Garan v. 1199SEIU Benefit and Pension Funds

Background

Jozef Garan, proceeding without a lawyer, sued 1199SEIU Benefit and Pension Funds over the amount of pension credit awarded to him. Garan worked as a housekeeper at New York Presbyterian-Lawrence Hospital from 2009 to 2021 and was a member of 1199SEIU UnitedHealthcare Workers East. He sought credit for his entire period of employment.

The Fund initially calculated a monthly pension benefit of $37 based on credited service beginning January 1, 2020. In approximately August 2023, it recalculated the benefit to $99 per month after determining that Garan qualified for an exception to the plan’s one-year waiting rule. The increase reflected credit for 2020, not credit for the years before 2020.

The hospital became obligated to contribute to the Fund on January 1, 2020, under a collective bargaining agreement reached with the Union in 2019. Garan appealed the benefit calculation three times. The Fund’s Retirement Committee denied his appeals, concluding that he was not entitled to credit for 2009 through 2019 because the hospital was not required to contribute during that period.

Garan filed the case in New York state court in August 2024. The Fund removed it to federal court based on federal-question jurisdiction and moved to dismiss under Federal Rule of Civil Procedure 12(b)(6). The Fund and the court treated the complaint as asserting a claim under Section 502(a)(1)(B) of the Employee Retirement Income Security Act, which permits a participant or beneficiary to sue for benefits allegedly owed under an employee-benefit plan.

Legal standard

On a Rule 12(b)(6) motion, the court accepts well-pleaded factual allegations as true and draws reasonable inferences for the plaintiff, but it need not accept conclusory statements. The complaint must contain enough factual matter to make the claim plausible. This type of motion tests whether the complaint adequately states a claim; it does not decide whether the plaintiff will ultimately win.

For an ERISA benefit-denial claim, review ordinarily is independent unless the plan gives the administrator or fiduciary discretionary authority to determine eligibility or interpret the plan. If the plan grants that authority, the court applies the more deferential arbitrary-and-capricious standard. Under that standard, the administrator’s decision may be overturned only if it was without reason, unsupported by substantial evidence, or legally erroneous.

Court’s analysis

The court found that Garan’s plan gave the Fund’s Retirement Committee final discretionary authority to administer and interpret the plan. The court therefore applied the arbitrary-and-capricious standard.

The court rejected Garan’s reliance on his union membership, payment of union dues, and work of more than 1,000 hours per year. According to the court, the plan did not condition pension credit on those facts. Instead, the plan provided pension credit to employees who worked for a contributing employer.

The court concluded that the administrative record showed the hospital had no obligation to contribute to the Fund until January 1, 2020. It further concluded that the Fund applied the plan’s terms consistently when calculating and reviewing Garan’s credited service. Garan did not allege that the denial of pre-2020 credit was arbitrary and capricious, and the complaint contained no facts supporting that conclusion.

Disposition

The court granted the Fund’s motion to dismiss. It dismissed the complaint with prejudice and directed the Clerk of Court to terminate the motion and close the case.