Smith v. Raytheon Co.
| Decision Date | 30 November 2021 |
| Docket Number | CIVIL ACTION NO. 1:19-CV-10328-DPW |
| Parties | The ESTATE OF Ralph R. SMITH III; and Dr. Deborah McCoy, Plaintiffs, v. RAYTHEON COMPANY, John Doe, in Its Capacity as Plan Administrator, Raytheon Company Pension Plan for Salaried Employees or Its Designated Successor, and Raytheon Benefit Appeals Committee, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Stephen D. Rosenberg, The Wagner Law Group, Boston, MA, for Plaintiffs.
James F. Kavanaugh, Jr., Johanna L. Matloff, Conn, Kavanaugh, Rosenthal, Peisch & Ford, LLP, Boston, MA, for Defendants Raytheon Company, Raytheon Company Pension Plan for Salaried Employees or its designated successor, Raytheon Benefit Appeals Committee.
Johanna L. Matloff, Conn Kavanaugh Rosenthal Peisch & Ford, LLP, Boston, MA, for Defendant John Doe in its capacity as Plan Administrator.
At issue in this case is the availability of annuity benefits from an ERISA plan. The Plan has taken the position that the participant, Ralph E. Smith, III, did not perfect his non-standard election of those benefits to its satisfaction before he passed away.
Plaintiffs — the Ralph E. Smith III Estate, and Mr. Smith's widow, Dr. Deborah McCoy — contend that attempts to make the non-standard election were improperly frustrated by action and inaction of the several defendants (collectively "Raytheon"). They seek relief in the form of benefits under the Plan that Mr. Smith attempted — but formally failed — to select before he lost his battle with amyotrophic lateral sclerosis ("ALS").
There is no dispute that Dr. McCoy is the rightful beneficiary under her late husband's plan. The question presented by the case is whether she should receive the benefits from the standard annuity or those of the annuity that Mr. Smith plainly intended and attempted to select.
Upon Raytheon's motion to dismiss, I review Plaintiffs’ Complaint to determine whether they adequately plead a claim for relief.
Plaintiffs Dr. Deborah McCoy and the Estate of Mr. Smith brought this action (a) to recover what they view to be the remainder of the benefits to which they are entitled following Mr. Smith's death and (b) to prevent any further denial of their future right to such benefits. Dr. McCoy was married to Mr. Smith at "all relevant times."
Defendants consist of the Raytheon Company , which is headquartered in Waltham, Massachusetts and sponsored the benefit plan at issue; a currently unknown Plan Administrator ("John Doe");1 the Raytheon Company Pension Plan for Salaried Employees , (the "Plan"); and the Raytheon Benefit Appeals Committee , which is organized under the Plan.
Mr. Smith was a long-term employee of Raytheon Company, where he worked for thirty-six years. He was diagnosed with ALS in July 2016.
Following that diagnosis, Mr. Smith and Dr. McCoy executed a Durable Power of Attorney, which became effective on September 2, 2016. Included in the powers granted to Dr. McCoy as her husband's "attorney in fact" was the "full power and authority with regard to all ‘Retirement Plans,’ " which included the "Plan" at issue here.2 Additionally, the authority granted to Dr. McCoy under the Power of Attorney included, but was not limited to, the power "to elect a form of payment of benefits" under the Plan and to "make [and] exercise ... all elections and/or options that [Mr. Smith] may have regarding" the Plan.
Just over a year later, in October 2017, Mr. Smith and Dr. McCoy began planning for his retirement in light of his deteriorating health. Mr. Smith decided to retire on October 6, 2017; however, there is no indication in the Complaint that his intention to terminate his employment was formally communicated to Raytheon.
On October 9, 2017, Dr. McCoy called the Raytheon Benefits Center to discuss her husband's options and assist with realizing his intention to retire. The Benefits Center required Mr. Smith's verbal confirmation that they had permission to speak with Dr. McCoy on his behalf. He provided that confirmation. After reviewing the package of annuity options, Mr. Smith determined that he wanted to select the 100% Joint and Survivor Annuity.
With this direction, Dr. McCoy called the Benefits Center on October 23, 2017 to execute her husband's choice. The Benefits Center requested verbal consent again from Mr. Smith for Dr. McCoy to speak on his behalf. However, at this point, Mr. Smith was unable to speak because he was on constant external ventilation due to the progression of his ALS and end stage respiratory failure. As a result, the Benefits Center refused to speak with Dr. McCoy about Mr. Smith's choice.
In an attempt to facilitate conversations on Mr. Smith's behalf, Dr. McCoy faxed the Power of Attorney to the Benefits Center on October 24, 2017. The Benefits Center received Mr. Smith's Power of Attorney that day. The following day, October 25, 2017, after being informed by the Benefits Center that the processing time for the Power of Attorney would be four or five days, Dr. McCoy informed the Benefits Center that Mr. Smith was unlikely to survive that long. She explained to the Benefits Center that failing to process the Power of Attorney before his death could result in his inability to make his desired election.
The same day, either on the same call or on a different call with the Benefits Center, Dr. McCoy was advised that Mr. Smith could make his retirement elections by phone; however, this was never effectuated because the Benefits Center declined to accept elections from Dr. McCoy, despite its prior receipt of the Power of Attorney, when Mr. Smith was no longer able physically to speak for himself.
Mr. Smith passed away on October 27, 2017. Raytheon finally confirmed the processing and approval of the Power of Attorney more than two weeks thereafter, on November 14, 2017.
Plaintiffs contend that the reason that they acted in the manner they did to try to elect Mr. Smith's benefits was because they were advised to do so by Raytheon and then relied upon its advice. Plaintiffs also contend that Raytheon's failure to act pursuant to the duly executed Power of Attorney rendered timely, non-standard elections impossible under the circumstances.
As a result of Mr. Smith's death before he had formally elected his preferred annuity benefits, Dr. McCoy received the default benefit, a 50% Surviving Spouse Benefit. The monthly payment associated with the 50% Surviving Spouse Benefit is equal to the monthly payment for the 50% Joint and Survivor Annuity,3 which is the default benefit for a plan participant who retires before his death.4 In order to receive any non-standard annuity, such as the 100% Joint and Survivor Annuity,5 the participant must make a special election in writing, pursuant to Article 9.2-A of the Plan.6
Dr. McCoy filed her written claim for the 100% Joint and Survivor Annuity on December 26, 2017, and it was denied on January 18, 2018.
Dr. McCoy filed an internal appeal on January 26, 2017. After reviewing her appeal on February 21, 2018, Raytheon, again, denied Dr. McCoy's claim on March 7, 2018.
Through this litigation, Dr. McCoy seeks to recover the full value of the 100% Surviving Spouse Benefit that Mr. Smith selected for her before his death.7 There appears to be no dispute that Mr. Smith met the requirements for Surviving Spouse Benefit eligibility, outlined in Article 8.4-A, apart from the formalities of election.
Fiduciary responsibilities are allocated under the Plan by Article 8.11(a) as follows:
Following their unsuccessful 2018 internal appeal with Raytheon, on February 20, 2019 Plaintiffs filed the Complaint before me in this court against Raytheon Company, an unknown plan administrator (identified at this point as John Doe, see supra note 1), the Raytheon Company Pension Plan for Salaried Employees, [the Plan] and Raytheon Benefit Appeals Committee, [together, "Raytheon"] pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA").
In three separate counts,11 Dr. McCoy and her deceased husband's estate seek relief in the form of recovery of the full value of the 100% Surviving Spouse Benefit annuity under the Plan in which Mr. Smith participated while employed at Raytheon and of a corresponding injunctive relief to prevent Raytheon's denial of their right to these benefits. Raytheon has moved to dismiss all counts.
Federal Rule of Civil Procedure 8(a) requires that a complaint include a "short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a). The short and plain statement need only "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotation omitted). "To survive a motion to dismiss, a complaint must contain sufficient...
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