Titus v. Operating Engineers' Local 324 Pension Fund
OPINION AND ORDER DENYING PLAINTIFF'S 1ST MOTION FOR LEAVE TO AMEND COMPLAINT 35 . Signed by District Judge Gershwin A. Drain. (TBan)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
ROBERT E TITUS, JR.,
Case No. 16-cv-10951
UNITED STATES DISTRICT COURT JUDGE
GERSHWIN A. DRAIN
OPERATING ENGINEERS’ LOCAL
324 PENSION FUND,
UNITED STATES MAGISTRATE JUDGE
ANTHONY P. PATTI
OPINION AND ORDER DENYING PLAINTIFF’S 1ST MOTION FOR LEAVE TO AMEND
This is a denial of benefits case under the Employee Retirement Income
Security Act (“ERISA”). Plaintiff moves to amend his complaint, one year after
filing his original complaint and twenty-two days after the Court issued an opinion
and order granting Defendant’s Motion for Partial Judgment on the Pleadings. For
the reasons that will follow, Plaintiff’s 1st Motion for Leave to Amend Complaint is
II. Factual Background
Robert Titus (“Plaintiff” or “Titus”) worked for Connelly Crane, a crane rental
company. Dkt. No. 14, p. 8 (Pg. ID 473). Plaintiff operated and maintained
construction cranes. Plaintiff became a member of the Operating Engineers’ Local
324 Pension Plan (“the Plan”) in August 1978. Dkt. No. 1, p. 3 (Pg. ID 3). The Plan
offers a Service Pension for active participants who are at least 55 years old and have
at least 30 years of credited service. Id. In February 2014, Plaintiff became eligible
for a Service Pension. Id., p. 4 (Pg. ID 4). That same month, Plaintiff explored
retiring and pursuing his own sales and consulting company (BJ Crane Consulting).
Id. There were risks to starting his own company. Plaintiff knew he might lose his
retirement income. Id. Plaintiff sought to embark on running his own company only
if he could still receive his pension benefits. Id., p. 5 (Pg. ID 5). According to ERISA
and its regulations:
A right to an accrued benefit derived from employer contributions shall
not be treated as forfeitable solely because the plan provides that the
payment of benefits is suspended for such period as the employee is
employed, subsequent to the commencement of payment of such
benefits-(i) in the case of a plan other than a multiemployer plan, by an employer
who maintains the plan under which such benefits were being paid; and
(ii) in the case of a multiemployer plan, in the same industry, in the
same trade or craft, and the same geographic area covered by the plan,
as when such benefits commenced.
The Secretary shall prescribe such regulations as may be necessary to
carry out the purposes of this subparagraph, including regulations with
respect to the meaning of the term “employed”.
29 U.S.C. § 1053 (a)(3)(B).
Status determination. If a plan provides for benefits suspension, the
plan shall adopt a procedure, and so inform employees, whereunder an
employee may request, and the plan administrator in a reasonable
amount of time will render, a determination of whether specific
contemplated employment will be section 203(a)(3)(B) service for
purposes of plan provisions concerning suspension of benefits.
Requests for status determinations may be considered in accordance
with the claims procedure adopted by the plan pursuant to section 503
of the Act and applicable regulations.
29 C.F.R. § 2530.203-3 (b)(6).
In February 2014, Plaintiff requested a Status Determination from the Pension
Plan regarding whether his proposed new business would result in suspension of his
retirement benefits. Dkt. No. 1, p. 6 (Pg. ID 6). Plaintiff spoke with the Pension
Plan’s Manager, Duane Menter. Dkt. No. 14, p. 9 (Pg. ID 474). Menter informed the
Plaintiff that establishing BJ Crane Consulting and working as a sales representative
and consultant would not result in the loss of his retirement benefits provided that
he was not operating and maintaining cranes (also called bargaining unit work) or
paid directly by his former employer. Id., p. 10 (Pg. ID 475). The conversation with
Menter was later confirmed in a March 28, 2014 letter:
As Mr. Titus described this opportunity to me, he would be establishing
a consulting company, recognized by the IRS and with a unique Tax
Identification Number and as proprietor of this Consulting Company
would be doing work within the construction industry. I explained to
him that as long as he was not personally working for an employer
obligated to contribute to the Local 324 Pension and that the work he
would be performing would not be that which would be covered under
a Collective Bargaining Agreement (Bargaining Unit Work) that he
would not be in violation of the Pension Fund’s rules regarding retirees
who return to work.
Dkt. No. 14-2.
According to the Plaintiff, the Plan also allowed retirees to perform less than
40 hours per month of bargaining unit work without having their retirement benefits
suspended. Dkt. No. 14, p. 10 (Pg. ID 475). Plaintiff relied on his conversation with
Mr. Menter, retired, applied for a Service Pension, and opened BJ Crane Consulting.
Id., p. 11 (Pg. ID 476). Plaintiff maintains that he did occasional bargaining unit
work, but never exceeded 40 hours per month. Id.
On February 6, 2015, approximately ten months after starting BJ Crane
Consulting, the Plan informed the Plaintiff that his retirement benefits were being
suspended. Dkt. No. 14-6, p. 2 (Pg. ID 508). According to the Plan, Plaintiff was
working “forty (40) or more hours in the same trade or craft in which [he was]
employed while participating in the [Plan].” Id.
Plaintiff filed his original Complaint on March 16, 2016. Plaintiff’s original
Complaint asserted three claims: (1) illegal suspension of benefits pursuant to
ERISA § 502(a)(3) (Count I), (2) failure to provide a full and fair review pursuant
to ERISA § 502(a)(3) (Count II), and (3) recovery of suspended benefits pursuant to
ERISA § 502(a)(1)(B) (Count III). Dkt. No. 1.
On October 31, 2016, the Plan filed a Motion for Partial Judgment on the
Pleadings. Dkt. No. 19. The critical issue in deciding the Motion for Partial
Judgment was whether Count I and Count II of the original Complaint failed as a
matter of law.
On February 27, 2017, the Court granted the Plan’s motion, in part, and found
that Count I and Count II of the original Complaint failed to state a claim under
ERISA § 502(a)(3). Dkt. No. 34. After the Court’s decision, only Plaintiff’s recovery
of suspended benefits claim (pursuant to ERISA § 502(a)(1)(B)) remained viable.
On March 22, 2017, Plaintiff filed a Motion for Leave to Amend Complaint. Dkt.
No. 35. Attached to the motion is an amended Complaint (hereinafter “Proposed
Complaint”). Compared to the original Complaint, the Proposed Complaint adds
new factual allegations and alleges four Counts. Proposed Count I seeks to enjoin
the Plan from future ERISA violations, pursuant to ERSIA § 502(a)(3). Dkt. No. 352, p. 15 (Pg. ID 1204). Proposed Count II seeks to reform the Plan to comply with
ERISA, pursuant to ERISA § 502(a)(3). Id., p. 22 (Pg. ID 1211). Proposed Count III
seeks to equitably estop the Plan from suspending benefits inconsistently with its
representations, pursuant to ERISA § 502(a)(3). Id., p. 24 (Pg. ID 1213). Proposed
Count IV seeks recovery of Plaintiff’s suspended benefits, pursuant to ERISA
502(a)(1)(B). Id., p. 27 (Pg. ID 1216).
Put simply, the Plaintiff’s original Complaint sought two types of remedies,
injunctive relief pursuant to ERISA § 502(a)(3) and recovery of benefits pursuant to
ERISA § 502(a)(1)(B). This Court found that the original Complaint failed to state
a proper claim for injunctive relief, and dismissed the injunctive relief claims
brought under ERISA § 502(a)(3). After reading the Court’s opinion and order, the
Plaintiff revised his Complaint to compensate for the deficiencies with respect to
III. Legal Standard for Amending Complaint
Under Federal Rule of Civil Procedure 15(a), leave to amend pleadings “shall
be freely given when justice so requires.” FED. R. CIV. P. 15(a). “The decision
whether or not to permit the amendment is committed to the discretion of the trial
court.” Gen. Elec. Co. v. Sargent & Lundy, 916 F.2d 1119, 1130 (6th Cir. 1990)
(citing Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330–32 (1971).
This discretion, however, is limited by Rule 15(a)’s liberal policy of permitting
amendments to ensure the determination of claims on their merits. Id. The Sixth
Circuit usually reviews a district court’s denial of leave to amend for abuse of
discretion. Miller v. Champion Enterprises Inc., 346 F.3d 660, 671 (6th Cir. 2003).
IV. Discussion and Analysis
The Defendant argues that amendment should be denied due to delay and
1. Rule 15 and Delay
Rule 15 does not establish a deadline within which a party must file a motion
to amend. See Lloyd v. United Liquors Corp., 203 F.2d 789, 793 (6th Cir. 1953)
(holding that under Rule 15, “certain amendments may be made, even after
judgment.”) (internal quotations omitted). “Nevertheless, the party requesting leave
to amend must act with due diligence if it wants to take advantage of the Rule’s
liberality.” Parry v. Mohawk Motors of Michigan, Inc., 236 F.3d 299, 306 (6th Cir.
2000) (internal quotations omitted). Thus, where “amendment is sought at a late
stage in the litigation, there is an increased burden to show justification for failing
to move earlier.” Wade v. Knoxville Utilities Bd., 259 F.3d 452, 459 (6th Cir. 2001).
“Courts are especially inclined to deny a motion brought under Rule 15 ‘if the
moving party knew the facts on which the claim or defense sought to be added were
based at the time the original pleading was filed and there is no excuse for his failure
to plead them.’ ” Hoving v. Lawyers Title Ins. Co., 256 F.R.D. 555, 572 (E.D. Mich.
2009) (Lawson, J.) (quoting 6 Charles A. Wright et al., Federal Practice and
Procedure § 1487 (2d ed. 1990)). However, the Sixth Circuit requires “at least some
significant showing of prejudice to deny a motion to amend based solely upon
delay.” Prater v. Ohio Educ. Ass’n, 505 F.3d 437, 445 (6th Cir. 2007) (internal
citations omitted). “Delay that is neither intended to harass nor causes any
ascertainable prejudice is not a permissible reason, in and of itself to disallow an
amendment of a pleading.”
Moore v. City of Paducah, 790 F.2d 557, 561–62 (6th Cir. 1986).
The Defendant argues that the Plaintiff seeks amendment too late into the
case. Dkt. No. 36, p. 8 (Pg. ID 1297). According to the Defendant, “Plaintiff was
aware of all the relevant facts and could have sought to amend his complaint at any
time before the briefing of or decision on Plainitff’s two motions seeking discovery
in this case and/or the Fund’s Motion to Dismiss.” Dkt. No. 36, p. 14 (Pg. ID 1303).
The Court understands the Defendant’s frustration. The Proposed Complaint
was filed over a year after the original Complaint. Furthermore, Plaintiff offers no
explanation for his failure to plead certain facts at an earlier stage. None of the facts
added in the Proposed Complaint appear new. None of the relevant law is new. It
seems that the failings of the original Complaint resulted from oversight or a lack of
diligence on the Plaintiff’s part.
Nevertheless, in light of the authority in the Sixth Circuit, which indicates that
the Defendant must show significant prejudice, the Court concludes that the denial
of plaintiff’s motion due to delay would be improper. Defendant claims it would be
prejudiced by the delay and expense of allowing amendment. The Court finds that
any prejudice to the Defendant would be slight. “Delay by itself is not sufficient
reason to deny a motion to amend.” Wade, 259 F.3d at 459. Furthermore, the cost of
litigating this motion is at most light prejudice. See Moore, 790 F.2d 557, 562 (6th
Cir. 1986) (reversing a denial of amendment when the district court found only
“relatively light prejudice” to the opposing party).
Therefore, because the Defendant has not shown significant prejudice,
denying Plaintiff’s amendment due to delay would be improper.
2. Futility and Rule 12(b)(6)
Despite Rule 15’s liberal amendment policy, courts can deny amendment if
the newly proposed claims are futile. Hahn v. Star Bank, 190 F.3d 708, 715 (6th Cir.
1999); SFS Check, LLC v. First Bank of Delaware, 774 F.3d 351, 355 (6th Cir.
2014). Newly proposed claims are futile if they cannot withstand a motion to
dismiss. Id. If the district court bases its decision on a legal conclusion that an
amended complaint could not withstand a motion to dismiss, the Sixth Circuit will
apply de novo review. Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509, 518 (6th Cir.
A. Legal Standard for Motion to Dismiss
“To survive a Rule 12(b)(6) motion, a complaint must comply with the
pleading requirements of Rule 8(a), which, among other things, requires a ‘short and
plain statement of the claim showing that the pleader is entitled to relief.’ ”
Thompson v. Bank of Am., N.A., 773 F.3d 741, 750 (6th Cir. 2014) (quoting Ashcroft
v. Iqbal, 556 U.S. 662, 677–78 (2009)). “[A] pleading must go beyond ‘labels and
conclusions’ or a mere ‘formulaic recitation of the elements of a cause of action.’ ”
Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “[N]aked
assertions devoid of further factual enhancement contribute nothing to the
sufficiency of the complaint.” Id. (internal quotations and citations omitted) (citing
Iqbal, 556 U.S. at 678). Defendant argues that Proposed Counts I-III, fail to meet
the Rule 12(b)(6) threshold.
B. ERISA Remedial Provisions
ERISA has six remedial provisions. The remedial provisions relevant to this
action are § 502(a)(1)(B) and § 502(a)(3), which state:
A civil action may be brought—
(1) by a participant or beneficiary—
(A) for the relief provided for in subsection (c) of this
(B) to recover benefits due to him under the terms of his
plan, to enforce his rights under the terms of the plan, or
to clarify his rights to future benefits under the terms of
(2) by the Secretary, or by a participant, beneficiary or fiduciary
for appropriate relief under section 1109 of this title;
(3) by a participant, beneficiary, or fiduciary (A) to enjoin any
act or practice which violates any provision of this subchapter
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 subchapter or the terms of the plan.
29 U.S.C. § 1132(a) (emphasis added) (referred to as ERISA § 502(a)).
C. Repackaging and the Interplay Between ERISA §
502(a)(1)(B) and ERISA § 502(a)(3)
The Supreme Court, in Varity Corp. v. Howe, 516 U.S. 489 (1996), spoke
to the interplay between § 502(a)(1)(B) and § 502(a)(3). “As the [Supreme] Court
explained, § 502(a)(3) ‘functions as a safety net, offering appropriate equitable relief
for injuries caused by violations that § 502 does not elsewhere adequately
remedy.’ ” Rochow v. Life Ins. Co. of N. Am., 780 F.3d 364, 371 (6th Cir. 2015),
cert. denied, 136 S. Ct. 480, (2015) (quoting Varity Corp., 516 U.S. at 513).
“[W]here Congress elsewhere provided 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.” Id. (emphasis in original). “ERISA remedies
are concerned with the adequacy of relief to redress the claimant’s injury, not the
nature of the defendant’s wrongdoing.” Id. Therefore, absent a showing that the
relief under § 502(a)(1)(B) is inadequate, there is no trigger for equitable relief under
§ 502(a)(3). Id.
Claimants may not repackage a § 502(a)(1)(B) claim as a § 502(a)(3) claim to
obtain equitable relief. “Impermissible repackaging is implicated whenever, in
addition to the particular adequate remedy provided by Congress, a duplicative or
redundant remedy is pursued to redress the same injury.” Rochow, 780 F.3d at 373.
If a plaintiff is “able to avail himself of an adequate remedy for [a defendant’s]
wrongful denial of benefits pursuant to § 502(a)(1)(B), he cannot obtain additional
relief for that same injury under § 502(a)(3).” Id. However, if the need for
§ 502(a)(3) relief implicates a different injury, injunctive relief may be proper. See
Hill v. Blue Cross & Blue Shield of Mich., 409 F.3d 710, 718 (6th Cir. 2005)
(distinguishing between denial of individual claims and a plan-wide mishandling of
claims as two distinct injuries).
In Hill, the plaintiff brought claims under § 502(a)(3) and § 502(a)(1)(B). Id.
at 716. The Sixth Circuit allowed the plaintiff to proceed with both claims, despite
arguments that the § 502(a)(3) claim was an impermissibly repackaged §
502(a)(1)(B) claim. Id. at 723. In determining that Hill’s § 502(a)(3) claim was
distinct from his § 502(a)(1)(B) claim, the Sixth Circuit focused on the relief sought
to redress the injuries, not the defendant’s wrongdoing. Id. at 718. Hill’s § 502(a)(3)
claim sought injunctive relief to redress defective procedures which allegedly
injured participants throughout the benefits plan. Id. On the other hand, Hill’s §
502(a)(1)(B) claim sought monetary compensation to redress the denial of Hill’s
benefits. Id. at 715. The Sixth Circuit held that, “an award of benefits to a particular
Program participant based on an improperly denied claim … will not change the fact
that [Defendant] is using an allegedly improper methodology for handing [all
claims]. Only injunctive relief of the type available under § (a)(3) will provide
the complete relief sought by Plaintiffs by requiring [Defendant] to alter the manner
in which it administers all the Program’s claims[.]” Hill, 409 F.3d at 718. Therefore,
Hill recognized an exception to Varity Corp., when a claimant seeks relief for two
Defendant argues that the Proposed Complaint is futile because Counts I, II,
and III: (1) fail to satisfy the exception in Hill and/or (2) are improperly repackaged
individual benefits claims. The Court agrees.
i. Proposed Count I
Pursuant to ERISA § 502(a)(3), Proposed Count I seeks to: (1) enjoin the Plan
from suspending retirement benefits until the Plan adopts status determination
procedure; (2) enjoin the Plan from suspending retirement benefits of any employee
who contemplated future employment and did not receive a proper status
determination; and (3) make whole any employee whose retirement benefits have
been suspended in the past. Dkt. No. 35-2, pp. 21–22 (Pg. ID 1210–11).
The Defendant argues that Count I of the Proposed Complaint fails to meet
the Hill standard based on facts and plausibility.
First, the Defendant attempts to distinguish Titus’ case from Hill based on
facts. Hill was a class action involving an automated benefit claims processing
system. Hill, 409 F.3d at 714. The automated system made claims determinations
based on a doctor’s diagnosis rather than a claimants symptoms at the time of
treatment. Id. The Defendant argues that because Titus is a single plaintiff, not
seeking class certification and because the present case does not involve a uniform
claim-processing procedure, Plaintiff cannot meet the Hill standard. Dkt. No. 36, pp.
17–18 (Pg. ID 1306–07).
Although the Defendant’s recitation of the facts in Hill is correct, the
Defendant’s argument is unpersuasive. The Defendant reads Hill too narrowly.
Hill’s holding did not turn on the automated system or the class action. Rather, Hill
based its decision on whether the plaintiff sought “plan-wide injunctive relief, not
individual-benefit payments.” Hill, 409 F.3d at 718.
Next, in a series of arguments, the Defendant seems to argue that Proposed
Count I cannot satisfy Hill because some of the Plaintiff’s claims about the Plan’s
status determination procedure are untrue and disputed. Dkt. No. 36, p. 18 (Pg. ID
1307). While these may be valid defenses, they are irrelevant to Hill and whether the
Proposed Complaint can survive a motion to dismiss. See Thompson, 773 F.3d at
750 (discussing that at the motion to dismiss stage, the court must accept all wellpleaded factual allegations as true).
Last, the Defendant argues that Proposed Count I cannot satisfy Hill because
it fails to plausibly establish that other plan participants have ever been denied a
status determination or have been irreparably harmed. Dkt. No. 16, pp. 19–20 (Pg.
ID 1308–09). This argument is well-taken.
“[N]aked assertions devoid of further factual enhancement contribute nothing
to the sufficiency of the complaint.” Thompson, 773 F.3d at 750 (internal quotations
and citations omitted). In this case, the critical flaw with regard to Proposed Count I
is that it makes a conclusory allegation suggesting that unidentified plan participants
failed to receive a proper status determination and subsequently had their retirement
benefits suspended. However, that assertion lacks any factual support. Proposed
Count I centers on a letter confirming Titus’ status determination. Dkt. No. 38-2, p.
8 (Pg. ID 1447). According to the Proposed Complaint, the letter only referred to
Mr. Titus. Id. The Proposed Complaint goes on to state that in reliance of the letter
about his status determination, Titus retired and later sought benefits. Id., p. 9, (Pg.
ID 1448). Plaintiff’s Proposed Complaint simply makes no factual allegation that
any other plan participant received a similar letter or relied on a similar
representation by the Defendant to their detriment. Instead, the Plan correctly points
out that the Proposed Complaint asks the Court to speculate that because Mr. Titus
received certain treatment, all plan participants receive the same treatment.
When faced with the Defendant’s argument, the Plaintiff’s Reply illustrates
the lack of factual allegations that other plan participants were similarly affected.
According to the Plaintiff,
[T]he Amended Complaint alleges facts showing that Plaintiff
requested a status determination, that he was not told of any additional
procedural requirements to obtain a status determination, that the
Pension Plan engaged in actions which reasonably led him to
understand the he had been given a status determination, and that the
Pension Plan did not given [sic] him a status determination which was
Dkt. No. 38, pp. 7–8 (Pg. ID 1435) (emphasis added). Plaintiff’s own
characterization of his Amended Complaint confirms that the only factual
enhancement in the Proposed Complaint relates to Titus’ experience. There is no
factual enhancement about other plan participants. Indeed, at oral argument Plaintiff
admitted that the Proposed Complaint fails to mention any other plan participant.
The Plaintiff goes on to argue that “the Pension Plan has not presented any
evidence that Titus was treated uniquely, or that no other retiree has suffered a
benefit suspension.” Dkt. No. 38, p. 8 (Pg. ID 1435). This argument incorrectly states
the burden. A motion to dismiss challenges the sufficiency of the allegations
contained in the complaint. The Defendant need not produce any evidence that Titus
was treated uniquely. Rather, to substantiate its conclusory allegations, the Proposed
Complaint must contain factual enhancement.
Plaintiff next argues that “[o]ther participants have worked in the industry
after retirement.” Id. (citing ¶¶ 16 and 73 of the Proposed Complaint). For this
argument, the Plaintiff cites the following two paragraphs from his Proposed
Robert Titus understood that the Pension Plan might consider his
contemplated employment as a violation of either the eligibility or the
suspension of benefit rules. However, Robert Titus had heard that the
Pension Plan had not disqualified other participants who engaged in
similar post-retirement work.
The employee who received the misrepresentations was unaware of the
true application of the suspension of benefits provision, because that
participant was aware that other participants had been permitted to
engage in similar types of work without having their benefits
Dkt. No. 38-2, pp. 7, 26 (Pg. ID 1446, 1465).
Neither paragraph, however, helps the Plaintiff’s argument. The first
paragraph contradicts the Plaintiff’s prayer for relief because it states that other,
similar plan participants were not disqualified from receiving their retirement
benefits, like the Plaintiff was. The second paragraph vaguely references an
unnamed “employee.” At first glance, it seems as though there might be factual
support for plan-wide relief. However, further examination reveals that the unnamed
“employee” referenced is the Plaintiff, not another plan participant.
Later, the Plaintiff relies on CIGNA Corp. v. Amara, 563 U.S. 421 (2011), to
support his claim that Proposed Count I seeks to redress two distinct injuries—
monetary damages to Titus and all similarly situated participants. Dkt. No. 35, p. 17
(Pg. ID 1178); Dkt. No. 38, p. 9 (Pg. ID 1436). However, Amara is distinguishable
on facts. First, Amara involved a class action brought on behalf of approximately
25,000 employees. Amara, 563 U.S. at 424. In this case, Titus the Proposed
Complaint does not even mention another plan participant. Second, in Amara, the
Supreme Court held that there was no authority under § 502(a)(1)(B) to reform the
plan. Id. at 438. Because § 502(a)(1)(B) did not authorize relief, the Supreme Court
used § 502(a)(3) to redress ERISA violations. Id. Here, unlike the case in Amara,
Plaintiff seeks relief (his individual pension benefits) that can be adequately
remedied by § 502(a)(1)(B) relief. Therefore, Titus’ reliance on Amara is to no avail.
Amara highlights the shortcomings of Titus’ Proposed Complaint.
Proposed Count I makes the naked assertion that injunctive relief is needed
for all plan participants. However, based on the plain language in the Proposed
Complaint and even the arguments by the Plaintiff, it is clear that there is no factual
showing that anyone other than the Plaintiff was or ever has been subject to similar
suspension of benefits. Therefore, Count I fails to state a valid claim for injunctive
relief pursuant to § 502(a)(3). See Thompson., 773 F.3d at 750 (affirming denial of
amendment when Plaintiff “made conclusory allegations” but made “no factual
showing” to support her allegations).
ii. Proposed Count II
Defendant argues that Count II is an improperly repackaged individual
benefits claim. The Court agrees.
Proposed Count II seeks to reform the Plan: (1) to state that the suspension of
benefits will be applied in the manner described in the alleged misrepresentations
made by the Plan and (2) to require any participant who relied upon those
misrepresentations be made whole. Dkt. No. 38-2, p. 24 (Pg. ID 1463). Although
Proposed Count II does not expressly reference ERISA § 502(a)(3), reformation can
only occur pursuant to ERISA § 502(a)(3). See Amara, 563 U.S. at 422 (“The power
to reform contracts is a traditional power of an equity court and is used to prevent
At first glance, Proposed Count II seems to be seeking plan-wide mishandling
of claims and therefore a completely distinct injury than the Plaintiff’s denial of
benefits. However, the misrepresentations that are referenced in Proposed Count II
demonstrate that there is no plan-wide injury. Proposed Count II refers to two alleged
misrepresentations made by the Plan: one in February 2014; another in March 2014.
According to the Proposed Complaint:
In February, 2014, Robert Titus requested a Status Determination
from the Pension Plan regarding whether his organization of a new
business (BJ’s Crane Consulting, LLC), and his sales representation
and crane consultation work would result in a suspension of his
retirement benefits, so that Robert Titus would know whether (1) to
retire and pursue his business opportunity, or (2) to not retire and keep
his union position.
In response to his request for a Status Determination, the Pension
Plan’s Manager told Robert Titus that the work he was contemplating
would not result in suspension of his pension benefits, provided that
Robert Titus was not directly employed by a contributing employer, and
as long as his work was not covered by the collective bargaining
On March 28, 2014, the Pension Plan sent a letter to the Union
which was shared with Robert Titus, confirming the Pension Plan’s
Dkt. No. 38-2, pp. 7–8 (Pg. ID 1446–47) (emphasis added).
Based on the factual allegations in the Proposed Complaint, the two
misrepresentations that form the basis for the Plaintiff’s reformation claim involve
only Titus’ individual status determination and no other participant. There is no
allegation that any other plan participant other than Titus relied on, or even knew
about the conversations between the Plan and the Plaintiff in February and March of
2014. Accordingly, because Proposed Count II merely repackages Titus’ individual
injury as some type of unsupported plan-wide injury, it must be dismissed.
iii. Proposed Count III
Defendant argues that Plaintiff’s equitable estoppel claim, Proposed Count
III, is an improperly repackaged individual benefits claim and also fails to meet
Equitable estoppel rests upon federal common law derived from ERISA. See
Trombly v. Fid. Workplace Servs. LLC, No. 11-13477, 2013 WL 866456, at *21-22
(E.D. Mich. Mar. 7, 2013) (citing Bloemker v. Laborers’ Local 265 Pension Fund,
605 F.3d 436, 440 (6th Cir. 2010) (recognizing the existence of a federal common
law claim of equitable estoppel in the context of ERISA pension benefits)). “The
elements of a traditional equitable estoppel claim are as follows: (1) conduct or
language amounting to a representation of material fact; (2) awareness of the true
facts by the party to be estopped; (3) an intention on the part of the party to be
estopped that the representation be acted on, or conduct toward the party asserting
the estoppel such that the latter has a right to believe that the former’s conduct is so
intended; (4) unawareness of the true facts by the party asserting the estoppel; and
(5) detrimental and justifiable reliance by the party asserting estoppel on the
representation.” Chebowski v. Kelsey-Hayes Salaried Pension Plan, No. 15-13092,
2016 WL 5477335, at *3–4 (E.D. Mich. Sept. 29, 2016) (Hood, C.J.) (citing
Armistead v. Vernitron Corp., 944 F.2d 1287, 1298 (6th Cir. 1991).
In the context of ERISA, principles of estoppel are rarely applied to vary the
terms of unambiguous plan documents because a “party’s reliance can seldom, if
ever, be reasonable or justifiable if it is inconsistent with the clear and unambiguous
terms of plan documents available to or furnished to the party.” Id. (quoting Sprague
v. General Motors Corp., 133 F.3d 388, 404 (6th Cir. 1998)). “However, a plaintiff
can invoke equitable estoppel in the case of unambiguous pension plan provisions
where the plaintiff can demonstrate the aforementioned traditional elements of
estoppel, ‘including that the defendant engaged in intended deception or such gross
negligence as to amount to constructive fraud, plus (1) a written representation; (2)
plan provisions which, although unambiguous, did not allow for individual
calculation of benefits; and (3) extraordinary circumstances in which the balance of
equities strongly favors the application of estoppel.’ ” Bloemker, 605 F.3d at 444.
The Sixth Circuit imposed these additional requirements in the context of ERISA
pension plans in order to address the concern that estoppel claims could undermine
the financial integrity of ERISA pension plans and prejudice the rights and legitimate
expectations of third parties to retirement income.” Chebowski, at *3–4.
Proposed Count III is titled “Action to Equitably Estop the Pension Plan from
Applying its Suspension of Benefit Rule Inconsistently with its Representations.”
Dkt. No. 38-2, p. 24 (Pg. ID 1463). Proposed Count III requests the Plan be equitably
estopped from: (1) suspending the retirement benefit of any employee who
detrimentally relied on a misrepresentation by the Plan; and (2) be ordered to make
whole any employee who detrimentally relied upon the misrepresentation made by
the Plan. Id., p. 26 (Pg. ID 1465).
Proposed Count III fails to expressly state whether it seeks equitable estoppel
pursuant to ERISA § 502(a)(3) or § 502(a)(1)(B). However, Plaintiff’s motion
implies that he is seeking equitable estoppel pursuant to § 502(a)(3) because “[t]he
prayer for relief does not mention Titus…and Titus will benefit from [Proposed]
Count III only to the extent that any other similar situated participant benefits.” Dkt.
No. 35, p. 25 (Pg. ID 1186). See also 29 U.S.C. § 1132(a) (stating that relief pursuant
to ERISA § 502(a)(1)(B) involves recovery of benefits or enforcement or rights only
to a single beneficiary). The distinction between the two provisions becomes
important when determining whether there is repackaging of an individual benefits
claim as a plan-wide claim.
Assuming that Proposed Count III proceeds via ERISA § 502(a)(3), it is an
improper repackaging of an individual benefit claim. According to Proposed Count
III, the alleged misrepresentations occurred in February 2014 and March 2014. Id.,
pp. 24–25 (Pg. ID 1463–64). As stated previously, the Proposed Complaint makes
clear that the representations made in February 2014 and March 2014 were made
only to Mr. Titus, involved only his own individual status determination, and were
relied on only by Mr. Titus. There is no factual allegation that any other plan
participant relied or even knew about them.
The Parties dispute whether or not Proposed Count III satisfies the Bloemker
requirements. However, upon finding that Proposed Count III is a mere repackaging
of an individual benefits claim, the Court need not analyze Bloemker.1
Despite the liberal amendment policy articulated in the Federal Rules of
Civil Procedure, amendment in this instance must be denied for futility. Plaintiff’s
attempt to amend his Complaint to obtain equitable relief for all plan participants
without any factual enhancement is precisely the type of repackaging the Supreme
Court forbade in Varity Corp. Accordingly, the Court will DENY Plaintiff’s 1st
Motion for Leave to Amend Complaint.
The law is not entirely clear on whether equitable estoppel proceeds via ERISA §
502(a) or via another, independent federal common law-derived vehicle. As best as
the Court can tell, finding that Plaintiff’s equitable estoppel claim is a mere
repackaging of his individual benefits claim, moots the need to undergo Bloemker
analysis. Even if Bloemker, a Sixth Circuit case, can be interpreted as providing an
independent vehicle for equitable relief, the Supreme Court in Varity Corp.
nevertheless forbids such a duplicative personal recovery. See Varity Corp., 516 U.S.
489 at 515 (“[W]here Congress elsewhere provided adequate relief for a
beneficiary’s injury, there will likely be no need for further equitable relief.”).
Therefore, Bloemker analysis is not needed if proposed claim cannot pass muster
under Varity Corp.
Dated: June 28, 2017
/s/Gershwin A Drain
HON. GERSHWIN A. DRAIN
United States District Court Judge
I hereby certify that a copy of the foregoing document was mailed to the attorneys
of record on this date, June 28, 2017, by electronic and/or ordinary mail.
Case Manager, (313) 234-5213
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