Court Finds Executive Made a Valid Claim for SERP Benefits

A judge found that an email requesting information about obtaining benefits constituted a ‘written request’ as required by the plan document and that Nissan didn’t respond within the required 90-day window.

A former Nissan North America executive made a valid claim for supplemental executive retirement plan (SERP) benefits and did not fail to exhaust his administrative remedies, as Nissan claimed, a federal judge has found.

The Nissan defendants argued that the plaintiff failed to follow the plan’s claims procedure and has never initiated a claim for benefits. They moved for the case to be dismissed for failure to exhaust any administrative remedies. However, the plaintiff said his remedies should be deemed exhausted because he made a request for benefits under the terms of the plan, and the defendants did not timely respond within 90 days, as established by the plan.

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In his opinion, Judge Eli Richardson of the U.S. District Court for the Middle District of Tennessee listed several relevant communications the plaintiff had with employees of Nissan regarding the payment of benefits under the plan. In response to some communications, the director of executive compensation at Nissan replied that the request was being considered, but for other communications, the plaintiff received no response.

The defendants asserted that the plaintiff never submitted a written claim for benefits to initiate the review process under the claims procedure. They characterized the communications that the plaintiff sent as being merely questions and general communications about his benefits. According to the court opinion, the defendants said the only communication that could constitute a request for benefits is an email from the plaintiff’s counsel, and they claimed the plaintiff acted prematurely in filing the lawsuit 64 days after the email from his counsel, instead of waiting 90 days.

Richardson noted that the plan document indicates only that “the participant shall make a written request for benefits under this plan.” It then lays out the claims procedure, indicating that a claim “shall be presented to the claims official appointed by the administrative committee in writing.” Richardson found the language of the plan document ambiguous, noting that the plan document does not clarify who should present this claim in writing to the claims official. He said the defendants “would be well-advised to substantially tighten up both the articulation and the execution (in particular cases) of their claims procedure.”

Richardson also found that the plaintiff’s emails, starting with his first email, constituted a “written request” for benefits and apprised the defendants that he was invoking his right to his benefits, by referencing the plan and asking how he would receive his benefits. The judge found that the defendants did not substantively respond to the plaintiff’s repeated communications about his claim, except for sending a delayed letter—outside the relevant 90 day window—indicating that the “senior vice presidents” had voted to deny the plaintiff’s claim. “Therefore, [the] plaintiff has exhausted his administrative remedies,” Richardson concluded.