Opinion
02 Civ. 7522 (JSM).
June 23, 2003.
MEMORANDUM OPINION AND ORDER
Plaintiff, Joseph Connell, brings this action under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq, alleging that he was denied benefits under Guardian's Severance Plan. Currently before the Court is Defendants' motion to dismiss the complaint on the grounds that Plaintiff's request for severance benefits was untimely or, alternatively, that the Plan Administrator's decision was not arbitrary and capricious.
FACTS
Connell was employed at Guardian since 1977 and served as Vice President of Guardian's Information Technology Department beginning in 2000. Plaintiff's complaint alleges that on July 21, 2000, Guardian summarily discharged Connell and told him that he was being discharged because "management no longer had confidence" in him. Compl. ¶ 16. At the time of his dismissal, Connell was not notified about Guardian's Severance Plan.
On or about October 30, 2001, over a year after his dismissal, Connell learned of Guardian's Severance Plan and wrote a letter to Guardian requesting a copy of it. Compl. ¶ 18. Plaintiff alleges that, although he never received a copy of the Plan from Guardian, he did request a benefit determination in a January 16, 2002 letter to Guardian. Compl. ¶ 20-21. In a February 14, 2002 letter, Defendant Henry Slattery as a member of the Severance Committee, denied Plaintiff's claim for benefits. Compl. ¶ 21. Discussion
When considering a motion to dismiss for failure to state a claim, the Court must accept the factual allegations in the complaint as true, construing the complaint in the light most favorable to Plaintiffs. Conley v. Gibson, 335 U.S. 41, 45-46, 78 S.Ct. 99, 102 (1957). Under the facts alleged in the complaint, Plaintiff has stated a cause of action under ERISA.
Defendants argue that Plaintiff's complaint must be dismissed because his request for severance benefits was untimely. Guardian's Plan states that an employee who is not notified that he qualifies for the Severance Plan, but believes that he or she is entitled to benefits under the Plan, may, within 45 days of such employee's Termination Date, submit a written statement to the Severance Committee describing the basis of his or her claim for benefits and requesting any forms required in connection with payment of such benefits. Compl. Ex. A, Guardian Life Insurance Severance Plan, ¶ 7. While Plaintiff did not make his request within 45 days of his termination, Plaintiff alleges that he was unaware of the company's Plan. If Plaintiff did not know of the Severance Plan because of Defendants' actions, Defendants are estopped from arguing that his claim was not timely filed. See Blau v. Del Monte Corp., 748 F.2d 1348, 1353-54 (9th Cir. 1985) (cited with approval by Gilbert v. Burlington Indus., Inc., 765 F.2d 320, 328 (2d Cir. 1985));Bowerman v. Wal-Mart Stores, Inc., 226 F.3d 574, 587 (7th Cir. 2000); Doe v. Blue Cross Blue Shield United of Wisconsin, 112 F.3d 869, 876 (7th Cir. 1997).
Defendants have submitted affidavits disputing this fact, but consideration of these is inappropriate in this motion to dismiss.
Although Plaintiff's request for benefits comes more than 45 days after his request for the Plan, Plaintiff alleges that, despite his request for the Plan, Defendants did not send it. This allegation exists not only in the complaint, but also in Plaintiff's January 16th letter requesting a review of his claim for Severance Benefits. Compl. Ex. D. If Plaintiff's untimely filing is caused by Defendants' actions, Defendants cannot benefit from their failure to comply with the requirements of ERISA. See 29 U.S.C. § 1024(b)(1).
Defendants also argue that Plaintiff's complaint should be dismissed because the denial of benefits is not arbitrary and capricious. There is a dispute among the parties about what is the appropriate standard of review. When a plan grants discretion to a Plan Administrator, the Court employs the arbitrary and capricious standard of review. Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956-57 (1989). Plaintiff argues, citing Sharkey v. Ultramar Energy Ltd., 70 F.3d 226, 229 (2d Cir. 1995), that the Court should grant a heightened arbitrary and capricious or de novo review. In Sharkey, there was a factual dispute about who actually made the benefit determination. Plaintiff in Sharkey presented evidence that individuals other than the Pension Committee made the determination. Sharkey, 70 F.3d at 229. "The factual issue of who actually made the benefit determination must be resolved before a court can properly decide whether or not to uphold the pension determination." Id. Additionally, the party claiming deferential review "bears the burden of proof" as to their entitlement to the deference. Id. Whether the Plan Administrator exercised his discretion, or abdicated to another decision-maker is a factual inquiry and, therefore, what standard of review to apply will be determined after discovery.
Even under an arbitrary and capricious standard, it would be inappropriate to determine whether Slattery's decision violated ERISA on a motion to dismiss. Plaintiff has adequately pled facts to suggest that Slattery's decision was a breach of his fiduciary duty to provide a full and fair review. Plaintiff's complaint alleges that his performance at Guardian was "consistently rated as outstanding," Compl. ¶ 6, and that he was terminated based upon the conclusions of an audit report. Plaintiff alleges that the audit report does not support the termination decision, Compl. ¶ 17, and that Slattery's review of Plaintiff's benefit eligibility was "arbitrary, illegal, capricious, unreasonable, and not made in good faith." Compl. ¶ 27. Defendants admit that Slattery performed no investigation, but simply relied on a conversation with one person who told him the reason for the termination of Mr. Connell's employment. Slattery Aff. ¶ 15.
Plaintiff also alleges that the Severance Committee has never responded to his request that the denial of benefits be reviewed. Compl. ¶ 23. Failure to provide a "full and fair review is grounds for finding a plan administrator's decision arbitrary and capricious." Dittmann v. Dyno Nobel, Inc. Defined Benefit Pension Plan I, No. 97 cv. 1724, 1999 WL 727464, at * 10 (N.D.N.Y. Sept. 10, 1999). A full and fair review requires that:
[T]he plan's fiduciary must consider any and all pertinent information reasonably available to him. The decision must be supported by substantial evidence. The fiduciary must notify the participant promptly, in writing and in a language likely to be understood by laymen, that the claim has been denied with the specific reasons therefor. The fiduciary must also inform the participant of what evidence he relied upon and provide him with an opportunity to examine that evidence and to submit written comments or rebuttal documentary evidence.Grossmuller v. Int'l Union, 715 F.2d 853, 857-58 (2d Cir. 1983).
For the reasons stated above, Defendants' motion to dismiss is denied. The parties shall confer and submit to the Court a discovery schedule by July 25, 2003.