Constas v. Highland Hospital

Filing 8

-CLERK TO FOLLOW UP-ORDER granting 4 defendant's Motion to Dismiss and dismissing plaintiff's complaint without prejudice. (Clerk to close case.) Signed by Hon. Michael A. Telesca on 3/2715. (JMC)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
_____________________________________
IRENE CONSTAS,
Plaintiff,

014-CV-06447T
DECISION
AND ORDER

v.
HIGHLAND HOSPITAL,
Defendants.
_____________________________________
INTRODUCTION

Plaintiff Irene Constas (“plaintiff” and/or “Constas”) brings
this action against defendant Highland Hospital (“defendant”), her
former employer, seeking recovery of disputed pension benefits and
alleging breach of contract, unjust enrichment, and detrimental
reliance. Specifically, plaintiff alleges that she sustained losses
with respect to retirement benefits allegedly due to her under the
Retirement Plan for Employees of Highland Hospital of Rochester,
New York (“the Plan”). Plaintiff alleges that she relied upon the
promise made by defendant that she would not be required to repay
any retirement benefits received by her under the Plan from 2004 to
2008

during

the

period

that

she

was

employed

part-time

by

defendant.
Defendant moves this Court for dismissal of the complaint
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure,
asserting that plaintiff’s claims are preempted by the Employee
Retirement Income Security Act (“ERISA” or the “Act”). For the
reasons that follow, defendant motion is granted and plaintiff’s
complaint is dismissed without prejudice.

BACKGROUND
Plaintiff was originally hired by defendant on December 10,
1979, but

retired

from

her

full

time,

permanent

position

on

April 27, 2001 and continued working for defendant on a per diem
basis. During

the

course

of

her employment,

plaintiff

participant in the Plan, which was governed by ERISA.

was

a

On March 3,

2004, plaintiff applied for retirement benefits under the Plan and
received monthly payments in the amount of $451.00 from 2004 to
2008.

In June 2008, defendant advised plaintiff that she could no

longer receive retirement benefits under the Plan if she continued
to work. In a letter dated June 8, 2009, Kathleen Gallucci, Chief
Human Resources Officer, informed plaintiff that she would “not be
required to pay any of the overpayment back to the pension plan,”
and that defendant would “be making an adjustment to the plan on
[plaintiff’s] behalf.” Complaint, Exhibit E.

Plaintiff continued

working for defendant, without receiving any benefits under the
Plan, until December 30, 2013.
Under the terms of the Plan, plaintiff was entitled to receive
a monthly payment of $1,435.30 upon her scheduled retirement date
of January 1, 2014.

However, on October 30, 2013, plaintiff was

notified by defendant that her normal monthly benefit under the
Plan would be reduced by $230.39 and that the balance of her
monthly payment was retained to make up for the distributions that
she had previously received while working part-time.

Plaintiff,

through her attorney, made a formal written demand to defendant for

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the full $1,435.30 monthly payment, asserting that the reduction of
her benefits was incorrect in light of defendant’s promise that she
would not be required to pay back to the Plan any of the previously
received distributions.
DISCUSSION
I.

Motion to Dismiss Standard
When

evaluating

a

Rule

12(b)(6)

motion

to

dismiss

the

complaint, a court must ascertain, after presuming all factual
allegations in the pleading to be true and viewing them in the
light most favorable to the plaintiff, whether or not the plaintiff
has stated any valid ground for which relief can be granted. Ferran
v. Town of Nassau, 11 F.3rd 21, 22 (2d Cir.1993), cert. denied, 513
U.S. 1014 (1994).

The court may grant a Rule 12(b)(6) motion only

where “‘it appears beyond doubt that the plaintiff can prove no set
of facts in support of his claim which would entitle him to
relief.’” Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44
(2d Cir.1991), quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
II.

Plaintiff’s Breach of Contract Claim Is Preempted by ERISA.
In her complaint, plaintiff essentially alleges a breach of

contract

claim,

asserting

that

a

contract

was

created

when

defendant assured her that it would “restore the overpayment to the
Plan without any cost to [p]laintiff,” and that defendant breached
that alleged contract by failing to do so. See complaint, ¶ 16-19.
Plaintiff further alleges she detrimentally relied on defendant’s
“long-standing policy” of allowing retired employees to collect
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retirement benefits while they continued to work on a part-time
basis, and that defendant is “unjustly enriched” by the $230.99
deducted from her monthly benefit. See complaint, ¶ 22.
Without making a finding on the merits, the Court determines
that plaintiff’s state law claims are preempted by ERISA, which
governs any matters that “relate to any employee benefit plan.”
29 U.S.C. §1144(a).
“ERISA sets forth a “comprehensive civil enforcement
scheme that represents a careful balancing of the need
for prompt and fair claims settlement procedures against
the public interest in encouraging the formation of
employee benefit plans. The policy choices reflected in
the inclusion of certain remedies and the exclusion of
others under the federal scheme would be completely
undermined if ERISA-plan participants and beneficiaries
were free to obtain remedies under state law that
Congress rejected in ERISA.” Pilot Life Ins. Co. v.
Dedeaux, 481 U.S. 41, 54 (1987); see also Romney v. Lin,
94 F.3d 74, 80-81 (2d Cir. 1996), cert. denied, 522 U.S.
906 (1997).
ERISA “shall supersede any and all State laws insofar as they
may now or ever relate to any employee benefit plan described in .
. . this title.” 29 U.S.C. §1144(a). The Supreme Court has found
“that the express pre-emption provisions of ERISA are deliberately
expansive, and designed to ‘establish pension plan regulation as
exclusively a federal concern’” See Pilot, 481 U.S. at 46, quoting
Alessi v. Raybestos Manhattan, Inc., 451 U.S. 504, 523 (1981).
Given this broad scope, ERISA will preempt even general state laws
that are not directed toward benefit plans in cases where those
laws would have “a connection with or reference to” an ERISA plan.
See Pilot, 481 U.S. at 47-48.

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It is well settled that ERISA preempts state law claims of
misrepresentation that “relate to” an employee benefit plan. See
Smith v. Dunham-Bush, Inc., 959 F.2d 6 (2d Cir. 1992); Cefalu v.
B.F. Goodrich Co., 871 F.2d 1290 (5th Cir. 1989)(ERISA preempted a
breach of contract claim relating to the terms of the retirement
plan).
The Court finds that each of plaintiff’s claims clearly
relates to a plan governed by ERISA. See Carlo v. Read Rolled
Thread Die Co., 49 F.3d 790, 794 (1st Cir.1998) (a negligent
misrepresentation claim was related to ERISA plan where damages
sought by plaintiff ultimately depended on terms of benefit plan).
Thus, plaintiff’s state law claims of breach of contract, unjust
enrichment, and detrimental reliance are preempted by ERISA, and
the defendants’ motion to dismiss the complaint is granted, without
prejudice.
CONCLUSION
For the reasons set forth above, defendant’s motion to dismiss
the complaint pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure is granted and plaintiff’s complaint is dismissed
without prejudice.
ALL OF THE ABOVE IS SO ORDERED.
s/Michael A. Telesca
MICHAEL A. TELESCA
United States District Judge
Dated:

Rochester, New York
March 27, 2015

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