claim for promissory estoppel under ERISA); Ludwig v. NYNEX Serv. Co., 838 F. Supp. 769, 793-95 (S.D.N.Y. 1993) (collecting cases). As a preliminary matter however, the Court notes that the plaintiff raises only an equitable estoppel argument. Therefore, this is the only estoppel doctrine the court will consider.
"The elements of estoppel are (1) material misrepresentation, (2) reliance and (3) damage." Lee, 991 F.2d at 1009, citing, Gridley v. Cleveland Pneumatic Co., 924 F.2d 1310, 1319 (3d Cir.), cert. denied, 501 U.S. 1232, 115 L. Ed. 2d 1023, 111 S. Ct. 2856 (1991) (recognizing the applicability of estoppel in the ERISA context but finding no material misrepresentation in that instance). However, the nature of the "extraordinary circumstances" necessary to state a claim for equitable estoppel under ERISA are not entirely clear.
Several circuit courts have developed a middle ground, holding that "equitable estoppel principles are applicable under ERISA only where the terms of the plan [at issue] are ambiguous." Marx v. Loral Corp., 87 F.3d 1049, 1056 (10th Cir. 1996). Accordingly, such "a cause of action . . . [exists] when a plan administrator makes a representation that interprets, rather than modifies, an ambiguous term of the plan." Lordmann Enterprises, Inc. v. Equicor, Inc., 32 F.3d 1529, 1534 (11th Cir. 1994), cert. denied, 133 L. Ed. 2d 234, 116 S. Ct. 335 (1995), citing the seminal case of Kane v. Aetna Life Ins. Co., 893 F.2d 1283, 1285 (11th Cir.), cert. denied, 498 U.S. 890, 112 L. Ed. 2d 192, 111 S. Ct. 232 (1990); see also Greany v. Western Farm Bureau Life Ins. Co., 973 F.2d 812, 821-22 (9th Cir. 1992) (adopting this rule). Whether this standard is applicable in the Second Circuit has not yet been decided. For example, in Aquilio v. Police Benevolent Ass'n, 857 F. Supp. 190, 201-02 & n.24 (N.D.N.Y. 1994), the district court recognized the standard as now set forth by the Ninth, Tenth and Eleventh Circuits but did not adopt this standard in its analysis. Rather, the court applied the elements set forth in Lee and denied the defendants' motion for summary judgment.
On the other hand, in Ludwig, the district court recognized the existence of a "wrinkle" in the application of the equitable estoppel doctrine under ERISA which permits plaintiffs to rely only upon an oral or written interpretation of ambiguous plan language. Ludwig, 838 F. Supp. at 798-99, citing, Kane, 893 F.2d at 1285 (recognizing this standard but finding it inapplicable in that case). Further, in a case decided before Lee, Judge Parker, then Chief Judge for the District of Vermont, adopted the standard applied in the Ninth, Tenth and Eleventh Circuits, finding it consistent with prior case law in the Second Circuit. See Gonyea v. John Hancock Mutual Life Ins. Co., 812 F. Supp. 445, 449 (D. Vt. 1993), citing, Dardaganis v. Grace Capital Inc., 889 F.2d 1237, 1241 (2d Cir. 1989).
Having reviewed the case law, the Court now expressly incorporates the standard first set forth in Kane and subsequently applied in Marx, Lordmann Enterprises and Greany into the "extraordinary circumstances" test set forth in Lee. Thus, the equitable estoppel doctrine is limited in applicability under ERISA to those situations where an oral representation is made with respect to an ambiguous term in a plan or SPD. Otherwise, a mechanical application of the elements set forth in Lee might result and the state law doctrine of equitable estoppel could be incorporated wholesale into ERISA, thereby rendering the "extraordinary circumstances" requirement a nullity.
Applying this standard, the Court finds that James is unable to maintain his claim under the principles of equitable estoppel. Assuming, as the Court must, that both Abbatemarco and Patterson represented to him orally that he would receive benefits for his wife's services, these representations would directly contradict unambiguous terms of the Plan and the SPD which "require" that the beneficiary would have been charged for the services rendered in the absence of insurance and did indeed pay for those services in order to receive benefits. Because, as previously stated, the Court has determined that these terms are unambiguous, an alleged modification or interpretation of this exclusion will not support a claim for equitable estoppel.
In concluding this analysis however, the Court notes that even if the Lee "extraordinary circumstances" test was applied without the incorporation of Kane and its progeny, the Court would still grant the defendants' summary judgment motion as to this issue. In the Court's view, applying a reasonable standard, the plaintiff has offered no evidence of anything other than an ordinary, as opposed to extraordinary, claim for equitable estoppel. See Snyder, 854 F. Supp. at 273 (granting summary judgment in part based on lack of "extraordinary circumstances"). Accordingly, because the Court has determined that the plaintiff is not entitled to benefits under the terms of the plan, or the SPD, and has failed to state a cause of action for equitable estoppel, the defendants' motion for summary judgment on this claim pursuant to Fed. R. Civ. P. 56 is granted dismissing this claim and the plaintiff's cross motion is denied.
4. Failure to disclose
James further contends that he is entitled to payment for his wife's services because of the defendants' failure to comply with ERISA's disclosure requirements with regard to the Plan itself. As set forth above, ERISA requires that plan sponsors furnish participants with summary plan descriptions. See 29 U.S.C. § 1024(b)(1). The SPD must "be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan." 29 U.S.C. § 1022(a)(1). However, in order to recover benefits for violation of ERISA's disclosure requirements, a plaintiff must demonstrate a "substantive harm" that "sufficiently taint[s]" the denial of benefits to warrant a finding that this decision was "arbitrary and capricious" and should therefore be reversed. Veilleux v. Atochem N. America, Inc., 929 F.2d 74, 76 (2d Cir. 1991); Gilbert v. Burlington Indus., Inc., 765 F.2d 320, 328-29 (2d Cir. 1985), aff'd, 477 U.S. 901 (1986); Blau v. Del Monte Corp., 748 F.2d 1348, 1354 (9th Cir. 1984), cert. denied, 474 U.S. 865, 88 L. Ed. 2d 152, 106 S. Ct. 183 (1985).
Applying this standard, the Court finds that James is unable to maintain his claim for violation of ERISA's disclosure requirements. Assuming the veracity of his allegations that he was denied access to the Plan, his claim fails because he is unable to demonstrate the required "substantive harm." As set forth above, under the terms of the SPD, which the plaintiff had received and read, James was not entitled to payment for his wife's services. A review of the Plan does not show that the terms relied upon above, namely the plaintiff's failure to be charged for, or pay for, his wife's services was in any way affected by the terms of the underlying Plan. Accordingly, the Court finds that to the extent that the defendants violated ERISA's disclosure provisions, such violations were without effect. As a result, the defendants' motion for summary judgment pursuant to Fed. R. Civ. P. 56 is granted dismissing the plaintiff's claim against the Fund based on a failure to disclose.
5. Breach of fiduciary duty
Finally the Court considers the plaintiff's cause of action against the individual defendants for breach of fiduciary duty because "none of these administrators of the Fund ever informed Reginald James as to his complete options and eligibility for nursing services under the terms of the [Plan]." Pl. Mem. of Law in Support of Cross Motion for Summary Judgment at 13. See Nerney v. Valente & Sons Repair Shop, 66 F.3d 25, 29-30 (2d Cir. 1996) (failure to alert plan participant of eligibility for continuation of coverage may constitute a breach of fiduciary duty where fiduciary is aware of potential loss of coverage); Fortune v. Medical Assocs. Of Woodhull, P.C., 803 F. Supp. 636, 641 (E.D.N.Y. 1992), citing, Eddy v. Colonial Life Ins. Co., 287 U.S. App. D.C. 76, 919 F.2d 747 (D.C. Cir. 1990).
As one recent district court decision on the subject recognized however:
section 409 of ERISA, the statute which authorizes a suit for breach of fiduciary duties as set forth in § 404, provides that "any person who is a fiduciary [under this subchapter] . . . shall be personally liable to make good such plan any losses to the plan resulting from each such breach. . . ." 29 U.S.C. § 1109(a). Accordingly, such suits can only be maintained on behalf of the plan itself and not by an individual beneficiary in his or her own behalf. See, e.g., Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140-43, 105 S. Ct. 3085, 3089-91, 87 L. Ed. 2d 96 (1985) (recovery for violation of § 409 inures to the benefit of plan as a whole); Donnelly v. Bank of New York Co., 801 F. Supp. 1247, 1253-54 (S.D.N.Y. 1992); O'Neil v. Gencorp, Inc., 764 F. Supp. 833, 833-34 (S.D.N.Y. 1991).
Snyder, 854 F. Supp. at 274. Accordingly, James cannot maintain a claim against the Plan trustees directly for breach of fiduciary duty.
This is not to say that in certain circumstances, such as where the beneficiary seeks "appropriate equitable relief," an ERISA claim for breach of fiduciary duty may not be maintained. See Varity Corp. v. Howe, 134 L. Ed. 2d 130, 116 S. Ct. 1065, 1073-79 (1996) (recognizing individual cause of action for breach of fiduciary duty where former plan participants sought reinstatement as participants pursuant to 29 U.S.C. § 1132(a)(3)). However, as one district court recently recognized, "there are no reported cases in which a plan beneficiary was permitted to maintain a § 1132(a)(3) claim for an alleged erroneous denial of benefits." Blahuta-Glover v. Cyanamid Long Term Disability Plan, 1996 U.S. Dist. LEXIS 5786, CIV No. A. 95-7069, 1996 WL 220977 (E.D. Pa. Apr. 30, 1996); see also Perlman v. Swiss Bank Corp Comprehensive Disability Protection Plan, 916 F. Supp. 843, 844 (N.D. Ill. 1996) (a claim for wrongful denial of benefits does not constitute a cause of action under § 1132(a)(3)). Further, to the extent that the plaintiff's claim relates to an alleged failure to disclose relevant information, for the reasons set above, namely a failure to cause any substantive harm, his claim still fails.
Nevertheless, according to 29 U.S.C. § 1132(c), the Court may, in its discretion award a fine up to $ 100 per day for such violations. See, e.g., Pagovich v. Moskowitz, 865 F. Supp. 130, 136-37 (S.D.N.Y. 1994) (addressing whether damages should be awarded under section 1132(c)). As the Pagovich court stated, when making such a determination:
courts have considered such factors as bad faith or intentional conduct on the part of the administrator, the length of the delay, the numbers of requests made and documents withheld, and the existence of any prejudice to the participant or beneficiary. See Ziaee v. Vest, 916 F.2d 1204 (7th Cir. 1990) (holding that in exercise of its discretion district court may consider factors such as number of requests made and number of documents withheld), cert. denied, 499 U.S. 959, 111 S. Ct. 1581, 113 L. Ed. 2d 646 (1991); Garred v. General American Life Ins. Co., 774 F. Supp. 1190 (W.D. Ark. 1991) (penalties were assessed due to the willful conduct of the administrator and the harm suffered by plaintiffs in the form of aggravation, frustration, and the need to hire an attorney to wage a lengthy court battle); Thomas v. Jeep-Eagle Corp., 746 F. Supp. 863 (E.D. Wis. 1990) (awarding penalties where administrator had no explanation for five-month delay); Sandlin v. Iron Workers Dist. Council, 716 F. Supp. 571 (N.D. Ala. 1988), aff'd mem. opinion, 884 F.2d 585 (11th Cir. 1989) (assessing penalties in view of lengthy delay, the frustration and distress of participant, and the deliberate misconduct of administrator).