On February 18, 2005 plaintiff Maritza Burgie commenced this action against defendants Euro Brokers, Inc. (“Euro Brokers”) and First Unum Life Insurance Company (“Unum”) alleging that Euro Brokers terminated her employment in violation of the Family and Medical Leave Act (“FMLA”), 29 U.S.C. § 2617(a), 1 the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., and the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. § 12101, et seq. and that Unum failed to process forms and materials submitted by plaintiff, denied her benefits under her disability policy and terminated her policy in violation of ERISA, the ADA and in breach of its contract with her. Now before this Court are defendant Unum’s (1) motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure plaintiffs breach of contract and ADA claims and (2) its motion for summary judgment on all claims alleged against it pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons set forth below, defendant Unum’s motions are granted, with leave to the plaintiff to amend her ADA claim.
BACKGROUND
The following facts are drawn from plaintiffs Second Amended Complaint, and the submissions of plaintiff and defendant Unum in connection with these motions. In connection with the motion to dismiss, the plaintiffs allegations in her Complaint are taken as true and every reasonable inference drawn in her favor. As relates to the motion for summary judgement, disputes are noted.
In September 2001 plaintiff was one of more than 500 employees of defendant Euro Brokers, had worked for Euro Brokers for more than twelve years as a Benefits Specialist in the Human Resources Department and qualified as a participant in Euro Brokers’ long term disability plan.
On September 11, 2001 plaintiff was on her way to work in the Euro Brokers office located in Tower Two of the World Trade Center when the Tower was attacked by terrorists. She observed her coworkers enter elevators to ascend to their office in an elevator. She was thereafter propelled from the building by the initial explosion. She observed another woman crushed to death by debris. A subsequent explosion propelled the plaintiff to the floor of a subway terminal. A Good Samaritan thereafter carried her to her husband’s place of business.
Plaintiff alleges in her Complaint that she suffered both mental and physical injuries in the attacks and, with the consent of her employer, took time off to recover. Defendant denies that she suffered from physical, as opposed to mental, injuries. During her leave, plaintiff and her husband informed her employer of her condition, whereabouts, and her intention to return to work. Thereafter, in November 2001, according to the plaintiff, her supervisors insisted that she return to work before she was medically able to do so.
On her return, Euro Brokers placed plaintiff, along with other employees, in an office overlooking barges carrying debris from the World Trade Center site. Plaintiff claims that her request for another location or “reasonable accommodation” of her disability was improperly denied by Euro Brokers, despite its accommodation of other employees by allowing them to work at home.
On November 23, 2001, plaintiff began an extended medical leave. According to plaintiff, she requested the leave under FMLA, 29 U.S.C. § 2601, et seq., together with disability benefits. In response to Euro Brokers’ request she provided a certification from her private physician in support of her request for medical leave. The certification stated that plaintiffs serious health condition commenced on September 11, 2001, that the probable duration was unknown, and that medical leave was appropriate since plaintiff was unable to perform the functions of her job.
On February 25, 2002, Human Resources Director Eileen McMahon sent a letter to plaintiff stating that she would be deemed terminated because she did not return calls, contact the office or advise of her projected return date. Plaintiff states that plaintiff, her husband and her physician maintained continuous contact with Euro Brokers and advised it of her intention to return to work.
On March 7, 2002 plaintiff was terminated in a letter signed by Roger E. Schwed, the Executive Vice President and General Counsel of Euro Brokers, delivered to her by Fed Ex.
In September 2002 plaintiff filed a claim with defendant Unum for disability benefits. In order to process the claim Unum requested certain paperwork from Euro Brokers which Euro Brokers did not supply. After informing plaintiff on October 11, 2002 that her claim could not be processed without the employer paperwork, and receiving no response from her or her employer, Unum informed plaintiff on October 22, 2002 that it was closing her claim and that she had thirty days to ask that it be reopened. Plaintiff did not respond and Unum closed the claim without rendering a decision on the merits. Plaintiff took no further action with respect to her claim until she commenced this litigation in February, 2005.
After this action was filed Unum obtained the employer paperwork required, determined that plaintiff was entitled to disability benefits for the period from November 27, 2001 to September 17, 2002, and, on October 24, 2005, paid her $1,801.56, the amount it deemed owed to her under the plan. Unum advised plaintiff that it would consider her eligibility for additional benefits after September 17, 2002 if she submitted medical records concerning that period. Thereafter, Unum obtained records from plaintiffs therapist for the post September 11 period, determined that plaintiff was eligible to receive additional benefits, and paid her $4,588.20 on March 9, 2006. According to Unum, this is the maximum amount plaintiff may recover under the plan because of the nature of her disability.
Unum originally filed its motion to dismiss on December 28, 2005 and this Court heard argument on April 18, 2006. At that time, decision was reserved on the motion to dismiss the breach of contract and ADA claims. The motion to dismiss plaintiffs ERISA claims was converted to a motion for summary judgment
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with regards to the question of whether the plaintiff has been paid the maximum benefits to which she is entitled under the plan. The parties
DISCUSSION
I. Motion to Dismiss — ADA Claim
Unum styles its motion as one to dismiss all claims under Federal Rule of Civil Procedure 12(b)(1) which relates to dismissal of a claim for lack of subject matter jurisdiction. However, defendant’s arguments, to the extent they raise non-jurisdictional issues, are more properly addressed under Federal Rule of Civil Procedure 12(b)(6) which requires dismissal of claims which fail to state a cause of action.
See Schoon v. Massanari,
In considering a motion pursuant to Rule 12(b)(6), a court should construe the complaint liberally, “accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiffs favor,”
Chambers v. Time Warner, Inc.,
Plaintiff alleges in Count One that Unum violated the ADA when it “fail[ed] to process the forms and materials submitted by Plaintiff, failed to procure the Employer’s Statement and all applicable forms and information from EBI and then terminated her under its policy without justification.”
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In its motion papers, Unum provides two reasons why this ADA claim
Under the “safe harbor” provision of 42 U.S.C. § 12201(c),
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claims against insurers are “exempt from regulation under the ADA so long as (i) their actions conform to state law, and (ii) they do not use the exemption as a ‘subterfuge to evade the purposes of the Act.’ ”
Leonard F. v. Israel Discount Bank of New York,
As to Unum’s argument that it is not plaintiffs “employer,” neither plaintiff, in her Complaint,
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nor Unum, in its motion, state under which of three different subsections of the ADA plaintiff sues: (1) Title I, 42 U.S.C. §§ 12111-12117, which deals with private employment; (2) Title II, 42 U.S.C. §§ 12131-12165, which deals with public services; or (3) Title III, 42 U.S.C. §§ 12181-12189, which deals with public accommodations and services provided by private entities. Appropriate defenses depend on which Title has allegedly been violated. In the present case, plaintiff may be making her claim under Title I or Title III,
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while Unum’s defense that it is not plaintiffs “employer” is only relevant under Title I, which prohibits discrimination by a “covered entity,” 42 U.S.C. § 12112(a), defined to include an “employer” in 42 U.S.C. § 12111(2). Since claims (and defenses) under Title I and Title III are distinct, I cannot determine the applicability of Unum’s “employer” defense without greater clarity by the plaintiff as to nature of her claim.
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Accordingly, the
II. Breach of Contract Claim
Although neither party directly addresses the issue of ERISA preemption of the state contract law claim against Unum, I raise it here
sua sponte. See Carabillo v. ULLICO, Inc.,
Plaintiffs Complaint alleges that Unum breached its contract with her when it denied her benefits under the plan. However, to ensure that pension plan regulation remained an “exclusively federal concern,” Congress included a broad preemption clause in ERISA.
Smith v. Dun-ham-Bush, Inc.,
III. Summary Judgment — ERISA Claim
Summary Judgment
Summary judgment is appropriate “[w]hen the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.”
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,
The party seeking summary judgment has the burden of demonstrating that no genuine issue of material fact exists.
Apex Oil Co. v. DiMauro,
The trial court’s function in deciding such a motion is not to weigh the evidence or resolve issues of fact, but to decide instead whether, after resolving all ambiguities and drawing all inferences in favor of the non-moving party, there is a genuine issue for trial.
Anderson v. Liberty Lobby, Inc.,
Calculation of Benefits Paid
The parties agree that Unum has paid the plaintiff $6,389.76. The question remains whether this amount constitutes the entire amount plaintiff was due under the policy. Unum has submitted an affidavit from Kevin Carder, a Disability Benefits Specialist with Unum who worked on plaintiffs claim. The affidavit explains how the amounts were calculated and verifies the authenticity of the claim file previously filed in this action 12 based on Carder’s knowledge of Unum’s record-keeping practices and his work on plaintiffs claim. 13
According to the Carder Affidavit, in step (1), Unum calculated plaintiffs monthly pre-disability earnings, based on payroll records and W-2s, as $4,437.39. After multiplying by 60%, the result came to $2,662.43 per month. Since the $20,000 maximum monthly benefit cap was not reached, $2,662.43 became the “gross disability payment” in step (3). In step (4), based on records provided by Euro Brokers and the plaintiff, and the provisions of the insurance policy, Unum deducted $1,733.33 per month in workers compensation benefits and $1,520 per month in social security disability benefits plaintiff received, for a total of $3,253.33 per month in deductible sources of income. Subtracting that from 70% of the monthly income ($3,106.17), Unum calculated — $147.16 in step (4). Since this amount was less than the “gross disability payment,” — $147.16 was the monthly benefit under step (5). When the amount calculated in step (5) is a negative number, the plan provides for a monthly benefit of the greater of $100 or 10% of the “gross disability payment.” In this case, 10% of the gross disability payment comes to $266.24 per month. The affidavit goes on to note that twenty-four months is the maximum amount of time for which benefits will be paid for a mental disability like the one suffered by the plaintiff. 14
In 2005, sufficient proof was initially supplied to qualify plaintiff for benefits from February 25, 2002 until September 17, 2002. Additional proof was later supplied sufficient to qualify her for benefits for the balance of the twenty-four month period. Pursuant to plaintiffs valid claims, Unum paid her $1,801.56 on October 24, 2005 and $4,588.20 on March 9, 2006, for a total of $6,389.76.
In papers filed in connection with this motion and at oral argument, plaintiff has alleged several reasons why this amount does not properly represent the total amount she is owed under her policy.
Plaintiff challenges the accuracy of the documents contained in the claim file, questioning whether the records provided are “complete, have been created after the fact, tampered with, or are accurate.” At oral argument, plaintiffs counsel further claimed that “they haven’t given us all the documents that make up the plan.” Transcript of Oral Argument at 8,
Burgie v. Euro Brokers, et al,
CV-05-0968 (E.D.N.Y argued Nov. 7, 2006). This as
Plaintiff also argues that the Carder affidavit is “suspect” since there has been no affidavit from Ann Berthiaume, an Intake Specialist whose name can be found on documents related to plaintiffs case file, such as the letters mailed to plaintiff. At oral argument, plaintiffs counsel further said, in reference to Ms. Berthiaume, that Unum had “not submitted anything to me from people that I would expect to have received it from.” Transcript of Oral Argument at 4,
Burgie v. Euro Brokers, et al,
CV-05-0968 (E.D.N.Y argued Nov. 7, 2006). However, plaintiff has made no effort to depose or otherwise obtain any discovery related to Ms. Berthiaume, and the mere fact that Unum did not seek an affidavit from her is hardly evidence that anything untoward occurred during the processing of plaintiffs claim, viewed in light of the Carder affidavit.
See Torres v. Selsky,
Plaintiff further states that the calculations are incorrect and that the amounts calculated by Unum were an “incorrect interpretation of the plan.” Transcript of Oral Argument at 4, Burgie v. Euro Brokers, et al, CV-05-0968 (E.D.N.Y argued Nov. 7, 2006). Specifically, in her papers, plaintiff states that the “SSD [Social Security Disability] paid is not a deductible source of her income and is improperly in Carder’s equations.” However, the process of calculating benefits followed by Unum, as described above, is exactly that laid out in the policy, which has been validated by Carder’s affidavit as the one applicable to plaintiffs claim. See Carder Aff., Ex. A, p. LTD-BEN-2. Further, the policy explicitly says that “Unum will subtract from your gross disability payment the following deductible sources of income” and goes on to include “[t]he amount you, your spouse and your children receive as disability payments because of your disability under: the United States Social Security Act.” Carder Aff., Ex. A, p. LTD-BEN-5.
Finally, plaintiff claims that she is entitled to more than two years of disability benefits. Under the plaintiffs policy, benefits are available for disabilities which prevent claimant from “performing the material and substantial duties of [her] regular occupation.” Carder Aff., Ex. A, p. LTD-BEN-1. While the maximum benefits vary depending on the age of the claimant, the plan states that “[disabilities due to mental illness have a limited pay period up to 24 months.” Carder Aff., Ex. A, p. LTDBEN-8. Plaintiff alleges that her injury was not merely mental but physical as well and supports that argument by stating, without providing any documentation, that the Social Security Administration has already “adjudicated her disabled physically and mentally due to the unique nature of the 9/11 injuries she sustained which defy categorization.”
Where the written plan documents confer upon a plan administrator the discretionary authority to determine eligibility for benefits or to construe the terms of a plan, a court confronted with such a claim should “not disturb the administrator’s ultimate conclusion unless it is ‘arbi
Unum notes that the record includes a 2002 letter from Dr. Howard Issacs, who was providing plaintiff “psychiatric medication management,” stating that plaintiff suffered from Major Depressive Disorder and Post-Traumatic Stress Disorder and describing her as displaying “depressive and anxiety symptoms.” Begos Aff., Ex. B, p. FULCL 26. Unum also notes another 2002 letter from plaintiffs treating psychologist, Dr. Maureen Kaley, which confirms that plaintiff was being treated for Major Depression and Post-Traumatic Stress Disorder and describes symptoms including memory loss, confusion, fear and suicidal thoughts; Dr. Kaley recommended continued psychotherapy and medication. Begos Aff, Ex. B, p. FULCL 24-25. Both depression and post-traumatic stress disorder are classified as mental illnesses by the American Psychiatric Association and a determination by Unum consistent with such a finding cannot be deemed arbitrary and capricious. Diagnostio and Statistioal Manual of Mental DISORDERS, Fourth Edition 339, 424 (American Psychiatric Association ed., 1994) (“DSM-IV”);
see Bergquist v. Aetna U.S. Healthcare,
Accordingly, the Court concludes that Unum has provided sufficient evidence showing that the claim file is complete and authentic, that it has performed proper calculations on plaintiffs claim under the.terms of the plan, and that the amount it has paid already is equal to the amount due under the twenty-four month benefits period to which a beneficiary with
IV. Other Claims
In filings with the Court and at oral argument, plaintiff has indicated that she believes there may have been “a conspiracy between First Unum and Euro Brokers, Inc. to lose’ her claim” and deny her benefits to which she was entitled. However, while plaintiff has alleged breach of contract, ERISA and ADA claims, she has not alleged any such conspiracy by Unum in her Complaint and has conceded as much by stating in a footnote of her papers that she “[sleeks leave to amend shortly to assert a conspiracy claim against First Unum and Euro Brokers, Inc. in more specific terms if permitted by the Court.”
See Swierkiewicz v. Sorema N.A.,
Finally, at oral argument, plaintiff also referred to the case of
Nicolaou v. Horizon Media, Inc.,
CONCLUSION
For the reasons set forth above, defendant Unum’s motion to dismiss the ADA and contract claims is granted with leave to amend the ADA claim and Unum’s motion for summary judgment with respect to plaintiffs ERISA claim is granted. The Clerk is directed to transmit a copy of the within to the parties and the Magistrate Judge.
SO ORDERED.
Notes
. The FMLA claim was not pled against Unum and, accordingly, is not at issue on the motion by Unum discussed herein.
. See Rule 12, which says, in relevant part:
If, on a motion asserting the defense ... to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided inRule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
Fed.R.Civ.P. 12(b).
See also In re European Rail Pass Antitrust Litigation,
. Plaintiff now requests that "the Court provide her with notice if it is to treat this motion as a F.R. Civ. P. 56[sic] motion so that she may be include such additional affidavits and documentation as may be necessary.” However, at oral argument on April 18, 2006, the Court stated: “I am going to formally convert this Rule 12 motion into a motion for summary judgement on the issue of whether the plaintiff has received all of the benefits to which she is entitled.” Transcript of Oral Argument at 6, Burgie v. Euro Brokers, et al., CV-05-0968 (E.D.N.Y argued April 18, 2006). In response to plaintiff's request on April 18 for "permission to proceed with some discovery,” the Court granted her leave to do so. Id. at 7.
. Plaintiff's filings in connection with this motion allege for the first time alleges that "if the facts in this case are found to support plaintiff’s theory that Unum conspired with her employer to deprive her of benefits, a cause of action may lie against Unum as an aider and abettor in an ADA claim against it.” Since the Complaint nowhere alleges that Unum "aided and abetted” Euro Brokers in violat
. In relevant part, the statute reads:
(c) Insurance
Subchapters I through III of this chapter and title IV of this Act shall not be construed to prohibit or restrict—
(1) an insurer, hospital or medical service company, health maintenance organization, or any agent, or entity that administers benefit plans, or similar organizations from underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law; or
(2) a person or organization covered by this chapter from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law; or
(3) a person or organization covered by this chapter from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that is not subject to State laws that regulate insurance.
42 U.S.C. § 12201(c).
. Plaintiff argues that Unum's "safe harbor” defense is waived since it was not included as an affirmative defense in Unum’s Answer to the initial Complaint, which was filed prior to the filing of the motion to dismiss. However, courts frequently allow a defense to be raised for the first time in a filing subsequent to the answer where it would not prejudice the plaintiff.
See DeVito v. Pension Plan of Local 819 I.B.T. Pension Fund,
.In
Leonard F.,
the court held that the question as to whether the actions of the insurer conformed to state law is one of law, not fact, which may be decided on a motion to dismiss.
. Unum does not argue, and accordingly I do not decide, whether plaintiff has sufficiently met the pleading requirements for “safe harbor” cases under
Pallozzi
v.
Allstate Life Ins. Co.,
. The only reference to the statute itself in plaintiff's Complaint is in the section on jurisdiction, where she states that she brings the claim under “42 U.S.C. §§ 12101 et seq.,” but fails to indicate which Title the claim is brought under.
.
See Pallozzi,
. In the interest of avoiding further delays, I note that courts have frequently found that the question of whether or not someone is an "employer” is a question of fact better determined on summary judgement than on a motion to dismiss. In
Carparts Distrib. Ctr., Inc. v. Auto. Wholesaler’s Ass’n of New England, Inc.,
. That file contains a copy of the insurance policy, as well as documents related to the processing of the 2002 claim, including doctor's notes and the letters Unum sent to plaintiff regarding the missing documentation. Plaintiff questions the authenticity of the policy but has offered no evidence that it is not authentic although given an opportunity for discovery.
. Plaintiff notes in passing, without elaboration, that Carder's identity was not revealed in any previous Rule 26 disclosure. See Fed. R.Civ.P. 26(a) (parties required to disclosure identity of “individual likely to have discoverable information that the disclosing party may use to support its claims or defenses”). However, Carder's significance as a witness did not arise until the April 18, 2006 hearing when the Court ordered Unum to provide information regarding the method used to calculate benefits, which Unum did by submitting this affidavit on May 17, 2006. Moreover, plaintiff was explicitly granted an opportunity to seek additional discovery. See
Johnson Elec. North America Inc. v. Mabuchi Motor America Corp.,
. The plan limits benefits to twenty-four months for “[d]isabilities due to mental illness.” Carder Aff., Ex. A, p. LTD-BEN-8.
. The arbitrary and capricious standard of review is narrow, and a court should not disturb the administrator's decision unless "it was without reason, unsupported by substantial evidence or erroneous as a matter of law.”
Pagan,
. Even if the Social Security Administration has made a finding of physical disability in plaintiff's case, that finding would not be binding on Unum.
See Couture v. UNUM Provident Corp.,
. While plaintiff's assertions may be sufficient to allow her to survive a motion to dismiss, where the court must construe all plaintiff's factual allegations as true, they are insufficient in a motion for summary judgment.
See Vantage Point, Inc. v. Parker Brothers, Inc.,
. To the extent plaintiff is arguing for any relief beyond the benefits payable under the plan, she has failed to exhaust her administrative remedies or explain why exhaustion would be futile, necessary preconditions for seeking relief before a district court under ERISA.
See, e.g., Peterson v. Continental Casualty Co.,
The Second Circuit has recognized a "firmly established federal policy favoring exhaustion of administrative remedies in ERISA cases.”
Thomas v. Verizon,
- Fed.Appx. -,
It is undisputed that plaintiff did not administratively appeal the closing of her claim or her termination. Failure to do so constitutes a failure to exhaust administrative remedies.
Greifenberger v. Hartford Life Ins. Co.,
. The same is true for plaintiffs mention in her papers on these motions that "[s]he has a ... fiduciary duty claim." Such a claim is nowhere referred to in the Complaint. Moreover, as with the breach of contract claims discussed above, fiduciary duty claims to recover individual relief for a denial of benefits are precluded by ERISA.
See Mass. Mut. Life Ins. Co. v. Russell,