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Little v. Reynolds American Inc.

United States District Court, N.D. Mississippi, Oxford Division

January 9, 2017

CHARLES LITTLE PLAINTIFF
v.
REYNOLDS AMERICAN INC. DEFENDANT

          ORDER

          MICHAEL P. MILLS, UNITED STATES DISTRICT JUDGE NORTHERN DISTRICT OF MISSISSIPPI

         This cause comes before the Court on defendant Reynolds American Inc.'s (“RAI”) Motion for Summary Judgment [12]. Plaintiff Charles Little (“Little”) filed a response in opposition to the motion, to which RAI filed a reply. Having given due consideration to the submissions of the parties, along with relevant case law and evidence, the Court is now prepared to rule.

         I. Relevant Factual and Procedural Background

         Charles Little began working at Lorillard Tobacco Company in June 1977. As part of his employment, Little participated in the Retirement Plan for Employees of Lorillard Tobacco Company (“the Plan”). After working with the company for over twenty-nine years, Little retired on November 1, 2006. At the time of his retirement, Little was married to his wife, Suzanne Little.

         Prior to his retirement, on April 30, 2006, Little completed an “Early Retirement Program Election” form, indicating that he wished to participate in the company's early retirement program. In accordance with the terms of the Plan, Little was later presented with a company form entitled “Election of Retirement Income Option” and instructed to complete it. As its name suggests, the form provides retiring employees an opportunity to select his or her desired option for retirement benefits. Under the Plan, Little had four different options for retirement benefits.

         The form listed the four options, along with a brief description of each and the amount of payment Little would receive under each option. The four options were:

Option 1: Life Annuity Option- “A monthly retirement income payable for my lifetime, with all the payments ceasing at my death.” The listed amount was $1, 994.01/month.
Option 2: 100% Joint and Survivor Option- “A reduced monthly retirement income payable for my lifetime, with the same amount payable to the joint annuitant named below.” The listed amount was $1, 575.27/month.
Option 3: 50% Joint and Survivor Option- “A reduced monthly retirement income payable for my lifetime, with one-half of that amount payable after my death to the joint annuitant named below.” The listed amount was $1, 754.73/month.
Option 4: Ten Year Certain Option- “A reduced monthly retirement income payable for my lifetime, with the provision that, if I die within ten years after my retirement, the pension will continue to be paid to my beneficiary named below for the remainder of the ten year period.” The listed amount was $1, 934.19/month.

         Although he disputes that he actually made the selection, the form submitted by Little on September 15, 2006, containing his signature appears to select Option 2, as there is an “X” beside that option and it is circled. However, Little left blank the sections of the form for “Designation of Joint Annuitant or Beneficiary under Option 2, 3, or 4” and “Designation of Beneficiary for the Lump Sum Death Benefit paid from the Pension Plan.” Lorillard later returned the form to Little due to his failure to list a beneficiary for the lump sum death benefit. Accordingly, Little completed that section of the form, listing his wife as the beneficiary. However, Little still did not complete the section for “Designation of Joint Annuitant or Beneficiary under Option 2, 3, or 4.”

         After his retirement, Little began receiving $1, 575.27 per month-the proper amount under Option 2. On March 25, 2015, Little and his wife divorced. At some point thereafter, Little contacted Lorillard to inquire about removing his wife as the beneficiary. However, he alleges that he was informed that his election was irrevocable and “[learned] that he should have been getting a monthly payment of $1, 754.73 under Option 3, the 50% Joint and Survivor Option, instead of the $1, 575.27 he had been receiving under Option 2.”

         Thereafter, on May 4, 2015, Little filed a claim for benefits with the company, arguing that he did not designate a joint annuitant or beneficiary on his election form and, thus, his form was void and he should have been placed in the default Option 3 category, which provided a larger monthly payment. In pertinent part, the Plan provides that “if the participant's spouse shall survive the participant, a retirement allowance shall be payable under the Plan to the participant's surviving spouse during the surviving spouse's remaining lifetime after the participant's death, in an amount equal to 50% (or such higher percentage, not in excess of 100%, as the participant shall have specified on the appropriate form submitted to the Retirement Committee in connection with the Participant's claim for benefits)[.]” Little relies on this language for the assertion that the 50% Joint and Survivor Option-Option 3-was the default option. Therefore, he argues that because the election form he completed was void, he should have been placed in the Option 3 default category.

         In June 2015, Lorillard merged with RAI, and RAI assumed the role of sponsor of the Plan. On August 25, 2015, ITG Brands, LLC (“ITG”), a company that was at the time handling transitional services under the Plan following the RAI and Lorillard merger, provided Little with a response to his claim, stating that it was being denied because his selection of Option 2 was irrevocable and his failure to list his ...


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