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Estate of Gottesman v. Verizon New York

April 6, 2009

ESTATE OF DAVID S. GOTTESMAN, AND PAULA GOTTESMAN, PLAINTIFFS,
v.
VERIZON NEW YORK, INC., DEFENDANT.



The opinion of the court was delivered by: John Gleeson, United States District Judge

MEMORANDUM AND ORDER

This action arises out of the alleged breach of an agreement by Verizon New York, Inc. ("Verizon"), the former employer of David S. Gottesman, who died January 20, 2003. The plaintiffs, the Estate of David S. Gottesman and Paula Gottesman -- David's surviving spouse -- (collectively "Gottesman"), originally filed their complaint in New York Supreme Court, Kings County. The complaint set forth three causes of action: (1) breach of contract; (2) negligent infliction of emotional distress; and (3) misrepresentation. Verizon removed the action to this court on the basis of federal question jurisdiction. 28 U.S.C. § 1441(b). Gottesman now moves to remand it back to state court on the ground that this court lacks subject matter jurisdiction. For the reasons set forth below, the motion is denied.

BACKGROUND

David Gottesman was an employee of Verizon for 33 years. As a Verizon employee, he was a participant in the Verizon Pension Plan for New York and New England Associates ("Verizon Pension Plan"). Decl. of David Fleming in Opp. to Pl.'s Mot. Remand ("Fleming Decl."), ¶¶ 3-4. As required by the Employee Retirement Income Security Act ("ERISA"), Verizon periodically distributes summary plan descriptions of its various pension plans to plan participants. Id. at ¶ 5. As of November 2002, the January 2001 Summary Plan Description was the most recent iteration of the Verizon Pension Plan. It was issued and mailed to all Verizon Pension Plan participants, including Mr. Gottesman, in September 2001. Id.

During the summer and fall of 2002, Verizon offered an early retirement incentive program to selected employees, including Mr. Gottesman. The early retirement incentive program consisted of two components: the Early Retirement Eligibility ("ERE") program and the Enhanced Income Protection Plan ("EIPP"). To inform eligible employees, such as Mr. Gottesman, about the program, Verizon mailed them information packets detailing the principal terms of the EIPP and ERE programs. Id. at ¶ 6. Under the EIPP, an employee was afforded the option of voluntarily terminating his or her employment with Verizon. In the event the employee's termination offer was accepted by Verizon, the employee would receive a lump sum payment, as well as 48 monthly EIPP payments. Id. at ¶ 7. Under the ERE program, an employee accepted as a participant became eligible for certain benefits, including: (1) the option to continue to earn age and eligibility service under the Verizon Pension Plan for up to three years after the termination date; (2) immediate eligibility for retiree medical, dental and life insurance benefits; and (3) election of any form of pension distribution available under the Verizon Pension Plan (including the lump sum distribution) at any time using a pension commencement date either on the first day after termination or on the first of any month after electing ERE participation after termination. Id. at ¶ 8.

On October 15, 2002, Mr. Gottesman phoned the Verizon Benefits Center to inquire about retirement, presumably in connection with his consideration of the offer to participate in the EIPP and ERE programs. Mr. Gottesman called the Verizon Benefits Center again the following day to request an estimate of his pension benefits under the Verizon Pension Plan. In response to his request, on October 19, 2002, the Verizon Benefits Center sent Mr. Gottesman an estimate of his pension benefits under the Verizon Pension Plan via overnight mail. Id. at ¶ 10, Ex. B.

On October 21 and 23, 2002, Mr. Gottesman signed forms reflecting his acceptance of the offer to participate in EIPP indicating a termination date of November 2, 2002. Id. at ¶ 11, Ex. C & D.*fn1 Also on October 21, 2002, Mr. Gottesman executed a form indicating that he accepted the provisions of the ERE program and understood that his termination date would be November 2, 2002. Id. at ¶ 12, Ex. E. The ERE form described the various enhancements to his rights and benefits under the Verizon Pension Plan. It specifically noted that he could elect any form of pension distribution available under the Verizon Pension Plan, including a lump sum, with such benefits to begin on the first day of any month following his termination date. The form also stated that he needed to contact the Verizon Benefits Center 30 days prior to the date he wished his pension distribution to commence. Id.

Mr. Gottesman's employment with Verizon terminated on November 2, 2002. As an ERE participant, Mr. Gottesman had the right to begin his pension on the first day of any month following his termination date, provided he give 30 days notice to the Verizon Benefits Center. On January 2, 2003, Mr. Gottesman phoned the Verizon Benefits Center and elected to start the retirement process under the ERE program with a pension plan benefit commencement date of February 1, 2003. Id. at ¶ 15. Upon receipt of that request, the Verizon Benefits Center manually calculated Mr. Gottesman's retirement benefits and on January 3, 2003, sent him a retirement package via overnight mail. Id., Ex. F. Pension election authorization and pension election confirmation forms were faxed to Mr. Gottesman on January 10, 2003. Id. On January 29, 2003, the Verizon Benefits Center received the January 10, 2003 pension election authorization forms, which had been signed by Mr. Gottesman and his wife on January 10, 2003. The forms indicated that Mr. Gottesman had elected to receive a lump sum distribution of his benefits under the Verizon Pension Plan in the amount of $232,708.48. Id. at ¶16, Ex. G. On January 20, 2003, Mr. Gottesman died, 11 days prior to the commencement date of his pension benefits. Mrs. Gottesman informed Verizon of her husband's passing on February 3, 2003. Id. at ¶ 17.

On April 1, 2003, Verizon mailed a check to "IRA of David S. Gottesman" for $232,708.48. Paula Gottesman Aff., ¶ 5 and Ex. 1. Verizon stopped payment on this check. Id. On April 15, 2003, Verizon sent a second check to the "Estate of David S. Gottesman." Id., Ex. 2. Verizon again stopped payment on the second check. Id. In July 2003, a Verizon representative notified Mrs. Gottesman that she would be receiving a lump sum payment of only $151,883.41, explaining that as a beneficiary under the Verizon Pension Plan she was not eligible for the full amount that her husband was entitled to but instead was eligible to receive a distribution in accordance with the plan's service pensioner death benefit. Paula Gottesman Aff., ¶ 6, Fleming Decl. at ¶ 19.

Through counsel, Mrs. Gottesman submitted forms and correspondence to the administrators of the Verizon Pension Plan, asserting that she was entitled to the full amount that her husband would have received had he applied for and commenced receipt of retirement benefits prior to his death. Mrs. Gottesman's claim was denied in a letter dated May 27, 2004 by the Verizon Claims Review Unit ("VCRU"), the designated claims administrator for the plan. The letter specifically described the available appeal procedures for disputing the determination. No appeal or request for review of the VCRU's May 27, 2004 determination was ever submitted by or on behalf of Mrs. Gottesman. Def.'s Mem. 1-2.

On January 28, 2009, plaintiffs served Verizon with the instant action, which was filed in the New York Supreme Court, Kings County. On February 17, 2009, Verizon removed the action to this court on the basis of federal question jurisdiction. Plaintiffs now move to remand the action to state court.

DISCUSSION

A. Standard for Removal

A defendant can remove an action filed in state court to a federal district court only if the federal court has original subject matter jurisdiction. See 28 U.S.C. § 1441(a) ("Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant ., to the district court of the United States for the district . embracing the place where such action is pending."); Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 271 (2d Cir. 1994). Thus, the primary consideration in evaluating whether removal was proper is whether the district court has original jurisdiction of the action, i.e. whether the case could have been ...


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