Sullivan-Mestecky v. Verizon In the

18-1591
Sullivan-Mestecky v. Verizon
In the 1
United States Court of Appeals 2
For the Second Circuit 3
________ 4
5
A UGUST TERM , 2019 6
7
A RGUED: MAY 15, 2019 8
D ECIDED: JUNE 1, 2020 9
10
No. 18-1591-cv 11
12
K RISTINE SULLIVAN-MESTECKY , individually and as the beneficiary of the 13
life insurance policy of Kathleen Sullivan, deceased, 14
Plaintiff-Appellant, 15
16
v. 17
18
V ERIZON C OMMUNICATIONS INC. and THE PRUDENTIAL INSURANCE 19
C OMPANY OF A MERICA, 20
Defendants-Appellees.* 21
________ 22
23
Appeal from the United States District Court 24
for the Eastern District of New York. 25
________ 26
27
Before: WALKER , C ABRANES , and H ALL , Circuit Judges. 28
29
________ 30
* The Clerk of the Court is respectfully requested to amend the caption as set forth above.

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2 No. 18-1591
Plaintiff-Appellant Kristine Sullivan-Mestecky brought this action 1
individually and as the beneficiary of the life insurance policy of her mother, 2
Kathleen Sullivan, under the Employee Retirement Income Security Act of 1974 3
(ERISA), 29 U.S.C. § 1001 et seq., following the denial of Sullivan’s life insurance 4
benefits by Defendants-Appellees Verizon Communications Inc. (Verizon) and 5
The Prudential Insurance Company of America (Prudential). On appeal, Sullivan- 6
Mestecky argues that the district court (Sandra J. Feuerstein, Judge) erred in 7
granting summary judgment to Verizon and Prudential on her claim for benefits 8
under ERISA § 502(a)(1)(B) and in dismissing her fiduciary breach claim under 9
ERISA § 502(a)(3). We conclude that the district court did not err in dismissing 10
Sullivan-Mestecky’s § 502(a)(1)(B) claim against both defendants and her 11
§ 502(a)(3) claim against Prudential. We conclude, however, that the district court 12
did err in dismissing her § 502(a)(3) claim against Verizon. We therefore AFFIRM 13
the district court’s dismissal of Sullivan-Mestecky’s § 502(a)(3) claim against 14
Prudential and its ruling granting Verizon and Prudential summary judgment on 15
Sullivan-Mestecky's § 502(a)(1)(B) claim, VACATE the district court’s dismissal of 16
Sullivan-Mestecky’s § 502(a)(3) claim against Verizon, and REMAND for further 17
proceedings consistent with this opinion. 18
________ 19
JOHN S TOKES (Peter K. Stris, on the brief), Stris & Maher LLP, Los 20
Angeles, CA, for Appellant. 21
JAMES P. H OLLIHAN, Duane Morris LLP, Pittsburgh, PA, and 22
K IRSTEN MCC AW G ROSSMAN (Robin H. Rome and Kristine V. 23
Ryan, on the brief), Nukk Freeman & Cerra, P.C., Chatham, NJ, 24
for Appellees. 25

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3 No. 18-1591
________ 1
JOHN M. WALKER , JR ., Circuit Judge: 2
Plaintiff-Appellant Kristine Sullivan-Mestecky brought this action 3
individually and as the beneficiary of the life insurance policy of her mother, 4
Kathleen Sullivan, under the Employee Retirement Income Security Act of 1974 5
(ERISA), 29 U.S.C. § 1001 et seq., following the denial of Sullivan’s life insurance 6
benefits by Defendants-Appellees Verizon Communications Inc. (Verizon) and 7
The Prudential Insurance Company of America (Prudential). On appeal, Sullivan- 8
Mestecky argues that the district court (Sandra J. Feuerstein, Judge) erred in 9
granting summary judgment to Verizon and Prudential on her claim for benefits 10
under ERISA § 502(a)(1)(B) and in dismissing her fiduciary breach claim under 11
ERISA § 502(a)(3). We conclude that the district court did not err in dismissing 12
Sullivan-Mestecky’s § 502(a)(1)(B) claim against both defendants and her 13
§ 502(a)(3) claim against Prudential. We conclude, however, that the district court 14
did err in dismissing her § 502(a)(3) claim against Verizon. We therefore AFFIRM 15
the district court’s dismissal of Sullivan-Mestecky’s § 502(a)(3) claim against 16
Prudential and its ruling granting Verizon and Prudential summary judgment on 17
Sullivan-Mestecky's § 502(a)(1)(B) claim, VACATE the district court’s dismissal of 18
Sullivan-Mestecky’s § 502(a)(3) claim against Verizon, and REMAND for further 19
proceedings consistent with this opinion. 20
21
BACKGROUND 22
Kathleen Sullivan was employed by the New York Telephone Company, a 23
predecessor entity to Verizon, from 1970 until 1978, during which period her 24

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4 No. 18-1591
annual income was $18,600. Sullivan received various benefits from the New York 1
Telephone Company and other predecessor companies of Verizon, both 2
individually and through her husband, who was also employed by the New York 3
Telephone Company. Upon Sullivan’s husband’s death in January 2005, Verizon 4
terminated all of Sullivan’s benefits, which Sullivan challenged over subsequent 5
years. 6
Pursuing her challenge, in June 2011, Sullivan contacted the Verizon 7
Benefits Center, which at that time was administered on behalf of Verizon by the 8
Aon Hewitt Company. The Verizon Benefits Center responded by sending 9
Sullivan a “Retirement Enrollment Worksheet” on Verizon letterhead.1 The 10
worksheet said that Sullivan was eligible for life insurance option “1 x Pay” of 11
Verizon’s Group Life Insurance plan, which provided coverage in the amount of 12
$679,700.2 Following the instructions on the worksheet, Sullivan called the 13
Verizon Benefits Center to enroll in “1 x Pay.” 14
After enrolling and designating her daughter, Kristine Sullivan-Mestecky, 15
as the beneficiary of the life insurance policy, Sullivan received various mailings 16
from Verizon, as plan administrator, that confirmed the existence and coverage 17
amount of the policy. Some of these mailings prompted Sullivan to call the 18
Verizon Benefits Center for more information. On these calls, Sullivan expressed 19
her understanding, and even surprise, about the extent of her benefits. However, 20
Center representatives repeatedly confirmed the existence and coverage amount 21
of the policy. As one example, during a call on December 19, 2011, Sullivan told a 22
1 App’x at 346.
2 Id. at 349.

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5 No. 18-1591
representative, “And hell. I have benefits I didn’t even know existed.”3 The 1
representative informed Sullivan, “Okay what I’m showing here, your retiree— 2
retiree life is currently [$]679,700.”4 The representative confirmed the coverage 3
amount three more times on the call, explaining further how the amount would 4
decline as Sullivan aged. 5
6
Sullivan’s calls raised questions internally at Aon Hewitt about her coverage 7
amount. On July 26, 2011, one Aon Hewitt employee wrote to a colleague that 8
Sullivan “was not salaried when active she was hourly. . . . The dollar amount 9
seems high is there a possibility that [our software] could be giving a higher figure 10
than what [Sullivan] is eligible for?”5 The next day, another Aon Hewitt employee 11
wrote back that Sullivan’s annual income had been “$970920,” approximately 52 12
times her actual annual income, and confirmed (erroneously) that the software 13
“shows the correct amount of life insurance.”6 It turned out that Aon Hewitt had 14
coded Sullivan’s annual $18,600 income as her weekly income, but did not catch 15
the mistake until after she died. 16
17
Sullivan-Mestecky, understanding herself to be the beneficiary of a 18
generous life insurance policy, allowed her aging mother to live rent-free at her 19
home, covered her mother’s living expenses, and paid off her mother’s debts. 20
Sullivan-Mestecky also took an extended unpaid leave of absence from work to 21
3 Id. at 362.
4 Id. at 363.
5 Id. at 383.
6 Id.

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6 No. 18-1591
care for Sullivan while Sullivan was living with her. On November 17, 2012, 1
Sullivan died. Based on Sullivan’s age at the time of her death, Sullivan-Mestecky 2
believed that her life insurance policy was worth $582,600. Sullivan-Mestecky 3
submitted a claim to Prudential, as claims administrator, for $582,600 in death 4
benefits under the policy. In response, Prudential paid $11,380 for Sullivan’s 5
funeral expenses and sent Sullivan-Mestecky a check for $20, which Prudential 6
said was the remainder of Sullivan’s death benefits. 7
8
Sullivan-Mestecky disputed the non-payment of her benefits, which she 9
expected to be in line with what her mother had been told. Verizon responded 10
that “Hewitt operating under the title Verizon Benefits Center” had mistakenly 11
calculated Sullivan’s large coverage amount and thus “provided Ms. Sullivan with 12
incorrect information” about her life insurance policy.7 Verizon and Prudential 13
rejected Sullivan-Mestecky’s claim. Sullivan-Mestecky then filed this suit in state 14
court. The defendants removed the case to the Eastern District of New York, and 15
Sullivan-Mestecky filed an amended complaint adding claims under 16
§§ 502(a)(1)(B) and 502(a)(3) of ERISA. On July 7, 2016, the district court granted 17
Verizon’s and Prudential’s motion to dismiss the § 502(a)(3) claim on the 18
pleadings, under Rule 12(b)(6).8 And on May 16, 2018, the district court granted 19
summary judgment to Verizon and Prudential on the § 502(a)(1)(B) claim. 20
7 Id. at 334–35.
8 In the same opinion, the district court found that most of Sullivan-Mestecky’s state law
claims were preempted by ERISA and dismissed them. It allowed Sullivan-Mestecky to pursue
one state law claim based on an alleged settlement agreement between Sullivan and Verizon.
Because Sullivan-Mestecky could not locate the alleged settlement agreement during discovery,

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7 No. 18-1591
DISCUSSION 1
On appeal, Sullivan-Mestecky challenges both decisions. “We review a 2
grant of summary judgment de novo, examining the evidence in the light most 3
favorable to, and drawing all inferences in favor of, the non-movant.”9 Similarly, 4
“[w]e review de novo a district court’s dismissal of a complaint pursuant to Rule 5
12(b)(6), construing the complaint liberally, accepting all factual allegations in the 6
complaint as true, and drawing all reasonable inferences in the plaintiff’s 7
favor.”10 8
I. Sullivan-Mestecky’s § 502(a)(1)(B) claim. 9
Section 502(a)(1)(B) of ERISA empowers “a participant or beneficiary” to 10
bring a civil action “to recover benefits due to him under the terms of his plan.”11 11
After reviewing the plan documents and communications between Sullivan, 12
Verizon, and Prudential that emerged during discovery, the district court 13
concluded that the terms of Verizon’s Group Life Insurance plan did not entitle 14
Sullivan-Mestecky to benefits in excess of $11,400 and granted summary judgment 15
in favor of Verizon and Prudential. On appeal, Sullivan-Mestecky argues that the 16
the district court ultimately granted summary judgment for Verizon on that claim. None of the
state law claims are at issue in this appeal.
9 Burke v. Kodak Ret. Income Plan, 336 F.3d 103, 109 (2d Cir. 2003) (internal quotation marks
omitted).
10 Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002).
11 29 U.S.C. § 1132(a)(1)(B).

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8 No. 18-1591
district court erred in allowing Verizon and Prudential to reduce her mother’s 1
benefits after they had vested upon her death. 2
Sullivan-Mestecky misunderstands the district court’s ruling. The Group 3
Life Insurance plan expressly granted discretionary authority to Verizon and 4
Prudential to interpret the plan’s terms. Because the plan granted such authority 5
to Verizon and Prudential, the district court could not overturn their interpretation 6
of the plan unless it was “arbitrary and capricious.”12 The district court found that 7
Verizon and Prudential’s interpretation of the plan—that Sullivan-Mestecky was 8
entitled to no more than $11,400—was based on substantial evidence and not 9
arbitrary or capricious. Notwithstanding the clerical error reflected on the 10
Retirement Enrollment Worksheet and other documents, Section 5.4.1 of the plan 11
clearly explained that its “1 x Pay” option entitles beneficiaries to a percentage of 12
the participant’s annual salary, to be reduced as the participant ages. None of the 13
mailings Sullivan received from Verizon or Prudential purported to displace 14
Section 5.4.1. Under the terms of Section 5.4.1, Sullivan-Mestecky was entitled to 15
a fraction of Sullivan’s annual income of $18,600. Verizon and Prudential chose, 16
in their discretion, to interpret Sullivan’s plan consistent with Section 5.4.1, not 17
with her Retirement Enrollment Worksheet and other documents. Deferring to 18
that reading, the district court found that Verizon and Prudential provided 19
Sullivan-Mestecky with the benefits that the plan had always promised: $11,400. 20
On appeal, Sullivan-Mestecky does not challenge Verizon and Prudential’s 21
interpretation of Section 5.4.1 or expressly take the position that their 22
interpretation of the plan as a whole was arbitrary and capricious. Instead, she 23
12 Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441 (2d Cir. 1995) (internal quotation marks
omitted).

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9 No. 18-1591
implies that the terms of the plan entitled her to the more generous death benefits 1
and argues that Verizon and Prudential’s interpretation resulted in an 2
impermissible retroactive amendment to Sullivan’s plan after her death. She cites 3
Blackshear v. Reliance Standard Life Ins. Co.,13 but Blackshear is inapposite. In 4
Blackshear, the Fourth Circuit found that a fiduciary could not correct a clerical 5
error that appeared in a participant’s ERISA plan and summary plan description 6
after that participant died, causing the benefits as set forth in the plan to vest with 7
the beneficiary.14 The outcome in Blackshear was premised on the fact that the 8
erroneous terms in the plan and its description unambiguously provided for the 9
benefits at issue. Here, terms limiting Sullivan’s death benefits to a percentage of 10
her annual income were accurately stated in the plan and its description. The 11
generous benefits Sullivan-Mestecky seeks never vested under the terms of the 12
plan. We find no reason to disturb the district court’s grant of summary judgment 13
on Sullivan-Mestecky’s § 502(a)(1)(B) claim. 14
II. Sullivan-Mestecky’s § 502(a)(3) claim. 15
Sullivan-Mestecky’s § 502(a)(3) claim requires an entirely different analysis 16
because, where circumstances allow, ERISA provides for equitable remedies that 17
transcend the plan. Section 502(a)(3) authorizes a “participant, beneficiary, or 18
fiduciary” of an employee benefit plan to bring a civil action to obtain “appropriate 19
equitable relief” to redress violations of ERISA Subchapter I, including, as relevant 20
here, fiduciary breaches.15 Without addressing whether Verizon and Prudential 21
13 509 F.3d 634 (4th Cir. 2007).
14 Id. at 641–42.
15 29 U.S.C. § 1132(a)(3).

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10 No. 18-1591
had breached their fiduciary duties under ERISA Subchapter I, as opposed to the 1
terms of Sullivan’s plan and summary plan description, the district court 2
dismissed the § 502(a)(3) claim for failure to state a claim under Rule 12(b)(6) on 3
the basis that Sullivan-Mestecky sought an impermissible remedy. The district 4
court concluded that Sullivan-Mestecky, despite framing her claim as one for 5
injunctive relief, could be “entirely compensated by damages allowing her to 6
recover the value of [Sullivan’s] death benefits” and had therefore brought a claim 7
for money damages rather than for equitable relief.16 8
Sullivan-Mestecky argues, however, that the district court’s classification of 9
her claim as one for damages rather than for equitable relief conflicts with the 10
Supreme Court’s decision in CIGNA Corp. v. Amara.17 She contends that Amara 11
undermines the district court’s reasoning with its holding that “the fact that . . . 12
relief takes the form of a money payment does not remove it from the category of 13
traditionally equitable relief” because “[e]quity courts possessed the power to 14
provide relief in the form of monetary ‘compensation.’”18 Amara details three 15
different kinds of equitable relief that historically provided a “kind of monetary 16
remedy” even “prior to the merger of law and equity”19: estoppel, surcharge, and 17
reformation.20 Sullivan-Mestecky argues that her claim satisfies the requirements 18
of each. For the reasons we now set forth, we agree that Sullivan-Mestecky is 19
16 Sullivan-Mestecky v. Verizon Commc’ns Inc., No. 14-CV-1835, 2016 WL 3676434, at *25
(E.D.N.Y. July 7, 2016).
17 563 U.S. 421 (2011).
18 Id. at 441.
19 Id. at 442.
20 Id. at 440–43.

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11 No. 18-1591
appropriately seeking equitable relief and hold that her § 502(a)(3) claim can 1
proceed against Verizon but not Prudential. 2
A. Appropriate Equitable Relief 3
1. Estoppel 4
The Restatement (Second) of Contracts provides that promissory estoppel is 5
an appropriate equitable remedy when a “promisor should reasonably expect [his 6
promise] to induce action or forbearance on the part of the promisee,” the promise 7
actually “does induce such action or forbearance,” and “injustice can be avoided 8
only by enforcement of the promise.”21 We have previously found that “principles 9
of estoppel can apply in ERISA cases,” albeit only “under extraordinary 10
circumstances.”22 We have required a showing of extraordinary circumstances “to 11
lessen the danger that commonplace communications from employer to employee 12
will routinely be claimed to give rise to employees’ rights beyond those contained 13
in formal benefit plans.”23 As a result, to make a claim for estoppel under 14
§ 502(a)(3), a plaintiff must plausibly allege five elements: “(1) a promise, (2) 15
reliance on the promise, (3) injury caused by the reliance, . . . (4) an injustice if the 16
promise is not enforced,” and (5) extraordinary circumstances.24 17
21 Restatement (Second) of Contracts § 90(1) (Am. Law Inst. 1981).
22 Schonholz v. Long Island Jewish Med. Ctr., 87 F.3d 72, 78 (2d Cir. 1996).
23 Aramony v. United Way Replacement Benefit Plan, 191 F.3d 140, 151 (2d Cir. 1999).
24 Weinreb v. Hosp. for Joint Diseases Orthopaedic Inst., 404 F.3d 167, 172–73 (2d Cir. 2005)
(quoting Schonholz, 87 F.3d at 79).

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12 No. 18-1591
The district court held that Sullivan-Mestecky had not plausibly alleged the 1
requisite elements of an ERISA estoppel claim. It found that, “[t]o the extent 2
plaintiff relies upon alleged oral representations by defendants as the basis for her 3
promissory estoppel claim, her claim fails ‘because oral promises are 4
unenforceable under ERISA and therefore cannot vary the terms of an ERISA 5
plan.’”25 It then determined that Sullivan-Mestecky’s “amended complaint is 6
bereft of any factual allegations from which ‘extraordinary circumstances’ may 7
reasonably be inferred” because none of the documents sent by Verizon or 8
Prudential “were sent in order to induce Sullivan or plaintiff to take any particular 9
action for the benefit of the defendant who sent the particular document.”26 10
We disagree with the district court’s reasoning in two respects. First, 11
although the district court correctly recited the law of this circuit that “oral 12
promises are unenforceable under ERISA,”27 it went beyond that proposition in 13
declining to consider whether the Verizon Benefits Center’s repeated oral 14
representations collectively supported Sullivan-Mestecky’s estoppel claim as an 15
extraordinary circumstance. There is daylight between considering an oral 16
representation simply as the requisite promise in an estoppel analysis and 17
considering an oral representation as a fact exacerbating, if not supplying, the 18
extraordinary circumstances under which the requisite promise was made, was 19
relied upon, caused injury, or would lead to injustice if unenforced. We see no 20
25 Sullivan-Mestecky, 2016 WL 3676434, at *30 (quoting Perreca v. Gluck, 295 F.3d 215, 225
(2d Cir. 2002)).
26 Id. at *30.
27 Perreca, 295 F.3d at 225.

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13 No. 18-1591
conflict between considering as an extraordinary circumstance the Verizon 1
Benefits Center’s oral misrepresentations, here coupled with misrepresentations 2
in written documents, and ERISA’s demand that “[e]very employee benefit 3
plan . . . be established and maintained pursuant to a written instrument.”28 We 4
therefore examine the Verizon Benefits Center’s repeated oral assurances to 5
Sullivan about the value of her life insurance policy in determining whether 6
Sullivan-Mestecky has pled extraordinary circumstances. 7
Second, we take issue with the district court’s implication that extraordinary 8
circumstances arise only when the requisite promise was made for the purpose of 9
inducing certain employee conduct. In Devlin v. Empire Blue Cross and Blue Shield, 10
we expressly disavowed the existence of such a rule and left open the possibility 11
that “extraordinary circumstances other than intentional inducement would 12
suffice” for an ERISA estoppel claim.29 And while Verizon highlights our 13
statement in Greifenberger v. Hartford Life Ins. Co. that “the ‘extraordinary 14
circumstances’ necessary [for] equitable estoppel in the context of an ERISA plan 15
require conduct tantamount to fraud,”30 the Supreme Court has long recognized 16
that “[f]raud has a broader meaning in equity (than at law) and intention to 17
defraud or to misrepresent is not a necessary element.”31 “Fraud” in a “court of 18
equity properly includes all acts, omissions and concealments which involve a 19
breach of legal or equitable duty, trust, or confidence, justly reposed, and are 20
28 29 U.S.C. § 1102(a)(1).
29 274 F.3d 76, 86 (2d Cir. 2001).
30 131 F. App’x 756, 759 (2d Cir. 2005) (non-precedential summary order).
31 SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 193 (1963).

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14 No. 18-1591
injurious to another.”32 The breadth of courts’ power in equity has led at least one 1
circuit, the Sixth, to allow ERISA estoppel claims regarding “such gross negligence 2
as to amount to constructive fraud.”33 We now join the Sixth Circuit in finding 3
that estoppel can be plausibly pled as an appropriate equitable remedy by an 4
ERISA plaintiff alleging gross negligence in the absence of intentional inducement. 5
Sullivan-Mestecky has plausibly pled the five elements required to make a 6
claim for estoppel against Verizon. In June 2011, Verizon’s agent sent Sullivan the 7
Retirement Enrollment Worksheet indicating that Sullivan was eligible for a life 8
insurance policy valued at $679,700. Following that initial document, Verizon’s 9
agents sent Sullivan a Retirement Confirmation of Enrollment, a Confirmation of 10
Coverage on Demand, a Beneficiary Confirmation Notice, and a W-2, all of which 11
represented that Verizon was providing her with this generous life insurance 12
policy.34 These written documents, taken together, constitute and reflect the 13
promise that Sullivan-Mestecky seeks to enforce. 14
Sullivan-Mestecky has amply pled that reliance and injury followed upon 15
this promise. In response to Verizon’s written promise, Sullivan enrolled in 16
Verizon’s offered plan, paid taxes based on the plan’s taxable imputed income, 17
and forwent procuring an alternative life insurance policy.35 Sullivan-Mestecky 18
also paid her mother’s debts and took an unpaid leave of absence from work to 19
take care of her mother, anticipating that her short-term financial losses would be 20
32 Id. at 194 (internal quotation marks omitted).
33 Bloemker v. Laborers’ Local 265 Pension Fund, 605 F.3d 436, 444 (6th Cir. 2010).
34 App’x at 179–82.
35 Id. at 179, 183.

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15 No. 18-1591
more than covered by Sullivan’s life insurance payout. It would be unjust to allow 1
these losses and forbearances, traceable to Verizon’s gross negligence, to be borne 2
by Sullivan and her daughter Sullivan-Mestecky, both of whom believed Verizon’s 3
repeated misrepresentations. Altogether, Sullivan-Mestecky has satisfied the 4
standard requirements of promissory estoppel. 5
The final requirement of ERISA estoppel—extraordinary circumstances—is 6
also met here based on Verizon’s conduct amounting to gross negligence, as 7
follows. Verizon’s agents sent numerous mailings informing and assuring 8
Sullivan that she was entitled to a life insurance policy in the amount of $679,000. 9
She relied on these representations only after diligently and repeatedly confirming 10
their veracity and meaning with the Verizon Benefits Center. On calls with the 11
Verizon Benefits Center, Sullivan expressed her surprise at the stated value of her 12
life insurance policy, effectively alerting Verizon to the fact that it may have 13
miscalculated the value. Not only did Sullivan draw attention to the high coverage 14
figure, but an Aon Hewitt employee flagged the policy amount, writing in an 15
email to a colleague that the amount seemed high and asking if the company’s 16
software was somehow computing the wrong amount. Another Aon Hewitt 17
employee then responded, erroneously, that the amount was correct. Instead of 18
opening an investigation that likely would have uncovered the clerical error that 19
led Sullivan and her daughter to believe that she had procured a generous life 20
insurance policy, Verizon representatives reassured Sullivan that her beneficiary 21
would receive, after the age discount, more than half a million dollars in death 22
benefits. It was only after Sullivan’s death, when the purchase of alternative life 23
insurance to support Sullivan-Mestecky was impossible, that Verizon attempted 24
to correct its clerical error. In contravention of what it had repeatedly and 25
unambiguously represented to Sullivan in writing and on calls, Verizon paid 26

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16 No. 18-1591
Sullivan-Mestecky a total of $11,400, less than two percent of what Verizon had 1
promised. Verizon’s acts of gross negligence present circumstances far “beyond 2
the ordinary.”36 The persistence and size of Verizon’s error, notwithstanding the 3
ample inquiry notice provided by Sullivan’s calls to the Verizon Benefits Center, 4
were “remarkable.”37 We find that Sullivan-Mestecky satisfactorily pled 5
extraordinary circumstances. 6
That Sullivan-Mestecky pled estoppel as “appropriate equitable relief” is 7
sufficient to determine that the district court erred in dismissing her § 502(a)(3) 8
claim against Verizon. Still, we briefly address Sullivan-Mestecky’s argument that 9
her § 502(a)(3) claim alternatively merits the remedy of surcharge or reformation. 10
While our circuit’s law on these remedies is somewhat less developed than it is on 11
estoppel in the ERISA context, we believe that Sullivan-Mestecky also has 12
adequately pled facts meeting their requirements. 13
2. Surcharge 14
In Amara, also a § 502(a)(3) case, the Supreme Court described surcharge 15
historically as “relief in the form of monetary ‘compensation’ for a loss resulting 16
from a trustee’s breach of duty.”38 Amara continued, “The surcharge remedy 17
extended to a breach of trust committed by a fiduciary” whose role is “analogous 18
to [that of] a trustee” and “encompass[ed] any violation of a duty imposed upon 19
36 Aramony, 191 F.3d at 152.
37 Id. (internal quotation marks omitted).
38 563 U.S. at 442.

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17 No. 18-1591
that fiduciary.”39 Inasmuch as ERISA imposes fiduciary duties on parties who 1
manage employee benefit plans,40 the Supreme Court has recognized that “these 2
fiduciary duties draw much of their content from the common law of trusts, the 3
law that governed most benefit plans before ERISA’s enactment.”41 In this regard, 4
Sullivan-Mestecky’s § 502(a)(3) claim is dependent on her allegation of fiduciary 5
breach, specifically that Verizon and Prudential failed to act “with the care, skill, 6
prudence, and diligence under the circumstances then prevailing that a prudent 7
man acting in a like capacity and familiar with such matters would use,” as ERISA 8
requires.42 As outlined above, Sullivan-Mestecky plausibly pled that Verizon 9
breached its fiduciary duties through its gross negligence in its management of 10
Sullivan’s life insurance policy by consistently failing to “provide complete and 11
accurate information” about Sullivan’s “status and options” “in response to 12
[Sullivan’s] questions about plan terms and/or benefits.”43 This fiduciary breach 13
is sufficient to support the equitable remedy of surcharge.44 14
39 Id.; see also Morrissey v. Curran, 650 F.2d 1267, 1282 (2d Cir. 1981) (“[W]e see no reason
not to permit a surcharge, when warranted by the facts, against one occupying any fiduciary
status.”).
40 29 U.S.C. § 1104 (entitled “Fiduciary duties”).
41 Vanity Corp. v. Howe, 516 U.S. 489, 496 (1996).
42 29 U.S.C. § 1104(a)(1)(B).
43 Estate of Becker v. Eastman Kodak Co., 120 F.3d 5, 8 (2d Cir. 1997) (internal quotation marks
omitted) (describing ERISA fiduciaries’ duties).
44 Like other circuits that have considered surcharge in ERISA cases post-Amara, we
recognize a plaintiff’s non-procurement of alternative coverage as a loss resulting from a
fiduciary’s material misrepresentation of the plaintiff’s extent of, or eligibility for, coverage.
Joining those circuits, we think it appropriate for a plaintiff to seek relief in the amount of the

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18 No. 18-1591
3. Reformation 1
Finally, Amara describes “[t]he power to reform contracts (as contrasted 2
with the power to enforce contracts as written)” as “a traditional power of an 3
equity court, not a court of law.”45 It notes that “‘equity would reform [a] contract, 4
and enforce it, as reformed, if . . . mistake or fraud were shown.’”46 Following the 5
Supreme Court’s remand in Amara, the Second Circuit elaborated that “[a] contract 6
may be reformed due to the mutual mistake of both parties, or where one party is 7
mistaken and the other commits fraud or engages in inequitable conduct.”47 8
Reformation does not require a showing of actual harm.48 We need not discuss 9
mutual mistake because Sullivan-Mestecky has adequately pled that Verizon 10
committed equitable fraud by misrepresenting that Sullivan was entitled to a life 11
insurance policy in the amount of $679,000. As a result of Verizon’s fraudulent 12
representations, Sullivan reasonably but mistakenly expected that Sullivan- 13
Mestecky would receive the generous death benefits. Sullivan-Mestecky has 14
thereby adequately pled circumstances that would permit the district court to 15
equitably reform the terms of her plan with Verizon, sufficient to bind Verizon to 16
promised policy, not just in the amount of wrongly-accepted premiums or wrongly-paid taxes,
under the equitable remedy of surcharge. See, e.g., Kenseth v. Dean Health Plan, Inc., 722 F.3d 869,
881–82 (7th Cir. 2013); McCravy v. Metropolitan Life Ins. Co., 690 F.3d 176, 181 (4th Cir. 2012).
45 563 U.S. at 440.
46 Id. (citing Baltzer v. Raleigh & Augusta R. Co., 115 U.S. 634, 645 (1885)).
47 Amara v. CIGNA Corp., 775 F.3d 510, 525 (2d Cir. 2014).
48 Id. at 525 n.12.

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19 No. 18-1591
its fraudulent representations. Reforming the plan to accord with Sullivan’s 1
reasonable expectations is an appropriate equitable remedy.49 2
Although we find that Sullivan-Mestecky has plausibly pled circumstances 3
that would entitle her to “appropriate equitable relief” against Verizon under 4
§ 502(a)(3), her arguments do not carry the same force against Prudential. Unlike 5
Verizon and its agents, Prudential sent only one letter to Sullivan, informing her 6
how the value of her policy would decrease as she aged. Neither Prudential nor 7
its agents fielded questions from Sullivan regarding her policy and repeatedly 8
misrepresented its benefits. We are reluctant to say that Prudential’s single 9
mailing was even negligent. As the plan administrator, Verizon, not Prudential, 10
was responsible for assessing Sullivan’s eligibility for and enrolling Sullivan in her 11
benefits plan. The core of Sullivan’s dispute was therefore with Verizon. Even if 12
Prudential could have checked Verizon’s work to confirm that Sullivan had been 13
properly enrolled, it had no duty to do so and any failure in that regard pales in 14
comparison to Verizon’s gross negligence and does not rise to the level of 15
extraordinary circumstances or equitable fraud. 16
B. Fiduciary Breach 17
Unable to provide a compelling rationale for why Sullivan-Mestecky is not 18
able to pursue equitable relief, Verizon makes two arguments to support its denial 19
that it committed a fiduciary breach. Verizon first claims that its agents, not 20
Verizon itself, ran the Verizon Benefits Center and provided the misinformation 21
49 Prudential suggests that granting Sullivan-Mestecky relief would require the
reformation of the Group Life Insurance plan for all plan participants. Prudential, however,
provides no authority for this suggestion, and we see no basis for adopting it.

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20 No. 18-1591
about which Sullivan-Mestecky complains. Verizon then argues that, in any event, 1
our In re DeRogatis decision precludes liability for unintentional 2
misrepresentations when the pertinent terms of the employee benefits plan are 3
clear.50 Neither argument is persuasive. 4
First, as In re DeRogatis held, plan administrators, like Verizon, “act as 5
fiduciaries when they communicate with plan members and beneficiaries about 6
plan benefits.”51 As that case explained, plan administrators “may perform a 7
fiduciary function through ministerial agents,” such as Aon Hewitt in this case, 8
even “without converting those individual agents themselves into fiduciaries.”52 9
Accordingly, when Verizon arranged for Aon Hewitt to communicate with 10
Sullivan about her plan benefits, Verizon was performing a fiduciary function and 11
was bound by its fiduciary duty to properly administer the plan. Although 12
Verizon makes much of the fact that the district court “unequivocally ruled that 13
Hewitt was not a plan administrator or fiduciary” for Sullivan’s benefits plan,53 14
this finding, based on Aon Hewitt’s status as a ministerial agent, does not prevent 15
us from imputing Aon Hewitt’s gross negligence to Verizon, Aon Hewitt’s 16
principal. Indeed, Aon Hewitt’s status as a ministerial agent allows us to do so.54 17
50 904 F.3d 174 (2d Cir. 2018).
51 Id. at 192.
52 Id.
53 Defendant-Appellee Verizon’s Br. at 40.
54 In re Derogatis, 904 F.3d at 192.

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21 No. 18-1591
Verizon cannot hide behind Aon Hewitt’s actions to evade liability for the 1
fiduciary breach that occurred here. 2
Nor can Verizon hide behind Sullivan’s plan documents, which it 3
characterizes as “clear, unambiguous, and in no way lack[ing in] clarity.”55 4
Verizon urges us to read In re DeRogatis as foreclosing liability for unintentional 5
misrepresentations when a fiduciary has provided a plan participant with a clear 6
and unambiguous summary plan description. But In re DeRogatis expressly 7
declined to answer the question of whether “an ERISA fiduciary may breach a 8
duty because of unintentional misrepresentations even when the SPD [summary 9
plan description] is clear if there is no evidence that the plaintiff knew or should 10
have known of the applicable SPD provisions at the time of the relevant 11
conduct.”56 In re DeRogatis found that the plaintiff had every reason to know of 12
the applicable, clear plan terms because even though the fiduciary’s agents had 13
provided ambiguous responses to the plaintiff’s queries, they had also sent the 14
plaintiff a copy of the terms with specific citations to the relevant sections on 15
pension and survivor benefits.57 Under such circumstances, In re DeRogatis 16
concluded that the agents’ ambiguous responses to the plaintiff did not rise to the 17
level of materially misleading information.58 18
This case differs from In re DeRogatis in three respects: (1) as pled, Verizon, 19
through its agents, directly and repeatedly informed Sullivan that she had a life 20
55 Defendant-Appellee Verizon’s Br. at 47.
56 904 F.3d at 196 n.27.
57 Id.
58 Id. at 195–96.

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22 No. 18-1591
insurance policy in the amount of $679,000; (2) in responding to Sullivan’s queries 1
about her policy, Verizon never referred Sullivan to clear plan terms that would 2
have alerted her to her ineligibility for the promised benefits; and (3) Sullivan’s 3
plan was far from clear and unambiguous because it expressly incorporated her 4
“enrollment materials, and other such communications relative to the Plan,” 5
including the Retirement Enrollment Worksheet indicating Sullivan’s eligibility 6
for a $679,000 life insurance policy and other documents of similar import.59 When 7
all is considered, Sullivan-Mestecky has plausibly alleged that Verizon breached 8
its fiduciary duty to act “with . . . care, skill, prudence, and diligence”60 when it 9
failed to provide Sullivan with “complete and accurate information” on her 10
benefits.61 11
12
CONCLUSION 13
For the reasons stated above, we AFFIRM the district court’s dismissal of 14
Sullivan-Mestecky’s § 502(a)(3) claim against Prudential and its ruling granting 15
Verizon and Prudential summary judgment on Sullivan-Mestecky's § 502(a)(1)(B) 16
claim, VACATE the district court’s dismissal of Sullivan-Mestecky’s § 502(a)(3) 17
59 Sullivan’s plan stated, “This Plan document hereby incorporates by reference any
summary plan descriptions, summaries of material modifications, enrollment materials, and
other such communications relative to the Plan as may be approved from time to time by
Verizon.” App’x at 288.
60 29 U.S.C. § 1104(a)(1)(B).
61 Estate of Becker, 120 F.3d at 10.

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23 No. 18-1591
claim against Verizon, and REMAND for further proceedings consistent with the 1
opinion. 2

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