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BERG v. EMPIRE BLUE CROSS AND BLUE SHIELD
July 14, 2000
SEYMOUR BERG, PLAINTIFF,
EMPIRE BLUE CROSS AND BLUE SHIELD, DEFENDANT.
The opinion of the court was delivered by: Hurley, District Judge.
Pending before the Court is the motion of Defendant Empire Blue
Cross and Blue Shield ("Empire" or "Defendant") to dismiss the
Complaint for failure to state a claim for relief pursuant to
Federal Rule of Civil Procedure ("Rule") 12(b)(6). For the
reasons that follow, the motion is granted in part and denied in
Plaintiff commenced employment with Empire in 1971. (Compl. ¶
10.) The Complaint alleges that as an employee, Plaintiff was
covered under Empire's life insurance policy and that during the
course of his employment, Empire made certain representations to
Plaintiff regarding the amount of his life insurance benefits.
(Id. ¶¶ 12-13.) More specifically, Plaintiff alleges that
Empire represented that the face amount of his life insurance
policy — which just prior to his retirement was $94,000.00 —
would be reduced by 10% on June 15, 1991, the date of his
retirement, and would be further reduced in increments of 10% on
each June 15th thereafter until it reached $47,000, where it
would remain constant for life. (Id. ¶¶ 13-14.)
Pursuant to Empire's representations, Plaintiff's life
insurance benefits had been reduced to $47,000 by June 15, 1995.
(Id. at 15.) By letter dated June 14, 1998, however, Empire
advised Plaintiff that, effective January 1, 1999, his life
insurance coverage would be reduced from
$47,000.00 to 7,500.00. (Id. ¶ 17.) Although Plaintiff objected
to this "unilateral" reduction of his benefits, (see id. ¶ 18),
Empire refused to reverse its decision. (Id. ¶ 19.)
On September 14, 1998, Plaintiff commenced an action in Nassau
County Supreme Court. In his original complaint, Plaintiff
asserted claims for breach of contract, estoppel, injunctive
relief, and attorney's fees. On September 29, 1998, Empire
removed the action to this Court, pursuant to 28 U.S.C. § 1331,
1441 and 1446, on the ground that Plaintiff's state law claims
relate to an employee welfare benefit plan and thus were
preempted under the Employee Retirement Income Security Act of
1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Thereafter, Plaintiff
moved to have the action remanded. By Memorandum and Order dated
May 19, 1999, the Court denied Plaintiff's motion and held that
Plaintiff's claims were preempted by ERISA.
Plaintiff filed a new "Verified Complaint" (the "Complaint") on
June 29, 1999, asserting claims for ERISA,*fn1 breach of
contract, equitable estoppel and attorney's fees based upon
Empire's alleged illegal decision to unilaterally reduce his
benefits. (Id. ¶ 20.) Annexed to the Complaint as Exhibit A are
the "applicable parts" of the Summary Plan Description ("SPD")
contained in Empire's employee handbook, (id. ¶ 12), to wit,
pages 35-37, which describe Empire's Group Life Insurance Plan
(the "Plan") under which the present suit has been brought.
Specifically, Plaintiff relies on page 36 of the SPD which
provides that upon retirement, an employee's "basic life
insurance will be reduced by 10% as of [his or her] retirement
date, and by an equal amount on each of the next four
anniversaries of your retirement date so that 50% of your life
insurance coverage remains in force for the rest of your life, at
no cost to you." (Id. Ex. A at 36 (emphasis added).)
In support of its motion, Empire has submitted the complete SPD
for the Court's review. (Affirmation of Gary H. Glaser, sworn to
July 22, 1999 ("Glaser Aff."), Ex. 3.) Page 42 of the SPD states
that "[o]ther important information about your Group Life
Insurance Plan and its administration can be found in the section
entitled `Benefit Administration.'" (Glaser Aff., Ex. 3 at 42.)
The Benefit Administration section of the SPD, located on page
68, provides that Empire "expects and intends to continue the
Plans in your Benefits Program indefinitely, but reserves its
right to end each of the Plans, if necessary. [Empire] also
reserves its right to amend each of the Plans at any time."
(Id. at 68.) Based on these provisions, Empire argues that it
had an unqualified right to reduce Plaintiff's benefits at any
The standards employed by the Court when deciding a motion to
dismiss under Rule 12(b)(6) are well established. In reviewing a
complaint for legal sufficiency, dismissal is appropriate only
when "it is clear that no relief could be granted under any set
of facts that could be proved consistent with the allegations."
H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 249-50,
109 S.Ct. 2893, 106 L.Ed.2d 195 (1989) (quoting Hishon v. King &
Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59
(1984)). In making this determination, a court looks solely to
the fact of the complaint, see Allen v. WestPoint-Pepperell,
Inc., 945 F.2d 40, 44 (2d Cir. 1991), accepting as true all
well-pleaded factual allegations, see DeJesus v. Sears, Roebuck
& Co., 87 F.3d 65, 69 (2d Cir. 1996), and viewing such
allegations, as well as all reasonable inferences drawn
therefrom, in the light most favorable to the non-moving party.
Harsco Corp., v. Segui, 91 F.3d 337, 341 (2d Cir. 1996); Leeds
v. Meltz, 85 F.3d 51, 53 (2d Cir. 1996).
The Court of Appeals for the Second Circuit has emphasized that
the district court's role when ruling on a motion to dismiss for
failure to state a claim is "merely to assess the legal
feasibility of the complaint," and not to engage in a weighing of
the evidence. Geisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir.
1980). "The issue is not whether a plaintiff is likely to prevail
ultimately, but whether the claimant is entitled to offer
evidence to support the claims. Indeed, it may appear on the face
of the pleading that a recovery is very remote and unlikely, but
that is not the test." Gant v. Wallingford Bd. Of Educ.,
69 F.3d 669, 673 (2d Cir. 1995) (citation and ...