Stephens v. Time Customer Service, Inc. et al

Filing 40

ORDER: Plaintiff and Counterclaim-Defendant Nina Stephens' Motion to Dismiss the Amended Counterclaim (Doc. # 38 ) is DENIED. Stephens' Answer to the Amended Counterclaim is due December 20, 2017. Signed by Judge Virginia M. Hernandez Covington on 12/6/2017. (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 Plaintiff
and Counterclaim-Defendant Nina Stephens’ Motion to Dismiss
the Amended Counterclaim (Doc. # 38), filed on November 19,
2017. Defendants and Counterclaim-Plaintiffs Time Customer
Service, Inc. Severance Plan (“TCS Plan”) and Henry Lescaille
responded on December 4, 2017. (Doc. # 39). For the reasons
that follow, the Motion is denied.
I.

Background
When Stephens was terminated from her position with Time

Customer Service, Inc., she signed a contractual separation
Agreement and general release. (Doc. # 37 at 14-15). The
Agreement stated that Stephens would receive $34,693.65 in

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severance benefits under the terms of the severance program.
(Id.). To be eligible to receive those benefits, Stephens had
to sign the Agreement and attached release, which Stephens
did. (Id.). The Agreement and release provided, among other
things, that the $34,693.65 was all Stephens was entitled to
and that, if Stephens violated the terms of the Agreement,
“the Company may seek all available relief under law or in
equity, including, but not limited to, recoupment of amounts
paid to” Stephens. (Doc. # 37-2 at 4). The release provided
that Stephens released any claims under ERISA against all
“the Time Inc. Entities and Persons,” each of which was
“intended

to

be

a

third

party

beneficiary

under

this

Agreement.” (Id. at 8).
The TCS Plan and Lescaille have paid the money specified
by the Agreement to Stephens, yet Stephens has sued for
additional benefits under the Plan. According to the TCS Plan
and Lescaille, “[b]y asserting her [ERISA] claims against
[them] in this action, [Stephens] has breached and continues
to breach the terms of the Plan as forth in the Plan Document
itself and the Agreement which is part of the Plan.” (Doc. #
37 at 17).
Stephens filed her three-Count Complaint in this Court
on June 6, 2017, against the TCS Plan and Lescaille as Plan

2

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 to respond to
document requests. (Id.). The TCS Plan and Lescaille filed
their Motion to Dismiss on August 1, 2017, (Doc. # 8), which
the Court denied on August 22, 2017. (Doc. # 15).
Then, on September 5, 2017, the TCS Plan and Lescaille
filed their Amended Answer and Counterclaim, (Doc. # 22),
which Stephens moved to dismiss. (Doc. # 26). On October 24,
2017, the Court granted Stephens’ motion to dismiss the
counterclaim in part. The Court dismissed Counts I and II for
breach of contract and specific performance as preempted by
ERISA but dismissed Counts III and IV for declaratory relief
and equitable restitution with leave to amend. (Doc. # 31).
The TCS Plan and Lescaille filed their Answer and Amended
Counterclaim on November 3, 2017 (Doc. # 37), asserting two
counterclaims:
Declaratory
restitution
1132(a)(3).

Count

Judgment
pursuant
Stephens

I

for
Act

to

declaratory
and

ERISA
moved

Count

relief
II

for

§

502(a)(3),

29

to

dismiss

the

under

the

equitable
U.S.C.

§

Amended

Counterclaim on November 19, 2017. (Doc. # 38). The TCS Plan

3

and Lescaille have responded (Doc. # 39), and the Motion is
ripe for review.
II.

Legal Standard
A motion to dismiss a counterclaim under Federal Rule of

Civil Procedure 12(b)(6) is evaluated in the same manner as
a motion to dismiss a complaint. Stewart Title Guar. Co. v.
Title

Dynamics,

Inc.,

No.

2:04–cv–316–FtM–33SPC,

2005

WL

2548419, at *1 (M.D. Fla. Oct. 11, 2005). Thus, on a motion
to dismiss, this Court accepts as true all the allegations in
the

counterclaim

and

construes

them

in

the

light

most

favorable to the counterclaim plaintiff. Jackson v. Bellsouth
Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004).
Further, this Court favors the counterclaim plaintiff
with all reasonable inferences from the allegations in the
counterclaim. Stephens v. Dep’t of Health & Human Servs., 901
F.2d 1571, 1573 (11th Cir. 1990). But,
[w]hile a [counterclaim] 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

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a legal conclusion couched as a factual allegation.” Papasan
v. Allain, 478 U.S. 265, 286 (1986).
III. Analysis
A.

Declaratory Judgment Claim

In Count I, the TCS Plan and Lescaille plead a claim
under the federal Declaratory Judgment Act. (Doc. # 37 at
19). They seek “a judicial declaration of their rights and
duties under the terms of the Plan as set forth in the Plan
Document and the Agreement which is part of the Plan and the
rights and duties of [Stephens], including a determination
that [Stephens] is bound by the General Release . . . .”
(Id.).
As the Court previously explained, the TCS Plan and
Lescaille can assert a claim under the Declaratory Judgment
Act to obtain a declaration as to the terms of the policy.
(Doc. # 31 at 14)(citing Prudential Ins. Co. of Am. v. Doe,
76 F.3d 206, 210 (8th Cir. 1996)). But Stephens asserts that
there is no potential or pending federal claim by her that
could provide federal subject matter jurisdiction. (Doc. # 38
at 3). She contends — without any citation to authority —
that her own ERISA claims do not qualify as such a potential
or pending federal action because “the agreement and attached

5

release can and will be litigated as part of this action.”
(Id.).
The

Court

disagrees.

That

there

is

factual

overlap

between Stephens’ claims and the TCS Plan and Lescaille’s
declaratory judgment claim does not support that Stephens’
ERISA claims should not be considered a relevant pending
federal claim. Regardless, even if no basis for original
federal jurisdiction existed for this declaratory judgment
claim, the Court would be free to exercise its supplemental
jurisdiction

over

this

claim

because

the

TCS

Plan

and

Lescaille also assert an ERISA claim. See Lucas v. Acheson,
No. 2:14-CV-0856-SLB, 2015 WL 685638, at *8 (N.D. Ala. Feb.
18,

2015)(holding

jurisdiction

over

that
the

“the

court

declaratory

has

judgment

supplemental
claim”

where

plaintiffs also brought a federal interpleader claim).
B.

Claim for Equitable Relief under ERISA

In Count II, the TCS Plan and Lescaille assert a claim
for equitable relief to enforce the terms of the Plan under
ERISA, 29 U.S.C. § 1132(a)(3). (Doc. # 37 at 21-22); see 29
U.S.C.

§

1132(a)(3)

(providing

that

a

participant,

beneficiary, or fiduciary may seek either an injunction or
“other appropriate equitable relief” in order “to redress
such

violations”

or

“to

enforce

6

any

provisions

of

this

subchapter or the terms of the plan”). They allege that
Stephens “has been unjustly enriched by her refusal to adhere
to the terms of the Agreement” because Stephens waived and
released the ERISA claims she currently asserts as a condition
precedent

to

her

receiving

the

$34,693.65

in

severance

benefits. (Id. at 21). The TCS Plan and Lescaille “seek all
appropriate equitable relief . . . to enforce the terms of
the Plan, including equitable restitution from Counterclaim
Defendant of the $34,693.65 severance payment made to her
under the terms of the Plan.” (Id.).
Stephens argues this claim should be dismissed because
“a right to recoupment does not exist” under the language of
the Agreement or the Plan summary attached to the Amended
Counterclaim. (Doc. # 38 at 4-5). The Court disagrees. The
TCS Plan and Lescaille persuasively contend they do not need
to identify a specific recoupment provision in the Plan
because their claim seeks “all available equitable relief,”
including

equitable

restitution,

as

provided

under

§

1132(a)(3). (Doc. # 39 at 4-5).
And, even if a specific Plan provision were required,
the TCS Plan and Lescaille correctly note that such provision
is included in the Agreement. (Id. at 5-6). To the extent
Stephens

argues

the

Agreement

7

and

release,

or

the

Plan

summary, are not part of the Plan and thus are not subject to
§ 1132(a)(3), the Court previously rejected that argument as
inappropriate for the pleading stage. See (Doc. # 31 at
18)(noting that the Court “need not determine, at this stage,”
whether the Agreement and release are terms of the TCS Plan
and that “the TCS Plan and Lescaille may seek to enforce the
Agreement through § 1132(a)(3) under the theory that the
letter Agreement and release are part of the TCS Plan’s
terms”).
Nor does the Court agree with Stephens that the language
in the Agreement, that “the Company [Time Inc.] may seek
recoupment,”

prevents

the

TCS

Plan

and

Lescaille

from

asserting this claim. (Doc. # 38 at 5-6). Although this
language specifies Time Inc., rather than the TCS Plan and
Lescaille, the release attached to the Agreement specifies
that all entities and people associated with Time Inc. are
covered by the release and are intended to be third party
beneficiaries of the Agreement. (Doc. # 37 at 22; Doc. # 372 at 8). Therefore, the TCS Plan and Lescaille have plausibly
alleged that they can seek recoupment at least as third party
beneficiaries of the Agreement.
Stephens also argues that the release’s terms do not
apply to her ERISA claims because “the release expressly

8

provides that it does not constitute a waiver of Stephens’
right to vested accrued benefits” or “of claims arising after
the date the release was signed.” (Doc. # 38 at 6-7). Stephens
insists her ERISA action fits within both exceptions, and
thus she has not violated the release. (Id.). The Court agrees
with the TCS Plan and Lescaille that this argument is more
appropriate for the summary judgment stage when the Court can
address when Stephens’ ERISA claims arose and whether her
benefits were vested. (Doc. # 39 at 10-11). For now, the
Amended Counterclaim plausibly alleges that Stephens’ ERISA
claims were waived under the release, and thus Stephens has
breached the terms of the Plan. (Doc. # 37 at 21). The Amended
Counterclaim states a claim for equitable relief under §
1132(a)(3).
IV.

Conclusion
Both

Counts

of

the

Amended

Counterclaim

survive.

Stephens’ Motion is denied and her answer to the Amended
Counterclaim is due December 20, 2017.
Accordingly, it is now
ORDERED, ADJUDGED, and DECREED:
(1)

Plaintiff

and

Counterclaim-Defendant

Nina

Stephens’

Motion to Dismiss the Amended Counterclaim (Doc. # 38)
is DENIED.

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(2)

Stephens’ Answer to the Amended Counterclaim is due
December 20, 2017.
DONE and ORDERED in Chambers in Tampa, Florida, this 6th

day of December, 2017.

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