Kieft v. American Exp. Co.

• Decision Date: 14 September 2006
• Docket Number: No. CIV.A. 04-10949 NMG.,CIV.A. 04-10949 NMG.
• Citation: 451 F.Supp.2d 289
• Parties: Alice KIEFT, Plaintiff, v. AMERICAN EXPRESS CO. et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

Page 289

451 F.Supp.2d 289

Alice KIEFT, Plaintiff, v. AMERICAN EXPRESS CO. et al., Defendants.

No. CIV.A. 04-10949 NMG.

United States District Court, D. Massachusetts.

September 14, 2006.

James F. Kavanaugh, Jr., Conn, Kavanaugh, Rosenthal, Peisch & Ford, LLP, Boston, MA, for American Express Company, American Express Company Life Insurance Plan, American Express Company Long Term Disability Plan, Defendants.

Constance M. McGrane, Conn, Kavanaugh, Rosenthal, Peisch & Ford, LLP, Boston, MA, for American Express Company, American Express Company Life Insurance Plan, American Express Company Long Term Disability Plan, Defendants.

Stephen L. Raymond, Law Office of Stephen L. Raymond, Esq., Haverhill, MA, for Alice Kieft, Plaintiff.

MEMORANDUM & ORDER

GORTON, District Judge.

In the instant case, Alice Kieft ("Kieft") alleges that she was wrongfully denied salary continuation benefits as well as long term disability benefits and continuation of life insurance by American Express Company, American Express Company Long Term Disability Plan and American Express Company Life Insurance Plan (col lectively "the defendants" or "American Express"). Defendants move for summary judgment on all claims. Plaintiff opposes that motion and cross-moves for summary judgment with respect to the ERISA claims. Having considered the memoranda in support of and opposition to the pending motions, the Court resolves the motions as follows.

I. Background

Kieft was employed by American Express as a "floating" Travel Agent until October, 2002. Her job responsibilities required her to travel to different American Express offices as needed.

While she was employed, Kieft participated in a "Salary Continuation Plan" ("the SCP"), which is not governed by the Employment Retirement Income Security Act ("ERISA"). The SCP provided for a continuation of an employee's salary for 26 weeks, at 100% for the first four weeks and 70% for the remainder of the period, if an employee became unable to work due to a "disability".

For a period up to and including October 24, 2002, Kieft was also a participant in a Long Term Disability Plan ("the LTD Plan"), which provided for payment of a monthly income benefit to participants who became disabled, with payments beginning after a six-month elimination period. In addition, the LTD Plan provided that an employee who was "totally disabled" would receive a "waiver of premium" under American Express's Life Insurance Plan.

Kieft fell down some stairs on September 22, 2002, and required the assistance of an ambulance and treatment at a local emergency room where she was treated for a sprained left ankle and injury to her left forearm and elbow. Kieft returned to work two weeks later, although she soon began using a wheelchair to help her move about. Kieft stopped working on October 24, 2002, as a result of multiple physical symptoms she experienced which prevented her from performing the duties of her job.

Sometime before October 24, 2002, plaintiff applied for benefits under the SCP. MetLife, which administered the SCP on behalf of American Express, initially approved Kieft's request for the period September 23, 2002, through October 7, 2002, and again approved her application for benefits through January 2, 2003. By a letter dated February 11, 2003, however, plaintiffs claim for continuing benefits under the SCP was denied. Kieft appealed that denial, first to MetLife and later to American Express but thp denial was upheld. That denial forms the basis of plaintiffs claim for breach of contract (which is not an ERISA claim because ERISA does not apply to SCPs).

On June 16, 2003, plaintiff allegedly sent a letter to defendants claiming benefits under the LTD Plan and a waiver of premium under the Life Insurance Plan. Kieft alleges that defendants never responded to those claims and that, therefore, her claims are "deemed denied".

Plaintiff filed a complaint on May 12, 2004, alleging three counts: 1) breach of the SCP, 2) failure to provide ERISA review of her claim for LTD benefits and 3) failure to provide ERISA review of her claim for a waiver of premium under the Life Insurance Plan. Plaintiff seeks a declaration that she is "totally disabled" and is entitled to the above-described benefits. In December, 2004, defendants answered denying the allegations. In July, 2005, plaintiff moved to amend her complaint, which defendants did not oppose, and the Court allowed that motion in September, 2005. Plaintiffs amended complaint is similar to her original complaint but for the addition of a new claim for promissory estoppel with respect to the SCP (Count II).

II. Discussion

A. Legal Standard for Summary Judgment

The role 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." Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir.1990)). The burden is upon the moving party to show, based upon the pleadings, discovery and affidavits, "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

A fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 262 (1986). "Factual disputes that are irrelevant or unnecessary will not be counted." Id. A genuine issue of material fact exists where the evidence with respect to the material fact in dispute "is such that a reasonable jury could return a verdict for the nonmoving party." Id.

Once the moving party has satisfied its burden, the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine, triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court must view the entire record in the light most hospitable to the non-moving party and indulge all reasonable inferences in that party's favor. O'Connor v. Steeves, 994 F.2d 905, 907 (1st Cir.1993). If, after viewing the record in the nonmoving party's favor, the Court determines that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law, summary judgment is appropriate.

B. Analysis

1. State Law Claims

Kieft brings two state-law claims against the defendants. She alleges that the SCP was an express contract and that the defendants breached that contract by failing to evaluate properly her claim for eligibility under the SCP after January 2, 2003 (Count I). Kieft alleges that, in the alternative, the SCP served as a promise on which she reasonably relied and that, therefore, defendants should be estopped from denying her claim for eligibility under the SCP after January 2, 2003 (Count II).

Both parties agree that Kieft was an "at-will" employee of American Express. Nevertheless, Kieft alleges that the SCP was a contract by virtue of the employer's offer which she accepted and for which she rendered consideration by continuing to work at American Express. Defendants respond that there could be no contract because the SCP expressly stated that American Express

reserves the right to make changes in, or discontinue, Company policies, compensation plans, benefits and programs as it deems appropriate, and these changes may be implemented even if they have not been communicated in this (or by change to this) document or otherwise.

The SCP goes on to state explicitly: "This memo does not create a contract of employment between the Company and any employee."

Kieft makes only passing reference to the quoted provision in her opposition to defendants' motion for summary judgment. Rather, she asserts that AMEX promised her participation in the SCP in exchange for her day-to-day labor. The cases that Kieft cites in support of her assertion that there was a contract are, however, either irrelevant or inapt.

In contrast, defendants effectively cite Jackson v. Action for Boston Community Development, Inc., 403 Mass. 8, 14-15, 525 N.E.2d 411 (1988), in support of their proposition that there was no contract because of their ability to amend unilaterally or to terminate the SCP. In fact, later Massachusetts cases that have found employment manuals to constitute contracts did not contain clauses authorizing the employer to change its provisions unilaterally as in the instant case. See, e.g., O'Brien v. New England Tel. & Tel. Co., 422 Mass. 686, 692-93, 664 N.E.2d 843 (1996). Cf. Hillstrom v. Best Western TLC Hotel, 265 F.Supp.2d 117, 129 (D.Mass. 2003) (interpreting an employment manual as not creating an employment contract when there were 1) express indications that it was for informational purposes only and 2) a provision authorizing the employer to change its terms unilaterally). In the instant case, American Express has similarly retained the unilateral right to make changes to, or discontinue, the SCP and has stated in the plan that it does not create a contract of employment. Thus, based on the relevant case law alone, defendants have demonstrated that there is no contract with Kieft.

Kieft's promissory estoppel claim is similarly unavailing. To succeed on a claim for promissory estoppel, Kieft must demonstrate, among other things, that she reasonably relied on an alleged promise to her detriment. Coll v. PB Diagnostic Sys., Inc., 50 F.3d 1115, 1124 (1st Cir. 1995). However, given the explicit language in the SCP expressly reserving American Express's right to discontinue the SCP at any time, Kieft could not have reasonably relied on any such alleged promise.

Moreover, even if there is a contract or quasi-contract between defendants and Kieft, that contract is limited to an obligation to determine eligibility under the SCP's definition of "disability", an obligation with which defendants have complied. The SCP explicitly states that "[t]he...