CANNELLA et al v. BOONE
ORDER DISMISSING the ERISA claim without prejudice. Absent the ERISA claim, the Court has discretion whether to retain the conversion claim and, on balance, declines to do so. The Trustees' complaint is accordingly DISMISSED without prejudice. Ordered by US DISTRICT JUDGE MARC THOMAS TREADWELL on 7/5/2017. (tlh)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
DEWEY CANNELLA, et al.,
LUE REA BOONE,
CIVIL ACTION NO. 5:15-CV-258 (MTT)
The Plaintiffs—Dewey Cannella, Alphonse Rispoli, Jr., Louis Sanchez, Aron
Forem, Bruce Vivadelli, and Frank Miraglia, in their capacity as Trustees for the WWEC
Local 863 Pension Plan (the “Trustees”)—moved for summary judgment on their claims
against the Defendant—Lue Rea Boone. Doc. 23. The Trustees assert two counts in
their complaint: Count I under ERISA, 29 U.S.C. § 1132(a)(3), (Doc. 1 ¶¶ 22-23); and
Count II for conversion under Georgia law (Doc. 1 ¶¶ 24-25). The core of the Trustees’
complaint is that Boone continued to accept her late husband’s “monthly pension
payments in the amount of $3,549.69 for the period March 2013 through December
2014,” which were delivered via direct deposit. Doc. 1 ¶ 16.
The Trustees sought summary judgment because “the undisputed evidence,
including the testimony [of the] Defendant, shows that she was on notice that she was
not entitled to her deceased husband’s pension payments, but that she continued to
accept that [sic] those payments and convert them to her own use in violation of the
terms of the Pension Plan document and Georgia law.” Doc. 23-7 at 7. And, “The
amount of the pension payments so converted and owing to Plaintiffs is . . . undisputed.”
Id. As an equitable remedy under 29 U.S.C. § 1132(a)(3), the Trustees requested that
the Court impose “a constructive trust over the mistaken pension payments to the extent
those funds have not been dissipated, permanently enjoin Defendant from further
disposing or transferring any of the funds still in her possession and control, [and]
require the return of such funds and a tracing of any portion of the funds no longer in
her control.” Id. at 5. The record does not demonstrate that any of the pension funds
remain or that there are any traceable proceeds. See Doc. 23-1 ¶¶ 15-17.
Boone, who is pro se, did not file a response.
The Court, having some concerns with the Trustees’ motion, scheduled a hearing
for April 18, 2017. See Doc. 25 (minute sheet). At the hearing, counsel for the Trustees
conceded that the Trustees have no meritorious claim for an ERISA remedy on these
facts because of the Supreme Court’s decision in Montanile v. Board of Trustees of
National Elevator Industry Health Benefit Plan, 136 S. Ct. 651 (2016). The Trustees,
though they have had the opportunity to do so, offer no reason why the ERISA claim
should not be dismissed for this reason; accordingly, the ERISA claim is DISMISSED
The Trustees’ complaint asserts that the Court’s sole basis of jurisdiction over
their state law conversion claim is supplemental jurisdiction under 28 U.S.C. § 1367.
Doc. 1 ¶ 6. In light to the potential dismissal of their ERISA claim, the Court ordered
the Trustees to show cause why the Court should continue exercise jurisdiction over the
conversion claim. Doc. 26.
District courts . . . possess the authority to dismiss claims
brought under § 1367(a) if:
(1) the claim raises a novel or complex issue of State
(2) the claim substantially predominates over the claim or
claims over which the district court has original
(3) the district court has dismissed all claims over which it
has original jurisdiction, or
(4) in exceptional circumstances, there are other
compelling reasons for declining jurisdiction.
28 U.S.C. § 1367(c); Parker, 468 F.3d at 743 (“Any one of
the section 1367(c) factors is sufficient to give the district
court discretion to dismiss a case’s supplemental state law
claims.”). Once any of these factors is satisfied, the district
court possesses the discretion to dismiss supplemental
claims and must “weigh . . . at every stage of the litigation,”
whether to dismiss the supplemental claims. . . . Actually
determining whether to dismiss the claims calls for the court
to weigh the “host of factors” outlined [prior case law]:
“judicial economy, convenience, fairness, and comity.” . . .
. . . . “A district court abuses its discretion if it applies an
incorrect legal standard, follows improper procedures in
making the determination, or makes findings of fact that are
clearly erroneous.” Klay v. United Healthgroup, Inc., 376
F.3d 1092, 1096 (11th Cir. 2004) (quotation marks omitted);
see also Estate of Amergi ex. rel. Amergi v. Palestinian
Auth., 611 F.3d 1350, 1365 (11th Cir. 2010) (“A district court
does not abuse its discretion when it has a range of choices
and the court’s choice does not constitute a clear error of
judgment.” (quotation marks omitted)).
Ameritox, Ltd. v. Millennium Labs., Inc., 803 F.3d 518, 532 (11th Cir. 2015).
The Trustees appear to concede that, because they have no viable ERISA claim,
the Court has discretion to dismiss their conversion claim under 28 U.S.C. § 1367(c)(3).
However, the Trustees offer several arguments in support of their position that the Court
should exercise its discretion to retain jurisdiction over the conversion claim.1 Doc. 27
First, the Trustees note the advanced stage of the case—“the parties have
engaged in full discovery, including the exchange of documents, subpoenas, and [taking
Boone’s] deposition[,] Plaintiffs have filed a motion for summary judgment[,] and . . .
attended a hearing [thereon].” Id. at 3. The Court understands that the summary
judgment stage is usually considered “advanced” when it comes to the lifecycle of a
case. On the other hand, the Trustees do not argue that they would not be able to use
Likely due to their position that the conversion claim is not preempted and the lack of any such
argument by Boone, the Trustees have not asserted that jurisdiction is proper under 28 U.S.C. § 1332 via
the exception to the well-pleaded complaint rule set out in Aetna Health Inc. v. Davila, 542 U.S. 200
(2004) and related case law. Accordingly, the Court does not consider this question further.
the discovery in a future state action. Moreover, the Trustees have not expended a
great deal of resources on their motion for summary judgment on the conversion claim;
their supporting memorandum devotes less than three pages to it. Doc. 23-7 at 5-7.
And, contrary to the Trustees’ suggestion that maintaining jurisdiction would
“support the conservation of judicial energy and avoid [the] multiplicity in litigation . . .
[created by] [h]aving a state court rehash issues that have already been argued in
federal court” (Doc. 27 at 4 (quotation marks and citations omitted)), the Court has
made no decisions relevant to the conversion claim. Indeed, the Court has resolved
almost nothing in this case. Other than denying a motion for default judgment against
Boone (Doc. 8), the Court’s sole substantive involvement in the case has been the
status conference regarding the Trustees’ summary judgment motion.
Lastly, as counsel for the Trustees acknowledged at the hearing, one reason this
issue is coming up later in the case is because the Supreme Court decision that
undercut their ERISA claim—Montanile—was handed down after this case was filed.
Accordingly, though the stage of the case does weigh slightly in favor of the Trustees’
position, it is only slightly.
Second, the Trustees argue that “the factor of ‘convenience’ [would not] be
served by dismissing the case and requiring Plaintiffs to start over in state court.” Doc.
27 at 4. Other than reintroducing arguments related to the stage of the litigation, the
Trustees offer no convenience consideration other than the lack of any significant
convenience of dismissal to Boone. Accordingly, this consideration is not helpful.
Third, the Trustees assert that the conversion claim is “neither novel [nor]
complex.” Id. This assertion is supported by neither explanation nor argument. The
Though a run-of-the-mill state tort claim is not usually novel or complex within the
meaning of 28 U.S.C. § 1367(c)(1), some tort claims raise novel or complex questions
of state law.2 Ameritox, Ltd., 803 F.3d at 532; Parker v. Scrap Metal Processors, Inc.,
468 F.3d 733, 743 (11th Cir. 2006). The Court has raised some questions about the
conversion claim that the Trustees have yet to answer. See Doc. 24. For example, the
Trustees argue that Boone converted Pension Plan funds. But the Trustees assume
that the funds deposited by the Plan into Boone’s account were the Plan’s funds, not
Boone’s, when Boone took any action regarding them. “[T]he presumption [is] that one
in possession of money has title to it[;] [T]hus [one must overcome this presumption to] .
. . establish the first element of the prima facie case for conversion, i.e., that plaintiff has
title to the allegedly converted property.” Tidwell v. Wedgestone Financial (In re
Hercules Auto. Prod., Inc.), 245 B.R. 903, 912 (Bankr. M.D. Ga. 1999). The Trustees
have yet to recognize this difficulty or make any appropriate argument.
Of course, it appears that the funds should not have been disbursed under the
Plan documents and that Boone had some notice of this, so the Trustees might have
retained some rights in the funds. Id. But the Trustees have neither made nor
supported this argument. Moreover, the Trustees have not considered whether Georgia
courts would allow a legal remedy in such circumstances. These matters are best left to
Georgia courts. Cf. Ameritox, Ltd., 803 F.3d at 533 (noting that the question of whether
violation of “Stark Law and the anti-kickback statute” could demonstrate “unfair,
deceptive, or unconscionable business practices” for purposes of state law claims was a
novel and complex state law question). This factor weighs heavily in favor of declining
the exercise of jurisdiction.
In conclusion, the Court, as noted above, DISMISSES the ERISA claim without
prejudice. Absent the ERISA claim, the Court has discretion whether to retain the
conversion claim and, on balance, declines to do so. The Trustees’ complaint is
accordingly DISMISSED without prejudice.
The comity considerations represented by the 28 U.S.C. § 1367(c)(1) inquiry should be considered
regardless of the subsection(s) of § 1367(c) upon which the Court relies.
SO ORDERED this 5th day of July, 2017.
S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT
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