Free Report - District Court of Arizona - Arizona

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Susan Martin (AZ#014226) Daniel L. Bonnett (AZ# 014127) Jennifer Kroll (AZ#019859) MARTIN & BONNETT, PL.L.C. 3300 N. Central Avenue, Suite 1720 Phoenix, Arizona 85012-2517 Telephone: (602) 240-6900 [email protected] [email protected] [email protected] Attorneys for Plaintiffs David B. Rosenbaum, Atty. No. 009819 Dawn L. Dauphine, Atty. No. 010833 OSBORN MALEDON, P.A. 2929 North Central Avenue, Suite 2100 Phoenix, AZ 85012-2794 Telephone: (602) 640-9000 [email protected] [email protected] Michael L. Banks, Pro Hac Vice William J. Delany, Pro Hac Vice Azeez Hayne, Pro Hac Vice MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5000 [email protected] [email protected] [email protected] Attorneys for Defendants IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Barbara Allen, Richard Dippold, Melvin Jones, Donald McCarty, Richard Scates and Walter G. West, individually and on behalf of all others similarly situated, Plaintiffs, vs. Honeywell Retirement Earnings Plan, Honeywell Secured Benefit Plan, Plan Administrator of Honeywell Retirement Earnings Plan, and Plan Administrator of Honeywell Secured Benefit Plan, Defendants.
Case 2:04-cv-00424-ROS Document 148

No. CV04-0424 PHX ROS

JOINT PROPOSED CASE MANAGEMENT PLAN

Filed 04/03/2006

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Pursuant to the Court's Order Setting Scheduling Conference and Case Management Meeting dated March 2, 2006, the parties, by their undersigned counsel, hereby jointly submit this Proposed Case Management Plan. The nature of the case, including the factual and legal basis of Plaintiff's claims and Defendants' defenses.
1. (a)

Plaintiffs' Description of the Case.

The facts of this case are set forth in Plaintiffs' Amended Complaint, Statement of Facts in Support of Plaintiffs' motion for summary judgment and in the Court's July 19, 2005 Order granting in part and denying in part Plaintiffs' motion for summary judgment. Many of the legal issues were decided by the Court in Plaintiffs' favor on Plaintiffs' motion for partial summary judgment, including Plaintiffs' claims that Defendants impermissibly cutback their accrued benefits by inter alia: amending the Plan to retroactively increase the interest rate used to calculate participants' SBA Offsets; by applying a Social Security offset attributable to years of service earned prior to introduction of that offset, and by eliminating a fractional reduction to the SBA Offset for participants with more than 35 years of service. The Court also granted summary judgment on Plaintiffs' claim that Defendants violated the terms of the Plan and ERISA §§ 204(g) and (h), 29 U.S.C. §§ 1054(g) and (h) by applying the SBA Offset to the minimum benefits formulas and by amending the Plan to provide an SBA Offset to the Plan's minimum benefits formulas retroactively and without notice. The Court also dismissed certain claims including inter alia: Plaintiffs' claim under Count V of the Amended Complaint that Defendants' failure to disclose the offsets violated ERISA 29 U.S.C. § 1022; the claim that Defendants' violated the terms of the Plan and ERISA § 204(g) and (h) with respect to the 1.25% minimum benefit formula; Plaintiffs' claims that Defendants violated ERISA § 203, and Plaintiffs' claims that Defendants violated the terms of the Plan by failing to use a 3.5% interest rate for those participants eligible to commence benefits on December 31, 1983.

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Defendants moved for reconsideration on the anti-cutback claims, or, alternatively, requested that the issue be certified for an interlocutory appeal. The Defendants also sought clarification of this Court's summary judgment order. This Court denied reconsideration by Order dated November 18, 2005. The Court certified the matter for an interlocutory appeal and stayed all proceedings in this Court pending the Ninth Circuit's ruling on Defendants' petition for permission to appeal. On February 24, 2006, the Ninth Circuit entered an order denying Defendants' petition for permission to appeal. With respect to the named Plaintiffs, Plaintiffs do not understand the Court's order regarding Defendants' motion for clarification permitting Defendants to proceed with discovery with respect to "individual putative class members' claims" to constitute a ruling on the merits that Defendants are not barred from asserting the statute of limitations and other affirmative defenses against the six named Plaintiffs with respect to the claims asserted on Plaintiffs' motion for partial summary judgment. Plaintiffs believe that the Court's order on clarification does not preclude Plaintiffs from asserting that Defendants' failure to litigate those defenses in opposition to Plaintiffs' motion for partial summary judgment bars those defenses against the six named Plaintiffs. Kontrick v. Ryan, 540 U.S. 443, 458-60 (2004). Other than the statute of limitations, Plaintiffs assert that Defendants are also barred from asserting affirmative defenses by Defendants' failure to raise them during the claims review process. Plaintiffs do not understand the Court's order on clarification to be ruling on the merits of Plaintiffs' position that Defendants waived any affirmative defenses other than the statute of limitations by their failure to assert them in the claims review process. Plaintiffs believe that Defendants are barred from asserting affirmative defenses against the named Plaintiffs as a result of the summary judgment proceeding and against the named Plaintiffs and individual putative class members as result of Defendants' failure to raise any affirmative defenses (other than the statute of limitations) during the claims review process.

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The substantive claims remaining to be decided are: 1) whether Defendant's retroactive application of amendments to the Plans imposing the Social Security offset, changing interest rates used to calculate the SBA offset and eliminating the fractional reduction to the SBA offset constitute breach Defendants' contractual promises to Plaintiffs and whether Plaintiffs are entitled to judgment for Defendants' breaches of contract under ERISA §§ 502(a)(1)(B) and (a)(3); 2) whether Defendants violated the terms of the Plan and ERISA's claim procedure and disclosure requirements and applicable regulations by delaying and failing to provide Plaintiffs with Plan documents; 3) whether Defendants violated ERISA and breached their contractual promises to Plaintiffs by imposing administrative fees on their Secured Benefits beginning in 1993; 4) whether Defendants violated the terms of the Plan and ERISA by failing to adjust Plaintiffs' benefits and pay them retroactive benefits plus interest for the claim granted in the administrative process; 5) whether Defendants violated ERISA and the terms of the Plan by reducing accrued benefits by amendments made in 2000 which resulted in employees' service prior to 1984 being disregarded and caused some Plaintiffs to make benefit elections and decisions based on incorrect benefit calculations; 6) whether Defendants violated the ERISA's written plan requirements, ERISA § 402; 7) whether Defendants violated ERISA § 208, ERISA's merger requirements. The Court also has not yet decided the appropriate remedies and damages for the violations found on summary judgment and remedies and damages with respect to the undecided claims will need to be determined.
(b)

Defendants' Description of the Case.

Prior to 1984, the Garrett Corporation (which, through numerous corporate acquisitions, is now a part of Honeywell International Inc.) maintained a pension plan for its employees, which was known as the Supplemented Retirement and Severance Program for Employees of the Garrett Corporation. This program consisted of two integrated plans: the Garrett Retirement Plan and the Garrett Severance Plan. These
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two plans were coordinated with one another to provide a total retirement benefit to eligible employees in what is commonly referred to as a "floor-offset" arrangement. On December 31, 1983, the Garrett plans were merged into plans maintained by Garrett's corporate parent, The Signal Companies, Inc. The effect of these mergers was to increase the retirement benefits for Garrett employees. Benefits that had accrued as of December 31, 1983 were not reduced as a result of the plan mergers and amendments. Despite an overall increase in their accrued benefits, Plaintiffs challenge changes made to discrete components of the post-merger benefit formula. In the Amended Complaint, Plaintiffs allege a panoply of ERISA violations in an attempt to gain pension benefit improvements that were neither promised nor contemplated by the plan sponsor. Specifically, the Amended Complaint alleges that Defendants violated ERISA's anti-cutback provision and the terms of the Retirement Plan by changing the interest rate used to calculate participants' Secured Benefit Account offsets under the Retirement Plan, by applying a Social Security offset in calculating participants' benefits, and by eliminating a fractional reduction to the Secured Benefit Account offset for participants with more than 35 years of service (the "Anti-Cutback Claims"). Plaintiffs also allege that Defendants violated ERISA's anticutback rule and notice requirement and violated the terms of the Retirement Plan by applying the Secured Benefit Account offset to the minimum benefit formulas and by later clarifying in a plan restatement that the Secured Benefit Account offset applies to the minimum benefit formulas without providing sufficient notice under ERISA (the "Minimum Benefit Claims"). Additionally, Plaintiffs allege that Defendants violated the terms of the Retirement Plan and ERISA by (1) delaying and failing to provide them with certain plan documents, (2) imposing administrative fees on participants' Secured Benefit Accounts, and (3) reducing accrued benefits by an amendment in 2000 that purportedly resulted in employees' service prior to 1984 being disregarded1

1

Plaintiffs also alleged numerous other violations of ERISA, all of which were dismissed by the Court.
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Defendants previously filed a Motion to Dismiss the Complaint, which Plaintiffs opposed and countered with a Motion for Partial Summary Judgment. By Order dated July 19, 2005, the Court granted in part and denied in part both Defendants' Motion to Dismiss and Plaintiffs' Motion for Partial Summary Judgment. The Court concluded that Plaintiffs were entitled to summary judgment on their AntiCutback Claims and their Minimum Benefit Claims. The Court also dismissed numerous claims asserted in the Amended Complaint. In a Motion for Reconsideration and Clarification, Defendants sought clarification of the Court's July 19, 2005 Order, and requested confirmation that, in granting summary judgment, the Court ruled only that Defendants had breached ERISA Sections 204(g) and (h), 29 U.S.C. §§ 1054(g) and (h) by making the challenged plan amendments, and did not intend to foreclose Defendants from taking discovery on, and asserting affirmative defenses related to, individual putative class members' claims. By Order dated November 18, 2005, the Court clarified its July 19, 2005 Order, to confirm that Defendants' understanding of the Court's decision was correct, and that the "parties may otherwise proceed with the litigation of this case." The following claims remain to be decided: (1) whether Defendants failed to respond on a timely basis to a written request for certain plan documents, (2) whether Defendants improperly failed to account for administrative fees that had been deducted from participants' Secured Benefit Accounts in calculating the Secured Benefit Account offset, (3) whether Defendants violated ERISA and the terms of the Plan by purportedly reducing accrued benefits by an amendment in 2000, and (4) whether Defendants violated the terms of the retirement plan by changing the interest rate used to calculate participants' Secured Benefit Account offsets under the Retirement Plan, by applying a Social Security offset in calculating participants' benefits, and by eliminating a fractional reduction to the Secured Benefit Account offset for participants with more than 35 years of service, in violation of ERISA Section

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502(a)(1)(B).2 Additionally, Defendants have asserted various affirmative defenses to Plaintiffs' claims, including the application of the statute of limitations to claims that are based on plan amendments that were adopted more than 20 years ago. Pursuant to the Court's November 18, 2005 Order, these affirmative defenses remain to be litigated. Despite the Court's clarifying Order, Plaintiffs incorrectly contend in various sections of this Joint Proposed Case Management Plan that Defendants are foreclosed from asserting affirmative defenses as they relate to the individual Named Plaintiffs' claims. There is no support in the Court's Order for this contention. Defendants' Motion for Reconsideration sought clarification from the Court that, in granting partial summary judgment in favor of Plaintiffs as it related to certain legal issues, the Court did not intend to foreclose Defendants from raising and litigating certain affirmative defenses both as to the Named Plaintiffs and other members of the putative class. Defendants correctly noted in their Motion for Reconsideration that the Named Plaintiffs filed their Motion for Partial Summary Judgment before Defendants filed their Answer, in which affirmative defenses would be asserted. The Court held correctly that affirmative defenses as they relate to all Plaintiffs remain to be litigated.
2. A list of the elements of proof necessary for each count of the Complaint and each Affirmative Defense and, if applicable, each Counterclaim. For those claims in which the burden of proof shifts, the elements that the party must prove to prevail must be listed. The list of the elements of proof must contain citations to relevant legal authority (i.e. United States statutory and/or administrative law, U.S. Supreme Court cases, Ninth Circuit Court of Appeals case law, Arizona State case and statutory law, and other authority as dictated by the conflict of law rules). (a)
2

Plaintiffs' Statement of the Elements of Proof.

In Plaintiffs' Description of the Claims, Plaintiffs assert for the first time that Defendants violated ERISA Section 208, 29 U.S.C. § 1058. Defendants note that the Amended Complaint does not include a claim that Defendants violated ERISA Section 208, 29 U.S.C. § 1058. Additionally, in Plaintiffs' Description of the Claims, Plaintiffs assert that Defendants violated ERISA Section 402, 29 U.S.C. § 1102. Defendants note that the Amended Complaint does not include any substantive allegation that Defendants violated ERISA Section 402, 29 U.S.C. § 1102. The only mention of ERISA Section 402 is made in conclusory fashion in the "Wherefore" clause at the end of the Amended Complaint; no reference to Section 402 is made in Counts I ­ V of the Amended Complaint.
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In order to prevail on their claims for benefits under ERISA § 502(a)(l)(B), Plaintiffs will establish that they were promised benefits under the terms of the Plan, that they made a claim for benefits and that those benefits were incorrectly denied. 29 U.S.C. § 1 132(a)(l)(B). See Order dated July 19th, 2005 p.30, determining that de novo review applies to Plaintiffs' claims relating to the prior merged plans. See. e.g., Order on summary judgment, doc. 73, p. 10 (citing Spacek v. Maritime Ass'n, 134 F.3d 283, 288 (5th Cir. 1998). See also ADA Section of Labor and Employment Law, Employee Benefits Law 891 (2d ed. 2000). Defendants' contention that Plaintiffs must establish that denial of their claims for benefits was arbitrary and capricious has already been rejected by this Court, (Order, doc. 73, p. 32, l. 2), and that order is law of the case. Section 402 of ERISA is violated if a plan is not "established and maintained pursuant to a written instrument." 29 U.S.C. § 1102. Section 208 of ERISA is violated if, with respect to a merger, termination or consolidation of plans, a plan does not meet the requirement that "each participant in the plan would (if the plan then terminated) receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer (if the plan had then terminated)." 29 U.S.C. § 1058. Contrary to Defendants' assertion, infra, these claims were properly raised in the amended complaint. See e.g., ¶ 35-37, 40-42, 50, 53. The Court has discretion to assess statutory penalties if a participant establishes that they made a request for documents that the administrator must furnish under ERISA and Defendants delayed or failed to comply with that request. 29 U.S.C. §§ 1021, 1022 , 1024, 1132(c). Plaintiffs must produce evidence that they made a request for documents to the plan administrator. Cline v. Industrial Maintenance Engineering & Contracting Co., 200 F.3d 1223 (9th Cir. 2000). Given that Plaintiff has already prevailed on several claims, the remaining elements of proof are with respect to damages. Plaintiffs will prove that they suffered
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damages and the amount of those damages. ERISA § 502(a)(1)(B), (a)(3); 29 U.S.C. § 1132(a)(1)(B), (a)(3). See also Employee Benefits Law at 891. Plaintiffs will establish that other appropriate equitable relief is also appropriate, including declaratory and injunctive relief for Defendants' violations of ERISA. ERISA § 502(a)(3); 29 U.S.C. § 1132(a)(3). See Employee Benefits Law at 899. Elements of Proof With Respect to Claimed Affirmative Defenses: Defendants have the burden of proof on all affirmative defenses. Plaintiffs believe that all of Defendants' affirmative defenses were barred by their failure to raise them either in the administrative appeal (with the exception of the statute of limitations) and barred with respect to the named Plaintiffs by Defendant's failure to prove either the statute of limitations or any other affirmative defense in opposition to Plaintiffs' motion for summary judgment. Kontrick v. Ryan, 540 U.S. 443, 458-60 (2004). The Court ruled that Defendants had not waived their rights to take discovery on and assert affirmative defenses relating to "individual putative class members' claims." (Doc. 138, p. 14.) Plaintiffs also believe that their claims are timely in that they have been brought within six years of accrual of their claims as to which the Court looks to the analogous state statute of limitations, which in this case is Arizona's limitations period on contracts, Ariz. Rev. Stat. § 12-548 or, in the event any other period is applicable, within the applicable period following accrual of the claim. Martin v. Construction Laborer's Pension Trust, 947 F.2d 1381, 1394 (9th Cir. 1991) ("A suit to enforce rights under a pension plan accrues, and the statute of limitations begins to run when there has been a clear and continuing repudiation of rights under the pension plan which is made known to the beneficiary."). Plaintiffs assert that the statutes of limitations cited by Defendants are no bar to Plaintiffs nor putative class members' claims. Defendants have failed and refused to provide a single document purporting to release a single putative class member's claim and Defendants have indicated they
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have no intention of doing so. Upon information and belief, Plaintiffs believe that Defendants cannot meet their burden to show that any releases signed by putative class members bar any of the claims asserted in this case. Even if there were such a release, Defendants would have to prove that such putative class member knowingly and voluntarily released the claims asserted in this case. See, e.g.,Carrabba v. Randalls Food Mkts., 145 F. Supp. 2d 763, 771-72 (D. Md. 2000). Plaintiffs also do not believe that any other purported affirmative defense would apply in this case.
(b)

Defendants' Statement of the Elements of Proof.
(1)

Recovery Of Retirement Benefits Under ERISA Section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B)

To prevail on their claims for benefits under ERISA § 502(a)(l)(B), 29 U.S.C. § 1132(a)(1)(B), Plaintiffs must prove that they were entitled to benefits under the terms of the Retirement Plan, that they made a claim for benefits and that the Plan Administrator's denial of their claim for benefits was arbitrary and capricious. 29 U.S.C. § 1132(a)(l)(B). See. e.g., Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989); Hensley v. Northwest Permanente P.C. Ret. Plan & Trust , 258 F.3d 986, 1001 (9th Cir. 2001).
(2)

No Decrease To Plaintiffs' Accrued Benefits

To prevail under ERISA Section 204(g), Plaintiffs must establish that their accrued benefits were decreased as a result of the challenged amendment. 29 U.S.C. § 1054(g).
(3)

Statutory Violation of ERISA Section 502(c), 29 U.S.C. § 1132(c)

Under ERISA, the Court has discretion to impose a penalty on a plan administrator for failure to provide plan documents to a participant within thirty days of a request. 29 U.S.C. § 1132(c)(1). To prevail on such a claim, Plaintiffs will need to show that they requested pertinent documents in writing from the plan administrator and that the plan administrator failed and refused to provide Plaintiffs with the
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requested pertinent plan documents. Moran v. Aetna Life Ins. Co., 872 F.2d 296 (9th Cir. 1989).
(4)

Statute of Limitations

To invoke the affirmative defense of the statute of limitations, Defendants must prove that Plaintiffs failed to file suit within the appropriate statutory period. For claims that borrow the most analogous state statute of limitations, the statutory period began to run from the date that Plaintiffs knew or should have known of the injuries that are the basis of this action. E.g. Pisciotta v. Teledyne Indus., Inc., 91 F.3d 1326, 1331 (9th Cir. 1996). One or more of the following Arizona statutes are most analogous to Plaintiffs' claims: ARS § 12-541, ARS § 12-548, and/or ARS § 12-550. For claims governed by ERISA's statute of limitations, the statutory period began to run from the date of the last act that constitutes part of the breach or violation, or from each Plaintiff's actual knowledge of the breach or violation. 29 U.S.C. § 1113.
(5)

Laches

To invoke the affirmative defense of laches, Defendants must establish an "inexcusable delay in the assertion of a known right and that [Defendants] have been prejudiced." Trustees for Alaska Laborers-Construction Indus. Health and Security Fund v. Ferrell, 812 F.2d 512, 518 (9th Cir. 1987).
(6)

Release

To invoke the affirmative defense of release, Defendants must establish that some Plaintiffs or putative class members knowingly and voluntarily relinquished their claims against Defendants by executing releases. Cirillo v. ARCO Chemical Co., 862 F.2d 448 (3d Cir. 1988).3
3

Plaintiffs assert incorrectly that Defendants have refused to produce documents purporting to release a single putative class member's claim and that Defendants have indicated that they have no intention of doing so. Rather, in response to Plaintiffs' request for all documents upon which Defendants "intend to rely" in support of their affirmative defense that members of the putative class have released the claims asserted in the Amended Complaint, Defendants have properly objected that Plaintiffs' request is premature as to members of the putative class beyond the Named Plaintiffs, because there has not yet been class wide discovery. Defendants have agreed to produce, and have begun producing, benefits files for each putative class member. It is possible that some release documents may be found in those files. At this time, however, with no class-wide discovery, Defendants need not (and cannot) identify the specific documents upon which they will rely at trial, if a class is certified, to show releases by approximately 10,000 individual class members.
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(7)

Failure To Exhaust Administrative Procedures

An ERISA plaintiff "must avail himself or herself of a plan's own internal review procedures before bringing suit in federal court. Diaz v. United Agric. Employee Welfare Benefit Plan and Trust, 50 F.3d 1478, 1483-84 (9th Cir. 1995). Where a plaintiff fails to do so, federal courts should dismiss his or her claim unless the plan's internal procedures do not provide an adequate remedy, or exhaustion would be futile. Id., see also Amato v. Bernard, 618 F.2d 559, 568 (9th Cir. 1980); Alloco v. Metro. Life Ins. Co., 256 F. Supp. 2d 1023, 1032-33 (D. Ariz. 2003) (Silver, J.).
(8)

Estoppel

Estoppel is available as a defense to ERISA claims. Bergt v. Retirement Plan For Pilots Employed By Markair, Inc., 293 F.3d 1139, 1146 n.3 (9th Cir. 2002). "When a person, knowing his rights, takes no steps to enforce those rights until the adverse party has, in good faith, changed his position such that he could not be restored to his former state if the rights are enforced, the delay becomes inequitable and the person is estopped from asserting the rights." 28 Am.Jur. 2d Estoppel and Waiver § 64. In addition, a person who accepts a benefit is estopped from repudiating an accompanying or resulting obligation. 28 Am.Jur. 2d Estoppel and Waiver § 65.
(9)

Waiver

A plaintiff waives the right to assert arguments in support of a claim for benefits that he or she did not raise before the plan administrator while exhausting his or her administrative remedies. See, e.g., Hess v. Reg-Ellen Mach. Tool Corp., 423 F.3d 653 (7th Cir. 2005) (finding that plaintiffs waived an argument they did not raise in their administrative claim for benefits). A plaintiff may also waive ­ voluntarily relinquish ­ his or her rights to a benefit. See, e.g., 28 Am.Jur. 2d Estoppel and Waiver s 197. The party asserting waiver must show that the plaintiff (1) was aware of (2) an existing right, and (3) had an actual intention to relinquish the right. See, e.g., 28 Am.Jur. 2d Estoppel and Waiver § 200.
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3. The factual and legal issues genuinely in dispute, and whether they can be narrowed by stipulation or motion.

a. (1)

The parties agree that the following factual and legal issues are in dispute: Whether the class and subclasses should be certified under Fed. R. Civ. P. 23(b)(2) or, alternatively, 23(b)(3).

(2)

Whether Defendants violated the terms of the Plans by amending the Plans to retroactively increase the interest rate used to calculate participants' SBA Offsets; by applying a Social Security offset attributable to years of service earned prior to introduction of that offset, and by eliminating a fractional reduction to the SBA Offset for participants with more than 35 years of service.

(3)

Whether Defendants violated the terms of the Plan and ERISA by imposing administrative fees on Secured Benefits.

(4)

Whether Defendants violated the terms of the Plan and ERISA by failing to make any changes or pay damages with respect to the claim granted by the Plan Administrator.

(5)

Whether Defendants violated the terms of the Plan and ERISA by purportedly reducing accrued benefits through amendments made in 2000, which allegedly resulted in employees' service prior to 1984 being disregarded.

(6)

Whether Plaintiffs are entitled to statutory penalties for Defendants' alleged failure to disclose documents and the amount of those penalties.

(7)

Whether Plaintiffs are entitled to declaratory and/or injunctive relief for Defendants' alleged violations of the terms of the Plan and ERISA.

(8)

The appropriate remedies including the amount of Plaintiffs' damages, if any.
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(9) (10)

The amount of attorneys' fees and prejudgment interest, if any. Whether the Plan Administrator properly denied Plaintiffs' claims for additional benefits under the Retirement Plan.

(11)

Whether Plaintiffs are entitled to any additional benefits under the Retirement.

(12)

Whether Defendants failed to respond on a timely basis to a request for documents in violation of ERISA Section 104(b)(4), 29 U.S.C. § 1024(b)(4), and whether Plaintiffs are entitled to statutory penalties under ERISA Section 502(c)(1), 29 U.S.C. § 1132(c)(1).

b. (1)

Plaintffs state that the following additional factual and legal issues are genuinely in dispute: Whether Defendants breached their contractual promises by amending the Plans to retroactively increase the interest rate used to calculate participants' SBA Offsets; by applying a Social Security offset attributable to years of service earned prior to introduction of that offset, and by eliminating a fractional reduction to the SBA Offset for participants with more than 35 years of service.

(2)

Whether Defendants violated ERISA and breached their contractual promises by imposing administrative fees on Secured Benefits.

(3)

Whether Defendants violated ERISA and breached their contractual promises by purportedly reducing accrued benefits through amendments made in 2000, which allegedly resulted in employees' service prior to 1984 being disregarded.

(4)

Whether Plaintiffs are entitled to injunctive, declaratory or other equitable relief for Defendants' failure and delay in disclosing documents.

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(5)

Whether Plaintiffs are entitled to statutory penalties for Defendants' delay in disclosing documents and the amount of those penalties.

(6)

Whether Defendants violated §§ 208 and 402 of ERISA and the relief for those violations.

(7)

Whether Defendants are barred from asserting affirmative defenses against the six named Plaintiffs on claims litigated on summary judgment.

(8)

Whether Defendants are barred from asserting affirmative defenses other than the statute of limitations against named Plaintiffs and individual putative class members as a result of Defendants' failure to raise them during the claims review process.

c.

Defendants state that the following additional factual and legal issues are genuinely in dispute.

As the Court has held in its November 18, 2005 clarifying Order, and as noted herein in Section 1 (b), the following defenses were properly asserted as affirmative defenses in the Answer to the Amended Complaint as required by the Federal Rules of Civil Procedure and some of these defenses were also raised in opposition to Plaintiffs' Motion for Partial Summary Judgment. Plaintiffs disagree that the following issues are in dispute because Plaintiffs contend that the following issues have either already been determined by this Court's July 19, 2005 order and are therefore conclusively determined or that Defendants are precluded from raising these issues by their failure to assert these issues as a basis for denial of Plaintiffs' administrative claims or with respect to named Plaintiffs, Defendants failure to carry their burden of proof on these issues by Defendants' failure to prevail on these issues in opposition to Plaintiffs' cross motion for summary judgment.
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(1)

Whether the Plan Administrator's decision to deny Plaintiffs' benefit claims was arbitrary and capricious.

(2)

Whether Plaintiffs' claims are barred because their accrued benefits have not been decreased.

(3)

Whether Plaintiffs' claims are barred by the applicable statute of limitations.

(4) (5) (6)

Whether Plaintiffs' claims are barred by the doctrine of laches. Whether Plaintiffs released their claims against Defendants. Whether Plaintiffs' claims are barred to the extent that they failed to exhaust the internal administrative procedures under the terms of the applicable plans.

(7)

Whether equity requires that Plaintiffs be estopped from recovering additional benefits under the retirement plan.

(8)

Whether Plaintiffs waived their rights to additional benefits under the Retirement Plan.

Whether These Issues Can Be Narrowed By Stipulation or Motion: The parties believe that motions for summary judgment may narrow some of these issues.
4.

The jurisdictional basis of the case, citing specific statutes.

Plaintiffs contend that this Court has jurisdiction over this action pursuant to 29 U.S.C. § 1132(e), (f), and 28 U.S.C. § 1331. Defendants agree that this Court has jurisdiction over the named Plaintiffs' claims pursuant to 29 U.S.C. § 1132(e), (f), and 28 U.S.C. § 1331. Defendants contend that Plaintiffs' proposed class definition purports to encompass claims on behalf of individuals over which the Court does not have subject matter jurisdiction.

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5. Parties, if any, which have not been served, as well as parties which have not filed an answer or other appearance. Unless counsel can otherwise show cause, the Proposed Case Management Plan shall be accompanied by a proposed order dismissing any party that has not been served, or appropriate pleadings seeking default judgment against any non-appearing party.

None.
6.

The names of parties not subject to the Court's jurisdiction.

This Court has jurisdiction over the Named Plaintiffs' claims. Defendants contend that Plaintiffs' proposed class definition purports to encompass claims on behalf of individuals over which the Court does not have subject matter jurisdiction.
7. Whether there are dispositive issues to be decided by pretrial motions and hearings including evidentiary hearings pursuant to Daubert and/or Fed. R. Evid. 702.

Plaintiffs have filed a motion for class action certification. Defendants' Response is due on April 3, 2006 and Plaintiffs' Reply is due May 6, 2006. Plaintiffs anticipate that, with leave of Court, many of the remaining issues will be decided on motions for summary judgment following discovery. Plaintiffs also anticipate that the formula for calculating damages may be decided on summary judgment motions, with leave of Court. Defendants anticipate that the statute of limitations and other affirmative defenses as they relate to the Named Plaintiffs raise dispositive issues that can be resolved by a motion for summary judgment. Plaintiffs assert that with respect to the matters decided on summary judgment that the statute of limitations and other affirmative defenses have been conclusively determined against Defendants and in favor of named Plaintiffs.
8. Whether the case is suitable for reference to arbitration, to a master, and/or to a United States Magistrate Judge for all further proceedings.

The parties agree that the case is not suitable for reference to arbitration, a special master, or a Magistrate Judge at this time. The parties will continue assessing these options as the case progresses.

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9. The status of related cases pending before other judges of this Court or before other courts.

There are no related cases pending before other judges of this court or before other courts. Suggested changes in the timing, form, or requirement for disclosure under Rule 26(a) Fed.R.Civ.P., including a statement of when initial disclosure were made or will be made.
10.

Plaintiffs propose that the parties exchange initial disclosures regarding all claims and all class members on May 26, 2006. Defendants propose that the parties will exchange initial disclosures regarding the claims of the named Plaintiffs on May 26, 2006. Suggested changes, if any, on the limitations imposed by Fed.R.Civ.P. 30, 31 and 33.
11.

Plaintiffs believe that they have yet to receive responses to their requests for production that Plaintiffs believe are in compliance with the Federal Rules of Civil Procedure. Plaintiffs and Defendants are endeavoring to resolve their disputes. Until Plaintiffs have received Defendants' production called for in the requests for production and interrogatories, Plaintiffs believe it is premature for Plaintiffs to clearly set forth the basis for expanding the number of permitted interrogatories; however, Plaintiffs believe that because of corporate mergers and changes in the benefits administration companies and personnel, additional interrogatories, up to 50, are appropriate and request that they be permitted to serve 50 interrogatories. Defendants disagree with Plaintiffs' contention that Defendants have not responded to Plaintiffs' request for production of documents. Defendants oppose Plaintiffs request to expand the number of interrogatories to 50. Most of the relevant information can be obtained through requests for production of documents and depositions. Defendants do not anticipate seeking any changes on the limitations imposed by Federal Rules of Civil Procedure 30, 31 and 33 as it relates to the named Plaintiffs' claims, but Defendants assert that a final determination on that issue cannot
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be made until Plaintiffs' Motion for Class Certification is decided.
12. The scope of discovery, the date discovery should be completed, and whether discovery should be conducted in phases or should be limited to or focused upon particular issues. For example, when dispositive motions will be filed counsel should consider limiting discovery to the issue to be addressed in the motion until the Court has ruled on it.

a.

Plaintiffs' Position Regarding Discovery

Plaintiffs promptly sought discovery beginning in August 2005. Despite Plaintiffs' interrogatories and requests for production seeking the information, Defendants have never produced any evidence that they have any individualized issues pertaining to affirmative defenses. Plaintiffs believe that there is no basis to limit the scope of discovery and that discovery should proceed on all outstanding issues including liability and damages. Plaintiffs also strongly object to Defendants' assertion that individualized inquiries are appropriate or necessary in this matter or that any discovery with respect to absent class members could be warranted. If the class certification motion is denied, Plaintiffs intend to seek leave to amend the complaint to add at least 800 individual Plaintiffs. Because Defendants have had Plaintiffs' class discovery requests since August 2005, Plaintiffs do not believe that any further delay is warranted or that Defendants have shown any basis to limit discovery at this time. Plaintiffs propose that discovery be completed by September 15, 2006. At Defendants' request, Plaintiffs have signed a second confidentiality agreement and have agreed that Defendants would not be deemed to waived any privilege by virtue of matters disclosed in electronically stored imaged benefits files that Defendants contend are necessary for the calculation of individual damages. However, Defendants failed to produce the imaged benefits files by the date agreed to, nor advised Plaintiffs that they were not going to produce them as agreed and in a subsequent telephone conversation initiated by Plaintiffs to resolve the discovery dispute, Defendants indicated that they are waiting for an answer from their clients as to whether they will produce imaged benefits files as agreed. If Defendants are permitted to delay

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production of the imaged benefits files, then it will not be possible to complete discovery by the date Plaintiffs propose. b. Defendants' Position Regarding Discovery

Because Plaintiffs' motion for class certification is pending, Defendants believe that pretrial scheduling is difficult at best (if not premature) until the parties know whether the Court will certify a class. However, in the event that the Court does certify a class, Defendants believe that Plaintiffs' proposed schedule does not allow adequate opportunity for discovery and adjudication of individualized issues associated with Defendants' affirmative defenses, including the statute of limitations, laches, waiver, estoppel, and release. These defenses necessarily require individualized inquiry and cannot be addressed on a class-wide basis. Thus, Defendants believe that, in the event the Court certifies a class in whole or in part, the Court will need to determine a proper procedure for litigating and resolving the individual issues associated with Defendants' affirmative defenses. There are thousands of putative class members who are former or current Honeywell employees, and individual inquiry is necessary to determine when each putative class member knew or reasonably should have known of the claims and to what extent the claims are otherwise barred by laches, release, waiver, and estoppel. Assuming that a class is not certified, Defendants believe that discovery regarding the named Plaintiffs' claims should conclude on January 30, 2007. Plaintiffs are incorrect in their contention that Defendants have failed to comply with certain agreed upon production deadlines as it relates to the production of thousands of imaged benefits files of putative class members. Originally, Defendants informed Plaintiffs that Defendants would produce hard copy benefits files in a rolling production, in light of the need to review thousands of benefits files for privileged information. However, after some initial spot checking, Defendants did not discover privileged information in the individual benefit files, and concluded that it was not likely that the files contained privileged information, or that the privileged information
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would not relate to this case. Based on that belief, and in an effort to expedite production, Defendants proposed that they would produce the imaged benefits files without further review provided that Plaintiffs agreed to return any inadvertently produced privileged material. However, Defendants have since learned that they were incorrect in their initial belief that the benefits files were devoid of privileged information that related to events at issue in this case. In light of the Defendants recent discovery of such privileged information, Defendants are in the process of identifying the most efficient method of production that will result in the nondisclosure of relevant privileged information, while, at the same time, expedite production to Plaintiffs' of the thousands of imaged benefits files. In the interim, Defendants have reviewed for privilege and produced to Plaintiffs the hard copy benefits files for hundreds of putative class members, including the Named Plaintiffs. Therefore, Defendants do not believe that these issues should delay the litigation of the Named Plaintiffs' claims.
13. The final date for supplementation of discovery, that shall be scheduled two to three weeks after the close of discovery. Under no circumstances will the final date for supplementation occur after the date for filing dispositive motions. The parties and counsel are reminded of the duty pursuant to Fed.R.Civ.P. 26(e) to supplement all Rule 26(a) disclosures and all responses to discovery requests before the date of the close of discovery or on the final date for supplementing discovery. Fed.R.Civ.P. 26(a) (3) disclosures of witnesses and exhibits which may be offered at trial must be disclosed before the close of discovery or, if agreed, on the final date for supplementation. This requirement supersedes the "30 days before trial" disclosure deadline in Fed.R.Civ.P. 26(a) (3). Therefore, (1) failure to timely supplement Rule 26(a) disclosures, including the witnesses and exhibits for trial, (2) failure to timely supplement responses to any valid discovery request, and (3) attempts to include witnesses or exhibits in the Joint Proposed Final Pretrial order that were not previously disclosed in a timely manner shall result in the exclusion of such evidence at trial or the imposition of other appropriate sanctions pursuant to Fed.R.Civ.P. 37, the Local Rules of the District Court, and the inherent power of the Court.

Plaintiffs propose that the final date for supplementation of discovery should be September 29, 2006. Defendants propose that, if class certification is denied, the final date for supplementation of discovery should be February 20, 2007. If a class is certified,

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fixing a date for supplementation of discovery will depend on the further procedures that are established for discovery and trial of class issues, as discussed above.
14. The proposed deadlines for (a) disclosure of experts and testimony under Rule 26 (a)(2) of the Fed.R.Civ.P.; (b) the filing of procedural motions including motions to amend, consolidate, and join additional parties; (c) the filing of one dispositive motion per party; (d) and the lodging of the Joint Proposed Pretrial Order.

Plaintiffs propose the following deadlines:
(a)

Disclosure of experts and testimony under Rule 26(a)(2) of the Fed.R.Civ.P.: July 17, 2006 and disclosure of rebuttal experts by August 15, 2006.

(b)

The filing of procedural motions including motions to amend, consolidate, and join additional parties: If class certification is granted, July 17, 2006. Plaintiffs note that this date and the date proposed by Defendants would be inequitable in the event the Court has not yet ruled on the motion for class certification. Plaintiffs request that the date for amendment of the complaint and to join additional parties and to consolidate not be earlier than 60 days following an order denying Plaintiffs' motion for class certification in whole or in part in order to permit amendment of the complaint and joinder of additional individual Plaintiffs. In the event the Court grants class certification but believes any individual named Plaintiff is an inadequate class representative, Plaintiffs seek additional time to amend the Complaint to add appropriate representative parties.

(c)

The filing of one dispositive motion per party: 30 days after the close of discovery. Plaintiffs request permission to file an additional dispositive motion. Plaintiffs' first dispositive motion was filed before any discovery had taken place and was solely
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(d) (c) (b) (d)

limited to issues upon which discovery was not necessary. Accordingly, Plaintiffs request that they be permitted to file an additional dispositive motion on or before 30 days after the close of discovery. The lodging of the Joint Proposed Pretrial Order: 60 days after the Court's ruling on any pending dispositive motions. As noted above, Defendants believe that pretrial scheduling is difficult at best (if not premature) until the parties know whether the Court will certify a class. Defendants believe that the pretrial scheduling deadlines will be impacted significantly by the Court's disposition of Plaintiffs' pending Motion for Class Certification. However, Defendants propose the following deadlines as it relates solely to the Named Plaintiffs' claims:
(a)

Disclosure of experts and testimony under Rule 26(a)(2) of the Fed.R.Civ.P.: The parties shall disclose their experts, if any, on August 15, 2006, and their rebuttal experts, if any, on October 2, 2006. The filing of procedural motions, including motions to amend, consolidate, and join additional parties: June 5, 2006. Defendants anticipate filing a motion for summary judgment on the Named Plaintiffs' claims. Defendants propose that dispositive motions be filed by: April 17, 2007, or 45 days after the close of discovery, whichever comes later. The lodging of the Joint Proposed Pretrial Order: 60 days after the Court's ruling on any pending dispositive motions.

15. The estimated date the case will be ready for trial, the anticipated length of trial, and any suggestions for shortening the trial.

Plaintiffs propose 30 days after the lodging of the Joint Proposed Pretrial Order. Anticipated length of trial will depend on the issues for trial. The parties may be able to stipulate to many of the facts, narrowing the factual issues, if any, for trial.
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Defendants believe that for the same reasons noted above with respect to pretrial scheduling, estimating the length and date of trial is difficult until the Court reaches a determination regarding Plaintiffs' pending Motion for Class Certification.
16.

Whether a jury trial has been requested.

The parties agree that no jury demand has been filed.
17. The prospects for settlement, including requests for a settlement conference before another United States District Court Judge or Magistrate Judge, or other requests of the Court for assistance in settlement efforts.

Currently, it does not appear that a settlement conference would be productive. The parties will consider requesting a settlement conference before another United States District Court Judge or Magistrate Judge, or private mediator as the case progresses.
18. In class actions, the proposed dates for class certification proceedings and other class management issues. Such certification will result in the case being reassigned to the complex track for case management purposes.

Plaintiffs have filed a Motion for Class Certification. Defendants' response to Plaintiffs' motion for class certification is due on April 3, 2006 and Plaintiffs' reply is due May 6, 2006.
19. Whether any unusual, difficult, or complex problems or issues exist which would require that this case be placed on the complex track for case management purposes.

The parties agree that because Plaintiffs purport to bring this action as a class action, the complex track will apply.
20.

The e-mail address of respective counsel or parties.

For Plaintiffs' counsel: [email protected] [email protected] [email protected] For Defendants' counsel: [email protected] [email protected]
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[email protected] [email protected] [email protected] [email protected]
21.

Any other matters that counsel believes will aid the Court in

resolving this dispute in a just, speedy, and inexpensive manner. Not at this time. Respectfully submitted this 3rd day of April, 2006. MARTIN & BONNETT, PLLC By:s/Susan Martin Susan Martin (AZ#014226) Daniel L. Bonnett (AZ# 014127) Jennifer Kroll (AZ#019859) 3300 N. Central Avenue, Suite 1720 Phoenix, Arizona 85012-2517 Attorneys for Plaintiffs OSBORN MALEDON, P.A. By:s/David B. Rosenbaum David B. Rosenbaum, Atty. No. 009819 Dawn L. Dauphine, Atty. No. 010833 2929 North Central Avenue, Suite 2100 Phoenix, AZ 85012-2794 Michael L. Banks, Pro Hac Vice William J. Delany, Pro Hac Vice Amy Promislo Covert, Pro Hac Vice Azeez Hayne, Pro Hac Vice Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, PA 19103 Attorneys for Defendants

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