This Section requires that an administrator of an employee benefit plan furnish -- upon written request -- a copy of the summary plan description, the latest annual report, any terminal report, the bargaining or trust agreement and any relevant contracts. See 29 U.S.C. § 1024(b)(4). An administrator who fails or refuses to comply with such a request may be held personally liable to the participant for an amount up to $ 100 per day. 29 U.S.C. § 1132(c)(1). The imposition and amount of any fine is committed to the sound discretion of the Court. See Pagovich v. Moskowitz, 865 F. Supp. 130, 137 (S.D.N.Y. 1994).
I must first decide, however, whether the Plaintiff made a valid written request. On or about September 11, 1996, the Plaintiff sent a letter to Dr. DeCarvalho, an Empire employee, requesting a copy of the Group 6HO contract between the Fund and Empire. Def.'s Ex. J. The Plaintiff also copied Gloria Williams, an administrator at the Fund. There is no dispute that the Fund received this letter and that the Plaintiff never received a copy of the contract. Consequently, the Plaintiff contends that the Fund violated § 104(b)(4).
The Fund, on the other hand, contends that they were not obligated to furnish a copy of the contract to the Plaintiff because her husband requested this document from Empire, who is not the plan administrator. Moreover, the Fund argues that it had no way of knowing that Empire never sent the contract, since in subsequent correspondence with the Fund the Plaintiff never complained about not receiving this document. Finally, the Fund asserts that a recent seventh circuit decision, Verkuilen v. South Shore Building and Mortgage Co. 122 F.3d 410, 411-12 (7th Cir. 1997) [hereinafter Verkuilen ], requires dismissal of the Plaintiff's claim.
Notwithstanding these arguments, this Court concludes that the Fund violated § 104(b)(4) by failing to provide the Plaintiff with a copy of the contract. Several reasons compel this conclusion. To begin with, since the Plaintiff copied the letter requesting the contract to a Fund official responsible for administering the benefit plan, the Defendant had notice that Mrs. Lidoshore sought this document. The Fund points out in its motion for summary judgment that § 104(b)(4) requires that the participant send the written request to the plan administrator, here the Fund Trustees. Therefore, the Fund knew, or should have known, that Empire had no obligation to provide the Plaintiff with the contract. Consequently, the Fund, as the entity ultimately responsible for the administration of the benefit plan, should have, at the very least, determined whether Empire had complied with the document request and upon learning that it had not, sent the contract to the Plaintiff.
In essence, the Fund seeks to avoid liability simply because the Plaintiff failed to address the letter to Ms. Williams, a plan administrator, and instead carbon copied her on the bottom of the correspondence. This hyper-technical argument is not persuasive, and has often been rejected by other courts. See Porcellini v. Strassheim Printing Co., Inc., 578 F. Supp. 605, 611 n.1 (E.D. Pa. 1983); see also Bixler v. Central Pennsylvania Teamsters Health & Welfare Fund, 12 F.3d 1292, 1302 (3d Cir. 1993) (failure to advise plaintiff about a broader class of benefits could constitute a fiduciary breach despite the limited nature of the participant's inquiry); Eddy v. Colonial Life Ins. Co., 287 U.S. App. D.C. 76, 919 F.2d 747, 750 (D.C. Cir. 1990) (rejecting argument that plan fiduciary had no obligation to provide information about benefit option not specifically requested by the participant). In Porcellini, the defendants argued that the participant failed to make a proper written request to the plan administrator because he addressed the letter containing the request to a person who had recently left the position. Porcellini, 578 F. Supp. at 611 n.1. Judge VanArtsdalen rejected this argument and reasoned that the request sought information that the participant had been entitled to obtain. Id. The court also noted that the letter was received by an employee of the plan administrator. Id. Similarly, Mrs. Lidoshore was entitled to a copy of the contract.
Finally, the only case the Fund cites to support its argument, Verkuilen, is distinguishable. In Verkuilen, the Seventh Circuit held that a complaint and interrogatory could not be treated as an ERISA demand for documents, reasoning that the defendant should not be made "to guess whether to use the approach of ERISA or the Federal Rules of Civil Procedure" when responding to litigation requests. Verkuilen, 122 F.3d at 411. Here, no such daunting task confronted the Fund Trustees. Rather, they faced one simple dilemma: find out whether Mrs. Lidoshore had received the contract from Empire, or ignore her request. This Court concludes that requiring the Fund Trustees to make the inquiry, and not ignore the Plaintiff's request, is consistent with their responsibilities as a fiduciary and plan administrator. The Fund Trustees chose not to ask Empire whether it sent the document, and as a consequence, the Plaintiff never received the contract she requested. Therefore, the Court concludes that the Fund violated § 104(b)(4).
Given this violation, the Plaintiff seeks statutory penalties of $ 100 per day, pursuant to 29 U.S.C. § 1132(c). There is no consensus on the issue of whether a participant must establish prejudice and bad faith prior to receiving an award. See Kascewicz v. Citibank, 837 F. Supp. 1312, 1321-22 (S.D.N.Y. 1993). At a minimum, however, it is clear that prejudice and bad faith on the part of the administrator are "primary factors" to be considered. See Lacoparra v. Pergament Home Centers, Inc., 982 F. Supp. 213, 229 (S.D.N.Y. 1997). The Court may also consider the length of the delay and the number of requests made by the plan participant. Id. (citation omitted).
The Plaintiff has not attempted to prove prejudice or bad faith, and the Fund merely makes conclusory assertions on these issues. As a result, the record does not provide a sufficient basis to decide whether statutory penalties should be imposed on the Defendant and if so how much. Accordingly, I decline the Plaintiff's invitation to assess the maximum $ 100 per day fine and reserve this issue for trial, at which time it is hoped that the parties will assist the Court in resolving the issue.
D. Reasons for Denial, Appeals Procedure, & Full/Fair Review
The Plaintiff alleges that the Defendants violated ERISA procedural requirements by offering an inadequate explanation of the reasons for denying her claim, failing to appraise her of the appeal remedies available, and by not providing a full and fair review. The beneficiaries and participants of ERISA benefit plans must be notified of the denial of their claims, in whole or in part, and be given an opportunity to seek review of the decision. 29 U.S.C. §§ 1022(b), 1133(1). Therefore, a notice refusing to pay a claim emanating from an ERISA fund must also provide specific reasons for the denial. See 29 C.F.R. § 2560.503-1(f). These requirements were satisfied. On August 30, 1996, Empire authored a denial letter to Mr. Lidoshore explaining why the nursery charges incurred by the Plaintiff were not covered. This letter also included the following passage:
You or your authorized representative may request a review of this claim within 60 days by writing to the claim review coordinator at the above address giving your identification number and the claim number indicated. You may also submit any additional information and comments. We shall then review the claim and advise you in writing of the specific reasons for our decision. Def.'s Ex. I.
On December 3, 1996, the Fund sent a letter to Mrs. Lidoshore explaining that well-baby coverage had been eliminated on September 1, 1993, and informing the Plaintiff that notice was sent to the membership on July 9, 1993. Def.'s Ex. K. Taken together, the August and December letters adequately explain the reasons for the denial, and the appeals process. Consequently, this branch of the Defendants' motions for summary judgment must be granted, and the Plaintiff's motion denied.
The Plaintiff also alleges that it failed to receive a full and fair review, in violation of 29 U.S.C. § 1133(2). At the very least, a full and fair review requires that the fiduciary inform the participant or beneficiary of the evidence that the fiduciary relied upon and provide "an opportunity to examine that evidence and to submit written comments or rebuttal" documents. Grossmuller v. International Union, 715 F.2d 853, 858 (3d Cir. 1983); see also Pesca v. Board of Trustees, Mason Tenders' District Council Pension Fund, 879 F. Supp. 23, 25 (S.D.N.Y. 1995) (ERISA requires that the participant be afforded the opportunity to submit issues and comments in writing). Here, the Plaintiff contends that she had not been invited to submit documentation. But the August 30, 1996 letter to Mr. Lidoshore states that he "may also submit [to Empire] any additional information and comments" concerning the appeal of the decision denying his wife's claim. Def.'s Ex. I. Despite the Plaintiff's contention, I find she had in fact been invited to submit documentation. Clearly, the Defendants afforded Mr. and Mrs. Lidoshore a full and fair review. Consequently, their motions for summary judgment with respect to the § 1133(2) claim are granted, and the Plaintiff's motion is denied.
For the reasons discussed above, the Plaintiff's motion is denied with respect to the claim that the Defendants improperly declined to pay her medical bill, and with respect to the claim that the Defendants failed to satisfy all of the ERISA procedural requirements. Conversely, the Defendants' motions with respect to these claims are granted. The Plaintiff's motion is granted with respect to the claim that the Fund Trustees failed to provide her with the requested contract, and the Fund's motion is denied. Following a bench trial, this Court will decide whether a statutory penalty is appropriate and if so the amount thereof. Finally, each sides motion for summary judgment is denied with respect to the accuracy of the summary plan description. The case remains on the March 1998 trailing trial calender, with a scheduled start date of March 9, 1998.
Dated: February 23, 1998
New York, New York
Harold Baer Jr.