Samborsky v. Rothstein

Background

Michael Samborsky was laid off in 2014 and later began receiving long-term disability benefits from the Building Service 32BJ Health Fund. The plan provided benefits to a participant who was “totally disabled,” meaning unable to work in any capacity. It also stated that long-term disability benefits would stop on the first day of the month after the participant worked at any job.

Samborsky sued Sara Rothstein, Alberta Galdri, and Regine Breton, each doing business as 32BJ Benefit Funds. He sought reinstatement of his benefits and unpaid benefits. The defendants moved for summary judgment, which asks the court to rule without a trial when there is no genuine dispute over a material fact and the moving party is entitled to judgment under the law.

Substitution of the Defendant

The court held that Samborsky had named the wrong defendants. Under the Employee Retirement Income Security Act, a federal law governing employee benefit plans, a claim to recover benefits generally may be brought against the plan and its administrators or trustees in their official capacities. The opinion states that none of the three named defendants was an administrator or trustee of the Fund.

Because Samborsky was representing himself and the Fund would not suffer undue prejudice, the court used Federal Rule of Civil Procedure 21 to add the Fund as a defendant and remove the three improperly named defendants. The court nevertheless considered Samborsky’s benefits claim on its merits.

Merits

The plan gave its administrator discretionary authority to decide eligibility and interpret the plan. The court therefore reviewed the Fund’s decision under the arbitrary-and-capricious standard, a deferential standard under which the court may not replace a reasonable plan administrator’s interpretation with its own. A benefits decision is arbitrary and capricious if it lacks a reason, lacks substantial supporting evidence, or is legally incorrect.

The court held that the Fund reasonably determined that Samborsky was not entitled to benefits. When he applied in September 2015, he was working for another company, so he was not unable to work in any capacity under the plan’s definition of total disability. The court also held that the Fund reasonably interpreted the plan to require benefits to end in April 2015 because Samborsky began working for Harvard Maintenance in March 2015.

The court acknowledged that the Fund’s interpretation did not follow inevitably from the plan’s text. Samborsky argued that the rule ending benefits after a return to work did not apply because he had not yet received a benefit check while working. The court held that it had to uphold the Fund’s reasonable interpretation even if Samborsky’s interpretation was also reasonable. Independently, the court concluded that Samborsky was not entitled to benefits when he applied because he was working at that time. The fact that he did not receive his first check until November 2015 did not change the result.

The court also rejected Samborsky’s arguments about an unidentified booklet and the Fund’s decision not to seek repayment. The court stated that the Summary Plan Description governed his eligibility and that not seeking repayment did not mean the Fund had approved his appeal or agreed to pay future benefits.

Disposition

Judge Gregory H. Woods granted the defendants’ motion for summary judgment because the Fund’s determination was not arbitrary and capricious. The court entered judgment for the defendants, directed the Clerk of Court to terminate pending motions and close the case, and certified that an appeal would not be taken in good faith. The court therefore denied fee-free appeal status for purposes of an appeal.