Sullivan-Mestecky v. Verizon Communications, Inc., No. 18-1591 (2d Cir. 2020)Annotate this Case
Plaintiff filed suit individually and as the beneficiary of the life insurance policy of her mother, Kathleen Sullivan, under the Employee Retirement Income Security Act of 1974 (ERISA), after the denial of Sullivan's life insurance benefits by Verizon and Prudential.
The Second Circuit held that the district court did not err in dismissing plaintiff's ERISA section 502(a)(1)(B) claim against both defendants and her section 502(a)(3) claim against Prudential. In this case, the terms limiting Sullivan's death benefits to a percentage of her annual income were accurately stated in the plan and its description, and thus the generous benefits plaintiff seeks never vested under the terms of the plan. However, the court held that the district court erred in dismissing the section 502(a)(3) claim against Verizon, because plaintiff pleaded estoppel as "appropriate equitable relief;" the fiduciary breach is sufficient to support the equitable remedy of surcharge; and reforming the plan to accord with Sullivan's reasonable expectations is an appropriate equitable remedy. Finally, the court rejected Verizon's arguments supporting its denial that it committed a fiduciary breach. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings.