Jennifer A. Davenport, Plaintiff-Appellant- Cross-Appellee v. Harry N. Abrams, Inc., Carman Mills, the Times Mirror Company, the Times Mirror Company Pension Plan, the Group Benefits Plan and Ron Madura, Defendants-Appellees-Cross-Appellants
Docket: 2000
Court: Court of Appeals for the Second Circuit; May 4, 2001; Federal Appellate Court
Jennifer A. Davenport filed a pro se lawsuit under the Employee Retirement Income Security Act of 1974 (ERISA) against multiple defendants, including her employer, Harry N. Abrams, Inc., and associated entities, seeking recovery of benefits she claimed were owed to her under the Times Mirror Pension Plan. The case originated in the Southern District of New York, where the court granted the defendants' motion for summary judgment and denied Davenport's motion, dismissing her claim for benefits without prejudice and also dismissing her claim for civil penalties.
On appeal, Davenport contended that she was not required to exhaust administrative remedies and argued that the court erred by not recognizing that such exhaustion would have been futile. The defendants countered that her unexhausted claim should be barred by the statute of limitations and maintained that the dismissal of her civil penalties claim should have been with prejudice.
Davenport worked as an independent contractor for Abrams from January 27, 1987, to December 16, 1996, during which she was not provided employee benefits. Despite dissatisfaction with her classification as a contractor since 1989, she did not take significant action until February 1997, when her attorney contacted Abrams regarding her exclusion from the employee benefit plan, citing a potential ERISA violation. Following this, she and her attorney sent multiple letters to Abrams and Times Mirror, asserting her rights to benefits, but were informed that her contractor status excluded her from coverage under the benefit plans.
Davenport has not applied for benefits under the Plan, nor did she request the Summary Plan Description (SPD) or related documents until after the lawsuit began. The district court determined that Davenport did not utilize available remedies under the Plan, asserting she "inexcusably failed" to do so, despite her claims to the contrary on appeal. Davenport argues that Department of Labor regulations necessitate a "reasonable" claims procedure, which should have been evidenced by the SPD. However, she did not raise this argument in the district court, and the appellate court noted that new arguments are typically only considered to prevent manifest injustice. Furthermore, Davenport's assertion that the defendants must present the SPD or that its absence renders the claims procedure unreasonable was unsupported by legal authority.
Davenport also contended that her failure to exhaust remedies should be excused due to futility or lack of access to the administrative process. The court clarified that the exhaustion requirement aims to hold ERISA trustees accountable and ensure a clear record for judicial review. It stated that a claim of futility must be substantiated by a clear showing that pursuing administrative remedies would be pointless. The court referenced a precedent where claims of futility were dismissed due to a lack of notification to the plan administrator regarding disputed claims, thus affirming that neither exception to the exhaustion requirement applied in Davenport's case.
Davenport has not demonstrated that pursuing her claim would be futile, as her correspondence from 1997-98 does not constitute a clear application for benefits or a formal denial that would preclude further administrative review. The February 26, 1998 letter from Times Mirror, which purportedly denied benefits, does not negate the requirement for Davenport to exhaust her administrative remedies. Allowing informal denials to supersede formal processes would undermine the exhaustion doctrine integral to ERISA, as it would shift the authority to adjudicate claims from plan trustees to the courts.
Davenport's claim that the exhaustion requirement should be waived due to lack of access to claims procedures was rejected; despite her previous ignorance of her remedies, she became aware of them and failed to act. The court emphasized that ignorance of the claims process does not excuse her from exhausting administrative remedies, particularly since she was represented by counsel and did not file a claim or request the Summary Plan Description (SPD). Furthermore, the absence of the SPD did not hinder her ability to pursue administrative remedies.
Regarding the statute of limitations, defendants assert that Davenport's claim is barred by New York's six-year limit. The court referenced precedents indicating that an ERISA claim accrues upon clear repudiation by the fiduciary, which can occur even without a formal application for benefits, highlighting the need for clarity in the claim process.
Davenport's claim for benefits is deemed premature due to her failure to exhaust available remedies under the plan. Defendants argue that her cause of action should have accrued in 1987 when she became an independent contractor, but this issue will only arise if her benefits claim is denied. If she is granted benefits during the exhaustion process, a statute of limitations defense would be irrelevant.
Regarding civil penalties under ERISA for the alleged failure to provide plan information, the district court dismissed Davenport's case without prejudice, allowing for future claims. Defendants contend that the claim fails regardless of her coverage, as penalties can only be imposed if there is a specific request for information. ERISA § 1132(c)(1) specifies that an administrator is liable for failing to respond to a request for information unless the failure is due to circumstances beyond their control. Davenport did not specifically request the Summary Plan Description (SPD), and the court found her requests for information insufficient. Thus, statutory penalties are not warranted.
Consequently, the court affirms the dismissal of Davenport's action for failing to exhaust remedies but modifies the judgment to state that her claim for civil penalties under ERISA is dismissed with prejudice.
Davenport was represented by Laura Schnell of Vladeck, Waldman, Elias, Engelhard from January 1997 to August 1998, and retained current counsel on January 19, 2000. Her argument that the claims procedure was unreasonable due to lack of information was rejected by the district court, which noted that her employer did not consider her covered by the plan, thus explaining the absence of a Summary Plan Description (SPD). The court emphasized that ignorance of the claims procedure does not exempt her from the exhaustion requirement, as established in Meza v. General Battery Corp., which imposes a duty to seek necessary information. There is no evidence that Davenport applied for pension benefits before filing suit, and granting her the ability to claim benefits through litigation would contradict the exhaustion requirement's purpose. This case differs from Marsh v. Crucible, Inc., where the futility exception applied only when a definitive determination had been made regarding a similar claim. The AARP submitted an amicus brief contending that the statute of limitations on Davenport's claim did not start upon her hiring, as only a fiduciary can repudiate a claim; however, this issue was not addressed by the court.
