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July 14, 2000


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 part.


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 time.


I. Rule 12(b)(6)

A. Standard of Review

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 ...

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