Rapp v. Henkel of America

          RULING ON DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS (DOC. NO. 64)

          Janet C. Hall United States District Judge

         I. INTRODUCTION

         Plaintiffs Theodore Rapp and Christy Rapp (“the Rapps”) bring this action against the defendant, Henkel of America, Inc. (“Henkel”), under the Employee Retirement Income Security Act of 1974 (“ERISA”). The Rapps assert claims of wrongful denial of pension benefits and breach of fiduciary duty. See Compl. (Doc. No. 1) ¶¶ 37, 49. Henkel has filed a Motion for Judgment on the Pleadings (“Motion”) (Doc. No. 64). For the reasons that follow, defendant’s Motion is granted in part.

         II. STANDARD OF REVIEW

         In deciding a motion for judgment on the pleadings, pursuant to Federal Rule of Civil Procedure 12(c), courts must “employ the same standard applicable to Rule 12(b)(6) motions to dismiss.” Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72, 78 (2d Cir. 2015). Therefore, courts “accept all factual allegations in the complaint as true and draw all reasonable inferences in [plaintiffs'] favor.” Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010). To survive a Rule 12(c) motion, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Id.

         III. FACTS

         From 1974 through 1986, Mr. Rapp worked at the Dexter Corporation. Dexter maintained a retirement pension plan for its employees (the “Dexter Plan”) and through this plan Mr. Rapp acquired a deferred vested pension plan. Compl. ¶¶ 8, 9. On January 25, 1988, Mr. Rapp received a letter from Dexter’s Human Resources (“Notification of Benefits”) explaining that Mr. Rapp would be entitled to pension benefits under the Dexter Plan when he attained the age of 65. The Notification of Benefits further stated that Mr. Rapp’s first day of normal retirement would begin on December 1, 2006. Id. ¶ 10.

         In 2000, the Dexter Plan was transferred to Loctite, an affiliate of Henkel, following Loctite’s acquisition of certain lines of business from Dexter. The Dexter Plan was then renamed the Loctite/Dexter Pension Plan. Id. ¶ 11.

         On April 1, 2001, Loctite and Henkel merged the Loctite/Dexter Pension Plan into a separate retirement plan maintained by Henkel (the “Plan”). All remaining liabilities and assets of the Loctite/Dexter Plan, including the responsibility for the payment of Mr. Rapp’s pension benefits under the Dexter Plan, were transferred to the Plan. Id. ¶ 17.

         On April 21, 2017, Mr. Rapp submitted a “Claim Initiation Form” to Henkel, seeking the pension benefits he acquired while working for Dexter. Id. at 19. Henkel denied Mr. Rapp’s request. The Claim Denial stated that Henkel had no record of Mr. Rapp’s employment with Dexter. It further stated that, “when Henkel acquired Dexter in 2001, a list was complied of all Dexter employees whose outstanding pension benefit obligations were transferred to Henkel. Henkel has confirmed that you are not on that list.” Id. at 20. Mr. Rapp appealed the denial of his benefits. Id. ¶ 21.

         In a letter dated March 16, 2018, Henkel’s Benefit Plans Administrative Committee denied Mr. Rapp’s appeal. Id. ¶ 23. The Denial of Appeal stated that the Committee acknowledged that Mr. Rapp had worked for Dexter and had been entitled to pension benefits under the Dexter Plan at some point in time. However, because the list that Henkel complied of all Dexter employees (the “Dexter List”) did not include Mr. Rapp’s name, Henkel had no record of Mr. Rapp’s entitlement to pension benefits under the Plan. Id.

         IV. DISCUSSION

         The Rapps have pled two counts under ERISA. In Count One, they seek to recover the benefits due to them under the Plan under section 502(a)(1)(B) of ERISA, section 1132(a)(1)(B) of title 29 of the United States Code. Id. ¶ 37. In Count Two, they allege breach of fiduciary duty and seek equitable relief under section 1132(a)(3). Id. ¶ 49. In response, Henkel argues that both claims are time barred. See Defendant’s Memorandum in Support of Its Motion for Judgment on the Pleadings (“Deft.’s Mem. in Supp.”) (Doc. No. 64-1) at 4, 6. Henkel further argues that the Rapps’ breach of fiduciary claim is impermissibly duplicative of their claims in Count One. Id. at 8. Finally, Henkel argues that the action is barred by the doctrine of laches. Id. at 10.

         A. Waiver

         As a preliminary matter, the Rapps argue that Henkel waived the right to invoke the statute of limitations defenses by failing to assert them in the claim and appeal denial letters. Plaintiffs’ Opposition to Defendant’s Motion (“Pl.s’ Opp.”) (Doc. No. 81) at 7–11. This claim fails. Although the Second Circuit has held that the doctrine of wavier applies to an ERISA action, see Lauder v. First Unum Life Ins. Co,, 284 F.3d 375, 381 (2d Cir. 2002), it has so found under two circumstance not present here. In Lauder, First Unum, the plan administrator, “knew of Lauder's claim of disability, chose not to investigate it, and chose not to challenge it.” Id. at 382. Instead, First Unum denied Lauder’s request for disability on the grounds that she was not an eligible participant. Id. at 378. The Second Circuit, therefore, held that First Unum had waived its right to rely on lack of disability as a defense to Lauder's claim. Id. at 382.

         First Unum’s waiver of its defense of lack of disability is substantively different from Henkel’s statute of limitations defense. Unlike First Unum, Henkel is not attempting to raise new substantive grounds for denying the Rapps’ claim different from those raised during the administrative process. They are, instead, asserting a defense to a “judicial action,” which “[o]ne would hardly expect a plan administrator” to assert “in the context of an administrative claim.” Kunsman v. Conkright, 977 F.Supp.2d 250, 263 (W.D.N.Y. 2013) (“[Lauder] is inapposite. Lauder involved an insurer's waiver of its defense of lack of disability. That is substantively different from a limitations defense to a judicial action.”). Even more, the concerns identified by the court in Lauder are absent here. Lauder “raise[d] the concern that plan administrators like First UNUM will try the easiest and least expensive means of denying a claim while holding in reserve another, perhaps stronger, defense should the first one fail.” 284 F.3d at 382. Here, there is no indication that Henkel engaged in these manipulative strategies. The facts of the Complaint suggest that Henkel denied the Rapps’ claim out of its belief that Rapp was not on the Dexter List and that Rapp was therefore not entitled to pension benefits under the Plan. Compl. ¶¶ 20, 23. See Gordon v. Deloitte & Touche, LLP Grp. Long Term Disability Plan, 749 ...