Court Opinion

ID: 4501855
Source: CourtListenerOpinion
Date Created: 2020-01-27 22:00:13.905513+00
Date Added: 2024-06-11T08:49:34.794424
License: Public Domain

United States Court of Appeals
                        For the First Circuit

No. 18-2127

                           MARCO MARTINEZ,

                        Plaintiff, Appellant,

                                  v.

                SUN LIFE ASSURANCE COMPANY OF CANADA,

                         Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

              [Hon. Leo T. Sorokin, U.S. District Judge]

                                Before

                    Torruella, Lipez, and Kayatta,
                            Circuit Judges.

     R. Joseph Barton, with whom Colin M. Downes and Block &
Leviton LLP were on brief, for appellant.
     Mark Schmidtke, with whom Diane M. Saunders, David L.
Schenberg, and Ogletree, Deakins, Nash, Smoak & Stewart, P.C. were
on brief, for appellee.

                           January 27, 2020
             LIPEZ,   Circuit   Judge.            Appellant    Marco     Martinez

challenges the decision by Sun Life Assurance Company of Canada

("Sun Life") to offset his benefits under its employer-sponsored

long-term disability insurance policy ("the Plan") by the amount

of   his    service-connected    disability        compensation     ("Veterans'

Benefits").        The district court found that Sun Life properly

interpreted the language of the Plan to permit the offset and

entered judgment for Sun Life on all counts.

             Martinez argues that the district court erred in two

primary ways:       by concluding as a matter of law that Veterans'

Benefits unambiguously qualify as a form of "Other Income Benefit"

covered by the Plan's offset provision, and by rejecting as a

matter of law that Sun Life's offset determination was motivated,

at least in part, by his military service in violation of the

Uniformed     Services   Employment         and   Reemployment      Rights   Act

("USERRA").

             After careful review of the facts and law, we affirm.

                                       I.

A.   Factual Background

             The   relevant   facts    are    undisputed      by   the   parties.

Martinez is a disabled veteran who suffers from multiple sclerosis.

He was honorably discharged from the United States Army in 1992.

In September 2010, Martinez began work for the Athens Group and

later became a participant in its employee welfare benefit plan,

                                      - 2 -
which included long-term disability benefits provided pursuant to

an insurance policy issued by Sun Life and governed by the Employee

Retirement Income Security Act of 1974 ("ERISA").         In November

2012, when his health deteriorated, Martinez submitted a claim to

Sun Life for long-term disability benefits.      Sun Life approved his

claim.   Under the Plan, Martinez was entitled to monthly benefit

payments calculated at sixty percent of his total monthly earnings,

less any "Other Income Benefits."         "Other Income Benefits," as

defined by the Plan, include the following:

          Other Income Benefits are those benefits
          provided or available to the Employee while a
          Long Term Disability Benefit is payable.
          These Other Income Benefits, other than
          retirement benefits, must be provided as a
          result of the same Total or Partial Disability
          payable under this Policy.       Other Income
          Benefits include:

          1. The       amount the Employee is eligible for
          under:
               a.      Workers' Compensation Law; or
               b.      Occupational Disease Law; or
               c.      Unemployment Compensation Law; or
               d.      Compulsory Benefit Act or Law; or
               e.      any automobile no-fault insurance
                       plan; or
                  f.   any other act or law of like intent.

          . . .

          6.   The disability or retirement benefits
          under the United States Social Security Act,
          or any similar plan or act, as follows:
               a. Disability benefits the Employee is
                   eligible to receive.

                                  - 3 -
              After Martinez had been receiving long-term disability

benefits under the Plan for nearly a year, he submitted a claim in

November 2013 to the United States Department of Veterans' Affairs

("the VA") for service-connected disability compensation pursuant

to the Veterans' Benefits Act, 38 U.S.C. § 1110.              The VA awarded

Martinez Veterans' Benefits in January 2015, retroactive to July

19,   2013,    based   on   a   number   of   health   conditions   caused   or

aggravated by his military service, including multiple sclerosis.

Martinez promptly notified Sun Life that his claim for Veterans'

Benefits had been granted.          By letter dated March 25, 2015, Sun

Life informed Martinez that his Veterans' Benefits were considered

"Other Income Benefits" subject to offset under the Plan and, as

a result, his monthly Plan benefits would be decreased from $2,500

to $465.      Sun Life also sought reimbursement of $32,560 for past

overpayments.       In describing Martinez's Veterans' Benefits as

"Other Income Benefits," the letter excerpted the entire "Other

Income Benefits" section of the Plan1 without further specifying

which provision authorized the offset.            The letter also notified

Martinez of his right to appeal Sun Life's decision.

              Martinez responded by asking Sun Life for clarification

of which "Other Income Benefits" provision it relied upon for its

decision.     Sun Life referred Martinez to Sections 1.f and 6 of the

      1We provide the complete "Other Income Benefits" section of
the Plan as an Appendix to this opinion.

                                     - 4 -
Plan, quoting both Section 1 and Section 6 in full.     Sun Life's

letter bolded the language "any other act or law of like intent"

in subsection 1.f and "or any similar plan or act" in Section 6.

Martinez then submitted a formal appeal of Sun Life's decision,

asserting various reasons for the exclusion of Veterans' Benefits

as "Other Income Benefits" under the Plan, including that such

benefits are not "compulsory" under Section 1.d.

          In its letter denying Martinez's appeal, Sun Life again

quoted the entire "Other Income Benefits" section of the Plan and

stated:

          Other Income Benefits are defined by the
          policy, as noted above. Specifically, Veteran
          Benefits would be considered disability or
          retirement benefits under the United States
          Social Security Act, or any similar plan or
          act or any other act or law of like intent.
          You are receiving Veteran Benefits due to a
          service connection for multiple sclerosis with
          the loss of use of both feet.         You are
          receiving Long Term Disability benefits
          because of your multiple sclerosis diagnosis.
          Because you are being paid Veteran Benefits,
          as a result of your disability, the Veteran
          Benefits are considered Other Income.

The letter cited a number of federal cases supporting its decision,

including Holbrooks v. Sun Life Assurance Co. of Canada, 570 F.

App'x 831 (10th Cir. 2014), which held that service-connected

disability benefits are awarded under a "Compulsory Benefit Act or

Law" pursuant to the same policy language as set forth in the Plan.

                              - 5 -
See id. at 835.     After receiving Sun Life's letter denying his

appeal, Martinez filed the instant action.

B.   Procedural History

           Martinez's complaint asserts seven counts:                   Count I

alleges   discrimination    based    on     service    in   the   military   in

violation of USERRA, 38 U.S.C. § 4311; Count II seeks benefits

pursuant to ERISA, 29 U.S.C. § 1132(a)(1)(B); Count III alleges

that Sun Life breached its fiduciary duty in violation of ERISA,

29 U.S.C. § 1104(a)(1)(A), (B), and (D); Count IV alleges co-

fiduciary liability in violation of ERISA, 29 U.S.C. § 1105(a);

Count V alleges violation of the Veterans' Benefits Act, 38 U.S.C.

§ 5301(a); Count VI seeks declaratory and injunctive relief under

ERISA, 29 U.S.C. § 1132(a)(3), and 28 U.S.C. §§ 2201-02; and Count

VII alleges knowing participation in a fiduciary breach by a non-

fiduciary in violation of ERISA, 29 U.S.C. § 1132(a)(3).             Sun Life

filed a motion to dismiss, see Fed. R. Civ. P. 12(b)(6), which the

district court denied without prejudice, instructing the parties

to compile and file the administrative record regarding Martinez's

ERISA benefit claim (Count II).             After Sun Life submitted its

complete claim file and applicable policy documents, Martinez

moved for discovery on Count II.            The district court denied the

motion,   stating   that   Martinez    had     not    "overcome   the    strong

presumption against discovery" in ERISA cases.

                                    - 6 -
            Sun Life then filed a motion for summary judgment on

Count II, arguing that Martinez's Veterans' Benefits are "Other

Income Benefits" and thus subject to offset as a matter of law

because he receives them pursuant to a "Compulsory Benefit Act or

Law" and "an act or law of like intent" to Workers' Compensation

Law, both of which it contended are unambiguous terms within the

Plan.    In granting the motion, the district court held that the

term    "Compulsory   Benefit   Act    or   Law"   unambiguously   includes

Veterans' Benefits like those awarded to Martinez.          The court did

not address the additional argument that Martinez's Veterans'

Benefits also are awarded under "an act or law of like intent" to

Workers' Compensation Law.

            The district court then ordered the parties to file a

joint report proposing a plan for resolving the remaining issues

in the case.    The parties proposed treating Sun Life's previously

filed motion to dismiss as a motion for judgment on the pleadings.

After briefing on the motion was complete, the court granted

judgment for Sun Life on all remaining counts.             The court held

that Sun Life did not violate USERRA because Martinez's military

status    was   not   a   motivating   or   substantial   factor   in   the

application of the "Other Income Benefits" provision of the Plan.

The court found that "the plain language of the Plan does not

distinguish between service members and non-service members;"

rather, the Plan uniformly permits Sun Life to offset benefits

                                   - 7 -
received from third parties for the same disability, including

Social    Security       disability     benefits,    which   Martinez    was   also

receiving and which had also been deducted from his Plan benefits.

The district court also found that its prior ruling on Count II,

concluding        that   Martinez's      Veterans'     Benefits   were     plainly

included in the "Compulsory Benefit Act or Law" section of the

Plan, compelled the conclusion that Sun Life did not breach any

duties under ERISA as a fiduciary (Count III), a co-fiduciary

(Count IV), or a non-fiduciary (Count VII) when it determined that

Martinez's Veterans' Benefits were "Other Income Benefits" subject

to offset.2       This appeal followed.

                                         II.

             We begin with Martinez's ERISA claims, first addressing

his appeal of the district court's summary judgment for Sun Life

on Count II and then its dismissal of the other ERISA counts.

A.   Standards of Review

             We    review    both   a   grant   of    summary   judgment    and   a

dismissal based on the pleadings de novo.                 Stamp v. Metro. Life

Ins. Co., 531 F.3d 84, 87 (1st Cir. 2008) (summary judgment); Mass.

Nurses Ass'n v. N. Adams Reg'l Hosp., 467 F.3d 27, 31 (1st Cir.

2006) (judgment on the pleadings).                   Because Sun Life has not

identified any language in the Plan granting it discretionary

      2The district court also entered judgment on the pleadings
for Sun Life on Counts V and VI, which Martinez did not appeal.

                                        - 8 -
authority to construe the terms of the Plan, we also review Sun

Life's ERISA benefits determination de novo.           See Firestone Tire

& Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).          Where, as here,

that determination was based solely on the construction of ERISA

contract language, we may affirm the grant of summary judgment

"only if the meaning of the language is clear" and "there is no

genuine issue as to the inferences which might reasonably be drawn

from the language." Rodriguez-Abreu v. Chase Manhattan Bank, N.A.,

986 F.2d 580, 586 (1st Cir. 1993).

            In reviewing a judgment on the pleadings, we accept the

non-movant's well-pleaded facts as true and draw all reasonable

inferences in the non-movant's favor.            Mass. Nurses Ass'n, 467

F.3d at 31.    We will affirm a judgment on the pleadings "only if

the    uncontested   and     properly   considered    facts   conclusively

establish   the   movant's    entitlement   to   a   favorable   judgment."

Aponte-Torres v. Univ. of P.R., 445 F.3d 50, 54 (1st Cir. 2006).

B.    ERISA Benefits Claim

            Martinez asserts that summary judgment was improper on

Count II based on the "Compulsory Benefit Act or Law" category of

"Other Benefits."     He argues that the district court erred by

concluding that Sun Life provided adequate notice of its reliance

on the "Compulsory Benefit Act or Law" provision to justify its

offset of his Veterans' Benefits, and by finding that the phrase

                                   - 9 -
"Compulsory Benefit Act or Law" unambiguously covers Veterans'

Benefits.     We address these contentions in turn.

             1.    Compliance with ERISA Notice Requirement

             Our initial task is to determine whether Sun Life's

alleged failure to clearly disclose in its letters to Martinez

that it relied upon the "Compulsory Benefit Act or Law" provision

for the offset now precludes it from relying on this rationale in

litigation.       This argument is premised on ERISA's statutory notice

provision, which requires that an insurer " provide adequate notice

in writing to any participant or beneficiary whose claim for

benefits under the plan has been denied, setting forth the specific

reasons for such denial, written in a manner calculated to be

understood by the participant."       29 U.S.C. § 1133(1).

             Sun Life's communications to Martinez complied with this

mandate.    Although Sun Life at times highlighted other rationales

for the offset, it indicated to Martinez on multiple occasions

that it intended to rely on the "Compulsory Benefit Act or Law"

provision.     The provision was included, albeit not emphasized, in

Sun   Life's      letter   in   response    to   Martinez's   request   for

clarification as to Sun Life's rationale for the offset. Likewise,

Sun Life's final letter denying Martinez's appeal included a

lengthy discussion of the Tenth Circuit’s Holbrooks decision,

which relied on the "Compulsory Benefit Act or Law" provision to

uphold an offset based on a receipt of Veterans' Benefits. Indeed,

                                   - 10 -
Martinez clearly understood that the "Compulsory Benefit Act or

Law" provision was pertinent because he addressed the alleged non-

compulsory nature of Veterans' Benefits explicitly in his appeal

letter.

           Moreover, even if Sun Life had not adequately disclosed

its rationale to Martinez, barring Sun Life from raising the

"Compulsory Benefit Act or Law" provision now would not be the

proper remedy in this case.        See Glista v. Unum Life Ins. Co. of

Am., 378 F.3d 113, 130-31 (1st Cir. 2004) (explaining that under

ERISA, courts have "an array of possible responses when the plan

administrator relies in litigation on a reason not articulated to

the claimant" and that "no single answer fits all cases").                  We

typically have only barred a plan from asserting defenses to

coverage not articulated to the insured when the lack of notice

resulted in prejudice to the insured.             See Bard v. Bos. Shipping

Ass'n, 471 F.3d 229, 241-45 (1st Cir. 2006) (barring the plan from

relying on a rationale not clearly articulated to the insured

because,   if   he   had   been   on    notice,   he   would   have   submitted

different medical documentation); Glista, 378 F.3d at 132 (same).

Given that this case is strictly one of contract interpretation

-- a question of law -- and Martinez has had a full opportunity to

present his arguments on the construction of the Plan's provisions,

we could find no prejudice to Martinez even had Sun Life not

                                       - 11 -
adequately advanced its present argument in its initial denial.3

Accordingly,     we   agree   with   the   district   court's   decision    to

entertain Sun Life's arguments premised on the "Compulsory Benefit

Act or Law" provision and will consider those arguments on appeal.

            2.   Meaning of "Compulsory Benefit Act or Law"

            Next, we must determine whether the phrase "Compulsory

Benefit Act or Law" is ambiguous.          If so, pursuant to the doctrine

of contra proferentem, the term must be construed in favor of

Martinez, thus barring the offset of his Veterans' Benefits.               See

Troiano v. Aetna Life Ins. Co., 844 F.3d 35, 44 (1st Cir. 2016)

(holding that ambiguous policy terms must be strictly construed

against the insurer when its determination is subject to de novo

review).

            ERISA-regulated employee benefit plans are interpreted

according   to   principles     of   federal   common   law.    See,   e.g.,

     3 For similar reasons, we also reject Martinez's argument that
the district court abused its discretion when it denied discovery
on Count II before deciding Sun Life's motion for summary judgment.
It is unclear how discovery would help elucidate the plain meaning
of an unambiguous contract term. Martinez's reliance on Taylor v.
Continental Group Change in Control Severance Pay Plan, 933 F.2d
1227 (3d Cir. 1991), is inapt.        The Taylor court permitted
discovery in a different procedural posture: after finding that
a term in an ERISA-governed severance plan was ambiguous, it
remanded the case, instructing the district court to consider
interpretive statements, past practices, and other evidence
bearing on the parties' understanding of the relevant term. See
933 F.2d at 1232-33. At the same time, the court noted that where
a plan term is unambiguous, it may be interpreted as a matter of
law, which is exactly what the district court did here. See id.
at 1232.

                                     - 12 -
Filiatrault v. Comverse Tech., Inc., 275 F.3d 131, 135 (1st Cir.

2001).    Under federal common law, plan language should be accorded

its plain and ordinary meaning based on "commonsense principles of

contract interpretation."         Id.    Courts may refer to dictionaries

to help elucidate the common understanding of terms, although

dictionary definitions are not controlling.               See Littlefield v.

Acadia Ins. Co., 392 F.3d 1, 8 (1st Cir. 2004).

            ERISA contract language is ambiguous only "if the terms

are inconsistent on their face" or "allow reasonable but differing

interpretations of their meaning."             Rodriguez-Abreu, 986 F.2d at

586.   The principle of reasonableness is central to our ambiguity

analysis -- courts are not permitted to "torture language in an

attempt to force particular results or convey . . . nuances the

contracting parties neither intended nor imagined."                   Burnham v.

Guardian Life Ins. Co. of Am., 873 F.2d 486, 489 (1st Cir. 1989).

            Applying     these    principles,     we   agree   with    both   the

district court and the Tenth Circuit in Holbrooks that "[t]here is

nothing ambiguous about the term 'Compulsory Benefit Act or Law.'"

Holbrooks, 570 F. App'x at 835; see also Martinez v. Sun Life

Assurance Co. of Canada, No. 16-CV-12154-LTS, 2018 WL 2163641, at

*3 (D. Mass. Feb. 14, 2018).        The ordinary meaning of "compulsory"

is "required by a law or rule" or "having the power of forcing

someone    to   do    something."       See,   e.g.,   Compulsory,      Merriam-

Webster's            Dictionary         Online,         https://www.merriam-

                                    - 13 -
webster.com/dictionary/compulsory (last visited Jan. 23, 2020).

Accordingly, a "Compulsory Benefit Act or Law" is an act or law

that requires benefits to be paid to any applicant who meets its

qualifying criteria.

          Because the VA was required by law to provide Veterans'

Benefits to Martinez once it determined his eligibility, his

Veterans' Benefits are clearly "compulsory."        Accord Holbrooks,

570 F. App'x at 835.   The statute governing basic entitlement to

service-connected   disability    compensation   states   that   "[f]or

disability resulting from personal injury suffered or disease

contracted in line of duty . . . the United States will pay to any

veteran thus disabled . . . compensation as provided in this

subchapter."   38 U.S.C. § 1110 (emphasis added).    There is no room

for discretion in this mandate.       For this reason, some of our

sister circuits have referred to Veterans' Benefits as "obligatory

compensation for injuries to service men and women during military

duty," Riley v. Sun Life & Health Ins. Co., 657 F.3d 739, 742 (8th

Cir. 2011), and "nondiscretionary, statutorily mandated benefits,"

Cushman v. Shinseki, 576 F.3d 1290, 1298 (Fed. Cir. 2009).         See

also Hannington v. Sun Life & Health Ins. Co., 711 F.3d 226, 234

(1st Cir. 2013) (stating that Veterans' Benefits are based solely

on "diseases and injuries incurred by service personnel on account

of their military service").

                                 - 14 -
            Ignoring this logic, Martinez asserts that a reasonable

alternative interpretation of "Compulsory Benefit Act or Law" is

a law that requires a third party, not the government, to pay

benefits.   Citing two Supreme Court cases that have used the word

"compulsory" to refer to programs of this nature,4 he contends that

the "normal use of the word compulsory suggests a third-party is

compelled, not that one compels oneself to do something."          He also

emphasizes that the other benefits programs listed in subsection

1 -- workers' compensation, occupational disease compensation, and

unemployment compensation -- all involve this so-called third-

party form of compulsion.5

            There are multiple flaws in this argument.                 First,

although the Supreme Court has called certain statutes requiring

workers' compensation and minimum standards of healthcare coverage

"compulsory,"   the   Court   has    never   suggested   that   only   those

programs qualify as compulsory.

     4 See Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724,
735 (1985); N.Y. Cent. R. Co. v. White, 243 U.S. 188, 195 (1917).
     5 In fact, workers' compensation law, occupational disease
law, and unemployment compensation law do not all fit the same
model of third-party coercion. For example, workers' compensation
laws compel employers to buy insurance to compensate employees for
work-related injuries.   However, unemployment compensation laws
compel employers to make financial contributions to a government-
created fund, which is ultimately paid out to unemployed
individuals by the state. See generally 20 C.F.R. §§ 601-604.6.

                                    - 15 -
           Second, there is nothing in the text of the Plan to

suggest that a "Compulsory Benefit Act or Law" must be similar in

form to the third-party model of benefits programs enumerated

therein.   Other subsections of the Plan do include a "similarity"

requirement -- for example, subsection 6 allows for offset of

"disability or retirement benefits under the United States Social

Security   Act,   or   any   similar   plan   or   act."   However,   the

"Compulsory Benefit Act or Law" provision stands alone without any

language to link the term to the other programs included in the

same subsection.6

           Third, by focusing on the form of the specific benefits

plans identified -- i.e., the particular entity that is compelled

to pay benefits to qualified individuals -- Martinez elevates form

over substance.     No reasonable reader of the Plan would look at

the term "Compulsory Benefit Act or Law" and ponder over what

specific type of entity is being compelled.            The essence of a

     6 Thus, contrary to Martinez's assertion, our decision in
Hannington that Veterans' Benefits are not "similar to" Social
Security or Railroad Retirement Act benefits, and hence cannot
offset disability benefits payable under a Sun Life long-term
disability plan, does not control the outcome of this case. See
Hannington, 711 F.3d at 234. Although the plan in Hannington did
contain a provision allowing for offset of "disability benefits
under any compulsory benefit act or law," the insurer did not rely
on that provision for its offset of the plan participant's service-
connected disability benefits. Id. at 228-29, 235. As such, we
had no occasion to opine on the application of that provision to
Veterans' Benefits. See Glista, 378 F.3d at 128 (explaining that
judicial review is limited to the asserted basis for the insurer's
decision).

                                 - 16 -
compulsory benefit law is that some entity -- be it an employer,

an insurance company, or a government agency -- is required by law

to pay the benefit to all qualified applicants.

            We also reject Martinez's contention that "Compulsory

Benefit Act or Law" must be defined in a way that it does not

render   superfluous   the   listing    of    workers'   compensation      law,

occupational disease law, and unemployment compensation law in

provisions "a" through "c" of subsection 1 of the Plan.                     See

Vendura v. Boxer, 845 F.3d 477, 486 (1st Cir. 2017) (noting the

"longstanding    principle    against        reading   plan   terms   to     be

superfluous").    The rule against superfluities, as a matter of

statutory interpretation, is not unwavering -- we apply it only if

the resulting construction is "rationally possible."           See New Eng.

Carpenters Cent. Collection Agency v. Labonte Drywall Co., 795

F.3d 271, 282 (1st Cir. 2015).         Martinez's urged construction is

irrational because it would mean that Sun Life cannot use a generic

description that covers the full range of compulsory benefit

programs contemplated by the Plan if that generic description also

encompasses certain programs that are specifically enumerated in

the Plan.    The insurer cannot anticipate every type of program

that might justify an offset.      It can supplement the itemization

of programs with generic descriptions whose plain meaning will be

understood by the average plan participant.

                                 - 17 -
             Finally, contrary to Martinez's argument, the fact that

the entire term, "Compulsory Benefit Act or Law," is capitalized

but not explicitly defined in the Plan's definitions section does

not render it ambiguous.7      Though the parties dispute the reach of

"Compulsory Benefit Act or Law," both agree that it is an umbrella

category and does not refer to only one specific act or law.               The

phrase also appears in a list of both capitalized and uncapitalized

terms, many of which are also undefined but connote a plain

meaning.       Where   the   only   contested   word   in   the   phrase    --

"compulsory" -- has a plain and unambiguous meaning, we cannot

find the provision ambiguous simply because it is capitalized but

undefined.

             We thus conclude that the only reasonable interpretation

of "Compulsory Benefit Act or Law" is a law that requires benefits

be paid to any applicant who meets its qualifying criteria.

Martinez's     Veterans'     Benefits    fall    squarely     within   this

definition.8

     7 The cases cited by Martinez, Scottsdale Insurance Co. v.
Torres, 561 F.3d 74 (1st Cir. 2009) and O'Neil v. Retirement Plan
for Salaried Employees of RKO General, Inc., 37 F.3d 55 (2d Cir.
1994), create no such per se rule.
     8 Hence, like the district court, we need not consider Sun
Life's alternative argument that Veterans' Benefits also
constitute an "act or law of like intent" to "Workers' Compensation
Law." This argument is premised on subsections 1.a and 1.f of the
"Other Income Benefits" provision of the Plan.        Specifically,
section 1.f allows for the offset of benefits awarded under "any
other act or law of like intent" to the previously enumerated laws,
which include "Workers' Compensation Law" in subsection 1.a. Thus,

                                    - 18 -
C.   ERISA Breach Claims

            Martinez also argues that the district court erred in

dismissing Counts III, IV, and VII, which allege that Sun Life

breached a fiduciary duty or participated in a fiduciary breach by

construing the Plan to require offset of his Veterans' Benefits

and failing to disclose that Veterans' Benefits constitute "Other

Income Benefits."   Martinez's claim for direct breach of fiduciary

duty (Count III) is based on the Plan itself, while the claims for

co-fiduciary (Count IV) or non-fiduciary liability (Count VII) are

premised on the language of the Summary Plan Description ("SPD"),

drafted by Sun Life and delivered by Martinez's employer and Plan

sponsor, the Athens Group.9   Finding that all three claims could

succeed only if Martinez's Veterans' Benefits were not properly

considered "Other Income Benefits" or not clearly disclosed as

such, the district court disposed of them in light of its earlier

ruling that the Plan unambiguously provides for offset of Veterans'

Benefits.

if Veterans' Benefits were awarded pursuant to a law of like intent
to workers' compensation law, Sun Life would, for that reason as
well, be entitled to subtract them from Martinez's ERISA disability
payment as "Other Income Benefits."
      9Thus, any primary fiduciary liability for Counts IV or VII
would lie with the Athens Group, and Sun Life could only be liable
as a co-fiduciary (Count IV) or a non-fiduciary who knowingly
participated in a fiduciary breach (Count VII).

                              - 19 -
           We agree that the fiduciary claims necessarily fail with

the   determination   that   "Compulsory   Benefit   Act   or   Law"

unambiguously covers Veterans' Benefits.   Properly construing and

following the terms of the Plan does not constitute a breach of

fiduciary duty.10

           Nor does the language of the SPD provide any basis for

a claim that the Athens Group breached a fiduciary duty, such that

Sun Life could be liable for participating in that breach as a co-

fiduciary or a non-fiduciary.     Given that the SPD contained an

identical definition of "Other Income Benefits" as the Plan, our

conclusion that the Plan language was unambiguous means that we

must also conclude that the SPD was "written in a manner calculated

to be understood by the average plan participant."         29 U.S.C.

§ 1022(a); see id. (further stating that a summary plan description

"shall be sufficiently accurate and comprehensive to reasonably

apprise such participants and beneficiaries of their rights and

obligations under the plan").

      10For similar reasons, we also reject the argument that Sun
Life had a fiduciary obligation to affirmatively advise Martinez
that Veterans' Benefits were subject to offset under the Plan as
soon as it learned that Martinez was a veteran.      The fiduciary
duty to convey unrequested material information to beneficiaries
"only arises if there was some particular reason that the fiduciary
should have known that his failure to convey the information would
be harmful."   Watson v. Deaconess Waltham Hosp., 298 F.3d 102,
114-15 (1st Cir. 2002).       In this case, there could be no
anticipated harm, given the Plan's unambiguous inclusion of
Veterans' Benefits within the term "Compulsory Benefit Act or Law."

                                - 20 -
             In so concluding, we reject Martinez's assertion that

the question of whether the SPD's terms are capable of being

understood by an "average plan participant" is a question of fact

not   appropriately   decided   on   a   motion   for   judgment   on   the

pleadings.    Our holding that the phrase "Compulsory Benefit Act or

Law" unambiguously applies to Veterans' Benefits forecloses the

argument that an "average plan participant" would not understand

its meaning.    Put differently, our determination that the phrase's

meaning is unambiguous rests on the judgment that an "average plan

participant" would read the provision as we do.         See, e.g., Harris

v. Harvard Pilgrim Health Care, Inc., 208 F.3d 274, 278 (1st Cir.

2000) (concluding, in effect, that an "unambiguous" plan provision

reasonably apprises the average plan participant of the plan's

relevant terms).

                                 III.

             Martinez claims that Sun Life's offset of Veterans'

Benefits discriminates against employees who have served in the

uniformed services in violation of USERRA, 38 U.S.C. § 4311.            In

entering judgment for Sun Life on the USERRA claim, the district

court held that Martinez had not adequately pleaded that his

military status was "at least a motivating or substantial factor"

in Sun Life's decision to offset his Veterans' Benefits.                See

Velázquez-García v. Horizon Lines of P.R., Inc., 473 F.3d 11, 17

(1st Cir. 2007).      On appeal, Martinez argues that the district

                                - 21 -
court misapplied both the standard of review under Federal Rule of

Civil Procedure 12(c) and the substantive standard for violation

of USERRA.    Because both arguments turn on our conclusion that the

phrase "Compulsory Benefit Act or Law" is unambiguous as a matter

of law, we address them together.

A.   USERRA Framework

             By its terms, § 4311 protects any member of the uniformed

services from being denied "any benefit of employment by an

employer on the basis of that membership."      38 U.S.C. § 4311(a).

Specifically, the relevant portion of the statute provides that:

             (a) A person who is a member of, applies to be
             a member of, performs, has performed, applies
             to perform, or has an obligation to perform
             service in a uniformed service shall not be
             denied   initial   employment,   reemployment,
             retention in employment, promotion, or any
             benefit of employment by an employer on the
             basis of that membership, application for
             membership,     performance    of     service,
             application for service, or obligation.

             . . .

             (c) An employer shall be considered to have
             engaged in actions prohibited--
             (1) under subsection (a), if the person's
             membership,    application   for   membership,
             service,    application    for   service,   or
             obligation for service in the uniformed
             services is a motivating factor in the
             employer's action, unless the employer can
             prove that the action would have been taken in
             the absence of such membership, application
             for membership, service, application for
             service, or obligation for service.

                                 - 22 -
Id. § 4311.        Thus, for a claim of discrimination under USERRA to

survive a motion for judgment on the pleadings, an employee must

plausibly allege that military status was "a motivating factor" in

the adverse action taken by the employer.                   See id.; Velázquez-

García, 473 F.3d at 17.           At later stages of the litigation, i.e.,

on a motion for summary judgment or at trial, if the plaintiff

introduces     evidence      to     substantiate     his     or    her   plausible

allegations of discrimination, the burden then shifts to the

employer to "prove, by a preponderance of the evidence, that the

action     would    have   been    taken   despite    the   protected    status."

Velázquez-García, 473 F.3d at 17 (quoting Sheehan v. Dep't of Navy,

240 F.3d 1009, 1014 (Fed. Cir. 2001)).

B.   Application of USERRA

             Martinez      did    not   meet   his   initial      pleading   burden

because his discrimination allegation is implausible as a matter

of law.11    The simple fact that his Plan benefits were reduced by

the amount of his Veterans' Benefits does not mean that Sun Life

      11In reaching this conclusion, the district court did not
improperly credit Sun Life's assertion that its interpretation of
the Plan was based on the policy's plain language instead of
crediting Martinez's assertion that the interpretation was an act
of discrimination under USERRA.      Rather than crediting any
assertions by Sun Life, the court relied on its previous holding
that, as a matter of law, the language "Compulsory Benefit Act or
Law"    unambiguously    covers   service-connected    disability
compensation. This conclusion required no resolution of disputed
facts; it was a legal conclusion based on the court's
interpretation of the Plan's unambiguous language.      See supra
Section II.B.

                                        - 23 -
was motivated, at least in part, by his status as a servicemember

to make that reduction.          By this logic, any insurance plan that

permits benefits to be offset by service-connected disability

benefits, whether it explicitly lists them as subject to offset or

includes them in a generic term like "Compulsory Benefit Act or

Law," is a per se violation of USERRA.           This approach would render

Veterans' Benefits practically untouchable by insurers like Sun

Life, allowing veteran recipients to double-collect disability

benefits    for   the   same     underlying   condition,     even   where       such

collection is barred for recipients of other forms of disability

benefits.   Hence,      Martinez's    interpretation       runs   afoul    of   the

statutory   purpose     of   §   4311,   which   is   to   root   out     unlawful

discrimination on the basis of uniformed service, not provide

preferential treatment to servicemembers.             See H.R. Rep. No. 103–

65(I), at 23 (1993), as reprinted in 1994 U.S.C.C.A.N. 2449, 2456

(stating that § 4311(a) is designed to "reenact the current

prohibition against discrimination"); Crews v. City of Mt. Vernon,

567 F.3d 860, 862, 866 (7th Cir. 2009) (holding that a city's

decision to stop providing a work schedule benefit to employees in

the National Guard, which it had never provided to non-Guard

employees, did not violate § 4311 because "USERRA does not require

such preferential treatment"); Rogers v. City of San Antonio, 392

F.3d 758, 768 (5th Cir. 2004) (finding "no intention" in § 4311(a)

"to prohibit neutral labor contracts from treating employees on

                                     - 24 -
military leave equally with those on non-military leave with

respect to the loss of benefits due to absence from work").

            Thus, the fundamental problem with Martinez's USERRA

claim is that he does not allege any facts suggesting that Sun

Life was motivated to apply the "Other Benefits" provision to him

because he was receiving military-related benefits.12      Indeed,

Martinez even concedes that Sun Life also offset his Social

Security disability benefits because, like his Veterans' Benefits,

they were awarded for the same disability for which he received

Plan benefits.    The only role that Martinez's military status

allegedly played in Sun Life's decision to offset his Plan benefits

is that the source of his "Other Income Benefit[]" was the VA.

That fact alone is not enough to plausibly allege a violation of

USERRA.13   Accordingly, we hold that the district court properly

     12 In this respect, the cases cited by Martinez are all
distinguishable, even though they found USERRA violations based on
facially neutral policies. See Erickson v. U.S. Postal Serv., 571
F.3d 1364, 1368 (Fed. Cir. 2009) (employee fired based in part on
his "excessive use of military leave"); Petty v. Metro. Gov't of
Nashville-Davidson Cty., 538 F.3d 431, 447-48 (6th Cir. 2008)
(employee investigated because of concerns related to his military
service); Velázquez-García, 473 F.3d at 17-19 & n.8 (employee
subject to explicitly anti-military comments in the workplace).
     13We also reject Martinez's argument that Sun Life's timing
in notifying him that his Veterans' Benefits would be offset
suggests a discriminatory motive. Sun Life was under no obligation
to explain its Plan interpretation to Martinez before Martinez
notified Sun Life that he had been awarded service-connected
disability benefits. Where the phrase "Compulsory Benefit Act or
Law"   unambiguously   covers    those  benefits,    any   earlier
communication would have been duplicative of the Plan's plain
language. Cf. Velázquez-García, 473 F.3d at 20-21 (finding that

                              - 25 -
granted judgment on the pleadings for Sun Life on Martinez's USERRA

claim.14

           Affirmed.

an employer's delay in informing a USERRA plaintiff that his check-
cashing business violated the employer's code of conduct suggested
that its reason for firing him was pretextual, in part because the
code of conduct provision was ambiguous and did not clearly bar
running a check-cashing business).       See also supra note 10
(rejecting another version of this argument in a different
context).
     14 Because we hold that Martinez failed to state a claim of
USERRA discrimination, and thus affirm judgment on the pleadings
for Sun Life, we do not reach Sun Life's alternative argument that
it is not a proper defendant under USERRA, which defines an
"employer" to include "a person, institution, organization, or
other entity to whom the employer has delegated the performance of
employment-related responsibilities." 38 U.S.C. § 4303(4)(A)(i).
Rather, our analysis assumes without deciding that Sun Life is
subject to suit under USERRA.

                              - 26 -
                             Appendix

Other Income Benefits

Other Income Benefits are those benefits provided or available to
the Employee while a Long Term Disability Benefit is payable.
These Other Income Benefits, other than retirement benefits, must
be provided as a result of the same Total or Partial Disability
payable under this Policy. Other Income Benefits include:

1.   The amount the Employee is eligible for under:
     a.   Workers' Compensation Law; or
     b.   Occupational Disease Law; or
     c.   Unemployment Compensation Law; or
     d.   Compulsory Benefit Act or Law; or
     e.   an automobile no-fault insurance plan; or
     f.   any other act or law of like intent.

2.   The Railroad    Retirement   Act   (including   any   dependent
     benefits).

3.   Any labor management trustee, union or employee benefit plans
     that are funded in whole or in part by the Employer.

4.   Any disability income benefits the Employee is eligible for
     under:
     a.   any other group insurance plan of the Employer;
     b.   any governmental retirement system as a result of the
          Employee's job with his Employer.

5.   The benefits the Employee receives under his Employer's
     Retirement Plan as follows:
     a.   any disability benefits;
     b.   the Employer-paid portion of any retirement benefits.
     (Disability benefits that reduce the Employee's accrued
     retirement benefit will be treated as a retirement benefit.
     Retirement benefits do not include any amount rolled over or
     transferred to any other retirement plan as defined in Section
     402 of the Internal Revenue Code.)

6.   The disability or retirement benefits under the United States
     Social Security Act, or any similar plan or act, as follows:
     a.   Disability benefits the Employee is eligible to receive.
     b.   Disability benefits the Employee's spouse, child or
          children are eligible to receive because of the
          Employee's Total or Partial Disability unless the
          dependent benefits are paid directly to the divorced

                              - 27 -
           spouse or to the children in custody of the divorced
           spouse.
      c.   Retirement benefits received by the Employee.
      d.   Retirement benefits the Employee's spouse, child or
           children receive because of the Employee's receipt
           because of the Employee's receipt of retirement benefits
           unless the dependent benefits are paid directly to the
           divorced spouse or to the children in custody of the
           divorced spouse.

      If an Employee's Total or Partial Disability begins after
      Social Security Normal Retirement Age, Social Security
      Retirement Benefits will not be offset if, prior to his Total
      or Partial Disability, he was already receiving Social
      Security Retirement Benefits.

7.    The amount the Employee receives from any accumulated sick
      leave.

8.    Any salary continuation paid to the Employee by his Employer
      which causes the Net Monthly Benefit, plus Other Income
      Benefits and any salary continuation to exceed 100% of the
      Employee's Total Monthly Earnings. The amount in excess of
      100% of the Employee's Total Monthly Earnings will be used to
      reduce the Net Monthly Benefit.

9.    Any amount due to income replacement or lost wages the
      Employee receives by compromise, settlement or other method
      as a result of a claim for any Other Income Benefit.

10.   Any amount the Employee receives from a voluntary separation
      of employment agreement from the Employer including severance
      pay or any other income in settlement of an employment
      contract.

Other Income Benefits will include any amount described above which
would have been available to the Employee had he applied for that
benefit.

                              - 28 -