The opinion of the court was delivered by: MICHAEL TELESCA, Senior District Judge
Plaintiff Rose Marie Klimbach ("plaintiff") brings this action
pursuant to the Employee Retirement Income Security Act of 1974
("ERISA"), alleging that defendants Spherion Corporation
("Spherion") and Aetna Life Insurance Company ("Aetna")
(collectively "defendants") improperly calculated her husband's
life insurance benefits.*fn1 Plaintiff now moves for summary
judgment in her favor and each of the defendants cross-moves for
summary judgment in its favor.*fn2 For the reasons set forth
below, plaintiff's motion for summary judgment is denied;
defendant Spherion's motion for summary judgment is granted in
its entirety; defendant Aetna's motion for summary judgment is also granted in
its entirety; and Aetna' request for attorneys' fees is denied.
Plaintiff is the widow of Roger Klimbach ("Mr. Kilmbach"), who
died on March 7, 2002 after battling cancer. Mr. Klimbach had
worked for defendant Spherion as a software consultant. When he
started his employment at Spherion on October 16, 2000, he was
considered an hourly employee, was paid $25 per hour for each
hour he worked and was not entitled to company-paid holidays,
vacation time, hospital and medical benefits or life insurance.
See Employment Agreement, Appendix A, ¶¶ 3 and 4, Attached to
Declaration of Dov Kesselman, Ex. A (Doc. No. 43). At that time,
he elected to pay for his own life insurance which Spherion made
available to its hourly employees through Aetna Healthcare,
Inc.*fn3
In December 2000, Mr. Klimbach was diagnosed with cancer, and
was required to take a leave of absence from Spherion until May
2001. When he returned to work on May 11, 2001, his hourly rate
was reduced to $21 per hour, which if annualized would equal
approximately $44,000 per year in earnings. He continued to work
at the $21 per hour rate until August 17, 2001, which was the
last day he worked for Spherion. From the time he was diagnosed
with cancer Mr. Klimbach had several communications with Spherion
employees regarding the continuation of his life insurance
coverage, and he continued to make monthly premium payments until
his death.
On March 25, 2002, after Mr. Klimbach's death, Spherion
prepared a Proof of Death form and submitted it to Aetna for
payment of life insurance benefits to plaintiff as the
beneficiary of Mr. Klimbach's life insurance policy. That Proof
of Death form contained plaintiff's earnings as determined by
Spherion and the level of coverage Mr. Klimbach elected. Based on
that information, Aetna issued plaintiff a check for $11,000 on
April 1, 2002. However, Spherion had misrepresented the level of
coverage Mr. Klimbach had elected and submitted a corrected Proof
of Death form to Aetna on April 24, 2002. On May 20, 2002, Aetna
issued plaintiff a check representing the difference between the
April 1, 2002 benefits payment and the amount to which she was
actually entitled a total of $31,000.
Plaintiff was under the impression that she was entitled to
$132,000 in benefits, and contacted Spherion to express her
concerns. In June 2002, Spherion sent her a letter advising her
of her right to appeal the benefits determination to Spherion's
Plan Administration Committee. By letter dated October 9, 2002,
Spherion's Plan Administration Committee denied plaintiff's
appeal.
The present controversy concerns interpretation of the terms of
the life insurance agreement (the "Plan"). The life insurance coverage election form quantified the available amounts of
coverage in terms of an employee's "salary." See Plaintiff's
Statement of Undisputed Material Facts, Ex. A (Doc. No. 29). Mr.
Klimbach elected coverage which upon his death would pay his
beneficiary two times his "salary" and elected supplemental
coverage which upon his death would pay his beneficiary an
additional year's worth of his "salary." See Plaintiff's
Statement of Undisputed Material Facts, Ex. A (Doc. No. 29). The
life insurance policy (the "Plan"), however, quantified the
coverage amounts in terms of an employee's "basic annual
earnings," which is defined as "[p]rior year's gross earnings,
including bonuses and commissions, or current year's gross
earnings, including bonuses and commissions, whichever is
greater." See Summary of Life Insurance Coverage, p. 3,
Attached to Declaration of Dov Kesselman, Ex. I (Doc. No. 43).
Rule 56 of the Federal Rules of Civil Procedure provides that a
party is entitled to summary judgment as a matter of law only
where, "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. . . ." FED.R.CIV.P. 56(c). The party seeking summary
judgment bears the burden of demonstrating that no genuine issue
of material fact exists, and in making the decision the court must
draw all reasonable inferences in favor of the party against whom
summary judgment is sought. Ford v. Reynolds, 316 F.3d 351, 354 (2d
Cir. 2003) (citing Marvel Characters v. Simon, 310 F.3d 280,
285-86 (2d Cir. 2002)). "Summary judgment is improper if there is
any evidence in the record that could reasonably support a jury's
verdict for the non-moving party." Id.
I. Plaintiff's § 1132 Claims
Under 29 U.S.C. § 1132(a)(1)(B) a plan participant or
beneficiary may bring an action "to recover benefits due to him
under the terms of his plan, to enforce his rights under the
terms of the plan, or to clarify his rights to future benefits
under the terms of the plan." 29 U.S.C. § 1132 (a)(1)(B). A claim
for improper denial of benefits under § 1132 is reviewed under a
de novo standard unless the administrator or fiduciary can
prove that it maintained discretionary authority to determine
eligibility for benefits or to construe the terms of the plan, in
which case an arbitrary and capricious standard applies.
Firestone Tire and Rubber Company v. Bruch, 489 U.S. 101, 115
(1989). Where a district court reviews a benefits determination
under the arbitrary and capricious standard, it is limited to
considering only the information available to the fiduciary at
the time of the benefits determination in question. Miller v.
united Welfare Fund, 72 F.3d 1066, 1071 (2d Cir. 1995). A
benefits determination will not be found to be arbitrary and
capricious unless it is "without reason, unsupported by
substantial evidence or erroneous as a matter of law." Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441-442 (2d
Cir. 1995).
A. Plaintiff's Claims Against Defendant Aetna
While plaintiff's complaint pursues several causes of action,
only one is directed toward Aetna; namely that Aetna failed to
pay certain life insurance benefits to plaintiff in violation of
ERISA § 1132, for which plaintiff now moves for summary judgment
in her favor. Aetna cross-moves for summary judgment, arguing
that it is ...