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SCHONHOLZ v. LONG ISLAND JEWISH MED. CTR.

February 18, 1994

GLENISS S. SCHONHOLZ, Plaintiff,
v.
LONG ISLAND JEWISH MEDICAL CENTER, IRVING SCHNEIDER, ELIHU MODLIN, LEONARD NADEL, STANLEY GREY, MICHAEL FELDMAN and IRVING WHARTON, JOHN and JANE DOES 1-15, Defendant.



The opinion of the court was delivered by: JOHN R. BARTELS

 Bartels, U.S. District Judge.

 Plaintiff brings this action pursuant to the Employee Retirement Income Security Act ["ERISA"], 29 U.S.C. § 1132(a)(1)(B), to recover benefits owed under her former employer's severance benefit plan. Defendants have moved to dismiss under Federal Rule of Civil Procedure ["Rule"] 12(b)(6) for failure to state a claim upon which relief may be granted. In addition, plaintiff and defendants have each cross-moved for Rule 11 sanctions. For reasons more fully explained herein, defendants' motion to dismiss is granted in part and denied in part, and the cross-motions for sanctions are denied.

 FACTS

 Plaintiff Gleniss Schonholz was employed by Long Island Jewish Medical Center ["LIJ"] as Chief Operating Officer. On May 3, 1991 LIJ implemented a severance pay program for senior management personnel who would be involuntarily terminated or removed from their positions. By letter dated December 18, 1992, LIJ's President and Chief Executive Officer, Dr. Robert K. Match, requested that plaintiff submit her resignation effective April 1, 1993. Dr. Match indicated in his letter that the request for plaintiff's resignation was due to a change in hospital management, and was in no way related to her job performance. Further, Dr. Match's letter explicitly stated that plaintiff would be eligible for benefits under the May 3, 1991 severance pay program.

 On December 22, 1992, plaintiff submitted her resignation effective April 1, 1993. It is undisputed that LIJ has not paid plaintiff severance benefits under the May 3, 1991 program. Plaintiff claims that ERISA guarantees her the right to payment under the severance pay program, and that defendants are estopped from denying her benefits based on Dr. Match's representations. However, defendants argue that ERISA permitted them to amend or terminate the severance program, and that plaintiff has not properly stated a claim of estoppel.

 DISCUSSION

 I. STANDARD OF REVIEW

 The court may grant a motion to dismiss pursuant to Rule 12(b)(6) only where it is beyond doubt that the plaintiff cannot prove any set of facts supporting entitlement to relief. H.J. Inc., v. Northwestern Bell Telephone Company, 492 U.S. 229, 249-50, 106 L. Ed. 2d 195, 109 S. Ct. 2893 (1989); Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). In deciding the motion, the court must accept as true the material facts alleged in the complaint, LaBounty v. Adler, 933 F.2d 121, 123 (2d Cir. 1991), and must construe all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974).

 In addition, the court is not permitted to consider factual matters submitted outside of the complaint unless the parties are given notice that the motion to dismiss is being converted to a motion for summary judgment under Rule 56 and are afforded an opportunity to submit additional affidavits. See Festa v. Local 3 International Brotherhood of Electrical Workers, 905 F.2d 35, 38 (2d Cir. 1990) ("this provision . . . is mandatory with respect to motions pursuant to Rule 12(b)(6)"); Wiener v. Napoli, 760 F. Supp. 278, 282 (E.D.N.Y. 1991). In this case, plaintiff has submitted her own affidavit, sworn to September 2, 1993, in opposition to the motion to dismiss, and the affidavit of Dr. Robert K. Match, sworn to October 22, 1993, in sur-reply to the motion to dismiss. Similarly, defendants have made factual representations in their memoranda of law in an effort to refute the allegations of the complaint. However, since the parties have not had an opportunity to submit all of the pertinent material for a summary judgment motion, *fn1" the court will not consider these affidavits and additional factual material in assessing the sufficiency of the complaint.

 It is well settled that severance pay policies are employee welfare plans governed by ERISA. See Bradwell v. GAF Corp., 954 F.2d 798, 800 n.1 (2d Cir. 1992); Garrett v. Veterans Memorial Medical Center, 821 F. Supp. 838, 840 (D. Conn. 1993). Further, under ERISA, severance benefits are not vested; an employer has the right to amend or eliminate a severance pay plan at any time. See Landy Michaels Realty Corp. v. Local 32 B-32J, Service Employees International Union, 954 F.2d 794, 801 (2d Cir. 1992); Reichelt v. Emhart Corp., 921 F.2d 425, 430 (2d Cir. 1990) (citing cases), cert. denied, 501 U.S. 1231, 115 L. Ed. 2d 1022, 111 S. Ct. 2854 (1991). Accordingly, plaintiff may only recover benefits under ERISA § 1132(a)(1)(B) pursuant to the May 3, 1991 severance pay program if this plan was in effect at the time her employment with LIJ terminated.

 According to the complaint, plaintiff was employed by LIJ until April 1, 1993. See P 9. Although plaintiff argues that she was "terminated" by LIJ in December 1992 when Dr. Match requested her resignation, the severance pay program clearly contemplates the payment of benefits only after the cessation of regular employment. Plaintiff further alleges that defendants revoked the severance pay program "after the termination of plaintiff's employment". See P 15. In their reply memorandum of law in support of the motion to dismiss, defendants claim that the May 3, 1991 severance pay program was revoked at a meeting of LIJ's Board of Trustees held on March 23, 1993, prior to the termination of plaintiff's employment. However, the court is not permitted to consider factual matters outside of the complaint in deciding a motion to dismiss. Plaintiff alleges that she has not been paid benefits according to the severance pay program in effect at the time her employment terminated; these allegations are sufficient to state a claim under ERISA and therefore to withstand a motion to dismiss.

 Moreover, ERISA requires every employee benefit plan to be established and maintained pursuant to a written instrument. 29 U.S.C. § 1102. An employee benefit plan cannot be unilaterally amended or superseded by an employer by oral modification. See Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1163-64 (3d Cir. 1990) (citing cases); Adler v. Aztech Chas P. Young Co., 807 F. Supp. 1068, 1071 (S.D.N.Y. 1992). See also Moore v. Metropolitan Life Insurance Co., 856 F.2d 488, 492 (2d Cir. 1988). There is no allegation in the complaint that defendants revoked the severance pay program in writing. Therefore, defendants' alleged revocation of the May 3, 1991 severance pay ...


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