Braden v. Utility Trailer Manufacturing Company, Inc. et al
MEMORANDUM OPINION AND ORDER GRANTING 16 MOTION to Dismiss Counts Four and Five; Counts Four and Five are DISMISSED with prejudice. Signed by Chief Judge William Keith Watkins on 11/14/14. (Attachments: # 1 civil appeals checklist)(djy, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
MANUFACTURING CO., INC.,
CASE NO. 1:14-CV-635-WKW
MEMORANDUM OPINION AND ORDER
Plaintiff brings this action against Defendant Utility Trailer Manufacturing
Co., Inc. (“Utility Trailer”), pursuant to the Employee Retirement Income Security
Act of 1974 (“ERISA”), as amended, 29 U.S.C. §§ 1001, et seq. Before the court
is Defendant’s Motion to Dismiss Counts Four and Five. (Doc. # 16.) Plaintiff did
not file a response to the motion, although permitted to do so under the General
Briefing Order (Doc. # 8), thus, indicating that she has “no opposition to the
motion” (Doc. # 11, § 6). Upon an independent review of the motion to dismiss,
the court finds that it is due to be granted.
I. JURISDICTION AND VENUE
Subject-matter jurisdiction over Plaintiff’s action against Utility Trailer is
proper pursuant to 28 U.S.C. §§ 1331, 1132(e).
personal jurisdiction or venue.
The parties do not contest
II. STANDARD OF REVIEW
When evaluating a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), the court must take the facts alleged in the complaint as true
and construe them in the light most favorable to the plaintiff. Resnick v. AvMed,
Inc., 693 F.3d 1317, 1321–22 (11th Cir. 2012). To survive Rule 12(b)(6) scrutiny,
“a complaint must contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “[F]acial
plausibility” exists “when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550 U.S. at 556).
Plaintiff Amanda Braden’s father died in February 2007, when Plaintiff was
thirteen years old. Plaintiff’s father was a long-time employee of Utility Trailer in
Enterprise, Alabama, and a participant in his employer’s profit sharing plan (the
“Plan”). At the time of her father’s death, Plaintiff was a fifty-percent beneficiary
of her father’s Plan funds.
In May 2007, Plaintiff’s maternal grandparents, Ray and Ruth Jerkins,1 filed
a petition on Plaintiff’s behalf in the Juvenile Court of Coffee County, Alabama,
requesting the appointment of a guardian ad litem for Plaintiff. The petition
requested an order directing the appointed guardian ad litem to “take all steps
necessary to determine the amounts available for the child, and to petition the
Probate Court of Coffee County, Alabama, to name a Conservator for the Estate of
the minor child.” (Petition (Ex. A to 2d Am. Compl.); see also 2d Am. Compl.
¶ 9.) In June 2007, the juvenile court granted the petition and appointed a guardian
ad litem. (Order (Ex. B to 2d Am. Compl.).)
After reaching the age of majority and having not yet received her fiftypercent share of her father’s Plan benefits, Plaintiff obtained the services of an
attorney. Acting on Plaintiff’s behalf, that attorney requested from Utility Trailer,
“the status of the funds belonging to Amanda Braden that were held by Utility
Trailer . . . for Richard Lee Braden.”2 (April 25, 2013 letter (Ex. E to 2d Am.
Compl.); see also 2d Am. Compl. ¶ 15.) In a letter dated April 30, 2013, Utility
Trailer responded that “there are no funds belonging to Amanda” in the Plan.
(April 2013 letter (Ex. C to 2d Am. Compl.).) Utility Trailer explained:
Plaintiff also sues Ms. Jerkins for conversion under state law, invoking the court’s
supplemental jurisdiction under 28 U.S.C. § 1367. This opinion does not address the state-law
The Plan lists Utility Trailer “as both the Administrator and named fiduciary.” (2d Am.
Compl. ¶ 7.)
On June 28, 2007, we received an Order from the Juvenile Court of
Coffee County, Enterprise Division, appointing Mr. John F. Grimes,
Esq as guardian ad litem. This Order was filed by the court on June
11, 2007; at the request of Mr. Grimes we proceeded to disburse
Amanda’s share on November 28, 2007 and May 28, 2008. The
checks were made payable to Ruth Jerkins FBO Amanda Braden.
(April 2013 letter; see also 2d Am. Compl. ¶ 14.) Plaintiff alleges that she is aware
of only a single check issued by Utility Trailer. The check is dated December 4,
2007, in the amount of $22,369.72, and, as Plaintiff emphasizes, is payable to
“Ruth Jerkins,” not “Ruth Jerkins FBO Amanda Braden.” (2d Am. Compl. ¶¶ 21–
23; see also Ex. D to 2d Am. Compl..)
Plaintiff brought this lawsuit against Utility Trailer alleging that it failed to
comply with the Plan’s requirements, did not pay the “appropriate beneficiary,”
improperly denied Plaintiff her benefits under the Plan, and breached its fiduciary
duties by paying Plan funds to a non-beneficiary and by “delegate[ing] decisionmaking to the guardian ad litem based upon an Order that did not provide for such
authority.” (2d Am. Compl. ¶¶ 17, 20, 28–29.) The governing Second Amended
Complaint sets forth seven counts against Utility Trailer under ERISA: (1) a claim
for benefits under the Plan presumably under 29 U.S.C. § 1132(a)(1)(B) (Count 1);
(2) breach of fiduciary duty under § 1132(a)(2) (Count 2); (3) breach of fiduciary
duty under § 1132(a)(1)(B) (Count 3); (4) breach of fiduciary duty under
§ 1132(a)(3) (Count 4); (5) breach of fiduciary duty under 29 U.S.C. §§ 1104 and
1105 (Count 5); (6) removal of Defendant as a fiduciary with respect to the plan
under 29 U.S.C. § 1109 (Count 6); and (7) an award of attorney’s fees under 29
U.S.C. § 1132(g) (Count 7). In the “prayer for relief,” Plaintiff requests on all
seven counts a declaration that the Plan “is obligated to pay the Plaintiff the
amount due her from the Plan,” a full accounting of the Plan, an order of restitution
to Plaintiff and the Plan, costs, and reasonable attorney’s fees. (2d Am. Compl.,
Utility Trailer’s motion seeks dismissal of Counts 4 and 5. The counts are
addressed in turn.
Relying on Varity v. Howe, 516 U.S. 489 (1996), and post-Varity Eleventh
Circuit case law, Utility Trailer argues that Count 4, the § 1132(a)(3) claim, fails to
state a claim upon which relief can be granted because it is “based on the same
factual predicate” as the § 1132(a)(1)(B) claim in Count 3. (Doc. # 16, at 2.)
In Varity, the Supreme Court held that § 1132(a)(3) empowered a
beneficiary to bring a cause of action for breach of fiduciary duty. The Court
remarked in dicta, though, that “where Congress elsewhere provide[s] adequate
relief for a beneficiary’s injury, there will likely be no need for further equitable
relief, in which case such relief normally would not be ‘appropriate’” under
§ 1132(a)(3).3 516 U.S. at 515.
The Eleventh Circuit has interpreted Varity’s dicta to mean that § 1132(a)(3)
is a “‘catchall’ provision that provides relief only for injuries that are not otherwise
adequately provided for by ERSIA.” Ogden v. Blue Bell Creameries USA, Inc.,
348 F.3d 1284, 1287 (11th Cir. 2003). “[A]n ERISA plaintiff who has an adequate
remedy under Section 502(a)(1)(B) cannot alternatively plead and proceed under
Section 502(a)(3).” Id. (citing Katz v. Comprehensive Plan of Grp. Ins., 197 F.3d
1084, 1088 (11th Cir. 1999)).
Additionally, the “availability of relief under
Section 502(a)(3) [is] in no way dependent on the success or failure of the Section
502(a)(1)(B) claim because ‘the availability of an adequate remedy under the law
for Varity purposes, does not mean, nor does it guarantee, an adjudication in one’s
favor.’”4 Id. (quoting Katz, 197 F.3d at 1089).
The Eleventh Circuit has cautioned that, although Varity and Katz speak in
terms of “relief” and “remedy,” those terms do not refer to the type of relief that a
Section 1132(a)(3) provides:
A civil action may be brought by a participant, beneficiary, or fiduciary (A) to
enjoin any act or practice which violates any provision of this title or the terms of
the plan, or (B) to obtain other appropriate equitable relief (i) to redress such
violations or (ii) to enforce any provisions of this title or the terms of this plan.
Section 502 of ERISA is codified at 29 U.S.C. § 1132. Section 502(a)(1)(B) is,
therefore, 29 U.S.C. § 1132(a)(1)(B), and § 502(a)(3) is 29 U.S.C. § 1132(a)(3).
plaintiff seeks in the complaint. Jones v. Am. Gen. Life & Accident Ins. Co., 370
F.3d 1065, 1073 (11th Cir. 2004). Rather, the focal point of Varity’s inquiry for
determining “whether the plaintiffs had stated a claim under [Section 1132(a)(3)],
was whether the plaintiffs also had a cause of action, based on the same
allegations, under [Section 1132(a)(1)(B)] or ERISA’s other more specific
The proper inquiry, therefore, is “whether the
allegations supporting the Section 502(a)(3) claim [are] also sufficient to state a
cause of action under Section 502(a)(1)(B), regardless of the relief sought . . . .”
Defendant focuses on Counts 3 and 4’s identical allegations that Utility
Trailer “breached its fiduciary duty when it denied benefits it owed to the Plaintiff
and misappropriated them.” (Compl. ¶¶ 30, 31.) The court must ask, though,
whether the allegations supporting the § 1132(a)(3) claim in Count 4 state a cause
of action under § 1132(a)(1)(B) for purposes of Count 3.5 As the factual predicate
Count 3, although alleging § 1132(a)(1)(B) as an “alternative” breach-of-fiduciary
claim, more appropriately is characterized as a claim alleging a denial of benefits under the Plan.
(See 2d Am. Compl. ¶ 30 (alleging that Utility Trailer “breached its fiduciary duty when it
denied benefits it owed to the Plaintiff”)); see also § 1132(a)(1)(B) (providing that “[a] civil
action may be brought – by a . . . beneficiary – . . . to recover benefits due to him under the terms
of his plan”); Hahnemann Univ. Hosp. v. All Shore, Inc., 514 F.3d 300, 309 (3d Cir. 2008)
(“When a denial of ‘benefits due’ arises from a plan administrator’s breach of its fiduciary
obligations to the claimant, Sections 1132(a)(1)(B) and (d) permit the beneficiary to seek redress
for the breach directly from the plan administrator as a fiduciary.”). The court treats Count 3 as a
denial-of-benefits claim. See Fed. R. Civ. P. 8(e) (“Pleadings must be construed so as to do
justice.”); see also Tabb-Pope v. SAN, Inc., No. 12cv2139, 2013 WL 5707327, at *7 (N.D. Ala.
Oct. 21, 2013) (observing that “[t]he fact these allegations are pled as a separate ‘breach of
fiduciary duty’ claim does not change the fact that they are a ‘benefits’ claim, properly pled
underlying Count 4, Plaintiff alleges that she is a beneficiary under the Plan, that
Utility Trailer owed her benefits under the Plan, and that Utility Trailer’s breach of
its fiduciary duties resulted in the wrongful denial of her benefits. These facts are
sufficient to state a cause of action under § 1132(a)(1)(B) for the recovery of
benefits allegedly owed Plaintiff under the Plan. See § 1132(a)(1)(B) (providing
that a beneficiary can bring a civil action “to recover benefits due to him under the
plan”); see also Varity, 516 U.S. at 512 (Section 1132(a)(1)(B) “specifically
provides a remedy for breaches of fiduciary duty with respect to the interpretation
of plan documents and the payment of claims.” (emphasis added)). On these facts,
resort to § 1132(a)(3) is not necessary.
Plaintiff, whose silence is construed as a concession to Defendant’s
argument, fails to demonstrate that § 1132(a)(1)(B) is not an adequate statutory
vehicle to pursue her claim under § 1132(a)(3) that Utility Trailer’s breach of
fiduciary duty resulted in the denial of her lawfully owed Plan benefits. She also
fails to show, nor can the court independently conceive of a way, that her
§ 1132(a)(3) claim might provide “other appropriate equitable relief” for an injury
that is “not otherwise adequately provided for by” § 1132(a)(1)(B). Ogden, 348
F.3d at 1287. Accordingly, Plaintiff cannot simultaneously pursue Counts 3 and 4
under § 502(a)(1)(B)”). In this regard, the redundancy of Counts 1 and 3 is acknowledged but is
outside the parameters of the relief Utility Trailer presently seeks, which is the dismissal of
Counts 4 and 5. Additionally, treating Count 3 as a denial-of-benefits claim does not preclude
Plaintiff from seeking relief for breach of fiduciary duty: Section 1132(a)(2) provides relief for
breach of fiduciary duty, and Count 2 of the Second Amended Complaint alleges such a claim.
for violations of § 1132(a)(1)(B) and § 1132(a)(3), respectively, and Defendant’s
motion to dismiss Count 4 is due to be granted.
Utility Trailer urges dismissal of Count 5 on grounds that §§ 1104 and 1105
“set forth fiduciary standards, but do not create their own enforcement
mechanism.”6 (Doc. # 16, at 3.)
Again, Plaintiff offers no rebuttal to this
Section 1132 is the civil enforcement mechanism for obtaining redress for
ERISA violations. Section “1104 does not grant civil enforcement for breach of
fiduciary duty.” Heroux v. Humana Ins. Co., No. 04cv304, 2005 WL 1377854,
at *4 (N.D. Ill. June 8, 2005). “Civil enforcement is instead found in §§ 1132(a)(2)
and 1109.” Id.; see also Keck v. Liberty Mut./Liberty Life Assur. Co. of Boston,
No. 06-13438, 2006 WL 3386760, at *1 n.1 (E.D. Mich. Nov. 21, 2006)
(explaining that § 1104 “sets forth the duties of a fiduciary,” that § 1109
“establishes the liability of a fiduciary for breach of its fiduciary duties,” and that
§ 1132 “grants a participant the authority to file a civil action for relief under
Section 1109”); Clark v. Hewitt Assocs., LLC, 294 F. Supp. 2d 946, 949 (N.D. Ill.
2003) (observing that the plaintiff “must bring a civil action for violation of
Section 1104 requires a fiduciary to “discharge his duties with respect to a plan solely in
the interest of the participants and beneficiaries.” Section 1105 sets out the circumstances under
which a fiduciary is liable for a breach committed by another fiduciary with respect to a plan.
[§ 1104] under 29 U.S.C. § 1132”); Dearmas v. Av-Med, Inc., 814 F. Supp. 1103,
1108 (S.D. Fla. 1993) (observing that § 1104 defines “fiduciaries’ duties (the
prudent man standard) and [that] § 1132 provides for the civil enforcement of
Count 5 alleges breaches of fiduciary duties under §§ 1104 and 1105 but
does not identify the section of ERISA’s enforcement provisions that permit a
cause of action. Counts 2 and 6 rely specifically, however, on § 1132(a)(2) and
§ 1109 as the statutory mechanism for seeking relief for Utility Trailer’s alleged
breaches of fiduciary duties. Without explanation from Plaintiff, it is difficult to
comprehend what different or additional type of claim Plaintiff is attempting to
plead in Count 5. On this record, Count 5 will be dismissed, but Plaintiff is not
foreclosed from relying on §§ 1104 and 1105 as supplying the standards of
fiduciary duty for purposes of Counts 2 and 6.
For the foregoing reasons, it is ORDERED that Defendant’s Motion to
Dismiss Counts Four and Five (Doc. # 16) is GRANTED and that Counts Four and
Five are DISMISSED with prejudice.
DONE this 14th day of November, 2014.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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