Guerra Delgado et al v. Popular Inc. et al, No. 3:2011cv01535 - Document 52 (D.P.R. 2012)

Court Description: OPINION AND ORDER GRANTING 24 MOTION to Amend/Correct Complaint; GRANTING IN PART AND DENYING IN PART 7 MOTION to dismiss. Plaintiff shall electronically file the Amended Complaint forthwith. Plaintiff's Commonwealth law claims for breach of contract, any claims under ERISA § 502(a)(1), and any claims against Popular, Inc., are DISMISSED. Plaintiff's other claims remain pending. Signed by Judge Jose A Fuste on 3/29/2012.(mrj)

Download PDF
1 2 3 4 UNITED STATES DISTRICT COURT DISTRICT OF PUERTO RICO ALFREDO GUERRA-DELGADO, BELINDA BLANCH-BERRIOS, 5 Plaintiffs, 6 Civil No. 11-1535 (JAF) v. 7 8 POPULAR, INC., et al., Defendants. 9 10 OPINION AND ORDER 11 Alfredo Guerra-Delgado ( Plaintiff ), on behalf of himself and his wife, coplaintiff 12 Belinda Blanch-Berríos, brings suit against Defendants, Popular, Inc. ( Popular, Inc. ), Banco 13 Popular de Puerto Rico ( Banco Popular Puerto Rico ), Banco Popular North America, Inc. 14 ( Banco Popular North America ), Plan de Retiro de Banco Popular ( the Plan ), Comité 15 Administrativo de Beneficios de Popular, Inc. ( the Committee ), and unnamed insurers and 16 trustees, administrators and agents, seeking damages under the Employee Retirement Income 17 Security Act of 1974 ( ERISA ), 29 U.S.C. §§ 1001 1461. (Docket Nos. 1; 24 1.) Plaintiff1 18 also seeks damages under the federal common-law doctrines of promissory and equitable 19 estoppel, as well as commonwealth law. (Docket Nos. 1; 24 1.) Popular, Inc., Banco Popular 20 Puerto Rico, Banco Popular North America, the Plan, and the Committee (together, Movants ) 21 move for dismissal under Federal Rule of Civil Procedure 12(b)(6). (Docket No. 7.) Plaintiff 1 Throughout this opinion, we refer to Plaintiff rather than Plaintiffs. We use Plaintiff for the sake of consistency and ease of reading. We note here again that Plaintiff brings his claim on behalf of both himself and his wife, coplaintiff Belinda Blanch-Berríos. Her interests are affected in the same way as Plaintiff s. Civil No. 11-1535 (JAF) -2- 1 requests leave to file an amended complaint, (Docket Nos. 24; 24 1), and opposes Movants 2 motion to dismiss (Docket No. 27).2 Movants reply to Plaintiff s opposition, and oppose 3 Plaintiff s request for leave to file an amended complaint. (Docket No. 39.) 4 I. 5 Allegations 6 We derive the following allegations from the amended complaint. (Docket No. 24 1.) 7 In 1998, Plaintiff accepted a job offer to work for codefendant Banco Popular North America 8 (Id. at 3.) Plaintiff alleges that he accepted the job offer because Banco Popular North America 9 agreed to credit his eighteen previous years of employment with another institution towards the 10 Plan.3 (Id.) Then, in 2000, Plaintiff transferred to Banco Popular Puerto Rico. (Id.) To ensure 11 that this transfer would not affect his previous agreement with Banco Popular North America, 12 Plaintiff requested that Banco Popular Puerto Rico confirm in writing that his eighteen years 13 had been credited to the Plan. (Id.) In June of 2000, Ms. Madeline Mundo, of Banco Popular 14 Puerto Rico s Benefits Department, wrote a letter confirming that Plaintiff s eighteen years of 15 employment had been credited to the Plan, in addition to two years of credit for the time 16 Plaintiff had worked for Banco Popular North America.4 (Id.) 2 For the reasons stated below, we grant Plaintiff s request for leave to file an amended complaint. We, therefore, analyze Movants motion to dismiss as it relates to Plaintiff s amended complaint (Docket No. 24 1). 3 Popular, Inc. is the parent corporation of Banco Popular Puerto Rico and Banco Popular North America. (Id. at 2.) Banco Popular Puerto Rico and Banco Popular North America are subsidiaries of Popular, Inc., with banking operations in Puerto Rico and the state of New York, authorized to do business in their respective jurisdictions. (Id.) 4 Plaintiff has provided a copy of this letter and incorporated it (along with the documents listed in the following four notes) in the complaint. (Docket No. 22 2.) Therefore, our review of these documents does not convert the motion to dismiss into a motion for summary judgment. Giragosian v. Ryan, 547 F.3d 59, 65 (1st Cir. 2008); Beddall v. State St. Bank and Trust Co., 137 F.3d 12, 17 (1st Cir. 1998). Defendants attached a copy of the Plan to their motion to dismiss. (Docket No. 7 2.) Civil No. 11-1535 (JAF) -3- 1 In each of the years from 2000 to 2008, Banco Popular Puerto Rico gave Plaintiff a 2 yearly written Total Compensation Report. (Id.) In each of these reports, Banco Popular 3 Puerto Rico confirmed that the eighteen years Plaintiff had worked before coming to Banco 4 Popular North America (in addition to the two years Plaintiff worked at Banco Popular North 5 America) had been credited to the Plan.5 (Id.) 6 In 2005, Banco Popular Puerto Rico discontinued the existing benefits structure. (Id. at 7 4.) These changes did not affect employees who had accrued more than ten years towards 8 retirement benefits. (Id.) As part of the reorganization, Banco Popular Puerto Rico offered 9 compensation to affected employees who had less than ten years of employment. (Id.) Plaintiff 10 was not offered, and did not receive, this compensation. (Id.) Plaintiff asserts that this was 11 because he had accrued more than ten years of employment at the time. (Id.) In November 12 2005, Plaintiff received a letter confirming that 24.09 years of employment had been credited 13 towards the Plan.6 (Id.) 14 Near the end of 2008, Plaintiff contacted Banco Popular Puerto Rico regarding his 15 potential benefits if he were to retire. (Id.) Plaintiff received an e-mail dated September 8, 16 2008, which estimated that he would receive approximately $2,356.59 per month.7 (Id.) He 17 also received an Estimated Pension Calculation that calculated that he would receive upwards 18 of $2,255.25 a month, depending on the retirement option he chose. (Id.) 5 Plaintiff has provided the relevant pages from the reports from 2000, 2004 and 2007. (Docket Nos. 22 3; 22 4; 22 5.) 6 Plaintiff has provided a copy of this letter. (Docket No. 22 6.) 7 Plaintiff has provided a copy of this e-mail. (Docket No. 22 7.) Civil No. 11-1535 (JAF) -4- 1 On December 1, 2008, Plaintiff gave notice that he was planning to retire. (Id.) After 2 he had retired, in a letter dated March 19, 2009, Popular, Inc. notified Plaintiff that he had only 3 seven years of service for credit towards the Plan.8 (Id.) This made him eligible for a monthly 4 payment of $570.87. (Id.) The letter also informed Plaintiff that based on this calculation, 5 Plaintiff had been erroneously denied the compensation offered in 2005 to employees who had 6 accrued less than ten years of employment. (Id.) Popular, Inc., therefore, offered to pay 7 Plaintiff this compensation, in the amount of $18,137. (Id.) 8 In a 2009 letter written by his attorney, Plaintiff requested reconsideration of Popular, 9 Inc. s determination of his years of service for eligibility and credit towards the Plan. (Id. at 5.) 10 Plaintiff alleges that the correct figures are 25.83 years of eligibility, and 24.83 years of credit. 11 (Id.) In a letter dated July 29, 2009, the Committee reiterated its calculation of monthly benefits 12 at $570.87. (Id.) The Committee reiterated its offer to pay $18,137 in back pay. (Id.) The 13 letter advised Plaintiff of his rights to present a civil action under ERISA. (Id.) 14 II. 15 Motion to Dismiss Under 12(b)(6) 16 A. Standard 17 A defendant may move to dismiss an action, based solely on the complaint, for the 18 plaintiff s failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). 19 In assessing such a motion, we accept[] all well-pleaded facts as true, and we draw all 8 Movants have attached a copy of the letter to their motion to dismiss. (Docket No. 7 3.) Plaintiff references the exhibit in his amended complaint. (Docket No. 24 1 at 4.) Neither Plaintiff nor Movants are clear about which entity of Popular, Inc. was responsible for writing the letter. Plaintiff writes that Banco Popular notified him of the seven years credit, then says Popular Group offered to pay $18,137 in back pay. (Id.) The letterhead and address of the attached letter lists Popular, Inc. as the sender. Civil No. 11-1535 (JAF) -5- 1 reasonable inferences in favor of the [plaintiff]. Wash. Legal Found. v. Mass. Bar Found., 993 2 F.2d 962, 971 (1st Cir. 1993). 3 [A]n adequate complaint must provide fair notice to the defendants and state a facially 4 plausible legal claim. Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011). 5 In considering a complaint s adequacy, we disregard statements in the complaint that merely 6 offer legal conclusions couched as fact or threadbare recitals of the elements of a cause of 7 action. 8 [n]onconclusory factual allegations . . . even if seemingly incredible. Id. On the basis of 9 those properly pled facts, we assess the reasonableness of the inference of liability that the Id. (internal quotation marks omitted). 10 plaintiff is asking the court to draw. Id. at 13. 11 B. We then take as true what remains, 12 13 14 Analysis 1. Proper Defendants a. Popular, Inc., Banco Popular Puerto Rico, and Banco Popular North America 15 Movants argue that the complaint should be dismissed as to Popular, Inc., Banco Popular 16 Puerto Rico, and Banco Popular North America (together, Popular codefendants ), because 17 the complaint lacks any well-pled factual allegations that they acted as fiduciaries. (Docket 18 No. 39 at 5.) ERISA contemplates actions against an employee benefit plan and the plan s 19 fiduciaries. With narrow exception, however, ERISA does not authorize actions against 20 nonfiduciaries of an ERISA plan. Terry v. Bayer Corp., 145 F.3d 28, 35 (1st Cir. 1998). A 21 party is a fiduciary to the extent that he or she exercises discretion over the management of the 22 plan or its funds or over its administration. Livick v. Gilette Co., 524 F.3d 24, 29 (1st Cir. Civil No. 11-1535 (JAF) -6- 1 2008) (internal quotation marks and citations omitted). A party not named as a fiduciary in the 2 plan, including an employer, can become a fiduciary to the extent it undertakes fiduciary duties. 3 Id. (internal quotation marks and citations omitted). 4 The parties dispute whether the Popular codefendants alleged actions qualify as 5 fiduciary duties. Both parties attempt to situate their versions of the facts within favorable case 6 law. Movants argue this case is like those in which defendants undertook only routine, 7 ministerial duties. (Docket No. 39 at 6.) The mere exercise of physical control or the 8 performance of mechanical administrative tasks generally is insufficient to confer fiduciary 9 status. Gómez-González v. Rural Opportunities, Inc., 626 F.3d 654, 665 (1st Cir. 2010) 10 (internal quotation marks and citations omitted). Providing estimates of benefits has been held 11 to be a ministerial function not conferring fiduciary status. Livick, 524 F.3d at 29. 12 On the other hand, Plaintiff argues, Popular codefendants did more than simply execute 13 ministerial duties. (Docket No. 27 at 6.) The First Circuit has held that an employer may be 14 sued as a fiduciary if it set up an internal committee with little if any, separate identity, and in 15 fact took control of the function allegedly delegated to that committee. Law v. Ernst & Young, 16 956 F.2d 364, 74 (1st Cir. 1992). Plaintiff also argues that his case is similar to Varity Corp. 17 v. Howe, 516 U.S. 489 (1996). In that case, an employer deliberately misled its employees 18 regarding the security of their future benefits. Id. at 494. In support of its effort to induce its 19 employees to change their benefit and employment plan, the employer falsely assured its 20 employees that the security of their benefits would not be at risk if they agreed to the change. 21 Id. The newly-formed company was, in fact, insolvent, and the employees lost their benefits. 22 Id. There, the Supreme Court held that the employer could be sued as a fiduciary. Id. at 501. Civil No. 11-1535 (JAF) -7- 1 In this case, we analyze the sufficiency of the complaint as it relates to each of the three 2 specific Popular codefendants. Movants argue that the complaint makes no factual allegations 3 that Popular, Inc. and Banco Popular North America acted as fiduciaries. (Docket No. 39 at 7.) 4 With respect to Popular, Inc., we agree. The complaint lacks any specific allegations that 5 Popular, Inc. acted as a fiduciary. (Docket No. 24 1.) Nor does Plaintiff s opposition cite any 6 specific allegations that Popular, Inc. acted as a fiduciary, instead focusing on the involvement 7 of Banco Popular Puerto Rico and Banco Popular North America. (Docket No. 27 at 6 10.) 8 We, therefore, dismiss the first cause of action as to Popular, Inc. See Watson v. Deaconess 9 Waltham Hosp., 298 F.3d 102, 117 (1st Cir. 2002) (finding that plaintiff failed to plead 10 fiduciary status of employer s parent company). 11 Regarding Banco Popular North America, Plaintiff alleges that this entity agreed to 12 credit eighteen years towards the Banco Popular Pension Plan. (Docket No. 24 1 at 3.) 13 Movants do not address this allegation directly, instead arguing that: [I]t is clear that [Banco 14 Popular North America] do[es] not have any duties assigned to them under the Plan and that 15 they were not involved in the ministerial tasks of providing pension estimates to Mr. Guerra or 16 information regarding the plan and/or Mr. Guerra s benefits. (Docket No. 39 at 7.) This 17 response fails to rebut Plaintiff s allegations that Banco Popular North America induced him 18 to accept employment by offering to credit eighteen years of employment towards his benefit 19 plan. We find these allegations sufficient for the complaint to proceed against Banco Popular 20 North America. See Varity, 516 U.S. at 501 (finding employer s false assurances regarding 21 security of future benefits, while inducing employee to switch employment plan, sufficient to 22 confer fiduciary status). Civil No. 11-1535 (JAF) -8- 1 We also find that the amended complaint is sufficient to proceed against Banco Popular 2 Puerto Rico. Plaintiff alleges that in June of 2000, Banco Popular Puerto Rico provided 3 Plaintiff with a letter, on Banco Popular letterhead, stating that eighteen years of employment 4 had been credited towards the Plan, and that two more years had been credited for his time at 5 Banco Popular North America. (Docket No. 24 1 at 3.) The letter was signed by Ms. Madeline 6 Mundo, of Banco Popular s Benefits Department.9 (Id.) Plaintiff alleges that Banco Popular 7 Puerto Rico continued to confirm, every year since 2000, that his eighteen years of previous 8 employment were being credited to his pension plan. (Id.) 9 The actions that Plaintiff alleges go well beyond merely mechanical calculations of 10 benefit estimates, as Movants contend. This is not a case in which a human resources officer 11 provided calculations that contradicted an otherwise clear, written policy provided by the 12 employer. See Livick, 524 F.3d at 30 (emphasizing that plaintiff had already received clear 13 written notice that prior employment years would not be considered as part of current 14 employer s pension plan). Rather, Banco Popular Puerto Rico appears to have given misleading 15 information to Plaintiff regarding the security of his future benefits, at a time when he might 16 have chosen to pursue other employment opportunities. Varity, 516 U.S. at 101. The fact that 17 Banco Popular Puerto Rico employees used company letterhead to communicate with Plaintiff, 18 regarding the security of his future benefits, also suggests a finding of fiduciary activity. See 19 Law, 956 F.2d at 374 (explaining that employees using company letterhead for benefit-related 20 communications suggests employer acted as fiduciary). Therefore, Plaintiff s first cause of 21 action will be allowed to proceed against Banco Popular Puerto Rico. 9 Plaintiff provides a copy of the letter. (Docket 22 2.) Civil No. 11-1535 (JAF) 1 b. -9- Committee in its Individual Capacity 2 Movants next argue that the complaint should be dismissed as to the Committee in its 3 individual capacity, because it lacks any allegations that the Committee breached its fiduciary 4 obligations under ERISA. (Docket Nos. 7 at 10 11; 39 at 8 11.) ERISA provides that [a]ny 5 money judgment under this subchapter against an employee benefit plan shall be enforceable 6 only against the plan as an entity and shall not be enforceable against any other person unless 7 liability against such person is established in his individual capacity under this subchapter. 29 8 U.S.C. § 1132(d)(2). §1109(a), in turn, provides that [a]ny person who is a fiduciary with 9 respect to a plan who breaches any of the responsibilities, obligations or duties imposed on 10 fiduciaries by this subchapter shall be personally liable . . . . The parties also agree that to 11 establish individual liability against a plan administrator requires a finding that the 12 administrator breached its fiduciary obligations under ERISA. (Docket Nos. 27 at 10; 39 at 13 8.) We agree. Evans v. Akers, 534 F.3d 65, 68 (1st Cir. 2008) (holding that ERISA allows 14 fiduciaries to be held personally liable for fiduciary breaches). In dispute is whether Plaintiff s 15 complaint contains sufficient allegations that the Committee breached a fiduciary duty. 16 Regarding this question, Movants direct us to only one case from the First Circuit, 17 Gómez-Gonzalez, 626 F.3d at 665. (Docket No. 39 at 8.) We note that this case provides little 18 guidance about what constitutes a breach of fiduciary duty. Movants also refer us to a more 19 instructive case from the Third Circuit, Hahnemann Univ. Hosp. v. All Shore, Inc., 514 F.3d 20 300, 309 (3d Cir. 2008). There, the Third Circuit held that a plan administrator could be held 21 individually liable, because it, as plan administrator, owed a fiduciary duty which it breached 22 by refusing to pay the claim without any justification. Id. Civil No. 11-1535 (JAF) -10- 1 We find that Plaintiff has stated a claim for breach of fiduciary duty against the 2 Committee. The amended complaint alleges that the Committee (together with other defendants) 3 represented to Plaintiff that he had 25.83 years of service for eligibility and 24.83 years of 4 service for credit. (Docket No. 24 1 at 5.) Plaintiff also alleges that his employment contract 5 stipulated that his eighteen years of employment would be credited towards his pension. (Id.) 6 After Plaintiff retired, the Committee informed him that those eighteen years had not been 7 credited, and that he would receive a greatly-reduced monthly payment. (Id.) At the motion to 8 dismiss stage of the proceedings, we find these allegations are sufficient to proceed against the 9 Committee in its individual capacity. See, e.g., Livick, 524 F.3d at 30 (holding that a named 10 fiduciary can be liable for the acts and omissions of persons designated to carry out fiduciary 11 responsibilities ) (citing 29 C.F.R. § 2509.75 8); Watson, 298 F.3d at 115 (recognizing that 12 [m]any of our sister circuits have spoken of an affirmative duty to inform beneficiaries of 13 material facts about a plan ); Vartanian v. Monsanto, 14 F.3d 697, 702 (1st Cir. 1992) (holding 14 that plan administrators had a fiduciary duty not to mislead plaintiff). 15 16 2. Available Relief a. Equitable Relief under § 502(a)(3) 17 Movants next argue that the relief sought by Plaintiff an injunction imposing personal 18 liability on Movants for past-due monetary obligations is a type of equitable relief not 19 available under ERISA § 502(a)(3), § 1132(a)(3). (Docket Nos. 7 at 10 12; 39 at 11 13.) 20 § 502(a)(3) allows a participant, beneficiary or fiduciary to obtain other appropriate equitable 21 relief to redress violations of parts of ERISA or to enforce any provisions of this subchapter 22 or the terms of the plan. § 1132(a)(3). Civil No. 11-1535 (JAF) -11- 1 The Supreme Court has interpreted the term appropriate equitable relief in § 502(a)(3) 2 as referring to those categories of relief that, traditionally speaking (i.e., prior to the merger 3 of law and equity) were typically available in equity. CIGNA Corp. v. Amara, 131 S. Ct. 4 1866, 1878 (2011) (quoting Sereboff v. Mid Atlantic Med. Servs., 547 U.S. 356, 361 (2006)) 5 (internal quotation marks and citations omitted). In CIGNA, the Court held that in a suit by 6 a beneficiary against a plan fiduciary (whom ERISA typically treats as a trustee) about the terms 7 of a plan (which ERISA typically treats as a trust), a district court had within its powers several 8 traditional equitable remedies. Id. These included the power to grant injunctions; the power 9 to reform contracts; estoppel; and the power to order monetary compensation for a loss 10 resulting from a trustee s breach of duty, sometimes called a surcharge. CIGNA, 131 S. Ct. 11 at 1879 80 (citations omitted). 12 Movants argue that CIGNA is inapposite, because that case may only be interpreted to 13 apply to cases in which a breach of trust under ERISA is alleged and where recovery is sought 14 pursuant to a Plan . . . . (Docket No. 39 at 11 12.) According to Movants, CIGNA is 15 inapplicable to cases, such as this, that are based exclusively on a theory of estoppel purporting 16 to recover benefits in excess of that to which the participant is entitled under the Plan. Id. 17 Movants contend that here, Plaintiffs seek relief on the basis of a theory of promissory estoppel 18 that is unrelated to any specific claim for breach of fiduciary duty under ERISA. Additionally, 19 Plaintiffs estoppel theory does not seek the payment of benefits owed under the Plan. (Id. at 20 13.) 21 We reject Movants argument. In CIGNA, the Court sought to remedy the false and 22 misleading information CIGNA provided in its representations to employees. 131 S. Ct. at Civil No. 11-1535 (JAF) -12- 1 1879. That remedy essentially held CIGNA to what it had promised. Id. at 1880. That is 2 essentially what Plaintiff seeks here. As the Supreme Court has said, quoting Justice Story, 3 equitable estoppel forms a very essential element in . . . fair dealing, and rebuke of all 4 fraudulent misrepresentation, which it is the boast of courts of equity constantly to promote. 5 Id. (quoting 2 J. Story, Commentaries on Equity Jurisprudence, § 1533, at 776 (12th ed. 1877)). 6 Based on these considerations, we reject Movants argument that the form of relief sought by 7 Plaintiff is beyond a court s power under ERISA. Id. 8 b. Equitable Relief under § 502(a)(1) 9 Movants next argue that Plaintiff lacks a valid claim under ERISA § 502(a)(1). (Docket 10 No. 7 at 12 13.) That provision states that a civil action may be brought by a plan participant 11 or beneficiary . . . to recover benefits due to him under the terms of his plan, to enforce his 12 rights under the terms of the plan, or to clarify his rights to future benefits under the terms of 13 the plan. § 1132(a)(1)(B). 14 Defendants argue that Plaintiff has no claim under § 502(a)(1), because he has no valid 15 claim for benefits under the terms of the plan. (Docket No. 7 at 12.) Defendants cite the 16 reasoning provided by the Committee in its decision to award only seven years of credit for 17 service towards the Plan. (Id.) Specifically, Movants cite Article 1.34 of the Plan, which 18 provides that Plan participants are only credited for years of service while employed at Banco 19 Popular.10 (Id.) Although the Plan also provides that certain other Transferred Participants 10 Plaintiff incorporated the Plan by reference in his complaint, and many of Plaintiff s responses in his opposition cite specific provisions of the Plan. (Docket Nos. 24 1; 27 at 24.) Therefore, our review of the Plan does not convert the motion to dismiss into a motion for summary judgment. Giragosian, 547 F.3d at 65 (1st Cir. 2008); Beddall, 137 F.3d at 17 (1st Cir. 1998). Defendants attached a copy of the Plan to their motion to dismiss. (Docket No. 7 2.) Civil No. 11-1535 (JAF) -13- 1 may receive years of credit, Plaintiff does not meet the definition of a Transferred Participant. 2 (Id.) Transferred Participants include employees who were employed by Banco de Ponce 3 when that institution merged with Banco Popular, and who became employees of Banco Popular 4 at the time of the merger. (Id.) Because Defendant was not employed by Banco de Ponce at 5 the time of the merger, and did not become an employee of Banco Popular at that time, Plaintiff 6 has no valid claim for benefits under the terms of the Plan. (Id.) 7 Plaintiff responds that nothing in the Plan prevents his eighteen years of service from 8 being credited. He cites no case law or any specific provisions of the Plan, arguing only that 9 [a]ll the Plan Administrator had to do was to calculate and disburse benefits based on the 10 benefit years which included the credited 18 years. (Docket No. 27 at 25.) 11 The denial of benefits in an ERISA claim under § 502(a)(1) is subject to de-novo review 12 unless the benefit plan gives the administrator or fiduciary discretionary authority to determine 13 eligibility for benefits or to construe the terms of the plan, in which event the court applies a 14 deferential arbitrary and capricious or abuse of discretion standard. Maher v. Mass. Gen. 15 Hosp. Long Term Disability Plan, 665 F.3d 289, 291 (1st Cir. 2011) (internal quotation marks 16 and citations omitted). In this case, Article 8.02 of the Plan gives the Committee the exclusive 17 right to interpret the Plan and to decide any matters arising in connection with the administration 18 and operation of the Plan. (Docket No. 7 2 at 2.) Therefore, we apply an arbitrary and 19 capricious or abuse of discretion standard to the Committee s decision. Maher, 665 F.3d at 20 291. 21 Plaintiff has provided no arguments suggesting that the Committee s interpretation of 22 the terms of the Plan was arbitrary and capricious or an abuse of discretion. We do not Civil No. 11-1535 (JAF) -14- 1 construe Plaintiff s claim as one that seeks to recover benefits due to him under the terms of 2 his plan, [or] to enforce his rights under the terms of the plan. § 1132(a)(1)(B). Rather, 3 Plaintiff argues that Movants are bound by separate commitments made to him that his eighteen 4 years would be credited. As the Court found in CIGNA, we hold that the remedy Plaintiff seeks 5 seems less like the enforcement of a contract as written and more like an equitable remedy. 6 131 S. Ct. at 1877. As such, any relief sought by the Plaintiff must fall under § 502(a)(3), not 7 § 502(a)(1). Id. 8 c. Equitable Estoppel 9 Defendants next argue that Plaintiff s complaint should be dismissed, because the First 10 Circuit has not recognized a cause of action for equitable estoppel under ERISA and, even if 11 it did, Plaintiff has not pled the necessary elements. (Docket Nos. 7 at 14 17.) Again, we 12 disagree. Although the First Circuit has found it unnecessary to decide whether to recognize 13 estoppel claims under ERISA, it has acknowledged that [m]ost of our sister circuits have 14 recognized such claims. Livick, 524 F.3d at 30 31 (citing Hooven v. Exxon Mobil Corp., 465 15 F.3d 566, 578 (3d Cir. 2006); Mello v. Sara Lee Corp., 431 F.3d 440, 444 (5th Cir. 2005); 16 Devlin v. Empire Blue Cross & Blue Shield, 274 F.3d 76, 85 86 (2d Cir. 2001); Bowerman, 17 226 F.3d at 586; Sprague v. Gen. Motors Corp., 133 F.3d 388, 403 & n.13 (6th Cir. 1998); 18 Greany v. W. Farm Bureau Life Ins. Co., 973 F.2d 812, 821 (9th Cir. 1992); Kane v. Aetna Life 19 Ins., 893 F.2d 1283, 1285 (11th Cir. 1990)). The Supreme Court has also recognized equitable 20 estoppel claims in an ERISA context. CIGNA, 131 S. Ct. at 1880. 21 On these facts, we find that Plaintiff has stated a valid equitable estoppel claim. To state 22 a viable claim for equitable estoppel, Plaintiff must plead: 1) a definite misrepresentation of fact Civil No. 11-1535 (JAF) -15- 1 was made; 2) Plaintiff reasonably relied on said misrepresentation to his detriment, thereby 2 changing his position for the worse; 3) Plaintiff suffered an injury or damage resulting from the 3 denial of benefits by the party that made the representation. Law, 956 F.2d 368. 4 We find that the amended complaint satisfies these three elements. The amended 5 complaint alleges that Ms. Mundo, of Banco Popular Puerto Rico s Benefits Department, 6 provided Plaintiff a letter on Banco Popular letterhead, indicating that his eighteen years would 7 be credited to the Plan. (Docket No. 24 1 at 6.) Plaintiff alleges that he relied on that 8 representation to his detriment, and was injured when he retired and received a much lower 9 pension than he expected. (Id. at 5.) 10 Movants argue that it was unreasonable for Plaintiff to rely on Ms. Mundo s letter, 11 because the terms of the Plan unambiguously state that Plaintiff s eighteen years were not 12 eligible for credit. (Docket No. 39 at 22 23.) In Livick, the First Circuit held that it was 13 inherently unreasonable to rely on an informal statement in conflict with a clear provision of 14 the Plan. 524 F.3d at 31. Plaintiff responds that under his reading of the Plan, nothing prohibits 15 Banco Popular from offering years of credit as a recruitment tool to new employees. (Docket 16 No. 27 at 24.) Plaintiff also points to Section 10.01 of the Plan, which allows the Plan to be 17 amended, retroactively or otherwise, at any time. (Docket No. 27 at 24.) 18 The facts of this case are easily distinguished from Livick, where the communications 19 relied on by the plaintiff were clearly identified as estimates. 524 F.3d at 31. In that case, the 20 plaintiff relied on estimates that included a prominent disclaimer that the Plan trumped any 21 estimates. Id. Here, we cannot say that it was unreasonable for Plaintiff to rely on the letter 22 he received from Ms. Mundo, of Banco Popular s Benefits Department. An employee could Civil No. 11-1535 (JAF) -16- 1 reasonably think that Ms. Mundo s position, and the manner in which she expressed herself 2 on Banco Popular letterhead, in no uncertain terms gave her the apparent authority to 3 ensure that Plaintiff s eighteen years would be credited to the Plan. Id. at 32. 4 3. 5 Defendants next argue that Plaintiff s commonwealth law claims for breach of contract 6 are preempted by ERISA. (Docket Nos. 7 at 17 20; 39 at 24 26.) We agree. ERISA s broad 7 preemption clause provides: Except as provided in subsection (b) of this section, the provisions 8 of this subchapter . . . shall supersede any and all State laws insofar as they may now or 9 hereafter relate to any employee benefit plan . . . . § 1144(a). The term State law includes 10 all laws, decisions, rules, regulations, or other State action having the effect of law, of any 11 State. § 1144(c)(1). Pre-emption of Commonwealth Law Claims 12 The First Circuit has held that ERISA preempts state law causes of action for damages 13 where the damages must be calculated using the terms of an ERISA plan. Hampers v. W.R. 14 Grace & Co., Inc., 202 F.3d 44, 52 (1st Cir. 2000) (citing Carlo v. Reed Rolled, 49 F.3d 790, 15 794 (1st Cir. 1995)). That the very same conduct . . . underlies [Plaintiff s] state law contract 16 claim and his ERISA-benefits claim suggests that the state law claim is an alternative 17 mechanism for obtaining ERISA plan benefits. Id. 18 The same is true here. Plaintiff s commonwealth law claim for breach of contract relies 19 on the same alleged actions that underlie his ERISA claims. (Docket No. 24 1 at 8 9.) In his 20 fourth cause of action, Plaintiff simply reincorporates the same allegations that underlie his first 21 three causes of action under ERISA. (Id.) Plaintiff also states that [t]he measure of damages 22 is the difference between the benefits correctly owed to [him] and the reduced benefits offered Civil No. 11-1535 (JAF) -17- 1 calculated at $2,397.90 monthly pay . . . . (Id.) This is equal to the difference between 2 Plaintiff s current monthly payment and the amount he would be paid if Movants credited his 3 eighteen years of previous employment to the Plan. 4 Because Plaintiff s breach of contract claim under commonwealth law is really only an 5 alternative mechanism for obtaining ERISA plan benefits, we hold that it relates to the 6 employee benefit plan, and is preempted. Id. at 53 54. 7 IV. 8 Conclusion 9 Given the foregoing, we hereby GRANT IN PART and DENY IN PART Movants 10 Rule 12(b)(6) motion (Docket No. 7). We GRANT Plaintiff s request for leave to amend the 11 complaint (Docket No. 24). 12 forthwith. Plaintiff shall electronically file the Amended Complaint 13 Plaintiff s commonwealth law claims for breach of contract, any claims under ERISA 14 § 502(a)(1), and any claims against Popular, Inc. are DISMISSED. Plaintiffs other claims 15 remain pending. 16 IT IS SO ORDERED. 17 San Juan, Puerto Rico, this 29th day of March, 2012. 18 19 20 s/José Antonio Fusté JOSE ANTONIO FUSTE U.S. District Judge

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.