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Case: 14-1490

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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION


No. 14-1490
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

E. FRANK CORNELIUS,
Plaintiff-Appellant,
v.
DYKEMA GOSSETT PLLC RETIREMENT
PLAN; DYKEMA GOSSETT PLLC,
Defendants-Appellees.

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FILED
Feb 17, 2015
DEBORAH S. HUNT, Clerk

ON APPEAL FROM THE UNITED


STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF
MICHIGAN

ORDER

Before: BOGGS, NORRIS, and CLAY, Circuit Judges.


E. Frank Cornelius, a Michigan resident proceeding pro se, appeals a district court
judgment dismissing his civil complaint under the Employee Retirement Income Security Act of
1974 (ERISA), 29 U.S.C. 1001. This case has been referred to a panel of the court pursuant
to Federal Rule of Appellate Procedure 34(a). Upon examination, we unanimously agree that
oral argument is not needed. Id.
Cornelius was employed with the law firm Dykema, Gossett, Spencer, Goodnow & Trigg
(now Dykema Gossett PLLC (Dykema)) from September 9, 1974, until January 2, 1981. As
an employee, he participated in the Dykema retirement plan (the Plan). Cornelius retired in
March 2007 and began receiving early retirement benefit payments in the amount of $171.11 per
month. In 2008, Cornelius requested information concerning the computation of his monthly
benefit payments and, in 2010, he filed a claim with the plan administrator, asserting that the

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-2method for calculating his compensation for 1974 was flawed and resulted in an improper
reduction of his benefits.

The plan administrator rejected Corneliuss challenge, and his

administrative appeal was denied.


In 2011, Cornelius filed a complaint and an amended complaint challenging the method
used in calculating his compensation for 1974, claiming that the defendants: (1) failed to
unambiguously identify the plan administrator; (2) calculated his compensation for 1974 in a
manner contrary to the Plans and ERISAs prohibition against double prorationi.e.,
converting part-time employment into its full-year equivalent by prorating both compensation
and service; and (3) breached their fiduciary duties under ERISA by failing to disclose the
annualization method in a Summary Plan Description (SPD). Cornelius moved to file a
second amended complaint, seeking to assert claims that the defendants:

(1) failed to

unequivocally designate a plan administrator; (2) failed to provide an SPD that disclosed the
use of a 45-hour week equivalency to annualize an attorneys part-year compensation; (3) failed
to distribute SPDs and summaries of material modifications (SMMs) every five years as
required by ERISA; (4) failed to provide Cornelius with a copy of the third amendment to the
1973 Plan, which would permit him to determine the date he began participating in the Plan; (5)
failed to provide SPDs and SMMs for the 1979 Plan as required under ERISA; (6) utilized a
flawed procedure to annualize part-year compensation and violated the Plans prohibition on
double proration; (7) miscalculated his benefits by incorrectly annualizing his compensation for
1974; and (8) breached their Fiduciary Duties and the Prudent Man Standard by incorrectly
annualizing employee compensation and underpaying contributions to the Plan.
A magistrate judge issued a report recommending that the district court deny Corneliuss
motion in part, reasoning that amendment would be futile with respect to claims 1-5 because: (1)
Dykema identified the plan administrator (claim 1); (2) Cornelius lacked standing to pursue an
order requiring the defendants to provide ERISA-required notices on behalf of beneficiaries and
participants who are not parties to the lawsuit (even though the magistrate judge determined that
ERISA required SPDs to include a description of the annualization method) (claim 2);
Corneliuss affidavit indicated that Dykema had provided him with all plan documents and

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-3amendments from 1973 through 2010 as required under ERISA (claims 3-5). The magistrate
judge recommended granting the motion as to claims 6-8 because they were contained in the first
amended complaint. The district court adopted the magistrate judges recommendation to deny
the motion to add claims 1-5 but rejected the magistrate judges determination that ERISA
required Dykema to include the methodology for converting part-time compensation to a fulltime equivalent in an SPD. Rather, the district court determined that, even though Cornelius may
have standing to seek ERISA-required disclosures for himself, his proposed claim was futile
because ERISA does not require an SPD to include the details for prorating work for a part-time
employee.
In 2013, Cornelius filed his second amended complaint, claiming that:

(1) the

defendants method for annualizing employee compensation was flawed; (2) the defendants
owed him additional benefits because they improperly annualized his 1974 compensation; and
(3) the defendants breached their Fiduciary Duties and the Prudent Man Standard by
incorrectly annualizing employee compensation and underpaying contributions to the Plan.
Subsequently, Cornelius filed a Motion to Determine Administrative Record, asserting that the
defendants failed to include various documents in the administrative record, including emails
between Dykema employees concerning his challenge to the calculation of his Plan benefits. He
also filed a motion seeking to enjoin the defendants from including affidavits from Dykemas
Human Resources Manager Lani Givens and its Human Resources Director Kimberly Amodeo,
arguing that they were prepared after the administrative proceedings had closed and were not
credible. The parties filed cross-motions for summary judgment.
The district court granted summary judgment to the defendants. First, the district court
determined that no conflict of interest existed in light of Dykemas dual responsibility for
administering the Plan and making contributions to the Plan. Next, the district court determined
that Dykemas method for annualizing Corneliuss 1974 compensation was not arbitrary and
capricious because Dykema reasonably interpreted the Plan language when determining his
Final Average Compensation, as defined in Section 2.13 of the 1976 Retirement Plan. Finally,

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-4the district court denied in part Corneliuss motion to determine the administrative record,
concluding that the emails Cornelius sought were protected by attorney-client privilege.
On appeal, Cornelius argues that the district court improperly granted summary judgment
to the defendants because it: (1) improperly denied him discovery; (2) erroneously concluded
that the defendants method for annualizing his part-time compensation was reasonable; (3)
ignored a genuine issue of material fact concerning what method Dykema actually used to
annualize his compensation; (4) ignored evidence that Dykemas calculations did not produce
equivalent compensation as required by the Plan; (5) improperly determined that he was not a
plan participant during a period following the end of his employment with Dykema; (6) ignored
Dykemas annualization errors that affected the Plan after Cornelius ended his employment with
Dykema; (7) erroneously concluded that there was no conflict of interest because Dykema had
interpreted the Plan in a manner that reduced its contributions to the Plan; (8) failed to discuss
the issue of double proration and credited service; (9) erroneously determined that the 1980 plan
controlled the reduction percentage used to calculate his early retirement benefits; (10) failed to
address Dykemas breach of its fiduciary duties; (11) erroneously concluded that Cornelius
lacked standing to pursue relief under ERISA 502(a)(2) when it determined that he sought
relief on behalf of other Plan participants; (12) erroneously determined that he is entitled to only
the most recent Plan document and SPD; (13) improperly denied his motion to amend his
complaint; and (14) improperly stated that his complaint constituted an administrative appeal
challenging the method used to calculate his retirement benefits.

Cornelius requests oral

argument.
We review a district courts decisions regarding discovery matters for an abuse of
discretion.

Reversal is proper only if we are firmly convinced of a mistake that affects

substantial rights and amounts to more than harmless error. Himes v. United States, 645 F.3d
771, 782 (6th Cir. 2011) (internal quotation marks and citation omitted). However, whether
the attorney-client privilege applies is a mixed question of law and fact, subject to de novo
review. Automated Solutions Corp. v. Paragon Data Sys., Inc., 756 F.3d 504, 517 (6th Cir.

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-52014) (quoting Reg'l Airport Auth. of Louisville v. LFG, LLC, 460 F.3d 697, 712 (6th Cir.
2006)).
Cornelius argues that the district court improperly denied his requests for documents and
emails related to Dykemas benefits determination. He also argues that the district court did not
respond to his request to depose Human Resources Manager Givens and Human Resources
Director Amodeo. Contrary to Corneliuss arguments, the district court properly concluded that
the emails he sought were protected by attorney-client privilege because they involved
communications between Dykemas general counsel and individuals responsible for
administering the Plan and were prepared after Cornelius advised Dykema that he was prepared
to litigate the decision regarding his claim for additional benefits. See In re Perrigo Co., 128
F.3d 430, 437 (6th Cir. 1997). James Obermanns, appointed as Benefits Member for the Plan,
averred that he reviewed Corneliuss claim for additional early retirement benefits and noted that
Cornelius had already made a complaint to the Department of Labor and stated that he was
prepared to file a lawsuit in the event that his administrative claim for additional benefits was
denied.
Second, although Cornelius argues that the district court did not respond to his request to
depose Givens and Amodeo, he did not make the request in his motion to determine the
administrative record. Rather, he made the request in his reply to the defendants response to his
motion to enjoin the defendants from including additional documents in the administrative
record, and stated that he wished to depose Givens and Amodeo in the event that Dykema was
allowed to add materials prepared after the close of the administrative record. Because the
district court did not permit the addition of documents prepared after the close of the record there
was no need to respond to his deposition request.
Finally, although Cornelius argues that the district court erred when it denied him other
documents generated in the course of Dykemas benefits determination, he does not specify the
documents to which he refers or provide a specific challenge to the district courts reasoning for
denying discovery with respect to such documents. Therefore, he has abandoned any challenge
to the denial of those documents for purposes of appellate review. See Harris v. J.M. Smuckers

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-6Co., 215 F.3d 1326 (6th Cir. 2000) (table opinion) (Issues must be briefed adequately to be
preserved.).
The district court also did not abuse its discretion when it denied in part Corneliuss
motion to submit a second amended complaint. See Colvin v. Caruso, 605 F.3d 282, 294 (6th
Cir. 2010). A motion to amend a complaint should be denied if the amendment is brought in
bad faith, for dilatory purposes, results in undue delay or prejudice to the opposing party, or
would be futile. Crawford v. Roane, 53 F.3d 750, 753 (6th Cir. 1995). Here, the district court
properly adopted the magistrate judges recommendation that claim 1 of the proposed amended
complaint would be futile because Dykema had been designated as the Plan administrator. The
district court properly determined that claim 2 would be futile and rejected the magistrate judges
finding that SPDs were required to describe the annualization method because the rules
governing the format and content of SPDs do not require a description of the method for
annualizing part-time compensation. See 29 U.S.C. 1022(b); 29 C.F.R. 2520.102-3. Finally,
the district court determined that claims 3-5 would be futile because ERISA requires that
Dykema provide Cornelius with a copy of only the latest Plan documents and SPD.

See

29 U.S.C. 1024(b)(4). Therefore, contrary to Corneliuss argument, Dykema was not required
to provide him with a copy of the third amendment to the 1973 Plan.
We review de novo the district courts grant of summary judgment. Younis v. Pinnacle
Airlines, Inc., 610 F.3d 359, 361 (6th Cir. 2010). Summary judgment is appropriate when the
evidence presented shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The moving party
bears the burden of showing that there is an absence of evidence to support the nonmoving
partys case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The party opposing a motion
for summary judgment may not rest upon the mere allegations or denials of his pleading, but . . .
must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986) (internal quotation marks and citation omitted); see Fed.
R. Civ. P. 56(c).

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-7The defendants are entitled to summary judgment on Corneliuss claim that the plan
administrators method for annualizing part-year compensation is flawed. Where an ERISA plan
affords the plan administrator discretion to determine whether benefits are due, federal courts
review the administrators determination under an arbitrary-and-capricious standard.

See

Wenner v. Sun Life Assurance Co. of Can., 482 F.3d 878, 881 (6th Cir. 2007). We review a
district courts disposition of an ERISA action based on the administrative record de novo and
apply the same legal standard as the district court. Id.
Cornelius asserts numerous arguments in support of his claim that the district court erred
when it granted summary judgment for the defendants. Contrary to Corneliuss arguments, the
district court properly upheld the plan administrators denial of his claim for additional benefits.
The district court correctly determined that the Plan grants the plan administrator full discretion
to construe and interpret the Plan, decide all questions of eligibility and determine the amount,
manner and time of payment of any benefits under the Plan . . . . Cornelius v. Dykema Gossett
PLLC Ret. Plan, No. 11-13186, 2014 WL 1230088, at *2 n.5 (W.D. Mich. Mar. 25, 2014).
Therefore, the district court properly applied the arbitrary-and-capricious standard when
reviewing Corneliuss claim. Under this standard, the plan administrators decision will be
upheld if it is the result of a deliberate, principled reasoning process that is rational in light of the
plans provisions. See Cooper v. Life Ins. Co. of N. Am., 486 F.3d 157, 165 (6th Cir. 2007).
When the plan authorizes the administrator to decide whether an employee is eligible for benefits
and to pay those benefits, it creates a conflict of interest that must be taken into consideration
when deciding whether the administrators decision was arbitrary and capricious. Id.
The district court properly determined that no conflict of interest existed in light of
Dykemas dual responsibility for administering the Plan and making contributions to the Plan
because Cornelius failed to present evidence that the dual role affected Dykemas benefits
decision. See Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 117 (2008). Cornelius argues that the
underfunding of the Plan, based on alleged miscalculations of employee compensation,
establishes that there is a conflict of interest. However, as explained more thoroughly below, the
plan administrator established that the annualization method is supported by the Plans terms. In

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-8addition, the district court noted that the difference resulting from selecting Corneliuss proposed
calculations would be less than $2.00 per month and does not represent an amount that would
have affected the benefits decision. See id.
The district court properly determined that the plan administrator reasonably interpreted
the terms of the Plan and selected an appropriate method for annualizing Corneliuss 1974
compensation. Dykema explained that its determination of Corneliuss 1974 compensation was
based on the Final Average Compensation language set forth in the April 1976 Retirement
Plan, which provides that:
In the determination of the Final Average Compensation of any Employee who
has been employed at any time by the firm on a part-time basis . . . . the
Employees Compensation for any such period shall be converted to a full-time,
full-year equivalent by multiplying the Employees Compensation for such period
by a fraction, the numerator of which is the normal annual number of hours for a
regular full-time Employee, and the denominator of which is the Employees parttime or part-year hours for the same period.
Section 2.13. This same section provides that the proposed calculations are intended to avoid
double proration in the computation of benefits for Employees who at any time have been
employed by the Firm on a part-time basis or for less than a full year.
To determine an employees annualized compensation, Dykema multiplies his actual
compensation for the year he was partially employed by the fraction described above. Dykema
interpreted the language for determining the numerator, i.e., the normal annual number of hours
for a regular full-time Employee as referring to a generic category of employees who work 8
hours per day and multiplied that number by the number of work days in the year. Dykema
interpreted the language for determining the denominator, i.e., the Employees . . . part-year
hours for the same period as referring to the employees actual credited hours. However,
because of the difficulty in determining the number of hours actually worked by attorneys
covered by the Plan, Dykema utilized a 45-hour work week for such participants. This decision
is based on the terms of the Plan that permit the plan administrator to determine Hours of
Service for . . . . some or all employees, by crediting to an Employee 45 hours of Service for
each week for which the Employee would be credited with at least one Hour of Service under the

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-9regular definition of Hour of Service in the preceding paragraph. Finally, the district court
noted that Dykema properly selected the early retirement reduction factor of .90 from the 1980
Plan because that was the Plan in effect when his employment with Dykema ended in January
1981. In light of the plan administrators reasonable interpretation of the Plans terms, the
district court properly concluded that the methodology used to annualize an employees part-time
or part-year compensation was reasonable.
The district court also properly granted summary judgment to the defendants on
Corneliuss claim that Dykemas method for annualizing part-year compensation resulted in the
Plan being underfunded. Amodeo averred that Dykema used the annualization method described
above with respect to only three attorney participants (including Cornelius), and that
recalculating their retirement benefits using Corneliuss proposed method would increase their
benefits by only $1.62 per month. Cornelius argues that this claim is disingenuous and states
that he presented worksheets from the defendants establishing that at least four plan participants,
in addition to himself, have been affected by Dykemas methodology. However, even five plan
participants miscalculation by such a small amount would not result in a significant
underfunding. Cornelius failed to establish that Dykemas annualization method resulted in a
serious underfunding of the plan.
Finally, the district court properly granted summary judgment to the defendants on
Corneliuss claim that Dykema breached its fiduciary duties by underfunding the Plan. Because
the method for annualizing employee compensation is not flawed, Cornelius has not established
that Dykema made incorrect contributions to the Plan. Cornelius reasserts his arguments that
Dykema failed to comply with various ERISA notice requirements. However, as explained
above, the district court properly determined that ERISA does not require Dykema: (1) to
distribute SPDs that describe the details of the annualization method for part-year compensation,
see 29 U.S.C. 1022(b); 29 C.F.R. 2520.102-3; or (2) to provide participants with anything
more than the latest Plan documents and SPD. See 29 U.S.C. 1024(b)(4). Although Cornelius
argues that Dykema violated ERISAs appeal regulations, the documents included in the

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- 10 administrative record reflect that Dykema considered his arguments, rejected his claim, and
notified him of the reasons for its benefits decision.
Accordingly, we DENY the request for oral argument and AFFIRM the district courts
judgment. Fed. R. App. P. 34(a)(2)(C).

ENTERED BY ORDER OF THE COURT

Deborah S. Hunt, Clerk