Delia v. UBS Financial Services Inc.

Background

Gina Delia sued UBS Financial Services Inc., the UBS Financial Advisor Survivor Benefit Plan, and the Plan Administrator. She brought the action individually and as executor of Denis Delia’s Estate. She sought survivor benefits based on alleged violations of the Employee Retirement Income Security Act of 1974 (ERISA) and state law.

The plan’s summary plan description stated that eligible financial advisors had to affirmatively enroll during the applicable enrollment period to become participants. It also stated that an eligible employee who did not enroll would not become a participant and would have no later opportunity to enroll.

After his death, Gina Delia requested benefits. The Plan Administrator denied the request and later denied her written appeal.

ERISA claim

The court granted summary judgment on Count III, identified as the sole federal claim. The claim alleged that the Plan and Plan Administrator breached fiduciary duties under ERISA and sought benefits under the plan.

ERISA allows a participant or beneficiary to sue to recover benefits or enforce rights under a plan. The court held that Denis Delia was not a participant when he died because he had not enrolled. Although he had become eligible to enroll, the plan required affirmative enrollment to become a participant. The court therefore concluded that he had no colorable claim to benefits at the time of his death.

The court also held that the Estate was not a participant or beneficiary. Under ERISA, a beneficiary is an individual designated by a participant or by the plan to receive benefits. Although the plan provided that benefits could go to the Estate if no beneficiary was named, the court held that this provision could not apply because Denis Delia had never enrolled and had no claim to benefits.

The court rejected the argument that Denis Delia did not become eligible until after his third anniversary of employment. It held that he satisfied the applicable service requirement on January 1, 2016, because the plan allowed employees hired before January 1, 2014, to qualify with three years of continuous service within the plan year in which they were notified of eligibility.

The court also rejected the argument that factual disputes existed about whether Denis Delia received the notices. Receipt of notice was not a condition of eligibility under the plan. The defendants presented copies of the notices and evidence from UBS business records that they had been sent. Gina Delia did not submit conflicting evidence showing that the notices were not sent. Her statement that she was unaware of Denis Delia receiving the notices did not contradict the evidence that UBS sent them.

The court did not address the Plan Administrator’s alternative argument in detail because Gina Delia lacked a statutory basis to bring the ERISA claim. The court nevertheless upheld the Plan Administrator’s decision under either a deferential or independent standard of review, reasoning that Denis Delia’s failure to enroll, rather than any alleged fiduciary breach, caused the loss of benefits. The court also stated that summary judgment was independently warranted because no reasonable jury could find the required causal connection between the alleged breach and the claimed loss.

State-law claims

The court held that the state-law claims were not displaced by ERISA. It reasoned that Gina Delia never could have brought the benefits claim under ERISA because she and the Estate lacked the required participant or beneficiary status. The court stated that it had diversity jurisdiction over the state-law claims.

Gina Delia asserted claims against UBS for breach of contract, breach of the implied obligation of good faith and fair dealing, and unjust enrichment. The court granted summary judgment against the contract claim because the record would not allow a reasonable jury to find that she was entitled to benefits under the plan. To the extent the contract claim relied on other alleged promises to provide compensation, the court found that she had presented no evidence of those promises.

The unjust-enrichment claim failed because it duplicated the contract claim. The good-faith-and-fair-dealing claim also failed because Gina Delia had not presented evidence from which a reasonable jury could find that UBS failed to provide Denis Delia notice of his right to enroll, notice of the enrollment requirements, or an opportunity to enroll.

Attorneys’ fees and disposition

In a footnote, the court dismissed the claim for attorneys’ fees. It held that fees under ERISA require some degree of success on the merits and that Gina Delia had not caused a material change in the parties’ legal relationship or achieved success on the merits.

Judge Schofield granted the defendants’ motion for summary judgment and closed the case. The court dismissed the state-law claims and the attorneys’ fees claim, upheld the Plan Administrator’s decision, and directed the Clerk of Court to close docket numbers 56 and 65.