Aff. in Opp'n, ¶ 17-24,
defendants' expression of its position that the Plan did not violate
ERISA was not a misrepresentation.
Moreover, even assuming that both sets of statements in the December 4
letter were false, plaintiff has not alleged that he relied upon them to
his detriment or that he has suffered any prejudice as a result. The
defendants' December 4, 1995 letter was sent to plaintiff's counsel
nearly 10 years after plaintiff last completed a year of credited service
under the Plan and four years after plaintiff last completed any hours of
service under the plan.*fn43 Even assuming that plaintiff's claim for
breach of fiduciary duty based on this letter were not barred by the
statute of limitations, plaintiff could not have reasonably relied the
December 4, 1995 letter to his detriment.*fn44 See Kurz v. Philadelphia
Elec. Co., 994 F.2d 136, 140 (3rd Cir. 1993) ("The ultimate inquiry is
whether there is a substantial likelihood that the affirmative
misrepresentation would mislead a reasonable employee in making an
adequately informed decision about if and when to retire.") (internal
quotations and citations omitted). Similarly, as the December 4 letter
was sent only to plaintiff, other putative class members could not have
reasonably relied upon it to their detriment.
Turning next to defendants' March 30, 2000 letter, we note that
according to its terms, the letter was sent to retired Plan
beneficiaries, informing them of a retroactive increase of their pension
benefits. The statements therein that the defendants had determined that
the recipients were entitled to increased pensions were not
misrepresentations. Indeed, they accurately informed the recipients that
they could expect a retroactive increase in benefits. While plaintiff's
counsel object that defendants' took credit for the increase, Pauk Aff.
in Opp'n, ¶ 24, that does not amount to a misrepresentation, let
alone a material one. Even assuming arguendo that the March 30, 2000
letter contained a misrepresentation about the genesis of the retroactive
increase, the retired beneficiaries receiving it could not have
reasonably relied upon it to their detriment. Accordingly, defendants'
motion for summary judgment as to plaintiff's seventh claim for relief is
E. Plaintiff's Claim for Interest on Late Payments
Plaintiff's eighth claim for relief seeks an award of interest on the
retroactive pension adjustments paid by the defendants. Compl. ¶¶
76-78. For the reasons that follow, defendants' motion for summary
judgment on plaintiff's eighth claim is granted in part and denied in
There is no question that plaintiff may pursue an award of prejudgment
interest on unpaid benefits where the Court has found an ERISA
violation. See, e.g., Mendez v. Teachers Ins. & Annuity Ass'n and College
Retirement Equities Fund, 982 F.2d 783, 789-90 (2d Cir. 1992)
(prejudgment interest discretionary in ERISA cases and should be awarded
only when such relief is "fair, equitable and necessary to compensate the
wronged party fully"). Id. Rather, the question is whether plaintiff may
bring a separate cause of action
for interest on benefits which have been
paid after a period of delay.
1. Interest on Delayed Benefits Is Recoverable Under ERISA
Plaintiff brings his eighth claim for relief pursuant to ERISA §
502(a)(3),*fn45 which authorizes civil actions by a participant,
beneficiary or fiduciary "(A) to enjoin any act or practice which
violates [ERISA] or the terms of the plan, or, (B) to obtain other
appropriate equitable relief" to remedy such violations or to enforce any
provisions of ERISA or the terms of the plan. 29 U.S.C. 1132(a)(3). While
the Second Circuit has not decided the question of whether interest on
delayed benefit payments is available as "other appropriate equitable
relief" under ERISA § 502(a)(3)(B), the Third and Seventh Circuits
have answered that question in the affirmative. See Holmes v. Pension
Plan of Betlehem Steel Corp., 213 F.3d 124, 131 (3rd Cir. 2000); Fotta
v. Trustees of the United Mine Workers of America, Health & Ret. Fund,
165 F.3d 209, 214 (3rd Cir. 1998); Clair v. Harris Trust and Sav. Bank,
190 F.3d 495, 497-98 (7th Cir. 1999), cert. denied 528 U.S. 1157 (2000).
Moreover, the Second Circuit has held that a widow may sue under ERISA
§ 502(a)(3)(B) for the sum of money that she should have received
upon her husband's death because her claim sought "make whole" relief
which Congress regards as equitable. Strom v. Goldman Sachs & Co.,
202 F.3d 138, 149-50 (2d Cir. 1999).*fn46
The question of whether interest on delayed benefit payments is
available as "other appropriate equitable relief" under ERISA §
502(a)(3)(B), has been addressed by the district court in Dunnigan v.
Metropolitan Life Insurance Co., 99 F. Supp.2d 307, 321 (S.D.N Y 2000),
appeal docketed, No. 00-7399 (2d Cir. 2000). Relying on Strom, the
Dunnigan court concluded that actions for interest on delayed benefit
payments are appropriate under ERISA § 502(a)(3)(B) where plan
participants establish an underlying breach of ERISA or the plan documents
by a plan fiduciary. See Dunnigan, 99 F. Supp.2d at 321. For the reasons
stated by the Dunnigan court, we conclude that interest on delayed
benefit payments is recoverable under ERISA § 502(a)(3)(B). See
also, Gustafson v. Kennametal, Inc., 2001 WL 25722, at *6-7 (S.D.N.Y.
2001) (interest on delayed benefit payments available under ERISA §
502(a)(3)(B) to prevent unjust enrichment) (citing Dunnigan).
2. Interest Recoverable Only on Individualized Basis
While interest on delayed benefits may be awarded under ERISA §
502(a)(3)(B), awarding restitution is an equitable remedy, and is subject to
equitable defenses such as laches. See Dunnigan, 99 F. Supp.2d at 325
(citing Fotta, 165 F.3d at 214). For this reason, the Dunnigan court
concluded that a class action format is not suitable for the
individualized treatment required for the exercise of equitable powers.
See 99 F. Supp.2d at 325-26. See also Holmes v. Pension Plan of Bethlehem
Steel Corp., 1999 WL 54591, at *8-10 (E.D.Pa. 1999) (claim for interest
on delayed benefits "unsuitable for class treatment"), aff'd in part and
rev'd in part on other grounds, 213 F.3d 124 (3rd Cir. 2000). That aspect
of the Dunnigan court's decision has been cited with approval in this
district. See Miner v. Empire Blue Cross/Blue Shield, 2001 WL 96524, at
*5 (S.D.N.Y. 2001) (holding that plaintiff could not maintain class
action seeking lost interest and other relief) (citing Dunnigan). The
briefs before us provide no persuasive reason to depart from Judge
Scheindlin's careful analysis in Dunnigan.
Accordingly, defendants' motion for summary judgment is granted to the
extent that plaintiff's seventh claim seeks class relief for interest on
delayed benefit payments. It is unclear from the record before us,
however, whether plaintiff has received delayed benefit payments
himself. To the extent that plaintiff seeks interest on any such payments
as a result of breaches of ERISA or the Plan,*fn47 the defendants'
motion for summary judgment is denied, and plaintiff may seek such
individual relief, if any.
F. Plaintiff's ERISA § 104(b)(1) Claims
ERISA § 104(b)(1) requires plan administrators to furnish certain
information to plan participants and beneficiaries. See
29 U.S.C. § 1024 (b)(1). Plaintiff's ninth claim for relief alleges
that defendants have failed to update the 1992 SPD in violation of ERISA
§ 104(B)(1), which requires plan administrators to provide an
updated SPD to each participant and each beneficiary receiving benefits
under the plan every five years, except when no amendments have been made
to a plan during the proceeding five years. Compl., ¶¶ 80-82.
Plaintiff's tenth claim for relief alleges that the 1995 Plan Amendment
was a "material modification" of the Plan and that defendants failed to
furnish a copy to each participant and beneficiary within 210 days after
the end of the plan year in which the change was adopted, as required by
ERISA § 104(b)(1). Compl., ¶¶ 84-88. Defendants' motion for
summary judgment on both claims is granted.
There is no dispute that the Plan was amended in 1995, Defs.' 56.1
Statement, ¶ 13, and that defendants issued an updated SPD in
January, 1999, seven months before this lawsuit was commenced.*fn48 Pauk
Aff. in Opp'n, ¶ 27-28; Defs.' Mem. p. 22; 1999 SPD, A540-575;
Compl. dated Aug. 19, 1999. Thus, there is no dispute that defendants'
provided a copy of the
1999 SPD within 5 years of the date of the 1995
Amendment, but not within 5 years of the 1992 SPD, as is required by
ERISA § 104(b)(1). We note that plaintiff seeks only declaratory
relief on his ninth claim, Compl. p. 35, Prayer for Relief ¶ 11.
While the ninth claim is pled as a class claim, the declaratory relief
requested can clearly be provided without considering class
certification. Moreover, as defendants have now provided an updated SPD
to all plan participants and beneficiaries, it appears to the Court that
plaintiff's ninth claim is moot. Accordingly, defendants' motion for
summary judgment on plaintiff's ninth claim is granted.
Likewise, while it is clear that defendants failed to furnish a copy of
the 1999 SPD within 210 days after the plan year in which the 1995
Amendment was passed, defendants have now provided the requisite notice
in the 1999 SPD. Accordingly, plaintiff's tenth claim for relief also
appears to be moot, and defendants' motion for summary judgment is granted
on plaintiff's tenth claim for relief.*fn49
For the reasons stated, plaintiff's motion for summary judgment is
denied as to plaintiff's first and second claims for relief and is
granted as to his eleventh claim for relief.
Similarly, defendants' motion is denied as to plaintiff's fifteenth,
sixteenth and seventeenth claims for relief and granted as to plaintiff's
first, second, sixth, seventh, ninth, tenth and nineteenth claims for
relief. Plaintiff's third, fourth, fifth, twelfth, thirteenth, and
fourteenth claims are dismissed, by agreement of the parties, either as
moot or as abandoned by the plaintiff. Further, defendants' motion for
summary judgment is granted in part and denied in part with respect to
plaintiff's eighth and eighteenth claims for relief, as stated in this
opinion. Finally, defendants' motion for summary judgment on statute of
limitations grounds is granted in part and denied in part as stated in
Counsel are directed to appear for a conference with the Court on
Wednesday, April 25, 2001 at 3:30 p.m. at the United States Courthouse,
500 Pearl Street, New York, New York, in Courtroom 21A. Counsel should
have authority to fully discuss all aspects of the litigation, including
IT IS SO ORDERED.