UBS Broker’s Widow Sues for Survivor Benefit of $685K
The widow of a veteran broker who died unexpectedly at age 63 last June has sued UBS Financial Services and one of its benefit plans for denying her claim of survivor benefits equal to his 2017 pretax payout.
The estate of Denis Delia was entitled to $684,606 under terms of the employment contract he signed when he joined the firm from Morgan Stanley in 2013, according to the lawsuit that his wife, Gina Delia, filed Monday in federal court for the Southern District in New York City.
UBS denied the payment because he had not signed up for the survivor benefit plan even though he had allegedly received four “blast” emails in early 2016 informing him of his need to enroll by March of that year, according to the lawsuit.
The notice was premature because Delia was not eligible to apply for the survivors’ benefit when the emails were sent, according to the filing. UBS also violated its ERISA fiduciary obligations by failing to notify Delia of his actual eligibility in December 2016 after his three calendar years of service.
“We believe that Denis should have been enrolled in the UBS FA Survivor Plan,” his wife wrote in appealing the plan administrator’s decision three weeks after her husband’s death. “We do not believe that he was even aware of its existence, or (if he was) that he was aware of any sort of opt-in component to a benefit that was not costing him anything.”
A spokesman at UBS Wealth Management USA did not immediately respond to a request for comment on the firm’s response to the lawsuit.
Lawsuits from advisors’ estates are relatively rare, although the widow of a Merrill Lynch broker in January sued the firm for $30 million, claiming she was entitled under the Family and Medical Leave Act to profits that the firm was making from continuing to service her late husband’s clients. She subsequently withdrew the lawsuit.
Lawyers said that UBS’s rejection of the estate’s claim underscores for advisors the need to carefully review employment contract agreements.
The unnamed administrator of the FA Survivor Plan was biased to reduced payments from the unfunded plan in order to preserve UBS’s general assets, according to the lawsuit.
“UBS was in the process of scaling back the Plan due to its escalating financial costs,” it said, noting that “the cost of the survivor benefit has increased significantly since we started the program.”
In 2014, the bank increased the time new employees must work before becoming eligible for the program, according to the lawsuit.
Delia’s widow sued on six counts, including “misrepresentation” and breach of the “implied covenant of good faith and fair dealing,” naming UBS Financial Services, the Financial Advisor Survivor Benefit Plan and the plan’s administrator as defendants. In addition to seeking the $684,606 of compensatory damages, she asked for legal and attorneys’ fees as well as unspecified punitive (“exemplary”) damages.
Denis Delia first registered as a broker with E.F. Hutton in 1983, and worked at successor firms Lehman Brothers and Smith Barney in New York City before joining Morgan Stanley for a four-year stint in 2009, according to his BrokerCheck history.
UBS recruited the Westchester County, New York, resident in early 2013 because of his “spotless record within the securities industry and his business consisting of more than $130 million of assets under management built over the preceding 30 years,” according to the lawsuit.