as to what occurred next. Plaintiff and Carey claim that Connecticut General's in-house counsel initially informed Plaintiff that she would receive her husband's death benefits. Connecticut General disputes Plaintiff's contention that it indicated that she was entitled to the death benefits. Moreover, Connecticut General indicates that it ultimately disclaimed coverage for the death benefits, on the ground that Gallien's life insurance coverage was terminated from the date that Carey discontinued making premium payments in July 1989. Connecticut General indicates further that, as Gallien never submitted an application to convert his group life insurance to an individual policy, and as his time to do so expired ninety days after termination of coverage, pursuant to N.Y. Ins. Law § 3220, he had no right to death benefits.
III. The Complaint
On September 27, 1990, Plaintiff commenced this action
to recover the face value of the life insurance policy. Count One of the Complaint alleges that Connecticut General is liable under the terms of the Plan for life insurance benefits in the amount of $ 200,000. Count Two of the Complaint alleges that Connecticut General knowingly and wilfully refused to acknowledge its obligation to provide coverage to Gallien, and acted in bad faith in violation of New York Insurance Law § 3220. The Third Count alleges that Carey breached its fiduciary duty to Gallien under 29 U.S.C. § 1109, by failing to notify him that it was delinquent in paying premiums to Connecticut General. The Fourth Count alleges that Carey breached its duties under 29 U.S.C. § 1161, by failing to provide continuity of health care coverage for Gallien and his dependents. Count Five alleges that Carey failed to notify Gallien that he had the right to obtain continued coverage, and that Carey was obligated to provide such continued coverage.
In its answer, Connecticut General alleges four cross-claims against defendant Carey. For its First and Second Causes of Action, Connecticut General alleges that Carey received the reasonable value of the insurance and other services provided by Connecticut General under the Plan, and that Carey breached the Plan by failing to pay premiums due in the amount of $ 1,030,729.90. Connecticut General also seeks contribution and indemnification against Carey (Third and Fourth Causes of Action).
Plaintiff now moves for summary judgment on Count Three of the Complaint against Carey. Connecticut General also moves for summary judgment dismissing the Complaint against it, and for summary judgment on its cross-claims against Carey. The Court will consider each of the parties' motions in turn.
I. Standard for Summary Judgment
Under Rule 56(c) of the Federal Rules of Civil Procedure, a motion for summary judgment must be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party must initially satisfy a burden of demonstrating the absence of a genuine issue of material fact, which can be done merely by pointing out that there is an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The nonmoving party then must meet the burden of coming forward with "specific facts showing that there is a genuine issue for trial," Fed. R. Civ. P. 56(e), by "a showing sufficient to establish the existence of [every] element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322.
The Court "must resolve all ambiguities and draw all reasonable inferences in favor of the party defending against the motion." Eastway Constr. Corp. v. New York, 762 F.2d 243, 249 (2d Cir. 1985); see also Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-159, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970); Hathaway v. Coughlin, 841 F.2d 48, 50 (2d Cir. 1988); Knight v. United States Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986), cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 (1987). The Court is to inquire, however, whether "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for the party," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986), and to grant summary judgment where the nonmoving's evidence is merely colorable, conclusory, speculative or not significantly probative. Id. at 249-50; Knight v. United States Fire Ins. Co., 804 F.2d at 12, 15; Argus Inc. v. Eastman Kodak Co., 801 F.2d 38, 45 (2d Cir. 1986), cert. denied, 479 U.S. 1088, 94 L. Ed. 2d 151, 107 S. Ct. 1295 (1987).
To determine whether the nonmoving party has met his or her burden, the Court must focus on both the materiality and the genuineness of the factual issues raised by the nonmovant. As to materiality, "it is the substantive law's identification of which facts are critical and which facts are irrelevant that governs." Anderson v. Liberty Lobby, Inc., 477 U.S. at 248. A dispute over irrelevant or unnecessary facts will not preclude summary judgment, id., but the presence of unresolved factual issues that are material to the outcome of the litigation mandates a denial of the summary judgment motion. See, e.g., Knight v. United States Fire Ins. Co., 804 F.2d at 11-12.
Once the nonmoving party has successfully met the burden of establishing the existence of a genuine dispute as to an issue of material fact, summary judgment must be denied unless the moving party comes forward with additional evidence sufficient to satisfy his or her ultimate burden under Rule 56. See Celotex Corp. v. Catrett, 477 U.S. at 330, n.2 (Brennan, J., dissenting). In sum, if the Court determines that "the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986) (quoting First Nat'l Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 289, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1969)); see also Weg v. Macchiarola, 654 F. Supp. 1189, 1191-92 (S.D.N.Y. 1987).
II. Plaintiff's Motion for Summary Judgment
Plaintiff moves for summary judgment on Count Three of the Complaint, which alleges that Carey breached its fiduciary duty to Gallien under 29 U.S.C. § 1109, by failing to notify him that Carey had discontinued premium payments under the Plan. In order to find breach of fiduciary duty, the Court must first determine whether Carey owed any fiduciary duties to Gallien under 29 U.S.C. § 1109, and then consider whether Carey breached these fiduciary duties by failing to notify Gallien that it had ceased paying premiums under the Plan.
ERISA § 3(21)(A) provides that a person is a fiduciary to the extent he
(i) exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, . . . or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan.