Estate of Frusher v. Abt Associates, Inc., C.A. No. 07-475 S.
| Decision Date | 13 August 2009 |
| Docket Number | C.A. No. 07-475 S. |
| Citation | 643 F.Supp.2d 220 |
| Parties | ESTATE OF Richard FRUSHER and Cecelia Frusher, Administrator of the Estate of Richard Frusher, Plaintiffs, v. ABT ASSOCIATES, INC., Defendant. |
| Court | U.S. District Court — District of Rhode Island |
Seth A. Perlmutter, Esq., Perlmutter Law, Cranston, RI, for Plaintiff.
Mark A. Pogue, Esq., Heather A. Pierce, Esq., Edwards Angell Palmer & Dodge LLP, Providence, RI, for Defendant.
Plaintiffs, Cecelia Frusher and the Estate of Richard Frusher, brought suit in Rhode Island Superior Court against Richard's former employer Defendant Abt Associates, Inc. ("Abt") alleging breach of contract on life insurance, health insurance, and pension plans allegedly in place during Richard's employment with Abt in the 1970s. Defendant removed pursuant to 28 U.S.C. § 1441(a), basing jurisdiction on diversity of citizenship, and now seeks summary judgment on all counts. For the reasons stated below, Defendant's motion is granted.
On December 18, 1972, Richard Frusher began working for Abt Associates, Inc. as a full-time analyst in Abt's Cambridge, Massachusetts office. During Richard's employment, Abt had employee plans in place for life and health insurance and pension benefits. Abt's health and life insurance plans stated: "The insurance for you and your dependents will terminate if you terminate your employment or cease to be actively employed." (Mar Aff. Ex. G (Doc. 16).) Upon termination, both health and life insurance were to be continued "for a period of 31 days during which time you may change to an individual policy regardless of your physical condition." Id. An additional provision allowed for the continuation of life insurance benefits if the employee became totally disabled prior to reaching age 60. This provision applied only if "proof of total and continuous disability is furnished from year to year as required." Id. Abt's pension plan provided:
In the event a Participant shall terminate employment and incur a One-Year Break in Service before completion of ten (10) years of Continuous Service or attaining age sixty-five (65), such Participant shall have a deferred Vested Benefit equal to the following percentage of the Participant's Accrued Benefit, as of the date of termination of employment.
If the Participant has under three (3) Years of Service, the percentage shall be zero (0).
(Mar Aff. Ex. H (Doc. 16).)
In December 1974, Richard stopped working due to mental illness, and in March 1975, he applied and was granted long term disability benefits, which he continued to receive until his death in 2005. On October 1, 1975, Richard's employment was formally terminated. His health insurance and life insurance were terminated effective November 1, 1975. Richard never elected to change his health or life insurance coverage to an individual policy nor did he furnish Abt with the information which might have allowed him to continue his life insurance benefits in light of his disability. Though Abt did not formally communicate to Richard that he had been terminated, it did advise Cecelia in January 1976 that she would have to seek new health insurance benefits because Abt was no longer paying the premiums.
In 1978, Richard and Cecelia divorced and Richard moved to Massachusetts, living with his parents in East Longmeadow until their deaths in 1983. He then lived on his own in Massachusetts until 1994, when he moved back in with Cecelia in Rhode Island. The couple remarried in 1995. In July 1995 and October 1996, Richard retained two different attorneys who wrote letters to Abt asserting claims for the benefits now at issue in this case. On both occasions, Abt communicated to Richard, through his two attorneys, its position that no benefits were owed him. From January to June of 1996, Cecelia corresponded by letter with Abt's Director of Human Resources and Manager of Employee Benefits, respectively, asserting that Richard continued to be an employee of Abt, and was therefore owed benefits. Abt replied that Richard was terminated in 1975, and was not entitled to any benefits from Abt.
On October 12, 2005, Richard passed away. Cecelia brought suit on November 27, 2007, claiming breach of contract on the three benefit plans, and seeking damages for life insurance benefits allegedly payable upon Richard's death, thirty-one years of health insurance premiums and other medical expenses that the Frushers incurred due to the allegedly wrongful termination of health insurance by Abt, and pension benefits that accrued from 1974 to 2005, the time during which Plaintiffs claim Richard was disabled but still employed by Abt.
When evaluating a summary judgment motion, the Court views the record in the light most favorable to the nonmovant, making all reasonable inferences in that party's favor. See Clifford v. Barnhart, 449 F.3d 276, 280 (1st Cir.2006); Nicolo v. Philip Morris, Inc., 201 F.3d 29, 33 (1st Cir.2000); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The threshold inquiry is whether a genuine issue of material fact exists, material facts being "those that `possess the capacity to sway the outcome of the litigation under the applicable law.'" See DePoutot v. Raffaelly, 424 F.3d 112, 117 (1st Cir.2005) (quoting Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir.1997)). Once this threshold is passed, the moving party must show that, given the undisputed facts, it is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548. As Plaintiffs bear the burden of production at trial on the breach of contract claims, Defendant may be entitled to summary judgment in one of two ways: (1) by negating an essential element of Plaintiffs' case through submission of affirmative evidence; or (2) by demonstrating that the evidence is insufficient to establish an essential element of Plaintiffs' claim. See Celotex, 477 U.S. at 331, 106 S.Ct. 2548.
In the present case, the question of whether any material facts are in dispute is resolved by the Plaintiffs' failure to object to the Defendant's request for admissions under Fed.R.Civ.P. 36 and their failure to dispute the Defendant's statement of undisputed facts under Local Rule 56(a). See Fed.R.Civ.P. 36; DRI LR Cv 56(a). Under Rule 36, all matters in a request for admissions are admitted unless specifically denied by the opposing party. Fed. R.Civ.P. 36(a)(3); Talley v. United States, 990 F.2d 695, 697 (1st Cir.1993). Local Rule 56(a)(3) states that "[f]or purposes of a motion for summary judgment, any fact alleged in the movant's Statement of Undisputed Facts shall be deemed admitted unless expressly denied or otherwise controverted by a party objecting to the motion."1 LR Cv 56(a)(3). Because Plaintiffs neglected to deny the facts contained in the request for admissions and neglected to properly challenge the moving party's statement of undisputed facts, those facts are deemed admitted in accordance with Fed.R.Civ.P. 36(a) and Local Rule 56(a). See CMI Capital Mkt. Inv., LLC v. Gonzalez-Toro, 520 F.3d 58, 61 (1st Cir. 2008); Talley, 990 F.2d at 697. Therefore, the Court adopts the facts as set out in the Statement of Undisputed Facts together with the admitted facts. See CMI, 520 F.3d at 61.
Defendant offers three arguments in support of its motion, any of which, if successful, would require summary judgment. The Court addresses each in turn.
Defendant's primary challenge is that Plaintiffs' claims are preempted under the Employee Retirement Income Security Act, ("ERISA"), 29 U.S.C. 1001 et seq., § 1144(a), the so-called "preemption clause."
ERISA was enacted by Congress in 1974 as a uniform, comprehensive regulatory scheme for employee pension and welfare plans. See Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 732, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985). It is well settled that in designing ERISA, Congress "intended to preempt the field for Federal regulations, thus eliminating the threat of conflicting or inconsistent State and local regulation of employee benefit plans." Carlo v. Reed Rolled Thread Die Co., 49 F.3d 790, 794 (1st Cir.1995) (internal citation omitted). Therefore, claims for employee benefits brought pursuant to state law will generally fall within this broad field of preemption, and must be dismissed or defeated at summary judgment. See Metro. Life, 471 U.S. at 732-33, 105 S.Ct. 2380; Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90-91, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983); Danca v. Private Health Care Sys., Inc., 185 F.3d 1, 7 (1st Cir.1999).
Determining whether ERISA preempts Plaintiffs' state law breach of contract claims requires a two-step analysis. First, the benefit plans on which Plaintiffs sue must be employee benefit plans within the scope of ERISA. See Hampers v. W.R. Grace & Co., 202 F.3d 44, 49 (1st Cir.2000) (citations omitted). Second, each cause of action must "relate[] to" the relevant employee benefit plan. Id. ERISA preempts state law claims if the trier of fact necessarily would be required to consult the ERISA plan to resolve the claims. Harris v. Harvard Pilgrim Health Care, Inc., 208 F.3d 274, 281 (1st Cir.2000).
ERISA governs all employee benefit plans which provide "medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, [or] death." 29 U.S.C. § 1002(1); see 29 U.S.C. § 1003; Metro. Life, 471 U.S. at 732, 105 S.Ct. 2380. ERISA further governs all "employee pension benefit plan[s]" providing "retirement income to employees." 29 U.S.C. § 1002; see 29 U.S.C. § 1003.
The determination of whether an ERISA plan exists is a "question of fact, to be answered in light of all the surrounding facts and circumstances from the point of view of a...
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