On March 12, 2012, the Plaintiff Janet D’lorio (the “Plaintiff’) commenced this action by filing a Complaint against the Defendant Winebow, Inc. (the “Defendant”). The action sought statutory, in-junctive, and equitable relief relating to the Defendant’s alleged failure to disclose plan documents and its affirmative and/or negligent misrepresentation of benefits under its longterm disability and life insurance plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). Specifically, the Plaintiff asserted (1) a cause of action under ERISA § 502(c)(1), 29 U.S.C. § 1132(c)(1), for the Defendant’s alleged failure to provide or comply with a request for information by a participant or beneficiary, which a plan administrator is required to furnish and (2) a cause of action under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), to redress alleged violations by the Defendant of fiduciary and statutory duties under ERISA.
On January 18, 2013, the Court granted the Defendant’s .motion pursuant to Federal Rule of Civil Procedure (“Fed.R.Civ.P.”) 12(b)(6) to dismiss the Plaintiffs first cause of action under ERISA § 502(c)(1) and denied the Defendant’s motion with respect to its second cause of action under ERISA § 502(a)(3).
Presently before the Court is the Defendant’s motion for (i) summary judgment pursuant to Fed.R.Civ.P. 56(a) to dismiss the Plaintiffs remaining cause of action under ERISA § 502(a)(3); or (ii) in the alternative, to limit the Plaintiffs damages at trial pursuant to Fed.R.Civ.P. 56(g). For the reasons set forth below, the motion is denied in part and granted in part.
I. BACKGROUND
Unless stated otherwise, the following facts are drawn from the parties’ Rule 56.1 statements. Triable issues of fact are noted.
A. The Underlying Facts
1. The Plaintiffs Compensation
In 1997, the Plaintiff began working as a sales representative for the Defendant. Before being employed by the Defendant, the Plaintiff had a history of chronic pain related to her neck and back. (D’lorio Dep. Tr. 102:16-20.) The parties do not set forth the Plaintiffs age or marital status.
The Defendant is a New Jersey corporation, which has its primary place of business in New Jersey. (Compl. at ¶ 5.) The parties do not make clear the precise nature of the Defendant’s business.
Pursuant to the Plaintiffs March 26, 2008 and October 1, 2009 employment contracts with the Defendant, the Plaintiffs compensation was based on “[recoverable draw against commission: $60,000.00 per annum, paid bi-weekly.” (Whitman Deck, Ex. 6; Ostrove Deck, Ex. 36.)
Under this policy, the Plaintiff received bi-weekly checks based on a salary of $60,000, referred to as her recoverable draw. The Plaintiffs recoverable draw did not include commissions. (Id.) In this regard, if the Plaintiffs commissions were less than her recoverable draw in a given month, she would start the following month owing the Defendant money and would have to earn additional commissions to “make it up.” (D’lorio Dep. 230:9-19; Delvin Dep. 9:20-24.) If in a given month, the Plaintiff earned commissions in excess of her recoverable draw, then she would receive an “additional check” for an unspecified amount. (Delvin Dep. 9: 10-14.) In 2008 and 2009, the two years prior to when she went on disability leave in 2010,
Under the Defendant’s compensation policy, an employee could submit a request to her supervisor to change her “recoverable draw.” A party’s request was only granted if approved by the sales representative’s supervisors and senior management.
However, the parties dispute whether the Defendant had a policy in place that precluded employees from increasing their recoverable draw above a certain amount. Both parties agree that theré was no written policy relating to a maximum recoverable draw. (Response to the PL’s. Req. for Admission at 6, Ostro. Decl., Ex. 27.) However, the Defendant alleges that there was an oral policy that the maximum amount that a commissioned sales employee could increase her recoverable draw to was 80 percent of 5.5 percent of that employee’s prior year sales. (Edelstein Decl. at ¶ 5; Delvin Dep. Tr. 10:6-8.) According to the Defendant, it enforced this policy “rigidly,” so that an employee could only alter her recoverable draw above the maximum amount under “extraordinary circumstances.” (Edelstein Dep. Tr. 32:3-6.) The Defendant does not make clear the meaning of “extraordinary circumstances.”
On the other hand, the Plaintiff disputes that the Defendant had an oral policy that prevented employees from raising their recoverable draw above a certain amount. (See Delvin Dep. Tr. 10:6-10; Ostro Decl., Ex. 13.) She asserts that an employee could seek permission from her supervisor to increase her recoverable draw at any time and for any reason.
2. The Employee Handbook
The Defendant provides its employees with certain benefits, including a long term disability plan (the “LTD Plan”). Generally, a company’s LTD Plan provides benefits in the form of compensation checks to employees in the event that they are disabled by an accident or an illness. (Whitman Decl., Ex. Q, at 62.) The Defendant is the Plan Administrator and named fiduciary of its LTD Plan.
On June 1, 2008, the Defendant revised its Employee Handbook. In a section entitled, “Long Term Disability Insurance,” the 2008 Employee Handbook states:
If you are a regular full-time employee of the Company, you are protected through a long-term disability insurance policy from financial hardship if you are totally disabled because of illness or accident that is not job related. Coverage amounts are defined in the Summary Plan Descriptions (SPD’s) provided by the insurance company. The Summary Plan Descriptions can be found on the Intranet under Human Resources or directly from the Human Resources Department. Long term disability benefits begin after 180 days of total disability and provide you with a % of your annual salary.
(Whitman Decl., Ex. Q, at 62.)
The Defendant operated an “Intranet” site, known as “Sharepoint,” which is an internal company website that the Defendant made available to its employees to access certain documents related to their benefits, including summary plan descriptions. Summary plan descriptions (“SPDs”) are documents provided by insurance companies that describe the benefits available to employees.
On June 12, 2008, the Plaintiff signed a form acknowledging that she had “received and read a copy of the Company Employee Handbook.” (Whitman Decl., Ex. B, at 146-47.)
3. The December 1, 2008 PowerPoint Presentation
The Defendant held “Open Enrollment meetings” for its employees several times a year to provide an overview of certain benefits available to its employees. The parties dispute whether at these meetings, the Defendant generally directed its employees to the Company’s intranet site for copies of the benefit plans and SPDs.
In addition, when the Defendant made changes to its employees’ benefits, Michelle Edelstein (“Edelstein”), the Defendant’s Vice President of Human Resources, would send communications to employees regarding those changes.
Prior to 2009, the Defendant used United of Omaha Life Insurance Company (“United of Omaha”) as its insurance carrier for the LTD Plan. Under the United of Omaha’s LTD plan, if an employee qualified for the LTD Plan because of an injury, he or she would receive a “monthly benefit” or check for a certain amount of money. (Ostrove Deck, Ex. 32, at 1.) The “monthly benefit” was “60% of [an employee’s] Basic Monthly Earnings up to a maximum benefit of $5,000 per month.” (Id. at 1.) The United of Omaha LTD plan defined “Basic Monthly Earnings” as “gross income received from [the Defendant] for the month immediately prior to the month in which [the employee’s] disability began.” (Ostrove Deck, Ex. 32, at 2.) Significantly, under this plan, an employee’s gross income “include[d] commissions received [from the Defendant].” (Id.)
In 2008, the Defendant changed its insurance carrier for its LTD Plan from United of Omaha to Unum Life Insurance Company of America (“Unum”). The change would become effective as of January 1, 2009. As is described in more detail below, the Unum Plan calculated employees’ monthly benefit payments under the LTD Plan based on their recoverable draw and not their gross earnings, including commissions.
Prior to the effective date, the Defendant held presentations regarding the changes to its benefits, including the LTD Plan. In particular, in a November 26, 2008 email to sales employees, Edelstein stated that the “2009 Benefit Enrollment Meeting” was scheduled for December 1, 2008. (Edelstein Deck, Ex. AA.) Edelstein attached to the email a copy of a PowerPoint presentation to be given at the meeting and asked the employees to “either print it out or have it up on your computer so that you can read along as we present the benefit plans for 2009.” (Id.) In the email, Edelstein also attached an “UNUM ... Long Term Disability Election Form[].” (Id.) The Plaintiff received the email and attachments. (D’lorio Deck at ¶ 2.)
The PowerPoint presentation was prepared by Mercer Health Benefits LLC (“Mercer”), a third party hired by the Defendant. However, Edelstein reviewed and approved it. (Edelstein Dep. Tr. 37:11-25.)
The PowerPoint presentation consisted of forty-one slides relating to the different benefit plans offered by the Defendant to its employees. (Edelstein Deck, Ex. AA.) One of the slides was entitled, “Short and Long Term Disability.” (Id.) Under a section of the slide entitled, “Long Term Disability,” there were four bullets, which stated: (i) “66 2/3% of monthly earnings to
The “UNUM Long Term Disability Election Form” required each employee to indicate whether he or she elected to (i) pay the premium for the LTD Plan on a “payroll deduction basis”; or (ii) not to pay the premium for the LTD Plan. (Ostrow Decl., Ex. 2.) Under the first option, the disability benefits claimed by the employee would not be subject to federal income tax. (Id.) However, under the second option, the Defendant would pay the premiums on the policy for the employee but any disability benefits later claimed by the employee would be subject to the federal income tax. (Id.)
On December 1, 2008, the Defendant held the scheduled meeting during which the PowerPoint presentation attached to the November 26, 2008 email was given. The Plaintiff attended the meeting. (D’lorio Decl. at ¶2.) Edelstein was also present during the meeting. (Edelstein Dep. Tr. 37:11-25.) The parties dispute whether Edelstein or a representative of Mercer presented the PowerPoint presentation. (Edelstein Dep. 37:2-9; the Def.’s Memo of Law, at 16.) A copy of the SPD of the LTD plan was not provided at .the meeting. (Edelstein Dep. Tr. 37:11-25.)
Following the meeting, the Plaintiff filled out the “UNUM Long Term Disability Election Form” attached to Edelstein’s November 26, 2008 email. The Plaintiff chose the first option pursuant to which the premiums for the LTD Plan were deducted directly from her pay check every two weeks.
The amount deducted per pay check was determined by the formula “.00847% of [the employee’s] annual salary.” This formula was not provided to employees in the documents contained in Edelstein’s November 26, 2008 email.
However, in a December 22, 2009 email to various sales employees, Erin McGuinness (“McGuinness”), a member of the Defendant’s Human Resources department, attached a document entitled, “Summary of Health and Welfare Benefits Effective January 1, 2010.” (Whitman Decl., Ex. K.) The document stated, “Long Term Disability starts after 180 days of total disability and pay[s] 66 2/3% of your base salary.” (Id.) In addition, the document stated, “If you are interested in calculating the premium costs, you can do so by using the following formula ... Current Annual salary/26/100 * 0.22[J For example, $30,-000/26/100 * = $2.54 per pay period.” (Id.)
Pursuant to this formula, beginning on January 1, 2009, $5.08 was deducted from each of the Plaintiff’s pay checks. Given that it was a “nominal amount,” the Plaintiff testified that she never thought to use this calculation to determine the “Current Annual Salary” that was being used by the Defendant to calculate her premium payments. (D’lorio Decl. at ¶ 4.)
4. The Summary Plan Description of the LTD Plan
The SPD of the 2009 Unum LTD Plan provides information and answers to questions regarding the eligibility requirements for the plan and the benefits available to employees. (Whitman Decl., Ex. I.) Under a heading entitled, “What are your monthly earnings,” the SPD states: “ ‘Monthly Earnings’ means your gross monthly income from, your Employer in effect just prior to your date of disability.... It does not include additional income received
The parties dispute whether the Defendant made the SPD for the 2009 Unum LTD plan available to the Plaintiff at any time prior to or following the December 1, 2008 presentation. In this regard, the Defendant asserts that the SPD of the 2009 Unum LTD Plan was mailed to all employees, including the Plaintiff, and was available on SharePoint. (McGuinness Dep. Tr. 15:23-16:5; Edelstein Decl. at ¶ 3.) On the other hand, Plaintiff asserts that she did not receive the SPD of the 2009 Unum LTD Plan in the mail and that she did not have access to the company’s SharePoint site. (DTorio Tr. 151:17-22; 152:24-153:13.) However, the Plaintiff admits that prior to applying for benefits under the LTD Plan in 2010, she never sought access to SharePoint to review the LTD Plan.
5. The Plaintiffs Injury and Application for LTD Benefits
In January 2010, the Defendant held Open Enrollment meetings where it used the same PowerPoint presentation delivered on December 1, 2009.
Also in January 2010, following the presentation, the Plaintiff was injured after falling in her garage. (DTorio Dep. Tr. 102:23-103:7.) The parties do not set forth the precise date in January when the Plaintiff was injured. After the injury, the Plaintiff was taken to the emergency room and given X-rays to her hands, wrists, and legs. (Id. at 103:10-18.) As a result of the fall, she suffered “some torn ligaments” in her foot, pain in her hands and wrists, and exacerbated her pre-existing injuries to her neck and back. (Id. at 102:11-103:24.)
On January 21, 2010, the Plaintiff emailed Lori Delvin (“Delvin”), her direct supervisor, to inquire about the scope of her benefits under the Unum LTD Plan. Devlin responded:
Erin [McGuiness] [ ] sent me a 45 page document but asked me not to forward as different employees fall under different plans based on salary level and other such things.... If you continue to feel this bad you should probably ask for a copy of your plan, it is hard for me to know the difference would be. The percentage of salary on Long Term on mine is 66.67%, but since reps are on commission I do not know if there would be a difference in how they calculate the numbers.
(Whitman Deck, Ex. V.)
On March 2, 2010, the Plaintiff emailed McGuiness requesting “information that was handed out awhile ago on LTD benefits and criteria.” (Ostrove Deck, Ex. 7.) On the same day, McGuiness responded, consistent with the PowerPoint presentation, that the “monthly benefit” was “66.6667% of monthly earnings to a maximum benefit of $15,000 per month.” (Os-trove Deck, Ex. 9.)
In a March 11, 2010 email to McGuinness, Nancy Duca (“Duca”), another employee of the Defendant’s Human Resources Department, asked, “Janet DTorio is looking for LTD information. Is it okay to send her this?” McGuinness responded to Duca, “She is looking for the plan document. ... If she needs it now-before I send [it] to her, it is on Sharepoint: Unum disability plan document.” (Ostrove Deck, Ex. 8.)
On April 5, 2010, the Plaintiff began a short-term disability leave. Pursuant to the Unum LTD Plan, the Plaintiff could only apply for benefits under the LTD Plan after being on short-term disability for a mandatory 180 day period.
. On September 10, 2010, after the expiration of the 180 day period, the Plaintiff
Michele, I know that you are aware of the situation that occurred with Janet’s long-term disability, but as a recap, [the] disability insurance contract apparently reflected her draw and did not account for the substantial overage that she earned every year [in commission]. As you know this represents a huge difference in income for her going forward. I do not recall hearing that this was how the calculations were being done when we have had benefits presentations. It would have been very easy to have had her draw raised. For the future, I think that we need to develop a standard formula to calculate commissioned reps[’] draw. Many of them do not ask for an increase as they earn more money since they do get a[n] overage check each month. Since many of them are paying their own premium, it would not cost the company anything to insure that each of them has the top level of protection for which they can qualify. I hope that this is something that we can consider.
(Ostrove Deck, Ex. 13.)
On the same day, Edelstein responded: Everyone is told when they start that the policy taken out is one times their draw. If you want to adjust draw up from time to time, it must be submitted to Mike Espo and approved by Frank. Otherwise if a situation arises where someone passes away or goes out on LTD, the payment will be based on the draw amount.
(Id.)
By letter dated November 2, 2010, Unum advised the Plaintiff that it had approved her .application for benefits under the LTD Plan. According to the letter, the Plaintiff was to receive a gross benefit under the LTD Plan of $3,333.34 per month, less $1,915.00 in Primary Social Security and $956.00 in Family Social Security, for a net payment from the LTD plan of $462.34 per month. Unum calculated her gross benefit by applying a formula of 66.67% of her “salary.” The Plaintiff later learned after a discussion with Edelstein and Duca that her “salary” was based solely on her recoverable draw, and did not include the commissions she received. As such, for purposes of determining her benefits under the LTD Plan, her “salary” was $60,000 even though she had earned in excess of $100,000 in 2008 and 2009 because of additional commissions.
B. Procedural History
On March 12, 2012, the Plaintiff commenced this action. She alleged: (1) a cause of action under ERISA § 502(c)(1), 29 U.S.C. § 1132(c)(1), for the Defendant’s alleged failure to provide or comply with a request for information by a participant or beneficiary, which a plan administrator is required to furnish; and (2) a cause of action under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), to redress alleged violations by the Defendant of duties under ERISA.
On January 18, 2013, the Court granted the Defendant’s motion to dismiss the Plaintiffs first cause of action under ERISA § 502(c)(1) without prejudice and denied the Defendant’s motion with respect to its second cause of action under ERISA § 502(a)(3). However, the Court found that the only remedy available for the Plaintiffs claim under ERISA § 502(a)(3) was a “surcharge remedy” and not the remedy of estoppel or reformation. (Memorandum of Decision & Order, Jan. 18, 2013, at 17.)
The Defendant also argues that to. the extent that the Plaintiff claims that the SPD itself was not sufficient, her claim lacks merit. In her opposition papers, the Plaintiff did not respond to this aspect of the Defendant’s argument, and as such, the Court dismisses the Plaintiffs 'ERISA claim to the extent that it relies on allegations that the SPD itself is not sufficient. See, e.g., Levy v. Maggiore, No. 13-CV-2219 (MKB),
II. DISCUSSION
A. Legal Standards
Pursuant to Fed.R.Civ.P. 56(a), a court may grant summary judgment when the “movant shows there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law.” The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.’ ” James River Ins. Co. v. Power Mgmt., Inc., No. 12-CV-02706 (ADS),
If the movant successfully demonstrates that there is no genuine issue of material fact, then the burden shifts to the non-movant who must come forward with specific facts showing that a genuine issue exists. See Major League Baseball Properties, Inc. v. Salvino, Inc.,
A genuine issue of material facts exists if “ ‘a reasonable jury could return a verdict for the nonmoving party.’ ” Id. (quoting Anderson v. Liberty Lobby, Inc.,
B. As to Whether the Defendant Met Its Disclosure Obligations Under ERISA
The Plaintiff asserts that the Defendant violated ERISA’s statutory and regulatory requirements by failing to furnish the Plaintiff with a copy of the SPD for the Unum LTD Plan within 90 days of that policy becoming effective.
1. Legal Standard
Sectiori 104(b)(1)(A) of ERISA requires a plan administrator to “furnish to each participant ... [with] a copy of the summary plan description [SPD] ... (A) within 90 days after he becomes a participant.” 29 U.S.C. § 1024(b)(1)(A). In fulfilling this requirement, a plan administrator has a “duty to provide an SPD to its participants setting forth information such as the name and type of benefit plan, the plan’s requirements with respect to eligibility for participation and benefits, and circumstances that may result in disqualification, ineligibility, or denial or loss of benefits.” Weinreb v. Hosp. For Joint Diseases Orthopaedic Inst.,
If a plan administrator violates this provision, Section 502(a)(1) of ERISA empowers plan participants and beneficiaries to bring civil actions against plan fiduciaries for any damages that result from the failure to properly disclose the SPD. Wilkins v. Mason Tenders Dist. Council Pension Fund,
The Department of Labor issued rules and regulations for how to satisfy section 104(b)(1)(A) of ERISA. In particular, section 2520.104b-l of the Rules and Regulations for Reporting and Disclosure under ERISA, 29 C.F.R. § 2520.104b-l(b)(l), provides that in “furnishing” a SPD to each participant under the plan, the plan administrator “shall use measures reasonably calculated to ensure actual receipt of
For example, “in-hand delivery to an employee at his or her worksite is acceptable.” Id. In addition, distribution of an SPD through “first, second, or third-class mail” may be sufficient to satisfy ERISA’s disclosure requirements. 29 C.F.R. § 2520.104b-l (“[Distribution by second or third-class mail is acceptable only if return and forwarding postage is guaranteed and address correction is requested. Any material sent by second or third-class mail which is returned with an address correction shall be sent again by first-class mail or personally delivered to the participant at his or her worksite.”); see also Hall v. Kodak Ret. Income Plan, No. 07-CV-6169 (MAT),
The plan administrator may also satisfy the ERISA disclosure requirement by furnishing SPDs through “electronic media.” However, in doing so, the Plaintiff must also take “appropriate and necessary measures reasonably calculated to ensure ... actual receipt of transmitted information (e.g., using return-receipt or notice of undelivered electronic mail features, conducting periodic reviews or surveys to confirm receipt of the transmitted information)[.]” 29 C.F.R. § 2520.104b-l.
In addition, “an ERISA claim premised on the complete absence of an SPD ... requires a showing of likely prejudice.” Watson v. Consol. Edison Co. of New York,
2. As to Whether the Defendant Properly Furnished the SPD to the Plaintiffs
The Defendant asserts that in 2009, it distributed the SPD for the LTD Plan by mail, and therefore satisfied its disclosure obligations under ERISA. (Id.)-, see also Simeon v. Mount Sinai Med. Ctr.,
However, the Plaintiff testified at her deposition that she did not receive the SPD by mail or any other method prior to March 2010. (D’Iorio Tr. 151:17-22;
The Defendant next contends that it satisfied its disclosure obligations under section 104(b)(1)(A) of ERISA by posting the SPD for the Unum LTD Plan on Share-Point and giving its employees notice that they could access the document on the site. (The Defi’s Mem. of Law at 6.) In particular, the Defendant’s 2008 and 2009 Employee Handbooks stated, “Summary Plan Descriptions can be found on the Intranet under Human Resources or directly from the Human Resources Department.” (Whitman Deck, Ex. Q, at 62.) Further, on June 12, 2008 and May 18, 2009, respectively, the Plaintiff signed a form acknowledging that she “received and read a copy of the Company Employee Handbook.” (Whitman Deck, Exs. B, S.)
In addition, in a March 11, 2010 email, McGuinness responded to a question from Duca, “[The Plaintiff] is looking for the plan document.... If she needs it now-before I send [it] to her, it is on Share-point: Unum disability plan document.” (Ostrove Deck, Ex. 8.) This statement also suggests that the SPD had always been available to employees on Sharepoint.
However, the Court finds that even if the Plaintiff had access to the SPD for the Unum policy on SharePoint, the Defendant would not be entitled to judgment as a matter of law on the Plaintiffs claim that the Defendant breached its fiduciary duty by violating the disclosure provisions of ERISA § 104(b)(1)(A). The plan administrator — in this case, the Defendant — can disclose SPDs to its employees through “electronic media,” but if they do so, they must also make “appropriate and necessary measures reasonably calculated to ensure ... actual receipt of transmitted information.” 29 C.F.R. § 2520.104b-1(b)(1). For example, the plan administrator can use “return-receipt or notice of undelivered electronic mail features, conducting periodic reviews or surveys to confirm receipt of the transmitted information.” Id.
Here, there is nothing in the record to suggest that the Defendant took any action to confirm that its employees were able to obtain the SPD for the Unum LTD Plan on its internal website. As such, the Court cannot find that as a matter of law, the Defendant is entitled to judgment based solely on the fact that the Defendant uploaded the SPD for the Unum LTD Plan to Sharepoint. See Helton v. AT & T, Inc.,
Lastly, the Defendant argues that even if the Defendant did not satisfy its disclosure obligations under ERISA, the Plaintiff cannot show that she was prejudiced by the Defendant’s failure because “she did not exercise due diligence in trying to understand her benefits before she began her disability leave.” (The Def.’s Reply Mem. of Law at 3.)
However, in the cases cited by the Defendant, the plaintiffs had actual or constructive knowledge of the benefit requirement at issue. For example, in Weinreb v. Hosp. for Joint Diseases Orthopaedic Inst., 285 F.Supp.2d 382, 388 (S.D.N.Y. 2003) aff'd,
By contrast, here, there is conflicting evidence as to whether the Plaintiff was put on notice of the Defendant’s policy that monthly benefits under the LTD Plan did not include an employee’s commissions. In particular, under the LTD Plan administered by United of Omaha in place from 2002 through 2008, commissions were included in the monthly benefit calculation. Therefore, it would be reasonable to infer that the Plaintiff would not have known that the policy changed in 2009 without receiving an SPD or being told directly of a change in the policy. (Ostove Deck, Ex. 32, at 1.)
Accordingly, the Court denies the Defendant’s motion with respect to the Plaintiffs ERISÁ § 502(a)(3) claim that the Defendant violated the disclosure requirements'in ERISA § 104(b)(1)(A).
C. As to Whether the Defendant Made Material Misrepresentations
The Defendant also argues that the Plaintiffs breach of fiduciary claim based on allegations of material misrepresentation made by the Defendant should be dismissed because (i) the Defendant’s employees were not acting in their fiduciary capacities when making the representations; (ii) the Plaintiffs claim is based on an omission, not an affirmative misrepresentation, and are therefore is not actionable; (iii) the misrepresentations were not material; and (iv) the Plaintiff cannot show that she was actually harmed by the misrepresentations. The Court disagrees.
1. Oral Misrepresentations and Representations Related to the Life Insurance Plan
To make a claim for a breach of fiduciary duty under ERISA based on a material misrepresentation, a plaintiff must show that “(1) the defendant “was acting as a fiduciary when taking the action subject to complaint”; (2) the defendant’s conduct “breached a fiduciary duty”; and (3) the plaintiff detrimentally relied on the defendant’s material misrepresentation or omission.” Levin v. Credit Suisse, Inc., No. 11-CIV-5252 (RJS), 2013 WL
In the complaint, the Plaintiff states that the Defendant’s employees made the following representations regarding the LTD plan: (i) an oral statement by McGuiness in February 2010 that her benefits would be 66.6% of her income; (ii) an oral statement by Duca in Septem- ■ ber 2010 that her benefits would be based on her income; (iii) an oral statement by Duca in September 2010 that her benefits would be based on numbers from her earning statements; and (iv) two statements regarding the LTD Plan and Life Insurance policy made in a PowerPoint presentation given on December 1, 2008 and in January 2010. (Compl. at ¶¶ 10,12,18, 21, 23.)
The Defendant argues that none of these statements are actionable. (The Def.’s Mem. of Law át 14-22.) . In her opposition memorandum, the Plaintiff only directly addresses the Defendant’s argument with respect to the statements made in the PowerPoint presentation. She also makes a vague reference to an “email” but does not make clear what email she is relying on. Accordingly, the Court grants the Defendant’s motion and dismisses the Plaintiff’s misrepresentation claim to the extent that it relies on statements made by the Defendant outside of the December 1, 2008 PowerPoint presentation. See Reid v. Ingerman Smith LLP,
The Plaintiff misrepresentation claim is also based on a representation in the December 1, 2008 PowerPoint presentation relating to the Defendant’s life insurance policy. In particular, she alleges that the Defendant changed its life insurance carrier in 2009 to Unum and under Unum’s policy, benefits were based on the employee’s recoverable draw and not their gross earnings. (Compl. at ¶ 56.) The December 1, 2008 PowerPoint presentation did not include any information regarding the alleged change in policy; rather, it stated that its employees’ life insurance benefits would be “lx annual earnings to a maximum of $150,000.” (Ostrove Deck, Ex. 6.) Accordingly, the Plaintiff alleges that in reliance on this representation, she was approved for a “less amount” of life insurance benefits than she would have been had she known of the policy regarding commissions. (Compl. at ¶ 56.)
However, the Plaintiff does not make clear what harm, if any, she suffered from the Defendant’s alleged misrepresentation. Indeed, the Court notes that the Plaintiff has not qualified for any benefit payments under the Defendant’s group life insurance policy because the policy only becomes effective when an employee dies. (Whitman Deck, Ex. J, at 2.) Without more, the Court must rely only on the Plaintiffs conclusory assertions of detrimental reb-anee. Buckley v. Deloitte & Touche USA LLP,
The Court will next address the parties’ arguments with respect to the statements made in the Defendant’s December 1, 2008
2. As to Whether the Defendant Was Acting as a Fiduciary
The Defendant argues that the Plaintiff cannot demonstrate that the Defendant was acting in its fiduciary capacity when delivering the PowerPoint presentation to its employees because (i) the statements were not made by the Defendant’s employees but a third party firm; and (ii) the act of “preparing presentation materials” is a purely ministerial act and cannot form the basis of a fiduciary duty claim under ERISA. (The Def.’s Mem. of Law at 16.)
The Plaintiff argues that the Defendant was acting as a fiduciary because (i) E del-stein was involved in reviewing and presenting the PowerPoint presentation and (ii)discussing future benefits with employees is not a ministerial act.
ERISA provides that a “ ‘person is a fiduciary with respect to a plan,’ and therefore subject to ERISA fiduciary duties, ‘to the extent’ that he or she ‘exercises any discretionary authority or discretionary control respecting management’ of the plan, or ‘has any discretionary authority or discretionary responsibility in the administration’ of the plan.’ ” Mahoney v. J.J. Weiser & Co.,
“In order to establish a claim for breach of fiduciary duty under ERISA, the plaintiff must establish that the defendant is a fiduciary with respect to the particular activity at issue in the action.” Denniston v. Taylor ex rel. administrator & fiduciary of Benckiser Consumer Products In. Grp. Life & Disability Income Ins. Plan, No. 98 CIV.3579(LTS),
Therefore, the inquiry into whether an individual is a fiduciary under ERISA is a functional one: “the threshold question is ... whether that person was acting as a fiduciary (that is, was performing a fiduciary function) when taking the action subject to complaint.” Murray,
In particular, “[flailing outside the ambit of ERISA are those individuals ‘who perform ministerial tasks with respect to the plan, such as the application of rules determining eligibility for participating, preparation of plan communication materials, the calculation of benefits, and the maintenance of employee records.’ ” Gill,
The Defendant first argues that the Plaintiff cannot demonstrate that the Defendant was acting in its fiduciary capacity when delivering the PowerPoint presentation to its employees because the statements were not made by the Defendant’s employees but by Mercer, a third party firm. The Court disagrees. Although the PowerPoint presentation was prepared by Mercer, Edelstein, a vice president of the Defendant’s Human Resources Department, reviewed and approved it, and emailed a copy of it to all of the Defendant’s employees. (Edelstein Dep. Tr. 37:11-25; Edelstein Decl., Ex. AA.) There is also a dispute of fact as to whether Edelstein or a representative of Mercer delivered the PowerPoint presentation at the December 1, 2008 meeting with the Defendant’s employees. (Edelstein Dep. Tr. 36-37) (“Our broker, Mercer, puts together presentation ... And typically, they will do the presentation. I will be there. In some instances when a Mercer rep cannot be there, I will do the presentation based off of their PowerPoint”).
The Defendant also argues that the act of “preparing presentation materials” is a purely ministerial act and cannot form the basis of a fiduciary duty claim under ERISA. (The Def.’s Mem. of Law at 16.) The Defendant relies on a Department of Labor Interpretative Bulletin, which states that certain actions, including “[p]reparation of employee communications material,” were ministerial and did not give rise to fiduciary duties. 29 C.F.R. § 2509.75-8.
However, the Plaintiffs misrepresentation claim is based on the Defendant’s presentation of the PowerPoint and the representations in the PowerPoint itself, not merely the preparation of the PowerPoint. Courts in this Circuit have held that discussing future benefits with potential employees can give rise to fiduciary duties under ERISA. See, e.g., Flanigan v. Gen. Elec. Co.,
Here, there is no dispute that the PowerPoint presentation given at the December 1, 2008 meeting was intended to provide information to the Defendant’s employees about its future benefits, including the LTD Plan. (Joint Statement
3. As to Whether the Defendant’s Representations Are “Material”
The- PowerPoint presentation that was sent and presented to the Defendant’s employees contained the following representations regarding the Unum LTD Plan: (i) “66 2/3% of monthly earnings to a maximum of $15,000 per month”; (ii) “Survivor Benefit”; (iii) “Dependent Care Benefit”; and (iv) “Paid by [the Defendant] at no cost to you.” (Edelstein Decl., Ex. AA.)
The Plaintiff asserts that the first statement is misleading because the Defendant did not specify in the presentation that the definition for “earnings” had changed under the Unum LTD Plan. In particular, the Unum LTD Plan’s definition of “earnings” did not include an employee’s commissions, while the previous United of Omaha LTD Plan did include commissions in its definition of “earnings.” (Ostrove Decl., Ex. 32, at 2; Whitman Decl., Ex. I.)
The Defendant asserts the statement is not material because, as a matter of law, an omission only satisfies the “materiality” requirement when the Defendant omits information in response to a question.
However, “[fjiduciaries may be held liable for statements pertaining to future benefits if the fiduciary knows those statements are false or lack a reasonable basis in fact.” Miller v. Int’l Paper Co., No. COTT12 CIV. 7071(LAK),
For example, in Devlin v. Empire Blue Cross & Blue Shield,
Similarly, in the instant case, the Defendant’s representations in its PowerPoint presentation related to changes to the employee’s benefits in 2009. Prior to 2009, the Defendant’s LTD Plan included commissions in its calculation of benefits under the plan. (Ostrove Decl., Ex. 32, at 2.) However, as a result of the Defendant’s decision to change policies, commissions were no longer included in the benefits
The Defendant relies on Burns v. Marley Co. Pension Plan for Hourly Emps.,
The Court does not find Bums to be applicable to the instant case. In that case, the Plaintiffs claim was based on an omission. Id. By contrast, in this case, the Plaintiffs claim is based on an affirmative and allegedly misleading statement, which courts in this Circuit have found can be actionable under ERISA. See Devlin,
4. As to Detrimental Reliance
“Where a plaintiff asserts a breach of fiduciary claim based on a material misrepresentation or omission, the plaintiff must establish detrimental reliance.” Bell v. Pfizer, Inc.,
In the instant case, at the time of the December 1, 2008 presentation, the Plaintiff had chronic health issues related to her back and neck. (D’lorio Dep. Tr. 102:16-20.) She had also earned significant com
However, the Defendant argues it was not reasonable for the Plaintiff to rely on the statement in the Defendant’s December 1, 2008 PowerPoint presentation regarding changes to its LTD Plan because it was a small part of a large presentation, which consisted of forty-one slides. (The Defs Mem. of Law at 19.) The Court disagrees.
The Defendant held the December 1, 2008 Open Enrollment meeting to provide its employees with “an overview of certain benefits available to its employees.” (Joint Statement of Facts at ¶ 30.) Indeed, in a November 26, 2008 email to employees attaching the presentation, Edelstein asked employees to “print [the PowerPoint presentation] out or have it up on your computer so you can read along as we present the benefit plans for 2009.” (Whitman Deck, Ex. AA). Under such circumstances, the Court finds that a fact-finder could conclude that the Plaintiff reasonably relied on one statement about the LTD Plan in the PowerPoint presentation in making decisions with respect to her benefits. Ballone v. Eastman Kodak Co.,
The Defendant next argues that the Plaintiff was or should have been aware that the Unum LTD Plan did not include commissions based on the premiums that were deducted from her pay check on a biweekly basis. In particular, beginning on January 1, 2009, when the Unum LTD Plan became effective, a $5.08 premium payment was deducted from each of the Plaintiffs pay checks. (Joint Statement of Facts at ¶ 10.) The amount deducted was calculated using a formula: “.00847% of [the employee’s] annual salary.” (Whitman Deck, Ex. K.) The Defendant contends that the Plaintiff could have used this formula to determine that her benefits were based on her recoverable draw of $60,000, and not her gross earnings, including commissions. (The Def.’s Mem. of Law 19-20.) Again, the Court disagrees.
The Plaintiff asserts that she never thought to use this formula to determine her “Current Annual Salary” because her monthly premium payment of $5.08 was a “nominal amount.” (D’lorio Deck at ¶ 4.) Moreover, as described, infra, other employees, who also paid monthly LTD premiums, appeared to be not aware of the change in policy regarding commissions. Therefore, the Court finds that a reasonable factfinder could conclude that the Plaintiff was not aware of the change in policy regarding commissions.
Lastly, the Defendant contends that the Plaintiff could not have increased her recoverable draw above $60,000 per year prior to going on disability leave. (The Def.’s Mem. of Law at 20-21.) The Defendant relies on Edelstein’s deposition testimony that the Defendant had a policy in
However, the Plaintiff disputes that this policy existed. In addition to the Plaintiffs own testimony, Delvin, the Plaintiffs direct supervisor, stated in her deposition: “[Y]ou never want [the draw] to be too high relative to the prior year’s sales, so you want to look at maybe 80 percent of the prior year’s sales. But I can’t say that that tvas any kind, of hard-and-fast rule.” (Delvin Dep. Tr. 10:6-10.) Similarly, in a September 29, 2010 email to Edelstein, Delvin wrote, “I know that you are aware of the situation that occurred with [the Plaintiffs] long-term disability, but as a recap, [the] disability insurance contract apparently reflected her draw and did not account for the substantial overage that she earned every year [in commissions] .... It would have been very easy to have had her draw raised. For the future, I think that we need to develop a standard formula to calculate commissioned reps[] draw.” (Ostrove Deck, Ex. 13.) (emphasis added). Based on the testimony of Delvin and the Plaintiff, together with these emails, the Plaintiff has, at the very least, demonstrated a genuine issue of material fact as to whether she could have raised her draw to an amount high enough that she would have received greater monthly payments under the LTD Plan.
Accordingly, the Court finds that the Plaintiff has demonstrated a genuine issue of material of fact as whether the Plaintiff detrimentally relied on the Defendant’s representation in its PowerPoint presentation relating to the Unum LTD Plan.
D. As to the Defendant’s Request to Limit the Plaintiffs Damages
In its January 18, 2013 memorandum of decision and order, the Court denied the Defendant’s motion to dismiss the Plaintiffs ERISA § 502(a)(3) claim. (Dkt. No. 14 at 14-16.) However, the Court found that the Plaintiff was entitled to monetary relief in the form of a “surcharge remedy” but not entitled to monetary relief under the theories of equitable estoppel or reformation. (Id.)
In the present motion, the Defendant states that the Plaintiff has represented to the Defendant in its expert report that she will seek as damages (i) a lump sum payment consisting of both the shortfall in past LTD payment and (ii) an amount reflecting the expected shortfall in future LTD payments discounted to present value. (The Defi’s Mem. of Law at 23.) The Defendant argues that awarding the Plaintiff damages for future payments under the LTD Plan would be inconsistent with nature of a surcharge remedy, which is equitable and can only make the Plaintiff whole, not compensate for future loss. (Id.) It further contends that it is not possible to determine what the Plaintiffs payments under the LTD plan will be because she is only eligible for benefits under the Plan so long as she is disabled, and if her condition improves, she may no longer be eligible to participate in the Plan. (Id.) Accordingly, the Defendant seeks an order
In response, the Plaintiff argues that she is entitled to additional measures of damages under a surcharge theory, including punitive damages to deter future breaches by the Defendant. (The PL’s Mem. of Law at 22.)
1. Legal Standards
The Fed.É.Civ.P. 56(g) provides, “[i]f the court does not grant all the relief requested by the motion, it may enter an order stating any material fact— including an item of damages or other relief — that is not genuinely in dispute and treating the fact as established in the case.” “ ‘The purpose of [the rule] is twofold: to salvage some of the judicial effort involved in the denial of a motion for summary judgment and to streamline the litigation process by narrowing the triable issues.’” In re Bak, No. 10-23045(ASD),
In this Court’s January 18, 2013 memorandum of decision and order, the Court denied the Defendant’s motion to dismiss the Plaintiffs breach of fiduciary claim under ERISA 502(a)(3), 29 U.S.C. 1132(a)(3). (Dkt. No. 14 at 8.). The Court found that the Plaintiff was entitled to monetary relief under ERISA § 502(a)(3) in the form of a “surcharge remedy” but .not entitled to monetary relief under the theories of equitable estoppel or reformation. (Dkt. No. 14 at 14-16.). ERISA § 502(a)(3) provides that a “participant, beneficiary, or fiduciary” may bring a civil action “to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this sub-chapter or the terms of the plan.” Id.
The Court begins by providing a brief overview of CIGNA, CIGNA Corp. v. Amara,
In CIGNA the plaintiffs, who were retiring employees, brought suit against the defendant-employer seeking to prevent the adoption of a new retirement plan and alleging that the defendant breached its fiduciary duty to the plaintiff under §§ 102(a), 104(b), and 204(h) of ERISA by failing to give proper notice of changes to the plan. Id. at 1872-73. The district court found that the defendant had provided its employees with misleading disclosures related to the policy changes and thus had breached its fiduciary duty to the employees. Id. at 1874-75. The district court then reformed the new plan and ordered the defendant to pay benefits accordingly, relying on section § 502(a)(1)(B) as the source of its authority. Id. at 1875-76. ERISA §' 502(a)(1)(B) provides that a “participant or beneficiary” may bring a
The United States Supreme Court vacated the district court’s decision and remanded the case. Id. at 1882. It found that the district court did not have authority under ERISA § 502(a)(1)(B) to provide the relief the district court had granted because, among other things, that section addressed enforcing the terms of the plan not altering or reforming the terms of the plan. Id. at 1877.
'However, in dicta, the Supreme Court found that the type of remedies ordered by the district court may be available to the plaintiffs on remand under . ERISA § 502(a)(3). Id. at 1879. It reasoned that the “appropriate equitable relief’ in § 502(a)(3) refers to “those categories of relief ... typically available in equity.” ’ Id. at 1878 (quoting Sereboff v. Mid Atl. Med. Servs., Inc.,
The Supreme Court noted that the district court’s order altering the terms of the plan to avoid the contested changes was analogous to the remedy of “reformation,” a “traditional power, of an equity court ... used to prevent fraud.” Id. at 1879. It also found that the district court’s order that the defendant could not deprive the plaintiff of benefits already accrued resembled the doctrine of equitable estoppel, which “operates to place the person entitled to its benefit in the same position he would have been in had the representations been true.” Id. at 1880.
Finally, and relevant to the instant case, the Supreme Court approved of the district court’s order requiring the “plan administrator to pay to already retired beneficiaries money owed them under the plan as reformed.” Id. It reasoned that “[e]quity courts possessed the power to provide relief in the form of monetary ‘compensation’ for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust enrichment.” Id. (citing Restatement (Third) of Trusts § 95). The Supreme Court noted that this remedy had sometimes been called a “surcharge.” Id. (citing Princess Lida of Thurn and Taxis v. Thompson,
Subsequently, in this Court’s January 1,’ 2013 memorandum of decision and order, the Court found that CIGNA permitted the Plaintiff to seek damages pursuant to a “surcharge remedy” based on allegations-that “her long-term disability benefits and life insurance benefits were significantly lower that they would have been had the Defendant provided her with this information concerning the connection between her benefits and her draw amount.” (Dkt. No 14, at 15.)
2. As to the Plaintiffs Damages
Although the Second Circuit has found that CIGNA permitted a plaintiff to obtain
The Defendant contends that the “surcharge” remedy is limited to restitution, and therefore, the Plaintiff damages are limited to the benefit payments she would have received had she been able to increase her recoverable draw to reflect the commissions that she earned. (The Def.’s Mem. of Law at 23-24.)
However, the Supreme Court in CIGNA suggested that “surcharge” was a remedy intended to provide all manner of compensatory damages to a plaintiff at equity and was not, as the Defendant contends, limited to a “make-whole remedy” — “[e]quity courts possessed the power to provide relief in the form of monetary ‘compensation’ for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust enrichment.” CIGNA Corp. v. Amara,
Therefore, the Court concludes that, as a matter of law, the Plaintiff is entitled under a surcharge theory to consequential damages, exemplary, or punitive damages in limited circumstances where malice or fraud is involved. Cf. McCravy v. Metro. Life Ins. Co.,
However, the Court notes that if the Plaintiff succeeds at trial, she will have the burden of establishing damages. Based on the record, the Plaintiff will have a difficult burden proving that she is entitled to damages for future payments under the LTD Plan because, as the Defendant correctly points out, it is not possible to determine what the Plaintiffs payments under the LTD plan will be in the future as she is only eligible for benefits under the Plan so long as she is disabled, and if her condition improves, she may no longer be eligible to participate in the Plan. (The Def.’s Mem. of Law at 23.) Moreover, the Plaintiffs claim that she is entitled to punitive damages to deter future wrongdoing by the Defendant appears to be unsupported by the record in this summary judgment background. There are no facts
Accordingly, the Court denies the Defendant’s motion as to the Plaintiffs damages.
E. As to the Plaintiff’s Request That the Court Reconsider Its Dismissal of the Plaintiff’s Estoppel and Reformation Claims
In supporting memorandum of law, the Plaintiff asks the Court to reconsider its January 18, 2013 order dismissing the Plaintiffs estoppel and reformation claims. (The PL’s Mem. of Law at 23.)
The law of the case doctrine “counsels a court against revisiting its pri- or rulings in subsequent stages of the same case absent cogent and compelling reasons such as an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.” Jackson v. New York State,
III. CONCLUSION
For the foregoing reasons, it is hereby:
ORDERED, that the Defendant’s motion for summary judgment pursuant to Fed.R.Civ.P. 56(a) regarding the Plaintiffs claims under ERISA § 502(a)(3) relating to the Defendant’s alleged failure to disclose the SPD and the Defendant’s alleged misrepresentations in the December 1, 2008 PowerPoint presentation relating to the Defendant’s LTD Plan, is denied; and
ORDERED, that the Defendant’s motion for summary judgment pursuant to Fed.R.Civ.P. 56(a) with respect to the Plaintiffs claims under ERISA § 502(a)(3) regarding oral misrepresentations and misrepresentations in the December 1, 2008 PowerPoint presentation relating to the Defendant’s life insurance plan, is granted; and
ORDERED, that the Defendant’s motion pursuant to Fed.R.Civ.P. 56(g) is denied;
SO ORDERED.