Candelario v. Metropolitan Life Insurance Company (MetLife) et al
Filing
26
OPINION AND ORDER denying 13 motion for summary judgment. Signed by Judge Juan M Perez-Gimenez on 8/30/2011. (PMA)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
LUIS CANDELARIO,
Plaintiff,
v.
CIV. NO. 10-1463(PG)
METROPOLITAN LIFE INSURANCE CO., ET.
AL.,
Defendants.
OPINION AND ORDER
Before the Court stands Metropolitan Life Insurance Company (“MetLife”)
and Wyeth Pharmaceutical Company’s (“Wyeth”) (collectively, “Defendants”)
motion of summary judgment, as well as Luis Candelario’s (“Candelario” or
“Plaintiff”) response thereto and Defendants’ reply. Candelario commenced this
action pursuant to the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1132, challenging the denial of long-term disability
(“LTD”) benefits under a group policy issued to Wyeth, Candelario’s former
employer, by MetLife. For the reasons explained below, Defendants’ motion for
summary judgment is hereby DENIED.
I. Background
The following factual narrative is derived from facts that are deemed
uncontested by the Court because they were included in the motion for summary
judgment and were agreed upon or properly supported by the evidence and not
genuinely opposed. The Court emphasizes only facts considered material and
non-repetitive.
Plaintiff was an employee of Wyeth. Wyeth maintained an employee welfare
plan for its employees that is regulated by ERISA. 29 U.S.C. § 1001 et. seq.
Said plan provides for the payment of LTD benefits to participants who become
disabled.
The
plan
defines
the
term
“disability”
and
outlines
other
requirements. LTD benefits are provided through a group insurance policy
issued by MetLife. Plaintiff alleges that on February, 1999, he suffered an
accident that physically and mentally incapacitated him. Defendants posit that
Candelario’s group policy has a three-year contractual limitations period for
Civ. No. 10-1463 (PG)
Page 2
legal actions to recover LTD benefits and that the limitations period
commenced on January 1, 2000 and concluded on January 1, 2003. However,
Candelario contends that Defendants never provided him with disclosures
regarding his rights under the LTD plan or in the alternative, that Defendants
unjustifiably denied him the benefits of the disability policy. As a result,
Candelario avers that the contractual limitations period is effectively
tolled.
II. Discussion
A. Motion for Summary Judgment Standard
A motion for summary judgment is governed by Rule 56 of the Federal Rules
of Civil Procedure, which entitles a party to judgment if “the movant shows
that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). “A dispute is
genuine if the evidence about the fact is such that a reasonable jury could
resolve the point in favor of the non-moving party.” Prescott v. Higgins, 538
F.3d 32, 40 (1st Cir. 2008) (citing Thompson v. Coca-Cola Co., 522 F.3d 168,
175 (1st Cir.2008)); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248-250 (1986); Calero-Cerezo v. U.S. Dep’t of Justice, 355 F.3d 6, 19 (1st
Cir. 2004) (stating that an issue is genuine if it can be resolved in favor
of either party). In order for a disputed fact to be considered material it
must have the potential “to affect the outcome of the suit under governing
law. Sands v. Ridefilm Corp., 212 F.3d 657, 660-661 (citing Liberty Lobby,
Inc., 477 U.S. at 247-248); Prescott, 538 F.3d at 40 (citing Maymi v. P.R.
Ports Auth., 515 F.3d 20, 25 (1st Cir. 2008)).
The ethos of summary judgment is to “pierce the pleadings and to assess
the proof in order to see whether there is a genuine need for trial.”
DeNovellis v. Shalala, 124 F.3d 298, 306 (1st Cir. 1997) (citing FED. R. CIV.
P. 56 (e) advisory committee note to the 1963 Amendment). The moving party
must
demonstrate
the
absence
of
a
genuine
issue
as
to
any
outcome-
determinative fact on the record. Shalala, 124 F.3d at 306. Upon a showing by
the moving party of an absence of a genuine issue of material fact, the burden
shifts to the nonmoving party to demonstrate that a trier of fact could
reasonably find in his favor. Id. (citing Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986)). The nonmovant may not defeat a “properly focused motion for
Civ. No. 10-1463 (PG)
Page 3
summary judgment by relying upon mere allegations,” but rather through
definite and competent evidence. Maldonado-Denis v. Castillo Rodriguez, 23
F.3d 576, 581 (1st Cir. 1994). The nonmovant’s burden thus encompasses a
showing of “at least one fact issue which is both ‘genuine’ and ‘material.’”
Garside v. Osco Drug,Inc., 895 F.2d 46, 48 (1st Cir. 1990); see also Suarez
v. Pueblo Int’l, 229 F.3d 49, 53 (1st Cir. 2000) (stating that a nonmovant may
shut down a summary judgment motion only upon a showing that a trialworthy
issue exists). As a result, the mere existence of “some alleged factual
dispute between the parties will not affect an otherwise properly supported
motion for summary judgment.” Liberty Lobby, Inc., 477 U.S. at 247-248.
Similarly, “summary judgment may be appropriate if the nonmoving party rests
merely upon conclusory allegations, improbable inferences, and unsupported
speculation.” Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st
Cir. 1990).
When considering a motion for summary judgment, the Court must examine
the facts in the light most favorable to the nonmoving party and draw all
reasonable inferences in its favor in order to conclude whether or not there
is sufficient evidence in favor of the nonmovant for a jury to return a
verdict in its favor. Rochester Ford Sales, Inc. v. Ford Motor Co., 287 F.3d
32, 38 (1st Cir. 2002). The Court must review the record as a whole and
refrain from engaging in an assessment of credibility or weigh the evidence
presented. Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 135
(2000). The burden placed upon the nonmovant is one of production rather than
persuasion. In other words, in weighing a nonmovant’s opposition to summary
judgment the Court should not engage in jury-like functions related to the
determination of credibility.
B. Liability for Plan Administrators
ERISA
governs
employee
benefit
plans
“if
it
is
established
maintained–(1) by any employer engaged in commerce or in any industry
or activity affecting commerce; or
(2)
by
any
employee
organization
or
organizations
representing employees engaged in commerce or in any industry
or activity affecting commerce; or
or
Civ. No. 10-1463 (PG)
Page 4
(3) by both.”
29 U.S.C. § 1003(a). ERISA defines a welfare plan as:
“any plan, fund, or program which was heretofore or is
hereafter established or maintained by an employer or
by an employee organization, or by both, to the extent
that such plan, fund, or program was established or is
maintained
for
the
purpose
participants
or
purchase
insurance
of
their
of
providing
beneficiaries,
or
otherwise,
for
its
through
the
(A)
medical,
surgical, or hospital care or benefits, or benefits in
the event of sickness, accident, disability, death or
unemployment, or vacation benefits, apprenticeship or
other
training
programs,
or
day
care
centers,
scholarship funds, or prepaid legal services...”
29 U.S.C. § 1002(1). Furthermore, “[l]ong-term disability plans provided to
employees by their employer are employee welfare benefit plans regulated by
ERISA.” Metropolitan Life Ins. Co. v. Colón-Rivera, 204 F. Supp. 2d 273, 277
(D.P.R. 2002) (citing Díaz López v. Commonwealth Oil Refining Co., Inc., 833
F. Supp. 86, 88 (D.P.R. 1993), aff’d, 29 F.3d 619 (1st Cir. 1994), cert.
denied, 513 U.S. 1025 (1994); Cintrón Parrilla v. Lilly Del Caribe, Inc., 32
F. Supp. 2d 35, 37 (D.P.R. 1998). “[I]t is clearly established in this Circuit
that disability and medical benefit plans provided to employees by an employer
are welfare benefits subject to ERISA.” Id.
ERISA empowers a participant or beneficiary to bring civil action in
order to recover benefits due to him 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. 28 U.S.C. § 1132 (a)(1)(B). “No federal
statute of limitations exists for ERISA lawsuits filed under § 1132.” Nazario
Martínez v. Johnson & Johnson Baby Products, Inc., 184 F. Supp. 2d 157, 159
(D.P.R. 2002). “In cases such as this the Court has to borrow the most
analogous statute of limitations from the jurisdiction where it sits to apply
to § 1132 claims.” Id. (citing Wilson v. Garcia, 471 U.S. 261 (1985)). The
Court has already confronted this issue and held that the statute of
limitations in this District is the residual contract statute found in the
Civ. No. 10-1463 (PG)
Page 5
Puerto Rico Civil Code, 31 P.R. LAWS ANN. § 5294, which provides fifteen years
for any action for which no special term of prescription has been fixed and
has been designated as the catch-all provision for contract disputes in Puerto
Rico. Id. at 162. (internal quotation marks omitted).
“Choosing which state statute to borrow is unnecessary, however, where
the parties have contractually agreed upon a limitations period, provided the
limitations period is reasonable.” Rios-Coriano v. Hartford Life and Acc. Ins.
Co., 642 F. Supp.2d 80, 83 (D. P.R. 2009) (citing Northlake Reg'l Med. Ctr.
v. Waffle House Sys. Employee Benefit Plan, 160 F.3d 1301, 1303 (11th Cir.
1998)). Defendants cite to Section B(4) of the Group Insurance Certificate
(Docket No. 13, Exhibit 3, Page No. 6) as evidence that Plaintiff’s claim is
effectively barred. Section B(4) of the Group Insurance Certificate states
that an action at law or in equity shall not “be brought at all unless brought
within three years from the expiration of the time within which proof of claim
is required by the Group Policy.” (Docket No. 13, Exhibit 3, Page No. 6).
Defendant’s further argue that Candelario’s suit is misplaced because
they are not the plan administrators. In the First Circuit, the proper party
defendant in an action concerning ERISA benefits is the party that controls
the administration of the plan. Cintrón-Serrano v. Bristol-Myers Squibb P. R.,
Inc., 497 F. Supp. 2d 272, 275 (D.P.R. 2007). If an entity other than the
named plan administrator makes the final benefits eligibility determination,
then that entity functions as the plan administrator for purposes of an ERISA
benefits claim. Id. Furthermore, 29 U.S.C. § 1022 imposes a duty to provide
program participants with a Summary Plan Description (“SPD”) only upon the
plan administrator. Stuart v. Metropolitan Life Ins. Co., 664 F. Supp. 619,
621 (D. Me. 1987), aff’d, 849 F.2d 1534 (1st Cir. 1988), cert. denied, 488
U.S. 968 (1988) (citing 29 U.S.C. § 1022).
In the case at hand, American Home Products Corporation is the plan
administrator. (Docket No. 13, Exhibit 2). However, it seems that MetLife was
responsible for the final benefits eligibility determination. (Docket No. 13,
Exhibit 3). As a result, the Court is unable to grant summary judgment. The
Court declines to dismiss on this ground due to its understanding that it
requires further explanation of how the final eligibility determination was
conducted under the plan. Similarly, the Court is reluctant to dismiss Wyeth
Civ. No. 10-1463 (PG)
Page 6
on grounds that it was not the plan administrator without a more complete
explanation of how the final eligibility determinations were made.
C. Equitable Relief
Section 502(a)(1)(B) empowers a participant or beneficiary to bring suit
to recover benefits due to him 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. 29 U.S.C. § 1132(a)(1)(B). Section
502(a)(3) allows a participant, beneficiary, or fiduciary to sue to (A)
enjoin any act or practice which violates any provision of this subchapter or
the terms of the plan, or (B) 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. § 1132(a)(3).
Plaintiff’s complaint states that he is seeking a monetary judgment award
for the benefits due to him pursuant to § 502(a)(1)(B).1 Plaintiff’s motion in
opposition to summary judgment requests equitable tolling of the three-year
contractual limitation. Plaintiff asserts that he is entitled to equitable
tolling because Defendants misled him into failing to take action that would
have enabled him to receive benefits under the insurance plan.
Plaintiff has properly substantiated his claim that he did not receive
a copy of the LTD plan or the SPD. (Docket No. 14-1, Exhibit I). Moreover, the
Court does not agree with Defendants’ argument that Plaintiff’s claim that he
did not receive a copy of the LTD plan or the SPD is an inconsequential
formality.
Defendants argue that equitable estoppel is not applicable on these
facts. Defendants cite to Ortega-Candelaria v. Johnson & Johnson, Civil No.
08-2382 (JAF) (D.P.R. June 25, 2009), for the basis of their argument.
However, Ortega-Candelaria stands for the proposition that a defendant does
1
Defendants talk at length about Amschwand v. Spherion Corp., and cite to
this case in their efforts to convince the Court that Plaintiff is not entitled to
equitable relief. 505 F.3d 342 (5th Cir. 2007). The Amschwand decision concluded
that, “under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), other appropriate equitable
relief permits recovery of extracontractual, or make-whole, damages in the form of
payment of life insurance benefits that would have accrued to a plan beneficiary
but for a plan fiduciary's breach of fiduciary duty” was not permissible. Id. at
343 (internal quotation marks omitted). As a result, the Court finds that
Defendants’ argument misses the point. Defendants cite to a case that addresses a
different section from the one in dispute in this case and finds it unnecessary to
delve into Amschwand’s line of analysis.
Civ. No. 10-1463 (PG)
Page 7
not have the duty to instruct the plaintiff on the law. Id. at 3. Defendants
also cite Ortega-Candelaria for the proposition that under civil law the
principle of caducity disallows any tolling of the contractual statute of
limitations. In Ortega-Candelaria, our sister court stated that a contractual
modification creates a period of caducity under civil law that permits no
interruption. Id. at * 3. However, our sister court went on to address the
plaintiff’s claims and did not discuss the issue of caducity any further. The
Court does not find that the concept of civil law caducity is applicable to
the
discussion
at
hand
because
there
is
no
contractual
modification.
Furthermore, the Court finds that the discussion of caducity in OrtegaCandelaria is entirely misplaced.
Similarly, the Court finds that Defendants’ reliance on Radford v.
General Dynamics Corp., is also misplaced. 151 F.3d 396 (5th Cir. 1998).
Radford addressed whether or not the statute of limitations should be tolled
while administrative remedies are being exhausted. The issue at hand is rather
different. Furthermore, “ERISA contains no statute of repose applicable to
claims arising under § 502 of the Act, and nothing in that section of the
statute suggests that the doctrine of equitable tolling is in any way
inconsistent with the statute's purpose.” Pettaway v. Teachers Ins. and
Annuity Ass'n of America, 547 F.Supp.2d 1, 7 (D.D.C. 2008). Therefore, the
Court does not find that Radford is controlling.
To establish that the court should apply the doctrine of equitable
estoppel, the party asserting the estoppel must show: 1) the party to be
estopped from asserting an untimeliness defense knew the facts; 2) the party
to be estopped intended that his conduct be acted on or acted in a way that
the party asserting the estoppel has a right to believe it was so intended;
3) the party requesting the application of estoppel was ignorant of the true
facts; and 4) the party requesting the application of estoppel relied on the
other party's conduct to his detriment.” Morales-De-Jesús v. Metropolitan Life
Ins. Co, No. 09-2156, 2010 WL 5175179 (1st Cir., Dec. 22, 2010)(citing
Vistamar, Inc. v. Fagundo-Fagundo, 430 F.3d 66, 73 (1st Cir. 2005)).
The Court agrees with the approach adopted in Ephraim v. Hartford Life
and Accident Ins. Co., C.A. No. 10-192S, 2011 U.S. Dist. Lexis 2789
(D.R.I.
Dec. 15, 2010). In Ephraim, the District Court of Rhode Island concluded on
Civ. No. 10-1463 (PG)
Page 8
similar facts that the plaintiff had submitted sufficient evidence to
establish a prima facie case of equitable estoppel sufficient to withstand the
entry of summary judgment. Candelario was notified that his LTD claim was
denied as evidenced by the October 4, 2001, letter. (Docket No. 19, Exhibit
1). However, said letter did not specifically or generally notify Candelario
of the contractual limitations period for filing an ERISA action contained in
the policy. Therefore, the Court concludes that Candelario has made a prima
facie
case
of
equitable
estoppel
sufficient
to
withstand
Defendants’
dispositive motion. The Court recognizes that there are existing factual
issues that will determine whether or not equitable estoppel is warranted. The
Court’s only conclusion at this juncture is that Candelario has produced
sufficient evidence that, if believed and viewed in the light most favorable
to him, rebuts Defendants’ limitations defense and presents a factual issue
as to whether or not Defendants should be estopped from relying upon the
policy’s limitations period. See Ephraim, C.A. No. 10-192S,2011 U.S. Dist.
Lexis 2789 at *4.
III. Conclusion
For the reasons explained above, the Court DENIES Defendants’ motion
for summary judgment.
IT IS SO ORDERED.
In San Juan, Puerto Rico, August 30, 2011.
S/ JUAN M. PEREZ-GIMENEZ
JUAN M. PEREZ-GIMENEZ
U.S. District Judge
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