MacDonald v. Associates for Restorative Dentistry, Ltd. Pension Plan et al
Filing
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OPINION AND ORDER: DENYING 4 MOTION to Dismiss Plaintiff's Complaint for Improper Venue Pursuant to Rule 12(B)(3) or In the Alternative to Transfer Venue Pursuant to 28 USC 1404 by Defendants Associates for Restorative Dentistry Ltd Pension Plan, James J Furmanek, Carle E Kibbitt. Signed by Judge Theresa L Springmann on 8/29/2016. (lhc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
JULIE MACDONALD,
Plaintiff,
v.
ASSOCIATES FOR RESTORATIVE
DENTISTRY LTD. PENSION
PLAN, et al.,
Defendant.
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CAUSE NO.: 2:16-CV-168-TLS
OPINION AND ORDER
This matter is before the Court on the Defendants’ Motion to Dismiss Plaintiff’s
Complaint for Improper Venue or, in the Alternative, Transfer Venue [ECF No. 4], filed on June
7, 2016. On May 12, 2016, the Plaintiff, Julie MacDonald, filed a four-count Complaint [ECF
No. 1] against the Defendants, Associates for Restorative Dentistry, Ltd. (the “Defendant
Corporation”), the Pension Plan of Associates for Restorative Dentistry, Ltd. (the “Plan”), James
Furmanek, and Carle Kibbitt (collectively “the Defendants”). The Defendants then moved to
dismiss the Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(3), asserting that venue
was improper in the Northern District of Indiana; alternatively, the Defendants sought to transfer
venue to the Northern District of Illinois, pursuant to 28 U.S.C. § 1404. On June 20, 2016, the
Plaintiff filed its Response to the Defendants’ Motion to Dismiss [ECF No. 9]. On June 28, 2016,
the Defendants filed their Reply in Support of their Motion to Dismiss [ECF No. 11]. With this
matter now being fully briefed, the Court denies the Defendants’ Motion to Dismiss or, in the
Alternative, Transfer Venue.
COMPLAINT ALLEGATIONS
The Plaintiff is an Indiana resident and the Defendant Corporation is an Illinois
corporation. (Compl. ¶¶ 4, 6, ECF No. 1.) The Defendant Corporation employed the Plaintiff
from 1998 until 2015. (Id. ¶ 8.) On May 1, 2001, the Plaintiff began participating in the Plan and
the “Plaintiff’s accrued retirement benefit under the Plan [wa]s fully vested and non-forfeitable.”
(Id.) On December 15, 2003, the Defendants allegedly froze the Plan’s accrued benefits and did
not notify the Plaintiff of that decision until June 11, 2007. (Id. ¶¶ 9–10.)
On May 12, 2016, the Plaintiff filed a lawsuit against the Defendants alleging four counts
arising under the federal Employee Retirement Income Security Act of 1974 (ERISA). First,
pursuant to 29 U.S.C. § 204(h), the Plaintiff seeks “an additional three (3) years of benefit
accrual for purposes of computing her Accrued Retirement Benefit under the . . . Plan” because
of the alleged 2003 decision to freeze the Plan. (Id. ¶ 12.) Second, under § 1021(a), the Plaintiff
seeks statutory penalties because the “Defendants have not made timely compliance with” the
Plaintiff’s repeated demands for Plan information. (Id. ¶¶ 18–19.) Third, under §§ 1104–05, the
Defendant Corporation breached its fiduciary duties by “fail[ing] to monitor the performance of
the fiduciaries of the Plan.” (Id. ¶ 21.) Fourth, pursuant to § 1132(g), the Plaintiff seeks statutory
attorneys’ fees. (Id. ¶ 22.)
STANDARD OF REVIEW
On consideration of a motion to dismiss, a court must resolve all factual disputes and
draw all reasonable inferences in the plaintiff’s favor, Faulkenberg v. CB Tax Franchise Sys.,
LP, 637 F.3d 801, 806 (7th Cir. 2011), with the plaintiff then bearing the burden of establishing
that venue is proper, Grantham v. Challenge–Cook Bros., Inc., 420 F.2d 1182, 1184 (7th Cir.
1969). If venue is improper, the court may either dismiss the suit or transfer it to a district in
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which the plaintiff could have initially filed the suit if “it be in the interest of justice.” 28 U.S.C.
§ 1406(a).1 Venue can be proper in more than one district. See Armstrong v. LaSalle Bank Nat’l
Ass’n, 552 F.3d 613, 617 (7th Cir. 2009).
The Plaintiff may demonstrate proper venue under ERISA’s venue provision, 29 U.S.C.
§ 1132(e)(2), or under the federal venue statute, 28 U.S.C. § 1391(b). See Varsic v. U.S. Dist.
Court for Cent. Dist. of Cal., 607 F.2d 245, 248 (9th Cir. 1979) (“The ERISA venue provision is
intended to expand, rather than restrict, the range of permissible venue locations.”); 14D Charles
Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3825 (4th ed.) (“The ERISA
venue provision is not exclusive.”). Under ERISA, venue is proper in a district court of the
United States: (1) “where the plan is administered,” (2) “where the breach took place,” or, (3)
“where a defendant resides or may be found.” § 1132(e)(2). Under the federal venue statute,
venue is proper in a district court of the United States: (1) “in which any defendant resides, if all
defendants reside” in the same State, (2) “in which a substantial part of the events or omissions
giving rise to the claim occurred,” or if (1) or (2) do not apply, then (3) “any judicial district in
which any defendant is subject to the court’s personal jurisdiction with respect to such action.”
§ 1391(b).
ANALYSIS
The Court has subject matter jurisdiction over this case because the Plaintiff’s claims
arise under federal law. 28 U.S.C. § 1331. The Plaintiff asserts that venue is proper under 29
U.S.C. § 1132(e)(2) because the Defendants’ breaches of ERISA occurred in the Northern
District of Indiana. (Compl. ¶ 3.) Additionally, the Plaintiff asserts that venue is proper under 28
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By contrast, if venue is proper in the district where the case is initially filed, that court retains discretion
to order transfer pursuant to 28 U.S.C. § 1404(a).
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U.S.C. § 1391(b) because the causes of action giving rise to this dispute arose in the Northern
District of Indiana. (Id.) The Defendants challenge venue on the grounds that the alleged
breaches did not occur in the Northern District of Indiana and thus § 1132(e)(2) is not met;
alternatively, the Defendants seek to transfer venue to the Northern District of Illinois pursuant
to 28 U.S.C. § 1404(a). As explained below, the Court finds that venue is proper in the Northern
District of Indiana and declines to transfer venue.
A.
Motion to Dismiss for Improper Venue
This Motion to Dismiss turns upon the meaning of the second provision of ERISA’s
venue provision—“where the breach took place.” The leading Courts of Appeals decisions on 29
U.S.C. § 1132(e)(2) have not interpreted “where the breach took place” for purposes of
determining venue. See, e.g., Waeltz v. Delta Pilots Ret. Plan, 301 F.3d 804, 807 n.1 (7th Cir.
2002) (declining to consider one-sentence, “undeveloped argument” that the “breach took place”
in the district where the plaintiffs lived); Varsic, 607 F.2d at 250 n.4 (finding that venue was
proper under the defendant “may be found” provision of § 1132(e)(2) and declining to consider
“whether one or more of the other alternative bases . . . might be applicable as well”).
The trend among other district courts is that the place “where the breach took place”
means “the place where pension benefits are received, which is plaintiff’s residence . . . .” E.g.,
Strickland v. Trion Grp., Inc., 463 F. Supp. 2d 921, 925–26 (E.D. Wis. 2006); Cole v. Cent.
States Se. & Sw. Areas Health & Welfare Fund, 225 F. Supp. 2d 96, 98 (D. Mass. 2002);
Wallace v. Am. Petrofina, Inc., 659 F. Supp. 829, 832 (E.D. Tex. 1987); Bostic v. Ohio River Co.
(Ohio Div.) Basic Pension Plan, 517 F. Supp. 627, 636–37 (S.D. W. Va. 1981).2 The Court
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There is a split of authority regarding this interpretation, Schoemann ex rel. Schoemann v. Excellus
Health Plan, 447 F. Supp. 2d 1000, 1002 (D. Minn. 2006) (collecting cases), but those cases finding that
the breach occurs where payments originated “are older and fewer than those finding that the breach
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adopts this interpretation of § 1132(e)(2) because it is consistent with principles of statutory
interpretation and congressional intent in enacting ERISA.
First, this interpretation of § 1132(e)(2) satisfies the “cardinal principle of statutory
construction that a statute ought . . . to be so construed that . . . no clause, sentence, or word shall
be superfluous, void, or insignificant.” TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001) (internal
quotation marks omitted). To find a breach only where a benefits check was issued would render
this provision superfluous because “the place of breach would always be the place where the
plan is administered.” Strickland, 463 F. Supp. 2d at 925–26; Cole, 225 F. Supp. 2d at 98.
Interpreting “where the breach took place” to mean the district where the recipient expected to
receive benefits presents no such problem.3 Second, this interpretation is consistent with
Congress’s purposes behind ERISA, which was intended “to provide the full range of legal and
equitable remedies available in both state and federal courts and to remove jurisdictional
procedural obstacles . . . for recovery of benefits due to participants.” Strickland, 463 F. Supp. 2d
at 925–26; Cole, 225 F. Supp. 2d at 98. The district where the plaintiff expects to receive
benefits will typically be where the plaintiff resides, thereby enabling recovery closer to home.
In the present case, the Plaintiff resides in the Northern District of Indiana; as such, that is
the district in which the Plaintiff expected to receive benefits. The Plaintiff alleges that the
Defendants failed to pay her benefits and provide her notices of the “cessation of future
retirement benefit accruals as required by ERISA § 204(h).” (Compl. ¶¶ 10, 13.) Thus, the Court
concludes that the alleged breaches took place in the Northern District of Indiana. Accordingly,
occur[s] where the plan beneficiary was to receive payments on his claim.” Garvey v. Piper Rudnick LLP
Long Term Disability Ins. Plan, No. 07-886-AS, 2008 WL 410088, at *8 (D. Or. Feb. 12, 2008).
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This interpretation comports with suits for breach in other contexts. For instance, a cause of action for
breach of contract typically accrues in the place “where the contract is to be performed” or its “benefits
are [to be] received.” See, e.g., Wallace, 659 F. Supp. at 832; Bostic, 517 F. Supp. at 636.
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venue is proper in the Northern District of Indiana pursuant to the “breach” provision of 29
U.S.C. § 1132(e)(2).4
B.
Motion to Transfer
Alternatively, the Defendants ask the Court to transfer venue to the Northern District of
Illinois. Title 28 of the United States Code, § 1404(a), provides that “[f]or the convenience of
parties and witnesses, in the interest of justice, a district court may transfer any civil action to
any other district or division where it might have been brought or to any district or division to
which all parties have consented.” The movant bears the burden of showing that the transferee
court is clearly more convenient. K & F Mfg. Co. v. W. Litho Plate & Supply Co., 831 F. Supp.
661, 664 (N.D. Ind. 1993). The decision to transfer a case pursuant to § 1404(a) ultimately lies
within the transferor court’s discretion. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th
Cir. 1986) (“The weighing of factors for and against transfer necessarily involves a large degree
of subtlety and latitude, and therefore, is committed to the sound discretion of the trial judge.”).
The Court balances the following interests in analyzing convenience: “(1) the plaintiff’s
choice of forum, (2) the situs of the material events, (3) the relative ease and access to sources of
proof, (4) the convenience of the witnesses, and (5) the convenience of the parties of litigating in
the respective forums.” Schumacher v. Principal Life Ins. Co., 665 F. Supp. 2d 970, 977 (N.D.
Ind. 2009). A transfer should not be granted if it merely shifts convenience from one party to
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The preceding analysis most clearly applies to Counts One, Two, and Four of the Plaintiff’s Complaint.
(Compl. ¶¶ 9–20, 22.) It is unclear whether Count Three satisfies § 1132(e)(2), as the Defendant
Corporation’s alleged breach of its fiduciary duties likely did not occur in the Northern District of
Indiana. Despite this, venue is nonetheless proper under 28 U.S.C. § 1391(b): the Plaintiff anticipated that
she would receive benefits at her home within the Northern District of Indiana, but the Defendant
Corporation’s alleged “failure to monitor the performance of the fiduciaries of the Plan” led to no benefit
disbursements. (Compl. ¶ 21.) Thus, “a substantial part of the events or omissions giving rise to the
claim”—the harm that the Defendant Corporation allegedly caused the Plaintiff as a result of failing to
monitor its fiduciaries—occurred in the Northern District of Indiana. § 1391(b).
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another. K & F Mfg. Co., 831 F. Supp. at 664. The analysis regarding the interests of justice
focuses on the efficient administration of the court system. See Coffey, 796 F.2d at 219–20.
Here, the Defendant has not persuaded the Court that venue transfer is appropriate. First,
venue is proper in both the Northern District of Indiana, as discussed above, and in the Northern
District of Illinois, given that the Defendants “may be found” there and the Plan is
“administered” there. 29 U.S.C. § 1132(e)(2). Second, the Northern District of Indiana is
convenient to the parties and their witnesses, and also enables access to relevant sources of proof
given the short distance between the districts in Indiana and Illinois. See Peterson v. U.S. Steel
Corp., 624 F. Supp. 44, 46 (N.D. Ill. 1985) (“[Section] 1404(a) should not be invoked for
transfer between courts separated by a short and easily traveled distance . . . .”). Transferring to
the Northern District of Illinois would merely “shift convenience from one party to another” at
the expense of the Plaintiff’s chosen forum. K & F Mfg. Co., 831 F. Supp. at 664. Finally, the
interests of justice do not favor transfer, as the arguments made by the Defendants do not show
how a trial in the Northern District of Indiana would impair the efficient administration of
justice. Thus, the Court concludes that the § 1404(a) factors are not met.
CONCLUSION
Based on the foregoing, the Court DENIES the Defendants’ Motion to Dismiss Plaintiff’s
Complaint for Improper Venue or, in the Alternative, Transfer Venue [ECF No. 4].
SO ORDERED on August 29, 2016.
s/ Theresa L. Springmann
THERESA L. SPRINGMANN
UNITED STATES DISTRICT COURT
FORT WAYNE DIVISION
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