Hall v. Newmarket Corporation et al
Filing
61
ORDER granting 54 Motion for Reconsideration, finding as moot 54 Motion for certificate for interlocutory appeal, and finding upon reconsideration that all claims should be dismissed with prejudice. Signed by Honorable David C. Bramlette, III on 3/20/2012 (ECW)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
THERESA HALL
PLAINTIFF
VS.
CIVIL ACTION NO. 5:09-cv-41(DCB)(RHW)
NEWMARKET CORPORATION;
AETNA LIFE INSURANCE
COMPANY; and JOHN DOES 1-10
DEFENDANTS
MEMORANDUM OPINION AND ORDER
This cause is before the Court on the defendants Aetna Life
Insurance
Company
(“Aetna”)
and
NewMarket
Corporation
(“NewMarket”)’s joint motion for reconsideration of this Court’s
order denying their motions to dismiss or, in the alternative, for
amendment of the order to add a certificate for interlocutory
appeal (docket entry 54).
Having carefully considered the motion
and response, the memoranda and the applicable law, and being fully
advised in the premises, the Court finds as follows:
The facts of this case are set forth in previous Memorandum
Opinions of this Court. Theresa Hall initially sued the defendants
on state-law claims for equitable estoppel, promissory estoppel,
negligent misrepresentation, and negligent infliction of emotional
distress. The Court found that her claims were preempted by ERISA.
Hall’s state law claims were dismissed, with leave to amend her
pleadings to assert claims under ERISA. She filed a Second Amended
Complaint asserting two causes of action: (1) breach of fiduciary
duty under ERISA, and (2) ERISA estoppel.
The defendants brought
motions to dismiss the ERISA claims under Fed.R.Civ.P. 12(b)(6).
The Court denied the motions, finding that the plaintiff had stated
claims upon which relief could be granted and that the defendants
could make their arguments in motions for summary judgment.
The
defendants
bring
their
present
motion
pursuant
to
Fed.R.Civ.P. 59(e), which allows a court to alter or amend a
judgment or order if, inter alia, there is a need to correct a
clear or manifest error in law or fact.
The Court does not find
any errors of fact in its prior order.
It does, however, upon
reconsideration,
find
addressing
claims
ERISA
that
and
it
a
overlooked
plaintiff’s
law
burden
specifically
under
Rule
12(b)(6) of the Federal Rules of Civil Procedure .
1. Breach of Fiduciary Duty Under ERISA
To survive a Rule 12(b)(6) motion, a complaint must contain
allegations regarding all the required elements necessary to obtain
the relief sought by the plaintiff.
Campbell v. City of San
Antonio, 43 F.3d 973, 975 (5th Cir. 1995).
The plaintiff’s Second
Amended Complaint alleges a claim for breach of fiduciary duty
under ERISA § 502(a)(2), which provides that a civil action may be
brought “by the Secretary, or by a participant, beneficiary or
fiduciary for appropriate relief under section (409) of this
title.”
ERISA § 409, titled “Liability for breach of fiduciary
duty,” states:
Any person who is a fiduciary with respect to a plan who
breaches any of the responsibilities, obligations, or
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duties imposed upon fiduciaries by this subchapter shall
be personally liable to make good to such plan any losses
to the plan resulting from each such breach, and to
restore to such plan any profits of such fiduciary which
have been made through use of assets of the plan by the
fiduciary ....
In interpreting § 409, the Supreme Court has concluded that
claims for breach of fiduciary duty brought under § 502(a)(2) must
be asserted for the benefit of an ERISA plan, not for the personal
benefit of plan participants.
Massachusetts Mutual Life Ins. Co.
v. Russell, 473 U.S. 134, 142-44; see also Matassarin v. Lynch, 174
F.3d 549, 565 (5th Cir. 1999)(recognizing that ERISA § 502(a)(2) and
§ 409 focus solely “on fiduciary breaches that cause harm to the
plan as a whole”).
Nowhere in her Second Amended Complaint does
the plaintiff allege any harm to the NewMarket Plan, or claim to be
seeking to recover anything on behalf of the Plan.
Instead, the
plaintiff seeks to recover for damages suffered only by herself.
The Court therefore finds that the plaintiff has failed to state a
claim for breach of fiduciary duty under ERISA § 502(a)(2).
In
addition, the plaintiff now concedes that she cannot recover under
§ 502(a)(2) for a breach of fiduciary duty.
Pl. Resp. Brief, p. 3.
The plaintiff also alleges a claim for breach of fiduciary
duty under ERISA § 502(a)(3)(B). However, only equitable relief is
available under that section.
Mertens v. Hewitt Assocs., 508 U.S.
248, 255 (1993)(restricting type of relief available under §
502(a)(3)(B) to equitable relief).
Since Hall seeks only past and
future
and
medical
expenses,
pre3
post-judgment
interest,
attorney’s fees and expenses, and court costs and expenses, she is
seeking legal remedies, not equitable relief, and therefore fails
to state a claim under ERISA § 502(a)(3)(B).
The fact that Hall’s
complaint includes a general prayer for “[a]ny and other damages
and/or relief, equitable or otherwise, to which the plaintiff may
be entitled under federal law ...” does not constitute a claim for
any particular injunctive or equitable relief, and is insufficient
to assert a proper equitable claim.
See West v. AK Steel Corp.
Ret. Accumulation Pension Plan, 484 F.3d 395, 403 (6th Cir. 2007);
Severstal Wheeling, Inc. v. WPN Corporation, 809 F.Supp.2d 245,
262-63 (S.D. N.Y. 2011); Hall v. Kodak Retirement Income Plan, 363
F. Appx. 103 (2nd Cir. 2010); Tuel v. Shawver Well Co. Inc., 2006
WL 839250 (N.D. Iowa, March 27, 2006).
The plaintiff has also
failed to state a claim for breach of fiduciary duty under ERISA §
502(a)(3)B).
2. ERISA Estoppel
The Fifth Circuit requires that a plaintiff must show three
elements to establish a claim for ERISA estoppel: (1) a material
misrepresentation, (2) reasonable and detrimental reliance upon
that representation, and (3) extraordinary circumstances. Mello v.
Sara Lee Corp., 431 F.3d 440, 444-45 (5th Cir. 2005).
dismissal,
the
plaintiff’s
complaint
must
contain
To avoid
sufficient
allegations regarding each of the required elements necessary to
obtain the relief sought in a particular claim. With regard to the
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ERISA estoppel claim, the defendants challenge the adequacy of the
plaintiff’s pleading regarding the “extraordinary circumstances”
element.
When considering a motion to dismiss, a court should not
accept as true “conclusory allegations, unwarranted deductions, or
legal conclusions” found in a complaint.
Belmonte v. Examination
Management Servs., Inc., 730 F.Supp.2d 603, 606 (N.D. Tex. 2010).
“Extraordinary circumstances” generally “involve acts of bad faith
on the part of the employer, attempts to actively conceal a
significant change in the plan, or commission of fraud.”
Id.,
quoting Burstein v. Retirement Acct. Plan for Emps. Of Allegheny
Health Educ. & Research Found., 334 F.3d 365, 383 (3rd Cir. 2003);
see also Sanborn-Alder v. Cigna Group Ins., 771 F.Supp.2d 713, 731
(S.D. Tex. 2011)(defendants’ inadvertent mistakes did not qualify
as
the
“bad
faith”
or
“fraud”
necessary
for
a
showing
of
“extraordinary circumstances”).
In the present case, the plaintiff’s Second Amended Complaint
contains no allegations of any bad faith or intentional misconduct
by either of the defendants.
refers
to
“mistake.”
the
defendants’
Instead, the plaintiff repeatedly
acts
of
purported
“negligence”
or
Second Amend. Compl. ¶ 35; Pl.’s Resp. Brief to
Defendants’ Mtns. to Dismiss., pp. 10, 13.
When a cause of action
requires there to have been intentional conduct by the defendant,
allegations of mere negligence will not suffice.
5
Campbell v. City
of San Antonio, 43 F.3d 973, 977 (5th Cir. 1995).
Similarly, the
plaintiff’s conclusory statement that her “previous allegations”
constitute “extraordinary circumstances” are insufficient because
the plaintiff’s allegations lack any factual basis from which to
draw such a conclusion.
See Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007)(“Factual allegations must be enough to raise a
right to relief above the speculative level”).
In addition, the defendants draw the Court’s attention to the
second
element
of
an
ERISA
estoppel
claim,
“reasonable
and
detrimental reliance.” Specifically, the defendants argue that the
only “misrepresentations” identified by the plaintiff are directly
contrary to the express terms of the NewMarket Plan; therefore, any
“reliance” by the plaintiff on such “misrepresentations” cannot be
reasonable.
plaintiff’s
In
Mello,
reliance
the
“can
Fifth
seldom,
Circuit
if
recognized
ever,
be
that
reasonable
a
or
justifiable if it is inconsistent with the clear and unambiguous
terms of plan documents available to or furnished to the party.”
431 F.3d at 447; see also Sanborn-Alder, 771 F.Supp.2d at 720
(“Where
the
plan
is
clear
and
unambiguous,
plaintiff
cannot
reasonably rely on an informal statement that differs from the
terms of the plan because it would mean that the informal statement
amended or modified the terms of the plan, contrary to ERISA’s
policy against informal modifications of plan terms.”).
In this case, the terms of the NewMarket Plan are both clear
6
and unambiguous.
The Plan expressly provides that participants
share the cost of medical coverage under the Plan and that “[i]f
you stop making the required contributions, coverage ends on the
last day of the period for which you last contributed.”
Summary Plan Description, pp. 4, 8.
NewMarket
The plaintiff, in her Second
Amended Complaint, admits that she knew she had to pay premiums to
continue her coverage under the Plan, and that she paid such
premiums to Aetna for several years.
Second Amend. Compl., ¶ 14.
Hall further admits that she stopped making the required premium
payments in 2004, at which time she understood that she would have
to secure medical coverage elsewhere.
Id. at ¶¶ 15-16.
Finally,
she admits that when she was told almost three years later that she
continued to have coverage, she was “confused.”
Id. at ¶ 20.
Nowhere does she claim to have inquired how she could possibly have
coverage when she had not made any premium payments for almost
three years.
These undisputed facts negate any possibility of
demonstrating the “reasonable” reliance necessary for an ERISA
equitable estoppel claim.
See Butler v. Trustmark Ins. Co., 211
F.Supp.2d 803, 807 (S.D. Miss. 2002)(where former plan participant
was unable to pay premiums required for COBRA coverage, he “did not
have a reasonable expectation that he could keep his insurance
coverage notwithstanding his failure to pay for same”).
The Court, upon reconsideration, finds that the plaintiff has
failed to allege all of the required elements necessary to obtain
7
relief under her claim for breach of fiduciary duty under ERISA §
502(a)(3)(B), and her claim for ERISA estoppel.
The Court also
finds that the plaintiff has conceded that she has failed to state
a claim under ERISA § 502(a)(2).
For the forgoing reasons, the
Court finds that the motions to dismiss previously denied should be
granted and this action dismissed with prejudice.
Accordingly,
IT IS HEREBY ORDERED that the defendants Aetna Life Insurance
Company
and
NewMarket
Corporation’s
joint
motion
for
reconsideration of this Court’s order denying their motions to
dismiss (docket entry 54) is GRANTED;
FURTHER ORDERED that the defendants’ motion in the alternative
for amendment of order to add a certificate for interlocutory
appeal (docket entry 54) is MOOT;
FURTHER ORDERED that defendant Aetna Life Insurance Company’s
motion
to
dismiss
(docket
entry
39)
and
defendant
NewMarket
Corporation’s motion to dismiss (docket entry 41) are granted, and
this action shall be dismissed with prejudice by a separate
judgment.
SO ORDERED, this the 20th day of March, 2012.
/s/ David Bramlette
UNITED STATES DISTRICT JUDGE
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