LEES v. MUNICH REINSURANCE AMERICA, INC. et al

Filing 40

MEMORANDUM OPINION filed. Signed by Judge Michael A. Shipp on 1/13/2016. (mmh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

RICHARD LEES,
Plaintiff,
Civil Action No. 14-2532 (MAS) (TJB)

v.
MEMORANDUM OPINION
MUNICH REINSURANCE AMERICA,
INC., et al.,
Defendants.

SHIPP, District Judge
This matter comes before the Court on Defendant Munich Reinsurance America, Inc. 's
("Munich" or "Defendant") motion to dismiss Plaintiff Richard Lees' ("Plaintiff') First Amended
Complaint. (ECF Nos. 27, 29.) Plaintiff opposed the motion (ECF No. 31), and Defendant replied
(ECF No. 32). On October 7, 2015, the Court heard oral argument on the motion, placed its
decision on the record, and issued an Order the following day (ECF No. 35). The Court dismissed
with prejudice Counts One, Three, and Four of Plaintiffs First Amended Complaint. 1 (Id.) As to
Count Two, the Court converted Defendant's motion to dismiss into a motion for summary
judgment and required Defendant to submit a statement of undisputed material facts.

(Id.)

Pursuant to Rule 56(d) of the Federal Rules of Civil Procedure, Plaintiff was required to respond
to Defendant's statement or submit an affidavit. Defendant filed a Statement of Uncontested
Material Facts (ECF No. 36), and Plaintiff filed a Response to Defendant's Statement of

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The Court also dismissed all claims against Defendants Robert Humes and Virginia Zdanowicz
for failure to serve pursuant to Rule 4(m) of the Federal Rules of Civil Procedure.

Uncontested Material Facts (ECF No. 37). The Court has carefully considered the parties'
submissions, and for the reasons stated below, the Court grants Defendant's motion.

I.

Background and Procedural History
This case involves misrepresentations allegedly made to Plaintiff regarding his entitlement

to certain pension credits and benefits. On July 1, 1991, Plaintiff was hired by Defendant's
predecessor, American Re-Insurance Company ("American"). (Def.' s Statement of Undisputed
Material Facts ("SUMP") ii 1, ECF No. 36; Pl.'s Resp. to Def.'s SUMP ("Pl.'s Resp.")

ii 1, ECF

No. 37.) From approximately October 28, 1996, through August 15, 1999, Plaintiff worked for
and was paid by a company called Systems Management Specialists ("SMS"). (Def. 's SUMP

iii! 2-3; Pl.'s Resp. iii! 2-3.) On August 15, 1999, Plaintiff recommenced his employment with
American. (Def.'s SUMP ii 3; Pl.'s Resp. ii 3.)
In June 2011, Plaintiff and Paul Rossmango filed a complaint in a prior action in the New
Jersey Superior Court, and Munich removed it to the District of New Jersey. (Am. CompI. iii! 1920, ECF No. 23.) Rossmango settled his claim with Munich. (Id.

ii 22.) The Honorable Anne E.

Thompson, U.S.D.J., dismissed all of Plaintiffs claims, holding that the state law claims alleged
in the complaint were preempted by the Employment Retirement Income Security Act of 1974
("ERISA"), 29 U.S.C. §§ 1001-1461, but granted leave to file an amended complaint. (Id.

iii! 21,

23.) Plaintiff filed an amended complaint, and after filing an answer, Munich moved to dismiss
the amended complaint asserting that Plaintiff had failed to exhaust his plan's administrative
remedies. (Id.

iii! 24-25, 27.) Judge Thompson granted Munich's motion and dismissed Plaintiffs

amended complaint without prejudice. (Id.

ii 28.)

On April 12, 2013, Plaintiffs counsel wrote the Munich Pension Committee, stating:
Mr. Lees is seeking Plan credit for the period October 28, 1996 through August 15,
1999 (2 ye~s and 10 months) based upon representations made to him in June,

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1999 by Human Resource employees for American Re-Insurance Company, a
member of and predecessor of Munich Re, that American Re-Insurance Company,
a member of and predecessor of Munich Re, would treat the time Mr. Lees was on
the SMS payroll [ie. the period October 28, 1996 through August 15, 1999 (2 years
and 10 months)], for the purpose of all benefits, including pension benefits under
the Plan, as if Mr. Lees had been on the payroll of American Re-Insurance
Company, a member of and predecessor of Munich Re for the entire period.
(Def.'s SUMP if 4, Certification ofRobert H. Bernstein ("Bernstein Cert.") Ex. B; Pl.'s Resp. if 4.)
Plaintiffs counsel further asserted that "[i]n June 1999, Mr. Lees agreed that in exchange for
declining a sign-on bonus to leave SMS for American ... , American ... would treat the time Mr.
Lees was on the SMS payroll [ie. the period October 28, 1996 through August 15, 1999 (2 years
and 10 months)], for the purpose of all benefits, including pension benefits under the Plan, as if
Mr. Lees had been on the payroll of American ... for the entire period." (Def. 's SUMF

if 5,

Bernstein Cert. Ex. B; Pl.'s Resp. if 5.) In support of the alleged representations made to Plaintiff,
Plaintiffs counsel stated that Plaintiffs 'EMPLOYEE PROFILE" "since July 12, 1999 indicat[ed]
Mr. Lees [sic] 'HIRE DATE' to be July 1, 1991, and, that Mr. Lees did not seek a sign-on bonus
to which he would otherwise have been entitled, Mr. Lees assumed his pension under the Plan
with Munich Re would be based upon his hiring date of July 1, 1991 without any interruption until
his retirement." (Pl.'s Resp. if 6; Bernstein Cert. Ex. B, 3.)
On July 19, 2013, Munich, through Gordon Furlong, Munich's Head of Regional
Compensation and Benefits, denied Plaintiffs claim seeking benefit credits for the time he was on
SMS's payroll and informed Plaintiff he could file an appeal. (Def.'s SUMF ifif 7-10, Bernstein
Cert. Ex. C; Pl. 's Resp.

ifif 7-10.) On August 9, 2013, Plaintiff appealed the decision, and on

September 19, 2013, Plaintiffs appeal was denied. (Def.'s SUMF ifif 12, 15; Pl.'s Resp.
15.)

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ifif 12,

On April 14, 2014, Plaintiff filed a nine-count Complaint in this action against Defendants
Munich, Robert Humes, and Virginia Zdanowicz for: (1) clarification of rights; (2) breach of
fiduciary duty; (3) delinquent contributions; (4) promissory estoppel; (5) equitable fraud;
(6) disgorgement; (7) unjust enrichment/quantum meruit; (8) reformation; and (9) unclean
hands/bad faith. (ECF No. 1.) Defendant moved to dismiss the Complaint in its entirety. (ECF
No. 8.) The Court dismissed Count One without prejudice and dismissed Counts Four, Five,
Seven, and Nine of Plaintiff's Complaint with prejudice. (ECF No. 21.) As to Count One
(clarification of rights), the Court held that Plaintiff's claim under § 113 2(a)( 1)(B) of ERIS A failed
to state a claim because it did not provide why the denial by the Plan's administrator was arbitrary
or capricious. (ECF No. 20.) As to Counts Four, Five, Seven, and Nine, the Court held that
Plaintiff was seeking compensatory damages merely framed as equitable relief and Plaintiff had
not pled a claim for equitable estoppel under §1132(a)(3) ofERISA. (Id.)
On March 27, 2015, Plaintiff filed his First Amended Complaint against Defendants
Munich, Robert Humes, and Virginia Zdanowicz for: (1) Munich Re as Plan Administrator
Improperly, Arbitrarily and Capriciously Denied Benefits to Plaintiff in violation of
§ 1132(a)(l)(B); (2) Breach of Fiduciary Duty in violation of §§ 1132(a)(2) and 1109;
(3) Delinquent Contributions in violation of§ 1132; and (4) Appropriate Equitable Relief pursuant
to§ 1132(a)(3). (ECF No. 23.) Defendant moved to dismiss all counts with prejudice. (ECF No.
27.) Following oral argument, the Court dismissed Count One with prejudice for again failing to
set forth sufficient facts demonstrating that the Plan Administrator's decision denying him credit
was arbitrary and capricious. Specifically, the Court held that Plaintiff's allegations of a biased
investigation and the failure to interview certain persons set forth in the First Amended Complaint
were not sufficient to state a claim that the Plan Administrator's decision was arbitrary and

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capricious. Plaintiff voluntarily withdrew Count Three (Delinquent Contributions). As to Count
Four, the Court dismissed with prejudice Plaintiffs continued attempt to assert state law claims
for compensatory damage couched as equitable relief. In addition, the Court dismissed all claims
against Defendants Robert Humes and Virginia Zdanowicz pursuant to Rule 4(m) of the Federal
Rules of Civil Procedure. As to Count Two, the Court converted Defendant's motion to dismiss
into a motion for summary judgment and this decision follows.
II.

Legal Standard

Pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, "[a] party may move for
summary judgment, identifying each claim or defense-or the part of each claim or defense-on
which summary judgment is sought." Fed. R. Civ. P. 56(a). Summary judgment is appropriate
where "there is no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law." Id. A dispute is genuine if there is sufficient evidentiary support such that "a
reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). A fact is material if it has the ability to "affect the outcome of the suit
under governing law." Kaucher v. Cnty. of Bucks, 455 F.3d 418, 423 (3d Cir. 2006) (citing
Anderson, 477 U.S. at 248). The party moving for summary judgment has the initial burden of
proving an absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317,
330 (1986). To decide whether a genuine dispute of material fact exists, the Court must consider
all facts, drawing all reasonable inferences in a light most favorable to the non-moving party.
Kaucher, 455 F.3d at 423. On a motion for summary judgment, however, "the judge's function is
not ... to weigh the evidence and determine the truth of the matter but to determine whether there
is a genuine [dispute] for trial." Anderson, 477 U.S. at 249.

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"A party that opposes summary judgment on the grounds of insufficient discovery has the
ability to do so through Rule 56(d)." Malouf v. Turner, 814 F. Supp. 2d 454, 459 (D.N.J. 2011).
If facts are unavailable to the nonmovant, it may "show[] by affidavit or declaration that, for
specific reasons, it cannot present facts essential to justify its opposition." Fed. R. Civ. P. 56(d).
"Vague or general statements of what a party hopes to gain through a delay for discovery under
Rule 56(d) are insufficient." Malouf, 814 F. Supp. 2d at 459-60 (citing Hancock Indus. v.

Schaeffer, 811 F.2d 225, 230 (3d Cir. 1987)). If the nonmovant presents sufficient reasoning by
affidavit, the Court may: "(1) defer considering the motion or deny it; (2) allow time to obtain
affidavits or declarations or to take discovery; or (3) issue any other appropriate order." Fed. R.
Civ. P. 56(d). Absent a genuine dispute for trial, summary judgment as a matter of law is proper.

III.

Analysis
In Count Two of the First Amended Complaint, Plaintiff asserts that Defendant's failure to

contribute the $20,000 bonus to the Munich pension plan, due to Plaintiff for leaving SMS and
returning to American, violated §§ 1132(a)(2) and 1109 of ERISA. (Am. Compl.

ifif 39-44.)

Plaintiff asserts that this failure to contribute is a breach of Defendant's fiduciary obligations, and
Plaintiff and the Munich pension plan have sustained, and will continue to sustain, damages. (Id.)
As a result, Plaintiff primarily seeks "[r] eformation of and/or contribution to the Munich re pension
plan to allow and contribute on behalf of Plaintiff sustaining Plaintiff's entitlement to the Munich
Re pension plan for the period of October 28, 1996 through August 15, 1999 when Plaintiff was
on the payroll of SMS." (Id. at 13.)
Pursuant to §l 132(a)(2), "[a] civil action maybe brought ... by a participant, beneficiary
or fiduciary for appropriate relief under section 1109 of this title." 29 U.S.C. § l 132(a)(2). Section
1109 states that "[a]ny person who is a fiduciary with respect to a plan who breaches any of the

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responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be
personally liable to make good to such plan any losses to the plan resulting from each such
breach .... " § 1109(a). Actions pursuant to§ 1132(a)(2) "must be brought on behalf of the plan
itself-and must, therefore, seek to restore losses to the plan." Leckey v. Stefano, 501F.3d212, 226
(3d Cir. 2007), as amended (Dec. 21, 2007) (citing Mass. Mut. Life Ins. Co. v. Russell, 473 U.S.
134 (1985)). Section 1132(a)(2) "is not a vehicle for individual relief." Id. (citing Great-West Life
& Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213 (2002)).

Although styled as a claim under § 1132(a)(2) to restore the alleged $20,000 bonus
contribution to the Munich pension plan, Count Two of Plaintiffs First Amended Complaint truly
seeks individual relief, Plaintiffs entitlement to pension credit for the period of October 28, 1996,
through August 15, 1999. This is not a claim brought on behalf of the Munich pension plan, and
therefore, § 1132(a)(2) is an inappropriate vehicle for relief. Additionally, even if Plaintiff asserted
his claim for individual relief based on his breach of fiduciary duty theory under § 113 2(a)(3 ), the
same arbitrary and capricious standard that the Court applied to Plaintiffs § 1132(a)(l) claim under
Count One would apply.

See Varity Corp. v. Howe, 516 U.S. 489, 514-15 (1996)

("[ C]haracterizing a denial of benefits as a breach of fiduciary duty does not necessarily change
the standard a court would apply when reviewing the administrator's decision to deny benefits.").
As such, Plaintiffs breach of fiduciary duty claim under§ l 132(a)(3) would likewise fail.
Lastly, even if this Court were to construe Plaintiffs First Amended Complaint to assert a
claim for equitable estoppel pursuant to § 1132(a)(3), such claim would fail. The Third Circuit
has held that an employer can be liable under ERISA in its fiduciary capacity for making an
affirmative misrepresentation on a theory of equitable estoppel. See Curcio v. John Mancock Mut.

Life Ins. Co., 33 F.3d 226, 235 (3d Cir. 1994). Under§ 1132(a)(3), a beneficiary may "obtain ...

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appropriate equitable relief ... to redress [ERISA] violations or ... to enforce any provisions of
[ERISA]." Pell v. E.I. DuPont de Nemours & Co. Inc., 539 F.3d 292, 300 (3d Cir. 2008) (quoting
29 U.S.C. § l 132(a)(3)).

Under §1132(a)(3), "[a] beneficiary can make out a claim for

'appropriate equitable relief,' based on a theory of equitable estoppel." Id. (quoting§ l 132(a)(3)).
"To succeed under this theory of relief, an ERISA plaintiff must establish (1) a material
representation, (2) reasonable and detrimental reliance upon the representation, and
(3) extraordinary circumstances." Id. (quoting Curcio, 33 F.3d at 235).
The Third Circuit has found that "extraordinary circumstances exist[] in a variety of factual
scenarios." Id. at 303 (citing Kurz v. Phi/a. Elec( Co., 96 F.3d 1544, 1553 (3d Cir. 1996)).
Extraordinary circumstances can arise by "a showing of affirmative acts of fraud," establishing a
"network of misrepresentations that arises over an extended course of dealing between parties," or
based on "the vulnerability of particular plaintiffs." Kurz, 96 F.3d at 1553 (citing Rosen v. Hotel
& Rest. Emps. & Bartenders Union, 637 F.2d 592, 598 (3d Cir. 1981), cert. denied, 454 U.S. 898

(1981) (holding that pension fund could not deny benefits to participant on grounds that
participant's employer failed to pay required contributions where fund administrator allowed
employee to pay contributions himself); Curcio, 33 F.3d at 238 (finding extraordinary
circumstances where insurer misrepresented type of coverage available, informed patient that
certain coverage would be provided, and then disclaimed coverage); Smith v. Hartford Ins. Grp.,
6 F.3d 131, 142 (3d Cir. 1993) (suggesting extraordinary circumstances might exist where plaintiff
repeatedly and diligently inquired about benefits and defendant repeatedly misrepresented scope
of coverage to plaintiff)). The Third Circuit has declined to find extraordinary circumstances
where there was an oral misrepresentation to beneficiaries, but "no showing of repeated
misrepresentations over time."

Id.

In contrast, the Third Circuit has found extraordinary

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circumstances existed where there were repeated oral and written misrepresentations coupled with
plaintiffs diligence in trying to determine his benefits. Pell, 539 F.3d at 304-05.
Here, viewing the facts in the light most favorable to Plaintiff, the facts are insufficient to
establish extraordinary circumstances. First, in response to this Court's October 8, 2015 Order,
Plaintiff did not file a Rule 56(d) affidavit, but instead stated numerous times in his Response to
Defendant's Statement of Undisputed Facts that:
unless and until Plaintiff is able to obtain the aforementioned
discovery from Munich Re, Plaintiff is unable to fully respond to
Munich Re's Statement Of Uncontested Material Facts. Therefore,
Plaintiff requests leave of this Court to obtain full responses to the
previously propounded discovery, including depositions of the
aforementioned noticed deponents, pursuant to F .R.C.P. 56(d) since
substantially all facts lie within the exclusive possession of Munich
Re and same are otherwise unavailable to Plaintiff.
(Pl.'s Resp. ifif 2-3, 6, 13-14, 17, 21.) Plaintiffs statement is deficient because it is not contained
within an affidavit or declaration and, additionally, it fails to fulfill the requirements of Rule 56(d).
Therefore, the relevant facts before this Court are: (1) in 1999, two human resource employees
orally told Plaintiff he would receive pension credit for the approximately three-year period he
was on the SMS payroll; (2) Plaintiffs employee profile listed a hire date of July 1, 1991; and
(3) in 2011, Plaintiff learned he would not receive the pension credit and began what is the long
procedural history of this litigation.
The isolated misrepresentation by two human resource employees and a notation as to a
hire date do not constitute extraordinary circumstances. Here, there is no showing of fraud, of
repeated misrepresentations over time, and no suggestion that Plaintiff was particularly vulnerable.
Additionally, unlike the plaintiff in Pell, Plaintiff was not "diligent" and did not engage in
"persistent questioning" about the benefits that were at stake. Instead, Plaintiff relied on a single
statement by two human resource personnel and concluded that a notation in his employee profile

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regarding his hire date confirmed he would receive pension credit. These facts do not constitute
extraordinary circumstances under Third Circuit precedent. Accordingly, Defendant's motion is
granted and judgment is entered in favor of Defendant.

IV.

Conclusion
For the reasons set forth above, Defendant's motion for summary judgment is granted. An

order consistent with this Memorandum Opinion will be entered.

sf Michael A. Shipp
MICHAEL A. SHIPP
UNITED STATES DISTRICT JUDGE

Dated: January 11, 2016

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