the
response time, in accordance with the terms of the Severance
Plan, by an additional 90 days, to January 13, 2018.
Plan Administrator did not issue her determination on or
before January 13, 2018. As a result, Romo's counsel sent
a letter to the Plan Administrator asserting that Romo's
administrative remedies had been exhausted because he had not
received a claim determination within the time prescribed by
the Severance Plan. But on January 23, 2018 the Plan
Administrator provided Romo two letters. First, she sent a
letter denying Romo's benefits claim under the Severance
Plan and explaining the reasons for the denial. Second, she
sent a letter explaining that she had also been referred the
determination whether to pay Romo under the Equity Incentive
Plans, and that, upon her review of the plans and
circumstances surrounding Romo's termination, Romo's
claims under these plans were also denied. A critical
component of the Plan Administrator's denials was her
determination that Romo was terminated for just cause as
defined in three of the four plans in issue: the Severance
Plan, the 2015 LTIP, and the 2016 LTIP.
March 2018, after additional correspondence between
Romo's counsel and counsel for the defendants, Romo filed
the instant suit against Waste Connections and Progressive
TX. Romo alleges that the defendants wrongfully denied his
claim to benefits under the Severance Plan and the Equity
Incentive Plans. Defendants now move for summary judgement,
contending that the Plan Administrator's denial of
benefits under the Severance Plan was proper and that Romo
cannot establish breach of the Equity Incentive Plans. Romo
opposes the motion.
are moving for summary judgment on claims on which Romo has
the burden of proof. Because Romo has the burden of proof,
defendants' burden at the summary judgment stage is to
point the court to the absence of evidence of any essential
element of Romo's claim. See Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). Once they do so, Romo
must go beyond his pleadings and designate specific facts
demonstrating that there is a genuine issue of fact. See
Id. at 324; Little v. Liquid Air Corp., 37 F.3d
1069, 1075 (5th Cir. 1994) (en banc) (per curiam). An issue
is genuine if the evidence is such that a reasonable trier of
fact could find in Romo's favor. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Romo's failure to produce proof as to any essential
element of the claim renders all other facts immaterial.
TruGreen Landcare, L.L.C. v. Scott, 512 F.Supp.2d
613, 623 (N.D. Tex. 2007) (Fitzwater, J.). Summary judgment
is mandatory if Romo fails to meet this burden.
Little, 37 F.3d at 1076.
court turns first to the question whether Romo can
demonstrate that the Plan Administrator abused her discretion
by denying Romo's claim to benefits under the Severance
maintain that the court should apply the abuse of discretion
standard of review to the Plan Administrator's denial of
benefits under the Severance Plan. Romo contends that de
novo is the standard to apply. The court concludes that
abuse of discretion is the proper standard of review.
denial of benefits challenged under § 1132(a)(1)(B) is
to be reviewed under a de novo standard unless the
benefit plan gives the administrator or fiduciary
discretionary authority to determine eligibility for benefits
or to construe terms of the plan.” Firestone Tire
& Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
Here, the Severance Plan grants the Plan Administrator
discretionary authority to determine eligibility for
Severance Plan benefits and to interpret the terms of the
Severance Plan, meaning that abuse of discretion is the
proper standard of review.
contends, however, that de novo review is
appropriate due to defendants' “failure to render a
timely decision” and “violation of one or more
requirements of 29 [C.F.R. §] 2560.503-1.” P. Br.
20. This is, in effect, an allegation that the Plan
Administrator violated ERISA procedural requirements.
Challenges to ERISA procedures are evaluated under the
substantial compliance standard. Lacy v. Fulbright &
Jaworski, 405 F.3d 254, 256-57 & n.5 (5th Cir.
2005). This means that the “technical noncompliance
with ERISA procedures will be excused so long as the purpose
of section 1133 has been fulfilled.” Robinson v.
Aetna Life Ins., 443 F.3d 389, 393 (5th Cir. 2006). The
purpose of section 1133 is “to afford the beneficiary
an explanation of the denial of benefits that is adequate to
ensure meaningful review of that denial.” Schneider
v. Sentry Long Term Disability, 422 F.3d 621, 627-28
(7th Cir. 2005).
Wade v. Hewlett-Packard Dev. Co. LP Short Term Disability
Plan, 493 F.3d 533, 539 (5th Cir. 2007), abrogated
on other grounds by Hardt v. Reliance Standard Life ...