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GLAVOR v. SHEARSON LEHMAN HUTTON

December 6, 1994

ROBERT H. GLAVOR, Plaintiff,
v.
SHEARSON LEHMAN HUTTON, INC., LEHMAN BROTHERS, a division of SHEARSON LEHMAN HUTTON, INC., EQUICOR, EQUICOR--EQUITABLE HCA CORPORATION, EQUICOR EQUITABLE SERVICE CORPORATION AS ADMINISTRATOR, THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, EQUICOR, INC., CIGNA COMPANIES, Defendants.



The opinion of the court was delivered by: D. LOWELL JENSEN

 This is an action by plaintiff alleging ERISA violations. By Order dated August 12, 1994, the Court denied plaintiff's motion for reconsideration of the Court's April 8, 1994 Order, rejecting plaintiff's argument that the ERISA plan recognized by the Court is invalid. The Court further dismissed plaintiff's action against defendant Equicor, Inc. and the Equitable Life Assurance Society of the United States. On the four remaining causes of action, the parties' motions for summary judgment were deferred pending submission of briefs exclusively directed at the following issues: statute of limitations and assessment of statutory penalties under 29 U.S.C. § 1132(c). The briefs by plaintiff and defendant Smith Barney Shearson, Inc. were timely filed. The parties' motions for summary judgment are properly before the Court. Plaintiff also filed a motion to reconsider the August 12, 1994 Order and the April 8, 1994 Order. Plaintiff's motion was heard on October 12, 1994. Upon consideration of the submissions, the Court DENIES plaintiff's motion for reconsideration and GRANTS summary judgment in favor of defendant Smith Barney Shearson, Inc.

 I. BACKGROUND

 Plaintiff Robert Glavor was employed from 1977 to April 1, 1988 by defendant Lehman Brothers, a division of Shearson Lehman Hutton, Inc., now Smith Barney Shearson, Inc. ("Shearson"). Prior to 1988, Shearson obtained long-term disability coverage for plaintiff with INA Life Insurance Company of New York. The INA plan provided payments for mental and nervous disabilities in the amount of $ 10,000 per month until plaintiff's 65th birthday if the disability occurred before age sixty.

 Plaintiff contends that the only notification he received prior to April 1, 1988 regarding a change in coverage was a pamphlet titled "1988 Group Health and Insurance Program Enhancements," which informed him that the new plan would increase his maximum monthly disability benefits to $ 15,000, but did not mention the four-year limit on benefits for mental and nervous disabilities. However, defendant Shearson asserts that, prior to April 1, 1988, it distributed to its employees a booklet entitled "Shearson Lehman Brothers Inc. 1988 Employee Benefits Program Highlights" which clearly set forth the four-year limitation on mental and nervous disabilities.

 Plaintiff claims that he became disabled on April 1, 1988. On April 29, 1988, he filed a claim for long-term disability benefits, indicating that his disability was caused by hypertension, stress, and depression. Plaintiff alleges that shortly thereafter he orally requested a copy of his policy from Shearson, and subsequently wrote Shearson two letters, dated October 15, 1988 and December 12, 1988, requesting a copy of his long-term disability policy. He did not receive a copy of the policy. However, on December 20, 1988, Shearson told plaintiff by phone that his claim had been approved by Equicor, and that his disability check was being processed. In late December, plaintiff began receiving disability payments in the amount of $ 15,000 per month, calculated retroactively to October 1, 1988.

 In January 1989, Equicor sent plaintiff a worksheet indicating that his benefit limit date was his 65th birthday in February 1996. The worksheet was inconsistent with the terms of the Equicor policy in effect as of April 1, 1988.

 Plaintiff alleges that he sent a request for a copy of his policy to Equicor on April 17, 1989, but again received no response. Equicor and Shearson issued the policy underlying the Equicor plan on May 19, 1989.

 On September 24, 1992, Equicor notified plaintiff that he would receive no further disability benefits after October 1, 1992. Plaintiff alleges that on October 12, 1992, he responded to Equicor's decision by renewing his request for a copy of his policy. A copy of the request was also sent to Shearson.

 Plaintiff formally appealed Equicor's termination of his benefits, and Equicor denied his appeal on November 24, 1992. On December 23, 1992, plaintiff's attorney requested in writing a copy of plaintiff's policy from CIGNA (Equicor). Equicor's letter in response suggested that he contact Shearson. On February 1, 1993, plaintiff's attorney requested a copy of the policy from Shearson. Plaintiff finally received a copy of the policy on June 23, 1993.

 Plaintiff filed suit on March 26, 1993 in state court and the federal court action was commenced on May 4, 1993. His first amended complaint alleged four causes of action. The first two causes of action alleged that defendants Shearson and Equicor violated 29 U.S.C. § 1132(c) of ERISA by failing to provide information requested by plaintiff, and that they failed to publish a summary plan description or modifications thereto as required by 29 U.S.C. § 1024(a)(1)(A). The third and fourth causes of action charged Equicor with estoppel and negligent misrepresentation based on the erroneous worksheet it mailed to plaintiff.

 Both sides brought motions for summary judgment. During the Court's hearing of the summary judgment motions, plaintiff apparently realized that as of April 1, 1988, a policy and summary plan description of plaintiff's long-term disability benefits which became effective on that date did not yet exist. Plaintiff also realized that ERISA does not provide a remedy for failure to have such information available. At plaintiff's request, the Court deferred ruling on the summary judgment motions, dismissed plaintiff's first amended complaint, and ordered plaintiff to move for leave to file a second amended complaint.

 In the April 8, 1994 Order, the Court found: (1) in light of the formal policy eventually adopted, no informal plan existed; (2) since neither Equicor nor Shearson made any promises, there were no claims of promissory estoppel; and (3) because the provisions of the plan eventually adopted were not ambiguous regarding the four-year limit, there were no claims of equitable estoppel. The Court therefore denied with prejudice plaintiff's motion to amend his claims regarding the de facto policy and the promissory and equitable estoppel claims, and granted plaintiff's motion to amend his claim under section 1132(c) regarding defendants' alleged failure to respond to requests for information. The Court also permitted defendants to respond to the amended complaint through supplemental briefs to their pending motions for summary judgment.

 On April 22, 1994, plaintiff filed a third amended complaint alleging six causes of action under section 1132(c) corresponding to six written requests for information, dated October 15, 1988, December 12, 1988, April 17, 1989, October 12, 1992, December 23, 1992, and February 1, 1993. Plaintiff and defendant Shearson moved for summary judgment, defendant Equicor moved to dismiss or for summary judgment, and plaintiff made a motion to reconsider the Court's April 8, 1994 Order.

 By Order dated August 12, 1994, the Court denied plaintiff's motion for reconsideration. The Court further granted defendant Equicor's motion to dismiss the third and fifth causes of action against Equicor. Plaintiff filed an appeal of that dismissal on September 12, 1994.

 Because the issue of the appropriate statute of limitations on the remaining four causes of action against Shearson was not sufficiently addressed by the parties, the Court deferred defendant Shearson's motion and plaintiff's motion for summary judgment pending submission of briefs exclusively directed at the issues of statute of limitations and assessment of statutory penalties under section 1132(c).

 The parties timely submitted their supplemental briefs to their pending motions for summary judgment. Plaintiff also filed a motion for reconsideration of the Court's August 12, 1994 Order and April 8, 1994 Order.

 II. DISCUSSION

 A. Legal ...


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