The opinion of the court was delivered by: McMAHON, District Judge.
MEMORANDUM DECISION AND ORDER AFFIRMING THE PLAN ADMINISTRATOR'S
DENIAL OF PLAINTIFF'S APPLICATION FOR SEVERANCE PAY UNDER THE
ERISA PLAN AND GRANTING DEFENDANT SUMMARY JUDGMENT
Plaintiff Nancy Kosakow sued her former employer, New Rochelle
Radiology Associates (the "Practice"), arguing that her
termination while on medical leave violated the Family Medical
Leave Act ("FMLA"), 29 U.S.C. § 2615, and, even if not in
violation of FMLA, Defendant's failure to pay her severance pay
was in violation of Employee Retirement Income Security Act
("ERISA"), 29 U.S.C. § 1132(a)(1)(B). In a decision and order
dated March 10, 2000, this Court found that a prior New York
State Department of Human Rights determination that Defendant
had legitimate business reasons — unrelated to Plaintiffs
medical leave — collaterally estopped Kosakow from rearguing the
reasons for her termination. As a result, the Court found
Plaintiff had failed to state a claim under FMLA. However, the
Court found that Defendant did maintain a Plan within the
meaning of ERISA and that Plaintiff was therefore entitled to a
determination by the Plan Administrator as to whether she would
qualify for severance benefits. The Court remanded the claim to
the Plan Administrator for two determinations: (1) whether the
elimination of Plaintiffs position was a termination within the
meaning of the Plan, and if she was terminated; (2) whether she
was entitled to severance pay. See Kosakow v. New Rochelle
Radiology Assocs., P.C. 88 F. Supp.2d 199, 216 (S.D.N.Y. 2000).
The Court permitted Plaintiff to submit evidence as to her
alleged entitlement to severance to the Plan Administrator prior
to the Plan Administrator making its determinations. Id.
On April 7, 2000, Plaintiff forwarded to Defendant a
"Submission Pursuant to Remand without Prejudice to Family and
Medical Leave Act Claim."*fn1 (Frumkin letter to Plan
Administrator, Apr. 7, 2000.) On April 13, 2000, Plaintiff
confirmed to Defendant in writing that she did not intend to
present any additional evidence with respect to her ERISA claim.
On May 10, 2000, Defendant responded in writing to Plaintiffs
Submission and made a series of factual and legal
determinations. In so doing, Defendant explicitly stated that it
"contests the Court's finding that it has an ERISA Plan
governing severance benefits, and expressly reserves the right
to appeal that determination, notwithstanding its response to
[plaintiffs] counsel's letters and its making the following
determination according to Court Order." (Gargano letter to
Kosakow, May 10, 2000, hereinafter "Determination Letter".) The
Administrator addressed both questions posed by the Court and
concluded that (1) Kosakow had not been "terminated" within the
meaning of the Plan, and (2) even if she had been "terminated,"
Kosakow was not entitled to severance pay.
For the reasons stated below, the first determination is
reversed and the second is affirmed. Defendant's motion for
summary judgment is granted and the case is dismissed.
"[A] denial of benefits challenged under [ERISA] is to be
reviewed under a de novo standard unless the benefit plan gives
the administrator or fiduciary
discretionary authority to determine eligibility for benefits or
to construe the terms of the Plan." Firestone Tire & Rubber v.
Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989).
The Employee Manual, which constitutes Practice's ERISA Plan,
does not contain language conferring the kind of broad
discretion that post-Firestone decisions have held could form
the basis for a more deferential review. See Masella v. Blue
Cross & Blue Shield of Conn., 936 F.2d 98, 103 (plan provisions
relied on by Blue Cross did not establish that is was granted
discretionary authority to construe plan terms); see, e.g.,
Jones v. Laborers Health & Welfare Trust Fund, 906 F.2d 480,
481 (9th Cir. 1990) (plan gave trustees the power "to construe
the provisions of . . . the Plan" and provided that any
construction adopted by the trustees in good faith would be
binding); Batchelor v. Int'l B'hood of Electrical Workers,
877 F.2d 441, 443 (5th Cir. 1989) (Plan gave trustees "full power to
construe the provisions of this Agreement" as well as authority
to "interpret the Plan")' Guy v. Southeastern Iron Workers'
Welfare Fund, 877 F.2d 37, 39 (11th Cir. 1989) (plan conferred
upon the trustees "full power to construe the provisions of
[the] Trust"). I therefore apply the de novo standard to the
Administrator's decision to deny Kosakow severance pay.
Under the de novo standard, this Court is required to give
Plan terms "their plain meanings, . . . the interpretations
given by the average person," Wickman v. Northwestern Nat. Ins.
Co., 908 F.2d 1077, 1084 (1st Cir.), cert. denied,
498 U.S. 1013, 111 S.Ct. 581, 112 L.Ed.2d 586 (1990) and read the Plan as
a whole. See Alfin Inc. v. Pacific Ins. Co., 735 F. Supp. 115,
119 (S.D.N.Y. 1990). The Plan Fiduciary, i.e. the Practice, must
show that the claimant's interpretation of the Plan is
unreasonable. Id. All ambiguities must be construed in favor
of the claimant. Masella v. Blue Cross & Blue Shield of
Connecticut, 936 F.2d 98, 107 (2d Cir. 1991).
The Practice Plan Administrator concluded that Kosakow was not
"terminated" from her employment with the Practice. In support
of this conclusion, the Administrator cited facts in the
evidentiary record before it, including the fact that "the P.C.
expressly offered you continued employment on a per diem basis",
and that "Dr. Novich [the President of Practice] testified
during deposition that `we weren't firing somebody.'"
(Determination Letter at 3.) The Administrator further noted
that the Practice Manual*fn2 "provides that per diem
employees are a distinct category of `employees' — i.e. persons
`employed by the P.C.'" (Id.) (citing Manual Section III.
Plaintiff argues that the Administrator's finding is
incorrect. I agree with Plaintiff. Nothing in the record
supports the Administrator's finding that Defendant's inchoate
offer to Plaintiff of per diem work on an "as needed" basis —
and apparently as an "independent contractor" — is sufficiently
definite to qualify as continued "employment." No ordinary
person could have so understood Defendants' "offer." Therefore,
Kosakow must have been "terminated."
Defendant apparently relies on Black's because the word
"Termination" is not defined in the Plan. However, Section
III(G) of the Policy Manual, entitled "Termination of
Employment," lists six ways in which someone's employment can be
terminated by the Practice: (1) retirement; (2) voluntary
resignation; (3) termination for cause; (4) death; (5)
termination without notice; and (6) reduction in force. The fair
implication is that, if Plaintiffs enforced departure falls
within one of these categories, her employment was "terminated."
Here, Plaintiff received a letter, dated March 7, 1997, telling
her that her position was being "eliminated" due to
"overstaffing." Cutting staff in response to overstaffing is
just another way of saying that the Practice was carrying out a
reduction in force. Thus, under the terms of the Plan, Plaintiff
In short, I find that Plaintiff was in fact terminated and
that the Plan Administrator's ruling to the contrary was