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GASSNER v. INTERNATIONAL BUSINESS MACHINES CORP.

ROSEMARY A. GASSNER, Individually, and as Administratrix of The Estate of PATRICK GASSNER, Deceased, Plaintiffs,
v.
INTERNATIONAL BUSINESS MACHINES CORP., a New York Corporation, and PRUDENTIAL INSURANCE OF AMERICA, Defendants. INTERNATIONAL BUSINESS MACHINES CORP., a New York Corporation, Third-Party Plaintiff, v. JENNIFER LAURI GASSNER, an individual, and PATRICK JEFFREY GASSNER, an individual, Third-Party Defendants.



The opinion of the court was delivered by: RONALD GUZMAN, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Rosemary Gassner ("Rosemary") has sued International Business Machines Corp. ("IBM") for breach of fiduciary duty pursuant to the Employee Retirement and Income Security Act ("ERISA"), 29 U.S.C. § 1132(a) et seq., as a result of a series of actions that culminated in the payment of the proceeds of a group life insurance policy held by her husband and former IBM employee, Patrick C. Gassner, to Patrick's children, Jennifer Gassner ("Jennifer") and Patrick "Jeffrey" Gassner ("Jeffrey"). Before the Court is Defendant IBM's Motion for Summary Judgment. For the reasons set forth below, the Court grants the motion. FACTS

The following facts are either undisputed or deemed admitted due to the parties' failure to comply with Local Rule 56.1, which this Court strictly enforces. When Patrick began working for IBM in 1996, he enrolled in IBM's group life insurance and travel accident insurance benefit plans, designating his two children, Jennifer and Jeffrey, as the beneficiaries. (Def.'s LR 56.1(a)(3) ¶ 30.) In September 1998, Patrick was diagnosed with end-term liver disease and stopped actively working for IBM. (Id. ¶ 33.) On June 4, 2000, Patrick and Rosemary were married. (Id. ¶ 36.) Two days later, on June 6, Patrick called IBM's Human Resources Service Center ("HRSC") and requested a new Designation of Beneficiary Form for his group life insurance and travel accident insurance policies. (Id.) The form at issue is for the group life insurance policy in the amount of $265,000. (Id.) HRSC sent the new form to Patrick's home on June 7. (Id.) The instructions on this form, state, in all capital letters, "INDICATE WHETHER THE DESIGNATION IS FOR IBM GROUP LIFE ONLY, TRAVEL ACCIDENT ONLY, OR BOTH POLICIES." (Id. ¶ 40.) The form warns that changes in the designation of the beneficiaries of a policy are "effective when the completed form is received and processed by the HRSC." (Id.) The form indicates that such processing entails the successful passage of auditing procedures that include an examination of whether the change indicated on the form is for one policy or for both and the signature of the witness. (Id. ¶ 41.) A form that fails this internal audit is returned to the employee. (Id.) One that passes is sent on to Prudential, the record keeper for IBM's group life insurance plan. (Id. ¶ 61.)

  Two months later, in August 2000, Patrick was admitted to the hospital. (Id. ¶ 38.) On August 21, Robert S. Bell, an attorney, was called to the hospital and met with Patrick alone to discuss his wishes regarding his estate. (Id.) The Gassners gave Bell the Designation of Beneficiary Form that they had received in June. (Id. ¶ 39.) He went back to his office where his staff at least partially filled out the form and returned to the hospital later that same day, and Patrick signed the form. (Id.) Having read the instructions on the form, Bell signed it four days later on August 25 and sent it to IBM on August 28. (Id. ¶¶ 51, 55.) For reasons which are not clear, on August 22, Rosemary requested a new Designation of Beneficiary Form which was mailed to Patrick's home the following day. (Id. ¶¶ 45, 50.)

  At any rate, the form that was received by IBM failed to pass the routine internal audit to which all forms are subjected because: (1) Patrick's signature date was unclear, (2) Bell's witness date did not match Patrick's signature date, and (3) there was no box checked indicating the plan for which Patrick was trying to change the beneficiary, i.e., the group life insurance plan, the travel accident plan, or both. (Id. ¶ 63.) Accordingly, IBM rejected the form, and it mailed the original rejected form, an audit checklist, and a new form back to Patrick's home on August 29.

  Patrick returned home on August 30, and at some point in the following week, he apparently received and viewed the August 29 package from IBM's HRSC. (Id. ¶¶ 66, 67.) On three consecutive days beginning August 30, Patrick and Bell discussed what was recorded variously on Bell's time sheets as "review [of] . . . IBM follow-up" and "IBM forms." (Id. ¶ 68.) Bell cannot remember what they discussed or whether Patrick told him that the Group Life Insurance plan form had been rejected or whether Patrick wished to send in a new form. (Id.) IBM was not contacted by anyone connected with this situation until September 20, when Rosemary called to inform it that on September 12, Patrick had died. (Id. ¶ 71.)

  At this point, an IBM HRSC employee determined who the beneficiaries were with regard to the plans in which Patrick was a participant. (Id. ¶ 73.) In the case of the group life insurance policy, IBM's HRSC requested a copy of the most recent, accepted beneficiary form from Prudential. (Id. ¶ 74.) The form on file with Prudential indicated that Jennifer and Jeffrey were the beneficiaries of Patrick's group life insurance policy. (Id. ¶ 75.) Rosemary was the beneficiary of record of all of Patrick's other benefits. (Id.) On August 21, the following day, IBM's HRSC sent Rosemary a Benefits Statement as well as a letter asking Rosemary to call with any questions she had regarding the statement and provided telephone numbers for this purpose. (Id. ¶ 78.) The Benefits Statement itself further stated that before payment could be made, additional information would have to be provided. (Id. ¶ 79.)

  A month later, on September 22, Rosemary called Bell to tell him that she had received the Benefits Statement. (Id. ¶ 80.) Bell's time sheet indicates that he spoke with Rosemary "regarding documents," but he does not remember whether Rosemary instructed him to find out what had happened, as Rosemary claims. (Id.) In any case, neither Bell nor Rosemary contacted IBM at that time regarding the Benefits Statement listing Jennifer and Jeffrey as the beneficiaries of their father's group life insurance policy. (Id. ¶ 81.) Rosemary claims to have called IBM on numerous occasions, including on or about October 3, to tell IBM that she was the group life insurance beneficiary and that Bell sent IBM a letter on October 11. (Id.; Pl's. LR 56.1(b)(3)(A) ¶ 81.)

  In the meantime, however, on September 27, Rosemary and Jennifer had met at the Gassners' condo in order to review Patrick's affairs. (Def.'s LR 56.1(a)(3) ¶ 82.) Rosemary told Jennifer that the Benefits Statement was wrong and that she was meant to be the beneficiary of Patrick's group life insurance policy, rather than Jennifer and Jeffrey. (Id. ¶ 83.) Nevertheless, Rosemary accompanied Jennifer to the building's office to make copies of the Benefits Statement. (Id. ¶ 84.) Jennifer called an HRSC employee responsible for the administration of her father's policies stating that she and her brother were sending the information necessary to receive payment of her father's group life insurance policy, which she did the next day. (Id. ¶¶ 87, 90.) Jennifer did not inform IBM of the dispute between herself and Rosemary regarding the intended beneficiary of Patrick's group life insurance policy. (Id. ¶ 91.) Jennifer also did not inform Rosemary that she was sending the additional requested information necessary to obtain payment of the benefits to herself and her brother. (Id.) On October 2, a day before Rosemary called IBM's HRSC, it received the additional information provided by Jennifer, and in accordance with its procedure, it sent a Proof of Death Statement to Prudential so the group life insurance checks could be processed. (Id. ¶ 92.) Thus, at the time that IBM's HRSC sent the requisite information to Prudential in order to release the funds to Jennifer and Jeffrey, it was unaware of a dispute regarding the intended beneficiary of the group life insurance policy. (Id. ¶ 95.) Rosemary apparently thought Bell was doing so, but he did not contact the HRSC until October 11. (Id.) Rosemary herself contacted the HRSC on the day following its delivery of the information to Prudential releasing the funds to Jennifer and Jeffrey. (Id.)

  On October 9, Prudential wrote checks to Jennifer and Jeffrey in the amount of $132,481.67 each, the amount each was owed on their father's group life insurance policy. (Id. ¶ 110.) Jennifer received her check sometime after October 13 and informed Rosemary of this fact. (Id. ¶ 106.) Although Rosemary told Jennifer that the money was supposed to have been hers, she made no effort to block either Jennifer or Jeffrey from spending it. (Id. ¶ 109.)

  On October 11, Bell sent a letter to IBM asking whether it would be disbursing proceeds from Patrick's group life insurance policy pursuant to the Designation of Beneficiary Form "filed previously with IBM." (Id. ¶ 103.) Attached to the letter was the already rejected form. (Id.) On October 16, the IBM HRSC employee responsible for the administration of Patrick's benefits left Bell a message stating that the benefits had already been paid out to Jennifer and Jeffrey and noted that the attached form was invalid because it had not been signed or stamped by IBM, a fact of which Bell was, or should have been, aware. (Id. ¶ 108.) Bell does not remember listening to this message, but he admits that he sometimes deletes voice-mail messages without listening to them. (Id.) The Court notes here that on the same day Rosemary brought her action against IBM, she also brought a malpractice suit against Bell, alleging that as a result of Bell's failures, the group life insurance policy benefits were mistakenly paid to Jennifer and Jeffrey, rather than Rosemary. (Id. ¶ 24.)

  DISCUSSION

  Rosemary has framed her claim as a breach of fiduciary duty claim. IBM, however, maintains that Rosemary's claim should in fact be cast as a denial of benefits claim and urges this Court to treat it as such. No matter how it is viewed, however, Rosemary's claim fails. The Court will analyze it first as a breach of fiduciary duty claim as Rosemary presented it and then as a denial of benefits claim as IBM advocates.

  On a motion for summary judgment, the Court considers all of the moving papers with all reasonable inferences drawn in favor of the non-moving party and all factual disputes resolved in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). To overcome a motion for summary judgment, the non-moving party cannot simply allege the existence of a factual dispute. Id. at 248. Instead, the non-moving party must set forth admissible facts which demonstrate that there is a genuine issue of material fact whose resolution requires a trial. Id. Summary judgment is appropriate ...


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