United States Court of Appeals For the First Circuit

No. 22-1614

BARBARA M. PARMENTER, individually and on behalf of all others similarly situated,

Plaintiff, Appellant,

v.

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA; TUFTS UNIVERSITY,

Defendants, Appellees,

DOES 1-50,

Defendants.

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

[Hon. Richard G. Stearns, U.S. District Judge]

Before

Montecalvo and Thompson, Circuit Judges, and Carreño-Coll,* District Judge.

Jonathan M. Feigenbaum for appellant.

Amanda S. Amert, with whom Erica C. Spilde, Wilkie Farr & Gallagher LLP, Jonathan I. Handler, and Day Pitney LLP were on brief, for appellee The Prudential Insurance Company of America.

Douglas E. Motzenbecker, with whom Thomas Blatchley and Gordon & Rees LLP were on brief, for appellee Tufts University.

* Of the District of Puerto Rico, sitting by designation. February 14, 2024 THOMPSON, Circuit Judge. Long-term care insurance

covers the costs of care when policy holders need assistance with

the activities of daily living. This insurance is often available

for purchase through a program offered by an employer, with the

coverage generally stepping in when neither Medicare nor private

health insurance provide coverage. Plaintiff (now appellant)

Barbara Parmenter ("Parmenter") subscribed to such a policy

offered by her employer Tufts University ("Tufts") and

underwritten by The Prudential Insurance Company of America

("Prudential"). The policy is governed by the Employee Retirement

Income Security Act of 1974 ("ERISA"). After Prudential twice

increased Parmenter's premium rate payments for her policy, she

sued Tufts and Prudential, alleging each breached their respective

fiduciary duties owed to her when Prudential increased those rates.

The defendants responded with motions to dismiss for failure to

state a plausible claim. Siding with the defendants, the district

court granted each of their motions and Parmenter now appeals the

judgment dismissing her case. For the reasons we explain below,

we reverse in part and affirm in part.

BACKGROUND1

Parmenter alleges that, while employed by Tufts, she

attended a presentation by Prudential where the company allegedly

1 This background summary relies on the allegations in the operative complaint (which is Parmenter's First Amended

- 3 - "assured prospective enrollees that any future premium increases

would need to be approved by the Massachusetts Commissioner of

Insurance before the increase could become effective." The "Tufts

University Group Contract . . . Prudential Long Term Care Coverage"

contract covering the policy in which Parmenter enrolled sometime

after attending the presentation included the same promise; the

Foreword states that Prudential "may increase the premiums you pay

subject to the approval of the Massachusetts Commissioner of

Insurance." The contract also has a discrete section for

"Premiums" wherein the "Increases in Premiums" subsection says

simply that Prudential "reserves the right to change premium rates"

(without reference to approval by any other body). And in the

"Additional Coverage Features" section of the contract, without

referencing the need for prior approval, Prudential includes a

"Substantial Premium Increase Table" purporting to show the amount

it may increase premiums based on an insured's age.

Parmenter says she paid the premiums "for years" and

then, in both 2019 and 2020, Prudential raised the premiums (by

40% and 19%, respectively) without securing the approval of the

Complaint), accepting the facts provided therein as true, as well as on the insurance policy documents (specifically the group contract and Summary Plan Description) Parmenter attached to her complaint. See Sonoiki v. Harv. Univ.,

(1st Cir. 2022).

- 4 - Massachusetts Commissioner of Insurance.2 After the second

unapproved premium rate increase, Parmenter stopped making the

premium payments (an option allowed under the contract but with

the consequence of receiving a reduced maximum benefit under the

plan).

Parmenter initiated this lawsuit against Prudential and

Tufts in January 2022.3 She asserted Prudential breached its

fiduciary duty to her when it raised the premium rate payments

without first securing the approval of the Massachusetts

Commissioner of Insurance as promised both in the contract and at

the presentation she had attended prior to enrolling, and that

Tufts breached its fiduciary duty by "failing to monitor

Prudential." Relying on ERISA, Parmenter sought equitable

remedies pursuant to

(a)(3); namely, reformation

and disgorgement of the increased premiums received available to

her (captioned as count 1). In addition, Parmenter sought

(pursuant to

(a)(1)(B)) to enjoin Prudential from

raising the premiums again without obtaining approval (captioned

2 Parmenter's pleading reveals no other details about herself, her position at Tufts, when she attended Prudential's presentation, or when she initially enrolled in the policy.

3Parmenter initiated the suit on her own behalf as well as on behalf of all others similarly situated, and she included allegations for future certification as a class action. The class allegations were not addressed during the adjudication of the motions to dismiss below and are not a subject in this appeal.

- 5 - as count 2). Lastly, Parmenter alleged entitlement to recover her

costs of the litigation, including attorney's fees, pursuant to

(g)(1) (captioned as count 3).

The district court concluded Parmenter had not plausibly

stated a claim for breach of fiduciary duty because the

Massachusetts Commissioner of Insurance had not yet "exert[ed] its

regulatory authority over premiums for group employer coverage,"

interpreting that part of the group contract stating that increases

to premiums would be "subject to" the approval of the Commissioner

as only effective if and when the Commissioner "opts to require

such approval." Without any plausibly alleged claims establishing

potential wrongdoing by either defendant, the district court

entered judgment in the defendants' favor.4 Now Parmenter turns

to us, arguing the district court effectively rewrote the plain

language in the group contract about premium increases, turning

what she calls a condition precedent (no increase unless or until

the Massachusetts Commissioner of Insurance approves the proposed

4 The district court also concluded that Parmenter's allegations of Prudential's "material misrepresentation" at the presentation Parmenter attended -- about seeking the Commissioner of Insurance's approval prior to putting premium increases into effect -- failed to meet the heightened pleading strictures for fraud-related claims set forth in Rule 9(b) of the Federal Rules of Civil Procedure because the complaint did not "specify the time and place of the alleged misrepresentation." In Parmenter's briefing to us, she is crystal clear that she is not alleging or claiming fraud, so we will not examine her allegations in the context of Rule 9(b).

- 6 - increase) into an optional step (premium rate increases are

"subject to" review and approval by the Massachusetts Commissioner

of Insurance only when the Commissioner chooses to begin exercising

its authority to review proposed premium increases).

DISCUSSION

We review anew a district court's decision to dismiss a

complaint for failure to state a plausible claim. N.R. by &

through S.R. v. Raytheon Co.,

(1st Cir. 2022)

(citing Ezra Charitable Tr. v. Tyco Int'l, Ltd.,

(1st Cir. 2006)). Our work involves "assum[ing] all well-pleaded

facts [are] true, analyz[ing] those facts in the kindest light to

the plaintiff's case, and draw[ing] all reasonable inferences in

favor of the plaintiff."

(citing U.S. ex rel. Hutcheson v.

Blackstone Med., Inc.,

(1st Cir. 2011)). Then

we decide whether the plaintiff has pled "factual allegations,

either direct or inferential, [about] each material element

necessary to sustain recovery under some actionable legal theory."

(quoting Gagliardi v. Sullivan,

(1st Cir.

2008)). "We may augment these facts and inferences with data

points gleaned from documents incorporated by reference into the

complaint."

(quoting Haley v. City of Bos.,

(1st Cir. 2011)).

A claim for breach of a fiduciary duty under ERISA

includes proving a breach, a loss, and the causal connection

- 7 - between the two. See Brotherston v. Putnam Invs., LLC,

(1st Cir. 2018);

. Parmenter seeks relief

pursuant to ERISA's civil enforcement provision, which allows

participants in ERISA welfare plans to bring a civil action "to

recover benefits due . . . under the terms of [her] plan, to

enforce [her] rights under the terms of the plan, or to clarify

[her] rights to future benefits under the terms of the plan,"

(a)(1)(B), or "to enjoin any act or practice which

violates any provision of this subchapter or the terms of the plan,

or . . . to obtain other appropriate equitable relief (i) to

redress such violations or (ii) to enforce any provisions of this

subchapter or the terms of the plan,"

§ 1132(a)(3).

We will examine Parmenter's alleged breach-of-fiduciary-

duty claims against each defendant separately, taking our lead

from the parties' briefing on where to focus, which homes us in on

whether each owed Parmenter the fiduciary duty she has alleged and

whether she has plausibly pled a breach of their respective duties.

Prudential

Duty

Parmenter alleges that Prudential's fiduciary status

derives from its role managing the long-term care insurance policy,

as expressed in the terms of the group contract and in the Summary

Plan Description, specifically the authority and discretion

(subject -- in some way -- to the approval of the Commissioner of

- 8 - Insurance) that it enjoys over setting the premium rates. In

Prudential's motion to dismiss, it argued to the district court

that it was not a fiduciary with respect to setting the premium

rate, but the district court did not address this point in its

decision granting the motion. The parties bring this point up

again on appeal. Whether Parmenter plausibly alleged Prudential

owed her a fiduciary duty under ERISA with respect to premium rates

is a threshold issue before us because there can be no breach of

a particular duty if a party does not owe that duty to the plaintiff

in the first place. We briefly explain why Prudential loses on

this point.

Consistent with the allegations in her complaint,

Parmenter again points to Prudential's representations in the

terms of the group contract and in the Summary Plan Description,

arguing before us that Prudential represented itself as a fiduciary

and that it acted as a fiduciary when it made the discretionary

decision to raise the premium rate for the plan's participants.

As the Summary Plan Description clearly states, Prudential tells

plan participants that it serves as a fiduciary and that it owes

them a duty to operate the plan in a prudent manner: "ERISA

imposes duties upon the people who are responsible for the

operation of the employee benefit plan. The people who operate

your plan, called 'fiduciaries' of the plan, have a duty to do so

prudently and in the interest of you and other plan participants

- 9 - and beneficiaries." As Parmenter also points out, ERISA is clear

that the "[p]rudent man standard of care" includes "discharg[ing]

. . . duties with respect to a plan solely in the interest of the

participants and beneficiaries and . . . in accordance with the

documents and instruments governing the plan . . . ."

(a)(1)(D); see Raytheon Co.,

(relying on

this statutory provision).

As relevant here, ERISA also defines an individual

fiduciary as follows: "[A] person is a fiduciary with respect to

a plan to the extent (i) he exercises any discretionary authority

or discretionary control respecting management of such plan . . .

or (iii) he has any discretionary authority or discretionary

responsibility in the administration of such plan."

(21)(A); see Shields v. United of Omaha Life Ins. Co.,

(1st Cir. 2022) ("The Supreme Court of the United

States has explained that the 'primary function' of a fiduciary

duty under ERISA 'is to constrain the exercise of discretionary

powers which are controlled by no other specific duty.'" (quoting

Varity Corp. v. Howe,

(1996))). As this court

has said before, "[d]iscretionary acts trigger fiduciary duties

under ERISA only when and to the extent that they relate to plan

management or plan assets." Merrimon v. Unum Life Ins. Co. of

Am.,

(1st Cir. 2014). According to Prudential

(which cites only out-of-circuit nonbinding cases to support its

- 10 - point), we should view its act of raising the premium rate not as

plan management, but rather, as a business decision, which

Prudential says falls outside the scope of its status as a

fiduciary. The cases on which Prudential relies, however, to

demonstrate business decisions deemed to fall outside the scope of

fiduciary duties are readily distinguishable. For example, those

cases involved pension plans and claims against employers for

either decisions involving how to staff financial projects and

transactions, a non-defendant trustee's decision regarding

transferring plan assets, Hunter v. Caliber Sys., Inc.,

(6th Cir. 2000), or the sole discretionary decision

being whether the employer contributed stocks instead of cash to

the 401(k) plans, Coulter v. Morgan Stanley & Co., Inc.,

(2d Cir. 2014). Neither case speaks directly to

Parmenter's situation in which she is a plan participant in a

welfare benefit plan operated and provided by a party who is not

her employer.

In our view, Prudential's decision to exercise its

discretion and increase premiums is part of the overall management

of the welfare benefit plan. In the plan documents, Prudential

held itself out to the plan participants as owing them a fiduciary

duty of prudence. Pursuant to ERISA, at the very least Prudential

owed Parmenter a fiduciary duty of prudence to manage the plan in

accordance with the documents governing the plan, i.e., as per the

- 11 - requirements of the "Tufts University Group Contract . . .

Prudential Long Term Care Coverage" contract, however it is

ultimately interpreted. See

(a)(1)(D).

We now move on to consider the plausibility of the breach

allegations against Prudential.

Breach

Parmenter alleges and argues that Prudential breached

its fiduciary duty when it increased the premiums without first

securing the approval of the Commissioner of Insurance as promised

in the group contract. Prudential counters that the "subject to"

language is simply a nod to the Commissioner of Insurance's

authority to regulate; a placeholder for the time when the

Commissioner does promulgate regulations and a process for review

and approval of premium rates, and that the language at issue does

not lock the premiums until the Commissioner begins regulating

employer-sponsored group insurance policies. Before resolving

this issue, it will be helpful to explain the Commissioner of

Insurance's authority to regulate this particular type of

insurance as well as the basic contract principles -- both general

and specific to the ERISA context -- on which our examination

relies.

The Massachusetts Commissioner of Insurance (who heads

up the state's Division of Insurance) has had the authority to

regulate group long-term care insurance since 2013, including

- 12 - premium rate increases. Mass. Gen. Laws ch. 176U, § 7 (2013).

However, despite being granted statutory authority a decade ago,

the regulations for long-term care insurance expressly state that

they do "not apply to an employment-based group policy." 211 Mass.

Code Regs. § 65.02; see also Long-Term Care Insurance Rate Increase

Questions and Answers, Mass. Div. of Ins.,

https://www.mass.gov/service-details/long-term-care-insurance-

rate-increase-questions-and-answers [https://perma.cc/2GCL-DNBL]

("The Division of Insurance does not approve rate changes for

employer group plans or policies offered through associations.").

Turning to ERISA, it is long-settled that "provisions of

an ERISA-regulated employee benefit plan must be interpreted under

principles of federal common law." Ministeri v. Reliance Standard

Life Ins. Co.,

(1st Cir. 2022) (quoting Filiatrault

v. Comverse Tech., Inc.,

(1st Cir. 2001)). By

that, we mean that ERISA does not include a "body of contract

principles informing the interpretation and enforcement of

employee benefit plans." Nash v. Trs. of Bos. Univ.,

(1st Cir. 1991). Rather, as we have observed, "Congress

intended instead 'that a federal common law of rights and

obligations under ERISA-regulated plans would develop.'"

(quoting Pilot Life Ins. Co. v. Dedeaux,

(1987)).

This court has commented before that "Congress specifically

contemplated that federal courts, in the interests of justice,

- 13 - would engage in interstitial lawmaking in ERISA cases in much the

same way as the courts fashioned a federal common law [interpreting

other federal statutes]." Id. at 965 (emphases removed) (quoting

Kwatcher v. Mass. Serv. Emps. Pension Fund,

(1st

Cir. 1989), abrogated on other grounds by Raymond B. Yates, M.D.,

P.C. Profit Sharing Plan v. Hendon,

(2004)). When state

law is "compatible with the purpose of [the federal statute at

issue], [state law] may be resorted to in order to find the rule

that will best effectuate the federal policy."

(quoting

Textile Workers Union v. Lincoln Mills of Ala.,

(1957)). Indeed, "in developing the federal common law, it is not

inappropriate that we examine the various state law approaches,

states generally having had much more experience in the area of

insurance contract interpretation." Wickman v. Nw. Nat'l Ins.

Co.,

(1st Cir. 1990).

With respect to contracts governing employee benefits

plans, the federal common law "'embodies commonsense principles of

contract interpretation' such as giving effect to the language's

'plain, ordinary, and natural meaning,'" Ministeri,

(quoting Filiatrault,

), and has pointed to state

law as the "richest source" of commonsense canons of contract

interpretation, Hughes v. Bos. Mut. Life Ins. Co.,

(1st Cir. 1994) (quoting Rodriguez-Abreu v. Chase Manhattan

- 14 - Bank, N.A.,

(1st Cir. 1993)).5 In addition, part

of determining a "common understanding" of a term may include

reference to dictionaries, though those definitions need not be

controlling. Ministeri,

(quoting Martinez v. Sun

Life Assurance Co. of Can.,

(1st Cir. 2020)).

Sometimes our journey into the meaning of a term reveals

that the specific word or phrase at issue is ambiguous.

That

is, the term in question is either "inconsistent on [its] face" or

is reasonably susceptible of different interpretations,

at 23

(quoting Martinez,

), emphasis on "reasonableness

[as] central to [the] ambiguity analysis," Martinez,

(emphasis added). "[W]hether a contract term is ambiguous is

[a question] of law for the judge," Allen v. Adage, Inc.,

(1st Cir. 1992); the determination of which includes

consideration of the entire contract, Smart v. Gillette Co. Long-

Term Disability Plan,

(1st Cir. 1995). See also

Amyndas Pharms., S.A. v. Zealand Pharma A/S,

(1st

Cir. 2022) ("[A]n inquiring court must avoid tunnel vision:

instead of focusing myopically on individual words, it must

consider contractual provisions within the context of the contract

as a whole."); Barclays Bank PLC v. Poynter,

(1st

The parties do not contend that the policy contains a clear 5

choice of law provision that might assist us here in our analysis. Therefore, we rely on general federal common law principles of contract interpretation in conducting our analysis.

- 15 - Cir. 2013) ("We take the words within the context of the contract

as a whole, rather than in isolation."); Restatement (Second) of

Conts. § 202 (Am. Law Inst. 1981) ("A writing is interpreted as a

whole, and all writings that are part of the same transaction are

interpreted together.").

The only point on which the parties here agree is that

the meaning of the language at issue is plain and unambiguous, yet

the plaintiff and the defendants ascribe starkly different

meanings to the supposedly unambiguous contract language.

According to Parmenter, "subject to" means Prudential "can raise

rates" but the company promised it won't "until a regulatory

framework is adopted in Massachusetts" so it can get the approval

of the Commissioner of Insurance. As she frames it, "Prudential

simply must wait until updated regulations are adopted by the

Commissioner and approval is received before increasing premiums."

According to Prudential, "subject to" is "an acknowledgement of

the possibility that the Commissioner may, at some future point in

time, institute an approval process for group long term care policy

premiums, . . . qualifying language ensur[ing] that Prudential

will seek Commissioner approval before increasing rates should the

Commissioner institute a process for pre-approval in the future."

Which interpretation is correct turns on the meaning of

"subject to." Black's Law Dictionary indicates that "subject to"

is not a legal term with one set meaning. The term appears

- 16 - frequently with other legal terms, such as "liability" ("subject

to liability" defined as "susceptible to a lawsuit that would

result in an adverse judgment,") or to real property concepts such

as "fee simple subject to a power of termination" or "fee simple

subject to special interest." Black's Law Dictionary (11th ed.

2019). The general definition of the term, according to the

Merriam-Webster dictionary, is "affected by or possibly affected

by (something)" or "dependent on something else to happen or be

true." Subject to, Merriam-Webster, https://www.merriam-

webster.com/dictionary/subject%20to [https://perma.cc/3P5W-7T76].

According to these general definitions, "subject to" can indicate

either an absolute or a possibility, which renders both Parmenter's

and Prudential's interpretations plausible and reasonable.

But we don't stop there because we must examine the

"subject to" clause in the context of the rest of the policy. See

Smart,

. Doing so, however, does not clarify the

meaning for us. The group contract includes two other references

to premium increases. In the section of the contract dedicated to

"premiums" in general, we note the following sentence: "Prudential

also reserves the right to change premium rates." And the section

covering "Additional Coverage Features" includes a definition of

a "substantial premium increase" and a discussion of how such would

be calculated based on the age of the insured. Neither section

mentions the Commissioner of Insurance and the silence renders the

- 17 - statements in these sections, especially the reservation of rights

to increase premiums, as conflicting with the message at the very

beginning of the group contract about any premium increases being

"subject to" the approval of the Commissioner of Insurance. The

reservation of rights clause -- on its own and in isolation from

the rest of the contract -- is crystal clear, but we cannot ignore

the reference to approval by the Commissioner of Insurance in the

earlier part of the contract. See

Simply put, consideration

of the policy as a whole does not ineluctably lead us to a clear

understanding of what the contract's "subject to" clause means.

All of these considerations cause us to conclude that "subject to"

is "reasonably susceptible of" different interpretations.

Ministeri,

. We therefore disagree with the parties

that the language is unambiguous; it actually fits the definition

of ambiguity quite comfortably. See

Before proceeding with our analysis, we pause to note

that the court has previously commented that it "may ponder

extrinsic evidence to determine whether an apparently clear term

is actually uncertain," Smart,

, or to assist with

"choos[ing] one plausible interpretation over the other as a matter

of law," Hughes,

. To be sure, the court has

warned that "this exception is narrow at best . . . extrinsic

evidence will be considered for the purpose of whether an ambiguity

exists only if it suggests a meaning to which the challenged

- 18 - language is reasonably susceptible." Smart,

. Here,

the parties do not contend the contract provision at issue is

ambiguous and so do not point to any extrinsic evidence to resolve

an ambiguity as a matter of law. Cf. Hughes,

, 269-

70 (deciding an appeal from a motion for summary judgment and

commenting both parties provided plausible interpretations of the

provision at issue but the record included no extrinsic evidence

to assist the court with choosing one interpretation over the other

as a matter of law); Smart,

(deciding an appeal

from a decision after an evidentiary hearing and explaining why

the extrinsic evidence on which the appellant relied did not

demonstrate an ambiguity in the language at issue). So we move

on.

Once a court concludes a term at issue in a contract is

ambiguous, the focus shifts to resolving the ambiguity which is a

determination of fact to be made by a factfinder. Clukey v. Town

of Camden,

(1st Cir. 2015); Hughes,

n.6. Federal common law also guides us here. The resolution

of the ambiguity will "turn on the [contracting] parties' intent,"

the "explor[ation]" of which will "often (but not always) involve[]

marshalling facts extrinsic to the language of the contract

documents. When this need arises, these facts, together with the

reasonable inferences extractable therefrom, are together

superimposed on the ambiguous words to reveal the parties'

- 19 - discerned intent." Smart,

. This inquiry also

includes the principle that "unclear 'terms must be construed in

favor of' the insured" (aka "the doctrine of contra proferentem"

for those who like Latin). Ministeri,

-23 (quoting

Martinez,

) (cleaned up); Hughes,

.

This principle embodies a nod to the status of insurance companies

compared to the insureds: "[I]nsurance policies are typically

contracts of adhesion[;] the insurance company drafts the policy

and the insured, rarely able to negotiate the terms, is left high

and dry unless [they] accede[] to the proffered terms." Ministeri,

(citing Mut. Life Ins. Co. of N.Y. v. Hurni Packing

Co.,

(1923)). The insurer is not, however, left

to the whim of the insured's or the court's interpretation because

"[c]ourts may not indulge fanciful readings, chimerical

interpretations, or 'tortured language' to find 'nuances the

contracting parties neither intended nor imagined.'"

(quoting

Burnham v. Guardian Life Ins. Co. of Am.,

(1st

Cir. 1989)) (cleaned up). In addition, "despite any interpretive

presumption favoring the insured, an insurer may seek to overcome

that presumption with probative evidence." Hughes,

n.6. When confronted with ambiguous ERISA policy language in the

context of a motion for summary judgment we have been clear that,

ultimately, "[t]he trier of fact must resolve any ambiguities in

an ERISA contract identified by the court and incapable of

- 20 - definitive resolution on the existing record."

(holding

contract language at issue was ambiguous and adopting, pursuant to

the doctrine of contra proferentem, the interpretation of the

ambiguous language put forward by the insured) (citing Allen,

). When the court has only pleadings before it, it has

declined to resolve ambiguous contract language on review of a

granted motion to dismiss. See Sonoiki v. Harv. Univ.,

(1st Cir. 2022); Lass v. Bank of Am., N.A.,

(1st Cir. 2012). With all of these principles and

precedents in mind and for the reasons we briefly explain below,

the ambiguity presented here cannot be resolved with the pleading

and contract documents before us.

In terms of plan management, Prudential may not have

intended to promise that it would lock the premium rate until such

time that the Commissioner of Insurance instituted a process to

review and approve proposed premium increases. Discerning

Prudential's intent is not possible, however, without knowing,

inter alia, when the terms of the group contract were first

drafted, whether the terms existed prior to 2013 and, if so,

whether the contract was subsequently amended after the

Massachusetts Legislature passed chapter 176U, § 7 to allow for a

Commissioner-imposed approval process. In addition, we would need

to know when Parmenter first joined the policy and therefore agreed

to the terms of the insurance policy applicable to her. As

- 21 - Prudential argues, these are details that Parmenter has not

included in her allegations, but because of the ambiguous "subject

to" clause in the contract, these missing details are not fatal to

the plausibility of her allegations (for which she receives the

benefit of our assumption that they are true, see Raytheon Co.,

). While the date Parmenter enrolled in the policy is

information to which she would have had access prior to filing her

complaint, the timing for the initial drafting of the group

contract and amendments (if any) is not likely to have been readily

available to her without the benefit of the discovery process.

This information will be relevant to resolving the ambiguity once

extrinsic evidence has been gathered through the discovery

process. As we mentioned above, while the decision about whether

a term is ambiguous is a question of law, the issue of the parties'

intent goes to a factfinder when the extrinsic evidence indicates

a factual dispute is at play. Balestracci v. NSTAR Elec. & Gas

Corp.,

(1st Cir. 2006).

Parmenter contends that Prudential knew "from the outset

that the Commissioner lacked authority to regulate in this area at

time of enrollment." She alleges in the complaint that, in a

written submission to the Massachusetts Commissioner of Insurance,

Prudential stated that it "did not have significant experience

with group rate changes" when Tufts enrolled with Prudential and

so the presentation referred to "the typical role a state plays in

- 22 - the regulation of the product and rate," resulting in "general

guidance" that "was not tailored" to "Group Long Term Care coverage

to be issued in Massachusetts." The allegation does not include

the date or context for the alleged communication with the

Commissioner of Insurance, but the phrases quoted above are

supposedly direct quotes from the letter. Parmenter also alleges

she attended a presentation by Prudential prior to enrolling in

the policy, in which Prudential "assured prospective enrollees

that any future premium increases would need to be approved by the

Massachusetts Commissioner of Insurance before the increase could

become effective." These allegations, taken as true without the

contextual details, do not help resolve the ambiguity before us;

each simply underscores the need for more information about how

and when the group contract was written because this will in turn

inform what Prudential knew about the status of rate regulation

for long term care plans in Massachusetts at the time it presented

to Parmenter and when Parmenter enrolled, and therefore the

intended effect of the "subject to" language.6 In our view, these

Parmenter also asserts several times in her brief (though 6

we note without legal support) that "prior approval by the Commissioner" is a "condition precedent." As Prudential points out, the group contract does not identify the "subject to" language as a condition precedent. "A condition is an event, not certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due." Restatement (Second) of Conts. § 224 (Am. Law Inst. 1981) (adding in the Reporter's Note that conditions precedent are now simply referred to as "conditions" and the word refers to the event and not the

- 23 - allegations, in light of our inability to definitively determine

the intended meaning of the "subject to" clause, push Parmenter

across the plausibility threshold on her claim for fiduciary

breach.

Also in the mix (though neither party brings this up) is

whether, if the interpretation principles set out above lead to

Parmenter's reasonable interpretation of the "subject to" language

ultimately winning the day, Prudential's performance may have been

excused because compliance with the term was rendered

impracticable by the Commissioner's explicit decision not to

regulate employer-sponsored long-term care insurance plans with no

indication of whether or when that may change. Impracticability

applies when, "after a contract is made, a party's performance is

made impracticable without his fault by the occurrence of an event

the non-occurrence of which was a basic assumption on which the

contract was made . . . ." Restatement (Second) of Conts. § 261

term of the contract). When a condition is made by agreement of the parties, see id. § 226, "[n]o particular form of language is necessary . . . although such words as 'on condition that,' 'provided that' and 'if' are often used for this purpose," id. § 226 cmt. a. The phrase "subject to" is noticeably absent from this short list of examples. Moreover, "[a]n intention to make a duty conditional may be manifested by the general nature of an agreement, as well as by specific language. Whether the parties have, by their agreement, made an event a condition is determined by the process of interpretation." Id. In addition to the other reasons we have explained, the acquisition of the facts necessary to determine the parties' intent will also inform whether "subject to" was meant to represent a condition to Prudential's obligations, if any, prior to initiating an increase to the premiums.

- 24 - (Am. Law Inst. 1981). Whether impracticability would ultimately

affect either party's performance, however, cannot be determined

on this record.

Bottom line, there is no dispute that Prudential did not

seek the approval of the Commissioner before raising Parmenter's

premiums in 2019 and 2020. Because we cannot resolve the meaning

of the "subject to" clause on the current record, we reverse the

judgment as to Prudential and remand for further proceedings.7

Tufts

Parmenter's allegations in her complaint focus primarily

on Prudential. As to Tufts, she alleges that the Summary Plan

Description names it as "the Plan Sponsor and Plan Administrator,"

which she says makes Tufts a fiduciary under ERISA but does not

specify the type of fiduciary duty Tufts owed to her. The only

allegation that Tufts breached a duty shows up within count 1

(requesting equitable relief in the form of reformation and

disgorgement of the increased premiums Prudential received) where

she alleges: "Tufts, as a co-fiduciary, did not take actions to

7 Prudential also argues that Parmenter has not suffered a loss because she is still receiving the coverage under the policy to which she's entitled, even if limited coverage after her decision to pay the lower premium. Parmenter responds that her loss was the additional money she paid for the twice-increased premiums before she exercised the nonforfeiture option. If Parmenter ultimately wins on the alleged breach, then she will have suffered a loss as a result of the breach.

- 25 - prevent Prudential from raising premiums and breached its

fiduciary duties to the participants by failing to monitor

Prudential."8 The district court also focused almost exclusively

on Prudential, providing no separate reasoning related to Tufts'

motion to dismiss (though it clearly granted both defendants'

motions to dismiss and entered judgment in favor of both

defendants).

Before us, Parmenter continues to argue that Tufts is

liable as a co-fiduciary for the allegedly unauthorized raise in

premiums because it "failed to do anything to stop Prudential from

breaching the Plan terms." Tufts rejoins that Parmenter has not

stated a plausible claim against it because Tufts "played no role

in the premium increase and derived no financial benefit from it."

Responding to Parmenter's assertion that Tufts had a duty to

monitor Prudential, Tufts says she has not pled any facts that

would show Tufts had an obligation to monitor Prudential or keep

Prudential from increasing the premiums, especially when

Prudential so clearly had the discretion to increase premiums.

8 Parmenter also argues that Tufts, as the named plan administrator in the Summary Plan Description, was a named fiduciary and therefore was responsible for monitoring and controlling fees and expenses paid by plan participants. According to Parmenter (and citing

(16)(A)), Tufts is directly liable even though it wasn't directly involved in setting premiums. Problem is, Parmenter's complaint does not allege Tufts breached this fiduciary duty; instead she only alleges breach as a co-fiduciary.

- 26 - "Co-fiduciary liability is a shorthand rubric under

which one ERISA fiduciary may be liable for the failings of another

fiduciary. Co-fiduciary liability inheres if a fiduciary

knowingly participates in or conceals another fiduciary's breach,

enables such other to commit a breach, or learns about such a

breach and fails to make reasonable efforts to remedy it." Beddall

v. State St. Bank & Tr. Co.,

, 18–19 (1st Cir. 1998)

(citing

(a)). Parmenter's allegations with

respect to Tufts -- that it failed to take any action to prevent

the premium rate increases or "monitor Prudential" -- does not

fall into one of the categories of co-fiduciary liability set forth

in § 1105(a) because there are no allegations Tufts knowingly

participated in, concealed, enabled, or failed to intercede in any

way to influence Prudential's decision to increase the premium

rates which affected Parmenter's premium payments. Based on the

text of section 1105(a), it seemingly contemplates active steps in

furtherance of the breach whereas Parmenter alleges Tufts stood by

and did nothing. We therefore affirm the district court's judgment

dismissing the complaint as to Tufts.

WRAP UP

The district court's judgment is reversed in part and

affirmed in part. Costs are awarded to Appellant.

- 27 -