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Patricia Rowland Zummo v. Anthony Zummo

July 31, 2012

PATRICIA ROWLAND ZUMMO PLAINTIFF,
v.
ANTHONY ZUMMO, EILEEN CALLAHAN, AND VERIZON COMMUNICATIONS INC., DEFENDANTS.



The opinion of the court was delivered by: Hurley, Senior District Judge:

MEMORANDUM & ORDER

On November 10, 2011, plaintiff Patricia Rowland Zummo ("plaintiff" or "Patricia") commenced this action in New York state court, alleging fraud against defendants Anthony Zummo ("Anthony") and Eileen Callahan ("Callahan"), and breach of contract against defendants Anthony and Verizon Communications Inc. ("Verizon"). On December 22, 2011, Verizon removed plaintiff's action to this Court citing preemption under the Employment Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. ("ERISA"), as the basis for federal jurisdiction. Presently before the Court is plaintiff's motion to remand back to state court. For the reasons set forth below, plaintiff's motion is denied.

BACKGROUND

The following facts have been taken from the Complaint. Patricia and Anthony Zummo were married in 1982 and remained married as of the date of filing. (Compl. ¶¶ 5, 6.) In or about 2002, Anthony left the marital residence and thereafter took up residence with Callahan, his girlfriend. (Compl. ¶ 8.) During the course of his employment with Verizon, for whom he worked until about 2005, Anthony acquired rights to benefits under the company's pension plan (the "plan" or "pension plan"). (Compl. ¶ 10.)

In December 2005, Anthony visited plaintiff at the former marital residence and presented her with a document entitled "Consent of Spouse." (Compl. ¶¶ 13, 16.) Under the terms of the pension plan, if a married participant elects for payment in any form other than a "Qualified 50-Percent Joint and Survivor Annuity," that participant must obtain the written consent of his or her spouse. (Pension Plan at 50, § 6.5 "Spousal Consent," Pl.'s Ex. A; Compl. ¶ 22.) Plaintiff alleges that in consideration for her signing the consent form, Anthony promised to pay her one-half of the value of the pension. (Compl. ¶ 22.) Sometime thereafter, Anthony elected to collect his pension from Verizon in the form of a lump sum payment of $533,296.93. (Compl. ¶ 26.) Plaintiff, however, did not learn that her husband had cashed out his pension until the couple initiated divorce proceedings in 2011. (Compl. ¶ 27.) By that time, Anthony had dissipated the funds without making any payments to plaintiff. (Id.)

The subject spousal consent was only valid if "witnessed by a notary public." (Pension Plan at 50.) Plaintiff, however, alleges that no notary was present when she executed the document. Instead, Anthony allegedly presented the document after the fact to Callahan, a notary herself, who notarized it outside Patricia's presence. (Compl. ¶ 23.)

On November 10, 2011, Patricia filed a lawsuit in state court alleging fraud against Anthony and Callahan and breach of contract against Anthony and Verizon. Plaintiff's breach of contract claim against Verizon alleges that "notwithstanding that the documents submitted by [Anthony] to Verizon were not signed and dated by Plaintiff in the presence of a Notary, Verizon paid over to Zummo the full amount of his accrued pension in a lump sum." (Compl. ¶ 59.) Therefore, plaintiff alleges, "by failing to enforce its own requirements for the submission of an application for payment of [Anthony's] pension, [Verizon] violated its contract with the Plaintiff by paying over to [Anthony] the full amount of his pension without making adequate inquiry for the protection of the Plaintiff." (Compl. ¶ 61.) On December 22, 2011, Verizon removed the case to this Court, arguing that Plaintiff's contract claim is preempted by ERISA because it seeks to recover benefits under the terms of an ERISA-governed pension plan. Plaintiff's present motion seeks to remand the action back to state court.

DISCUSSION

I.LEGAL STANDARD

Under 28 U.S.C. § 1441, a defendant can remove a civil action filed in state court to a federal district court only if the district court has original subject matter jurisdiction over the action. Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 271 (2d Cir. 1994); see also Chichra v. Chichra, 2012 U.S. Dist. LEXIS 75985 at *1 (E.D.N.Y. May 29, 2012).

Verizon's sole asserted basis for subject matter jurisdiction rests upon federal question jurisdiction pursuant to 28 U.S.C. §1331 through the preemption provisions of ERISA, 29 U.S.C. § 1144(a). Verizon bears the burden of showing that the case is properly before the Court. See Grimo v. Blue Cross/Blue Shield of Vt., 34 F.3d 148, 151 (2d Cir. 1994) (where federal jurisdiction is purportedly based on ERISA preemption, "the defendant bears the burden of demonstrating the propriety of removal"); see also Estate of Gottesman v. Verizon N.Y., Inc., 2009 U.S. Dist. LEXIS 28928 at *9 (E.D.N.Y. Apr. 9, 2009) (Upon plaintiff's motion to remand, the burden falls upon the defendant "to prove that jurisdiction exists and that the case is properly in federal court.").

The federal question statute, 28 U.S.C. § 1331, gives the district courts "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." "Ordinarily, determining whether a particular case arises under federal law turns on the 'well-pleaded complaint' rule." Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004) (citing Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 9-10 (1983)). Under this rule, a defendant generally may not remove a case to federal court unless a federal question appears on the face of the complaint. See Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). This rule is premised on the principle that a plaintiff is generally free to choose his law and forum. See id. However, "a plaintiff's choice in pleading his complaint is not absolute." Bellido-Sullivan v. Am. Int'l Grp., 123 F.Supp. 2d 161, 164 (S.D.N.Y. 2000). An exception exists to allow a defendant to remove where federal law preempts a cause of action pleaded entirely on state law grounds. Davila, 542 U.S. at 208. The Supreme Court has recognized ERISA as one of the statutes that operates within this exception. Id.

ERISA has the dual purposes of "'protect[ing] . . . the interests of participants in employee benefit plans and their beneficiaries by setting out substantive regulatory requirements for employee benefit plans and [providing] for appropriate remedies, sanctions, and ready access to the Federal courts." Id. (quoting 29 U.S.C. § 1001(b)); see also Arditi v. Lighthouse Int'l, 676 F.3d 294, 299 (2d Cir. 2012). ERISA's enforcement provision, 29 U.S.C. §1132(a)(or "§502(a)"), affords participants and beneficiaries with the right to bring a civil action to recover benefits due under the terms of their plans, to enforce rights under the terms of their plans, or to clarify their rights to future benefits under the terms of their plans.

To establish uniformity in enforcement, ERISA contains a sweeping preemption provision. See Solnin v. GE Group Life Assur. Co., 2007 U.S. Dist. LEXIS 20955 at *21 (E.D.N.Y. Mar. 23, 2007). Therein, it states that ERISA "supersede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in . . . this title." 29 U.S.C. § 1144(a). The Supreme Court has formulated a two-pronged test to determine when this provision applies. In Davila, 542 U.S. 200, the Supreme Court held that ERISA preemption occurs where: (1) "an individual, at some point in time, could have brought his or her claim under ERISA §502 (a)(1)(B);" and (2) "no other independent legal duty [ ] is implicated by a defendant's actions." Davila, 542 U.S.at 210; see also Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321, 328 (2d Cir. 2011). The Second Circuit later clarified that under the first prong of this test, the plaintiff must show that: (a) she is "the type of party [who] can bring a ...


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