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A federal judge has awarded severance pay to a fired investment banker after finding that the “oversight committee” at Deutsche Bank Americas that heard his appeal had “unreasonably failed to provide meaningful review.” In his 23-page opinion in Poehlmann v. Deutsche Bank Americas Severance Pay Plan, U.S. District Judge Berle M. Schiller concluded that the bank’s decision to deny severance pay to James Poehlmann was “arbitrary and capricious” because the committee that heard his appeal had simply accepted the word of a single investigator that his sales figures were inadequate and that he had been warned that his presentation skills needed improvement. In doing so, Schiller said, the committee completely ignored Poehlmann’s evidence that his sales figures were among the company’s best, and that he was never warned of any problems in his presentation skills. “When the committee began its review of plaintiff’s termination, it had before it two sharply divergent accounts of plaintiff’s sales performance and completely contradictory statements regarding whether [his supervisor] ever warned plaintiff to improve his performance,” Schiller wrote. “Faced with conflicting evidence on these critical issues, the committee wholly abdicated its responsibility to make even a cursory investigation into plaintiff’s claim, and thereby unreasonably concluded that plaintiff’s claim should be denied,” Schiller wrote. Schiller said he recognized that, under the Employee Retirement Income Security Act, it was not the court’s role to “pass judgment upon the decision to terminate plaintiff, or decide whether plaintiff was a ‘good’ mutual fund wholesaler.” Instead, Schiller said, “the sole question for this court is whether the committee’s review of that termination, and its decision to uphold the termination’s classification as one made for ‘unsatisfactory performance,’ was reasonably made based on the evidence before it.” But even under the highly deferential standard mandated by ERISA, Schiller found that the bank’s decision to deny Poehlmann severance pay of $41,800 was objectively unreasonable. Schiller found that the committee “relied exclusively” on the investigator’s memo and “conducted no independent review whatsoever” despite a letter from Poehlmann that showed he ranked among the company’s top sellers. “This conclusion, made without the benefit of any examination of plaintiff’s sales numbers despite conflicting constructions of those numbers, is the epitome of an arbitrary and capricious decision,” Schiller wrote. The ruling is a victory for attorney David J. Truelove and Matthew J. Bass of Curtin & Heefner in Morrisville, Pa. Truelove said that the judgment against Deutsche Bank Americas could double because he will be filing a petition for an award of attorney fees. According to court papers, Poehlmann was a regional vice president for Scudder Investments, a company that was acquired in April 2002 by Deutsche Bank Americas. Poehlmann was a “wholesaler” — a job that involved calling on brokerage firms and banks and independent advisers to sell mutual funds. In the suit, Poehlmann claimed that the bank’s rejection of his appeal for severance pay was faulty since it was premised on false conclusions about his job performance. The suit said that in 1998, Poehlmann had sales of over $97 million — the third-highest among the 14 wholesalers in his region. Over the next few years, the suit said, his ranking dropped, but only slightly, to fifth in 2001 and to sixth of 49 in 2003, following the acquisition by Deutsch Bank Americas. In his last full evaluation, the suit said, Poehlmann’s manager determined that he “fully meets expectations” in all evaluated areas. After Deutsche Bank Americas acquired Scudder Investments, the suit said, Dwight Jacobsen became the company’s northeast region’s sales manager and Poehlmann’s direct supervisor. In July 2003, Jacobsen fired Poehlmann, telling him that he was falling short of his 2003 sales goals; that his presentation skills were poor; and that his “passion, drive, activity level and presence are not what they need to be.” Under the bank’s severance plan, Poehlmann was deemed to be ineligible for severance because his involuntary termination was for “unsatisfactory performance.” Schiller found that the bank’s severance plan provides a four-step claims procedure for those who are denied benefits. Initially, Schiller said, the claim is referred to a single investigator. In the last step, a final decision is made by a four-member oversight committee. In Poehlmann’s case, investigator David Denaro wrote a memo in which he described the termination as “straightforward” and “clearly performance related.” The memo said Poehlmann was “not on track” to meet his sales goals for 2003, and that, despite a warning from Jacobsen, he had failed to increase his effort or production. In an appeal to the oversight committee, Poehlmann insisted that his sales performance “was better than the vast majority of the other” wholesalers around the country, and that he had “never received any written or oral notices that his sales performance was in anyway in doubt.” The committee rejected the appeal, telling Poehlmann in a letter that “your production was well below the potential numbers available to you in your region and you failed to meet the expectations regarding developing new sales.” Now Schiller has ruled that Poehlmann is entitled to severance pay because the committee failed to perform its role. “The committee unreasonably conducted no inquiry into the relative merits of plaintiff’s contentions vis-�-vis the Denaro memo, but rather simply swallowed Denaro’s version whole,” Schiller wrote. “Under the circumstances, the committee’s lack of inquiry was arbitrary and capricious,” Schiller wrote. Schiller found that the committee “failed to examine a single sales figure despite plaintiff’s claims regarding those figures — claims that diverged significantly from Denaro’s characterizations.” Poehlmann, the judge said, “was claiming to be in the top 10 percent of wholesalers, while Denaro placed him ‘among the lowest’ in that class.” If the committee had reviewed the figures, Schiller said, “it would have realized that plaintiff’s claims had significant merit.” Schiller noted that the Denaro memo said Poehlmann “had a sales goal he needed to attain this year” but “was not on track to meet his goals.” “In reality, though,” Schiller found, “out of 49 nationwide wholesalers, Plaintiff ranked first in the Northeast region, and fourth nationwide.” That discrepancy, Schiller found, “demonstrates the arbitrary and capricious nature of the committee’s decision.” Deutsche Bank Americas was represented in the suit by attorneys Michael L. Banks and Michael E. Dash Jr. of Morgan Lewis & Bockius. Banks did not return a phone call seeking comment on the decision.

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