Sevely v. the Bank of New York Mellon Co.

18-3247
Sevely v. The Bank of New York Mellon Co.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION ASUMMARY ORDER@). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of
New York, on the 13th day of December, two thousand nineteen.
PRESENT:
DENNIS JACOBS,
SUSAN L. CARNEY,
MICHAEL H. PARK,
Circuit Judges.
_____________________________________
Joseph Sevely,
Plaintiff-Appellant,
v. 18-3247
The Bank of New York Mellon Corporation
Long Term Disability Coverage Plan, The
Prudential Insurance Company of America,
Defendants-Appellees.
_____________________________________
FOR PLAINTIFF-APPELLANT: JOSEPH SEVELY, pro se, New York, NY.
FOR DEFENDANTS-APPELLEES: AMANDA A. SONNEBORN, Seyfarth Shaw
LLP, Chicago, IL (Robert T. Szyba, Seyfarth
Shaw LLP, New York, NY, on the brief).
Appeal from a judgment of the United States District Court for the Southern District of
New York (Batts, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court entered on September 27, 2018, is AFFIRMED.
In 2017, Joseph Sevely sued the Bank of New York Mellon Corporation Long Term
Disability Plan1 (the “Plan”) and the Prudential Insurance Corporation of America (“Prudential”)
for violating the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq.,
alleging that they unlawfully denied his application for disability benefits under the Plan.
Defendants jointly moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6)
for failure to state a claim. The district court granted the motion, reasoning that the plain language
of the Plan and the allegations in Sevely’s complaint established that he was not entitled to the
claimed benefits. We assume the parties’ familiarity with the underlying facts, the procedural
history, and the issues on appeal, to which we refer only as necessary to explain our decision to
affirm.
We review de novo the dismissal of a complaint pursuant to Rule 12(b)(6). Forest Park
Pictures v. Universal Television Network, 683 F.3d 424, 429 (2d Cir. 2012). To survive a motion
to dismiss, a complaint must plead “enough facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although all factual allegations in
the complaint are assumed to be true, we do not automatically accept a complaint’s legal
conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In reviewing a motion to dismiss, “a
1
The Plan’s correct name is “The Bank of New York Mellon Health and Welfare Plan.” The Bank
of New York is referred to herein as “BNY.”
2
district court may consider the facts alleged in the complaint, documents attached to the complaint
as exhibits, and documents incorporated by reference in the complaint.” DiFolco v. MSNBC Cable
L.L.C., 622 F.3d 104, 111 (2d Cir. 2010).
Under ERISA § 502(a)(1)(B), a plan participant or beneficiary may bring a civil suit “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). Courts may enforce, but may not change, the terms of a plan. See CIGNA Corp. v.
Amara, 563 U.S. 421, 435-36 (2011) (Section 502(a)(1)(B) “speaks of ‘enforcing’ the ‘terms of
the plan,’ not of changing them.” (quoting 29 U.S.C. § 1132(a)(1)(B)) (brackets omitted)).
The Plan provided that, for a person to be “disabled” for plan purposes, he must: (1) be
“unable to perform the material and substantial duties of [his] regular occupation due to [his]
sickness or injury”; (2) be “under the regular care of a doctor”; and (3) “have a 20% or more loss
in [his] monthly earnings due to that sickness or injury.” App’x at 56 (emphasis omitted). We agree
with the district court’s determination that Sevely was not “disabled” within the Plan’s definition
because under his complaint’s allegations, he failed to satisfy the third prong. Sevely alleged that
his monthly earnings were never reduced while he was employed by BNY. Compl. ¶ 39, Sevely v.
The Bank of New York Mellon Co., No. 17-cv-6207 (S.D.N.Y. Aug. 16, 2017), ECF No. 1
(“Compl.”). He has conceded, both in his brief in the district court and his brief in this Court, that
he was terminated as part of a reduction in force and not because of his disability. Mem. of Law
in Opp’n to Def.’s Mot. to Dismiss at 1, Sevely v. The Bank of New York Mellon Co., No. 17-cv-
6207 (S.D.N.Y. Dec. 4, 2017), ECF No. 18 (“BNY terminated him in a ‘reduction in force’
effective at end of the work day on August 31, 2015.”); Appellant’s Br. at 3 (“[H]is position was
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terminated in a reduction in force.”); Appellant’s Reply at 5 (“The key issue is whether being
included in a reduction in force precludes disability benefits which would otherwise be awarded.”).
Assuming, as we must at the motion to dismiss stage, the truth of his allegations, they establish
that his pay was never reduced during his employment with BNY and that there was no causal
connection between his disability and the termination of his employment. In order for Sevely to
qualify as “disabled,” the Plan required both a reduction in pay and a causal connection between
that reduction and his disability. Sevely has not shown either.
Although Sevely concedes that he was terminated because of a reduction in force and not
for any other reason, he nonetheless advances several arguments in support of the notion that a
causal connection tied his disability to his termination. First, he points to the determination made
by the Social Security Administration (“SSA”) that he is eligible for disability benefits under that
program. He argues that because the SSA requires a causal link between a person’s disability and
his or her capability to earn income, that determination proves the Plan’s to be wrong. His
argument is misguided. SSA awards may be considered when determining whether a claimant is
disabled under a plan, but a plan administrator is not bound by such an award and is not required
to accord deference to that determination because the plan’s governing standards may be different.
See, e.g., Paese v. Hartford Life & Accident Ins. Co., 449 F.3d 435, 443 (2d Cir. 2006) (SSA
determinations are not binding on ERISA plan administrators or district courts.).
Sevely also argues that the Plan’s definitions of “monthly earnings” and “active
employment” are ambiguous, and that in the face of this ambiguity, they should be interpreted in
his favor. The Plan defined “monthly earnings” as: “your gross monthly income from your
Employer in effect just prior to your date of disability.” App’x at 57. Sevely asserts that the
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definition is ambiguous because “it is not specified when one would start measuring subsequent
monthly earnings to determine whether or not there was a 20% or greater loss.” Appellant’s Br. at
15-16. He suggests that the Plan’s “monthly earnings loss requirement” be interpreted to mean the
“loss of earnings during the month following the date an employee ceases work due to the
disability, as compared to the earnings prior to cessation of work.” Id. at 16. Even Sevely’s
proposed interpretation does not help him, however, since he concedes that he did not cease
working because of his disability, but rather because of a reduction in force. Regardless, the Plan
required consideration of Sevely’s monthly earnings “just prior to” his “date of disability,” App’x
at 57, and Sevely’s “date of disability” could not be earlier than August 31, 2015, because he
worked and received his full salary until that date. His monthly earnings were never reduced during
his employment with BNY.
As to the term “active employment,” which is relevant under the Plan because an
employee’s coverage ceases on “the last day” of “active employment,” the Plan states that
“[a]ctive employment means that you are working for your Employer for earnings that are paid
regularly and that you are performing the material and substantial duties of your regular
occupation.” App’x at 51. Sevely contends that this definition is ambiguous, but describes no
scenario in which he could reasonably be considered to have been in “active employment” after
August 31, 2015. Sevely alleged that August 31 was his “separation date.” Compl. ¶ 30. Thus, he
could not have been “performing the material and substantial duties” of his job after that date.
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We have considered all of Sevely’s remaining arguments and conclude that they are
without merit. Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine O=Hagan Wolfe, Clerk of Court
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