# Futterman v. United Employee Benefit Fund

> District Court, N.D. Illinois · November 5, 2021

URL: https://www.frixlaw.com/law-library/cases/10145593

## Case

- **Court:** District Court, N.D. Illinois
- **Decided:** November 5, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

Ronald Futterman,

Plaintiff,
Case No. 20-cv-6722
v.

United Employee Benefit Fund, et al., Judge Mary M. Rowland

Defendants.

MEMORANDUM OPINION AND ORDER
Plaintiff brings this case under the Employee Retirement Income Security Act
of 1974 (ERISA) against an employee benefit fund, the fund’s trustees, and the fund’s
plan administrator alleging that they breached their fiduciary duties, failed to
provide him documents upon written request, and failed to terminate the fund in
contravention of a governing trust agreement. Defendants have moved to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6). [14]. For the reasons explained
below, this Court denies Defendants’ motion.
I. Background
This Court accepts as true the following factual allegations from the complaint
[1]. See Bilek v. Fed. Ins. Co., 8 F.4th 581, 586 (7th Cir. 2021).
Plaintiff participates in the United Employee Benefit Fund (Fund) which, until
Plaintiff turns ninety years old, entitles his beneficiaries to a death benefit worth
between $1 million and $1.5 million. [1] ¶ 1. Plaintiff is currently seventy-seven
years old. Id.
Defendant Fund constitutes an “employee benefit plan” under Section 3(3) of
ERISA, 29 U.S.C. § 1002(3). Id. ¶ 9. Defendants Gary Meyers and John Fernandez
serve as the Fund’s Board of Trustees. Id. ¶ 11. The Board has, at all relevant times,

been the plan administrator and plan sponsor of the Fund. Id. The Board appointed
Defendant David Fensler to act on its behalf as plan administrator in connection with
day-to-day operations and administration of the Fund. Id. ¶ 14. Certain plan
documents—such as the summary plan description (SPD) and the trust agreement—
govern Plaintiff’s Fund benefits and other rights concerning the Fund. Id. ¶¶ 3, 15,
34, 42.

On or around May 21, 2020, Plaintiff received a letter dated May 11, 2020 from
Trustee Meyers. Id. ¶ 39. The letter stated, in relevant part, that “for participants
65 and over there will be a 30% reduction of their life insurance death benefit.” Id.
Because he believed that the Fund had no right or authority to reduce his benefit,
Plaintiff began to write letters to Defendants, asking them to provide his plan
documents and requesting an explanation regarding the basis and authority for the
reduction in benefits. Id. ¶ 42. Plaintiff claims that his repeated efforts to obtain

necessary documents proved futile and that he received only some documents. Id.
Plaintiff also claims he received some documents more than thirty days after his
requests. Id.
Plaintiff also alleges that a 2020 annual statement for his life insurance policy
revealed a loan balance in the amount of $2,769.61 despite never requesting a loan.
Id. ¶¶ 73–74. As of the filing of Plaintiff’s complaint, neither Fensler nor anyone else
has provided any information to Plaintiff about the reason for the loan balance. Id.
¶ 76.
Plaintiff additionally asserts that he discovered other improprieties which

could threaten his rights to, or value of, his death benefit. Id. ¶ 77. Specifically,
Plaintiff alleges that the trust agreement requires that the Fund terminate when
there are no more employers required to make contributions to the Fund, and as of
2018, there were no longer any employers with such an obligation. Id. ¶ 92. Plaintiff
thus claims that the Fund trustees have failed to terminate the Fund in accordance
with the Trust Agreement. Id. ¶ 92.

Plaintiff brings a four-count complaint under ERISA to redress his alleged
statutory injuries. Count I alleges a failure to provide plan documents against
Defendants Fensler, Meyers, and Fernandez under ERISA section 104(b)(4); Count
II alleges breach of fiduciary duty against all Defendants based upon their purported
failure to administer the Fund in accordance with governing documents; Count III
alleges breach of fiduciary duty against Meyers, Fernandez, and Fensler based upon
the reduction of Plaintiff’s death benefit; and Count IV alleges failure to terminate

the trust in accordance with the trust agreement against all Defendants.
Defendants have moved to dismiss all claims against them. [14].
II. Legal Standard
A motion to dismiss tests the sufficiency of a complaint, not the merits of the
case. Gunn v. Cont’l Cas. Co., 968 F.3d 802, 806 (7th Cir. 2020). To survive a motion
to dismiss under Rule 12(b)(6), “the complaint must provide enough factual
information to state a claim to relief that is plausible on its face and raise a right to
relief above the speculative level.” Haywood v. Massage Envy Franchising, LLC, 887
F.3d 329, 333 (7th Cir. 2018) (quoting Camasta v. Jos. A. Bank Clothiers, Inc., 761

F.3d 732, 736 (7th Cir. 2014)); see also Fed. R. Civ. P. 8(a)(2) (requiring a complaint
to contain a “short and plain statement of the claim showing that the pleader is
entitled to relief”). A court deciding a Rule 12(b)(6) motion accepts plaintiff’s well-
pleaded factual allegations as true and draws all permissible inferences in plaintiff’s
favor. Degroot v. Client Servs., Inc., 977 F.3d 656, 659 (7th Cir. 2020). A plaintiff
need not plead “detailed factual allegations,” but “still must provide more than mere

labels and conclusions or a formulaic recitation of the elements of a cause of action
for her complaint to be considered adequate under Federal Rule of Civil Procedure
8.” Bell v. City of Chicago, 835 F.3d 736, 738 (7th Cir. 2016) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)).
Dismissal for failure to state a claim is proper “when the allegations in a
complaint, however true, could not raise a claim of entitlement to relief.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 558 (2007). Deciding the plausibility of the claim is

“a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Bilek, 8 F.4th at 586–87 (quoting W. Bend Mut. Ins.
Co. v. Schumacher, 844 F.3d 670, 676 (7th Cir. 2016)).
III. Analysis
A. Exhaustion of Administrative Remedies
Defendants first argue that Plaintiff’s claims should all be dismissed for failure

to exhaust mandatory administrative remedies available under the Plan. [14] at 6–
7.
ERISA requires benefit plans to implement administrative dispute resolution
processes. Di Joseph v. Standard Ins. Co., 776 F. App’x 343, 348 (7th Cir. 2019); 29
U.S.C. § 1133. Although ERISA’s text is silent on the issue, the Seventh Circuit has
long “interpreted ERISA as requiring exhaustion of administrative remedies as a

prerequisite to bringing suit under the statute.” Id. (quoting Schorsch v. Reliance
Standard Life Ins. Co., 693 F.3d 734, 739 (7th Cir. 2012)); see Zhou v. Guardian Life
Ins. Co. of Am., 295 F.3d 677, 679 (7th Cir. 2002) (“As a pre-requisite to filing suit,
an ERISA plaintiff must exhaust his internal administrative remedies.”). Failure to
exhaust is, however, not an element of an ERISA claim but rather an affirmative
defense. Lange v. The Univ. of Chi., No. 15 C 7303, 2015 WL 7293588, at *2 (N.D. Ill.
Nov. 19, 2015). Accordingly, this Court can only dismiss an ERISA case for failure

to exhaust if it appears that way from the face of the complaint. Id.
There is no dispute that an administrative process exists in this case. The
trust agreement governing the Fund provides: “All questions or controversies of any
kind arising between any parties or persons in connection with the Trust or its
operation, whether as to any claim for benefits, the construction of this Agreement,
the Plans of Benefits, or any decision, or accounts in connection with the operation of
the trust, shall be submitted to the Trustees for decision.” [1-1] at 21. The allegations
here suggest that Plaintiff sufficiently exhausted this process.
Plaintiff submitted his written dispute concerning the Trustees’ decision and

authority for reducing his benefits by letter to Trustee Meyers, and emailed a copy to
the Plan Administrator, Fensler, on May 22, 2020. [1] ¶ 42. He also invoked his right
under ERISA to receive pertinent documents within 30 days of his written request.
Id. ¶¶ 42–43. Plaintiff also set forth a list of questions about the Trustees’ decision
in an email on June 9 to Fensler, noting that Meyers had not responded to him. Id.
¶¶ 45–46. Plaintiff emailed Fensler again on July 6 noting that Meyers had failed to

respond to his May 22 letter. Id. ¶ 48. On July 8, Fensler told Plaintiff he forwarded
Plaintiff’s questions to Fund counsel. Id. ¶¶ 58–59. On July 17, Plaintiff received
another notice about his benefit cut, stating that “inquiries should be directed to”
Fund counsel. Id. ¶ 63. Following this notice, Plaintiff communicated with Fensler,
and Fensler disclosed that Defendants had not reviewed Plaintiff’s life insurance
policy when deciding to reduce benefits by 30%. Id. ¶ 70. Fensler also never
responded to Plaintiff’s inquiries about the loan balance on his annual statement. Id.

¶ 75. Thus, construing all allegations in Plaintiff’s favor, it appears that Plaintiff did
submit “questions and controversies” to the trustees “for decision,” and the trustees
never responded. His actions sufficiently satisfied the trust agreement’s
administrative process.
Defendants also invoke an administrative procedure for claim resolution found
in the SPD, arguing that Plaintiff did not satisfy a multi-step review and appeals
process set forth therein. The SPD states: “Prior to filing a claim for benefits and
exhausting his or her rights to review . . . , your beneficiary will not be able to seek
review of a denial of benefits or to bring any action in any court to enforce a claim for

benefits.” [1-1] at 43. The Plan then outlines a process for submitting a claim and
then for appealing a denial of a claim. See id. at 44 (“If a claim is denied, in whole or
in part, your beneficiary has the right to request that the Plan Administrator review
the denial.”). Id. at 44. Defendants argue that Plaintiff never went through this
multi-step administrative process. But as Plaintiff points out, that process, by its
plain terms, applies only to beneficiaries, and Plaintiff is not a beneficiary but rather

a Plan participant. See [1] ¶ 1. The SPD’s administrative review procedure therefore
is inapplicable to Plaintiff.
For these reasons, this Court declines to dismiss the complaint based upon a
failure to exhaust.
B. Pleading Relief for Breach of Fiduciary Duty in the Alternative
In Counts II and IV, Plaintiff has asserted breach of fiduciary duty claims and
has requested relief under ERISA section 502(a)(1)(B), as well as equitable relief

under section 502(a)(3) and section 502(a)(2). Section 502(a)(1)(B) authorizes a
participant to sue “to recover benefits due to him under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify his rights to future benefits
under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). Section 502(a)(3) permits
civil actions to be brought “(A) to enjoin any act or practice which violates any
provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate
equitable relief (i) to redress such violations or (ii) to enforce any provisions of this
subchapter or the terms of the plan.” 29 U.S.C. § 1132(a)(3). In Varity Corporation
v. Howe, the Supreme Court held that the equitable relief contemplated under section

502(a)(3) is available only when ERISA does not otherwise elsewhere provide
“adequate relief.” 516 U.S. 489, 515 (1996).
Against this statutory backdrop, Defendants contend that Plaintiff’s breach of
fiduciary duty claims fail because he impermissibly asserts recovery under both
section 502(a)(3) and section 502(a)(1)(B). [14] at 8–10. True, at the conclusion of the
suit, “a plaintiff is not entitled to equitable relief for claims already covered by the

statute, such as a claim to recover benefits owed under a plan.” Day v. Humana Ins.
Co., 335 F.R.D. 181, 195 (N.D. Ill. 2020). But this case is still at the pleadings stage.
District courts in this circuit permit plaintiffs to plead claims under both subsections
as alternative theories. Id. (collecting cases); see also Crista v. Wis. Physicians Serv.
Ins. Corp., No. 18-CV-365-WMC, 2021 WL 3511092, at *18 (W.D. Wis. Aug. 10, 2021).
This Court declines to dismiss Counts II and IV due to Plaintiff’s pleading of
alternative theories of relief.

C. Ripeness
Defendants argue that Plaintiff’s breach of fiduciary duty claims in Counts II–
IV are unripe because the Plan only provides benefits payable to beneficiaries upon
Plaintiff’s death, and Plaintiff is still alive. [14] at 7–8. This argument lacks merit
because it erroneously assumes that a participant or beneficiary must have an
immediate claim to a benefit in order to sue under ERISA. To the contrary, ERISA
allows any “participant or beneficiary” to “bring suit generically to ‘enforce his rights’
under the plan, or to clarify any of his rights to future benefits.” Aetna Health Inc. v.
Davila, 542 U.S. 200, 210 (2004) (emphasis added). Thus, as a plan participant,

Plaintiff can sue “even if benefits are not presently due.” Neuma, Inc. v. Wells Fargo
& Co., 515 F. Supp. 2d 825, 846 (N.D. Ill. 2006).
D. Plan Documents Pursuant to a “Written Request”
Defendants next move for dismissal of Plaintiff’s claim in Count I pursuant to
29 U.S.C. § 1024(b)(4). [14] at 10. Section 1024(b)(4) requires an administrator,
upon written request, to furnish a beneficiary with certain plan documents. Killian

v. Concert Health Plan, 742 F.3d 651, 658 n.23 (7th Cir. 2013); see 29 U.S.C. §
1024(b)(4) (“The administrator shall, upon written request of any participant or
beneficiary, furnish a copy of the latest updated summary, plan description, and the
latest annual report, any terminal report, the bargaining agreement, trust
agreement, contract, or other instruments under which the plan is established or
operated.”).
Defendants argue that Plaintiff never submitted a “written request” for

documents to a plan administrator because the complaint alleges that Fensler (the
plan administrator) was merely copied by email on a May 22, 2020 letter Plaintiff
sent to Meyers requesting copies of the CBA, union documents, and trust documents.
[14] at 11; see [1] ¶ 43. No authority exists for the notion that a carbon copy to the
plan administrator fails to satisfy “written request” requirement. And in any event,
Plaintiff’s email requests for documents following the May 22 communication
addressed Fensler directly. See [1] ¶ 45 (June 9 email to Fensler requesting union
documents), ¶ 47 (June 26 email to Fensler requesting a follow-up to his May 22 letter
and June 9 email)), ¶ 48 (July 6 email to Fensler concerning the failure to respond to

Plaintiff’s May 22 letter).
Defendants also incorrectly suggest that Plaintiff’s email communications
cannot qualify as “written” requests. [14] at 12. An email is plainly a form of written
communication, and the Seventh Circuit has affirmed penalties against an
administrator who failed to respond to an emailed request for a summary plan
document in a timely fashion. See Huss v. IBM Med. & Dental Plan, 418 F. App’x

498, 509 (7th Cir. 2011).
Defendants also argue that Plaintiff sought a larger universe of documents
than contemplated under section 1024(b)(4). [14] at 12. To be sure, Plaintiff
requested an “explanation regarding the basis and authority for the reduction in
benefits” and “Union Documents,” and these requests may fall outside of the scope of
section 1024(b)(4). But Plaintiff also asked for the master bargaining agreement and
trust documents. [1] ¶¶ 43, 49. Those documents fall squarely under section

1024(b)(4).
Finally, Defendants contend that Plaintiff does not allege prejudice or
detrimental reliance based upon their failure to provide documents. [14] at 13. This
argument also lacks merit. Section 1024(b)(4) does not require a plaintiff to plead
and prove prejudice or detrimental reliance. See Mondry v. Am. Fam. Mut. Ins. Co.,
557 F.3d 781, 806 (7th Cir. 2009); Harsch v. Eisenberg, 956 F.2d 651, 662 (7th Cir.
1992).
IV. Conclusion
For the reasons stated above, the Court denies Defendants’ motion to dismiss.
[14]. Defendants are ordered to answer the complaint by November 23, 2021.

ENTER:

Dated: November 5, 2021 “4
MARY M. ROWLAND
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10145593. Public record. Not legal advice.