Opinion
CO01 Civ. 2700 (SAS)
April 3, 2002
Eric L. Ramos, Bronx, NY, for Plaintiff (Pro Se).
Gary Silverman, Esq., O'Dwyer Bernstien, New York, NY, for Defendant.
OPINION AND ORDER
Eric Ramos, proceeding pro se, brings this action against the Welfare Fund of Local 74 of the Services Employees International Union AFL-CIO-CLC ("Welfare Fund" or "Fund"), seeking reimbursement of medical expenses related to the birth of his child. Ramos commenced this suit by filing a Notice of Claim in small claims court. See 2/27/01 Notice of Claim Filed in Civil Court of the City of New York, Bronx County, Small Claims Part ("2/27/01 Notice of Claim"), Ex. A to 3/29/01 Notice of Removal ("Notice of Removal"). Defendant removed on the ground that the Welfare Fund is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). See Notice of Removal ¶ 4; see also 28 U.S.C. § 1441 (a), (b) and 1446(a), (b). Defendant now moves for summary judgment. For the reasons set forth below, the motion is granted.
Plaintiff originally named "Local 74 SEIU" as defendant, but the Civil Court Judge amended the Notice of Claim sua sponte to name the Fund instead. See Notice of Removal ¶ 6.
Jurisdiction is proper under section 502(a)(1)(B) of ERISA, which provides that a plan participant may bring a civil action to recover benefits due him under an ERISA plan. See 29 U.S.C. § 1132 (a)(1)(B).
I. INTRODUCTION
Plaintiff argues that defendant should reimburse him for medical expenses related to the birth of his child for four reasons. First, plaintiff claims that he was eligible for family coverage under the terms of his union's health care plan. Second, if he was not eligible, plaintiff argues that defendant failed to notify him of his statutory right to continue his family coverage by paying for it himself. Third, he argues that comments made to him by a claims supervisor over the phone modified the eligibility requirements for family coverage such that his child's birth was covered. Fourth, plaintiff contends that those same comments constituted a promise estopping the Fund from denying him reimbursement.
On December 14, 2001, and again on January 14, 2002, Ramos was given notice of his right to submit opposition papers in response to GE Capital's motion for summary judgment by February 8, 2002. See 1/14/02 Order; 12/14/01 Order. Ramos, however has failed to submit any legal memorandum or affidavits (or other admissible evidence). This Court nevertheless construes his deposition to contain several theories in opposition on to summary judgment.
II. BACKGROUND
Ramos is a member of Local 74 of the Services Employees International Union ("SEIU Local 74" or "Local 74"), through which he has been a participant in the union's Welfare Fund since 1988. See Defendant's Statement of Undisputed Facts Pursuant to Local Rule 56.1 ("Def. 56.1") ¶¶ 1, 9 (citing Affidavit of Hugh J. Forde, Administrator of the Welfare Fund ("Forde Aff.") ¶¶ 2 n. 1, 10). The Welfare Fund is a jointly-trusteed multi-employer benefit plan within the meaning of section 3(3) of ERISA, 29 U.S.C. § 1002 (3). See id. ¶ 1. The Welfare Fund provides medical benefits to members of Local 74 through various HMOs. See id. Collective bargaining agreements between Local 74 and employers of Local 74 members require employers to contribute to the Welfare Fund a fixed dollar amount for each hour worked by each employee (presently, $1.63) to pay for the insurance. See id. ¶ 2. A large number of Local 74 Welfare Fund plan participants — including plaintiff — are custodial workers in New York City public schools, on whose behalf contributions are paid by the New York City Board of Education ("Board"). See Forde Aff. ¶ 4.
While the workers are employed by individual custodial engineers, not the City or the Board, it is the Board which makes contributions on the workers' behalf. See Forde Aff. ¶ 4 n. 2.
Eligibility rules for coverage under the Welfare Fund are set forth in the Summary Plan Description ("Plan Document" or "Plan"). See September 1999 Plan Document, Ex. A to Defendant's 10/5/01 Notice of Motion, at 1; Def. 56.1 ¶ 4. To be eligible for individual coverage, an employee must have completed 90 days of employment with a contributing employer and work a minimum of 60 hours per four-week payroll period. A minimum of 150 hours per payroll period is required for dependent or family coverage. See Def. 56.1 ¶¶ 3-4. Loss of eligibility occurs when the participant fails to meet the minimum hours requirement for two consecutive payroll periods. See id. ¶ 5; Plan Document at 1, 5.
This document is mailed to all newly hired employees, and to all employees when it is substantially revised. See Forde Aff. ¶ 5. This last occurred in September 1999. See id.
Because eligibility is determined by the number of hours worked, the Board must report hours to the Fund. Approximately eight weeks after the close of each four week payroll period, the Board submits a computer diskette to the Welfare Fund containing the number of hours worked by each employee. See Forde Aff. ¶ 4. That data is fed into the Welfare Fund's computer system, which is programmed to check to assure that participants continue to meet eligibility requirements. See Def. 56.1 ¶ 6. The system generates a list of individuals whose reportei hours drop below the required minimum for the second consecutive month ("Event List"). See Def. 56.1 ¶ 8.
The Board divides the year into 13 four-week pay periods. See Forde Aff. ¶ 4 n. 3.
When a participant becomes ineligible for either single or family coverage, the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), 29 U.S.C. § 1161-68, become applicable. COBRA requires that the Welfare Fund notify the participant that he has become ineligible for benefits under the group plan, and provide him with the opportunity to continue the same coverage for up to 18 months at a self-paid monthly premium. See 29 U.S.C. § 1161-62; Affidavit of Maryann Falce, COBRA Coordinator for the Plan ("Falce Aff.") ¶ 4. If the participant does not respond to the letter within 60 days of receiving the notice, the opportunity to continue coverage is lost.See 29 U.S.C. § 1165 (1)(B) (ii)
Sometime in early 2000, Ramos called the Welfare Fund to inquire as to whether the Fund would cover the expenses related to the expected birth of his second daughter. See 8/9/01 Deposition of Eric Ramos ("Ramos Dep."), Ex. 1 to Declaration of Gary Silverman, Defendant's Counsel, at 30-31. Ramos spoke with Lorraine McClelland, a benefit claims supervisor for the Welfare Fund, who responds to participant inquiries concerning their benefits. See id. at 30; Affidavit of Lorraine McClelland ("McClel. Aff.") ¶ 2. Previously, the Fund had reimbursed him for claims related to the birth of his first daughter in 1989. See Ramos Dep. at 16 ("They paid for everything."). Ramos asked McClellend whether the Fund would pay such claims if his wife gave birth outside the country. See id. at 34-35. McClelland told Ramos that the expenses would be covered with proper documentation, namely a translation of the bills, and a notarized statement of the conversion to U.S. dollars for each of the charges. See id. McClel. Aff. ¶ 3.
On February 28, 2000, the Welfare Fund's COBRA Coordinator, Maryann Falce, ran a routine computer program to generate the COBRA Event List.See Def. 56.1 ¶ 13; Falce Aff. ¶ 5. That report indicated that Ramos was no longer eligible for coverage under the group plan because he had fallen below the 150 hours minimum for two consecutive months: in the 13th payroll period of 1999, his employer reported 130 hours of work, and in the first period of 2000, 128 hours. See Def. 56.1 ¶ 12 (citing Forde Aff. ¶ 12). On February 28, 2000, Falce prepared and mailed the COBRA notification letter along with a booklet entitled "Continued Health Care Coverage, COBRA Highlights" to Ramos and the other persons on that month's Event List. See Falce Aff. ¶ 6. An entry was made in Ramos's computer file indicating that COBRA notification was sent on February 28, 2000. See Computer Print-Out of Ramos File, Ex. C to Forde Aff. Ramos did not respond to this notification. See Def. 56.1 ¶ 15; Forde Aff. ¶ 12. Subsequently, the Fund Administrator determined that as of January 1, 2000, Ramos's dependents were no longer covered by the HIP HMO medical care provided through the Welfare Fund. See Forde Aff. ¶ 13.
Ramos did not again attain the 150 hour minimum until the 7th payroll period of 2000; thus his family coverage was restored effective August 1, 2000. See Forde Aff. ¶ 13. Had Ramos elected COBRA and self-paid the required COBRA premium of $324.00 per month, he would have continued his HIP HMO family coverage, retroactive from January 1, 2000.See id. ¶ 14.
On April 9, 2000, Ramos's daughter was born in the Dominican Republic.See Ramos Dep. at 46. In June or July 2000, Ramos submitted bills for medical expenses relating to the birth, but the union denied them. See id. at 45. Ramos seeks $3,000 for these unpaid claims. See 2/27/01 Notice of Claim.
III. LEGAL STANDARD
Rule 56 of the Federal Rules of Civil Procedure provides for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). "An issue of fact is `material' for these purposes if it `might affect the outcome of the suit under the governing law[,]' [while] [a]n issue of fact is "genuine' if `the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Konikoff v. Prudential Ins. Co. of Am., 234 F.3d 92, 97 (2d Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
In assessing the record to determine whether genuine issues of material fact are in dispute, a court must view the evidence in the light most favorable to the nonmovant. See Brelarid-Starling v. Disney Publishing Worldwide, 166 F. Supp.2d 826, 829 (S.D.N.Y. 2001) (citing Anderson, 477 U.S. at 255). A court must resolve all ambiguities and draw all reasonable factual inferences in favor of the non-moving party. See Parkinson v. Cozzolino, 238 F.3d 145, 150 (2d Cir. 2001) "Although the moving party bears the initial burden of establishing that there are no genuine issues of material fact, once such a showing is made, the nonmovant must `set forth specific facts showing that there is a genuine issue for trial.'" Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d Cir. 2000) (quoting Anderson, 477 U.S. at 256)
The non-moving party may not, however, "rest upon . . . mere allegations or denials." St. Pierre v. Dyer, 208 F.3d 394, 404 (2d Cir. 2000). "Statements that are devoid of any specifics, but replete with conclusions, are insufficient to defeat a properly supported motion for summary judgment." Bickerstaff v. Vassar Coll., 196 F.3d 435, 452 (2d Cir. 1999), cert. denied, 530 U.S. 1242 (2000). See also Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998) ("If the evidence presented by the non-moving party is merely colorable, or is not significantly probative, summary judgment may be granted.") (citations and alterations omitted).
The papers of a party proceeding pro se should be read liberally and interpreted "to raise the strongest arguments that they suggest."McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999) (quotation marks and citations omitted); see also Haines v. Kerner, 404 U.S. 519, 520 (1972). However, a pro se party's bald assertions, if unsupported by evidence, are not sufficient to overcome a motion for summary judgment.See Carey v. Crescenzi, 923 F.2d 18, 21 (2d Cir. 1991)
IV. DISCUSSION
A. Eligibility Under Plan
Fiduciaries are required to administer an ERISA plan in accordance with plan documents. See 29 U.S.C. § 1104 (a)(1)(D) O'Neil v. Retirement Plan for Salaried Employees of RKO Gen., 37 F.3d 55, 61 (2d Cir. 1994). "[A]s a general matter, unambiguous language in an ERISA plan must be interpreted and enforced in accordance with its plain meaning."Aramony v. United Way Replacement Benefit Plan, 191 F.3d 140, 149 (2d Cir. 1999). See also American Fed'n of Grain Millers v. Int'l Multifoods Corp., 116 F.3d 976, 980 (2d Cir. 1997)
The statute reads: "[A] fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and . . . in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this chapter." 29 U.S.C. § 1104 (a)(1)(D). There is no contention here that the Plan's eliqibility rules are inconsistent with any provision of ERISA.
The Plan Document clearly provides that a participant must work at least 150 hours per month to be eligible for family coverage during that month. See supra Part I. In late 1999 and early 2000, Ramos's reported hours for two consecutive payroll periods were 130 and 128 hours, respectively. See id. Under the unambiguous terms of the Plan, Ramos was ineligible for family coverage beginning January 1, 2000, until July 31, 2000, when he again attained minimum hours. See Forde Aff. ¶ 13;supra note 7. Thus the Administrator denied Ramos's request for reimbursement for expenses related to the birth of his child in April 2000. Ramos does not raise an issue as to the number of hours he worked, the number of hours reported by the Board, or any other material fact.
Further, a district court must accord deference to the denial of benefits by a fiduciary where the plan document itself grants the fiduciary discretion in applying and interpreting the plan. See Rombach v. Nestle, 211 F.3d 190, 194 (2d Cir. 2000); Patterson v. Retirement and Pension Plan for Officers and Employees of the N.Y. Dist. Council of Carpenters and Related Orgs., No. 00 Civ. 5962, 2000 WL 1178670, at *4 (Oct. 5, 2001). A court may only overturn a fiduciary's denial of benefits under such a plan if the fiduciary has acted arbitrarily or capriciously in construing its terms. See Rombach, 211 F.3d at 194;Patterson, 2001 WL 1178670, at *4. Here, the Welfare Fund Plan grants the Administrator discretion to construe its terms. See Plan Doc. at 68; Forde Aff. ¶ 16. Having applied the plain language of the Plan, the Administrator's eligibility determination was far from arbitrary or capricious.
B. Right to Continue Discontinued Coverage
Nor was Ramos entitled to continuing coverage under COBRA. The statute requires that the Welfare Fund notify participants when they have become ineligible for benefits under the group plan due to a "qualifying event," and provide them with the opportunity to continue the same coverage at a monthly premium. 29 U.S.C. § 1161-68. See also supra Part I. A reduction in work hours, such as Ramos experienced, is listed as a qualifying event under COBRA. See 29 U.S.C. § 1163 (2). COBRA further provides that if the participant does not respond to the letter within 60 days, the opportunity to continue coverage is lost. Here, Ramos failed to respond to the letter sent by the Welfare Fund and thus forfeited his right to continued self-paid coverage under the statute.
These provisions were codified as part of ERISA. See Philips v. Saratoga Harness Racing, Inc., 240 F.3d 174, 177 (2d Cir. 2001).
By denying that he ever received the COBRA letter, Ramos raises an issue of fact as to whether the Welfare Fund complied with its statutory duty under COBRA. See Ramos Dep. at 27, 47. The issue is immaterial, however, because COBRA does not require actual receipt of notification by the plan participant; to the contrary, only a good faith attempt to notify is required). See DeGruise v. Sprint Corp., 279 F.3d 333, 337 (5th Cir. 2002); Hubicki v. Amtrak Nat'l Passenger R. Co., 808 F. Supp. 192, 196 (E.D.N.Y. 1992). Here, the Local 74 Welfare Fund routinely runs eligibility checks, and sends out COBRA notification shortly thereafter to participants who have become ineligible. See supra Part I. A February 28, 2000 entry in the Welfare Fund's computer system indicates that a letter went out that day to Ramos. See Falce Aff. ¶ 6. The COBRA coordinator testified that, in accordance with her usual practice, the letter was mailed to Ramos's most recent address on file. See id. Thus, the defendant satisfied its statutory duty. Ramos cannot produce any evidence, much less "significantly probative" evidence, to support a finding that COBRA notification was not sent to Ramos's most recent address on file on the same day Ramos was deemed ineligible for family coverage under the Plan. Scotto, 143 F.3d at 114.
Nor is the issue genuine. Ramos had updated his address a month or two before the notice was sent, see infra note 11, and admits that he received various other plan documents through the mail. See Ramos Dep. at 17-18 (newsletters); 18 (dental forms); 20-22 ("shoe vouchers"). Bare denials cannot defeat summary judgment. See St. Pierre, 208 F.3d at 404.
Ramos recalls having updated his address by calling the Welfare Fund only a few weeks or months prior to the events at issue, in November or December 1999. See Ramos Dep. at 19-20.
C. McClelland's Comments to Plaintiff
In two conversations that Ramos had with McClelland between January and March 2000, he and McClelland discussed his coverage with respect to the expected birth of his daughter. Ramos testified that in the first conversation,
[s]he picks up the phone, she asked who it is, I said Eric Ramos, she asked my Social Security number, I explained my wife was giving birth in the Dominican Republic, would they pay for it, she said I think so, I have seen other cases in the past that you come back with the bills, translate it and we will reimburse you and I was surprised. I was like wow, yes, she said call me back — I don't know if she — I think it was call me back in a couple of days and I will let you know.
Ramos Dep. at 34. Ramos further testified that he called back a few days later and spoke with McClelland. See id. at 37. After he reminded her who he was and what they had discussed earlier, she said "`yes, oh yes, it could be done,'" and told him that he should bring in the translated bills and send them to the union. Id. See also supra Part I.
1. Modification
Section 402 of ERISA requires that every benefits plan be in writing.See 29 U.S.C. § 1102 (a)(1)
The basic premise of ERISA is that a plan sponsor will be free to determine what benefits the plan will provide, but that once such a determination has been made, the benefits must be described in a written plan that is available to participants any time upon request.Algie v. RCA Global Communications Inc., 891 F. Supp. 839, 860 (S.D.N.Y. 1994). Further, every benefits plan must specify procedures for its modification and identify who is authorized to modify it. See 29 U.S.C. § 1102 (b)(3). Plan modifications must be in writing; oral changes will not be enforced in the absence of fraud. See Moore v. Metropolitan Life Ins. Co., 856 F.2d 488, 489 (2d Cir. 1988); McConnell v. Costigan, No. 00 Civ. 4598, 2002 WL 313528, at *10 (S.D.N.Y. Feb. 28, 2002); Algie, 891 F. Supp. at 861; Sandler v. Marconi Circuit Tech. Corp., 814 F. Supp. 263, 265 (E.D.N.Y. 1993).
McClelland, as an administrative employee, was not authorized by the Plan Document to alter Plan provisions. See Forde Aff. ¶ 17. Indeed, such power rests solely with the trustees of the Welfare Fund.See id. Further, McClelland's communications with plaintiff were made orally and in the absence of any evidence of fraud. Thus, McClelland's comments to plaintiff did not modify the Plan's eligibility requirements or any other provision of the Plan.
2. Promissory Estoppel
"[P]romissory estoppel in ERISA cases requires satisfaction of four elements drawn from the state common law of promissory estoppel: (1) a promise, (2) reliance on the promise, (3) injury caused by the reliance, and (4) an injustice if the promise is not enforced." Aramony, 191 F.3d at 151. See also McConnell, 2002 WL 313528, at *10. Concerned with "the danger that commonplace communications from employer to employee will routinely give rise to employees' rights beyond those contained in formal benefit plans," this Circuit has added a fifth requirement to estop an employer from denying benefits under an ERISA plan: "extraordinary circumstances." Id. "Remarkable consideration," for example where an employer promises severance benefits to persuade an employee to retire and then reneges, has been held to constitute extraordinary circumstances. Devlin v. Transportation Communications Int'l Union, 173 F.3d 94, 102 (2d Cir. 1999) (discussing Schonholz v. Long Island Jewish Medical Center, 87 F.3d 72 (2d Cir. 1996)). Other types of intentional inducement and deception also qualify. See Devlin, 173 F.3d at 102. Written or oral interpretation of an ambiguous term may also satisfy this requirement where circumstances are "beyond the ordinary."Aramony, 191 F.3d at 152.
Here, assuming that McClelland's comments constitute a promise to pay benefits Ramos cannot adduce evidence to justify a finding of extraordinary circumstances. There is no hint of deception or intentional inducement, nor is the eligibility provision at issue ambiguous. Ramos and his wife cannot even be said to have relied on McClelland's statements Moreover, neither reliance nor even injustice is sufficient to satisfy the "extraordinary circumstances" criterion because both are already incorporated into the four-prong test. See Aramony, 191 F.3d at 151. Thus, Ramos's estoppel argument must also be rejected.
The assumption is barely tenable. McClelland's statement to Ramos that "it could be done," Ramos Dep. at 37, was made in the context of explaining the requirements for receiving reimbursement for out-of-country medical expenses. She did not in any way address or negate the eligibility requirement set out on the first page of the Plan Document and known to Ramos at the time of his conversation with McClelland. See id. at 25. Further, McClelland had no way of knowing in early 2000 that Ramos would be ineligible for family coverage in April.See supra Part I (explaining that hours are reported by the Board eight weeks after the corresponding payroll period).
This Court is also mindful that the use of estoppel may
undermine the actuarial soundness of pension plans by subjecting them to the payment of benefits through court order to persons who are not entitled to such benefits under the express terms of the plans [thus risking the] potential depletion of plan assets that could result through the imposition of liability.Ludwig v. Nynex Serv. Co., 838 F. Supp. 769, 798 (S.D.N.Y. 1993).
V. CONCLUSION
For the foregoing reasons, defendant's motion for summary judgment is granted. The Clerk of the Court is directed to close this case.
SO ORDERED.