Stephens v. Time Customer Service, Inc. et al
Filing
15
ORDER: Defendants Time Customer Service, Inc., Severance Plan and Henry Lescaille's Motion to Dismiss (Doc. # 8 ) is DENIED. Defendants' answers to the Complaint are due September 5, 2017. Signed by Judge Virginia M. Hernandez Covington on 8/22/2017. (DMD)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
NINA STEPHENS,
Plaintiff,
v.
Case No. 8:17-cv-1338-T-33AEP
TIME CUSTOMER SERVICE, INC.,
SEVERANCE PLAN and HENRY
LESCAILLE, as Plan
Administrator,
Defendants.
______________________________/
ORDER
This
matter
comes
before
the
Court
pursuant
to
Defendants Time Customer Service, Inc., Severance Plan and
Henry Lescaille’s Motion to Dismiss (Doc. # 8), filed on
August 1, 2017. Plaintiff Nina Stephens filed a response on
August 14, 2017. (Doc. # 10). For the reasons that follow,
the Motion is denied.
I.
Background
For
Service,
many
Inc.,
years,
which
Stephens
“is
an
worked
for
Time
Customer
organization
that
provides
fulfillment services in the publishing industry services.”
(Doc. # 1 at ¶¶ 8, 12). On July 23, 2015, Stephens “received
a
termination
letter
and
severance
1
package,”
with
her
termination becoming effective on September 11, 2015. (Id. at
¶ 13). Because she was an employee of Time Customer Service,
Inc., Stephens alleges she is a participant in the Time
Customer Service, Inc., Severance Plan (TCS Plan). (Id. at ¶¶
9, 11). Yet, “[t]he termination letter stated that Stephens
was eligible for certain payments and benefits under the Time
Inc. Severance Plan for Regular Employees (Time Inc. Plan)”
— a different plan. (Id. at ¶ 14)(emphasis added). Eligibility
for benefits was contingent on Stephens signing a release,
which she did. (Id.).
“The Time Inc. Plan provides, in pertinent part, that
persons covered by the plan receive severance pay in an amount
equal to two weeks of weekly pay for each year of service.”
(Id. at ¶ 15). In contrast, the TCS Plan “provides that [Time
Customer Service], in its discretion, may adopt a severance
program” and that “severance benefits are to be paid under
the terms of that program.” (Id. at ¶ 9). Stephens had 17.97
years of service with Time Customer Service at the time of
her severance but “she was offered only one week’s severance
pay for each year of service.” (Id. at ¶ 16).
Then, on December 8, 2015, “Stephens filed a written
claim for benefits with both the Plan Administrator for the
TCS Plan and the Plan Administrator for the Time Inc. Plan.”
2
(Id.
at
¶
17).
“In
her
claim,
among
other
things,
she
requested that each of these plan administrators provide to
her and incorporate into her claims file all the calculations
they
made
that
were
relevant
to
the
determination
of
Stephens’[s] benefits under” the Time Inc. Plan and under the
TCS
Plan.
numerous
(Id.).
other
Also
in
documents
her
claim,
including,
Stephens
among
requested
others:
“all
benefit booklets and similar materials that referred to the
provisions” of the TCS Plan or Time Inc. Plan; “all board
resolutions” pertaining to the TCS Plan and the Time Inc.
Plan; “all correspondence relating to her claim for benefits”
under the TCS Plan and Time Inc. Plan; and “any documents,
board resolutions or administrative actions that modified or
amended the plan terms” of either plan. (Id.). “These requests
were not addressed or responded to.” (Id.).
Also on December 8, 2015, Stephens’s attorneys sent a
letter “request[ing] that each Plan Administrator explain
fully their justification for concluding that [Stephens’s]
severance benefit was equivalent” to one week of base pay per
year
and
“request[ing]
all
documents
relating
to
this
conclusion.” (Id. at ¶ 18). “This request was not addressed
or responded to.” (Id.).
3
Later, “[b]y letter dated March 18, 2016, Stephens,
through her attorneys, notified both plan administrators that
Stephens had made a formal claim for benefits under the TCS
Plan and the Time Inc. Plan and a formal request for Plan
documents.” (Id. at ¶ 19). That letter noted that the previous
letter was never responded to and that the statutory deadline
to provide the requested documents had passed. (Id.). In
response, the Vice President and Deputy General Counsel for
Time sent an email and “enclosed as attachments the plan
document for the TCS Plan and the plan document for the Time
Severance Plan.” (Id. at ¶ 20). The letter also enclosed,
among other things, the “portion of the TCS Plan [Summary
Plan Description] that dealt with claims procedures.” (Id.).
Then,
on
March
29,
2016,
“Lescaille
sent
by
email
to
Stephens’[s] counsel a so called fully executed agreement and
release for Stephens.” (Id. at ¶ 21).
After
“Stephens
[]
exhausted
her
administrative
remedies” (Id. at ¶ 22), she filed her three-Count Complaint
in this Court on June 6, 2017, against the TCS Plan and
Lescaille as Plan Administrator for the TCS Plan. (Doc. # 1).
The Complaint asserts claims under ERISA §§ 502(a)(1)(B),
502(a)(3), and 502(c)(1), as codified in 29 U.S.C. § 1132,
for denial of benefits, breach of fiduciary duty, and failure
4
to respond to document requests. (Id.). Defendants filed
their Motion to Dismiss on August 1, 2017. (Doc. # 8).
Stephens responded on August 14, 2017. (Doc. # 10). The Motion
is ripe for review.
II.
Legal Standard
On a motion to dismiss, this Court accepts as true all
the allegations in the complaint and construes them in the
light most favorable to the plaintiff. Jackson v. Bellsouth
Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004). Further,
this
Court
favors
the
plaintiff
with
all
reasonable
inferences from the allegations in the complaint. Stephens v.
Dep’t of Health & Human Servs., 901 F.2d 1571, 1573 (11th
Cir. 1990)(“On a motion to dismiss, the facts stated in [the]
complaint and all reasonable inferences therefrom are taken
as true.”). However,
[w]hile a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide
the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
level.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal
citations omitted). Courts are not “bound to accept as true
5
a legal conclusion couched as a factual allegation.” Papasan
v. Allain, 478 U.S. 265, 286 (1986).
Furthermore, “[t]he scope of review must be limited to
the four corners of the complaint.” St. George v. Pinellas
Cty., 285 F.3d 1334, 1337 (11th Cir. 2002). There is “an
exception, however, in cases in which a plaintiff refers to
a document in its complaint, the document is central to its
claim, its contents are not in dispute, and the defendant
attaches the document to its motion to dismiss.” Fin. Sec.
Assur., Inc. v. Stephens, Inc., 500 F.3d 1276, 1284 (11th
Cir. 2007). “In this context, ‘undisputed’ means that the
authenticity of the document is not challenged.” Day v.
Taylor,
400
F.3d
1272,
1276
(11th
Cir.
2005)(internal
citation omitted). A consideration in determining whether a
document is central to a plaintiff’s claim is “whether the
plaintiff would have had to offer the document in order to
prove its case.” Fin. Sec. Assur., Inc., 500 F.3d at 1285.
III. Analysis
As a preliminary matter, the Court notes that Defendants
have
attached
copies
of
the
termination
letter,
general
release, and an excerpt of the TCS Plan to their Motion. (Doc.
## 8-1, 8-2). Defendants assert the Court may consider these
documents without converting the Motion to a motion for
6
summary judgment because “Plaintiff refers to them in her
Complaint and they are central to her claims.” (Doc. # 8 at
4 n. 2-3). Defendants are correct that all the documents are
referenced in the Complaint. But Stephens insists that the
general release is not central to her claims because she “does
not have to offer a copy of the release to prevail.” (Doc. #
10 at 5). The Court disagrees. The Complaint states Stephens’s
eligibility
for
severance
payments
and
benefits
was
contingent upon signing the release, which Stephens did.
(Doc. # 1 at ¶ 14). Thus, to show that she was eligible for
benefits, Stephens would need to produce the release she
alleges she signed. Therefore, the Court finds that all the
documents, including the release, are central to Stephens’s
claims. The Court may consider these documents in its analysis
without
converting
the
Motion
to
a
motion
for
summary
judgment.
Now, the Court will analyze Defendants’ arguments in
turn.
A.
Count I
Defendants argue Count I, under ERISA § 502(a)(1)(B), 29
U.S.C.
§
1132(a)(1)(B),
“should
be
dismissed
because
[Stephens] has released and waived” her claim for additional
benefits
under
the
Severance
7
Plan.
(Doc.
#
8
at
2).
Specifically, they argue Stephens “released any claim that
she is entitled to a different level of benefits than those
specified
in”
the
termination
letter
agreement
when
she
signed a release. (Id. at 8).
Release and waiver are affirmative defenses. Fed. R.
Civ. P. 8(c)(1). As such, Count I can only be dismissed if it
is clear on the face of the Complaint that Stephens waived or
released her claim for additional severance benefits. See
LeFrere v. Ouezada, 582 F.3d 1260, 1263 (11th Cir. 2009)(“If
the complaint contains a claim that is facially subject to an
affirmative defense, that claim may be dismissed under Rule
12(b)(6).”).
Defendants emphasize that the termination letter stated
Stephens would receive 17.97 weeks of base pay, or $34,693.65,
in severance benefits, which is one week of base pay per year
of Stephens’s employment. (Doc. # 8 at 8; Doc. # 8-2 at 23). That letter also advised that eligibility to receive those
benefits was dependent on signing a release. (Doc. # 8-2 at
5).
That
release
stated
that,
by
signing,
Stephens
releasing:
any and all claims, whether known or unknown, which
Releasors ever had or may now have against any of
the Time Inc. Entities and Persons arising out of
[her] employment, the terms and conditions of such
employment, and/or the termination or separation of
8
was
[her] employment, including but not limited to . .
. (ii) any claims under the Employmnet Retirement
Income Security Act of 1974 (except as set forth
below)
(Doc. # 8-2 at 8). The exceptions to the release include,
among others, “claims to enforce the Agreement” and any
“rights to accrued, vested benefits under any qualified or
non-qualified employee benefit plan of the Company or its
parent companies or subsidiaries (in accordance with the
terms of the official plan documents and applicable law).”
(Id. at 9).
Defendants argue the vested benefits exception does not
apply to Stephens’s claim because Stephens “seeks severance
benefits under the TCS [] Plan which did not vest until all
conditions
including
precedent
the
to
the
requirement
receipt
that
of
such
[Stephens]
benefits,
execute
the
[release], were met.” (Doc. # 8 at 8 at n.7). Thus, according
to Defendants, “the first moment [Stephens] became entitled
to any benefits under the TCS [] Plan, and thus any such
benefits could be considered ‘accrued’ or ‘vested,’ was when
she executed the [release] and waived her right to assert a
claim for any further severance benefits.” (Id.).
In response, Stephens argues that, even if the release
attached to the Motion is considered, the applicability of
9
the affirmative defense of release is not clear on the face
of the Complaint. (Doc. # 10 at 4-5). She asserts that
Defendants have not made a sufficient showing that the release
is valid and stresses that “[t]he severance program promised
by the letter in reality consisted of a jumbled assortment of
writings that was hardly a model of clarity.” (Id. at 2, 45).
The Court agrees with Stephens. Although the release may
ultimately be found valid, the Court is unable to make that
determination at this time. Defendants have focused on the
release’s existence, but they have not addressed its validity
or
the
circumstances
surrounding
its
signing.
And
the
Complaint plausibly implies Stephens was confused because the
termination letter referenced the Time Inc. Plan, rather than
the TCS Plan, as determining the amount of her severance
benefits. (Doc. # 1 at 3; Doc. # 10 at 2). Therefore, the
Court cannot determine at this time whether the release was
knowingly and voluntarily executed by Stephens. See Bacon v.
Stiefel Labs., Inc., No. 09-21871-CV-KLNG, 2011 WL 4944122,
at *4 (S.D. Fla. Oct. 17, 2011)(noting that “the knowing and
voluntary standard based on the totality of the circumstances
applies to releases of ERISA claims” and that the Eleventh
Circuit applies a six-factor test in determining whether a
10
release
of
federal
statutory
claims
was
knowing
and
voluntary).
Without providing any analysis as to the validity of the
release, Defendants have not established that Stephens’s
claim for benefits is barred. At this juncture, Count I for
additional severance benefits survives. Defendants may still
raise their release argument at the summary judgment stage or
trial.
B.
Counts II and III
Defendants argue Counts II and III, based on Defendants’
failure to respond to Stephens’ requests for information and
documents, should be dismissed because: (1) Stephens “has no
standing as a ‘participant’ under ERISA”; (2) she “is not
eligible for equitable relief under ERISA § 502(a)(3) because
she has a cause of action under a separate ERISA enforcement
provision”; and (3) she “failed to exhaust her administrative
remedies under the Plan with respect to such claims as
required.” (Doc. # 8 at 2).
i.
Equitable Relief Is Not Precluded
In Count II, Stephens asserts a claim for equitable
relief for breach of fiduciary duty under ERISA § 502(a)(3).
Defendants allegedly breached their fiduciary duty by failing
to
timely
provide
requested
documents
11
and
information
—
similar allegations underlie Count III, which is brought
under ERISA §§ 502(a)(3) and 502(c)(1). (Doc. # 1 at 6-7).
“The United States Supreme Court has stated that section
502(a)(3) of ERISA is a ‘“catchall” provision[]’ that ‘act[s]
as a safety net, offering appropriate equitable relief for
injuries caused by violations that [section] 502 does not
elsewhere adequately remedy.’”
Gilmore v. Am. Basketball
Ass’n Players’ Ret. Plan, No. 3:15-cv-337-J-JRK, 2015 WL
12806538, at *8 (M.D. Fla. Nov. 19, 2015)(quoting Varity Corp.
v. Howe, 516 U.S. 489, 512 (1996)). Thus, “[i]n determining
whether
a
plaintiff
has
stated
a
claim
under
section
502(a)(3), the ‘relevant concern’ is whether the plaintiff
‘also had a cause of action, based on the same allegations,
under Section 502(a)(1)(B) or ERISA’s other more specific
remedial provisions.’” Brown v. Validata Computer & Research
Corp., No. 2:12CV775-SRW, 2013 WL 3422477, at *4 (M.D. Ala.
July 8, 2013)(quoting Jones v. American General Life and
Accident Ins. Co., 370 F.3d 1065, 1073 (11th Cir.), rehearing
and suggestion for rehearing en Banc den., 116 F. App’x 254
(2004)).
A claim under § 502(a)(3) is barred if another provision
of § 502 provides an adequate remedy. So, the Court must
determine “whether the allegations supporting the Section
12
502(a)(3) claim [are] also sufficient to state a cause of
action”
under
another
of
ERISA’s
more
specific
remedial
provisions. Jones, 370 F.3d at 1073. “Notwithstanding this
rule,
one
may
still
plead
an
equitable
claim
in
the
alternative, particularly at the pleading stage, based on
allegations for which [another ERISA provision] does not
provide an adequate remedy.” Gilmore, 2015 WL 12806538, at
*8.
Defendants
argue
that
Count
II
should
be
dismissed
because the remedy available under ERISA § 502(c)(1), which
Stephens is pursuing in Count III, provides sufficient relief
for the failure to provide documents alleged in Count II.
(Doc. # 8 at 12-13). ERISA § 502(a)(1)(A) allows a participant
or beneficiary to bring a civil action for the relief provided
for in § 502(c)(1). 29 U.S.C. § 1132(a)(1)(A). And § 502(c)(1)
provides for a $100 per day penalty for a plan administrator
“who fails or refuses to comply with a request for any
information which such administrator is required by [ERISA’s
protection of employee benefits provisions] to furnish to a
participant or beneficiary” within 30 days. 29 U.S.C. §
1132(c)(1)(B). Because the basis for a § 502(c)(1) claim is
the
failure
to
provide
information
or
documents
ERISA
requires be provided, Defendants reason a claim under the §
13
502(a)(3)
catchall
for
failure
to
provide
documents
and
information is precluded. Cf. Brown, 2013 WL 3422477, at *45 (dismissing breach of fiduciary duty claim based on failure
to provide documents as barred by ERISA § 502(a)(1)(A) claim
for violation of § 104(b)(4)).
But
Stephens
argues
she
requested
information
and
documents from Defendants that are not covered by ERISA §
104(b)(4), a provision that specifies certain items a plan
administrator must disclose upon request and that may be
enforced through ERISA § 502(c)(1). (Doc. # 10 at 8-9). Count
II is based on the Plan Administrator’s failure to provide
“information as to the calculation of [Stephens’s] benefits”,
the “justification for the conclusion that [Stephens] was
entitled to benefits equivalent to 17.97 weeks of pay,”
“benefits booklets for the TCS Plan,” and “for correspondence
related to Stephens’[s] claim for benefits.” (Doc. # 1 at ¶
26). In contrast, ERISA § 104(b)(4) only requires a plan
administrator
to
“furnish
a
copy
of
the
latest
updated
summary, plan description, and the latest annual report, any
terminal report, the bargaining agreement, trust agreement,
contract,
or
established
other
or
instruments
operated.”
29
under
U.S.C.
which
§
the
plan
1024(b)(4).
is
Thus,
Stephens argues: “Because it applies only to a limited range
14
of documents, ERISA § 104(b)(4) does not provide an adequate
remedy
to
Stephens
who
has
requested
information
not
available under that section.” (Doc. # 10 at 8).
And Defendants have not pointed out another remedial
provision of ERISA that would require providing the specific
information
referenced
in
Count
II.
Nor
have
Defendants
argued that a breach of fiduciary duty claim under § 502(a)(3)
cannot be predicated upon a failure to provide information
that is not explicitly required to be provided by another
provision of ERISA. Therefore, Defendants have not shown that
Count II is based upon requested information that another
specific
remedial
provision
of
ERISA
required
the
Plan
Administrator to provide, or that it otherwise fails to state
a claim. As such, Count II survives the motion to dismiss
stage.
ii.
ERISA
§
Stephens has Standing as a Participant
502(a)(3)
provides
that
a
“participant”
or
“beneficiary” may bring a civil action for equitable relief
to redress violations of or to enforce any provisions of the
ERISA subchapter or the terms of the plan at issue. 29 U.S.C.
§ 1132(a)(3). Similarly, ERISA § 502(c)(1) provides for daily
penalties for a plan administrator “who fails or refuses to
comply
with
a
request
for
any
15
information
which
such
administrator is required by this subchapter to furnish to a
participant
or
beneficiary.”
1132(c)(1)(B)(emphasis added).
29
U.S.C.
Thus, to have
§
standing to
bring such claims for breach of fiduciary duty and failure to
provide information, “the plaintiff must be a participant or
beneficiary at the time the information is requested” and “at
the time the action is commenced.” Estate of Prince v. Aetna
Life Ins. Co., No. 8:08-cv-468-T-24TGW, 2008 WL 4327049, at
*2 (M.D. Fla. Sept. 18, 2008).
ERISA defines a “participant” as
any employee or former employee of an employer, or
any member or former member of an employee
organization, who is or may become eligible to
receive a benefit of any type from an employee
benefit plan which covers employees of such
employer or members of such organization, or whose
beneficiaries may be eligible to receive any such
benefit.
29 U.S.C.A. § 1002(7). Furthermore, “[t]he Supreme Court has
found that ‘participant’ in the context of ERISA” includes
“‘former
employees
who
have
a
reasonable
expectation
of
returning to covered employment or who have a colorable claim
to vested benefits.’” Winchester v. Pension Comm. of Michael
Reese Health Plan, Inc. Pension Plan, 942 F.2d 1190, 1192–93
(7th Cir. 1991)(quoting Firestone Tire & Rubber Co. v. Bruch,
489 U.S. 101, 117 (1989)).
16
Defendants argue Counts II and III, brought under ERISA
§§
502(a)(3)
and
502(c)(1),
should
be
dismissed
with
prejudice because Stephens was not a “participant” under
ERISA, and thus lacks standing. (Doc. # 8 at 9-11). They
insist that “it was clear [Stephens] had no further right to
any benefits from the TCS [] Plan” and had “no colorable
ability to claim further benefits from the Plan because she
had expressly released and waived any such right.” (Id. at
10). “Therefore, [Stephens] was not a participant in the TCS
[] Plan at the time she made her request for information from
the Plan Administrator on December 8, 2015, and she had no
right under ERISA to the information requested.” (Id.).
But the Complaint alleges “Stephens is a participant in
the TCS Plan.” (Doc. # 1 at ¶ 11). Stephens felt she was not
paid the full benefits she was owed under the TCS Plan because
the termination letter referenced a separate plan, the Time
Inc. Plan, under which employees are entitled to two weeks of
pay per year of service. (Id. at ¶¶ 14-16). She then made
requests
for
information
through
her
formal
claim
for
benefits under either the TCS Plan or the Time Inc. Plan, as
well as through a separate letter requesting information.
(Id. at ¶¶ 17-19). Stephens insists that, “[b]ecause [she]
did not get her full benefits under the TCS Plan at the time
17
she filed suit, she was and remains a participant in the TCS
Plan for ERISA purposes.” (Doc. # 10 at 6-7).
At this juncture, the Court agrees these allegations are
sufficient to show Stephens has standing to pursue her claims.
Stephens alleges she is a participant in the TCS Plan and
plausibly pled that she was not paid the full benefits offered
to her through the Plan. Therefore, Counts II and III survive.
iii. Stephens
Remedies
Has
Exhausted
her
Administrative
Defendants also argue Stephens has failed to exhaust her
administrative remedies for her breach of fiduciary duty and
request for documents claims. (Doc. # 8 at 13-14). Defendants
assert
that
exhaust,
the
Stephens
“did
administrative
not
even
claims
initiate,
procedure
much
in
the
less
TCS
Severance Plan, nor has she alleged that such exhaustion would
be futile.” (Id. at 14). But it is not clear that Stephens
failed to exhaust her administrative remedies. Indeed, the
Complaint states “Stephens has exhausted her administrative
remedies.” (Doc. # 1 at ¶ 22). The exhibits to the Motion do
not contradict this assertion. For the motion to dismiss
stage, this allegation is sufficient and Counts II and III
survive.
Accordingly, it is now
18
ORDERED, ADJUDGED, and DECREED:
(1)
Defendants Time Customer Service, Inc., Severance Plan
and Henry Lescaille’s Motion to Dismiss (Doc. # 8) is
DENIED.
(2)
Defendants’ answers to the Complaint are due September
5, 2017.
DONE and ORDERED in Chambers in Tampa, Florida, this
22nd day of August, 2017.
19
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