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SUNDERLIN v. FIRST RELIANCE STANDARD LIFE INS. CO.
November 4, 2002
TERRY R. SUNDERLIN, PLAINTIFF,
FIRST RELIANCE STANDARD LIFE INSURANCE COMPANY, ENI INC. LONG TERM DISABILITY PLAN, AND ENI TECHNOLOGY, INC., DEFENDANTS.
The opinion of the court was delivered by: Charles J. Siragusa, United States District Judge
This is an action pursuant to the Employee Income Retirement Security
Act (ERISA) 29 U.S.C. § 1001 et seq. The following motions are now
before the Court: 1) a motion [#79] by defendants ENI, Inc. Long Term
Disability Plan ("the Plan") and ENI Technology, Inc. ("ENI"), to dismiss
plaintiff's Second Amended Complaint; and 2) a motion [#86] by defendant
First Reliance Standard Life Insurance Company ("First Reliance") for
summary judgment against plaintiff and for dismissal of the cross-claim
by ENI pursuant to Fed.R.Civ.P. 12(b)(6). For the reasons that follow,
the motion by ENI and the Plan is denied in its entirety, and First
Reliance's motion is denied as to plaintiff but granted as to ENI.
Moreover, plaintiff is granted summary judgment as to liability only on
her first cause of action, and is granted summary judgment on her
second, third, and fourth causes of action.
MOTION TO DISMISS/SUMMARY JUDGMENT STANDARD
It is well settled that in determining a motion to dismiss under
Fed.R.Civ.P. 12(b)(6) for "failure to state a claim upon which relief can
be granted," a district court must accept the allegations contained in
the complaint as true and draw all reasonable inferences in favor of the
nonmoving party. Burnette v. Carothers, 192 F.3d 52, 56 (2d Cir. 1999).
The Court "may dismiss the complaint only if it appears beyond doubt that
the plaintiff can prove no set of facts in support of his claim which
would entitle him to relief." Id. (internal quotations omitted)(citing
Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).
If, on a motion to dismiss, "matters outside the pleading are presented
to and not excluded by the court, the motion shall be treated as one for
summary judgment and disposed of as provided in Rule 56, and all parties
shall be given reasonable opportunity to present all material made
to such a motion by Rule 56." FED. R. CIV. P. 12(c).
The standard for granting summary judgment is also well established.
Summary judgment may not be granted unless "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a
matter of law." FED.R.CIV.P. 56(c). A party seeking summary judgment
bears the burden of establishing that no genuine issue of material fact
exists. See, Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970).
"[T]he movant must make a prima facie showing that the standard for
obtaining summary judgment has been satisfied." 11 MOORE'S FEDERAL
PRACTICE, § 56.11[a] (Matthew Bender 3d ed.). Once that burden has
been established, the burden then shifts to the non-moving party to
demonstrate "specific facts showing that there is a genuine issue for
trial." Fed.R.Civ.P. 56(e); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 250 (1986). To carry this burden, the non-moving party must
present evidence sufficient to support a jury verdict in its favor. Id. at
249. The parties may only carry their respective burdens by producing
evidentiary proof in admissible form. FED. R. CIV. P. 56(e). The
underlying facts contained in affidavits, attached exhibits, and
depositions, must be viewed in the light most favorable to the non-moving
party. U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962).
Summary judgment is appropriate only where, "after drawing all
reasonable inferences in favor of the party against whom summary judgment
is sought, no reasonable trier of fact could find in favor of the
non-moving party." Leon v. Murphy, 988 F.2d 303, 308 (2d Cir. 1993).
While in the instant case, plaintiff did not file a cross-motion for
summary judgment, it is well settled that
summary judgment may be rendered in favor of the
opposing party even though he has made no formal
cross-motion under Rule 56. A motion for summary
judgment searches the record. If undisputed facts are
found which, when applied to the law, indicate that
judgment against the moving party is appropriate, Rule
56(c) will operate to grant summary judgment in favor
of the non-moving party.
Dempsey v. Town of Brighton, 749 F. Supp. 1215, 1220 (W.D.N.Y. 1990)
(citations omitted), affirmed sub. nom Curenton v. Town of Brighton,
940 F.2d 648 (2d Cir. 1991), cert denied, 502 U.S. 925 (1991).
Defendant ENI Technology, Inc. is the sponsor of an employee welfare
benefit plan to provide disability insurance for its employees. In that
regard, ENI contracted with defendant First Reliance Standard Life
Insurance Company to provide long-term disability benefits to the Plan's
participants. Plaintiff Terry R. Sunderlin is an employee of ENI and a
participant in the Plan. In November 1995, plaintiff became disabled and
began receiving disability benefits. In June 1996, plaintiff returned to
work at ENI on a part-time basis. On May 25, 1999, First Reliance denied
plaintiff any further benefits. At the suggestion of her doctor, plaintiff
then retained an attorney and sought to appeal the denial of benefits by
First Reliance. Before filing an appeal, plaintiff's counsel requested,
on June 30, 1999 and August 10, 1999, that First Reliance provide him
with certain Plan documents, but First Reliance did not.
On July 22, 1999, First Reliance informed plaintiff's counsel that the
Plan administrator was Linda Almekinder, an employee of ENI. On July 27,
1999, plaintiff's counsel wrote to Ms. Almekinder, requesting a copy of
the Summary Plan Description ("SPD"). This letter was returned, with a
notation that Ms. Almekinder no longer worked at ENI. On July 27, 1999,
plaintiff's counsel again wrote to ENI, requesting a copy of the SPD.
Plaintiff's letter expressly stated that it was a "request for a copy of
the Plan's Summary Plan Description." (Perticone Affidavit, Exhibit 2).
On August 9, 1999, ENI sent plaintiff's counsel a copy of the disability
insurance policy issued by First Reliance. The insurance policy is the
only document which plaintiff ever received in response to her request
for a summary plan description.
On August 25, 1999, plaintiff filed an appeal with First Reliance.
Under the terms of the policy, First Reliance was required to render a
decision within 60 days. (Amended Complaint [#36], ¶ 24). However, First
Reliance never issued a decision. On November 23, 1999, plaintiff again
requested that First Reliance provide Plan documents. On December 15,
1999, First Reliance sent plaintiff an incomplete copy of the disability
insurance policy issued to ENI. Subsequently, on February 16, 2001,
counsel for First Reliance wrote to plaintiff's counsel and stated: "With
respect to the plan summary, the employer used the certificate booklet
prepared by First Reliance as the summary plan description. The booklet is
in storage and will be provided when it is retrieved." (Hulslander Letter
dated 2/16/01). First Reliance has never produced such a booklet.
On June 6, 2000, plaintiff commenced this action. Plaintiff's initial
complaint named First Reliance and an insurance policy, but not the
Plan, as defendants. Subsequently, plaintiff filed an Amended Complaint
[#36], which named both First Reliance and the Plan as defendants, and
alleged four causes of action. The first was against First Reliance "for
violation of 29 U.S.C. § 1132(a)(1)(B) to recover benefits due
Plaintiff under the terms of her plan." (Amended Complaint [#36], p. 4).
Plaintiff alleged that First Reliance wrongfully denied her benefits
"from April 10, 1999 through the present." (Id., ¶ 32). The second cause
of action alleged that First Reliance violated 29 U.S.C. § 1132(c) by
failing and refusing to provide her with the Plan information she had
requested. The third cause of action sought an injunction against the
Plan, pursuant to 29 U.S.C. § 1132(a)(3)(A), on the grounds that it
"has a demonstrated history of administering its claims procedure in a
way which is unreasonable and in willful violation of the minimal
protections provided by ERISA." The fourth cause of action sought a
declaratory judgment, pursuant to 29 U.S.C. § 1132(a)(1)(b),
clarifying plaintiff's rights to future benefits. Specifically, she
sought a determination that she was entitled to receive long-term
disability benefits under the Plan "until the end of the maximum benefits
period, March 26, 2022, provided that she remains disabled and meets all
other provisions of the group policy." (Id., ¶ 53). The Amended Complaint
also demanded costs and attorneys' fees.
First Reliance and the Plan moved for summary judgment. In connection
with these motions, the parties appeared before the undersigned on March
7, 2002. At that time, First Reliance indicated that it had lost
plaintiff's claim file, and had therefore decided to resume making
payments under the disability policy.*fn1 First Reliance stated it had
tendered a check to plaintiff for the full amount of back payments owed
to her, in the amount of $28,062.50. First Reliance admitted that it had
previously miscalculated the amount owed as being only $23,000.
Plaintiff's counsel indicated that he did not understand how First
Reliance had calculated the amount of back payment, and, as to the front
payments, stated that First Reliance was deducting monies from plaintiff's
monthly checks without explanation.
During that same court appearance, the Court asked plaintiff what she
demanded to settle the action, and she requested: 1) that First Reliance
arrange to have a Certified Public Accountant certify that the dollar
amounts First Reliance was proposing to pay were accurate under the terms
of the policy; 2) that plaintiff be provided with a SPD; 3) 50% of the
maximum discretionary penalty under 29 U.S.C. § 1132(c)(1)(B) for
failing to provide the SPD; 4) that First Reliance create a claim file
for plaintiff, and continue to pay her benefits for as long as she
remained entitled to receive them; 5) a corrected W-2 statement; and 6)
disbursements of approximately $1,700. Plaintiff finally indicated that
if First Reliance would comply with demands 1, 4, and 5 above, that she
would settle the action as to First Reliance, and First Reliance agreed
to meet those demands. (Id., pp. 32, 39-40). The Court then directed
counsel for plaintiff and First Reliance to submit a settlement agreement
within 30 days. (Id. p. 40). As to the remaining claims against the
Plan, the Plan maintained that it had sent plaintiff a "booklet," which
had all the information required of a summary plan description pursuant
to 29 U.S.C. § 1022. Despite plaintiff's counsel's insistence that
all he had received was an insurance policy, counsel for the Plan and ENI
steadfastly maintained that what ENI had sent to plaintiff was a
"certificate booklet," not the insurance policy. (Transcript of 3/7/02
appearance, pp. 16-17). After reviewing the document, the Court stated
that what plaintiff received was an insurance policy, not a booklet.
(Id. at 18). The Court further noted, "I think it's fair to say that for
a long time plaintiff has been misled by who was the plan administrator
and who wasn't." (Id. at 22). Nonetheless, the Plan maintained that it
had complied with plaintiff's demand for an SPD, and was therefore
entitled to judgment as a matter of law. The parties then agreed that
plaintiff would file a second amended complaint, adding a cause of action
against ENI, the sponsor and administrator of the plan, for its failure
to provide her with the SPD. (Id., pp. 40-41).*fn2 It was further agreed
that ENI would then file a motion to dismiss the second amended
complaint, which the Court would convert to a motion for summary
Accordingly, on March 14, 2002, plaintiff filed a second amended
complaint, adding ENI as a defendant. On April 19, 2002,
ENI and the Plan
filed a motion [#79] to dismiss the second amended complaint.
Significantly, in support of that motion, ENI and the Plan now admit, for
the first time, that the document provided to plaintiff was an insurance
policy, not some other type of "booklet." (Perticone Affidavit [#80], ¶
7)("On August 9, 1999, ENI responded to Ms. Sunderlin's attorney's letter
by providing her with a copy of the insurance policy that ENI uses as the
summary plan description for the Plan.")
On April 11, 2002, counsel for First Reliance wrote to the Court
regarding the status of settlement negotiations with the plaintiff. First
Reliance's counsel, Mr. Hulslander, indicated that First Reliance had
provided plaintiff with a certification by a CPA, and with a corrected W-2
statement. However, he indicated that plaintiff's counsel had increased
his demand to include payment for the cost of serving the summons and
complaint, and attorneys' fees. First Reliance's counsel indicated that
First Reliance was willing to pay the cost of service if plaintiff would
give up her demand for attorneys' fees. As an aside, the Court does not