Aquilio v. Police Benev. Ass'n of NY State Troopers

• Decision Date: 15 June 1994
• Docket Number: No. 91-CV-325.,91-CV-325.
• Citation: 857 F. Supp. 190
• Parties: Dominick J. AQUILIO, Plaintiff, v. POLICE BENEVOLENT ASSOCIATION OF The NEW YORK STATE TROOPERS, INC., John R. Canfield and Richard Fairchild, Defendants.
• Court: U.S. District Court — Northern District of New York

857 F. Supp. 190

Dominick J. AQUILIO, Plaintiff, v. POLICE BENEVOLENT ASSOCIATION OF The NEW YORK STATE TROOPERS, INC., John R. Canfield and Richard Fairchild, Defendants.

No. 91-CV-325.

United States District Court, N.D. New York.

June 15, 1994.

COPYRIGHT MATERIAL OMITTED

Donald J. Aquilio, Marietta, GA, for plaintiff.

Hinman Straub Pigors & Manning (William F. Sheehan, John R. Saccocio, of counsel), Albany, NY, for defendants.

MEMORANDUM-DECISION AND ORDER

McCURN, Senior District Judge.

INTRODUCTION

Currently before the court is a motion for summary judgment by the defendant, the Police Benevolent Association of the New York State Troopers, Inc. ("PBA").¹ Also before the court is the motion for partial summary judgment by the plaintiff, Dominick Aquilio, a retired New York State Trooper, who brings this action in connection with the PBA's administration of its group life insurance program.² Jurisdiction is predicated upon the existence of a federal question under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq.³

BACKGROUND

By way of background, the PBA is an employee organization representing active and retired members of the New York State Police. Affidavit of John R. Canfield (Mar. 30, 1992) at ¶ 5. As an employee organization, the PBA undertakes a wide variety of responsibilities on behalf of its members, including the procurement of group term life insurance, which it has offered to its membership since at least 1961. Affidavit of Richard D. Fairchild (Mar. 25, 1992) at ¶ 27; see also Canfield Affidavit at ¶¶ 17 and 18. Participation in the PBA's insurance plan is strictly voluntary. Canfield Affidavit at ¶ 25; see also Affidavit of Caryl Erhardt (Mar. 27, 1992) at ¶ 8. One advantage to plan participation is the fact that PBA members are able to purchase insurance at group rates, without the common requirement of a physical examination. Canfield Affidavit at ¶ 24.

Throughout the years, the PBA, through a competitive bidding process, has contracted with licensed life insurance companies to underwrite and provide this group term life insurance to its members. Id. at ¶ 20; Fairchild Affidavit at ¶¶ 20, 21, and 23. This term life insurance is provided at fixed rates for a specific duration, usually one to three years. Canfield Affidavit at ¶ 23. Many different companies have provided this insurance over the years;⁴ and consequently, with each contract, there have been variations in the amount of insurance available, the cost, and the amount that can be "carried over" into retirement. Common to all of these insurance contracts and plan summaries, however, including the US Life policy, is that they set forth the circumstances which could result in disqualification, ineligibility, denial or loss of benefits.

When the PBA changes life insurance carriers, its practice is to notify member plan participants in writing of the details of the new insurance programs, including any rate changes. Id. at ¶ 28. Plan participants also receive written notification of the specifics pertaining to the new insurance programs, in the form of plan summaries.⁵Id. at ¶ 29. These plan summaries give an indepth description of the terms and conditions of the current policy. Erhardt Affidavit at ¶ 22. In addition, as required under ERISA,⁶ the PBA annually files with the United States Department of Labor a reporting and disclosure form regarding the group life insurance program which it is offering at the time. Fairchild Affidavit at ¶ 41. The insurance companies with whom the PBA has contracted must make the same filing. Id. at ¶ 44.

Insofar as plaintiff Aquilio is concerned, he was born March 8, 1925 and became a New York State Trooper in 1959. Defendant's exh. O (Deposition of Dominick Aquilio (Sept. 17, 1991) at 7 and 12). Soon after becoming a trooper, Mr. Aquilio joined the PBA and became aware of the availability of life insurance through that organization. Id. at 13-14. Early on in his career, the plaintiff voluntarily elected to purchase life insurance coverage beyond the minimal coverage he received by virtue of his status as a PBA member, and he has maintained coverage continuously up to the present time. Id. at 13-15.

The US Life policy which is the subject of this litigation was in effect from June 1, 1985 through November 30, 1988. There are three separate documents beyond the policy itself and the plan summary upon which plaintiff relies to support his first cause of action. Thus a somewhat detailed review of those documents is necessary to an understanding of the parties' respective arguments as to the viability of that cause of action. The first document is a letter from PBA Treasurer Fairchild which plaintiff acknowledges receiving in the first part of 1985.⁷ Aquilio Affidavit at ¶ 7. Fairchild explains that he wrote that letter to announce the "new" PBA insurance program to be offered through US Life, which had "certain changes from previous PBA group life insurance plans." Fairchild Affidavit at ¶ 51. That letter closed by stating, "any questions, you may have, please call the PBA office." Complaint, exh. A thereto at 2. According to Treasurer Fairchild, in the case of plaintiff Aquilio, those were not just empty words, because Fairchild was plaintiff's PBA delegate, as well as his personal friend. Fairchild Affidavit at ¶ 54. Even given that relationship, Fairchild claims that he does not recall receiving any questions from plaintiff around the time this letter was sent. Id.

Included with this 1985 letter was a chart comparing the "new" PBA insurance program offered through US Life with the PBA program then currently in place. Complaint, exh. A thereto. The attached "Comparison Chart" mentioned several times that the coverage would be "maintained until death." Id. Also included with that letter was a document entitled "Reduction Formula;" and it too made reference to coverage "till death." Id. In one brief synopsis, for example, it stated:

125,000 policy You can take 125,000 into retirement which reduces to 43,750 at age 60, reduces to 37,500 at age 65. This coverage remains till death.

Id. (emphasis in original). A similar provision was included for additional coverage offered through the "new PBA Tier Two" plan. Id. The "Reduction Formula" also summarized the coverage if a retired member took advantage of both the Tier One and Tier Two plans as follows: "You could take 250,00 sic into retirement which would reduce to 87,500 at age 60, reduced to 75,000 at age 65, which would remain until death." Id. (emphasis added). Plaintiff Aquilio avers that "based on this information, I believed that by enrolling in both Tier One and Tier Two PBA coverage, I would have life insurance at the death benefit levels set forth in the communication until my death at the specified premium levels." Aquilio Affidavit at ¶ 8. Mr. Aquilio therefore enrolled in the "new" PBA program and opted to take the dependent coverage described in that communication for his wife. Id.

After the PBA contracted with US Life to underwrite the group term life insurance policy, as was its usual practice, the PBA asked US Life to prepare for distribution to all plan participants a plan summary, detailing the terms and conditions of the US Life policy. Fairchild Affidavit at ¶ 55. US Life did not provide a draft summary, however, until mid-1986. Id. at ¶ 56. Finally, in approximately March, 1987, the US Life generated plan summary received the required approval from the New York State Insurance Department. Id. at ¶ 59. The plan summary was then mailed "to all participants." Id. As had previous plan summaries provided in conjunction with PBA sponsored insurance programs,⁸ the US Life plan summary detailed the terms and conditions of the PBA's contract with US Life, including an explicit cancellation provision. Canfield Affidavit, exh. A thereto.

Plaintiff Aquilio claims, however, that he never received this particular US Life plan summary. Complaint at ¶ 18. Interestingly, apparently he is the only plan participant who claims not to have received this document. Canfield Affidavit at ¶ 61; see also Erhardt Affidavit at ¶ 27. In fact, after receiving this US Life plan summary, many PBA members contacted the PBA with questions about it. Id.; see also Erhardt Affidavit at ¶ 26.

The second document upon which plaintiff relies to support his first cause of action is another PBA generated communication. This communication addressed various insurance coverage options, including the impact of the same in terms of retirement. In so doing, that letter expressly referred to "present available coverage" and "your current biweekly deduction." Id. Complaint, exh. B, thereto. Enclosed with that May, 1987 letter was an enrollment card and a payroll deduction card, which Mr. Aquilio filled out and returned to the PBA. Plaintiff's next communication regarding the PBA's new insurance program with US Life was a letter dated October 29, 1987 from PBA President Canfield. Complaint, exh. C thereto. Acknowledging receipt of plaintiff's notice of retirement, that letter expressly advised, among other things, "At age 60, your coverage will reduce to $87,400 at a cost of $367.50 annually plus your dues and dependent coverage premium. At your final reduction ($75,000) you will pay an annual premium of $315.00 plus dues and dependent coverage." Id.

Effective September 3, 1987, plaintiff retired. Id. When making his retirement plans in the preceding spring, plaintiff Aquilio elected an irrevocable single life retirement annuity. Aquilio Affidavit at ¶ 10, and exh. D thereto. More particularly, on the election form, Mr. Aquilio checked the box designated "Single Life Allowance," which states, "I elect to receive the maximum lifetime retirement allowance payable to me. Stop all payment at my death. DO NOT NAME A BENEFICIARY." Id., exh. D thereto (emphasis in original). Mr. Aquilio explains that he understood that under...