Metro. Life Ins. Co. v. Sicoli

• Decision Date: 26 September 2016
• Docket Number: 15 Civ. 7141 (PGG)
• Parties: METROPOLITAN LIFE INSURANCE COMPANY, Plaintiff, v. SICOLI AND MASSARO INC. PENSION TRUST, SICOLI AND MASSARO INC. PENSION TRUST PLAN, SICOLI AND MASSARO INC., AS PLAN ADMINISTRATOR FOR THE SICOLI AND MASSARO INC. PENSION TRUST PLAN, and DOMINIC P. MASSARO, AS TRUSTEE OF THE SICOLI AND MASSARO INC. PENSION TRUST AND PLAN ADMINISTRATOR OF THE SICOLI AND MASSARO INC. PENSION TRUST PLAN, Defendants.
• Court: U.S. District Court — Southern District of New York

METROPOLITAN LIFE INSURANCE COMPANY, Plaintiff, v. SICOLI AND MASSARO INC. PENSION TRUST, SICOLI AND MASSARO INC.PENSION TRUST PLAN, SICOLI AND MASSARO INC.,AS PLAN ADMINISTRATOR FOR THE SICOLI AND MASSARO INC. PENSION TRUST PLAN,and DOMINIC P. MASSARO, AS TRUSTEE OF THE SICOLI AND MASSARO INC.PENSION TRUST AND PLAN ADMINISTRATOR OF THE SICOLI AND MASSARO INC.PENSION TRUST PLAN, Defendants.

15 Civ. 7141 (PGG)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

September 26, 2016

MEMORANDUM OPINION & ORDER

PAUL G. GARDEPHE, U.S.D.J.:

Plaintiff Metropolitan Life Insurance Company ("MetLife") brings this action pursuant to Section 502 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132, against Defendants Sicoli and Massaro Inc. Pension Trust (the "Trust"); Sicoli and Massaro Inc. Pension Trust Plan ("the Plan"); Sicoli and Massaro, Inc., as plan administrator for the Plan; and Dominic P. Massaro, as trustee of the Trust and administrator for the Plan. MetLife claims that Defendants breached their fiduciary duty to MetLife by refusing to return an overpayment that MetLife erroneously made to Defendants in connection with a life insurance policy. (Cmplt. (Dkt. No. 1)) Defendants have moved to dismiss the Complaint or, in the alternative, to transfer this action to the Western District of New York. (Dkt. No. 27)

For the reasons stated below, Defendants' motion to dismiss will be granted, and Defendants' motion to transfer will be denied as moot.

BACKGROUND

I. FACTS¹

On May 1, 1973, Sicoli and Massaro, Inc. established the Sicoli and Massaro Inc. Pension Trust for the benefit of its employees. (Cmplt. (Dkt. No. 1) ¶¶ 2, 12) The Trust, in turn, established the Sicoli and Massaro Inc. Pension Trust Plan, a pension plan organized under ERISA, 29 U.S.C. § 1001 et seq. (Id. ¶¶ 3, 13) Sicoli and Massaro, Inc. is the administrator for the Plan. (Id. ¶ 4) Dominic P. Massaro is both a principal of Sicoli and Massaro, Inc., and a trustee of the Trust. (Id. ¶ 5)

On June 1, 1999, the Trust - on behalf of the Plan - purchased a life insurance policy (the "Policy") from New England Life Insurance Company² insuring the life of Dominick C. Massaro, an employee of Sicoli and Massaro, Inc. (Id. ¶ 16) Claims under the Policy are administered by MetLife. (Id. ¶ 19) The Policy has a face amount of $690,500. (Id. ¶¶ 20-21) Dominick C. Massaro designated the Trust as the beneficiary of the Policy. (Id. ¶ 29) The Policy obligates MetLife to pay the Trust the face amount of the Policy -$690,500 - upon Dominick C. Massaro's death. (Id. ¶¶ 23-25, 28)

Dominick C. Massaro died on June 4, 2012 (id. ¶ 27), and the Trust submitted a claim to MetLife under the Policy at that time. (Id. ¶ 30)

On June 18, 2012, MetLife erroneously paid the Trust $1,174,060.36 - $481,237.21 more than the correct amount due to the Trust under the Policy.³ (Id. ¶¶ 31-32) The overpayment was the result of MetLife having inadvertently included benefits under an inapplicable rider, as well as corresponding interest. (Id. ¶ 33)

On August 23, 2012, MetLife wrote to Dominic P. Massaro - as trustee of the Trust (id. ¶ 5) - and asked him to return the $481,237.21 overpayment. (Id. ¶ 35) On September 20, 2012, the Trust informed MetLife that it would not return the money unless MetLife provided documentation demonstrating that the $481,237.21 was, in fact, an erroneous overpayment. (Id. ¶ 36) MetLife thereafter sent additional letters and documentation to Dominic P. Massaro demonstrating that the $481,237.21 was an overpayment. (Id. ¶ 37) Defendants have refused to return the alleged overpayment, however. (Id. ¶ 38)

DISCUSSION

I. RULE 12(b)(6) STANDARD⁴

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "In considering a motion to dismiss . . . the court is to accept as true all facts alleged in the complaint," Kassner, 496 F.3d at 237 (citing Dougherty v. Town of N. Hempstead Bd. of ZoningAppeals, 282 F.3d 83, 87 (2d Cir. 2002)), and must "draw all reasonable inferences in favor of the plaintiff." Id. (citing Fernandez v. Chertoff, 471 F.3d 45, 51 (2d Cir. 2006)).

"In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint." DiFolco, 622 F.3d at 111 (2d Cir. 2010) (citing Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002); Hayden v. County of Nassau, 180 F.3d 42, 54 (2d Cir. 1999)). Additionally, "[w]here a document is not incorporated by reference, the court may never [the] less consider it where the complaint 'relies heavily upon its terms and effect,' thereby rendering the document 'integral' to the complaint." Id. (quoting Mangiafico v. Blumenthal, 471 F.3d 391, 398 (2d Cir. 2006)).

II. ANALYSIS

Defendants argue that MetLife has not stated a claim for breach of fiduciary duty under ERISA, because "Defendants did not owe MetLife a fiduciary duty." (Def. Br. (Dkt. No. 33) at 2).⁵ Defendants further contend that MetLife cannot obtain equitable relief pursuant to ERISA § 502(a)(3), because MetLife's underlying ERISA claim for breach of fiduciary duty fails. (Id. at 10)

A. Breach of Fiduciary Duty under ERISA

All of MetLife's claims in this action are explicitly premised on Defendants' alleged breach of fiduciary duty under ERISA.⁶ (See Cmplt. (Dkt. No. 1) at 5-6 ("First Cause ofAction" for "Breach of Fiduciary Duty, Unjust Enrichment and Surcharge" brought under "ERISA § 502(a)(3)"); id. at 8 ("Second Cause of Action" for "Breach of Fiduciary Duty and Equitable Restitution" brought under "ERISA § 502(a)(3)"); id. at 8-9 ("Third Cause of Action" for "Breach of Fiduciary Duty and Constructive Trust" brought under "ERISA § 502(a)(3)") Indeed, the Complaint's sole theory of recovery is that "the Defendants breached their fiduciary duties to MetLife . . . and to the [T]rust [under ERISA] by improperly retaining . . . the erroneous overpayment of death benefits in the amount of $481,237.21." (Id. ¶ 53; see id. ¶¶ 62, 71)

"ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefits plans." Bendik v. Credit Suisse First Boston (USA), Inc., No. 02 CIV. 9554 (CBM), 2004 WL 736852, at *7 (S.D.N.Y. Apr. 5, 2004) (citing Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90 (1983)). "'ERISA's central purpose is to protect beneficiaries of employee benefits plans.'" Trustees of Upstate New York Engineers Pension Fund v. Ivy Asset Mgmt., 131 F. Supp. 3d 103, 121 (S.D.N.Y. 2015) (quoting Gedek v. Perez, 66 F.Supp.3d 368, 373 (W.D.N.Y. 2014) (internal quotation marks and citation omitted)); see John Hancock Mut. Life Ins. Co. v. Harris Trust & Sav. Bank, 510 U.S. 86, 114 (1993) ("ERISA's focus [is] on protecting plan participants and their beneficiaries" (citations omitted)).

Under Section 409 of ERISA,

[a]ny person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries . . . shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary.

29 U.S.C. § 1109(a).

"To state a claim for breach of fiduciary duty under ERISA, a plaintiff must allege facts which, if true, would show that the defendant acted as a fiduciary, breached its fiduciary duty, and thereby caused a loss to the plan at issue." Pension Ben. Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d 705, 730 (2d Cir. 2013) (citing 29 U.S.C. § 1109(a); Pegram v. Herdrich, 530 U.S. 211, 225-26 (2000)). "As [the Second Circuit] has observed, 'a person may be an ERISA fiduciary with respect to certain matters but not others, for he has that status only to the extent that he has or exercises the described authority or responsibility.'" Trustees of Upstate New York Engineers Pension Fund v. Ivy Asset Mgmt., 131 F. Supp. 3d 103, 127 (S.D.N. Y. 2015) (quoting Harris Trust & Sav. Bank v. John Hancock Mut. Life Ins. Co., 302 F.3d 18, 28 (2d Cir. 2002) (internal quotation marks and citation omitted)). Thus, "'[i]n every case charging breach of ERISA fiduciary duty . . . the threshold question is . . . whether [the defendant] was acting as a fiduciary (that is, was performing a fiduciary function) when taking the action subject to complaint.'" Coulter v. Morgan Stanley & Co. Inc., 753 F.3d 361, 366 (2d Cir. 2014) (quoting Pegram, 530 U.S. at 226); see F.W. Webb Co. v. State St. Bank & Trust Co., No. 09 CIV. 1241 RJH, 2010 WL 3219284, at *4 (S.D.N.Y. Aug. 12, 2010) ("The threshold issue in this case, like in any ERISA case, is whether and to what extent defendants were fiduciaries. . . . Unless defendants' [challenged actions] fell within the scope of fiduciary responsibilities[,] . . . plaintiffs have no claim [for breach of fiduciary duty] under ERISA." (citing Harris Trust and Savings Bank, 302 F.3d 18, 28 (2d Cir. 2002); Pegram, 530 U.S. at 226)).

Here, Defendants argue that "MetLife cannot sue [Defendants] for breach of fiduciary duty, as [Defendants] did not owe MetLife a fiduciary duty." (Def. Br. (Dkt. No. 33) at 5) MetLife contends, however, that Defendants owed fiduciary duties to MetLife becauseMetLife and Defendants are "co-fiduciaries of the Plan." (Pltf. Br. (Dkt. No. 31) at 17; see Cmplt. (Dkt. No. 1) ¶ 53 ("as fiduciaries under ERISA, the Defendants breached their fiduciary duties...