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KEISER v. CDC INVESTMENT MANAGEMENT CORP.

United States District Court, S.D. New York


March 17, 2004.

CONSTANCE S. KEISER, Plaintiff, -against- CDC INVESTMENT MANAGEMENT CORP., et al., Defendants

The opinion of the court was delivered by: WILLIAM PAULEY, District Judge

MEMORANDUM AND ORDER

On March 25, 2003, this Court issued a Memorandum and Order that, inter alia, granted defendants CDC Investment Management Corp.'s, CDC Capital Incorporated Long Term Disability Income Plan's and CDC Capital Incorporated Life Insurance Plan's (collectively "CDC") motion for summary judgment on the grounds that extra-contractual legal relief is not available under ERISA. See Keiser v. CDC Inv. Mgmt. Corp., et al., No. 99 Civ. 12101 (WHP), 2003 WL 1733729, at *7-9 (S.D.N.Y. Mar. 25, 2003) ("Keiser II"). On April 4, 2003, plaintiff Constance S. Keiser moved for a partial reconsideration of that Memorandum and Order, arguing, inter alia, that this Court overlooked Second Circuit precedent upholding similar ERISA promissory estoppel claims. As it appears this Court overlooked certain aspects of controlling decisions in dismissing plaintiff's promissory estoppel claim, plaintiff's motion for reconsideration is granted. However, Keiser fails to establish a cause of action under ERISA promissory Page 2 estoppel principals in this Circuit. Therefore, upon reconsideration CDC's underlying motion for summary judgment is granted on grounds different than those enumerated in Keiser II.

  DISCUSSION

 I. Standard for a Motion for Reconsideration

  Local Civil Rule 6.3 provides in relevant part: "There shall be served with the notice of motion a memorandum setting forth concisely the matters or controlling decisions which counsel believes the court has overlooked." Thus, to be entitled to reconsideration, a movant must demonstrate that the Court overlooked controlling decisions or factual matters that were put before it on the underlying motion, which, had they been considered "might reasonably have altered the result reached by the court." Consol. Gold Fields v. Anglo Am. Corp., 713 F. Supp. 1457, 1476 (S.D.N.Y. 1989). The decision to grant or deny a motion for reconsideration is within the sound discretion of the district court. See Dietrich v. Bauer, 76 F. Supp.2d 312, 327 (S.D.N.Y. 1999); AT&T Corp. v. Microsoft Corp., No. 01 Civ. 4872 (WHP), 2004 WL 309150, at *1 (S.D.N.Y. Feb. 19, 2004). Page 3

 II. plaintiff's Argument for Reconsideration

  The underlying facts in the dispute are laid out in detail in Keiser v. CDC Inv. Mgmt. Corp., et al., 160 F. Supp.2d 512, 514-16 (S.D.N.Y. 2001) ("Keiser I") and Keiser II, 2003 WL 1733729, at *l-2, and are not repeated here.

  In Keiser II, this Court granted CDC's motion for summary judgment against plaintiff on the grounds that plaintiff's promissory estoppel claim against CDC sought "extra-contractual legal relief . . . [that] is not recoverable under ERISA." 2003 WL 1733729, at *7. On reconsideration, plaintiff argues that, while this Court is correct that a promissory estoppel claim is not available to her under ERISA § 502(a)(3), 29 U.S.C. § 1132 (a)(3), her claim against CDC arises under § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). Plaintiff claims that, in contrast to § 502(a)(3), the Second Circuit has "repeatedly affirmed the validity of ERISA promissory estoppel claims" arising from violations of § 502(a)(1)(B), and that this Court overlooked controlling decisions in that regard. (Pl. Mem. at 5.) See, e.g., Devlin v. Empire Blue Cross and Blue Shield, 274 F.3d 76, 85-86 (2d Cir. 2001) ("Devlin II"); Abbruscato v. Empire Blue Cross and Blue Shield, 274 F.3d 90, 100-02 (2d Cir. 2001); Aramony v. United Way Replacement Benefit Plan, 191 F.3d 140, 151-53 (2d Cir. 1999); Devlin v. Transportation Communications Int'l Union, 173 F.3d 94, 101-102 (2d Cir. 1999) Page 4 ("Devlin I"); Schonholz v. Long Island Jewish Medical Center, 87 F.3d 72, 79-80 (2d Cir. 1996).

  While this Court considered the above-mentioned decisions in granting CDC's motion for summary judgment in Keiser II, it conflated plaintiff's claims under § 502(a)(3) and § 502(a)(1)(B), thus overlooking distinguishing factors in those decisions that "might reasonably have altered the result reached by the court." Consol. Gold Fields, 713 F. Supp. at 1476. Accordingly, plaintiff's motion for reconsideration of those portions of Keiser II which granted CDC's motion for summary judgment on plaintiff's promissory estoppel claim is granted. This, however, does not end the inquiry, as this Court must now consider the merits of plaintiff's promissory estoppel claim in light of CDC's motion for summary judgment.

 III. Plaintiff's ERISA Promissory Estoppel Claim

  Promissory estoppel for ERISA claims requires satisfaction of four elements: "`(I) a promise, (2) reliance on the promise, (3) injury caused by the reliance, and (4) an injustice if the promise is not enforced,'" Aramony, 191 F.3d at 151 (quoting Schonholz, 87 F.3d at 79). To minimize "the danger that commonplace communications from employer to employee will routinely give rise to employees' rights beyond those contained in formal benefit plans," the Second Circuit has added a fifth Page 5 element: "extraordinary circumstances." Aramony, 191 F.3d at 151.

  In the heartland of cases analyzing ERISA promissory estoppel, courts find extraordinary circumstances only where an employer engages in intentional inducement or deception of an employee with respect to benefits in order to persuade that employee to take some action that inures to the employer's benefit. See, e.g., Devlin II, 274 F.3d at 86 (finding sufficient facts existed supporting plaintiff's claim that they were intentionally induced to remain with company with promise of lifetime insurance benefits that were later reduced); Aramony, 191 F.3d at 152 ("[The plaintiff] points to nothing beyond the ordinary about the circumstances surrounding the promises allegedly made to him. . . . Nothing, for example, suggesting that [the defendant] made a promise to [the plaintiff] in order to induce him to take action for [the defendant's] benefit only to later renege on the promise."); Schonholz, 87 F.3d at 79 (finding extraordinary circumstances where employer promised severance benefits as an inducement to persuade the plaintiff to retire); Hart v. The Equitable Life Assurance Soc., No. 02 Civ. 2364 (HB), 2002 WL 31682383, at *5 (S.D.N.Y. Nov. 26, 2002) (granting summary judgment to defendant on plaintiff's ERISA promissory estoppel claim on grounds that plaintiff failed to demonstrate intentional inducement or other extraordinary Page 6 circumstances). While not expressly limited to "circumstances of inducement," Devlin II, 274 F.3d at 86, such actions by an employer must be "beyond the ordinary." Aramony, 191 F.3d at 152; see also Devlin I, 173 F.3d at 102 ("[T]here is evidence . . that some employees . . . considered the promised medical benefits in timing their retirements. But reliance is one of the four basic elements of promissory estoppel, and would not by itself render this case `extraordinary,'").

  Even after resolving any ambiguities and drawing all justifiable inferences in plaintiff's favor, as this Court is required to do on summary judgment, see Celotex Corp. v. Catrett, 477 U.S. 317, 330 n. 2 (1986), plaintiff cannot demonstrate any extraordinary circumstances to support her ERISA promissory estoppel claim. In this case, plaintiff admits that she and CDC mutually agreed to terminate their relationship in March 1996. (Affirmation of Constance S. Reiser, dated July 1, 2002 1 2; Declaration of Constance S. Keiser, dated September 11, 2000 ¶ 17.) While plaintiff claims that she relied on CDC's representations concerning the continuation of her LTD coverage in deciding to resign, such reliance is insufficient to support an ERISA promissory estoppel claim because "reliance is one of the four basic elements of promissory estoppel, and would not by itself render this case `extraordinary.'" Devlin I, 173 F.3d at 102. Unlike the plaintiffs in Schonholz and Devlin II, Keiser Page 7 has not proffered sufficient evidence to show that CDC intentionally induced or deceived her with respect to her LTD benefits, or otherwise demonstrated circumstances "beyond the ordinary." Aramony, 191 F.3d at 152; accord Ramos v. SEIU Local 74 Welfare Fund, No. 01 Civ. 2700 (SAS), 2002 WL 519731, at *6 (S.D.N.Y. April. 5, 2002) (in granting summary judgment to defendant, holding that "[the plaintiff] cannot adduce evidence to justify a finding of extraordinary circumstances . . . [because] [t]here is no hint of deception or intentional inducement"); Hart, 2002 WL 31682383, at *5 (in granting defendants' motion for summary judgment on plaintiff's ERISA promissory estoppel claim, distinguishing Devlin II by noting that "[i]n that case, the court found that defendant had intentionally induced plaintiffs with the promise or `lure' of lifetime insurance benefits"). Accordingly, this Court adheres to its earlier determination granting CDC's motion for summary judgment, albeit for different reasons than those set forth in Keiser II, 2003 WL 1733729, at *7-9. Page 8

  CONCLUSION

  For the reasons set forth above: (1) plaintiff Constance S. Keiser's motion for partial reconsideration of this Court's March 25, 2003 Memorandum and Order is granted; and (2) upon reconsideration, CDC Investment Management Corp.'s, CDC Capital Incorporated Long Term Disability Income Plan's and CDC Capital Incorporated Life Insurance Plan's motion for summary judgment against plaintiff Constance S. Keiser is granted for reasons different than those set forth in Keiser II.

  SO ORDERED.

20040317

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