Salvucci v. Glenmede Corp.

657 F.Supp.3d 677

Louis SALVUCCI, Plaintiff, v. The GLENMEDE CORP., et al., Defendants.

CIVIL ACTION NO. 22-1891

United States District Court, E.D. Pennsylvania

Filed February 23, 2023

Mark A. Schiavo, Dilworth Paxson LLP, Cherry Hill, NJ, Matthew I. Whitehorn, Katherine D. Enright, Dilworth Paxson LLP, Philadelphia, PA, for Plaintiff.

Frederick G. Sandstrom, Blank Rome LLP, Philadelphia, PA, for Defendants.

MEMORANDUM

EDUARDO C. ROBRENO, DISTRICT JUDGE

I. INTRODUCTION

Plaintiff Louis Salvucci, individually and as executor of the Estate of Carla Marie Salvucci ("Ms. Salvucci"), brings this action against Glenmede Corporation ("Glenmede") and the Compensation Committee of the Board of Directors of the Glenmede Corporation ("Compensation Committee") (collectively "Defendants"). Plaintiff brings Employee Retirement Income Security Act of 1974 ("ERISA") claims against both Defendants arising from a denial of benefits to Ms. Salvucci's estate under Glenmede's Plan (the "Plan"), a defined benefit pension plan sponsored by Glenmede and administered by the Compensation Committee.

Plaintiff's Second Amended Complaint contains two of the four claims alleged in his First Amended Complaint: (I) Breach of Fiduciary Duty under § 502(a)(3) of ERISA; and (II) Estoppel and Discrimination under § 510 of ERISA. Defendants have filed a second motion to dismiss for failure to state a claim as to both counts. For the following reasons, Defendants' motion will be granted in full.

II. BACKGROUND¹

Plaintiff is the executor and sole beneficiary of the Estate of Ms. Salvucci. Ms. Salvucci, Plaintiff's cousin, was employed by Glenmede from August 1986 through July 2016, when she became disabled and commenced long-term disability benefits.

A. Ms. Salvucci's Employment with Glenmede

According to the Second Amended Complaint, the employees at Glenmede were a tight-knit community, and Ms. Salvucci shared details of her personal life with friends and colleagues at Glenmede.

On multiple occasions, Ms. Salvucci introduced her colleagues to her cousin, Plaintiff, when the two had lunch near Glenmede's office in Philadelphia. In or around 2005, Plaintiff and Ms. Salvucci jointly purchased a home in Berks County, Pennsylvania, using a $50,000 loan from Ms. Salvucci's Glenmede-sponsored 401k plan account to put toward the down payment. After the two moved into the home together, Plaintiff drove Ms. Salvucci to the train station to commute to work every day, which was widely known by her work colleagues.

In March 2006, Ms. Salvucci was diagnosed with ovarian cancer and took a brief disability-related leave of absence, returning to Glenmede in July of 2006. Plaintiff alleges that employees at Glenmede were aware that he cared for Ms. Salvucci through her illness. Although Ms. Salvucci's ovarian cancer was in a period of remission for almost ten years, the cancer recurred in or around the end of 2015, and Ms. Salvucci went on short-term disability leave through a Glenmede-sponsored Life Insurance Company of North America ("Cigna") plan. Employees of Glenmede sent a "get well" card to Ms. Salvucci when she went on leave.

Ms. Salvucci remained on short-term disability until her benefits expired in June 2016. Ms. Salvucci spoke to Glenmede's Director of Human Resources, Ann Marie Bell, to discuss the possibility and implications of Ms. Salvucci transitioning to long-term disability benefits. Ms. Salvucci informed Ms. Bell that she was undergoing experimental cancer treatment and was hopeful it might improve or resolve her condition so she might eventually return to work. In June 2016, Ms. Salvucci made a claim for long-term disability benefits which was approved through the Glenmede-sponsored plan with Cigna.

The next month, Ms. Salvucci received a termination letter, stating that she was "eligible to receive a reduced pension benefit . . . . [or] defer retirement until you reach full retirement age."² A "Last Day/Benefits Information" guide was enclosed with the termination letter, which included information about a variety of benefits, and stated "[i]f you have five years of credited service and are vested, you will receive a pension estimate from Glenmede within a reasonable time. Please keep Glenmede apprised of your current address and marital status. For questions about your pension please contact Marianne McCafferty[.]"

After Ms. Salvucci was terminated, Plaintiff's brother, John Salvucci, Esq., reached out to Jim Belanger, corporate counsel for Glenmede, on behalf of Ms. Salvucci. Mr. Belanger informed John Salvucci that "the benefit would be approximately 30% less, if [Ms. Salvucci] started receiving the pension today as opposed to age 65." Several years later, in September 2019, Ms. Salvucci received a letter from Marianne McCafferty at Glenmede stating that the Plan was going to be frozen at the end of the year, that Ms. Salvucci "continued to earn years of service credit towards [her] benefit accrual in the pension plan because [she] remained on disability," and that Glenmede "recognize[d] that the pension plan is a key part of [her] retirement planning." The letter also included a frequently asked questions ("FAQ") document, yet the FAQs were silent on an unmarried participant's loss of their accrued benefit due to death prior to electing an alternative form of benefit and specifically designating a beneficiary under the Plan.

B. Denial of Benefits to Ms. Salvucci's Estate

In November 2020, Ms. Salvucci passed away unmarried at 64 years old. Through her employment with Glenmede, Ms. Salvucci participated in the Plan, a defined benefit pension plan sponsored by Glenmede and administered by the Compensation Committee. Participants whose employment with Glenmede ended due to a disability "after being credited with five Years of Service for vesting" are entitled to remain as active participants in the Plan until they either choose to commence an early retirement benefit or reach their normal retirement age.

Ms. Salvucci, a participant with more than ten years of credited service, was able to elect a retirement day as early as age 55, (the first "early retirement date" on which she might choose to commence an early retirement benefit under the Plan) or as late as age 65 (the Plan's "normal retirement date"). See Defs. Mot. to Dismiss, Ex. A §§ 1.20, 1.37; ECF No. 22-2 [hereinafter "Plan"]. For an unmarried participant in the Plan, like Ms. Salvucci, the normal form of retirement benefit is a single life annuity, in the form of monthly payments, which terminate upon the participant's death. Id. § 6.2. However, the Plan provides alternative options for the payment of accrued retirement benefits, including a 10-year certain annuity, paid over 120 months to the participant and/or the participant's beneficiary if the participant dies before collecting all 120 payments. Id. § 6.5.4. The Plan does not offer any survivor's benefit if an unmarried participant passes away prior to commencing her pension benefit.³

Under the Plan, the Compensation Committee must provide participants with a Notice of Benefit Election Rights at least 30 days, and not more than 180 days, before the participant's Anticipated Annuity Starting Date, which is the first day of the month following the participant's normal retirement date. Id. at § 6.4.1. Ms. Salvucci's Anticipated Annuity Starting Date was March 1, 2021. Thus, under the Plan, the Committee could have provided Ms. Salvucci with a Notice of Benefit Election Rights on September 3, 2020 until January 30, 2021. However, Ms. Salvucci passed away on November 19, 2020, before Glenmede provided her, or was required to provide her, with a notice of benefit election rights.

According to the Second Amended Complaint, at the time of Ms. Salvucci's death, Plaintiff was her cousin and closest living relative. Plaintiff was also the named beneficiary of Ms. Salvucci's Cigna life insurance benefits under Glenmede's applicable ERISA-covered health and welfare plan. Ms. Salvucci believed she or Plaintiff would receive her accrued pension benefit under the Plan, and Defendants were aware of Ms. Salvucci's ongoing battle with cancer and her close familial relationship with Plaintiff.

Plaintiff alleges that Defendants' failure to provide Ms. Salvucci with a Notice of Benefit Election Rights prior to her death was a breach of fiduciary duty because they knew or should have known her death was impending based on her condition and severely deteriorating health. Accordingly, Plaintiff alleges that Defendants' failures deprived Ms. Salvucci of the opportunity to designate a beneficiary, namely, Plaintiff, for her pension benefits.

Defendants, however, contend that the Plan's Summary Plan Description ("SPD") communicated clearly to Ms. Salvucci all of the information required by ERISA and necessary for her to make an informed decision about her retirement benefit. See generally Defs. Mot. to Dismiss Ex. B, ECF No. 22-3 [hereinafter "SPD"]. According to Glenmede, the SPD informed Ms. Salvucci in plain language that she had a right to early retirement,⁴ that no survivor benefit would be payable if she died before commencing her Plan benefit because she was unmarried,⁵ that she had a right to elect a 10-year certain annuity,⁶ and that there was a deadline for electing an optional form of benefit,⁷ such as the 10-year certain and continuous annuity.

At the time of her death, Ms. Salvucci had not elected to commence her Plan benefit. Because she was not married, there was no benefit payable under the Plan to her estate.

On August 3, 2021, Plaintiff filed an administrative claim with the Compensation Committee. The Compensation Committee denied Plaintiff's claim and administrative appeal, explaining that no benefit was payable. Based on the above facts and allegations, Plaintiff filed the present action under ERISA. The Court dismissed all counts in Plaintiff's first amended complaint without prejudice after Defendants' first motion to dismiss. See ...