Court Dismisses Claim of Breach of Fiduciary Duty by IBM

>Rosemary Gassner, the wife of former IBM employee Patrick Jeffrey Gassner, had claimed that IBM had breached its duties under the Employee Retirement Income Security Act (ERISA) when it refused to validate a beneficiary change .US District Juge Ronald Guzman of the US District Court for Northern Illinois ruled that IBM had followed proper plan procedure, when, in the weeks before Patrick Gassner’s death, it notified him that his change of beneficiary designation form was invalid. Thus, the claim was dismissed.

>Patrick Gassner was an employee of IBM from 1996 until 1998, at which time he was diagnosed with end-term liver disease. At the time, the beneficiaries of his company life insurance plan were his two children. When he was married in June 2000, Patrick Gassner requested a change of beneficiary form, and was promptly provided with it by IBM. However, when it was resubmitted, IBM refused to validate the change due to illegible writing and incorrect date verification. IBM immediately notified Patrick Gassner of the problem. Before the problem was rectified, he passed away.

“It cannot fairly be said that IBM was not acting in the interest of plan participants and beneficiaries when it so promptly alerted [the employee] of the problems with the Designation of Beneficiary Form,” Guzman wrote. The court cited the following of proper procedural rules by IBM as a reason to dismiss. It also found that Rosemary Gassner undercut her own claim by suing her husband’s attorney for legal malpractice, an act that court viewed as an implicit admission of the lawyer’s, not IBM’s, failure.

>The case is Gassner v. International Business Machines Corp., N.D. III, No. 02 C 5985 9/7/04. The opnion is at http://www.ilnd.uscourts.gov/racerimg/6028529_78.pdf .