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Romo v. Waste Connections US, Inc.

United States District Court, N.D. Texas, Dallas Division

August 9, 2019

RAYMOND ROMO, Plaintiff,



         Defendants move for summary judgment in this ERISA[1] 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.


         Romo worked as an accountant in the waste management industry for over 30 years.[2] 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 accountants.

         In June 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 2017).

         After 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. 50.

         A 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.[3]

         At a 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 2017.

         After 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.

         In April 2017 Romo, McDonald, and other Waste Connections executives toured the Eastern Region.[4] 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.

         Three 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.

         The 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.

         In 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, [5] 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.[6]


         Defendants 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.


         The 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 Plan.


         Defendants 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.

         “[A] 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.

         Romo 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 ...

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