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HUSSEY v. CHASE MANHATTAN BANK

United States District Court, E.D. Pennsylvania


December 31, 2003.

JOSEPH HUSSEY
v.
CHASE MANHATTAN BANK, ET AL

The opinion of the court was delivered by: RICHARD B. SURRICK, District Judge

MEMORANDUM & ORDER

Presently before us is Defendants', Liberty Life Assurance Company of Boston ("Liberty Life") and Liberty Mutual Group ("Liberty Mutual") (collectively "Liberty Insurance"), Motion for Summary Judgement under Federal Rule of Civil Procedure 56. (Doc. No. 27.) The Liberty Insurance Defendants claim there is no dispute as to the fact that they are not fiduciaries with respect to Plaintiff's claim against his employer under the Employee Retirement Income Security Act ("ERISA"). Defendants also claim that there is no dispute that Defendants currently provide Plaintiff with full benefits under the plan in which Plaintiff is enrolled. For the following reasons, Defendants' motion will be granted.

I. FACTS

  Plaintiff, Joseph Hussey, joined Chase Manhattan Mortgage Corporation ("CMMC") in June 1997, after having spent ten years working at Maryland National Bank. Plaintiff joined CMMC as an executive sales manager and loan officer. Upon arriving at CMMC, Plaintiff's supervisor, Greta Huegel, gave Plaintiff the "Welcome to Chase" binder, which contained information about employee benefits, including the Long Term Disability ("LTD") Plan and the LTD Excess Plan. The LTD Plan, administered by Defendants, Liberty Insurance, provided employees who became totally or permanently disabled with benefits, following twenty-six weeks of absence from work. In 1997, employees had the option of choosing among three levels of payment: 50% with a maximum monthly benefit of $6,250; 60% with a maximum monthly benefit of $7,500; and 70% with a maximum monthly benefit of $8,750. The benefits were capped at incomes up to $150,000. To properly insure those employees in the higher earning brackets, CMMC provided the option of enrolling in the LTD Excess Plan. The LTD Excess Plan essentially removed the earning cap and allowed participants to choose from the same 50%, 60%, or 70% level of payment.*fn1

  On June 2, 1997, Plaintiff elected the 70% coverage under the LTD Plan. Upon joining CMMC, Plaintiff was not yet eligible for the LTD Excess Plan because his salary was commission-based and as a new employee, he had no earning history to calculate his annual income. (Deposition of Greta Huegel, at 24:21.) If Plaintiffs earning for his first year exceeded the $150,000 cap, then he would be eligible to elect the LTD Excess Plan during the next enrollment period, which ran for several weeks every October and November. Changes made during the enrollment period would become effective at the start of the new plan year on January 1[st].

  The enrollment period for 1999, the year in question, ran from October 14, 1998, through November 4, 1998. (Mem. of Law in Supp. of the Chase Defs.' Mot. for Summ. J., at 7 (citing 1999 Chase Choice Enrollment Bulletin, attached to Huegel Aff. as Ex. 6.).) Precisely what happened during that enrollment period is in dispute, but it is clear that Plaintiff did not enroll in the LTD Excess Plan. Plaintiff claims he did not receive any materials during the enrollment period for the 1999 calendar year. The Chase Defendants claim that Plaintiff received the annual enrollment materials and Personalized Fact Sheet ("PFS"). (Mem. of Law in Supp. of the Chase Defs.' Mot. for Summ. J., at 7.) "Personalized fact sheets are individualized documents that show each employee's Benefits Eligible Compensation ("BEC"), the employee's current level of benefits and the cost of that level of benefit for the next year." (Id.) The Chase Defendants further contend that Plaintiff received the 1999 Enrollment Guide, which explained how to add or remove benefits for the upcoming year:

II. How to Use Your Enrollment Materials
Your Personalized Fact Sheet and Enrollment Guide are valuable materials that can help make your coverage decision-making process and your one CHASE enrollment phone call as streamlined as possible. Here's how to use your materials:
1. On your Personalized Fact Sheet, review your current coverages and the cost to continue them for 1999.
2. Decide which coverages you want to keep and which ones you want to change for 1999.
3. At the end of each benefit section in this Enrollment Guide, you'll find a "Making Your Elections" box. This box outlines the available options, what you should complete on your Worksheet to make a change, and the next steps.
4. To make a change, turn to the Worksheet in the back of this Enrollment Guide (or on your Personalized Fact Sheet) and fill in the box(es) to the right of the coverage(s) you want to change. . . .
5. After you complete your Worksheet, call one CHASE . . . and enter your elections as they appear on your Worksheet.
(Mem. of Law in Supp. of the Chase Defs.' Mot. for Summ. J., at 8.)

  In October of 1999, Plaintiff became totally disabled due to a severe stroke. (Compl. ¶ 18.) For twenty-six weeks following the stroke, Plaintiff received short-term disability benefits. Id. Then in April of 2000, Plaintiff became eligible for benefits under the terms of his LTD Plan. Plaintiff was initially informed that he would be eligible for $9,333.00 per month, which was 70% of the maximum ($160,000) allowed at that time under the regular LTD Plan.*fn2 (Letter from Glidden to Joseph Hussey of 4/25/00, at 1.) When Plaintiff's wife, Maureen Hussey, received Liberty Insurance's letter explaining the benefits, she questioned why Plaintiff was not eligible for benefits equal to 70% of his total salary for 1999, which would have been $18,305.03 per month (or 70% of Plaintiff's $313.800.47 annual salary for 1999). (Affidavit of Maureen Hussey (stating that she questioned Liberty Insurance's letter of April 25, 2000).) See also, Facsimile from Prejean to Glidden of 5/02/00, at 1 (citing Plaintiff's income as $313,800.47). CMMC looked into the matter and thereafter informed Liberty Insurance that Plaintiff was indeed eligible for benefits under the LTD Excess Plan.*fn3 (Facsimile from Prejean to Glidden of 5/02/00, at 1.) Plaintiff then began receiving payments of $18,305.00 per month, which was equal to 70% of his total salary for 1999. On October 27, 2000, Defendants Liberty Insurance informed Plaintiff that an audit had revealed that he was only eligible for benefits equal to 70% of the salary cap of $160,000. (Letter from Glidden to Joseph Hussey of 10/27/00, at 2.) Liberty Insurance also initially requested repayment of the overpayment totaling $46,355.00, but later withdrew that demand. (Compl. ¶ 23.)

  None of the parties is able to produce a copy of Plaintiff's PFS for 1999, but Plaintiff's PFS for the subsequent year, 2000, described Plaintiff's 1999 benefits: "You currently [for the calendar year 1999] are enrolled under LTD Option 3 (70% of eligible compensation up to a maximum of $160,000)." The 2000 PFS also indicates Plaintiff's attempt to change his benefits for the year 2000. "Due to plan amendments, coverage under this option for 2000 will include eligible compensation above $160,000 up to a maximum of $700,000." (Mem. of Law in Supp. of the Chase Defs.' Mot. for Summ. J., at 9 (citing PL's 2000 Personalized Fact Sheet attached to Berliner Aff. as Ex. 6.).) It is clear that in 1999, Plaintiff became eligible for the LTD Excess Plan, but did not elect to participate. The reason for Plaintiff's failure to enroll in the LTD Excess plan is a disputed issue of fact between Plaintiff and the Chase Defendants, which does not implicate the Liberty Insurance Defendants. II. JURISDICTION

  This case arises under ERISA, 29 U.S.C. § 1001-1461. As such, this Court has jurisdiction to hear this claim under 28 U.S.C. § 1331.

 III. STANDARD OF REVIEW

  Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). An issue is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986). A factual dispute is "material" if it might affect the outcome of the case under governing law. Id.

  A party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the record that it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Where the non-moving party bears the burden of proof on a particular issue at trial, the movant's initial burden can be met by "pointing out to the district court that there is an absence of evidence to support the non-moving party's case." Id. at 325. After the moving party has met this initial burden, "the adverse party's response, by affidavits or otherwise as provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." FED. R. CIV. P. 56(e). That is, summary judgment is appropriate if the non-moving party fails to rebut by making a factual showing "sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322.

 IV. DISCUSSION

  Because Plaintiff did not enroll in the LTD Excess Plan and because neither Liberty Insurance Defendant is a fiduciary*fn4 with respect to Plaintiff's claim, we will grant the Liberty Insurance Defendants' Motion for Summary Judgment. Our decision is guided by the Third Circuit decision in Curcio v. John Hancock Mut. Life Ins. Co., where the court granted summary judgment to the insurance company, finding that the company was "not responsible . . . for . . . [the employer's] inaccurate representations made to its employees . . . " 33 F.3d 226, 229 (3d Cir. 1994). The Curcio court found that the insurance company, John Hancock, had satisfied its duty to Plaintiff by providing benefits under the policy in which Plaintiff had enrolled. Id. at 229. The court also found that if the Curcio plaintiff's employer had breached its fiduciary duty to Plaintiff by not informing him of his eligibility to elect additional benefits with John Hancock, it would be the employer, not the insurance company, that would be responsible to Plaintiff. Id. at 229.

  In the instant case, Plaintiff admits he did not enroll in the LTD Excess Plan and alleges his failure to do so was due to Chase Defendants' breach of its fiduciary duty. (Compl. ¶¶ 16-17.) Further, it is undisputed that the Liberty Insurance Defendants currently provide Plaintiff with the full benefits for the LTD Plan (the only plan that Plaintiff ever elected). (Letter from Glidden to Joseph Hussey of 10/27/00 (stating Plaintiff's benefits at $9,333.00 per month).) Even assuming a finding of a breach of fiduciary duty on the part of the Chase Defendants, the Liberty Insurance Defendants cannot be compelled to provide Plaintiff with the additional benefits, unless Liberty Insurance knowingly participated in or undertook to conceal Chase's breach, enabled Chase to commit the breach, or had knowledge of Chase's breach and failed to make reasonable efforts to remedy the breach. 29 U.S.C. § 1105(a). Nothing in the record suggests this type of involvement by the Liberty Insurance Defendants, nor does Plaintiff contend that this is the case.

  Even if we were to disregard Plaintiff's suggestion that the Liberty Insurance Defendants might not be fiduciaries, it remains clear that the Liberty Insurance Defendants do not owe Plaintiff a duty in this situation. These Defendants do not serve as fiduciaries regarding notification of eligibility, which is the duty that forms the basis of Plaintiffs complaint.

 

In its role as the insurer for disability benefits under the Chase LTD Policy, Liberty Life played no role in providing information to Chase employees in conjunction with the process by which they elect the level of coverage under the Chase LTD Policy, or exercise options to elect changes in their coverage under the Chase LTD Plan.
(McGee Affidavit, at ¶ 19. See also Deposition of K. Berliner, at 28 (stating that Chase handledall of the notification duties in-house).) As a result, even assuming some level of fiduciary responsibility under the instant facts, the Liberty Defendants cannot be held accountable under § 502(a)(3).

 V. CONCLUSION

  Because Liberty Insurance presently fulfills its obligations under the plan Plaintiff elected, and Plaintiff admits that Liberty Insurance is not a fiduciary, it is simply not possible for a remedy to flow from the Liberty Insurance Defendants to Plaintiff. Accordingly, there is no basis upon which to require that the Liberty Insurance Defendants remain in the lawsuit. Liberty Life and Liberty Mutual's Motion for Summary Judgment is granted.

  An appropriate Order follows.

  ORDER

  AND NOW, this ___ day of December, 2003, upon review of the Motion for Summary Judgment filed by the Liberty Insurance Defendants, (Doc. No. 27), and all papers filed in support thereof and in opposition thereto, it is ORDERED that the Liberty Insurance Defendants' Motion is GRANTED.

  IT IS SO ORDERED.


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