LENIHAN, United States Magistrate Judge.
Currently before the Court for disposition are three motions: (1) a Motion to Dismiss (Doc. No. 9) filed by Defendants Mellon Bank, N.A., Mellon Financial Corporation, The Bank of New York Mellon Corporation, Corporate Benefits Committee, and Sheila Miller (the "Mellon Defendants"); (2) a Motion to Dismiss (Doc. No. 23) filed by Life Insurance Company of North America ("LINA") and CIGNA Corporation ("CIGNA") (together the "Insurance Defendants"); and (3) a Motion for Leave to File an Amended Complaint (Doc. No. 34) filed by Plaintiff, Arlene Miller. This case is brought pursuant to Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. §§ 1001, 1132(a)(1)(B), for review of a denial of long-term disability benefits and determination of her rights to past and future benefits under the terms of her employer's long-term disability plan. This Court has subject matter jurisdiction over this action pursuant to 29 U.S.C. § 1132(e)(1). Venue in this District is proper under 29 U.S.C. § 1132(e)(2).
Because this action comes before the Court on a motion to dismiss, the Court must accept as true all of Plaintiff's allegations of fact and must view the facts in the light most favorable to her. The relevant facts are as follows.
Arlene Miller (hereinafter "Plaintiff") is a participant in the Defendant Mellon Long-Term Disability Plan (hereinafter "Plan"),
Defendant Corporate Benefits Committee (hereinafter "CBC") was the Plan Administrator of the Mellon Long-Term Disability Plan until July 2009, when it was dissolved.
Defendant Mellon Bank, N.A., is named as the "Plan Sponsor" in § 1.3 of the Plan, as well as in the SPD.
Defendant LINA was retained by the Plan to provide ministerial services, such as information collection on an as-requested basis. (Compl. ¶ 7.) Defendant CIGNA Corporation was designated as the claims administrator and, as such, performed certain claims administrative functions for the Plan. (SPD at 25.)
On or about February 2004, the Plaintiff began receiving short-term disability benefits. Upon the expiration of her eligibility for short-term benefits, the Plaintiff applied to the Plan for long-term disability ("LTD") benefits. Plaintiff's claim was initially denied. However, on June 20, 2005, the Plaintiff was advised by letter, that the CBC had reversed the denial, and directed that monthly benefits be paid in the amount of $2,210.83. The monthly benefits would continue for a period of two years, retroactive to August 30, 2004. The letter also advised the Plaintiff that CIGNA would be conducting a subsequent review of her claim to determine whether she would be entitled to receive benefits as of August 30, 2006, the two year anniversary of her initial benefit eligibility date.
Section 2.3 of the Plan provides that a participant is considered "Totally Disabled" following the two year anniversary if she is "wholly and continuously unable" to engage in any occupation or perform any work for compensation or profit for which he is or may become reasonably fitted by education, training, or experience. (Plan at 8.)
On September 22, 2006, CIGNA recommended that the Plan deny further benefits because of a purported failure by the Plaintiff to provide further medical evidence. Defendant Sheila Miller, by letter dated October 12, 2006, advised the Plaintiff that no benefits were payable as of October 15, 2006, based on her failure to provide further medical evidence indicating that as of August 30, 2006, she was disabled within the meaning of the "any occupation" standard set forth in § 2.3(b) of the Plan. In response, on March 15, 2007, Plaintiff appealed the determination to the CBC. By letter dated April 17, 2007, Sheila Miller indicated that the CBC had received the Plaintiff's appeal. On October 29, 2007, the CBC advised the plaintiff that her appeal was denied and that her claim for benefits was deemed terminated as of October 12, 2007.
On August 28, 2009, Plaintiff instituted the present litigation, pursuant to Section 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B), seeking payment of monies allegedly due to her under the terms of the Plan, and judgment directing Defendants to honor the Plaintiff's alleged entitlement to future disability benefits under the terms of the Plan. The Plaintiff specifically contends that Defendants' determination terminating disability benefits ignored lay and medical evidence in Plaintiff's administrative file; contradicted defendants' own previous determination that the medical evidence was sufficient to establish that Plaintiff was entitled to benefits; ignored and disregarded the debilitating effect plaintiff's disability had on her ability to respond to requests for medical information and to provide medical information; ignored medical evidence establishing that plaintiff was disabled within the meaning of the "any occupation" standard set forth in § 2.3(b) in the Plan Document; failed to request Plaintiff submit to medical, psychological, or functional capacity examinations; and, ignored additional indicia of disability as evidenced by the award of
In response, the Mellon Defendants filed a Motion to Dismiss and supporting brief on January 12, 2010. The Insurance Defendants also responded by separately filing a Motion to Dismiss and supporting brief on February 12, 2010.
While the motions to dismiss were pending, Plaintiff filed a Motion for Leave to File an Amended Complaint (Doc. No. 34) on April 2, 2010, which attempts to address the arguments raised by the Defendants in their motions to dismiss. Defendants have filed a response objecting on the basis that it would be futile to allow the proposed amendments. The motions, having been fully briefed and responded to, are now ripe for disposition.
Rule 15(a) of the Federal Rules of Civil Procedure provides that leave to amend a pleading "shall be freely given when justice so requires." In Foman v. Davis, the Supreme Court delineated the grounds that would justify denying leave to amend: "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment". Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). The grant or denial of leave to amend is within the sound discretion of the district court; however, failure to provide a reason for denying leave to amend is considered an abuse of that discretion. Id.; see also In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir.1997) (citing Foman, supra). In determining whether the proposed amendment would be futile, courts apply the same standard as that applied to motions to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Alvin v. Suzuki, 227 F.3d 107, 121 (3d Cir.2000) (citation omitted). The Rule 12(b)(6) standard is discussed, infra, at Part III, Section A.
Plaintiff seeks leave of Court to file an amended complaint to address the arguments raised in the two motions to dismiss. Specifically, Plaintiff seeks to plead additional facts to further demonstrate that each of the non-Plan Defendants acted in a fiduciary capacity with regard to her claim for denial of LTD benefits. Plaintiff also seeks to plead additional facts to demonstrate the liability of Defendant CIGNA Corporation as the alter ego of its subsidiary, LINA. Plaintiff's proposed amended complaint adds four new claims: (1) a
For the reasons that follow, the Court finds that the proposed amendments would not establish plausible claims against the non-plan Defendants, nor is there any support under either ERISA or federal common law for adding the four new claims and four new parties proposed by Plaintiff. Thus, permitting the proposed amendments would be futile.
Plaintiff seeks to assert four new claims in her proposed amended complaint, the first of which is a claim for equitable relief against all Defendants in the form of an order directing the payment of future benefits under 29 U.S.C. § 1132(a)(3), designated as "A Third Claim For Which Relief Can Be Granted" in the proposed amended complaint. The factual allegations offered in support of this claim consist of the assertion that the administrative record establishes that she was disabled at all relevant times and continues to be disabled under the "any occupation" standard. Prop. Am. Compl., ¶ 99. Plaintiff further asserts that pursuant to sections 2.3 and 3.1 of the Plan, she is entitled to continue receiving LTD benefits until she reaches age 65. Id. at ¶ 101. Consequently, Plaintiff asserts that under Section 1132(a)(3), she is entitled to "injunctive, equitable and remedial relief (a) directing defendants, as fiduciaries of the Plan, to continue to pay to plaintiff Plan benefits based on plaintiffs' [sic] ongoing disability and entitlement to benefits within the meaning of the Plan; until such time as there has been a determination by the defendants, in accordance with the procedures set forth in the Plan for rendering such determinations, that plaintiff is no longer disabled." Id. at ¶ 102.
In response, Defendants counter that the relief requested in paragraph 102 of the proposed amended complaint, on its face, is the very relief that a claim under Section 1132(a)(1)(B) already authorizes solely from an ERISA plan. Defendants further contend that Plaintiff's attempt to distinguish between legal relief, in the form of an award of benefits, or equitable relief, in the form of an injunction ordering the payment of benefits, is unavailing based on the Supreme Court's decision in Great-West Life & Annuity Company v. Knudson, 534 U.S. 204, 221, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002) (In Section 1132(a)(1)(B), "Congress authorized `a participant or beneficiary' to bring a civil action `to enforce his rights under the terms of the plan,' without reference to whether the relief sought is legal or equitable.") Because Section 1132(a)(1)(B) expressly authorizes equitable and injunctive relieve from the ERISA plan in enforcing rights under the plan, clarifying rights to future benefits under the plan, and for benefits due under the plan, and thus, an adequate remedy exists under that section, Defendants submit that Plaintiff may not assert a claim under the catch-all provision under Section 1132(a)(3) for "other appropriate" equitable relief. Defendants rely on Varity Corporation v. Howe, 516 U.S. 489, 515, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996), as support for this argument. Defendants further contend that Benamara, upon which Plaintiff relies, is not controlling here because the district court in that case failed to give proper weight to the Varity decision and also failed to consider that the relief requested was really indistinguishable.
The Court agrees with the Defendants that under Varity and Knudson, Plaintiff's proposed Third Claim for equitable relief under Section 1132(a)(3) is inappropriate. In Varity, the Supreme Court explained:
516 U.S. at 515, 116 S.Ct. 1065. In determining whether the requested relief is appropriately framed in equity for purposes of Section 1132(a)(3), the Supreme Court has cautioned that a court must look past the label attached by the plaintiff. In this regard, the Supreme Court further explained:
Knudson, 534 U.S. at 210, 122 S.Ct. 708 (quoting Bowen v. Massachusetts, 487 U.S. 879, 918-19, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988) (Scalia, J., dissenting)).
When the Court looks past the label here, it is clear that the equitable relief requested by Plaintiff is essentially "a claim for benefits expressed in equitable language." Clark v. Feder Semo & Bard, P.C., 527 F.Supp.2d 112 (D.D.C.2007) (holding plaintiff who sought "such declaratory, legal, equitable and remedial relief as the Court deems appropriate" to ensure her receipt of all benefits due was essentially "a claim for benefits expressed in equitable language," and thus, failed to seek appropriate equitable relief under § 1132(a)(3)) (quoting Fairview Health Servs. v. Ellerbe Becket Co. Employee Med. Plan, Civ. File No. 06-2585, 2007 WL 978089, at *6 (D.Minn. Mar. 28, 2007)). Here the relief Plaintiff seeks in her proposed Third Claim under Section 1132(a) (3) is "injunctive, equitable and remedial relief (a) directing defendants, as fiduciaries of the Plan, to continue to pay to plaintiff Plan benefits based on plaintiffs' [sic] ongoing disability and entitlement to benefits within the meaning of the Plan; until such time as there has been a determination by the defendants, in accordance with the procedures set forth in the Plan for rendering such determinations, that plaintiff is no longer disabled." Proposed Am. Compl., ¶ 102. This relief is essentially a claim for benefits expressed in equitable language, and thus, authorized by Section 1132(a)(1)(B).
Moreover, contrary to Plaintiff's argument, courts have held that Section 1132(a)(1)(B) does provide a mechanism for ordering a plan to pay benefits due. See, e.g., Clark, supra; Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146-147, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985) ("To recover the benefits due her, [plaintiff] could have filed an action pursuant to § 502(a)(1)(B) to recover accrued benefits, to obtain a declaratory judgment that she is entitled to benefits under the provision of the plan contract, and to enjoin the plan administrator from improperly refusing to pay benefits in the future."); Smith v. Life Ins. Co. of N. Am., 466 F.Supp.2d 1275, 1292 (N.D.Ga.2006) (finding claim for equitable relief under § 1132(a)(3), requesting court to enter order enjoining defendant from reducing plaintiff's disability benefits based on personal injury settlement so long as plaintiff remained disabled, was inappropriate as an adequate remedy existed under § 1132(a)(1)(B)) (citing Katz v. Comprehensive Plan of Group Ins., 197 F.3d 1084, 1088-89 (11th Cir.1999)). In Smith, the district court concluded that because it could award back pay to plaintiff and `clarify future rights' to benefits under Section 1132(a)(1)(B), all of the relief plaintiff sought was available under Section 1132(a)(1)(B), and thus, he was precluded from proceeding on his claim for equitable relief under Section 1132(a)(3). Id. at 1292. Likewise here, since Plaintiff
In so concluding, the Court does not find the authority relied upon by Plaintiff to be persuasive for several reasons. Benamara was decided pre-Twombly,
Because Plaintiff's attempt to add the proposed Third Claim for Equitable Relief under Section 1132(a)(3) fails as a matter of law, it would be futile to allow Plaintiff to amend her complaint to add this claim.
Next, Plaintiff proposes to add two claims for breach of fiduciary duty under 29 U.S.C. §§ 1104(a)(1), 1109 and 1132(a)(2)—one for imprudent investment and management of Plan assets, and the other for failure to act in accordance with documents and instruments governing the Plan-against the following Defendants" Mellon Long-Term Disability Plan, Sheila Miller, Mellon Bank, N.A., Mellon Financial Corporation, BNY Mellon Corp., and the CBC, as well as proposed new defendants, the BIC and John Doe (collectively referred to by Plaintiff as the "Mellon defendants", but as noted above, the Court will refer to this group as the "Expanded Mellon Defendants"). In support of her claim for imprudent investment and management of Plan assets, Plaintiff alleges:
Prop. Am. Compl., ¶ 106. Section 1104(a)(1) provides, in relevant part:
29 U.S.C. § 1104(a)(1). In support of her claim that the Expanded Mellon Defendants failed to act in accordance with the documents and instruments governing the Plan, Plaintiff alleges:
Prop. Am. Compl., ¶ 115.
29 U.S.C. § 1109(a). Section 1132(a)(2) authorizes the Secretary of Labor, a participant, beneficiary, or fiduciary to bring a civil action for appropriate relief under Section 1109.
In order to maintaining a breach of fiduciary duty claim against the non-Plan Defendants under ERISA, it is axiomatic that Plaintiff must first establish that each is a fiduciary. Section 3(21)(A) of ERISA provides the following definition of a fiduciary:
29 U.S.C. § 1002(21)(A).
With these precepts in mind, the Court will address the viability of the proposed Fourth and Fifth Claims against each of the Expanded Mellon Defendants.
The breach of fiduciary duty claims against the Plan are completely unavailing. Section 1132(a)(2) allows a claim to be brought by the Secretary, a participant, beneficiary, or fiduciary for appropriate relief under 29 U.S.C. § 1109. However, it is well settled that recovery under Sections 1109 and 1132(a)(2) inures to the plan, not the individual. Leckey v. Stefano, 501 F.3d 212, 226 (3d Cir.2007) (citing Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 147, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985); Knudson, 534 U.S. at 213, 122 S.Ct. 708); see also Varity, 516 U.S. at 515, 116 S.Ct. 1065 (citation omitted). As noted by the court of appeals in Hozier v. Midwest Fasteners, Inc.:
Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1162 n. 7 (3d Cir.1990). Therefore, Plaintiff, as a participant, can only bring a claim pursuant to §§ 1132(a)(2) and 1109 on behalf of the Plan, not against the Plan.
In the case at bar, the Bank Defendants submit that the allegations in the proposed amended complaint do not establish that any of them is a fiduciary under ERISA. In support of this argument, the Bank Defendants submit that the proposed amended complaint does not contain any well-pleaded facts to the effect that any of them exercised or had actual control over, influenced or dictated the actions, decisions or operations of the CBC or BIC in any manner or respect, or any control over the decision of the LTD Plan to deny Plaintiff's appeal seeking LTD benefits. In response, Plaintiff contends that the facts clearly demonstrate the Bank Defendants maintained actual control over the operations of the CBC to a degree which warrants a finding that they were fiduciaries. In support, Plaintiff points to paragraph 14 of the proposed amended complaint, wherein she asserts that Mellon Financial Corp. and BNY Mellon Corp. had the authority to remove members of the CBC and/or CIB.
The Court agrees with the Bank Defendants. In her proposed amended complaint, Plaintiff acknowledges the statement of Defendant Sheila Miller that Defendant Mellon Financial Corporation ceased to exist on July 1, 2007, when BNY Mellon Corp. was formed. Plaintiff also acknowledges that Mellon Bank, N.A. changed its name to BNY Mellon, N.A. Yet, Plaintiff continues to name Mellon Bank, N.A. and Mellon Financial Corporation as defendants in the proposed amended complaint. Moreover, none of the factual allegations in the proposed amended complaint vis a vis BNY Mellon, N.A. or BNY Mellon Corp., shows that either entity (or their predecessors-in-interest) had actual control or influence over, or dictated, the decisions or operations of the CBC in any manner
Consequently, the proposed amended complaint fails to plead a factual basis to show a plausible claim against Defendants Mellon Bank, N.A., Mellon Financial Corporation, or BNY Mellon Corp.
Likewise, the Court finds that the factual allegations in the proposed amended complaint do not establish that Sheila Miller, the Plan Manager, is a fiduciary. In reaching this conclusion, the Court is guided by the decision of the Court of Appeals for the Third Circuit in Taylor v. Peoples Natural Gas Company, 49 F.3d 982 (3d Cir.1995). In that case, the Court of Appeals addressed the standards under which an individual employee may be held liable as an ERISA fiduciary:
49 F.3d at 987 (quoting Dep't of Labor Regulation § 2509.75-8, 29 C.F.R. § 2509.75-8, Q & A D-2). Thus, the Taylor court held that a plan sponsor's "Supervisor of Employee Benefits" was not an ERISA fiduciary, as his activities were limited to administrative ministerial functions, such as advising employees of their rights and options under the plan, preparing reports concerning participants' benefits, and calculating the costs of alternative plan amendments on behalf of the plan administrator. Id. at 982.
In addition, none of the factual allegations set forth in the proposed amended complaint regarding Defendant Sheila Miller shows that she is a fiduciary. For example, in paragraph 6 of the proposed amended complaint, Plaintiff asserts that at all relevant times Sheila Miller acted as the Plan Manager as defined in Section 1.25 of the Plan. In paragraph 36, Plaintiff asserts that Section 2.2 of the Plan "states that a participant will be eligible for benefits under the Plan provided that, among other things, the Plan Manager determines that the participant is Totally Disabled within the meaning of § 2.3." Proposed Am. Compl., ¶ 36. In actuality, Section 2.2 of the Plan states that a "[p]articipant shall be initially eligible for benefits under the Plan if he satisfies the application requirements of Section 6.2" and if all five enumerated conditions are met, one of which is that the Plan Manager determines that the participant is totally disabled as defined in Section 2.3.
In newly added paragraph 41(i), Plaintiff alleges that the Plan Manager sent her a letter on July 24, 2007, advising her that her appeal would be delayed because not all of her doctors had responded to CIGNA's request for information. Proposed Am. Compl., ¶ 41(i). In paragraph 44, Plaintiff asserts that on October 12, 2006, Sheila Miller sent a letter to Plaintiff ("Initial Determination") in which Defendant Miller informed Plaintiff that the Plan determined that no benefits were payable as of October 15, 2006. Id. at ¶ 44. (Emphasis
Similarly, the allegations in paragraphs 73, 86, and 87 of the proposed amended complaint again describe ministerial tasks of the Plan Manager (such as ordering IMEs) and demonstrate that Sheila Miller was acting solely in a ministerial capacity when she wrote to Plaintiff on September 21, 2004 informing her of the CBC's decision to initially deny her claim for benefits and on April 17, 2007. Therefore, Plaintiff has failed to allege any facts to suggest, let alone show, that Defendant Sheila Miller was acting in a fiduciary capacity with regard to her handling of Plaintiff's claim for LTD benefits. Accordingly, the proposed amended complaint fails to state a plausible claim for breach of fiduciary duty against Sheila Miller.
The proposed amended complaint also fails to establish a plausible claim for breach of fiduciary duty as to the CBC. The allegations set forth in paragraphs 12, 13, 14 of the proposed amended complaint, as well as Sections 5.1 and 5.3, establish that the CBC was a fiduciary to the extent it exercised discretionary authority or control with respect to the administration of the Plan. In this regard, it appears that when the CBC made a final determination denying Plaintiff's claim for LTD benefits, it was acting in a fiduciary capacity. Plan, § 5.3(a)(i). However, the CBC was dissolved in July 2009 and, thus, no longer exists.
As with the CBC, the Plan establishes that the BIC is a named fiduciary when exercising certain powers granted thereunder. Specifically, the BIC is vested with discretionary authority in the management of the Plan assets and investment decisions. However, the BIC's discretionary authority does not include the power to adopt, amend, or terminate the Plan, as said power is expressly reserved to the Plan Sponsor, Mellon Bank, N.A.
These factual allegations do not support a breach of fiduciary duty claim with regard to a self-funded welfare benefit plan. Instead, the alleged withdrawal of funds from the Trust represents a change in the way the Plan is funded, which is not a fiduciary act, but a business decision made by the Plan Sponsor, not BIC. Lockheed Corp. v. Spink, 517 U.S. 882, 890, 116 S.Ct. 1783, 135 L.Ed.2d 153 (1996). The Supreme Court in Lockheed concluded that inasmuch as the definition of a fiduciary under ERISA does not include acts involving plan design, amending or terminating a welfare plan is not an act of plan management or administration, and thus, not subject to fiduciary review. Id., 517 U.S. at 890, 116 S.Ct. 1783 (citing Siskind v. Sperry Ret. Program, Unisys, 47 F.3d 498, 505 (2d Cir.1995); Varity, 516 U.S. at 505, 116 S.Ct. 1065); see also Hozier, 908 F.2d at 1160-62.
To support her argument that the Expanded Mellon Defendants breached their fiduciary duties by substantially reducing funding in the Trust, Plaintiff relies on Sections 1.23 and 8.1 of the Plan, as well as on Frulla v. CRA Holdings Inc., 596 F.Supp.2d 275 (D.Conn.2009). However, such reliance is misplaced. Although the court in Frulla held that the fiduciaries may have breached their fiduciary duties by failing to take steps to ensure that the plan sponsor adequately funded the plan, this holding was based on the court's determination that the plan sponsor was contractually obligated to provide and fund benefits under the welfare plan, even though ERISA did not impose a minimum funding requirement for welfare plans. Id. at 283-84 (emphasis added).
Plan, § 8.1. In addition, § 8.2 provides that the plan sponsor "has the right, in its sole discretion, to cease making contributions under and to the Plan." Plan, § 8.2. Accordingly,
Thus, the Fourth Claim against BIC fails for two reasons. First, in the case at bar, the Plan Sponsor's decision to significantly reduce the amount of the assets in the Trust and purportedly purchase an insurance policy with the funds clearly constitutes a business decision regarding how the Plan would be funded, and the carrying out of that decision resulted in an amendment of the Plan, neither of which is a fiduciary act. Second, the decision to reduce the funding in the Trust established for the Plan was not made by any of the named Defendants, nor was it made by the BIC. The Plan expressly reserves that power to the Plan Sponsor, BNY Mellon, N.A., who is not a named party.
And lest Plaintiff attempt to amend her complaint to add BNY Mellon, N.A., such attempt would also be futile because the termination or amendment of a welfare plan is not a fiduciary act as defined under ERISA. Lockheed, 517 U.S. at 890, 116 S.Ct. 1783 ("Plan sponsors who alter the terms of a plan do not fall into the category of fiduciaries."); Hozier, 908 F.2d at 1162. As the Supreme Court opined in Curtiss-Wright Corporation v. Schoonejongen, 514 U.S. 73, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995), "[e]mployers or other plan sponsors are generally free under ERISA, for any reason at any time, to adopt, modify, or terminate welfare plans." 514 U.S. at 78, 115 S.Ct. 1223 (citing Adams v. Avondale Indus., Inc., 905 F.2d 943, 947 (6th Cir.1990)).
With regard to her Fifth Claim in particular, Plaintiff alleges in paragraph 115 of the proposed amended complaint that the Plan document required that the decision to divest the Plan of virtually all of its assets and to purchase a policy of insurance be undertaken only upon sufficient provision being made to secure the Plan's ability to pay benefits to Plaintiff and any participant or beneficiary whose claim might give rise to entitlement to benefits which could not be paid under the insurance policy, and in failing to make a sufficient provision for payment of benefits not covered by insurance, the Mellon defendants violated the terms of the documents governing the plans. Prop. Am. Compl., ¶ 115. However, Plaintiff fails to identify the section(s) of the Plan Document or other documents which purportedly contain this provision, and the Court's perusal of the Plan Document failed to locate any such provision. Thus, Plaintiff's argument does not find support in the record. At best, Plaintiff's allegations in support of her Fifth Claim are conclusory and thus do not have to be accepted as true in considering a 12(b)(6) motion.
Accordingly, for all of the above reasons, the Court finds the proposed amended complaint fails to state a plausible claim
Finally, the proposed amended complaint also fails to establish a plausible claim for breach of fiduciary duty as to John Doe, in his capacity as the Global Head of Compensation and Benefits of the BNY Mellon Corp. and as Plan Administrator of the Mellon Long-Term Disability Plan. According to the proposed amended complaint, counsel for the Expanded Mellon Defendants informed Plaintiff's counsel via correspondence that following the dissolution of the CBC in July 2009, the Plan Administrator is the Global Head of Compensation and Benefits of the BNY Mellon Corp. Prop. Am. Compl., ¶ 23. Plaintiff's attempt to add John Doe is futile because the Plan simply does not authorize the Plan Administrator, whoever that person or entity is, to make decisions regarding the management and/or investment of plan assets, or to amend or terminate the Plan. Moreover, none of the factual allegations in the proposed amended complaint show or event suggest that the Global Head of Compensation and Benefits breached a fiduciary duty owed to Plaintiff in administering the Plan and/or in exercising any of the Plan Administrator's duties set forth in Section 5.3(a) of the Plan, nor could it, since the CBC was the Plan Administrator at all relevant times. See Pegram v. Herdrich, 530 U.S. 211, 226, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000) ("In every case charging breach of ERISA fiduciary duty, then, the threshold question is not whether the actions of some person employed to provide services under a plan adversely affected a plan beneficiary's interest, but whether that person was acting as a fiduciary (that is, was performing a fiduciary function) when taking the action subject to complaint.") Accordingly, the proposed amended complaint fails to state a plausible claim for breach of fiduciary duty against John Doe in his individual capacity.
However, the current Plan Administrator may be named in its official capacity as a defendant in a § 1132(a)(1)(B) claim for recovery of benefits. Graden v. Conexant Systems Inc., 496 F.3d 291, 301 (3d Cir.2007) (citation omitted); Hahnemann Univ. Hosp. v. All Shore, Inc., 514 F.3d 300, 308 (3d Cir.2008) (citing Graden, supra); see also discussion, infra, at 441-42. Therefore, the Court will allow Plaintiff leave to amend her complaint, but only with respect to adding the current Plan Administrator in its official capacity.
The crux of Plaintiff's proposed Sixth Claim in which she seeks to hold the Bank Defendants vicariously liable under the doctrine of respondeat superior, is that CBC and/or BIC, as the agents of the Bank Defendants, through their constituent members, acted within the scope of their authority as employees of the Bank Defendants while engaged in the performance of their duties as designated members of the CBC and/or BIC and while employed by and acting in furtherance of the business of the Bank Defendants. Proposed Am. Compl., ¶ 120. Consequently, Plaintiff submits the Bank Defendants are vicariously liable for the actions of the CBC and BIC as set forth in the proposed amended complaint. Id. at ¶ 121.
Plaintiff and the Bank Defendants dispute whether respondeat superior is a viable theory of recovery in ERISA actions. Plaintiff maintains that it is and submits that based on controlling precedent in this circuit, a participant may recover damages for the benefit of the plan directly from
The Bank Defendants advance several arguments in opposition. First, the Bank Defendants contend that because Plaintiff has failed to adequately plead a breach of fiduciary duty claim against any Defendant for the Settlor's/Plan Sponsor's decision to modify its manner of self-funding the LTD Plan, no respondeat superior liability can be asserted against any Defendant in Plaintiff's proposed Sixth Claim.
Second, the Bank Defendants submit that when the members of the CBC and BIC were acting within the scope of their authority as set forth under the terms of the LTD Plan, the employee-members were wearing their fiduciary hats and not acting as employees. Consequently, when acting as a fiduciary, the Bank Defendants posit that the employee-members are liable only under ERISA because the employee's duty to act on behalf of his or her employer is replaced with a fiduciary duty owed only to the plan. Stated another way, under the "two hats" theory, when an employee takes actions regarding the plan, he or she is not acting within the scope of his authority granted by the employer, but rather, is acting within the scope of authority granted by the plan or plan fiduciary.
For their third argument, the Bank Defendants submit that ERISA preempts common law theories of liability that are not expressly set forth in ERISA's comprehensive and reticulated enforcement scheme, § 514(a) and (c)(1), 29 U.S.C. § 1144(a) and (c)(1). Consistent with Supreme Court precedent,
Finally, the Bank Defendants submit that Plaintiff fundamentally misconstrues the court of appeals decision in McMahon, in that the court of appeals was not talking about holding the employer liable for the breach of the fiduciary's duties. Rather, the Bank Defendants posit that what the court of appeals meant by the statement, "if a beneficiary or participant can show that the plan fiduciaries breached their duties, he may also be able to recover damages, for the benefit of the plan, directly from the employer", was that if the participants can establish that the fiduciaries breached their duties in failing to pursue the employer for breach of contract for nonpayment of pension contributions, then the participants may stand in the shoes of the plan fiduciaries and maintain a derivative action against the employer for unpaid contributions. In any event, the Bank Defendants point out that McMahon was decided one year before the Supreme Court's decision in Pilot Life, which was the first Supreme Court decision on preemption that clearly rejected the assumption that an expansive interpretation of the enforcement provisions under § 502 of ERISA was permitted or that common law principles could be easily imported.
Although there appears to be some conflict among the various courts of appeals as to whether respondeat superior may be invoked to impose liability against a non-fiduciary employer/plan sponsor under ERISA for a breach of fiduciary duty by the employer's/plan sponsor's agent/employee, the majority of circuits, including the Third Circuit, appear to allow such theory of recovery, but apply slightly different tests. See, e.g., McMahon, 794 F.2d at 109 ("if a beneficiary or participant can show that the plan fiduciaries breached their duties, he may also be able to recover damages, for the benefit of the plan, directly from the employer.") (citing Struble v. New Jersey Brewery Employees' Welfare Trust Fund, 732 F.2d 325 (3d Cir. 1984)); Am. Fed'n of Unions Local 102 Health & Welfare Fund v. Equitable Life Assurance Soc'y, 841 F.2d 658, 665 (5th Cir.1988) ("The doctrine of respondeat superior can be a source of liability in ERISA cases .... For respondeat superior liability to attach, the employee must have breached his duty to a third party while acting in the course and scope of his employment[,]" and the employer must have "actively and knowingly participated" in the breach of duty);
Whether respondeat superior liability may be invoked to hold the employer/plan sponsor liable for its employee-fiduciaries' breach of fiduciary duties is a question this Court need not reach because, as discussed above, Plaintiff has failed to show that CBC and BIC breached a fiduciary duty in the first instance. Thus, there is simply no underlying violation/liability upon which to hold the Bank Defendants vicariously liable, assuming such a claim is viable. See McMahon, 794 F.2d at 109 ("employer cannot be sued by the participants or beneficiaries under Section 502(a)(2), 29 U.S.C. § 1132(a)(2), without first establishing that the fiduciaries breached their fiduciary duties.") (citing Struble, 732 F.2d at 338). Accordingly, the Court finds that Plaintiff has failed to state a plausible claim for her proposed Sixth Claim, and therefore, allowing leave to amend the complaint to add this claim would be futile.
In her proposed amended complaint, Plaintiff seeks to add new allegations which purportedly establish that named Defendants LINA and CIGNA Corp., as well as newly added Defendants Connecticut General Corporation and CIGNA Holdings, Inc., are fiduciaries. However, the Court finds that the factual allegations do not establish that any of the
In reaching this conclusion, the Court is guided by the court of appeals decision in Confer v. Custom Engineering Company, 952 F.2d 34 (3d Cir.1991). In Confer, a participant in an employee health benefit plan brought suit in federal court against his employer, who was the plan administrator and fiduciary, as well as against the officers of the employer corporation, alleging breach of fiduciary duty in denying his claim. The plaintiff in that case also sued the plan's third-party administrator, who was delegated the day-to-day administrative responsibilities for the plan. Particularly relevant here, the Confer court found that the third-party administrator was not a fiduciary with regard to its day-to-day administration, and therefore, was not responsible for wrongfully denying benefits to the plaintiff. Id. at 39. In reaching this conclusion, the court of appeals explained:
Id. Moreover, the court of appeals found no basis in the plan documents or anywhere else in the record to support Confer's assertion that the third-party administrator exercised discretionary authority or control. Id.
In the case at bar, the new allegations Plaintiff seeks to add regarding the Insurance Defendants purportedly establish three main points: (1) that the four Insurance Defendants constitute an integrated enterprise, each acting on behalf of the others, such that each acted as the alter ego of the others and as a mere façade for the operations of the others sufficient to pierce the corporate veil of each (Prop. Am. Compl., ¶ 33); (2) by engaging in a pattern and practice of employing a series of logos and service marks, the Insurance Defendants misled and confused lay persons into concluding CIGNA was an actual entity and not merely a service mark (id. at ¶ 34); and (3) that CIGNA was vested with discretionary authority in the administration of the Plan (id. at ¶¶ 32, 41, 43). The allegations contained in paragraphs 28 through 31, 33 and 34 are simply immaterial to Plaintiff's claim for LTD benefits under § 1132(a)(1)(B), nor do those allegations have any relevancy to CIGNA's or LINA's status as a fiduciary, or any of the other new claims asserted in the proposed amended complaint.
Likewise, the allegations contained in paragraphs 32, 41 and 43 do not establish that any of the existing or proposed new Insurance Defendants acted as fiduciaries vis a vis plan administration. Rather, the new allegations state merely that the Insurance Defendants provided claims administration services, including collecting medical records from doctors and information from Plaintiff regarding her inability to work, scheduling medical evaluations, and making recommendations regarding a determination of claims for benefits both initially and on administrative appeal. Prop. Am. Compl., ¶¶ 32, 41(a)-(k), 43. The conduct described by Plaintiff in paragraphs 32 and subparagraphs (a) through (k) of paragraph 41 all constitute ministerial acts similar to those engaged in by the third party administrator in Confer whom
Accordingly, as none of the allegations in the proposed amended complaint suggests that any of the existing or proposed new Insurance Defendants acted in a fiduciary capacity with regard to administration of the Plan, or provided the insurance policy to fund the Plan, allowing Plaintiff leave to file the proposed amended complaint to add Connecticut General Corporation and CIGNA Holdings, Inc. as party-defendants, as well as the new allegations regarding all of the Insurance Defendants, would be futile.
Having concluded that it would be futile to allow Plaintiff leave to file the proposed amended complaint, the Court will now consider Defendants' motions to dismiss the claims against the non-Plan Defendants as improper parties and Plaintiff's request for a jury trial.
A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of a complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir.1993). A complaint must be dismissed for failure to state a claim if it does not allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (rejecting the traditional 12(b)(6) standard set forth in Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)); Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1960, 173 L.Ed.2d 868 (2009) (citing Twombly). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal at 1949 (citing Twombly at 556, 127 S.Ct. 1955). The Supreme Court further explained:
Id. (citing Twombly at 556-57, 127 S.Ct. 1955). The court of appeals expounded on this standard in its decision in Phillips v. County of Allegheny, 515 F.3d 224 (3d Cir.2008) (construing Twombly in a civil rights context), and the Supreme Court's recent decision in Iqbal.
Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009). In light of Iqbal, the Fowler court then set forth a two-prong test to be applied by the district courts in deciding motions to dismiss for failure to state a claim. First, the district court must accept all well-pleaded facts as true and discard any legal conclusions contained in the complaint. Fowler at 210-11. Next, the court must consider whether the facts alleged in the Complaint sufficiently demonstrate that the plaintiff has a "plausible claim for relief." Id. at 211. To survive a motion to dismiss, a complaint must show an entitlement to relief through its facts. Id. (citing Phillips at 234-35).
Courts generally consider only the allegations of the complaint, its attached exhibits, and matters of public record in deciding motions to dismiss. Pension Benefit Guar. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993). Factual allegations within documents described or identified in the complaint may also be weighed if the plaintiff's claims are based upon those documents. Id. (citations omitted). A district court may consult those documents without converting a motion to dismiss into a motion for summary judgment. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.1997). As Plaintiff's claims are based on the Plan Document and SPD, the Court may consider these documents, attached as Exhibits 1 and 2, respectively, to the Second Declaration of Sheila Miller (Doc. No. 23-2), in ruling on the motions to dismiss without converting them to summary judgment motions.
The Mellon Defendants and Insurance Defendants, by separate motion,
The Mellon Defendants submit that the claims against the non-Plan Mellon Defendants should be dismissed because the only proper party defendant in a claim to recover benefits under 29 U.S.C. § 1132(a)(1)(B) is the Plan. Defendants reason that based on the plain and unambiguous language of §§ 1132(a)(1)(B), (d)(1) and (d)(2), any judgment against the Plan is enforceable only against the Plan; hence, no other party is necessary to a claim for benefits. Moreover, although ERISA does allow other parties to be held personally liable under certain exceptions specifically delineated under ERISA, such as breach of a fiduciary duty under § 1109(a), the facts here do not support an exception.
In opposition, Plaintiff contends that she is also proceeding in this case under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), which permits equitable relief. The Plaintiff argues that because § 1132(a)(1)(B) only permits money damages, and does not
The claims Plaintiff asserts in her Complaint are predicated solely upon § 1132(a)(1)(B), which provides in relevant part:
29 U.S.C. § 1132(a)(1)(B). With regard to the status of an employee benefit plan as an entity, Section 1132(d) provides in relevant part:
29 U.S.C. § 1132(d).
The issue raised by the pending motions to dismiss is whether the Plan is the only proper defendant in a suit to recover benefits under 29 U.S.C. § 1132(a)(1)(B). The courts of appeals have disagreed on whether a plan is the only proper defendant in a suit to recover benefits under § 1132(a)(1)(B). In Gelardi v. Pertec Computer Corporation, 761 F.2d 1323 (9th Cir.1985), the United States Court of Appeals for the Ninth Circuit held that suits to recover benefits may only proceed against the plan itself. Id. at 1324-25. In so concluding, the court of appeals relied on the statutory language in 29 U.S.C. §§ 1132(a)(1)(B) and 1132(d)(2).
Similarly, in Jass v. Prudential Health Care Plan Inc., 88 F.3d 1482, 1490 (7th Cir.1996), the United States Court of Appeals for the Seventh Circuit, citing Gelardi, held that suits to recover benefits may only be against "the Plan as an entity." However, in subsequent decisions by the Seventh Circuit, it clarified its holding in Jass, which it described as dicta. See, e.g., Mein v. Carus Corp., 241 F.3d 581, 584-85 (7th Cir.2001); Garratt v. Knowles, 245 F.3d 941, 949 n. 7 (7th Cir.2001). In Mein, the court of appeals stated that although ordinarily the only proper defendant in an ERISA suit to recover benefits is the plan, it noted an exception where the employer was the plan administrator, and the employer and plan are closely intertwined, with the plan documents referring to the plan and employer-corporation interchangeably. 241 F.3d at 584-85; see also Garratt, 245 F.3d at 949 n. 7 (citing Mein, supra); Neuma, Inc. v. AMP, Inc., 259 F.3d 864, 872 n. 4 (7th Cir.2001) (citing Jass, Garratt, and Mein, supra) (other citation omitted). In Mein, the corporation was also the designated agent for
Other courts of appeals have held that both the plan and plan administrator may be proper defendants in a suit to recover benefits under 29 U.S.C. § 1132(a)(1)(B). The United States Court of Appeals for the Second Circuit has held that "in a recovery of benefits claim, only the plan and the administrators and trustees of the plan in their capacity as such may be held liable." Chapman v. ChoiceCare Long Island Term Disability Plan, 288 F.3d 506, 509-10 (2d Cir.2002) (citing Leonelli v. Pennwalt Corp., 887 F.2d 1195, 1199 (2d Cir.1989); Crocco v. Xerox Corp., 137 F.3d 105, 107 (2d Cir.1998)). Similarly, the United States Court of Appeals for the Eleventh Circuit has held that "the proper party defendant in an action concerning ERISA benefits is the party that controls administration of the plan." Garren v. John Hancock Mut. Life Ins. Co., 114 F.3d 186, 187 (11th Cir.1997) (citing Daniel v. Eaton Corp., 839 F.2d 263, 266 (6th Cir. 1988); 29 U.S.C. § 1132(d)(1)) (other citation omitted). The United States Court of Appeals for the Eighth Circuit agreed in Layes v. Mead Corp., 132 F.3d 1246, 1249 (8th Cir.1998), upholding summary judgment in favor of the employer who was not the plan administrator, on the basis that it was not a proper party defendant (citing Garren, 114 F.3d at 187). In Daniel, the Sixth Circuit held that "[u]nless an employer is shown to control administration of a plan, it is not a proper party defendant in an action concerning benefits." 839 F.2d at 266.
Although the United States Court of Appeals for the Third Circuit has not yet addressed the precise issue before this Court, it has taken the position recently that the only proper defendant in a § 1132(a)(1)(B) claim is "the plan itself (or plan administrators in their official capacities only)." Graden v. Conexant Systems Inc., 496 F.3d 291, 301 (3d Cir.2007) (citing Chapman, 288 F.3d at 509-10); see also Hahnemann v. All Shore, Inc., 514 F.3d 300, 308 (3d Cir.2008) (citing Graden, supra). In Graden, a former employee sued fiduciaries of a retirement plan under § 1132(a)(2), alleging mismanagement of plan assets, which caused a reduction in his benefits. In noting that the employee could have also brought a claim for benefits under § 1132(a)(1)(B) but that he had a good reason for not doing so,
More recently, in a non-binding, not for publication opinion, the court of appeals ruled that "[i]n a claim for wrongful denial of benefits under ERISA, the proper defendant is the plan itself or a person who controls the administration of benefits under the plan." Evans v. Employee Benefit Plan, Camp Dresser & McKee, Inc., 311 Fed.Appx. 556, 558 (3d Cir.2009) (citing 29 U.S.C. § 1132(a)(1)(B)). In Evans, the employee-participant brought suit against her employer and MetLife, which administered the employer's disability insurance plan, for wrongful denial of long-term disability benefits under ERISA. In affirming the district court's dismissal of the employer as an improper party, the court of appeals opined that the defining characteristic of the proper defendant under § 1132(a)(1)(B) is the exercise of control over the administration of benefits.
In reaching this conclusion, the Evans court relied on Curcio, decided by another panel of the court of appeals, for the proposition that entities other than the plan may be proper parties in a recovery of benefits claim under § 1132(a)(1)(B). However, it appears that the Evans court gave an overly expansive construction to the holding in Curcio. See Petroff v. Verizon North, Inc., Civ. A. No. 02-318E, slip. op. at 4 (W.D.Pa. June 10, 2003) (Judge McLaughlin concluded that the district courts in the Third Circuit, which relied on Curcio for the proposition that entities other than the plan are proper defendants in a recovery of benefits claim under § 1132(a)(1)(B), had engaged in an overly expansive reading of Curcio.)
In Curcio, the court of appeals was asked to determine whether the employer was a fiduciary and thus a proper party against whom the plaintiff could seek equitable relief based on breach of fiduciary duty and equitable estoppel theories pursuant to §§ 1109 and 1132(a)(3)(B). Significantly, Curcio did not involve a claim for benefits under § 1132(a)(1)(B). Indeed, that remedy was not available because the plan did not offer any supplemental life insurance option. Therefore, Mrs. Curcio's breach of fiduciary duty and equitable estoppel claims against her deceased spouse's employer were predicated on affirmative misrepresentations allegedly made by the employer to her spouse regarding supplemental life insurance benefits. The employer attempted to argue that it was not a proper party because ERISA permits suits to recover benefits against the plan as an entity and against the fiduciary of the plan, and it was neither a plan nor a fiduciary. 33 F.3d at 233. The court of appeals agreed that the employer was not a plan, but disagreed that it was not a fiduciary. Id. In its employee benefits booklet, the employer described itself as the plan administrator, and the employer announced the new plan to its employees through meetings and
Thus, "Curcio stands for the proposition, not applicable here, that a plan administrator who breaches its fiduciary duty may be sued under § 1132(a)(3)(B) under the theory of equitable estoppel or under § 1109 for breach of fiduciary duty." Guiles v. Metro. Life Ins. Co., No. CIV.A. 00-5029, 2002 WL 229696, *2 (E.D.Pa. Feb. 13, 2002) (footnote omitted). Moreover, the Curcio court was not presented with the opportunity to address the effect of § 1132(d)(2) on subsection (d)(1), since a § 1132(a)(1)(B) claim was not at issue. Therefore, the Court does not find persuasive those cases relying on Curcio to hold that parties other than the plan are proper parties in a recovery of benefits claim under 1132(a)(1)(B).
Defendants rely on a number of district court cases in support of their position that the only proper defendant is the Plan itself. See, e.g., Petroff v. Verizon North, Inc., Civ. A. No. 02-318E, Slip. Op. (W.D.Pa. June 10, 2003) (listing cases); Smith v. Duquesne Light Company, No. 04-0714, slip op. (W.D. Pa. April 21, 2005); Guiles, supra. The decisions in these cases are predicated on the district courts' interpretation of § 1132(d)(2), which Defendants endorse and submit should be applied here. In essence, Defendants construe § 1132(d)(2) in tandem with § 1132(d)(1) to mean that only when the non-plan entity is found liable in its individual capacity, i.e., for its own conduct, can a court enforce a judgment against this non-plan entity. Defendants stress that this liability would be for the entity's individual conduct, not for plan benefits. In response, Plaintiff attempts to discredit those decisions by arguing that the language of § 1132(d)(2) does not provide the limiting language urged by Defendants or their cited authority, and that Defendants' reasoning is flawed.
It appears that the court of appeals recent decision in Hahnemann settles this dispute. In Hahnemann, a patient covered by the subject health benefits plan assigned his claim to benefits under the plan to the hospital, which in turn submitted a claim to the plan administrator for reimbursement. When the plan administrator failed to reimburse the hospital for the full amount claimed, the hospital sued the plan and plan administrator to recover benefits owed under 29 U.S.C. § 1132(a)(1)(B), and the district court entered judgment in favor of the hospital and against both the plan and plan administrator. On appeal, the plan administrator argued, among other things, that the district court should not have entered judgment against it as an entity. In resolving this issue, the court of appeals started by noting that the judgment against the plan administrator was not entered against it in its official capacity, but rather, had been entered against the plan administrator in its individual capacity. 514 F.3d at 309. The court of appeals reached this conclusion based on the fact that the hospital did not sue the plan administrator seeking benefits from the plan assets, i.e., in its official capacity, and instead, sought recovery against both the plan and plan administrator jointly and severally. Id.
The Hahnemann court went on to explain:
514 F.3d at 309. The court of appeals further opined:
Id.
It is significant to note that in both Graden and Hahnemann, the court of appeals, in stating that a plan administrator could be a proper defendant in a § 1132(a)(1)(B) claim, emphasized that such liability attached only to the plan administrator in its official capacity. The significance of this distinction is that any money judgment awarded against the plan under § 1132(a)(1)(B) is not enforceable against the plan administrator; rather, the court may only order the plan administrator to pay the judgment out of the plan assets. Hahnemann, 514 F.3d at 308 ("if entitlement to benefits is established [under § 1132(a)(1)(B)], the court can direct the plan administrator to pay [the benefits] from the assets of the plan, much as a trustee may be compelled to satisfy a trust obligation from trust assets.") (citation omitted).
Thus, the following precepts can be gleaned from the court of appeals discussions in Graden and Hahnemann, First, in addition to the plan itself, a plan administrator may be sued in its official capacity in a § 1132(a)(1)(B) claim. If a participant proves entitlement to benefits under that claim against the plan, a plan administrator sued only in its official capacity can be directed to pay benefits only from the plan assets; the plan administrator cannot be held individually liable on the money judgment entered against the plan. In other words, the money judgment against the plan is not enforceable against the plan administrator individually where said administrator is sued only in its official capacity. Second, the plan administrator can be held individually liable for a money judgment against the plan under § 1132(a)(1)(B), but only if the facts establish an individual basis upon which to hold it liable, such as where the plan administrator is a fiduciary and breaches an owed duty.
Applying these precepts to the present case, the Court finds that the only proper defendants in Plaintiff's § 1132(a)(1)(B) claim are the Plan and the Plan Administrator, CBC, in its official capacity. In order to state a plausible claim against the CBC for individual liability, however, Plaintiff must allege facts to show the CBC was a fiduciary and it breached a fiduciary duty owed to Plaintiff or the Plan. It is clear from the factual allegations in the Complaint and the Plan documents that CBC was the Plan Administrator at all relevant times, and as such, was vested with and exercised all discretionary authority and control over the administration of the Plan, including making the final determination to deny benefits. Therefore, CBC was clearly a fiduciary to the Plan.
However, Plaintiff does not assert facts to show a breach of fiduciary duty owed by CBC to Plaintiff in exercising its discretionary authority to deny Plaintiff's claim for continuing LTD benefits. When a fiduciary exercises a power with which it has been vested, a mere mistake in exercising that authority will not render it liable for the resulting loss. Leckey v. Stefano, 501 F.3d 212, 224 (3d Cir.2007) (citing RESTATEMENT (SECOND) OF TRUSTS § 201 cmts. a-c (1959)). Rather, in order for a fiduciary to be found liable in the exercise of its powers, there must be a showing of fault, in the form of bad faith, or negligence on the part of the fiduciary. Id. (citing Burke v. Latrobe Steel Co., 775 F.2d 88,
Even if Plaintiff had pled sufficient facts to show a plausible breach of fiduciary duty by the CBC, she would still be without recourse against the CBC, both in its official and individual capacities, because the CBC no longer exists as an entity. Therefore, even if Plaintiff is able to obtain a money judgment against the Plan and prove the CBC was individually liable as a fiduciary, she would not be able to enforce the money judgment against the CBC, as it no longer exists. For this reason alone, Plaintiff cannot maintain her § 1132(a)(1)(B) claim (or any claim for that matter) against the CBC.
As to the remaining non-Plan Mellon Defendants, none of them is the Plan or Plan Administrator, nor are any of them fiduciaries—see discussion, supra, at 427-30. Consequently, no basis exists for holding them individually liable to Plaintiff. Therefore, Mellon Bank, N.A.,
Accordingly, the Court will grant the Mellon Defendants' motion to dismiss the Complaint against the non-Plan Mellon Defendants, including the CBC.
In support of their motion to dismiss, LINA and CIGNA submit that Plaintiff does not plead in her Complaint (or, for that matter, in her proposed amended complaint) any facts from which it could be inferred that either LINA or CIGNA would be liable to her for LTD benefits payable by the Plan. The Insurance Defendants further contend that the facts, as alleged, do not show that either LINA or CIGNA underwrote the LTD Plan's benefits or issued an insurance policy under which LTD benefits of the Plan were funded or paid, nor does the Complaint allege any facts to establish that LINA or CIGNA was a plan administrator or fiduciary.
As discussed in the previous section, since Plaintiff's claim for benefits is brought exclusively under § 1132(a)(1)(B), the Plan and Plan Administrator in its official capacity are the only proper defendants. The Insurance Defendants clearly are not the Plan. Moreover, the factual allegations in the Complaint and the Plan documents make clear that the Insurance Defendants are not the designated Plan Administrator, nor did they have any discretionary authority with regard to the
All of the Defendants have moved to dismiss Plaintiff's request for a jury trial, and Plaintiff has not opposed this aspect of Defendants' motion. The court of appeals has held a § 1132(a)(1)(B) claim for benefits is equitable in nature, and hence, the plaintiff is not entitled to a jury trial. See e.g., Cox v. Keystone Carbon Co., 894 F.2d 647, 649 (3d Cir.1990); Pane v. RCA Corp., 868 F.2d 631, 636 (3d Cir.1989); Turner v. CF & I Steel Corp., 770 F.2d 43, 47 (3d Cir.1985). The Defendants' Motions to Dismiss Plaintiff's Demand for a Jury Trial will be granted.
For the reasons set forth above, Plaintiff's Motion for Leave to File an Amended Complaint (Doc. No. 34) will be granted in part and denied in part. Plaintiff's motion will be granted as to the addition of the current Plan Administrator in its official capacity only, and denied in all other respects. In addition, the Motion to Dismiss (Doc. No. 9) filed by the Mellon Defendants, and the Motion to Dismiss (Doc. No. 23) filed by the Insurance Defendants, will be granted. Finally, the Motion to Dismiss Plaintiff's demand for a jury trial filed by all of the Defendants will be granted.
An appropriate Order will follow.
496 F.3d at 301.
