The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court
In this action, twenty-eight individual plaintiffs assert claims pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiffs' claims arise from Defendants' decision to amend Plaintiffs' post-retirement life insurance plan. Plaintiffs seek reinstatement of the original plan, and, further, seek recovery of their alleged overpayment of excessive premiums for supplementary insurance. Presently before this Court is Plaintiffs' Motion for Partial Summary Judgment and Defendants' Motion for Summary Judgment.*fn1 For the reasons discussed below, Plaintiffs' motion is denied and Defendants' motion is granted.
Plaintiffs are twenty-eight employees of Defendants National Grid USA Service Company, Inc. ("National Grid") and Niagara Mohawk Power Corporation ("Niagara Mohawk"). In or around 2002, National Grid merged and became Niagara Mohawk. (Plaintiffs' Rule 56 Statement of Undisputed Facts ("Pls.' Statement"), Docket No. 66-4, ¶ 60.) All of the plaintiffs began working for Niagara Mohawk on or before October 1, 1982. (Id. at ¶ 1.)
Each plaintiff participated in Niagara Mohawk's Group Life Insurance Program under a Group Insurance Policy provided by Prudential Insurance Company of America ("Prudential"). (Id. at ¶¶ 2, 4.) Until 1982, this plan was the only life insurance option offered to management employees by Niagara Mohawk. (Id. at ¶ 3; Defendants' Local Rule 56.1(b) Response to Plaintiffs' Local Rule 56.1(a) Statement of Facts ("Defs.' Resp."), Docket No. 76-2, ¶ 3.) In October 1982, Niagara Mohawk implemented a second life insurance option that also provided life insurance coverage during an employee's active employment. (Plaintiffs' Statement, ¶ 19.) This second life insurance option became known as "Plan B" while the original life insurance plan became known as "Plan A." (Id. at ¶ 22.) Plan A permitted employees to receive a life insurance benefit equivalent to either 1.5 or 2.5 times the employee's retiring salary (reduced by 10% each year, beginning at age 65, until reaching a minimum of 50% of the amount of the employee's life insurance coverage at retirement). (Id. at ¶ 2.) Plan B, by contrast, provided a flat-sum upon retirement equal to, at present, $20,000. (See id. at ¶ 19.) Non-represented employees hired on or after October 1, 1982 were limited to choosing Plan B. (Id. at ¶ 27.) In 1982, plaintiffs were informed that should they elect not to continue Plan A coverage, Plan A would no longer be available to them. (Id. at ¶¶ 27-28.) All plaintiffs elected to continue Plan A coverage. (Id. at ¶ 29.)
In April 1992, Niagara Mohawk informed Plan A participants that in order to retain Plan A coverage, they would be required to purchase Supplemental Insurance Coverage in the amount of 1 times the employees' salary at a rate of $1.00 per $1,000 worth of supplemental coverage. (Id. at ¶ 31.) Although Plan A participants were required to pay $1.00 per $1,000 worth of supplemental coverage, Niagara Mohawk only paid premiums on this supplemental coverage at a rate of approximately $.30 per $1,000 worth of coverage. (Id. at ¶ 40). All plaintiffs chose to maintain Plan A coverage and purchased the supplemental coverage. (Id. at ¶ 49.)
Following the merger between Niagara Mohawk and National Grid, Niagara Mohawk became a participating employer in the National Grid USA Companies' Group Insurance Plan as to its non-represented employees, effective January 1, 2003. (Defs.' Resp. ¶¶ 60, 62). Employees who had elected Plan A and who accepted voluntary retirement offers made in 2002 and 2003 based on their eligibility would be provided life insurance coverage as per Plan A. (Id. at ¶ 64). All other Plan A participants would receive 50% times final pay, but would no longer be required to purchase supplemental coverage. (Id. at ¶ 61; Plaintiffs' Statement ¶ 61). Plaintiffs now seek enforcement of the original Plan A's benefits and an award for damages covering all losses plaintiffs incurred as a result of Defendants' reduction of Plan A benefits.
Plaintiffs commenced this action April 2, 2004 by filing a complaint in the United States District Court for the Western District of New York. (Complaint, Docket No. 1.) Plaintiffs' subsequently filed an amended complaint on December, 13, 2005. (Amended Complaint ("Am. Comp."), Docket No. 18.) Plaintiffs allege they are entitled to enforce their rights and recover benefits pursuant to § 502(a)(1) of ERISA, 29 U.S.C. § 1132(a)(1) and 29 U.S.C. § 1132(a)(3), as well as under principles of contract law and promissory estoppel. (Am. Comp. ¶¶ 64, 71, 75, 97-98). Plaintiffs further allege that Defendant National Grid, as the Plan Administrator of Plan A, has breached its fiduciary duty to Plaintiffs pursuant to § 404(a)(1)(A), (B), and (D) of ERISA, 29 U.S.C. § 1104(a)(1)(A), (B), and (D), as well as committing anti-inurement violations and engaging in transactions prohibited under ERISA. (Id. at ¶¶ 87, 114, 133, 135.) Finally, Plaintiffs allege Defendants' caused them financial harm by failing to provide adequate notice of Plaintiffs' right to convert their Plan A into an individual plan, as well as improperly reducing their post-retirement benefits under § 204(g) of ERISA, 29 U.S.C. § 1054(g). (Id. at ¶¶112, 142-43.)
On August 4, 2008 Defendants filed a Motion for Summary Judgment seeking dismissal of all claims. (Defendants' Memorandum of Law in Support of Their Motion for Summary Judgment ("Defs.' Mot."), Docket No. 65-16.) Plaintiffs filed a cross-motion for summary judgment as to their First, Second, Third, Ninth, Tenth, and Eleventh causes of action. (Plaintiffs' Memorandum of Law in Support of Motion for Summary Judgment ("Pls.' Mot."), Docket No. 66-2.)
Summary judgment is appropriate 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 and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). In deciding a motion for summary judgment, the evidence and the inferences drawn therefrom must be "viewed in the light most favorable to the party opposing the motion." Adickes v. S.H. Kress and Co., 398 U.S. 144, 158, 90 S.Ct. 1598, 1609, 26 L. Ed. 2d 142 (1970). Further, the function of the court is not to weigh the evidence and determine the truth of the matter, but rather to determine whether there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986).
B. Plaintiffs' and Defendants' Cross-Motions for Summary Judgment
Plaintiffs argue that their Plan A benefits have contractually vested on the basis of various plan documents such that Defendants are precluded from amending Plan A's life insurance policy. (Pls.' Mot. 2-3.) Plaintiffs also allege a fiduciary breach because Defendants charged Plaintiffs premiums in excess of those required to purchase supplementary life insurance, used the excess contributions to off-set Defendants' own financial obligations, and failed to inform Plaintiffs of the fact that they were paying premiums in excess of those required to maintain the coverage. (Id. at 17-18.) Plaintiffs' finally argue that Defendants breached a fiduciary duty by failing to give adequate notice of Plaintiffs' right to convert their policies to individual plans and unlawfully decreased Plaintiffs' accrued benefits through amendments to Plan A. (Am. Comp. ¶¶112, 142-43.)
Defendants in their Opposition Memorandum and their own Motion for Summary Judgment respond that Plaintiffs have failed to identify written plan language that could reasonably be interpreted as vesting Plaintiffs' benefits. (Defendants' Memorandum of Law in Opposition to Plaintiffs' Motion for Summary Judgment ("Defs.' Opp'n"), Docket Nos. 76, 4, 10.) Additionally, Defendants argue that summary judgment in Plaintiffs' favor is inappropriate because the amount Plaintiffs' were charged under Plan A is a matter of plan design that does not give rise to a fiduciary relationship, there was no duty to disclose plan costs, and demands for reimbursement constitute prohibited money damages under ...