Summary
In Bordonaro, the express language of the agreement released "Union Carbide Corporation, its parent, subsidiary, affiliated, related, companion, predecessor or successor corporations, their agents, representatives, officers, employees, successors and assigns..."; the agreement did not expressly reference the Union Carbide Corporation Long Term Disability Plan or Metropolitan Life Insurance Company. 2002 WL 32824, at *1-2.
Summary of this case from Linder v. Byk-Chemie USA, Inc.Opinion
CIVIL ACTION NO. 01-1177 SECTION "L"(1)
January 10, 2002
ORDER REASONS
Before the Court is the motion of Defendants Metropolitan Life Insurance Company ("MetLife"), Union Carbide Corporation, and Union Carbide Corporation Long Term Disability Plan ("the Plan") seeking dismissal of the Plaintiffs claim alleging denial of long term disability benefits in violation of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001 et seq. ("ERISA"). For reasons set forth below, the motion is GRANTED.
I. BACKGROUND
This case has its genesis in an alleged pattern of sexual harassment at the Union Carbide Plant in Taft, Louisiana. In 1993 Plaintiff Toni Bordonaro, an employee of Union Carbide Corporation, filed suit in U.S. District Court for the Eastern District of Louisiana claiming damages under Louisiana law for sexual harassment and intentional infliction of emotional distress. On June 15, 1995, the case was dismissed on the request of the parties after reaching a settlement agreement. On April 18, 2001, Plaintiff Toni Bordonaro filed the instant action in which she claims an entitlement to long term disability benefits under ERISA, 29 U.S.C. § 1001, et seq.
Defendant moves for summary judgment claiming dismissal is proper according to both the express terms of the release agreement and the doctrine of res judicata. Specifically, according to the Defendants, although the June 1995 release agreement was executed by only the Plaintiff and the Union Carbide Corporation, the release is broad enough in scope to extinguish Plaintiffs claims against the Union Carbide Corporation Long Term Disability Plan ("the Plan") and Metropolitan Life Insurance Company ("MetLife"). Defendants claim that it is only reasonable to conclude that the agreement contemplates the release of long term benefits because at the time the release was written and signed, the Plaintiff was receiving these benefits.
Alternatively, the Defendants claim that the doctrine of res judicata operates in this case to bar the Plaintiffs claim against the Plan and MetLife. According to the Defendants, because the Plaintiffs 1993 suit was dismissed with prejudice, Plaintiffs claims in the instant suit against the Plan and MetLife are barred because they are considered, for purposes of res judicata, as parties to the 1993 action by virtue of their relation to Union Carbide Corporation. In particular, Defendants point out that the Plan is self-funded by Union Carbide Corporation and that MetLife simply administers the Plan.
Plaintiff opposes dismissal claiming that the Defendants in the instant action were not, nor could they be considered, party to the 1993 suit. Plaintiff further claims that neither the Plan nor MetLife were party to the release and, therefore, they cannot defend the instant suit on the grounds of res judicata. Plaintiff further argues that the release she signed did not contemplate the release of claims for long term disability benefits.
II. ANALYSIS
The proper analysis in evaluating who Bordonaro released by the settlement agreement begins by looking to the terms of the release agreement itself. The express language of the agreement provides that the Plaintiff:
"releases . . . Union Carbide Corporation, its parent, subsidiary, affiliated, related, companion, predecessor or successor corporations, their agents, representatives, officers, employees, successors and assigns, and all those for whose acts and omissions any of said parties might be responsible, all persons who might be responsible for the acts and omissions of any said parties and their respective insurers, of and from any and all claims, demands, actions and causes of action for damages, compensation, medical payments, court costs, attorney's fees, penalties, interest, expenses and loss of any and every kind whatever . . . . on account of or in any way growing out of, any and all known and unknown personal injuries, which resulted or may result from alleged harassment of any nature whatsoever . . . by employees of Union Carbide Corporation during the term of [Bordonaro's] employment with Union Carbide Corporation . . ." (emphasis added)
While the release agreement references Union Carbide, it does not expressly reference the Plan or MetLife.
In the instant case, although Plaintiff demands payment of long term disability benefits from MetLife and/or the Plan, the underlying cause of the disability which Plaintiff claims to suffer, is attributable to the actions of Union Carbide which were the subject matter of the earlier suit. Moreover, based on the clear and unambiguous language of the release agreement, the Plaintiff discharged any and all claims arising out of the subject of the earlier suit which necessarily includes claims for long term disability payments from Union Carbide Corporation. Thus, as to Defendant Union Carbide there can be no doubt that the release agreement discharged it from any and all liability arising from the subject matter of the earlier suit. Plaintiff argues, however, that even if Union Carbide Corporation is discharged of any obligation to pay long term disability payments, the Plan and MetLife are not similarly discharged of this obligation.
Under ERISA, the law recognizes, in some situations, that an employee benefit plan is separate and distinct from the employer which sponsors the plan. "An employee benefit plan may sue or be sued under this subchapter as an entity." 29 U.S.C. § 1132(d)(1). In Antoniou v. Thiokal Corp. Group Long Term Disability Plan, 849 F. Supp. 1531 (M.D. Fl. 1994), the district court held that where a release agreement referenced the plaintiffs employer but did not reference the employee disability plan, the release agreement did not release the defendant plan because the employer and the disability plan were properly recognized as separate legal entities under 29 U.S.C. § 1132(d)(1) and (d)(2). However, the separate legal status of a plan from the employer company is not steadfastly maintained in all situations.
The facts of the Antoniou decision are remarkably similar to those of the instant case. In Anotniou, a disabled seaman brought suit against his employer, Thiokol Corp., for injuries sustained in the course and scope of employment. Subsequently the plaintiff settled his case against his employer by executing a release agreement. At the time the plaintiff signed the release he was receiving long-term disability payments from the plan. For eight months following the execution of the release, the plaintiff received disability payments. Soon thereafter the Plan administrator informed plaintiff that his benefits would be discontinued because of the release signed by the plaintiff.
Slaughter v. ATT Info. Sys., Inc. 905 F.2d 92 (5th Cir. 1990) involved an action against an employer and an "unfunded" ERISA plan. In an earlier state court action the plaintiff unsuccessfully sought early termination pay from her employer, ATT Information Systems. Subsequently, plaintiff filed suit in federal court alleging that she was denied benefits under an ERISA plan and that her employer and the ERISA plan had violated the provisions of ERISA by forcing plaintiff to accept a lesser payment as a result of her early termination from ATT. The Fifth Circuit held that res judicata barred the suit against the plan even though it was not made party to the first suit. The court reasoned that even though 29 U.S.C. § 1132(d)(1) provides that a plan can sue and be sued independent of the employer company, in the case at bar the defendant plan was merely a nominal defendant, and that the real party in interest was the employer. The court noted that the plan had no funds with which to satisfy a judgment against it because it was an unfunded benefit plan and self-administered by ATT.
A similar rationale was applied in Guiles v. Metropolitan Life Ins. Co., 2001 WL 1454041 (E.D. Pa.). Plaintiff employee brought suit against his employer, Warner-Lambert, alleging violations of the Americans with Disabilities Act. Plaintiff released all claims against its employer pursuant to a settlement agreement, and the suit was dismissed with prejudice. Plaintiff subsequently filed suit against Metropolitan Life Insurance Co., Warner-Lambert Short Term Disability Plan, Warner-Lambert Long Term Disability Plan, and Warner-Lambert asserting violations of ERISA for the denial of long-term disability benefits. The court readily dismissed the claim as to Warner-Lambert as it was named in the first suit. As to the Wamer-Lambert Disability Plans, the court relied on the Fifth Circuit opinion in Slaughter to conclude that the plans were merely nominal defendants and, for res judicata purposes, they had no existence apart from Wamer-Lambert. Accordingly, the court dismissed the claims against the plans as barred by res judicata.
For purposes of contract interpretation, there is nothing that compels the conclusion that an ERISA benefits plan, for all purposes, must be considered a distinct entity from that of the establishing entity. Indeed, as the Fifth Circuit has noted, in a unfunded plan the entity from which the plaintiff really seeks recovery is the employer. Thus, the Plan is to be treated merely as a nominal defendant because any amount paid by the Plan is actually paid by the employer. Indeed, it is the employer that is the actual party at interest.
Accordingly, for purposes of construing the release agreement at issue in this case, the Court concludes that Union Carbide Corporation and the Plan are actually the same entity, and should be considered as much in interpreting a release agreement. Therefore, under the release agreement the discharge of Union Carbide Corporation also discharged the Union Carbide Long Term Disability Plan...
Turning next to the Plaintiffs claim against MetLife, the Court notes that MetLife was not referenced in the release agreement — it is not an insurer of Union Carbide Corp. Nor can MetLife be considered the same legal entity as Union Carbide Corp. or the Union Carbide Long Term Disability Plan. However, in this case the Plaintiff does not allege any breach of fiduciary duty by the Plan administrator Rather, Plaintiff seeks only the payment of benefits allegedly owed under the Plan..
A plan administrator is potentially liable only for breaches of fiduciary duties in administering the plan. See Todd v. AIG Life Ins. Co., 27 F.3d 1448, 1457-58 (5th Cir. 1995) (holding that the plan administrator is not liable for benefits rather only for breach of fiduciary duty); see also Musmeci v. Schwegmann Giant Super Markets, 159 F. Supp.2d 329, 351 (E.D. La. 2001). Because, as a matter of law, the Plaintiff can not prevail in a suit against a plan administrator for payment of plan benefits, Plaintiffs claim against MetLife is subject to dismissal on summary judgment. Accordingly, the claim against MetLife is dismissed.
III. CONCLUSION
For the foregoing reasons, the motion of Defendants Union Carbide Corporation, Union Carbide Corporation Long Term Disability Plan, and Metropolitan Life Insurance Company is GRANTED. Accordingly, the action is DISMISSED with prejudice, each party to bear it own costs.