Delia v. UBS Fin. Servs.

• Decision Date: 15 July 2020
• Docket Number: 19 Civ. 3109 (LGS)
• Parties: GINA DELIA, Plaintiff, v. UBS FINANCIAL SERVICES, INC. et al., Defendants.
• Court: U.S. District Court — Southern District of New York

GINA DELIA, Plaintiff, v. UBS FINANCIAL SERVICES, INC. et al., Defendants.

19 Civ. 3109 (LGS)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

July 15, 2020

OPINION AND ORDER

LORNA G. SCHOFIELD, District Judge:

Plaintiff Gina Delia, individually and as the Executor of Denis Delia's Estate (the "Estate"), brings this action against UBS Financial Services Inc. ("UBS"), UBS Financial Services Inc. Financial Advisor Survivor Benefit Plan (the "Plan") and the Plan Administrator for the Benefit Plan (the "Plan Administrator"). She seeks damages under state law and the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1101 et seq. ("ERISA") due to an alleged wrongful refusal to provide her appropriate survivor benefits after Mr. Delia's death. Defendants have filed a motion for summary judgment. For the reasons below, the motion is granted, and the case is closed.

I. BACKGROUND

The following facts are undisputed. UBS has offered survivor benefits under the Plan to eligible employees since 2009. The 2016 Summary Plan Description (the "SPD")¹ states the Plan eligibility requirements as follows:

You are eligible to participate in the Plan if:

(1) on January 1 of the applicable Plan year, you are a full-time employee of the Firm or one of its affiliates or subsidiaries that participates in the Plan (the "Participating Companies") holding the position of Financial Advisor . . .; and

(2) you have at least five years of continuous service with the Firm and the Participating Companies as of the date on which you are notified that you are eligible to participate in the Plan, or you will have five years of continuous service with the Firm and the Participating Companies within the plan year that you are notified that you are able to participate in the plan; and

(3) your 12-month gross production is $500,000 or more.

For financial advisors hired prior to January 1, 2014, you may nevertheless be eligible to participate in the Plan if you had met the Plan's previous length of service requirement of three years of continuous service even if you currently have not reached five years of continuous service with the Firm and the Participating Companies as long as you meet the other eligibility requirements.

The SPD also includes a section titled "Enrollment Procedure for Newly Eligible Financial Advisor," which states:

The Plan Administrator will notify you if you are a Financial Advisor who becomes newly eligible to enroll in the Plan. If you are newly eligible, you must affirmatively enroll in the Plan if you wish to be a participant. To enroll, you must elect the benefit via the Your Benefits Resources ["YBR"] website during the effective Open Enrollment period. If you are eligible to participate in the Plan and you do not affirmatively enroll in the Plan in accordance with this SPD, you will not be a participant in the Plan and you will not have another opportunity to enroll in the Plan in the future.

Mr. Delia was continuously employed at UBS as a Financial Advisor from April 2013 through his death in June 2018, and in 2016 his 12-month gross production in the prior calendaryear was at least $500,000. On February 18, 2016, after Mr. Delia's third year of service at UBS had begun but before he had completed three total years at the company, the UBS benefits third-party service provider sent an email to a list of employees, including Mr. Delia. The email reminded the recipients of the features of the Plan, notified them that the Plan Administrator had set an enrollment period for the Plan, to expire on March 2, 2016, and provided instructions on how to log onto a linked web page established by UBS for use in electing to enroll. After explaining the Plan's eligibility requirements, the email stated that "[o]ur records indicate you will be completing your third year of service with [UBS] by December 31, 2016." The email also stated that "[t]o accept participation in the Survivor Benefit Plan you must log onto YBR and complete your enrollment election or click on the link below before 3/2/16." Mr. Delia did not enroll in the Plan.

A second email was sent on February 25, 2016. It contained the same information as the prior email, including the eligibility requirements, that the enrollment period ended on March 2, 2016, and how to enroll. The email stated, "If you do not enroll, you are no longer eligible to participate in the UBS Financial Advisor Survivor Benefit, and no coverage will be in place for you under this benefit. As per the [SPD], you will not have another opportunity to enroll in the plan in the future." An email with the same information was also again on March 1, 2016. Mr. Delia did not enroll in the Plan in response to the email.

On March 7, 2016 -- several days after the enrollment period had concluded -- the UBS Director of Health & Welfare ("HWB Director") personally sent Mr. Delia an email titled "FINAL REMINDER," informing him that the enrollment period for the Plan had expired, but nonetheless affording him an extension to elect to enroll through and including March 8, 2016. The email repeated the instructions on how to log onto the linked webpage to enroll and statedthat "[t]o accept participation in the Survivor Benefit Plan you must log onto YBR and complete your enrollment election or click on the link below before 3/8/16." Mr. Delia did not enroll in the Plan.

In June 2018, after Mr. Delia had died, Plaintiff requested benefits under the Plan. The Plan Administrator verbally denied the request but advised her that she could submit a formal written appeal. Plaintiff filed a written appeal on June 26, 2018. By email on August 8, 2018, the Plan Administrator denied Plaintiff's appeal, and the denial was confirmed and explained in a letter dated August 23, 2018.

II. STANDARD

Summary judgment is appropriate if the record establishes 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 genuine issue of material fact exists if 'the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Nick's Garage, Inc. v. Progressive Cas. Ins. Co., 875 F.3d 107, 113 (2d Cir. 2017) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The moving party "bears the burden of 'demonstrat[ing] the absence of a genuine issue of material fact.'" Nick's Garage, Inc., 875 F.3d at 114 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)) (alteration in original). The evidence is construed in the light most favorable to, and all reasonable inferences are drawn in favor of, the nonmoving party. Nick's Garage, Inc., 875 F.3d at 113. Summary judgement is improper if there is any evidence in the record from any source from which a reasonable inference in the nonmoving party's favor may be drawn. Id. at 123.

"However, a party may not rely on mere speculation or conjecture as to the true nature of facts to overcome a motion for summary judgment." Federal Trade Commission v. Moses, 913F.3d 297, 305 (2d Cir. 2019) (citation and internal quotation marks omitted). "Conclusory . . . denials therefore are not evidence and cannot by themselves create a genuine issue of material fact where none would otherwise exist." Id. (citation and internal quotation marks omitted).

III. ANALYSIS

A. ERISA Claim

Summary judgment is granted to Defendant on Count III, the sole federal claim. Plaintiff alleges that the Plan Administrator and Plan breached their fiduciary duties to Plaintiff under ERISA sections 404(a) and 502(a). See 29 U.S.C. §§ 1104, 1132(a). She seeks to recover benefits under the Plan. However, ERISA section 502(a), which creates a private right of action, permits only a plan "participant" or "beneficiary" (or fiduciary, which is not relevant here) to bring an action to recover benefits or enforce rights under the terms of a plan. 29 U.S.C. § 1132(a)(1)(B). Summary judgment is granted as to this claim because Plaintiff is neither a participant nor beneficiary, and therefore is not entitled to bring this claim under ERISA.

1. Neither Mr. Delia nor the Estate is a "Participant."

With regard to who is a participant under the Plan, the SPD states, "If you are newly eligible, you must affirmatively enroll in the Plan if you wish to be a participant. To enroll, you must elect the benefit via the 'Your Benefits Resources ["YRB"]' website during the effective Open Enrollment period." The SPD also states who is not a participant: "If you are eligible to participate in the Plan and you do not affirmatively enroll in the Plan in accordance with this SPD, you will not be a participant in the Plan and you will not have another opportunity to enroll in the Plan in the future."

Under ERISA section 3(7), as relevant here, a "participant" means "any employee who is or may become eligible to receive a benefit . . . or whose beneficiaries may be eligible to receiveany such benefit." 29 U.S.C. § 1002(7). In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), the Supreme Court ruled that a claimant "may become eligible" for benefits when she has a colorable claim that (1) she will prevail in a suit for benefits or (2) the eligibility requirements will be fulfilled in the future. 489 U.S. at 117-18 (citations and quotation marks omitted); accord Bulovic v. Both, 14 F. Supp. 3d 365, 383 (S.D.N.Y. 2014). When a decedent's estate claims benefits under ERISA, which is the case here, courts determine participant status based on the date of the employee's death, rather than the date the complaint was filed. See Miller v. Rite Aid Corp., 504 F.3d 1102, 1107 (9th Cir. 2007) ("In the case of a deceased employee, it would seem to make more sense to look to the time of the employee's death to determine whether he is covered" by the ERISA plan).

Plaintiff argues that Mr. Delia's Estate is a participant because the Estate has a colorable claim to prevail in a suit for benefits. The undisputed facts, however, show that...