Brightman v. 1199 SEIU Health Care Employees Pension Fund et al
Filing
40
DECISION AND ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT denying 19 Motion for Summary Judgment; granting in part and denying in part 24 Moti on for Summary Judgment. For the reasons stated above, Plaintiff's Motion for Summary Judgment is denied and Defendants' Motion for Summary Judgment is granted in part and denied in part. The case is remanded to the Fund for reco nsideration in light of this opinion. The Clerk of Court is respectfully directed to close Dkt. Nos. 19 and 24. This constitutes the decision and order of the Court. (Signed by Judge Colleen McMahon on 7/10/2019) (mro) Modified on 7/10/2019 (mro).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
r:-:
I
11 · .
.
VICTORIA I. BRIGHTMAN,
,"'i
1.
,:,
1Cf LLY FILED
Plaintiff,
-againstNo. 18 Civ. 4932 (CM)
l 199SEIU HEALTH CARE EMPLOYEES
PENSION FUND and 1l 99SEIU RETIREMENT
COMMITTEE,
Defendants.
DECISION AND ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY
JUDGMENT AND GRANTING IN PART AND DENYING IN PART DEFENDANTS'
MOTION FOR SUMMARY JUDGMENT
McMahon, C.J.:
On June 4, 2018, Victoria Brightman ("Plaintiff') filed this action against 1199SEIU
Health Care Employees Pension Fund and 1199SEIU Retirement Committee ("Defendants")
seeking relief pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), as
amended, 29 U.S.C. §§ 1132(a)(l)(B), (a)(3)(B), and (g)(l). On November 30, 2018, the Parties
filed claims for summary judgment.
For the reasons stated below, Plaintiffs Motion for Summary Judgment is denied and
Defendants' Motion for Summary Judgment is granted in part and denied in part. Two of
Plaintiffs claims are being remanded to the Fund for reconsideration. This Court will retain
jurisdiction while the Fund reconsiders Plaintiffs claims for benefits in light of the following
op1mon.
1
I.
Factual Background
The factual background is derived from the administrative record and the Local Rule 56.1
statements Plaintiff and Defendants submitted in support of their motions, and in response to
their opponent's motion. Denials without support or explanation are treated as admissions. See
Ferring B. V. v. Allergan, Inc., 253 F. Supp. 3d 708, 710 (S.D.N.Y. 2015).
A.
The 1199 SEIU Health Care Employees Pension Fund
At issue in this case is the l 199SEIU Health Care Employees Pension Fund (the "Plan").
(Deel. of Stanley D. Baum ("Baum Deel."), Dkt. No. 21, Ex. Q (the "Plan").) The Plan, which is
governed by ERlSA, covers employees "working under a Collective Bargaining Agreement
between a Contributing Employer and 1199SEIU United Healthcare Workers East (the "Union")
providing for contributions on [the employee's] behalf to this Pension Fund." (Plan at 14.)
Plaintiff is a Plan participant and a Union member. (Defs.' 56.1 Statement of Material Facts in
Supp. of their Mot. For Summ. J. ("Defs.' 56.1"), Dkt. No. 27, 17.)
Plaintiff has brought ERlSA claims with respect to the Fund's calculation and payment of
her pension benefits.
1.
Pension Calculation
Plaintiffs pension is one-twelfth of the following sum: 1.85% of her Average Final Pay
multiplied by her Credited Future Service, plus 1.5% of her Past Service Pay multiplied by her
Credited Past Service. (Id. § 5.2(b) at 148-49.)
'"Average Final Pay' means for each Participant, the highest average Regular Pay during
five (5) consecutive Plan Years of employment after his Applicable Effective Date and within his
last ten (IO) Plan Years of Credited Future Service." (/d. § 1.6 at 132).
'"Regular Pay' means for each Participant, his total pay in a Plan Year ... during periods
for which his Contributing Employer is required to make Contributions, excluding overtime, on2
call pay, commissions, bonuses and gratuities, and expense allowances." (Id § 1.29 at 137.)
"For periods for which the Fund office is unable to obtain actual pay information, Regular Pay
shall be calculated utilizing industry standards through a methodology approved by the
Retirement Committee." (Id)
"Credited Future Service" is the "total service on and after [Participant's] Applicable
Effective Date, credited at the rate of one ( 1) month for each month for which Contributions are
required to be made to the Fund by reason of the Participants employment." (Id § 3.2(a) at 142.)
'·Credited Past Service" is "determined as of the date such person ceases to be an Employee and
... it means for each Participant his total service prior to his Applicable Effective Date with all
Contributing Employers ... Service shall not be granted for any service with a Contributing
Employer in a job category which has not been included for pension coverage under this Plan
(i.e., contributions required) as of the date Participant last worked in [sic] Covered Service." (Id.
§ 3.2(b) at 143.)
2.
Pension Eligibility
Pension payments begin when a Plan participant is eligible for retirement. Eligibility for
retirement depends on a number of factors. Plaintiff became eligible on the first of the month
following her 65 th birthday. (Id. § 4.1 at 145.)
After participants are eligible for retirement, they may continue to receive pension
benefits even if they become "actively employed," with the following exceptions:
[E]xcept as required by law, no pension benefit payment shall be
made or continue to be made to a Pensioner who is actively
employed in full or part-time employment for more than 40 hours
per month:
(a) in the healthcare or human service industry or a related
industry (including, but not limited to, hospitals, nursing and
convalescent homes, drugstores, laboratories, medical
schools, and universities), and
3
(b) utilizing skills applicable to his previous employment in
the healthcare or human service or related industry, and
(c) in an Area covered by the Plan and within the meaning
of "Section 202(a) (3)(B) Service" pursuant to Department
of Labor Regulations 29 C.F.R. § 2530.203-3(c)(2).
(Id § 11.7 at 175.)
There are specific notice requirements to which the Plan must adhere when an individual
who has received or is eligible for pension is precluded from receiving the pension because of his
or her present work. The Plan requires that:
A Pensioner whose benefits are suspended as described above and a
Participant who continues to work for a Contributing Employer
beyond Normal Retirement Date shall receive (to the extent required
under ERISA) a notice that includes the information and complies
with Department of Labor Regulations 29 C.F.R. §2530.2033(b)(4). Such notice shall be delivered by first class mail or personal
delivery not later than the end of the first calendar month during
which benefit payments are suspended.
(Id)
3.
Disability Benefits
The Plan also provides for disability benefits, which can be claimed earlier than
retirement benefits. Under the Plan, "A Participant who is totally and permanently disabled ...
shall be eligible to receive a Disability Pension Benefit, provided that the condition or event
giving rise to the total and permanent disability commenced or occurred on or before the last day
of his Credited Service and the Participant's employment with a Contributing Employer
terminated as a result of such condition or event." (Id § 8 .1 at 167.) Disability benefits "cease
on the Participant's Normal Retirement Date [the first day of the month after the participant's
65 th birthday]. A Participant who is receiving a Disability Pension Benefit may [then] apply for
a Normal Retirement Benefit in accordance with the Plan." (Id § 8.4 at 168.) Disability benefits
are calculated in the same way as retirement benefits. (Id. § 8.2 at 167.)
4
4.
Participant's Appeal Rights
The Plan grants the Plan Administrator and Trustees discretionary authority to interpret
the Plan and related Plan documents, decide all matters in connection with entitlement to benefits
under the Plan, and make all factual determinations required to administer the Plan and related
plan documents. (See Plan § IX.G at 92.)
If a Plan participant is denied benefits or believes that his or her pension amount is not
correct, the participant has the right to appeal to the Retirement Committee by filing a written
request with the Plan Administrator within 60 days of receiving notice of the adverse benefit
determination. (Id. at§ IX.Bat 86.) The Retirement Committee must issue a decision during the
next quarterly scheduled meeting. (Id.) The decision of the Retirement Committee must be
made in writing and include an explanation of the decision and the basis for such decision; the
decision is final, binding, and conclusive. (Id.)
B.
Plaintiff's Relevant Work History
Between 1993 and 2014, Plaintiff worked as a physician's assistant ("PA") on Riker' s
Island. During this period, she was employed by various hospitals that contracted with New
York City to provide medical services on Rikers Island. (Pl.' s Rule 56.1 Statement of Material
Facts ("Pl. 's 56.1 "), Dkt. No. 23, ,J 1.)
From July 1993 to March 1994, Plaintiff was employed by Bronx Lebanon Hospital
("Bronx Lebanon"). (Id. ,i 2.)
From 1993 to 1997, Plaintiff worked as a PA in a unit managed by St. Vincent's Catholic
Medical Center ("'St. Vincent's"). (Id. ~ 3.) Plaintiff contends that while she was employed by
St. Vincent's, it was a participating employer in the 1199SEIU Health Employees Pension Fund
(the "Fund"). The Fund admits that St. Vincent's Catholic Medical Center was a "Contributing
Employer to the 1199SEIU Health Care Employees Pension fund," but asserts that St. Vincent's
5
did not make contributions for [Plaintiffs] job category [of PA]." (Compare id
,r 4 with Deel.
of John Eng, Dkt. No. 26, Ex. A ("Admin Record") at 17.)
From January 1998 through around December 2000 - Plaintiff says December 2000 but
the document included in the administrative record says January 2001 - Plaintiff worked as a PA
employed by St. Barnabas Hospital. (Pl.'s 56.1
,r 5; Admin Record at 56.) Her position was
governed by a contract collectively known as the "Riker's Island Contract." (Pl.'s 56.1
,r 5.)
While Plaintiff was working for St. Barnabas, Local 1199SEIU (the "Union") began
organizing the St. Barnabas PAs to join the Union. (Id
,r 6.) Plaintiff says that during the
organizational efforts, Mark Bergen, a Union organizer, informed the PAs, including Plaintiff,
that if they joined the Union, St. Barnabas would credit their pre-1998 service as PAs. (Admin
Record at 7, 61; Aff. of Victoria Brightman in Supp. of Mot. for Summ. J. ("Brightman Aff."),
Dkt. No 20, ,r 7.) Plaintiff contends that this means that her three years at St. Vincent's qualify
for past service credit, because she was covered as a PA while employed by St. Vincent's. (Pl.' s
56.1
,r 8.)
Plaintiff claims that she relied on Bergen's promise when she decided to join the Union
in 1998. (Admin Record at 7, 61; Pl.'s 56.1
,r 9.)
In early 2001, Plaintiff began working as a PA for Corizon Health, Inc. ("Corizon"),
when it took over the contract for the provision of health care services at Rikers Island. Corizon
assumed a contribution obligation to the Fund beginning in January 2001. The first date on
which the Fund received contributions on behalf of PAs for Riker' s Island and Manhattan House,
including Plaintiff, was January 1, 2001. (Defs.' Resp. to PL' s Rule 56.l Statement of Material
Facts, Dkt. No. 32, ,r 10.)
6
At all times while Plaintiff was employed by Corizon, it was a contributing employer to
the Fund. Corizon contributed to the Fund on behalf of all of its PAs, including Plaintiff. (Pl.' s
56.1~11.)
In her role as a PA at Corizon, Plaintiffs duty was to provide direct patient care by,
among other things, performing CPR, taking blood pressures, administering stiches, and, more
generally, caring for and treating injured patients. (Pl.'s 56.1
,r 12; Admin Record at 83.)
In May 2014, Plaintiff became physically disabled. Her disability requires her to use a
wheelchair. (Pl.'s 56.1
,r 14.)
She stopped working at Corizon because of her disability. (Id)
Plaintiff was unable to work at all from May 5, 2014 to May 16, 2016, due to her
disability. (Id
~
15.)
On May 16, 2016, Plaintiff began employment with the Physician Affiliate Group of
New York, P.C. ("PAGNY"), which had replaced Corizon as the employee of PAs at Rikers
Island. (Id) PAGNY participates in the Fund. (Id)
At PAGNY, Plaintiff holds the title of PA, but she asserts that her duties as a PA with
PAGNY are very different from when she was a PA at Corizon. At PAGNY, she acts as a
"computer operator, who reviews the work of physicians and PAs;" she no longer meets with,
cares for, and treats injured patients, as she did in her previous role as PA with Corizon. (Admin
Record at 83.) As Plaintiff now requires the assistance of a wheelchair, employing her in a nonpatient care role seems appropriate.
Plaintiff's employment with PAGNY continues on and off due to physical problems
resulting from her injury. (Id) Since December 2017, Plaintiff has consistently worked less
than 40 hours per month at PAGNY. (Pl. 's 56.1
,r 72.)
7
She did not work for PAGNY at all
between December 2017 and June 2018. Currently, she works one day a week. (Brightman Aff.
,! 17.)
C.
2016
Plaintiff's Disability and Pension Payments from November 2014 to October
In November 2015, Plaintiff applied for disability pension from the Fund. She sought
benefits retroactively effective to May 2014, when she had to stop working for Corizon. (Pl.'s
56.1 ,i 17; Admin Record at 29.)
Pursuant to the Plan, Plaintiff's eligibility for disability pension benefits started on the
effective date of her Social Security disability payments, which was November 2014. (Admin
Record at 22-23, 29.) Plaintiff was eligible for disability pension up until April 1, 2015, the first
day of the month after her 65 th birthday. On this day, per the terms of the Fund, Plaintiff's
disability pension was converted to a normal retirement pension (which, in reality, made little
difference, as the pension amounts are the same). (Pl.'s 56.1 ~,i 18, 20; Admin Record at 78.)
Plaintiff received her first payment from the Fund in January 2016. (Admin Record at 1.)
Although the Fund had informed Plaintiff in writing that she would receive $1,963 per month
(Admin Record 9-11 ), her initial payments were only in the amount of $1,692 (PL 's 56.1 , 21 ).
On February 12, 2016, one month after receiving her first payment, Plaintiff wrote a
letter to the Fund, "appealing the amount of the disability award" that had been awarded the
December 17, 2015 letter. She asked about the calculation of her benefits and demanded that she
be granted past service for the period when she was employed by St. Vincent's. (Admin Record
at 39.)
On April 25, 2016, the Fund responded that, at the time Plaintiff left St. Vincent's, PAs
employed there were not covered by the Fund, so she was not entitled to past service credit for
those years. (Admin Record at 43.)
8
On August 5, 2016, Plaintiff sent another letter to the Fund, asking why the calculation of
her pension was lower than she was advised it would be. She again demanded that she receive
the promised pension benefit. (Admin Record at 46.)
D.
Termination of Plaintiff's Benefits in November 2016
The Fund paid Plaintiffs pension benefits through October 2016. It stopped paying her
in November 2016. (Pl.'s 56.1.
,119, 23.)
The payments were terminated because the Fund
determined that Plaintiffs employment with PAGNY, which began in May of 2016, precluded
her from receiving pension benefits.
The administrative record contains a letter dated September 2, 2016, which the Fund
claims it sent to Plaintiff. The letter stated that because Plaintiffs current employment (with
PAGNY) was considered "Related Employment," Plaintiff was not eligible to receive a pension
benefit for any month in which she had worked, or was paid for, at least forty hours by PAGNY.
(Admin Record at 49.) Although the Fund recognized that Plaintiff began her employment with
PAGNY prior to November 2016, she was not required to pay back the benefits that she had
already received. (Defs.' 56.1 120.)
Plaintiff claims that she did not receive this letter or any other notice that her benefits had
been stopped. (Admin Record at 68; Brightman Aff. 122.).
The administrative record also contains an October 3, 2016 letter from the Fund to
Plaintiff. (Admin Record at 92.) Like the September letter, it advised Plaintiff that, due to her
active employment, she would not be receiving her pension benefits until she fully retired or
reached the age of 70.5. (Id.)
Plaintiff also claims that she did not receive this letter. (Id. at 68.)
9
E.
The Fund's Calculation of Plaintiff's Benefits
In December 2016, two months after Plaintiffs benefits were suspended, Plaintiff
received two letters from the Fund responding to her earlier inquiries.
In a letter dated December 5, 2016, the Fund wrote, "Currently, you are receiving a
monthly pension benefit inclusive of any increases approved by the Board of Trustees." (Admin
Record at 12 (emphasis added).) Plaintiff was not "currently" receiving any benefits in
December 2016; they had been suspended as of a month earlier. The Fund informed Plaintiff
that her pension benefit had been recalculated to be $1,861, and that she was entitled to
retroactive payment of $3,652.46 for the period from December 1, 2014 to October 1, 2016which reflects back payment for the period of time before Plaintiffs benefits were suspended.
(Id.) The fact that the Fund said that she was covered through October 1, 2016 corresponds with
the suspension of Plaintiffs benefits, but is in clear contrast with the first line of the letter.
Plaintiff confirms that she received this letter and a check for the underpayments. (Pl.' s
56.1
,r,r 25-27.)
Notably, this letter was sent to the same address as the two letters notifying
Plaintiff that her benefits had been suspended (which she claims she did not receive) - 49
Kaufman Ave, Little Ferry, NJ 07643. (Admin Record at 12, 49, 68.)
The Fund sent Plaintiff a second letter nine days later, on December 14, 2016. (Admin
Record 56-58.) The letter explained in detail the recalculation that had been addressed in the
December 5 letter. (Id). This letter was the first time that Plaintiff received a detailed
description of how her benefits were calculated.
The letter explained that the Fund calculated Plaintiffs benefits using two formulas,
which were then added together.
First, benefits for periods of credited future service were calculated as follows: 1.85% *
Final Average Pay ("F AP") * Years of Credited Future Service. (Id.)
10
The Fund averaged the following figures as Plaintiffs wages for the purpose of
determining her FAP: 2009 - $67,998.06; 2010- $90,664.08; 2011 - $92,163.49; 2012 $92,447.32; and 2013 - $93,055.30. (Admin Record at 57.) The Fund calculated Plaintiffs
FAP to be $87,271.65. (Id.)
The letter said that Plaintiffs wages were obtained from Plaintiffs "former employer,
Richmond University Medical Center." (Id.) But Plaintiff never worked for Richmond
University Medical Center. (Pl.'s 56.1 ~ 33.) The Fund credited Plaintiff with 13 years of future
service - one month for her work with St. Barnabas and the rest from her time with Corizon.
(Admin Record 52-58.)
Second, Plaintiffs benefits for periods of credited past service were calculated as
follows: 1.5% * 1980 Wages* Credited Past Service. (Id. At 57.) Plaintiffs 1980 wages were
calculated by taking Plaintiffs wages on January 1, 2001, multiplying them by a .418 step back
factor, and then multiplying this number by 52 to get a yearly wage. The Fund credited Plaintiff
with three years and seven months of past service, for work performed from July 1993 to March
11, 1994 at Bronx Lebanon, and from January 1, 1998 to December 2000 at St. Barnabas. (Pl.' s
56.1
~
36.) Plaintiff did not receive credited past service for her work as a PA with St. Vincent's.
(Id.~ 37.)
Application of this formula led the Fund to conclude that Plaintiffs pension was
$1,861.00 per month.
The December 14 letter also included Plaintiffs right to request an appeal within sixty
days from the date of the letter. (Admin Record at 58.)
The Fund claims that these letters should not be read as indicating that the Fund believed
that it had any obligation to continue paying benefits to Plaintiff after October 2016. While the
11
first letter used the word "currently," it also clearly states that Plaintiff would receive retroactive
pay only through October 2016.
F.
Plaintiff Challenges the Calculation of Her Benefits (February 2, 2017 Letter
and Response)
On February 2, 2017, Plaintiffs counsel sent a letter to the Fund, demanding that the
Fund pay Plaintiff benefits owed for the months of November 1, 2016 to February 1, 2017, and
that the Fund continue to pay her benefits thereafter. (Admin Record at 60-62.) The letter also
demanded that (1) Plaintiff be credited with service for her employment with the St. Vincent's
unit at Rikers's Island from 1993 to 1997, because credit for that service had been promised by
Mark Bergen, a Union organizer (id. at 61), and that (2) the Fund recalculate Plaintiffs FAP
using information obtained from Corizon, the Social Security Administration, or Plaintiffs
records (which were outlined in the letter and provided to the Fund), rather than the information
purportedly obtained from Richmond University Medical Center, for which Plaintiff never
worked (id.). Plaintiffs counsel calculated her correct FAP to be $103,244.3, as compared to the
Fund's calculation of $87,271.65. (Id. at 62.)
Plaintiffs counsel claims that at the time he sent this letter, neither he nor Plaintiff had
notice that her benefits had been suspended due to her employment with PAGNY. (Pl.'s 56 I ,i
50.)
On April 19, 2017, the Fund sent Plaintiffs counsel a response. (Baum Deel. Ex. G.) 1
The Fund denied all of Plaintiffs counsel's requests. (Admin Record at 64-65; Baum Deel. Ex.
G.) Specifically, the Fund explained that: (1) Plaintiffs work with PAGNY for more than forty
hours per month disqualified her from receiving any pension benefits, starting when she was
The Court cites to the Baum declaration because the administrative record is missing the second page of
this letter.
12
employed with PAGNY ;2 (2) the Fund had sent Plaintiff a letter explaining this rule on
September 2, 2016; (3) Plaintiff received disability benefits through November 2014 and,
therefore, was not eligible for Pension benefits during that period; (4) Plaintiffs employment
from 1993-1997 could not be credited because during that time she was under the St. Vincent's
contract, and past service credit was not awarded until St. Barnabas took over the contract, which
occurred on January 1, 1999; (5) the Fund had reached out to Corizon to verify the earnings
numbers that Plaintiff provided because it wanted to ensure that these numbers did not include
overtime, but also asked that Plaintiff provide documentation for her earnings for this period; 3
(6) the Fund had used Plaintiffs weekly salary and industry standard wages to calculate her
FAP; and (6) industry standard wage had also been used to determine her wage on the applicable
Effective Date (January 1, 2001), which was then adjusted to establish her 1980 base pay for
purposes of calculating her past service pay. (Id.)
Plaintiff claims that this letter is the first time that she received notice that her benefits
had been suspended. (Pl.'s 56.1
~
50.)
G.
Plaintiff Appeals the Fund's Termination of Benefits (June 15, 2017 Letter
and Response)
On June 15, 2017, Plaintiffs counsel officially appealed the Fund's decision. (Admin
Record at 6-8.)
In her notice of appeal, Plaintiff repeated all of her prior demands - reinstatement of her
monthly payments, payment of the missed monthly payments, and an adjustment to reflect what
she believed to be the correct pay and credited service. (Id.) Plaintiff informed the Fund that she
In this letter, the Fund incorrectly identified Plaintiffs start date with PAGNY as January I, 2016, when it
was May I, 2016. (Admin Record at 64.)
3
The Fund asserted that it could not rely on Social Security Administration records because overtime was
not part of the formula for FAP.
2
13
had never received a copy of the "forty hour letter" suspending her benefits, and listed six other
individuals who she believed were being credited by the Fund for services as PAs on Rikers
Island at the time she was working for St. Vincent's (service for which Plaintiff was not
credited). Finally, after pointing out that the Fund was required to maintain accurate records of a
participant's pay pursuant to ERISA, she insisted that the Fund, not she, should bear the
responsibility of obtaining the actual numbers of Plaintiffs pay from Corizon - or else should
use the base pay Plaintiff had provided. (Id at 6-7.)
Plaintiff included with her appeal letter personal records of her wages for the years
relevant for her FAP, including pay stubs and W-2 forms. (Id; Pl.'s 56.1
,r 52; Admin Record at
14-15, 21.) Plaintiff claimed that her FAP should be calculated using the following wages: 2009
- $81,056.92; 2010- $99,730.80; 2011 - $94,402.66; 2012 - $123,291.62; and 2013 - $122,
854.58. (Pl.' s 56.1
,r,r 52, 55; Admin Record at 61- 62. )4
Plaintiff claims that none of these
wages include overtime, on-call pay, commissions, bonuses, gratuities or an expense allowance
(Brightman Aff.
,r 30)
- all of which are not includable for pension calculation purposes per the
terms of the Plan.
Michael Kaiser ("Kaiser"), the Chief Pension Officer of the Fund, responded to
Plaintiffs counsel on August 3, 2017. (Baum Aff. Ex. J.) 5 The letter confirmed that the Fund
still found Plaintiff ineligible to collect benefits as of November 1, 2016. It also asserted that her
FAP had been calculated correctly, based on the information available to the Fund; her time with
St. Vincent's could not be included in the past service calculation; and her disability benefits
commenced on the appropriate date. (Id) Attached to this letter were copies of the two letters
4
Plaintiffs wages for 2010-2011 were significantly lower than the following two years because Plaintiff
took unpaid medical and family leave during this period. (Pl. 's 56.1 ,r 53.)
5
The Court cites to the Baum declaration because the administrative record is missing the first page of this
letter.
14
the Fund claims to have sent to Plaintiff on September 2, 2016 and October 3, 2016, informing
Plaintiff that her benefits had been suspended. (Pl. 's 56.1
,r 60.)
Neither letter informed Plaintiff
of the Plan's review procedures, as required by ERISA regulations. (Id. at ,r 60; see also 29 CFR
2530.203-3(b)(4).)
H.
Appeal Hearing and Supplemental Memoranda
A hearing on Plaintiffs appeal was scheduled before the Retirement Committee for
August 23, 2017. (Pl.'s 56.1
,r 61; Baum Deel. Ex. J at 3.)
Plaintiff and her counsel attended the
hearing. (Admin Record at 101.)
Prior to the hearing, Plaintiffs counsel set the Fund a "supplemental memorandum"
dated August 15, 2017, which described the basis for her appeal. (Admin Record at 68; Pl. 's
56.1
,r 62.)
Counsel stated that the appeal was based on the February 2, 2017 and June 15, 2017
letters, as well as the following additional issues: (1) Plaintiff was never provided with an
updated Plan summary description for 1199SEIU and was never otherwise informed about the
suspension of benefits rule or given any notice that her benefits were being suspended; (2) her
service for St. Barnabas should be treated as future service; and (3) the source of the wages used
for her FAP calculation was not clear and the wages should have been based on the pay stubs she
submitted or information from Corizon. (Id.)
After the hearing, the Retirement Committee "pended the appeal" to allow Plaintiffs
counsel the opportunity to file an official appeal covering the new issues raised at the meeting
but not raised in the first-level or initial second-level appeal. (Defs.' 56.1
,r 28.)
At the request
of the Retirement Committee, Plaintiffs counsel submitted a second "supplemental
memorandum." This memorandum described the differences between Plaintiffs job as a PA
with PAGNY and her job as a PA with Corizon and argued that a suspension should not be
15
imposed because of the difference in duties. It outlined what Plaintiff argued was the correct
calculation for years of service and FAP. And it demanded a description of the calculation of
Plaintiffs monthly pension benefits from the Fund and the amount actually paid to Plaintiff.
(Admin Record 83-84.)
The Fund responded to Plaintiffs supplemental memorandum on November 20, 2017;
this response was considered a first-level response to the new issues raised in the supplemental
memorandum. (Admin Record 86- 87; Defs.' 56.1
~
29.)
The Fund maintained that it had mailed suspension letters to Plaintiff. It rejected
Plaintiffs argument that she could still receive benefits because she does not use the same skills
as a PA for PAGNY, saying: "Although Ms. Brightman does not, by her account, use the same
skills as she used in her previous position as a PA, that fact is irrelevant to the Plan's rules:
Regular hours in any position in Covered Employment triggers the Suspension of Benefits rule,
Irrespective of duties." (Admin Record at 86 (emphasis added).)
The Fund also denied Plaintiffs challenges to the years of service calculation, explaining
that St. Vincent's was not included at all and that her time at St. Barnabas was past service (not
future service) until January 2001, when St. Barnabas joined the Fund. The letter read, "The
Fund does not have, and could not obtain, a copy of the St. Barnabas Collective Bargaining
Agreements ... but recorded the effective date contemporaneously with the event." (Id)
Finally, the Fund rejected Plaintiffs challenge to her FAP calculation, explaining that,
while it had received her wage information from Corizon, Corizon did not specify whether the
wages did or did not include overtime. As a result, the Fund deemed the information unusable.
It also said that Corizon had not responded to a follow-up inquiry. (Id at 2.)
16
Plaintiffs counsel did not respond to this first-level response with new inquiries and did
not submit any new arguments for the Retirement Committee to consider in its decision on the
second-level appeal. (Defs.' 56.1 ,-r 29.)
I.
The Retirement Committee Denies Plaintiff's Appeal
On December 8, 2017, Plaintiffs counsel received notice from the Retirement
Committee that Plaintiff's appeal was denied in almost all respects. (Admin Record at 98-100.)
The notice said: "The Committee noted the Fund's determination that [Plaintiffs]
Average Final Pay should be re-calculated to include a shift differential. The Committee
otherwise upheld the Fund's determination that no other changes to [Plaintiffs] benefit amount
were warranted." (Id) The letter outlined the bases for the denial: (1) her service at St.
Barnabas was properly included as past pay; (2) her service at St. Vincent's was not; (3) her FAP
(updated to include the shift deferential) was correctly calculated; and (4) the suspension of
benefits was proper. (Id.) The letter did not include an FAP calculation or advise when and
how she would receive money due her as a result of the shift differential. The letter also
identified the relevant Plan sections on which the Committee relied in making its decision. (Id.;
Defs.' 56.1 ,-r 32.)
Plaintiff has not yet received any lump sum retroactive payment for the shift differential
or any notice recalculating her benefits. (Brightman Aff. ,-r 23.) She currently is not receiving
any pension payments. (Id.)
She appeals from the decision of the Committee.
17
II.
Discussion
A.
Legal Standard
Summary judgment is granted where all submissions, taken together, show there is "no
genuine dispute as to any material fact" and that the moving party is "entitled to a judgment as a
matter oflaw." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
The moving party has the burden of demonstrating the absence of a genuine issue of
material fact. Celotex, 477 U.S. at 322-23. A fact is considered "material" if it "affect[s] the
outcome of the suit under the governing law." Anderson, 477 U.S. at 248. There is a "genuine
issue" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving
party." Id.
B.
ERISA
The Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132,
provides that a person denied benefits under an employee benefits plan may challenge that denial
in federal court. Under section 502(a)(2)(B), "A civil action may be brought ... to recover
benefits due to [the plaintiff] under the terms of his plan, to enforce his rights under the terms of
the plan, or to clarify his rights to future benefits under the terms of the plan." See 29 U.S.C. §
1132(a)(l)(B). Under section 502(a)(3)(B), "A civil action may be brought. .. to obtain other
appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this
subchapter or the terms of the plan." Id. at (a)(3)(B).
A summary judgment motion is a "vehicle whereby the Court can apply substantive
ERISA law to the administrative record." S.M v. Oxford Health Plans (N. Y), Inc., 94 F. Supp.
3d 481,497 (S.D.N.Y. 2015), aff'd sub nom. S.M v. Oxford Health Plans (N. Y), 644 F. App'x
81 (2d Cir. 2016) (quoting Gannon v. Aetna Life Ins. Co., No. 05-CV-2160 (JGK), 2007 WL
18
2844869, at *6 (S.D.N.Y. Sept. 28, 2007)). ERISA itself "does not set out the applicable
standard of review for actions challenging benefit eligibility determinations." Fay v. Oxford
Health Plan, 287 F.3d 96, 103 (2d Cir. 2002) (quoting Zuckerbrod v. Phoenix Mut. Life Ins. Co.,
78 F. 3d 46, 49 (2d Cir. 1996)). "Substantive ERISA law determines the proper standard of
review that the Court should apply in reviewing the decision of the plan administrator, as well as
whether the Court can consider materials beyond the administrative record." Gannon, 2007 WL
2844869, at *6. The Supreme Court has held that a "denial of benefits challenged under
[ERISA] is to be reviewed under a de nova standard unless the benefit plan gives the
administrator or fiduciary discretionary authority to determine eligibility for benefits or to
construe the terms of the plan." Fay, 297 F. 3d at 103 (quoting Firestone Tire & Rubber Co. v.
Bruch, 489 U.S. 101, 115 (1989)). However, where a plan grants the administrator discretionary
authority to determine eligibility benefits, the court applies a deferential standard of review. See
McCauley v. First Unum Life Ins. Co., 551 F.3d 126, 132 (2d Cir. 2008).
1.
The Arbitrary and Capricious Standard Applies
The Parties agree that the Plan grants the Fund Trustees discretionary authority to
interpret the Plan and related Plan documents. Thus, the Court "will not disturb the
administrator's ultimate conclusion unless it is 'arbitrary and capricious.'" Hobson v. Metro. Life
Ins. Co., 574 F.3d 75, 82 (2d Cir. 2009) (quoting Pagan v. NYNEX Pension Plan, 52 F.3d 438,
441 (2d Cir. 1995)); see also Firestone, 489 U.S. at 115.
Under arbitrary and capricious review, the "scope of review is narrow." O'Shea v. First
Manhattan Co. Thrift Plan & Tr., 55 F.3d 109, 112 (2d Cir. 1995). An administrator's decision
is arbitrary and capricious when it is "without reason, unsupported by substantial evidence or
erroneous as a matter oflaw." McCauley, 551 F.3d at 132 (quoting Pagan, 52 F.3d at 442).
Courts have defined "substantial evidence" as "evidence that a reasonable mind might accept as
19
adequate to support the conclusion reached by the administrator;" substantial evidence "requires
more than a scintilla but less than a preponderance." Durakovic v. Bldg. Serv. 32 BJ Pension
Fund, 609 F.3d 133, 141 (2d Cir. 2010) (quoting Celardo v. GNY Auto. Dealers Health &
Welfare Tr., 318 F.3d 142, 146 (2d Cir. 2003)); see also Sandoval v. Aetna Life and Casualty Ins.
Co., 967 F.2d 377, 382 (2d Cir. 1995). "Where both the trustees of a pension fund and a rejected
applicant offer rational, though conflicting, interpretations of plan provisions, the trustees'
interpretation must be allowed to control ... [but] where the trustees of a plan impose a standard
not required by the plan's provisions, or interpret the plan in a manner inconsistent with its plain
words, or by their interpretation render some provisions of the plan superfluous, their actions
may well be found to be arbitrary and capricious." 0 'Shea, 55 F.3d 109 at 112 (internal citations
removed).
2.
The Court's Review is Limited to the Administrative Record
"For a review under the arbitrary and capricious standard ... a district court's review ...
is limited to the administrative record." Valentine v. Aetna Life Ins. Co., 125 F. Supp. 3d 425,
438 (E.D.N.Y. 2015) (internal quotation removed) (citing cases); see also Miller v. United
Welfare Fund, 72 F .3d 1066, 1071 (2d Cir. 1995). In ERIS A cases applying an arbitrary and
capricious standard of review, the Second Circuit has "repeatedly said that a district court's
decision to admit evidence outside the administrative record is discretionary," and that this
"discretion ought not to be exercised in the absence of good cause." Wedge v. Shawmut Design
& Const. Grp. Long Term Disability Ins. Plan, 23 F. Supp. 3d 320,337 (S.D.N.Y. 2014)
(quoting Krauss v. Oxford Health Plans, Inc., 517 F.3d 614,631 (2d Cir. 2008)).
Neither Party has presented this court with "good cause" to review evidence beyond the
administrative record. See Joyner v. Cont'! Cas. Co., 837 F. Supp. 2d 233,240 (S.D.N.Y. 2011).
Although "extra-record evidence might sometimes be admissible to assist procedural inquiries,"
20
it is not admissible for the purpose of challenging the substantive determination. Richard v.
Fleet Fin. Grp. Inc. Ltd Employee Benefits Plan, 367 F. App'x 230,233 (2d Cir. 2010).
Accordingly, the only ''extra record" evidence that the Court will consider in this case are
documents that should be in the record but have been omitted due to Defendants' carelessness in
filing an incomplete record (and one in which documents and pages are out of order). See
Burgio v. Prudential Life Ins. Co. ofAm., 253 F.R.D. 219,229 (E.D.N.Y. 2008) (extra-record
evidence may be relied upon to the "the exact nature of the information considered by the
fiduciary in making its decision").
C.
Parties' Motions for Summary Judgment
Plaintiff suggests four aspects of the Retirement Committee's decision that are arbitrary
and capricious: the suspension of Plaintiffs benefits; the calculation of Plaintiffs FAP; the
denial of future service credit for her work at St. Barnabas; and the failure to give Plaintiff past
service credit for work performed while she was employed by St. Vincent's.
Defendant has also moved for summary judgment, arguing that the suspension of benefits
was consistent with the law and the Plan, and the determination of Plaintiffs pension was
reasonable and supported by the evidence.
Nowhere in her summary judgment papers does Plaintiff argue that she received
"unfavorable treatment" with respect to the calculation of her benefits when compared with
Susan Noah, as alleged in the "Fourth Claim for Relief' in the Complaint. (Dkt. No. 1.)
Because this claim has not been addressed, the Court deems it abandoned. See Jackson v. Fed
Exp., 766 F.3d 189, 196 (2d Cir. 2014) ("Where abandonment by a counseled party is not
explicit but such an inference may be fairly drawn from the papers and circumstances viewed as
a whole, district courts may conclude that abandonment was intended.").
21
D.
Suspension of Plaintiff's Benefits
1.
Applicable Plan Provisions and Related Regulations
Plaintiffs benefits were suspended pursuant to Section 11. 7 of the Plan. Section 11. 7
says:
[E]xcept as required by law, no pension benefit payment shall be
made or continue to be made to a Pensioner who is actively
employed in full or part-time employment for more than 40 hours
per month: (a) in the healthcare or human services industry ... and
(b) utilizing skills applicable to his previous employment in the
healthcare or human service or related industry, and (c) in an Area
covered by the Plan and within the meaning of' Section 202(a)(3 )(B)
Service' pursuant to Department of Labor Regulations 29 C.F.R.
§2530.203-3(C)(2).
(Plan§ 11.7 (emphases added).)
A "Section 202(a)(3)(B) service" is defined by the Code of Federal Regulations. It
means when the employee in a monthly payroll:
o
completes 40 or more hours of service or "receives payment
for any such hours of service performed on each of 8 or more
days (or separate work shifts) in such month or payroll
period";
•
in "an industry in which employees covered by the plan were
employed and accrued benefits under the plan as a result of
such employment at the time that the payment of benefits
commenced or would have commenced if the employee had
not remained in or returned to employment";
•
in "a trade or craft in which the employee was employed at
any time under the plan"; and
•
in the "geographic area covered by the plan at the time that
the payment of benefits commenced or would have
commenced if the employee had not remained in or returned
to employment."
See 29 CFR 2530.203-3(c)(2).
22
Section 11. 7 also requires that the Fund provide notice to the participant that his or her
benefits are being suspended. Notice must include "the information [about the suspension] and
compl[y] with Department of Labor Regulations 29 C.F.R. §2530.203-3(b)(4)." (Plan§ 11.7.)
This means that notice must be delivered by personal delivery or first class mail "not later than
the end of the first calendar month during which benefit payments are suspended," contain a
description of the reasons why the payments are being suspended and the relevant plan
provisions, and reference the applicable CFR provisions. (Id.; see also 29 C.F.R. § 2530.2033(b)(4).) The notice must also include the Plan's procedures for affording review of the
suspension. See 29 C.F.R. § 2530.203-3(b)(4).
2.
The Retirement Committee's Decision was Arbitrary and Capricious
Plaintiff makes three arguments as to why the suspension of her benefits was arbitrary
and capricious: ( 1) The Fund did not follow the Plan and ERISA in determining the suspension;
(2) Plaintiff's work at PAGNY was not in the same trade or craft as her work at Corizon; and (3)
Plaintiff did not receive appropriate notice before her benefits were suspended. (Mem of Law in
Supp. of Pl. Victoria Brightman's Mot. for Summ. J. ("Pl.'s Br."), Dkt. No. 22, at 11-17.)
Defendants argue that the decision was consistent with the Plan and ERISA.
I find that the Fund's decision was arbitrary and capricious.
a)
The Fund was Required to Compare Plaintiff's Skills as a PA at
Corizon and PAGNY Prior to Suspending Her Benefits.
First, Plaintiff argues that the Fund did not apply the correct criteria when determining
whether her benefits should be suspended because it did not consider whether she was utilizing
skills relevant to her prior employment, a requirement she must satisfy for her benefits to be
suspended.
23
There can be no question that the Fund did not make the necessary comparison; indeed, it
did not believe that it had to. In a November 20, 2017 letter, Kaiser, the Fund's Chief Pension
Officer, asserted, "Although [Plaintiff] does not, by her account, use the same skills as she used
in her previous position as a PA, that fact is irrelevant to the Plan's rules: Regular hours in any
position in Covered Employment triggers the Suspension of Benefits rule, irrespective of duties."
(Admin Record at 86 (emphasis added).) But that interpretation is inconsistent with the plain
language of the Plan.
Second Circuit courts apply "familiar rules of contract interpretation in reading an ERISA
plan." Lifson v. INA Life Ins. Co. of NY, 333 F.3d 349, 353 (2d Cir. 2003). Plans are reviewed
"as a whole, giving terms their plain meaning" and interpreted "in an ordinary and popular sense
as would a person of average intelligence and experience." Montefiore Med Ctr. v. Local 2 72
Welfare Fund, 712 F. App'x 104, 106 (2d Cir. 2018) (summary order) (internal citations
removed). In New York, "No ambiguity exists when contract language has 'a definite and
precise meaning, unattended by danger of misconception in the purport of the [contract] itself,
and concerning which there is no reasonable basis for a difference of opinion.'" Trs. of the Sheet
Metal Workers' Nat. Pension Fundv. Steel & Duct Fabrication, Inc., 124 F. Supp. 3d 187, 196
(E.D.N.Y. 2015) (quoting Sayers v. Rochester Tel. Corp. Supplemental Mgmt. Pension Plan, 7
F.3d 1091, 1095 (2d Cir. 1993)).
The Plan could not be clearer. In order for Plaintiff's benefits to be suspended, she must
be in a position where she is "using skills applicable to [her] previous employment in the
healthcare or human services industry.'' Among other things, the Plan says that no pension
benefit shall be made or continue to be made for a pensioner who is working for more than 40
hours per month and is using skills applicable to her previous employment. (Plan§ 11.7 at 175.)
24
The use of "and" means that both requirements must be satisfied; this is not an either/or
determination, as the Fund argues. See Ellington v. EM! Music, Inc., 24 N.Y.3d 239,244 (N.Y.
2014) ("The words and phrases used by the parties must, as in all cases involving contract
interpretation, be given their plain meaning."). Plaintiff must meet all of the required criteria for
her benefits to be suspended, and any decision that was made not using all the criteria is arbitrary
and capricious. See Pesca v. Bd. ofTrs., Mason Tenders' Dist. Council Pension Fund, 879 F.
Supp. 23, 25 (S.D.N.Y. 1995) ("departure from the clearly defined terms of the Plan" is arbitrary
and capricious).
The Plan also states that, for a participant's pension to be suspended, she must be in an
area "within the meaning of 'Section 202(a)(3)(B) Service' pursuant to Department of Labor
Regulations 29 C.F.R. § 2530.203-3(c)(2)." (Plan§ 11.7.) Defendants appear to argue that
"within the meaning of 'Section 202(a)(3)(B) Service" only requires that Plaintiff work more
than 40 hours. (Mem. of Law in Supp. of the Mot. For Summ. J. of Defs. ("Defs.' Br."), Dkt.
No. 28, at 11-12.) But that argument is based on an incorrect reading of the statute, to which
this Court is not obligated to give any deference - even under an "arbitrary and capricious"
standard of review - because it is an interpretation (or, in this case, a misinterpretation) of law.
The relevant section of the Code of Federal Regulations reads as follows:
(2) Multiemployer plans. In the case of a multiemployer plan, as
defined in section 3(37) of the Act, the employment of an employee
subsequent to the time the payment of benefits commenced or would
have commenced if the employee had not remained in or returned to
employment results in section 203(a)(3)(B) service during a
calendar month, or during a four or five week payroll period ending
in a calendar month, if the employee, in such month or payroll
period:
- Completes 40 or more hours of service (as defined in§ 2530.200b2(a)(l) and (2)) or
25
- Receives payment for any such hours of service performed on each
of 8 or more days (or separate work shifts) in such month or payroll
period, Provided, That the plan has not for any purpose determined
or used the actual number of hours of service which would be
required to be credited to the employee under§ 2530.200(b)-(2)(a);
in
- An industry in which employees covered by the plan were
employed and accrued benefits under the plan as a result of such
employment at the time that the payment of benefits commenced or
would have commenced if the employee had not remained in or
returned to employment, and
- A trade or craft in which the employee was employed at any time
under the plan, and
- The geographic area covered by the plan at the time that the
payment of benefits commenced or would have commenced if the
employee had not remained in or returned to employment.
(29 C.F.R § 2530.203-3(c)(2) (emphases added).)
Defendants argue that this regulation should be read as requiring either that: ( 1) the
employee completes 40 hours of service, or (2) the employee is paid for hours of service
performed on eight or more days in a month (i) in an industry in which employees covered by the
plan were employed at the time payment of benefits commenced, (ii) in a trade or craft in which
the employee was employed at any time under the plan, and (iii) in a particular geographic area.
Put otherwise, Defendants argue that the regulation should be read to apply the three
"industry/trade or craft/geographic" criteria only when the employee was paid for services
performed on eight or more days in a month - but not when the employee has completed 40
hours of service.
First, I again note that the interpretation of this regulation from the Code of Federal
Regulations is a matter of statutory interpretation - not interpretation of the terms of the Plan so the Court owes no deference to the Fund's interpretation of the regulation.
26
Second, it is obvious that whoever interpreted the regulation in the manner described
above does not know his/her grammar.
The regulation is drafted in the following form: either A or B; plus Cl, C2, and C3. Note
the placement of the semicolon. It appears, not immediately before the "or" between A and B,
but after "B." That means that "Either A or B" is one group, and "C 1, C2 and C3" is another
group - one that modifies "Either A or B." Were Defendants' reading of the regulation correct,
the comma would have to appear before the "or" that separates A and B (A being "40 hours of
service;" B being "gets paid for services performed on 8 or more days in a month"), and there
would be a comma, not a semicolon, after B (the paragraph that discussed getting paid for
services performed on 8 or more days in a month). But that is not the way the regulation is
written.
Of course, the fact that Plaintiff is not seeing patients does not necessarily mean she is
not "using skills applicable to [her] previous employment;" it could well be the case that at
PAGNY, Plaintiff is using the same skills she employed earlier as a PA in her review of the work
of other PAs and physicians. But nothing in the administrative record suggests that anyone
associated with the Fund ever thought about this issue, even though Plaintiffs counsel raised this
argument in his written appeals, at the hearing, and in his post-hearing memorandum. (Admin
Record at 101-09.) Indeed, at the Retirement Committee's meeting to make a final decision on
Plaintiffs appeal, the only notation in the minutes about the suspension is that the, "Trustees
reviewed the Fund's suspension of benefits letter sent to the member because she was working
more than 40 hours per month while in Covered Employment" and "noted that the member is
currently working and will not receive additional pension payments, until she retires again." (Id.
107-09). There was no discussion about how the Fund determined that Plaintiff was in "covered
27
employment," despite the fact that, in his supplemental memorandum following the August 15,
2017 hearing, Plaintiffs counsel described her current job as a "computer operator, who reviews
the work of physicians" and specifically wrote that "she does not use the same skills as her
previous job of a PA, where she met, cared for and treated injured patients." (Admin Record at
83.)
If, based on the administrative record, a district court "concludes that the Trustees'
decision was arbitrary and capricious, it must remand to the Trustees with instructions to
consider additional evidence, unless no new evidence could produce a reasonable conclusion
permitting denial of the claim or remand would otherwise be a useless formality." Miller, 72
F.3d at 1071 (internal quotation omitted); Cejaj v. Bldg. Serv. 32B-J Health Fund, No. 02 CIV.
6141 RMBMHD, 2004 WL 414834, at *10 (S.D.N.Y. Mar. 5, 2004). Accordingly, the Fund's
motion for summary judgment must be denied and the matter remanded for further proceedings.
See Crocco v. Xerox Corp., 137 F.3d 105, 108 (2d Cir. 1998); Valentine v. Aetna Life Ins. Co.,
125 F. Supp. 3d 425,444 (E.D.N.Y. 2015); Cook v. NY Times Co. Long-Term Disability Plan,
No. 02 CIV. 9154 (GEL), 2004 WL 203111, at *6 (S.D.N.Y. Jan. 30, 2004) ("full and fair
review" includes "having the decisionmaker consider the evidence presented by both parties
prior to reaching and rendering his decision" (internal quotation removed)).
Upon remand, an adequate analysis of whether Plaintiff used skills applicable to her
previous employment requires the Plan to undertake a detailed examination of Plaintiffs duties
at both jobs and the skill set she has used and now uses. See Smith v. CMTA-IAM Pension Tr.,
654 F.2d 650, 659 (9th Cir. 1981).
The Plan's requirement that Plaintiff be "utilizing skills applicable to [her] previous
employment" mirrors the requirement included in 29 CFR 2530.203-3(c)(2) - which is also
28
incorporated into the Plan - that an employee may not receive a pension when, among other
requirements, she is working "in a trade or craft in which the employee was employed at any
time under the plan." Id. Other courts and the Department of Labor ("DOL") have opined on
the meaning of this requirement. The DOL has interpreted the phrase "trade or craft" to mean, as
relevant here: "a skill or skills, learned during a significant period of training or practice, which
is applicable in occupations in some industry." 29 C.F.R. § 2530.203-3. Moreover, it has found
that "the determination whether a particular job classification, job description or industrial
occupation constitutes or is included in a trade or craft shall be based on the facts and
circumstances of each case." (Id. ( emphases added).) Courts have found the DO L interpretation
to mean that a plan may not decide "whether a retiree worked in a 'trade or craft' based solely on
the retiree's 'job classification,job description or industrial occupation' ... [but] must consider
the 'skill or skills' actually used by the retiree in his job." Eisenrich v. Minneapolis Retail Meat
Cutters & Food Handlers Pension Plan, 574 F.3d 644, 650 (8th Cir. 2009) (finding DOL's
interpretation of"trade or craft" warranted Auer deference); see also Tapley v. Locals 302 & 612
of Int 'l Union of Operating Eng 'rs-Emp 'rs Const. Indus. Ret. Plan, 728 F .3d 1134, 1142 (9th
Cir. 2013); De Vito v. Local 553 Pension Fund, No. 02 CIV. 4686 (RCC), 2005 WL 167590, at
*7 (S.D.N.Y. Jan. 26, 2005) ("determination of whether a particular job classification constitutes
a trade or craft is based on the facts and circumstances of the case").
b)
The Record Does Not Demonstrate that the Fund Provided
Plaintiff with Adequate Notice.
Plaintiff also argues that the Fund was barred from suspending her benefits in October
2016 because she did not receive prior notice of the suspension, which both the Plan and ERISA
require. The Fund claims that it twice sent letters to Plaintiff notifying her of the suspension;
Plaintiff says she received neither letter.
29
Both of these letters are included in the administrative record. They were sent to the
same address at which Plaintiff received subsequent letters from the Fund. Nevertheless, there is
no proof that the letters were actually sent to Plaintiff, let alone by personal delivery or first-class
mail, as required by the Plan and by ERISA. (Admin Record at 49, 91.)
Moreover, in their brief Defendants wrote, "On September 2, 2016, the Fund sent
[Plaintiff] a letter informing her that she was working more than 40 hours per month and
suspended her pension. Although [Plaintiff] entered Disqualifying Employment as of January 1,
2016, the Fund's [sic] did not discover this fact until October 20 I 6, so the suspension took effect
the month of October 2016." (Defs.' Br. at 10-11 (emphasis added).) This makes no sense.
How could a letter be sent in September if the Fund did not know that Plaintiff had entered
disqualifying employment until October? This fact leads the Court to question whether the
letters - or at least the September letter - were ever sent.
Finally, even if the Plan had established that the letters were actually sent, it did not
comport with the requirements of law, in that the letters did not notify Plaintiff about her right to
a review of the suspension of her benefits, which violates both the Plan and ERISA.
3.
Schedule for Remand
Plaintiff has 30 days from the date of this order to submit any additional evidence she
would like the Fund to consider in making its suspension decision. See Magee v. Metro. Life Ins.
Co., 632 F. Supp. 2d 308,322 (S.D.N.Y. 2009) (affording plaintiff opportunity to supplement the
file with additional evidence to insure effective review). The Fund then has 30 days to review
this information - and any additional information it obtains on its own - and make its decision.
If the Fund determines that Plaintiffs pension should be suspended, it must also address
the issue of when Plaintiff first received adequate notice of the suspension. The Fund should
obtain proof that the letters were actually sent to Plaintiff and provide adequate documentation
30
supporting its finding. Plaintiff is owed benefits up and until the Fund can establish that it
provided notification pursuant to the requirements of the Plan and 29 C.F.R. § 2530.203-3(b)(4).
Finally, the Fund should also consider whether Plaintiff is still working at least 40 hours
per week at PAGNY and whether that impacts any determination of when Plaintiffs benefits
should have restarted.
The Parties are directed to report the status of the remand to this Court 60 and 120 days
after the date of this order.
E.
Calculation of Plaintiff's Average Final Pay
Plaintiff next argues that the Fund acted arbitrarily and capriciously in calculating her
FAP. At issue are the values that the Fund was using to determine Plaintiffs "Regular Pay,"
which were then averaged to determine her "Average Final Pay."
Section 1.29 of the Plan describes "Regular Pay." It says:
"Regular Pay" means for each Participant, his total pay in a Plan
Year . . . during periods for which his Contributing Employer is
required to make Contributions, excluding overtime, on-call pay,
commissions, bonuses and gratuities and expense allowances, ...
For periods for which the Fund office is unable to obtain actual pay
information, Regular Pay shall be calculated utilizing industry
standards through a methodology approved by the Retirement
Committee ...
(Plan§ 1.29 at 137 (emphases added).)
The Fund has calculated Plaintiffs regular pay for 2009-2013 - the five consecutive Plan
years she earned the highest regular pay out of the last ten plan years she worked in a Covered
Job Category - using industry standards, but Plaintiff claims that the Fund has or should have
access to her "actual pay" information, and that it should have used that pay instead of industry
standards.
31
1.
The Retirement Committee's Decision was Arbitrary and Capricious
The Retirement Committee's decision was arbitrary and capricious.
The first reason that the decision was arbitrary and capricious is that the administrative
record does not establish that the Fund was "unable to obtain actual pay information," such that
reliance on industry standards was permissible.
If the administrative record is underdeveloped, plan administrators have some obligation
to develop it further. A "reasonable effort" is required, Cohen v. Liberty Mut. Grp. Inc., No. 16CV-9295 (VSB), 2019 WL 1437615, at* 12 (S.D.N.Y. Mar. 31, 2019); "'[t]he rule is one of
reason,"' and '" [n ]othing ... requires plan administrators to scour the countryside in search of
evidence to bolster a petitioner's case,"' Roganti v. Metro. Life Ins. Co., 786 F.3d 201,213
(2d Cir. 2015) (quoting Harrison v. Wells Fargo Bank, N.A., 773 F.3d 15, 22 (4th Cir. 2014)).
The Fund represented to Plaintiff and to the Court that it made a reasonable effort to
reach out to Corizon to obtain the wage records it needed to determine regular pay. But nothing
in the administrative record supports this statement. The only evidence in the record that the
Fund ever communicated with Corizon is a statement in a November 20, 2017 letter from Kaiser
to Plaintiffs counsel, stating that the Fund had reached out to and finally "did receive wage
information from Corizon," but that this information would not affect its decision because
Corizon had not indicated whether overtime was included in the wages provided. (Admin
Record at 87.) The Fund does not explain why it did not in the first instance ask for the exact
information it needed. There is no document in the administrative record describing the Fund's
processes and procedures for reaching out to Corizon, and the documentation that Corizon sent
to the Fund is also not included.
The letter also said that "The Fund has followed-up, but has not received Regular Wages
from [Corizon]." (Id) However, there is no evidence in the record of any follow-up with
32
Corizon; in particular, there is no evidence that the Fund asked Corizon whether the wage
information it had provided included overtime or other excludable wages. There is also no
evidence of the Fund taking any other steps to secure the needed information, such as by
reaching out to the Union to confirm whether Plaintiff would have even been eligible for
overtime or securing additional useful information from Plaintiff.
The Fund argues that the Court should consider documents attached to the Kaiser
affidavit, which includes the document Corizon sent to the Fund, because it shows that Corizon
included overtime in its calculation of Plaintiffs wages, both when reporting them to the Fund
and in Plaintiffs pay stub. (Defs.' Reply to Pl.'s Opp. to Defs.' Mot. for Summ. J. in favor of
Defs., Dkt. No. 35, at 5.) But these documents are not part of the administrative record that the
Retirement Committee used in making its determination of Plaintiffs appeal. Defendants (who
take the position that evidence outside of the record should not be considered) cannot have it
both ways. If this information was material, it should have been part of the administrative record
given to the Retirement Committee, which then could have determined whether or not
"reasonable efforts" were undertaken. The Court will not consider additional evidence,
particularly when Defendants have made no argument as to why there is "good cause" to do so.
Moreover, even if the Court were to examine these documents, they would not
necessarily be helpful to Defendants. The Fund's form asked Corizon to list "Total accumulated
yearly salary excluding overtime, on call pay, commissions, and gratuities." (Deel. of Michael
Kaiser, Dkt. No. 25, Ex. 2 at 7.) The Corizon representative then listed a number for 2010-2014.
Next to each number are two boxes: one says, "OT included YES" and one says "NO." (/d.)
The Corizon representative did not check either box, so no reasonable trier of fact could assume
that the figures Corizon provided included overtime. In fact, as the question specifically states
33
that overtime not be included, the logical assumption would be that these figures do not include
overtime payments. (Id at 5.)
Finally, the evidence that is in the record does not support Defendants' argument that it
actively reached out to Corizon. Defendants argue that, because Corizon - which was in legal
trouble - lost its contract with the Department of Corrections in 2015 and ceased to be a
contributing member of the Fund, it is "not unsurprising that Corizon refuses not [sic] to
communicate with or provide information to the Fund." (Mem. of Law in Opp. to Pl.'s Mot. for
Summ. J. ("Defs.' Opp."), Dkt. No. 33, at 4-5.) It argues that efforts to obtain information from
Corizon were, as a result, futile.
But the Fund received information from Corizon in 2017, long after Corizon's contract
was terminated. This undermines its futility argument. The fact that the Fund was able to
communicate with Corizon to obtain some information about Plaintiffs pay leads the Court to
believe that there is a genuine issue of fact as to whether Defendants are exaggerating how
difficult it would have been to obtain the additional information they claim they needed. (See
Admin Record at 87.)
Assuming arguendo that the Fund did not act in an arbitrary and capricious manner in
refusing to use the Corizon data, there is still a problem, because it is not clear from the
administrative record whether the Fund used industry standard information to calculate
Plaintiffs FAP rather than data it obtained from "Richmond University Medical Center," which
never employed Plaintiff. The Fund now claims that its reference to "Richmond University,"
was a "typo" and that Plaintiffs FAP was calculated using an industry standard. (Defs.' Opp. at
4.) But that explanation does not appear in the administrative record. The Fund never told
Plaintiff that there was a "typo" relating to "Richmond University" and never provided a
34
recalculation demonstrating that it had actually applied industry standards, rather than
information that it received from the wrong entity. There is nothing in the administrative record
from which the Committee or the Court could verify that the figures applied to calculate
Plaintiffs FAP were actually those derived from the Industry Standard.
Because the administrative record does not establish that the Fund was "unable to obtain
actual pay information," such that it could rely on industry standards under the Plan, nor has the
Fund provided a record demonstrating that its calculations based on industry standards are
accurate, I find that the Retirement Committee's decision was arbitrary and capricious. This
claim, too, is remanded to the Trustees, for a "full and fair" review.
2.
Schedule for Remand
The Fund should take, and record for the administrative record, "reasonable efforts" to
obtain necessary information from Corizon or the Union, including by attempting to contact
Corizon by letter and by telephone within 14 days of this opinion. Plaintiff may also provide the
Fund with any additional information she is able to obtain on her own within 30 days of this
order. The Fund should provide Plaintiff with an update within 60 days of initiating contact with
Corizon or the Union, that includes any new information the Fund learned as well as
documentation of the efforts it took to reach out to obtain the missing information and any
responses it did (or did not) receive.
If the Fund is able to obtain the relevant information within 60 days of attempting contact
with Corizon, it should use that actual pay data to recalculate Plaintiffs FAP and, if that shows
underpayment of benefits, reimburse Plaintiff accordingly. If the Fund is still unable to obtain
sufficient information about Plaintiffs actual pay within 60 days, it may use the "industry
standard" to calculate Plaintiff's FAP- but it must send Plaintiff a detailed description of what
"industry standards" were used and how the FAP was calculated.
35
Plaintiff has also raised the issue that the Fund acted arbitrarily and capriciously by
failing to recalculate Plaintiffs benefits to account for the shift deferential, as it said that it
would when resolving its appeal. Defendants argue that the Court should not address this claim
now, given that Plaintiff has not exhausted her administrative remedy. Defendants are correctPlaintiff should, by letter, request that the Fund follow-up on its decision and, if necessary,
proceed through the appeal process as outlined by the Plan.
The Parties are directed to report the status of the remand to this Court 60 and 120 days
after the date of this order.
F.
Plaintiff's Future Service Credit for Her Work at St. Barnabas
Plaintiff's third claim is that the Fund acted arbitrarily and capriciously by denying her
future service credit for her work at St. Barnabas.
For her work at St. Barnabas, Plaintiff was awarded past service credit, which is
calculated using a lower multiplier than credited future service. Initially, Plaintiff did not dispute
the Fund's finding that she was entitled to past service credit for her work with St. Barnabas,
which joined the fund in 2001. However, Plaintiff now argues that, in an August 3, 2017 letter to
Plaintiff, the Fund indicated that Plaintiff "joined the Fund when she worked a St. Barnabas from
1998 to 2001," and, therefore, she should be receiving credited future - not past - service for this
time. (Baum Deel. Ex. J at 1.)
1. The Retirement Committee's Decision was Not Arbitrary and
Capricious
The Committee did not act arbitrarily and capriciously in interpreting the Plan and the
facts as it did. Indeed, the letter cited by Plaintiff does not support her argument.
The letter to which Plaintiff refers says the following:
Ms. Brightman joined the Fund when she worked at St. Barnabas
from 1998 to 2001. Physicians Assistants from St. Barnabas joined
36
the Fund in 2001 and Ms. Brightman received Credited Past Service
from 1998 to 2001 for her St. Barnabas employment. In this case,
Ms. Brightman received the proper Credited Past Service for her
employment at St. Barnabas ...
(Id. at 1-2.) The Fund never said that Plaintiff was in the Fund the entire time that she was at St.
Barnabas; it said that she became enrolled in the Fund during the period when she was working
for St. Barnabas (from 1998 to 2001) and then quite specifically says that she joined in 2001,
along with the other PAs.
At the August 23, 2017 hearing, the Trustees nevertheless agreed to review the St.
Barnabas CBA to confirm their understanding of when the PAs became covered. (Admin
Record at 105.) However, in the November 20, 2017 letter, the Fund indicated that it did "not
have, and could not obtain, a copy of the St. Barnabas Collective Bargaining Agreements from
more than a decade ago, but the Fund recorded the effective date [for PAs] contemporaneously
with the event." (Id at 86.)
The fact that the Trustees could not access the CBA to confirm their records is not
enough for me to find that they acted arbitrarily and capriciously by holding that Plaintiff should
receive past service credit for her work at St. Barnabas from 1998 until January 2001, especially
when the Fund asserts that its contemporaneous records show the applicable date as January
2001. Plaintiff has provided no evidence to contradict the Trustee's reliance on its own record of
the effective date (which she originally did not dispute). The Fund's own records offer a
perfectly reasonable basis for its decision. See Wedge v. Shawmut Design & Const. Grp. Long
Term Disability Ins. Plan, 23 F. Supp. 3d 320, 334 (S.D.N.Y. 2014) (plan's decision "must be
upheld unless it is not grounded on any reasonable basis" (internal quotation removed)).
Accordingly, Defendants are entitled to summary judgment on this claim.
37
G.
Plaintiff's Past Service Credit for Work Performed With St. Vincent's
Finally, Plaintiff argues that she should be credited for past service performed for the
period from 1993 to 1997, when she worked as a PA for St. Vincent's.
Plaintiff does not dispute that when she worked for St. Vincent's, it was not contributing
to the Fund on behalf of PAs. (Admin Record at 53.) She asserts that credit for pre-1998 work
at Rikers Island was promised to P As who were working for St. Barnabas by Union organizer
Mark Bergen, and that this promise should be enforced. She explains that Bergen's promise was
the reason that she joined the Union and began participating in the Fund. (Pl.' s Br. at 21.)
1. The Retirement Committee's Decision was Not Arbitrary and
Capricious
Again the Trustees decision to deny Plaintiffs claim was not arbitrary and capricious
Plaintiff relies on Pasqualini v. Sheet Metal Workers' National Pension Fund, 54 F.
Supp. 2d 357 (S.D.N.Y. 1999) to support her argument that a pension fund may be bound by
promises made during a union representative during an organizing campaign. In Pasqualini, my
colleague, Judge Kaplan, recognized that, in the Second Circuit, "under 'extraordinary
circumstances' principles of estoppel can apply in ERISA cases. The controlling questions ...
are (I) whether plaintiffs have made out a case of estoppel and, if so, (2) whether the
circumstances are sufficiently extraordinary to permit invocation of that estoppel against the plan
notwithstanding the strong statutory policies cutting against such a result." Pasqualini, 54 F.
Supp. 2d at 362. Judge Kaplan found that both of these requirements were satisfied when a Fund
representative had convinced the principals of a company to execute a collective bargaining unit
with the union by orally promising that they would get 15 years of past service credit under the
pension plan. He found that the plaintiffs were "working people," whose reliance on "flat,
unequivocal statements" of union representatives was "entirely reasonable." Id. at 363. He
38
explained that to "hold otherwise would be to ignore the reality that lay people simply do not
approach business transactions as their more educated offspring are taught to approach them at
our nation's law schools.'' Id Judge Kaplan also found that there were "extraordinary
circumstance" because of the "pivotal role" the promise had in inducing the owners to join the
union, "the quid pro quo for which [plaintiffs] bargained in agreeing to the CBA, with its
requirement of making benefit plan contributions to the Fund," and the fact that the fulfillment of
this promise would have minimal impact on the fund. Id
But there is one key difference between the facts of Pasqualini and the facts here. In
Pasqualini, the Fund was bound to uphold a promise that was made by a "representative of the
Fund," not a representative of the Union. Here, Plaintiff alleges that Mark Bergen was a "Union
Organizer," but do not claim that he represents the Fund. Plaintiff has cited to no case that says
that a promise by a Union organizer- not a Fund representative - can bind the Fund. Nor does
she offer any evidence that a Union organizer can bind the Fund.
Moreover, even if Plaintiff could bring an estoppel claim, she has not satisfied the
requirement of "extraordinary circumstances."
Plaintiffs submissions to the Fund were sufficient to make out a claim.of estoppel. In
multiple letters to the Fund, Plaintiff explained that when the Rikers PAs were being organized,
they were "given assurance by Union organizer Mark Bergen that if they joined the Union at its
inception, [they] would be granted past service credit for time at Rikers Island and the 'Tombs.'"
(Admin Record at 40.) This would mean that Plaintiff's time with St. Vincent's would be
covered as past service credit. Plaintiff also provided the Fund with the names of six individuals
who she believes are being credited for past service as PAs at Rikers during the time she was at
St. Vincent's. (Id. at 7.) This testimony is enough to support an estoppel claim - Plaintiff, a
39
"working person," reasonably relied on a promise by the Union representative when agreeing to
join that Union.
Nevertheless, Plaintiff's estoppel claim fails because she has not raised a genuine issue of
material fact that Bergen's promise could constitute "extraordinary circumstances." See
Pasqualini, 54 F. Supp. 2d at 363. Extraordinary circumstances exist when a representative
makes a promise to induce action, and later reneges on that promise. See Aramony v. United
Way Replacement Benefit Plan, 191 F.3d 140, 152 (2d Cir. 1999); Berg v. Empire Blue Cross &
Blue Shield, 105 F. Supp. 2d 121, 130 (E.D.N.Y. 2000) (inducement can serve as basis for
"extraordinary circumstances"); Herter v. Dick's Clothing & Sporting Goods, Inc., 58 F. Supp.
2d 306,312 (S.D.N.Y. 1999). But plain reliance, does "not by itselfrender [a] case
'extraordinary."' Devlin v. Transportation Commc 'ns Int'! Union, 173 F.3d 94, 102 (2d Cir.
1999).
Plaintiff claims that she was made a promise by Bergen and that she relied on that
promise, but she never says that this promise induced her to join the Union. And there is no
evidence in the record that this promise was essential to her decision to join the Union or to
convince other PAs to do the same. Since Plaintiff failed to provide any evidence of inducement,
she has not raised a genuine issue of material fact as to whether there were "extraordinary
circumstances."
Accordingly, I cannot find that the Fund acted arbitrarily and capriciously by relying on
the terms of the contract alone to deny Plaintiff's demand for past service credit for her time at
St. Vincent's. Summary judgment is granted for the Defendants on this claim.
40
III.
Conclusion
For the reasons stated above, Plaintiffs Motion for Summary Judgment is denied and
Defendants' Motion for Summary Judgment is granted in part and denied in part. The case is
remanded to the Fund for reconsideration in light of this opinion.
The Clerk of Court is respectfully directed to close Dkt. Nos. 19 and 24. This constitutes
the decision and order of the Court.
Dated: July 1.Q_, 2019
Chief Judge
BY ECF TO ALL PARTIES
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