Miranti v. Amalgamated Industrial Toy & Novelty Workers of America Local 223

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

-----------------------------------X

JOHNNIE MIRANTI,

Plaintiff,

MEMORANDUM & ORDER

-against- 19-CV-7077(JS)(AYS)

AMALGAMATED INDUSTRIAL TOY &

NOVELTY WORKERS OF AMERICA LOCAL

223; AMALGAMATED PRODUCTION &

SERVICE EMPLOYEES UNION LOCAL 22;

and INTERNATIONAL UNION OF ALLIED

NOVELTY & PRODUCTION WORKERS, AFL-

CIO,

Defendants.

-----------------------------------X

APPEARANCES

For Plaintiff: Stephen Goldblatt, Esq.

44 Court Street, Suite 1217

Brooklyn, New York 11201

For Defendants: Sheri Dorothy Preece, Esq.

McCarthy & Preece PLLC

118 North Bedford Road, Suite 100

Mount Kisco, New York 10549

SEYBERT, District Judge:

On December 18, 2019, Johnnie Miranti (“Plaintiff”)

initiated this action against Amalgamated Industrial Toy & Novelty

Workers of America Local 223 (“Local 223”), Amalgamated Production

& Service Employees Union Local 22 (“Local 22”), and International

Union of Allied, Novelty & Production Workers, AFL-CIO

(“International,” and together with Local 223 and Local 22,

“Defendants”) alleging violations of the Employee Retirement

Income Security Act of 1974 (“ERISA”), breach of contract, unjust

enrichment, and promissory estoppel based on Defendants’ decision

to deny Plaintiff access to certain union medical and severance

benefits. Pending before the Court are the parties’ cross-motions

for summary judgment. (Defs. Mot., ECF No. 25; Defs. Support Memo,

ECF No. 25-2; Defs. Reply, ECF No. 29; Pl. Opp’n, ECF No. 28.)

For the following reasons, Defendants’ motion is GRANTED, and

Plaintiff’s motion is DENIED.

BACKGROUND

Unless otherwise noted, the following facts are

undisputed.1

1 Unless otherwise noted, the following facts are taken from

Defendants’ Local Rule 56.1 Statement (“Defs. 56.1 Stmt.,” ECF No.

25-1); Plaintiff’s Local Rule 56.1 Statement (“Pl. 56.1 Stmt.,”

ECF No. 28-4); and Defendants’ Local Rule 56.1 Counterstatement

(“Defs. 56.1 Counterstmt.,” ECF No. 29-1). Defendants’ exhibits,

which are attached to the Affidavit of Sheri Preece (ECF No. 25-

4), are identified by numbers. Plaintiff’s exhibits, which are

attached to the Affirmation of Stephen Goldblatt (ECF No. 28-5),

are similarly identified by numbers.

As Defendants correctly point out, Plaintiff failed to submit a

counterstatement to Defendants’ Local Rule 56.1 Statement, as the

Local Rules requires. See Local Rule 56.1(b). “Upon the failure

to properly controvert a movant’s statement of material fact, such

statement ‘will be deemed admitted for the purposes of the

motion.’” Adams v. Liberty Mar. Corp., 407 F. Supp. 3d 196, 199

(E.D.N.Y. 2019) (quoting Local Rule 56.1(c)). However, “a district

court must ensure that there is support in the record for facts

contained in unopposed Rule 56.1 statements before accepting those

facts as true.” United States v. Abady, No. 03-CV-1683, 2004 WL

444081, at *3 (S.D.N.Y. Mar. 11, 2004) (citing Giannullo v. City

of New York, 322 F.3d 139, 140–43 (2d Cir. 2003)). As a result,

the uncontroverted statements in Defendants’ Local Rule 56.1

Statement that the Court finds are supported by the record are

deemed admitted for purposes of the pending cross-motions.

I. Facts

A. Background and Plaintiff’s Indictment

International is a national labor union that represents

workers in many industries, including general manufacturing.

International is divided into multiple locals within the five

boroughs of New York City, such as Local 223.2 (See Am. Compl.,

ECF No. 16-2, ¶¶ 4-6.) Plaintiff was employed by Local 223 for

approximately twenty years, from 1996 until August 16, 2016.

(Defs. 56.1 Stmt. ¶ 1.) During that time, Plaintiff served as

Recording Secretary-Treasurer and an Executive Board member. (Am.

Compl. ¶ 11.) In this role, Plaintiff drafted all the meeting

minutes. (Defs. 56.1 Stmt. ¶ 15.)

On July 1, 2015, Plaintiff was indicted for his

participation in a kickback scheme related to his role as Trustee

to the Local 223 Sick Benefit Fund. (Defs. 56.1 Stmt. ¶ 2); see

also United States v. Miranti, No. 15-CR-0415 (S.D.N.Y.). The

grand jury indicted Plaintiff on three counts for conspiracy to

defraud the United States in violation of 18 U.S.C. § 371,

including: (1) conspiracy to solicit and receive kickbacks to

influence the operation of an employee benefit plan;

(2) conspiracy to embezzle from an employee benefit plan; and

(3) conspiracy to commit theft or embezzlement in connection with

2 In February 2017, Local 223 was merged into Local 22.

a health care benefit program. (Defs. 56.1 Stmt. ¶ 2.) At a July

15, 2015, Local 223 Executive Board meeting, Plaintiff informed

the Executive Board of his indictment and stated that the

allegations in the indictment were untrue. (Id. ¶ 3.) Defendants

assert that Plaintiff “continuously professed his innocence to the

Executive Board and never informed the Executive Board when he

began negotiating a plea deal.” (Id. ¶ 4.)

B. The Benefit Programs at Issue

Plaintiff claims that he is entitled to funds or coverage

under three separate welfare employee benefit plans: (1) the Local

223 Severance Policy; (2) the Local 223 Lifetime Medical Benefits

Policy; and (3) the International Non-Qualified Deferred

Compensation (“NQDC”) Plan.

1. The Severance Policy

Local 223’s Severance Policy entitles its members to

receive severance “upon termination of office of employment by

reasons of death, disability, or resignation.” (Defs. 56.1 Stmt.

¶ 13.) The severance is paid out in weekly installments over a

thirty-six-month period. (Id.) After Plaintiff’s indictment, at

a November 28, 2015 “special membership meeting” held to amend

Local 223’s Constitution and Bylaws, Plaintiff proposed a

modification to the Severance Policy. (Id. ¶ 14.) Specifically,

Plaintiff requested the Severance Policy be amended to include

officers who were terminated “for any reason.” (Id.) Plaintiff

testified that the Board approved the proposed modification

“because my Board didn’t want to hurt me, with everything I was

going through, as far as the indictment,” that is, “to make sure

that I got my severance benefit.” (Pl. Depo. Tr. at 49:17-24, Ex.

22, attached to Preece Aff.)

2. Lifetime Medical Benefits Policy

Similarly, Local 223’s Lifetime Medical Benefits Policy

entitles members to a monthly Medicare Supplement Benefit “upon

termination of office or employment or retainer . . . by reason of

death, disability, or resignation.” (Defs. 56.1 Stmt. ¶¶ 18, 21.)

The Lifetime Medical Benefits Policy is provided through the Local

223 Sick Benefit Fund, which is an ERISA-governed welfare benefit

fund. (Id. ¶¶ 19-20.) While the policy originally provided for

a lifetime preferred provider organization plan, in 2012 the

Executive Board, including Plaintiff, amended the policy to

provide a Medicare supplement benefit. (Id. ¶¶ 21-23.)

At an August 17, 2015 Local 223 Executive Board meeting,

Plaintiff proposed modifying the Lifetime Medical Benefits Policy

to include a length of service requirement. (Id. ¶¶ 24-25.) After

amendment, the provision read: “All Union Officers with at least

fifteen (15) years of service will receive lifetime medical

coverage for themselves and their spouse to be paid by the Union

upon their separation from employment.” (Id. ¶ 24 (emphasis

added).) Notably, the change from termination “by reason of death,

disability, or resignation” to “separation from employment” was

not reflected in the Executive Board meeting minutes. (Id. ¶ 25.)

As Plaintiff later testified regarding the amendment, “I was there

for over 15 years and I wanted to make sure that my lifetime

medical benefits were secured.” (Id. ¶ 26.)

3. The NQDC Plan

International administers the NQDC Plan, an ERISA-

governed plan that provides certain deferred compensation benefits

to eligible International Officers and General Executive Board

members. (Id. ¶¶ 29-30.) Under International’s Constitution:

The International Union, from its General

Funds, shall establish a Non-Qualified

Deferred Compensation and Severance Plan

providing such benefits as may be determined

by the General Executive Board for the

International Officers and General Executive

Board members. To be eligible for benefits

(under the NQDC Plan), the International

Officer or General Executive Board member must

have retired from any position of office with

the International Union, any subordinate body,

and any benefit fund of the subordinate body

or related to the subordinate body.

(Id. ¶ 31 (emphasis added).) The NQDC Plan is governed by the

terms of the NQDC Plan Document, which provides in relevant part

that “[t]he [Advisory] Committee shall have the sole right to

reconcile, determine, interpret, and construe any question or

dispute arising in connection with definitions of terms, rights,

status or classification of Participants, or any other dispute

arising under the [NQDC Plan],” and that “such reconciliation,

determination, interpretation or construction shall be final and

conclusive.” (Id. ¶ 32.) The NQDC Plan Document further provides

that only the Advisory Committee has the authority to determine

eligibility and the right to participate in the NQDC Plan, and

that “[n]o person shall have any vested right to the benefits

provided by the [NQDC] Plan.” (Id.) Benefits from the NQDC Plan

are paid from the general assets of International. (Id. ¶ 33.)

C. Plaintiff’s Guilty Plea and Termination

On August 8, 2016, Plaintiff pleaded guilty to one count

of conspiracy to solicit and receive kickbacks to influence the

operation of the Local 223 Sick Benefit Fund. (Id. ¶ 6.) On

August 16, 2016, Plaintiff was terminated from his employment as

Union Officer of Local 223 and Trustee of the Sick Benefit Fund.

(Id. ¶ 7.) Plaintiff disputes this, arguing that he resigned from

his position and pointing to his deposition testimony in support.

(Pl. 56.1 Stmt. ¶ 3; Pl. Depo. Tr. at 59:3-7.)

On that same day, International placed Local 223 into

temporary trusteeship. (Defs. 56.1 Stmt. ¶ 35.) On September 28,

2016, International sent notice to all Local 223 members that Local

223 was to be placed into permanent trusteeship based on

Plaintiff’s conviction for crimes against the Local 223 Sick

Benefit Fund. (Id. ¶ 36.) On February 24, 2017, International

sent notice to all members that Local 223 would merge into Local

22. (Id. ¶ 38.) As a result of the merger, the trusteeship of

Local 223 was terminated. (Id. ¶ 39.)

D. Plaintiff’s ERISA Denials

On September 13, 2016, International denied Plaintiff’s

initial claim for benefits from the NQDC Plan on the grounds that

Plaintiff’s conviction made it unlawful for International to pay

Plaintiff additional compensation from the International’s general

assets. (Id. ¶ 40.) Specifically, International relied on 29

U.S.C. § 504(d), which prohibits individuals who are convicted of

certain criminal acts from participating in, and from receiving

salary from, a labor organization. (Id.) Similarly, on September

19, 2016, Local 223, acting through the International-appointed

Trustee, denied Plaintiff’s initial claim for benefits under the

Lifetime Medical Benefits Policy on the grounds that providing

that benefit would violate 29 U.S.C. § 504(d). (Id. ¶ 41.)

Plaintiff unsuccessfully appealed the unfavorable determinations.

(Id. ¶¶ 42-44.)

Later, on June 14, 2017, Plaintiff submitted a second

appeal and request for payment under the Severance Policy. (Id.

¶ 45.) International denied Plaintiff’s request based on his

indictment and subsequent attempt to amend the Local 223

Constitution and Bylaws prior to his removal from office. (Id. ¶

46.) More than a year later, Plaintiff submitted a third appeal

to the newly formed Local 22, arguing that he is entitle to

severance and to the benefits under the Lifetime Medical Benefit

Policy because they are vested benefits under ERISA. (Id. ¶ 47.)

Local 22 denied Plaintiff’s third appeal pursuant to 29 U.S.C. §

504(d); it also rejected Plaintiff’s contention that the benefits

had vested. (Id. ¶ 48; see also Correspondence, Exs. 12-20,

attached to Preece Aff.)

II. Procedure

Plaintiff initiated this action on December 18, 2019.

Based on the foregoing allegations, Plaintiff asserts one cause of

action under ERISA Section 502(a)(2), 29 U.S.C. § 1132, for

International’s denial of Plaintiff’s request for payment under

the NQDC Plan, as well as causes of action under New York State

law for breach of contract, promissory estoppel, and unjust

enrichment based on Defendants’ denial of Plaintiff’s request for

payment under the NQDC Plan, Severance Policy, and Lifetime Medical

Benefit Policy. (See generally Am. Compl.) The parties completed

discovery on December 8, 2020, and the instant motion practice

ensued.

DISCUSSION

I. Legal Standard

Summary judgment is appropriate where there is “no

genuine dispute as to any material fact and the movant is entitled

to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “Material

facts are those which might affect the outcome of the suit under

the governing law, and a dispute is genuine if the evidence is

such that a reasonable jury could return a verdict for the

nonmoving party.” Wagner v. Chiari & Ilecki, LLP, 973 F.3d 154,

164 (2d Cir. 2020) (quoting Coppola v. Bear Stearns & Co., 499

F.3d 144, 148 (2d Cir. 2007)) (internal quotation marks omitted).

“The moving party bears the initial burden of showing that there

is no genuine dispute as to a material fact.” CILP Assocs., L.P.

v. PriceWaterhouse Coopers LLP, 735 F.3d 114, 123 (2d Cir. 2013)

(cleaned up). “In moving for summary judgment against a party who

will bear the ultimate burden of proof at trial,” as Plaintiff

does here, “the movant may satisfy this burden by pointing to an

absence of evidence to support an essential element of the

nonmoving party’s claim.” Gummo v. Village of Depew, 75 F.3d 98,

107 (2d Cir. 1996) (citing Celotex Corp. v. Catrett, 477 U.S. 317,

322–23 (1986)). “If, as to the issue on which summary judgment is

sought, there is any evidence in the record from which a reasonable

inference could be drawn in favor of the opposing party, summary

judgment is improper.” Hetchkop v. Woodlawn at Grassmere, Inc.,

116 F.3d 28, 33 (2d Cir. 1997). Moreover, “the court is not to

make assessments of the credibility of witnesses” on a motion for

summary judgment, as “[c]redibility assessments, choices between

conflicting versions of events, and weighing of the evidence are

matters for the jury.” Id.

On a motion for summary judgment the court considers the

“pleadings, deposition testimony, answers to interrogatories and

admissions on file, together with any other firsthand information

including but not limited to affidavits.” Nnebe v. Daus, 644 F.3d

147, 156 (2d Cir. 2011). In reviewing the record, “the court is

required to resolve all ambiguities and draw all permissible

factual inferences in favor of the party against whom summary

judgment is sought.” Sheet Metal Workers’ Nat’l Pension Fund v.

Vadaris Tech. Inc., No. 13-CV-5286, 2015 WL 6449420, at *2

(E.D.N.Y. Oct. 23, 2015) (quoting McLee v. Chrysler Corp., 109

F.3d 130, 134 (2d Cir. 1997)). When drawing inferences from

evidence in the record in favor of the non-moving party, however,

a court should not accord the non-moving party the benefit of

“unreasonable inferences, or inferences at war with undisputed

facts.” Berk v. St. Vincent’s Hosp. & Med. Ctr., 380 F. Supp. 2d

334, 342 (S.D.N.Y. 2005) (quoting County of Suffolk v. Long Island

Lighting Co., 907 F.2d 1295, 1318 (2d Cir. 1990)).

II. Analysis

First, Defendants argue that Plaintiff’s state law

claims for breach of contract, promissory estoppel, and unjust

enrichment are preempted by ERISA. Second, with respect to

Plaintiff’s remaining claim for wrongful denial of benefits under

ERISA, Defendants argue that International properly denied

Plaintiff’s claim for benefits under the NQDC Plan. The Court

addresses these arguments in turn.

A. Preemption

1. Applicable Law

“Congress enacted ERISA to ‘protect . . . the interests

of participants in employee benefit plans and their beneficiaries’

by setting out substantive regulatory requirements for employee

benefit plans and to ‘provid[e] for appropriate remedies,

sanctions, and ready access to the Federal courts.’” Aetna Health

Inc. v. Davila, 542 U.S. 200, 208 (2004) (quoting 29 U.S.C. §

1001(b)). To that end, “Section 502(a)(1)(B) of ERISA provides

participants or beneficiaries with a civil remedy to recover

benefits due under their plans, to enforce rights under their

plans, or to clarify rights to future benefits under their plans.”

Arditi v. Lighthouse Int’l, 676 F.3d 294, 299 (2d Cir. 2012)

(citing 29 U.S.C. § 1132(a) (“ERISA Section 502”)). Moreover,

ERISA contains “deliberately expansive” preemption provisions,

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 45-46 (1987), aimed

at establishing a “uniform regulatory regime over employee benefit

plans” and ensuring “employee benefit plan regulation is

exclusively a federal concern,” Davila, 542 U.S. at 208. See also

Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65-66 (1987)

(discussing ERISA’s “extraordinary pre-emptive power” which

“converts an ordinary state common law complaint into one stating

a federal claim . . . .”). ERISA Section 514 specifically provides

that it “shall supersede any and all State laws insofar as they

may now or hereafter relate to any employee benefit plan.” 29

U.S.C. § 1144. Essentially, “where a plaintiff brings a state law

claim that is in reality an ERISA-claim cloaked in state-law

language, ERISA’s preemption power will take effect.” N. Shore-

Long Island Jewish Health Care Sys., Inc. v. MultiPlan, Inc., 953

F. Supp. 2d 419, 427 (E.D.N.Y. 2013).

“Under the Supreme Court’s test in Davila, ERISA

preempts a cause of action where: (1) ‘an individual, at some point

in time, could have brought his or her claim under ERISA

§ 502(a)(1)(B);’ and (2) ‘no other independent legal duty . . . is

implicated by a defendant’s actions.’” Arditi, 676 F.3d at 299

(quoting Davila, 542 U.S. at 210). The Second Circuit has further

clarified that, under the first prong of Davila, the plaintiff

must show: “(a) he is the type of party who can bring a claim

pursuant to § 502(a)(1)(B) of ERISA; and (b) the actual claim

asserted can be construed as a colorable claim for benefits

pursuant to § 502(a)(1)(B).” Id. (citing Montefiore Med. Ctr. v.

Teamsters Local 272, 642 F.3d 321, 328 (2d Cir. 2011)). To

determine whether the plaintiff’s state law claims are preempted

by ERISA, the Court must examine the plaintiff’s complaint, the

statute on which the plaintiff’s claims are based, and the various

plan documents. Davila, 542 U.S. at 211.

2. Application3

i. Davila Prong One

The first Davila prong is satisfied because Plaintiff

could have brought his claim under ERISA. Davila, 542 U.S. at

210. Indeed, he brought a claim under Section 502 in his Amended

Complaint. See Arditi, 676 F.3d at 299 (finding first prong of

Davila satisfied where the plaintiff initially filed an action

seeking benefits pursuant to Section 502 of ERISA but then

3 Although Plaintiff does not address this issue, the Court notes

the programs in question are employee welfare benefit plans subject

to an ERISA preemption analysis. See Hall v. LSREF4 Lighthouse

Corp. Acquisitions, LLC, 220 F. Supp. 3d 381, 388 (W.D.N.Y. 2016)

(“‘Congress [only] pre-empted state laws relating to plans, rather

than simply to benefits’ because the concern of providing ‘a

uniform set of administrative procedures governed by a single set

of regulations’ only arises ‘with respect to benefits whose

provision by nature requires an ongoing administrative program to

meet the employer’s obligation.’” (quoting Fort Halifax Packing

Co. v. Coyne, 482 U.S. 1, 11 (1987))). Based on the undisputed

record, applying the factors identified in Fort Halifax, the Court

finds that Defendants’ “undertaking involves the kind of ongoing

administrative scheme inherent in a ‘plan, fund, or program.’”

Okun v. Montefiore Med. Ctr., 793 F.3d 277, 279 (2d Cir. 2015).

With respect to the Severance Policy, “[t]he term ‘employee welfare

benefit plan’ has been held to apply to most, but not all, employer

undertakings or obligations to pay severance benefits.” Hall, 220

F. Supp. 3d at 389 (quoting Schonholz v. Long Island Jewish Med.

Ctr., 87 F.3d 72, 75 (2d Cir. 1996)); see also id. at 392

(distinguishing Fort Halifax and James v. Fleet/Norstar Fin. Grp.,

Inc., 992 F.2d 463 (2d Cir. 1993)). The Severance Policy at issue

here is more like the severance benefit plans at issue in Okun and

Schonholz than in Fort Halifax and Fleet/Norstar, because the

Severance Policy “necessitated both managerial discretion and a

separate analysis of each employee in light of certain criteria,”

such as eligibility criteria, and “was not limited either to a

single payment or to a short span of time,” but rather would pay

out in weekly installments over a 36-month period. Schonholz, 87

F.3d at 76-77.

voluntarily dismissed the complaint). The first cause of action

in Plaintiff’s Amended Complaint is a claim for benefits under the

NQDC Plan brought pursuant to Section 502 of ERISA. (Am. Compl.

¶¶ 22-25.) Moreover, the undisputed record shows that Plaintiff

sought and was denied benefits under the Severance Policy and

Lifetime Medical Benefits Policy. See Arditi, 676 F.3d at 299

(“Arditi is the type of party who can bring an ERISA claim because

he is a Plan participant and he is seeking benefits under the Plan

. . . .”). There can be no doubt that Plaintiff is seeking benefits

established by ERISA plans and is therefore a party who could bring

a claim pursuant to ERISA Section 502.

Further, the actual claims asserted by Plaintiff,

namely, breach of contract, promissory estoppel, and unjust

enrichment, can be construed as colorable claims for benefits

pursuant to Section 502 of ERISA. See Arditi, 676 F.3d at 299

(citing Montefiore, 642 F.3d at 328). To arrive at this

conclusion, the Court has considered the distinction between

claims concerning a “right to payment” versus claims involving an

“amount of payment.” Montefiore, 642 F.3d at 331. Whereas right-

to-payment claims “implicate coverage and benefits established by

the terms of the ERISA benefit plan,” which may be brought under

Section 502(a)(1)(B), amount-of-payment claims are “typically

construed as independent contractual obligations between the

provider and . . . the benefit plan.” Id. Montefiore “teaches

that a dispute is a colorable claim for benefits under ERISA when

its resolution depends on an interpretation of the terms of an

ERISA-governed employee benefit plan; that is, when, in order to

determine whether the plaintiff is entitled to relief, the court

must look to the terms of employee benefit plan, itself.” Olchovy

v. Michelin N. Am., Inc., No. 11-CV-1733, 2011 WL 4916891, at *4

(E.D.N.Y. Sept. 30, 2011), report and recommendation adopted, 2011

WL 4916564; see also Montefiore, 642 F.3d at 331-32 (approving

district court’s approach to review the at-issue claims and plan

documents to determine whether the plaintiff’s claims are

colorable claims under ERISA); Paneccasio v. Unisource Worldwide,

Inc., 532 F.3d 101, 114 (2d Cir. 2008); N. Shore-Long Island Jewish

Health Care Sys., Inc., 953 F. Supp. at 438.

Here, Plaintiff’s state law claims fit comfortably in

the “territory of a right to payment claim.” N. Shore-Long Island

Jewish Health Care Sys., Inc., 953 F. Supp. 2d at 440. Plaintiff’s

efforts to collect under the various plans at issue here “implicate

coverage and benefits established by the terms of the ERISA benefit

plan[s],” because they implicate coverage determinations under the

terms of each Policy and Plan. See Montefiore, 642 F.3d at 331

(holding claims for reimbursement “appear to implicate coverage

determinations under the relevant terms of the Plan, including

denials of reimbursement because . . . ‘the member is not

eligible’”); Josephson v. United Healthcare Corp., No. 11-CV-3665,

2012 WL 4511365, at *3 (E.D.N.Y. Sept. 28, 2012) (Seybert, J.)

(concluding step two of Davila’s first prong satisfied where some

of the reimbursement claims at issue “were denied for reasons that

would implicate coverage determinations under the terms of the

United benefit plans”); Beth Israel Med. Ctr. v. Goodman, No. 12-

CV-1689, 2013 WL 1248622, at *3 (S.D.N.Y. Mar. 26, 2013); N. Shore-

Long Island Jewish Health Care Sys., Inc., 953 F. Supp. 2d at 440

(collecting cases). Put simply, Plaintiff sought to collect under

the ERISA benefit plans, and International or Local 223 denied his

claims and subsequent appeals based on the plan documents and

relevant federal law. As a result, Plaintiff’s claims could have

been brought under ERISA.

ii. Davila Prong Two

Even if the first prong of the Davila test is satisfied,

a claim is not preempted by ERISA if “some other, completely

independent duty forms another basis for legal action.” Enigma

Mgmt. Corp. v. Multiplan, Inc., 994 F. Supp. 2d 290, 301 (E.D.N.Y.

2014) (emphasis in original) (quoting Montefiore, 642 F.3d at 332).

As a result, the Court considers whether Plaintiff’s claims for

breach of contract, promissory estoppel, or unjust enrichment

implicate some “other independent legal duty” per Davila’s second

prong. “A state law claim does not raise an independent legal

duty if liability derives entirely from the particular rights and

obligations established by the benefit plans.” Id. But there is

no preemption where the benefit arose from a separate promise and

did “not require a court to review the propriety of an

administrator’s or employer’s determination of benefits.”

Stevenson v. Bank of N.Y. Co., Inc., 609 F.3d 56, 61 (2d Cir.

2010).

Plaintiff claims that Defendants have been unjustly

enriched by withholding benefits to which he is entitled. He

further claims that Defendants promised under the respective plans

to pay out benefits if certain criterion were met, a promise that

Plaintiff relied on to his detriment when Defendants allegedly

violated their obligations under the plans by denying his claims.

In response, Defendants argue that they were entitled to deny

payment under the plans under the respective plan provisions and

federal law. The Court agrees with Defendants and finds that

Plaintiff’s state law claims are “claim[s] for unpaid benefits

that fall[] squarely within the terms of the ERISA plan and do[]

not raise any independent legal obligation.” Enigma, 994 F. Supp.

2d at 301 (citations omitted); see also Devlin v. Transp. Commc’ns

Int’l Union, 173 F.3d 94, 101 (2d Cir. 1999) (affirming district

court finding that the plaintiffs’ breach-of-contract claims were

preempted under ERISA); Kelly v. Deutsche Bank Sec. Corp., No. 09-

CV-5378, 2010 WL 2292388, at *1 (E.D.N.Y. June 3, 2010) (Seybert,

J.) (“It is well-settled that ERISA preempts common law state

claims that ‘do not attempt to remedy any violation of a legal

duty independent of ERISA.’ This includes breach of contract

claims.” (internal citation omitted)); N. Shore-Long Island Jewish

Health Care Sys., Inc., 953 F. Supp. 2d at 443 (finding the

plaintiff’s unjust enrichment and quantum meruit claims “similarly

fail to establish an independent duty under Davila or Montefiore”).

The Second Circuit’s decision in Stevenson is

distinguishable, as Defendants correctly argue. In that case, the

plaintiff left the employ of the defendant bank. Stevenson, 609

F.3d at 60. Nevertheless, the bank promised to maintain the

plaintiff’s benefits under its pension plan, notwithstanding the

fact pension beneficiaries would normally lose coverage upon

ending their employment with the bank. Id. The Stevenson Court

held that the plaintiff’s complaint did “not derive from the

particular rights and obligations established by any benefit plan

. . . but rather, from a separate promise that references various

benefit plans.” Arditi, 676 F.3d 294 (quoting Stevenson, 676 F.3d

at 300 (cleaned up)). Put otherwise, “[w]hatever rights the

plaintiff had arose not from the bank’s plan, but from the

independent agreement that gave him benefits even though he had no

right to them under the plan.” Id. (distinguishing Stevenson).

Conversely, in the instant action, there are no comparable promises

separate and independent from the three ERISA plans that governed

Plaintiff’s access to severance, lifetime medical, and deferred

compensation benefits. Defendants “made no promises of benefits

separate and independent from the benefits under the Plan[s].”

Id. at 301.

Plaintiff does not meaningfully address Davila’s inquiry

or explain why its analysis does not apply here. Instead,

Plaintiff cites to a pair of cases involving vested ERISA benefits.

(Pl. Opp’n at 10 (discussing Am. Federation of Grain Millers, AFL-

CIO v. Int’l Multifoods Corp., 116 F.3d 976 (2d Cir. 1997); Guidry

v. Sheet Metal Workers Nat’l Pension Fund, 493 U.S. 365 (1990)).)

But Plaintiff fails to controvert the undisputed evidence that the

employee welfare benefit plans from which Plaintiff seeks to

recover are not vested benefits. To the contrary, Defendants have

submitted evidence showing that the Local 223 and International

policies and plans could be amended, modified, or terminated at

any time. “Unlike pension plan benefits, the benefits provided by

a welfare plan generally are not vested and an employer can amend

or terminate a welfare plan at any time.” Am. Fed’n of Grain

Millers, AFL-CIO, 116 F.3d at 979. Indeed, Plaintiff facilitated

the amendment of the eligibility requirements governing the

Severance Policy and Lifetime Medical Benefits Policy shortly

after he was indicted.4

4 Nor does Guidry control here. In Guidry, the Supreme Court

addressed separate provisions of ERISA as applied to a pension

benefit plan, not a welfare benefit plan like those at issue in

this litigation.

In sum, Defendants’ conduct did not create a

sufficiently independent duty under Davila; rather, Defendants

denied Plaintiff’s requests for benefits based of the terms of the

at-issue plans and federal law. Therefore, Plaintiff’s state law

claims raise issues that are “inextricably intertwined with the

interpretation of Plan coverage and benefits,” which the Court

turns to next. Montefiore, 642 F.3d at 332.

B. Claim for Unpaid Benefits

Having concluded Plaintiff’s state law claims are

preempted by ERISA, the Court turns to Plaintiff’s remaining cause

of action under Section 502 of ERISA, which seeks recovery for

unpaid benefits under the NQDC Plan.

1. Applicable Law

“A denial of benefits challenged under ERISA §

502(a)(1)(B) is to be reviewed under a de novo standard unless the

benefit plan gives the administrator or fiduciary discretionary

authority to determine eligibility for benefits or to construe the

terms of the plan.” Krauss v. Oxford Health Plans, Inc., 517 F.3d

614, 622 (2d Cir. 2008) (quoting Firestone Tire & Rubber Co. v.

Bruch, 489 U.S. 101, 115 (1989) (cleaned up)). Where the fiduciary

establishes that it has such discretionary authority, “the

benefits decision is reviewed under the arbitrary and capricious

standard.” Id. (citing Fay v. Oxford Health Plan, 287 F.3d 96,

104 (2d Cir. 2002)). Under the “deferential” arbitrary and

capricious standard, the court will overturn a fiduciary’s denial

“only if the decision is ‘without reason, unsupported by

substantial evidence or erroneous as a matter of law.’” Kinstler

v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 249 (2d

Cir. 1999) (quoting Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442

(2d Cir. 1995)); see also O’Shea v. First Manhattan Co. Thrift

Plan & Trust, 55 F.3d 109, 112 (2d Cir. 1995) (holding denial is

arbitrary and capricious where plan administrator or fiduciary has

“impose[d] a standard not required by the plan’s provisions, or

interpret[ed] the plan in a manner inconsistent with its plain

words”). The Second Circuit defines substantial evidence as “such

evidence that a reasonable mind might accept as adequate to support

the conclusion reached by the decisionmaker and requires more than

a scintilla but less than a preponderance.” Miller v. United

Welfare Fund, 72 F.3d 1066, 1072 (2d Cir. 1995) (quoting Sandoval

v. Aetna Life & Casualty Ins. Co., 967 F.2d 377, 382 (10th Cir.

1992)). “The court may not upset a reasonable interpretation by

the administrator.” Jordan v. Ret. Comm. of Rensselaer Polytechnic

Inst., 46 F.3d 1264, 1271 (2d Cir. 1995) (citations omitted).

2. Application

To begin, the terms of the NQDC Plan Document grant

International’s Advisory Committee discretionary authority to

determine eligibility for benefits, including “the sole right to

reconcile, determine, interpret, and construe any question or

dispute arising in connection with definitions of terms, rights,

status or classification of Participants,” and further provides

that its interpretation is “final and conclusive.” Importantly,

NQDC Plan Document grants sole authority to the Advisory Committee

to “determine eligibility for benefits and the right to participate

in the Plan.” It further clarifies that benefits under the NQDC

Plan are not vested. Last, International’s “General Executive

Board” has “exclusive control over and management of the assets of

the Plan.” As a consequence of this grant of discretion, the

Court’s inquiry is whether International acted arbitrarily and

capriciously in denying Plaintiff’s claim for benefits.

Cirincione v. Plumbers Loc. Union No. 200 Pension Fund, No. 07-

CV-2207, 2009 WL 3063056, at *3 (E.D.N.Y. Sept. 24, 2009) (Seybert,

J.) (applying arbitrary and capricious standard where pension plan

granted reviewing board the “exclusive right to interpret the Plan

and to decide any matters arising thereunder in connection with

the administration of the Plan”), aff’d, 404 F. App’x 524 (2d Cir.

2010); see also Ganton Technologies, Inc. v. Nat’l Indus. Grp.

Pension Plan, 76 F.3d 462, 466 (2d Cir. 1996) (applying arbitrary

and capricious standard where the plan explicitly provided that

the trustees had authority to “resolve all disputes and ambiguities

relating to the interpretation of the Plan”); Jordan, 46 F.3d at

1270 (applying arbitrary and capricious standard where the plan

“confer[red] upon the Retirement Committee the power of

‘interpretation’”).

International’s Advisory Committee based its adverse

decision on (a) federal law, in particular 29 U.S.C. § 504, which

bars any member in a labor organization from receiving any salary

when he has been barred from his office or position; and (b) its

interpretation of the International Constitution, which provides

that only retirees are eligible for benefits under the NQDC Plan.

The Court addresses these bases in turn.

(a) Section 504

Section 504 of the Labor-Management Reporting and

Disclosure Act (the “LMRDA”) bars any person who has been convicted

of certain enumerated offenses, including bribery, extortion, and

embezzlement, from serving as an officer or employee of any labor

organization. 29 U.S.C. § 504(a). The provision further prohibits

any person who has been so barred from receiving “any salary which

would be otherwise due such person by virtue of such office or

position” until the conviction has been reversed, in which case

the bar is lifted and the individual is paid out of escrow for the

period of time during which a salary would have been due, or

sustained, in which case the withheld salary is returned to the

employer. Id. § 504(d). Any person who willfully violates Section

504 faces a fine not to exceed $10,000 and/or imprisonment not to

exceed five years. Id. § 504(b). In enacting Section 504(a),

Congress sought “to eliminate or prevent improper practices on the

part of labor organizations, employers, labor relations

consultants, and their officers and representatives which distort

and defeat the policies of the [LMRDA].” 29 U.S.C. § 401(c); see

also Nass v. Local 348, Warehouse Production, Sales and Servs.

Emps. Union, 503 F. Supp. 217, 220 (E.D.N.Y. 1980) (“[I]n enacting

§ 504 Congress sought to eliminate the intolerable and corrupt

conditions which prevailed throughout segments of organized labor

during the 1950’s.”).

Plaintiff argues that Section 504(d) applies only to

salaries, not to what he incorrectly claims are vested benefits.

(Pl. Opp’n at 16.) Defendants counter that because the NQDC Plan

benefits are paid from the general assets of International, they

reasonably believed that paying Plaintiff out of these funds would

violate Section 504(d) and expose International to liability under

the statute. (Defs. Support Memo at 17-19; Defs. Reply at 15-17.)

The parties have not cited any authority on point, and the issue

appears to be one of first impression. Based on its review of

Section 504(d) and caselaw interpreting the provision, the Court

finds that Plaintiff’s construction of the statute is stronger:

the purpose of Section 504(d) is “to protect the interests of a

debarred union officer whose conviction was improperly obtained by

the government and later reversed.” McMahan v. Int’l Ass’n of

Bridge, Structural & Ornamental Iron Workers, 858 F. Supp. 529,

537-38 (D.S.C. 1994) (extensively reviewing the statute’s

enactment history). However, in the absence of controlling

authority, the Court cannot say that International’s construction

of the provision is unreasonable or “erroneous as a matter of law.”

This is especially the case since the NQDC benefits would be paid

out from International’s general assets, i.e., the benefits would

be paid out by International and not by a separate benefit fund.

Rather, where, as here, a claimant and fiduciary offer “two

competing yet reasonable interpretations,” the court “must accept

that offered by the administrator.” Wegmann v. Young Adult Inst.,

Inc., Trustees of Supplemental Pension Plan for Certain Mgmt. Emps.

of Young Adult Inst., No. 20-CV-1147, 2021 WL 3573753, at *1 (2d

Cir. Aug. 13, 2021) (quoting Pagan, 52 F.3d at 443 (cleaned up));

see also Jordan, 46 F.3d at 1273. Accordingly, the Court finds

that International’s reliance on Section 504(d) in denying

Plaintiff benefits under the NQDC Plan was supported by substantial

evidence and not arbitrary or capricious.

(b) Plaintiff’s Termination

The second basis for International’s decision further

supports the Court’s conclusion. As noted, to be eligible for

benefits under the NQDC Plan, the member “must have retired” from

the Union. According to Defendants, Plaintiff did not retire but

rather was terminated due to his felony conviction. Plaintiff

disputes whether he resigned, citing to his deposition testimony

in support. Plaintiff’s testimony on this point is inconsistent.

(Id. at 59:16-22 (testifying the attorney for International “came

down to New York . . . and said to me, ‘I think it is best that

you leave.’ And I said to him, ‘It was going to happen anyway.’”).)

It is further undermined by the termination letter Plaintiff

received on August 16, 2016 -- eight days after he pleaded guilty

-- in which International “relieved” Plaintiff of his duties as

the Business Manager of Local 223. Thus, there is nothing in the

record to support Plaintiff’s claim that he retired other than his

“own contradictory and incomplete testimony.” Jeffreys v. City of

New York, 426 F.3d 549, 555 (2d Cir. 2005) (affirming district

court grant of summary judgment where the plaintiff’s testimony

raising material issues of fact “was largely unsubstantiated by

any other direct evidence” and was “so replete with inconsistencies

and improbabilities” that “no reasonable juror would undertake the

suspension of disbelief necessary to credit the allegations made

in his complaint”). But even setting aside whether this case is

one of those situations in which the Jeffreys rule can be applied,

the Court is unable to conclude that International’s decision was

without reason. Rather, a reasonable mind could find the evidence

before International’s Advisory Committee, including the

termination letter, was sufficient to support its conclusion that

Plaintiff had been terminated from his position and, therefore,

was not eligible for the NQDC benefits per the International

Constitution.

* * *

Because the Court finds that Plaintiff’s New York State

law causes of action are preempted by ERISA, and Defendants are

entitled to judgment as a matter of law on his remaining ERISA

claim, the Court need not address Defendants’ remaining

contentions regarding Plaintiff’s alleged breach of his fiduciary

duties or unclean hands in seeking the benefits. Moreover,

applying the relevant factors, the Court declines to exercise its

discretion to award Defendants attorney’s fees under ERISA. See

29 U.S.C. § 1132(g)(1); Hardt v. Reliance Standard Life Ins. Co.,

560 U.S. 242, 254-55 (2010); Chambless v. Masters, Mates & Pilots

Pension Plan, 815 F.2d 869, 879 (2d Cir. 1987).

To the extent not expressly addressed, the Court has

considered the parties’ remaining arguments and finds them to be

without merit.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

CONCLUSION

Accordingly, for the stated reasons, IT IS ORDERED that

Defendants’ motion for summary judgment (ECF No. 25) is GRANTED;

and Plaintiff’s cross-motion for summary judgment (ECF No. 28) is

DENIED. The Clerk of the Court is respectfully directed to enter

judgment accordingly and mark this case CLOSED.

SO ORDERED.

/s/_JOANNA SEYBERT___________

Joanna Seybert, U.S.D.J.

Dated: June 23 , 2022

Central Islip, New York