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Danielle R. P. v. Charitable Leadership Found

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK


March 23, 2012

DANIELLE R. P. KINSEY, PLAINTIFF,
v.
CHARITABLE LEADERSHIP FOUND., DEFENDANT.

The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge

MEMORANDUM-DECISION and ORDER

Currently before the Court, in this action filed pro se by Danielle R. P. Kinsey ("Plaintiff") against Charitable Leadership Foundation ("Defendant") pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq., is Defendant's motion to dismiss for lack of subject-matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1), based on Plaintiff's failure to exhaust her available administrative remedies before commencing this action. (Dkt. No. 4.) For the reasons set forth below, Defendant's motion is denied.

I. RELEVANT BACKGROUND

A. Plaintiff's Claims

Generally, in her Complaint, Plaintiff asserts a claim for retirement benefits against Defendant, pursuant to ERISA. (See generally Dkt. No. 1 [Plf.'s Compl.].) In support of this claim, Plaintiff alleges that Defendant wrongfully denied her ERISA benefits when it failed to contribute four percent of her 2009 and 2010 salaries (amounting in $3,192.20) to her retirement fund. (Id.) Plaintiff further alleges that she was entitled to these benefits under Defendant's Charitable Leadership Defined Contribution Retirement Plan ("the Plan"). (Id.) Familiarity with the remaining factual allegations supporting this claim in Plaintiff's Complaint is assumed in this Decision and Order, which is intended primarily for review by the parties. (Id.)

B. Factual Background

The following summary of the events giving rise to this action is derived from Plaintiff's Complaint, Defendant's motion to dismiss, and Plaintiff's reply memorandum of law. (See generally Dkt. No. 1 [Plf.'s Compl.]; Dkt. No. 4 [Def.'s Motion to Dismiss]; Dkt. No. 5 [Plf.'s Resp. Memo. of Law].)

Plaintiff was employed by Defendant from May 2006 until July 2010, when she was temporarily laid off by Defendant. While Plaintiff was temporarily laid off, Defendant sent a letter to her (and other employees who were temporarily laid off) stating that eligible employees would receive a contribution of four percent of their 2009 and 2010 salaries to the Plan on or about November 15, 2010, and January 31, 2011, respectively. Subsequently, Defendant sent another letter to Plaintiff stating that those contributions would instead be made on or about March 31, 2011.

After contacting her bank, Plaintiff received written confirmation from that bank on May 17, 2010 and May 25, 2011, that the contributions in question had not been made. In May 2011, Plaintiff called Defendant to confirm that the contributions had not been made. During this call, Defendant did not ask Plaintiff to submit a claim for these contributions. Nor did she subsequently send any written communication to Defendant.

Rather, later in May 2011, Plaintiff filed an Application to File a Small Claim in Saratoga Springs City County Court for these contributions. Defendant subsequently removed this claim to federal court under 28 U.S.C. § 1331, on the ground that Plaintiff's claim arises under ERISA.

Familiarity with the remaining factual background of this action is assumed in this Decision and Order, which (again) is intended primarily for review by the parties. (Id.)

C. Defendant's Motion

Generally, in support of its motion to dismiss for lack of subject-matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1), Defendant argues that Plaintiff failed to exhaust her available administrative remedies before commencing this action in May 2011, by failing to submit a prior written claim to Defendant as required by the Plan. (See generally Dkt. No. 4, Part 3 [Def.'s Memo. of Law].) In response to Defendant's motion, Plaintiff argues as follows:

(1) she was never asked to submit a claim or any written communication to Defendant; and (2) she was an eligible participant in the Plan and thus entitled to the contributions she seeks. (See generally Dkt. No. 5 [Plf.'s Opp. Papers].) In its reply, Defendant reiterates its original argument that Plaintiff failed to exhaust her available administrative remedies before commencing a claim in court. (See generally Dkt. No. 6 [Def.'s Reply Memo. of Law].)

II. RELEVANT LEGAL STANDARDS

Generally, a claim may be properly dismissed for lack of subject-matter jurisdiction where a district court lacks constitutional or statutory power to adjudicate it. Makarova v. U.S., 201 F.3d 110, 113 (2d Cir. 2000). A district court may look to evidence outside of the pleadings when resolving a motion to dismiss for lack of subject-matter jurisdiction. Makarova, 201 F.3d at 113. The plaintiff bears the burden of proving subject-matter jurisdiction by a preponderance of the evidence. Makarova, 201 F.3d at 113 (citing Malik v. Meissner, 82 F.3d 560, 562 [2d Cir. 1996]). When a court evaluates a motion to dismiss for lack of subject-matter jurisdiction, all ambiguities must be resolved and inferences drawn in favor of the plaintiff. Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005) (citing Makarova, 201 F.3d at 113).

With regard to dismissals for failure to exhaust available administrative remedies, "[i]t is certainly true . . . that there is a 'firmly established federal policy favoring exhaustion of administrative remedies in ERISA cases.'" Paese v. Hartford Life & Acc. Ins. Co., 449 F.3d 435, 445 (2d Cir. 2006) (quoting Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 594 [2d Cir. 1993]). However, the Second Circuit has been unambiguous in its statement that a plaintiff's failure to exhaust her available administrative remedies is an affirmative defense that must be pleaded and proved by a defendant, not a jurisdictional prerequisite to the plaintiff's commencing an action in federal court. Grover v. Hartford Life & Ass. Ins. Co., 04-CV-1340, 2007 WL 2757963, at *2 (N.D.N.Y. Sept. 21, 2007) (Scullin, S.J.) (citing Paese, 449 F.3d at 446).*fn1 As a result, such a challenge is properly raised on a motion for summary judgment,*fn2 or perhaps on a motion to dismiss without prejudice for failure to state a claim (if the failure to exhaust is evident from the face of the plaintiff's complaint).*fn3

In support of its argument that a plaintiff's failure to exhaust her available administrative remedies prior to filing an ERISA action in federal court results in a lack of subject-matter jurisdiction, defense counsel relies on a Second Circuit Court of Appeals case and two cases from New York district courts. (See generally Dkt. No. 4, Part 3 [Def.'s Memo. of Law].)

However, only one of these cases (the Second Circuit case) is on point.*fn4 Moreover, that case, which is decades old and only obliquely addresses the issue at hand, has effectively been overruled by the Second Circuit's decision in Paese v. Hartford Life & Acc. Ins. Co., 449 F.3d 435 (2d Cir. 2006), which is more recent and clearly addresses the issue.*fn5

III. ANALYSIS

As stated above in Part I.C. of this Decision and Order, Defendant's motion to dismiss for lack of subject-matter jurisdiction is based on Plaintiff's failure to exhaust her available administrative remedies before commencing this action. However, as explained above in Part II of this Decision and Order, exhaustion of available administrative remedies before filing an ERISA claim is not a requirement for federal court jurisdiction in the Second Circuit. For this reason, Defendant's motion must be, and is, denied.

Further, even if this Court were to liberally construe Defendant's motion as one to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6), the Court would have difficulty concluding that Plaintiff has pled herself out of court (i.e., by alleging facts that could only be construed as plausibly suggesting that she failed to exhaust her available administrative remedies before commencing this action).*fn6 This is because Plaintiff's Complaint (which is nothing more than a one-page "Application to File a Small Claim" in state court) says nothing about exhaustion of available administrative remedies. (Dkt. No. 1, Attach. 3 [alleging merely that "[a]ccording to the 403B Retirement Plan, defendant owes claimant a 4% employee contribution of claimant's 2009 & 2010 annual earnings"].) Nor does it allege that mere days elapsed between the acts giving rise to Plaintiff's claim and the commencement of this action. (Id.)

Although courts may liberally construe a pro se plaintiff's papers in opposition to a motion to dismiss for failure to state a claim as effectively amending her complaint (to the extent those papers are consistent with the allegations in the complaint), this Court would have difficulty doing so under the circumstances, because that rule was established to help, rather than hurt, pro se plaintiffs.*fn7 In any event, even if this Court were to construe Plaintiff's opposition papers as effectively amending her Complaint, the Court notes that those opposition papers may be liberally construed as plausibly suggesting that estoppel (and/or other equitable considerations) might excuse Plaintiff's failure to exhaust under the circumstances. (Dkt. No. 5, at 3-4 [attaching pages "2" and "3" of Plf.'s Papers].)*fn8 Simply stated, the Court finds that Defendant's challenge is properly raised on a motion for summary judgment.

For all of these reasons, Defendant's motion to dismiss for lack of subject-matter jurisdiction is denied.

ACCORDINGLY, it is

ORDERED that Defendant's motion to dismiss for lack of subject-matter jurisdiction (Dkt. No. 4) is DENIED; and it is further ORDERED that this case is referred to Magistrate Judge David R. Homer for a Rule 16 conference and a pretrial scheduling order .


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