Van Gent v. Saint Louis Country Club et al

Filing 204

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that plaintiff Hubert Van Gents Motion For Leave To File Third Amended Complaint Docket No. 173 is denied. IT IS FURTHER ORDERED that defendants request for attorneys fees is denied at this time. Signed by Magistrate Judge Frederick R. Buckles on 11/27/2013. (RAK)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
HUBERT VAN GENT,

)
)
)
)
)
)
)
)
)
)

Plaintiff,
v.
SAINT LOUIS COUNTRY CLUB,
et al.,
Defendants.

Case No. 4:08CV959 FRB

MEMORANDUM AND ORDER
Presently before the Court is plaintiff Hubert Van Gent’s
Motion For Leave To File Third Amended Complaint.

(Docket No.

173). All matters are pending before the undersigned United States
Magistrate Judge, with consent of the parties, pursuant to 28
U.S.C. § 636(c).
I.

Factual Background and Procedural History
Plaintiff

Hubert

Van

Gent

(“plaintiff”)

began

his

employment with defendant Saint Louis Country Club (“SLCC” or
“Club”) in 1976 as a maitre’d.

He was subsequently elevated to the

position of General Manager, and held this position until he
resigned in May of 2007.
During his tenure as General Manager of SLCC, plaintiff
was one of the highest paid employees of SLCC, and had the
authority to hire and fire all non-sports related employees of
SLCC. Plaintiff routinely made recommendations regarding salaries,
bonuses, and deferred contribution amounts for SLCC employees,
- 1 -

including himself.

During plaintiff’s tenure as General Manager,

there were between 250 and 300 full and part-time employees, and an
average of 40-50 full-time employees.
On July 1, 1984, following plaintiff’s elevation to
General Manager, SLCC and plaintiff entered into an Employment
Agreement.

(Administrative Record (“A.R.”) 0001).1

Plaintiff

negotiated with SLCC for the inclusion of a deferred compensation
plan as part of that agreement, which the parties refer to as the
“Employment

Agreement

Plan.”2

The

Employment

Agreement

Plan

required the Club to credit a portion of plaintiff’s salary to a
bookkeeping reserve.

(A.R. 0002).

Plaintiff negotiated with SLCC

for the ability to suggest investments for the Employment Agreement
Plan because he felt it was his money.

The parties agree that

plaintiff requested that his account be managed by defendant
William Simpson, a broker, but plaintiff claims that Simpson
mismanaged his account since its inception.
plaintiff received account statements.

For twenty years,

Plaintiff alleges that the

Employment Agreement does not provide that SLCC is required to
follow plaintiff’s investment suggestions, and that he in fact
suggested very few investments over the years.

1

The Administrative Record, spanning more than 2,500 pages,
has been filed by defendants under seal. (Docket Nos. 101-128).
2

A deferred compensation plan “is an agreement by the
employer to pay compensation to employees at a future date. The
main purpose of the plan is to defer the payment of taxes.” In re
IT Group, Inc., 448 F.3d 661, 664 (3rd Cir. 2006) (quoting David
J. Cartano, Taxation of Compensation & Benefits § 20.01, at 709
(2004)).
- 2 -

The Employment Agreement contained numerous provisions
regarding the Employment Agreement Plan. These included the manner
in which the Club was to credit and debit plaintiff’s account,
plaintiff’s right to designate a beneficiary or beneficiaries, the
timing and manner in which the funds would be distributed to
plaintiff

or

to

his

beneficiary

or

beneficiaries

following

plaintiff’s termination of service, plaintiff’s right to suggest
investments for his account, a provision that the Club had no duty
to fund its obligations under the agreement, the assets from which
payments would be made under the agreement, and the statement that
a person’s rights to receive payments from the Club under the
Employment Agreement Plan shall be no greater than the rights of an
unsecured creditor of the Club.

(A.R. 0002-0005).

On approximately February 1, 1990, the Club executed the
St.

Louis

Country

Club

Deferred

Compensation

Plan

(“Deferred

Compensation Plan”), which provided for retirement benefits, death
benefits, and hardship benefits for plaintiff and other Club
employee participants.

(A.R. 0006-0018).

On August 23, 2007, the

Club filed a Top-Hat Plan3 Registration Statement with the United
States Department of Labor for both the Deferred Compensation Plan
and

the

Employment

Agreement,

stating

3

that

both

were

plans

A top hat plan is a plan that is unfunded, used by
employers to provide “deferred compensation for a select group of
management or highly compensated employees,” and exempted from
certain ERISA requirements that are relevant to plaintiff’s
claims in the case at bar. 29 U.S.C. §§ 1051(2), 1081(a)(3),
1101(a); see also Emenegger v. Bull Moose Tube Co., 197 F.3d
929, 932 n. 6 (8th Cir. 1999)(internal citations omitted).
- 3 -

“maintained for a select group of management or highly compensated
employees.”

(A.R. 67-68).

Plaintiff filed his original complaint on July 1, 2008,
alleging various claims arising under the Employee Retirement
Income Security Act, 29 U.S.C. § 1001 et seq. (also “ERISA”), and
state law. Before responsive pleadings were filed, plaintiff filed
a First Amended Complaint on October 6, 2008, again alleging claims
pursuant to ERISA and state law.
several

counts

of

plaintiff’s

Upon the motion of defendants,
First

Amended

Complaint

dismissed on various grounds, including ERISA preemption.

were
In

addition, a motion to compel arbitration, filed by former partydefendants A.G. Edwards & Sons, Inc., Wachovia Securities, L.L.C.,
and William Simpson, Jr., was granted.
On December 2, 2010, plaintiff sought and was given leave
to

file

a

Second

Amended

Complaint.

On

December

plaintiff filed a nine-count Second Amended Complaint.
through VIII alleged claims pursuant to ERISA.

22,

2010,

Counts I

Count IX alleged

civil conspiracy against eight individual defendants, all of whom
were

named

only

in

Count

IX.

On

April

4,

2011,

the

eight

individual defendants filed a motion to dismiss Count IX, arguing
that the civil conspiracy cause of action plaintiff asserted
therein was preempted by ERISA.

In his responsive pleading,

plaintiff stated that he intended to withdraw Count IX, and stated
that he also intended to seek leave of court to file a third
amended complaint.

When ordered by this Court to respond to the

substantive arguments presented by the individual defendants in
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their motion to dismiss Count IX, plaintiff, on October 12, 2011,
filed a response stating that, while he intended to withdraw Count
IX, the claims therein were not preempted by ERISA because they
were only tangentially related to the administration of the Plans
at issue, and because the actions detailed in Count IX caused harm
separate from the claims alleged in the Second Amended Complaint’s
ERISA counts.

At no time did plaintiff argue that the Employment

Agreement Plan was not governed by ERISA. In fact, throughout this
litigation, plaintiff has proceeded under the theory that the
Employment Agreement Plan and the Deferred Compensation Plan are
governed by ERISA.

Based upon the submissions and representations

of the parties, this Court granted the individual defendants’
motion to dismiss Count IX on October 12, 2011.
In

January

of

2012,

plaintiff

filed

a

motion

for

permission to obtain discovery which, following stipulation between
the parties, was granted as to the following issues: whether the
plans

were

plaintiff’s

top

hat

plans

employment

under

ERISA,

relationship

with

the
SLCC

manner
ended,

in

which

and

the

transfer of funds between certain accounts related to the two plans
at issue.
On May 4, 2012, the defendants filed motions for summary
judgment. When counsel of record for plaintiff at that time failed
to timely respond, this Court entered an order giving counsel until
July 23, 2012 to do so.

On that date, plaintiff, proceeding pro

se, filed a motion for an extension of time due to counsel’s
negligence.

A

hearing

was

subsequently
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held,

during

which

plaintiff’s counsel indicated his intent to file responses to the
motions for summary judgment, and this Court entered an order
granting counsel until August 10, 2012, to do so.

On that date,

counsel filed a memorandum, stating that illness prevented him from
complying

with

the

Court’s

order,

and

stating

his

intent

to

withdraw as counsel for plaintiff. This Court entered an order
granting plaintiff until September 14, 2012, to respond to the
motions for summary judgment either pro se or through new counsel.
The

following

day,

present

counsel

entered

an

appearance

on

plaintiff’s behalf, and filed timely responses to the motions for
summary judgment.
In the Second Amended Complaint, plaintiff alleges that
“[t]he deferred compensation portion of the Employment Agreement is
an ‘employee pension benefit plan’ or ‘pension plan’ as defined
pursuant to ERISA Section 3(2)(A)(i) and (ii)” or § 1002(2).
(Docket No. 61 at 20).

Plaintiff also alleges that he lacked

“knowledge and expertise in the structure and characteristics of
employee

benefit

plans,”

and

that

the

parties

had

“unequal

bargaining power.” (Id. at 21). Plaintiff also alleges that SLCC,
as Plan Administrator, failed to follow various administrative
procedures as required by the Employment Agreement.

(Id. at 21-

24).
In his Second Amended Complaint, plaintiff alleges that
SLCC established an investment account at A.G. Edwards in 1984 for
the purpose of funding the Employment Agreement Plan.

Plaintiff

alleges that this account was liquidated in September of 2005 and
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transferred to a Fidelity Investments account representing the
Deferred Compensation Plan’s Trust account, account number Z83296503.

Plaintiff alleges that, in late 2005 and early 2006, SLCC

consolidated plaintiff’s deferred compensation accounts into a
single Fidelity Investments account, account number Z83-976601
(“Fidelity account 601”).

Plaintiff alleges that in May of 2007,

SLCC separated Fidelity account 601 into two separate Fidelity
accounts: Fidelity Account 601 and a second Fidelity Account
bearing account number Z71-68827 (“Fidelity Account 827”).
Plaintiff alleges that Fidelity Account 601 represented
the

Employment

Agreement

Plan,

while

Fidelity

Account

827

represented the Deferred Compensation Plan, but that SLCC, by and
through its directors and officers, wrongfully commingled funds
between and among Fidelity Accounts 601 and 827 such that Fidelity
Account 601’s value dropped significantly and Fidelity Account
827’s value increased significantly.

Plaintiff alleges that, in

May of 2009, SLCC, by and through its directors and officers,
removed $30,000.00 from Fidelity Account 827 and closed Fidelity
account 601, leaving approximately $60,000.00 unaccounted for.
Plaintiff also alleges that, in April of 2010, SLCC, by and through
its directors and officers, removed approximately $14,000.00 from
Fidelity Account 827.

The parties dispute which Fidelity Account

represents the funds for which Plan.
In Counts I and II of the Second Amended Complaint,
plaintiff

states

claims

for

benefits

under

the

Deferred

Compensation Plan and the Employment Agreement Plan, respectively,
- 7 -

pursuant to 29 U.S.C. § 1132(a)(1)(B).

In Counts III through VI,

plaintiff proceeds under the civil enforcement section of ERISA, 29
U.S.C. § 1132(a)(2), which allows a participant to bring a civil
action for relief under 29 U.S.C. § 1109 for breach of fiduciary
duty.
In Count VII, citing 29 U.S.C. § 1140, plaintiff alleges
that SLCC, Snowden, Lilly and Wells interfered with his protected
ERISA rights by discriminating against him in retaliation for his
assertion

of

his

Agreement Plan.

ERISA

rights

pertaining

to

the

Employment

Plaintiff alleges that this discrimination took

the form of constructive discharge from his position at SLCC, and
defendants’ failure and refusal to: (1) release certain benefits;
(2) provide plaintiff with requested documents and availability of
people with information useful to plaintiff; and (3) make timely
benefit payments under both plans.

In Count VIII plaintiff,

proceeding against SLCC, alleges that SLCC, the Plan Administrator,
failed to provide information under 29 U.S.C. § 1024, inasmuch as
SLCC did not provide a copy of the Summary Plan Description or
other documents related to the Employment Agreement Plan or the
Deferred Compensation Plan.
On October 24, 2012, plaintiff filed the instant motion,
seeking leave to file a third amended complaint, stating that he
was seeking to do so “solely in response to the Eighth Circuit’s
decision in Dakota, Minnesota & Eastern Railroad Corporation v.
Schieffer, 648 F.3d 935 (8th Cir. 2011).” (Docket No. 173 at 5)
(emphasis in original).

Focusing exclusively on the Employment
- 8 -

Agreement Plan, plaintiff argues that Schieffer held that a “oneperson employment contract is not a plan under ERISA.”

(Id. at 5).

Plaintiff states that the proposed third amended complaint would
eliminate Counts II, III (in part), IV, V, VI and VII because those
counts were based upon the Employment Agreement Plan which, under
Schieffer, is not a plan as defined in ERISA.

Plaintiff further

states that the third amended complaint would add claims of breach
of

contract,

negligence/gross

negligence,

and

wrongful

termination/constructive discharge arising out of the Employment
Agreement and the Employment Agreement Plan. Plaintiff also states
that he wishes to reassert his previously-dismissed claim for civil
conspiracy, thereby re-joining the eight individual defendants who
were previously dismissed.
Defendants object to the relief plaintiff seeks in the
instant motion.

Noting the procedural history of this case,

defendants argue that granting the instant motion would essentially
allow plaintiff to “press the reset button” and re-start this case
from the beginning, abandoning the foundation for the claims he has
been asserting for the past four years.
(emphasis omitted).

(Docket No. 187 at 1)

Defendants argue that they would suffer

substantial prejudice were plaintiff permitted to file another
amended

pleading

after

he

has

already

filed

three

different

complaints, after the parties have briefed and the Court has ruled
on two rounds of motions to dismiss, after plaintiff was granted
leave to conduct extensive discovery, after defendants provided
plaintiff with additional written discovery, conducted depositions
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of plaintiff and three SLCC witnesses, filed an Administrative
Record of more than 2,500 pages, and filed motions for summary
judgment directed to the Second Amended Complaint which is premised
on the two plans at issue being governed by ERISA.

Defendants note

that they have expended significant time, resources, and effort
addressing and defending the ERISA claims that plaintiff has been
asserting for four years. Defendants also contend that plaintiff’s
proposed amendment would be futile, inasmuch as Schieffer is
inapplicable to the Employment Agreement Plan.

II.

Discussion
Although leave to amend should be freely granted when

justice so requires, Fed. R. Civ. P. 15(a); see also Popp Telecom
v. Am. Sharecom, Inc., 210 F.3d 928, 943 (8th Cir. 2000) (internal
citations omitted) (leave to amend should be granted absent a good
reason for denial), a plaintiff does not have an absolute or
automatic

right

to

amend.

Meehan

v.

United

Consumers

Club

Franchising Corp., 312 F.2d 909, 913 (8th Cir. 2002) (citations
omitted).

Good reasons for denial of leave to amend include undue

delay, bad faith or dilatory motive, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to
the nonmoving party, or futility of the amendment. Becker v. Univ.
of Neb., 191 F.3d 904, 907-08 (8th Cir. 1999) (quoting Brown v.
Wallace,

957

F.2d

564,

566

(8th

Cir.1992)).

Courts

have

considerable discretion in ruling on a motion for leave to amend,
and their decisions are reviewed for abuse of discretion.
- 10 -

U.S. ex

rel. Lee v. Fairview Health Sys., 413 F.3d 748, 749 (8th Cir.
2005). For the following reasons, the arguments defendants present
in opposition to the instant motion are well-taken.
A.

Futility of Amendment

Futility is a valid reason for denying leave to amend.
Becker, 191 F.3d at 907-08 (internal citation omitted); see also
Doe v. School District of the City of Norfolk, 340 F.3d 605, 615-16
(8th Cir. 2003) (permission for leave to amend may be withheld
when, inter alia, plaintiff lacks a colorable ground for relief).
As defendants assert, Schieffer is inapplicable to the case at bar
because this case involves an employee pension benefit plan as
defined in 29 U.S.C. § 1002(2), and the Schieffer Court expressly
limited its holding to employee welfare benefit plans offering
Schieffer does not

severance benefits, defined in § 1002(1).
provide

plaintiff

with

a

colorable

ground

for

relief,

and

plaintiff’s proposed amendment would therefore be futile.
In Schieffer, Kevin Schieffer became the President and
Chief Executive Officer of the Dakota, Minnesota & Eastern Railroad
(“DM &E”) in 1996.

648 F.3d at 936.

In 2004, anticipating a

change of control, Mr. Schieffer and DM & E entered into an
employment

agreement

to

encourage

Mr.

Schieffer’s

ongoing

employment and provide severance benefits in the event he was
terminated without cause. Id. In 2008, facing an imminent merger,
DM & E terminated Mr. Schieffer without cause, triggering the
employment agreement’s severance provision.
and

Mr.

Schieffer

filed

a

demand
- 11 -

for

Id.

Disputes arose,

arbitration

under

the

employment Agreement’s arbitration provision.

Id.

DM & E filed

suit to enjoin the arbitration on the grounds of ERISA preemption.
Schieffer, 648 F.3d at 936.

The district court granted Mr.

Schieffer’s motion to dismiss on the grounds that the employment
agreement was not covered by ERISA and DM & E appealed, arguing
that the severance plan was an employee welfare benefit plan under
20 U.S.C. § 1002(1).

Id.

In analyzing the case under 29 U.S.C. § 1002(1), the
Eighth Circuit noted that the determination of whether a plan was
governed by ERISA involved a mixed question of fact and law.

The

Court expressly held: “[c]onsidering ERISA’s statutory language,
purpose, and historical context, we conclude that an individual
contract

providing

severance

benefits

to

a

single

executive

employee is not an ERISA employee welfare benefit plan within the
meaning of 29 U.S.C. § 1002(1).”

Id. at 938.

There are two types of plans under ERISA: “employee
welfare

benefit

benefits,

and

plans”

“employee

retirement income.

which

provide,

pension

inter

benefit

alia,

plans”

severance

that

provide

ERISA defines each plan separately:

(1) The terms “employee welfare benefit plan” and
“welfare plan” mean any plan, fund, or program which was
heretofore or is hereafter established or maintained by
an employer or by an employee organization, or by both,
to the extent that such plan, fund, or program was
established or is maintained for the purpose of providing
for its participants or their beneficiaries, through the
purchase of insurance or otherwise, (A) medical,
surgical, or hospital care or benefits, or benefits in
the event of sickness, accident, disability, death or
unemployment, or vacation benefits, apprenticeship or
other training programs, or day care centers, scholarship
funds, or prepaid legal services, or (B) any benefit
- 12 -

described in section 186(c) of this title (other than
pensions on retirement or death, and insurance to provide
such pensions).
(2)(A) Except as provided in subparagraph (B), the terms
“employee pension benefit plan” and “pension plan” mean
any plan, fund, or program which was heretofore or is
hereafter established or maintained by an employer or by
an employee organization, or by both, to the extent that
by its express terms or as a result of surrounding
circumstances such plan, fund, or program-(i) provides retirement income to employees,
or
(ii) results in a deferral of income by
employees for periods extending to the
termination of covered employment or beyond,
regardless of the method of calculating the
contributions made to the plan, the method of
calculating the benefits under the plan or the
method of distributing benefits from the plan.
A distribution from a plan, fund, or program
shall not be treated as made in a form other
than retirement income or as a distribution
prior to termination of covered employment
solely because such distribution is made to an
employee who has attained age 62 and who is
not separated from employment at the time of
such distribution.
29 U.S.C.A. § 1002.
As defendants correctly note, courts analyze employee
welfare benefit plans offering severance benefits differently than
employee pension benefit plans.

See Fort Halifax Packing Co. v.

Coyne, 482 U.S. 1, 7 n. 5 (1987) (addressing the uncertainty of the
ERISA

status

of

such

plans

given

the

lack

of

an

ongoing

administrative scheme, and explaining how severance benefits fall
within the definition of an employee welfare benefit plan).

Other

courts have rejected the argument that case law involving employee
welfare

benefits/severance

benefits

- 13 -

applies

equally

to

cases

involving employee pension benefits.

See Robbins v. Friedman

Agency, Inc., 760 F. Supp. 2d 564, 567 (E.D. Va. 2010) (rejecting
the argument that Fort Halifax should be applied to decide that the
single-participant deferred compensation portion of an employment
agreement was not an ERISA pension benefit plan, noting that Fort
Halifax was “inapposite here, where there is no dispute over
severance benefits.”)
In Schieffer, the Court analyzed only a severance plan
under the definition of an “employee welfare benefit plan” of 29
U.S.C. § 1002(1), and expressly limited its holding to employee
welfare benefit plans offering severance benefits.

Schieffer is

inapplicable to the case at bar, which does not involve a dispute
over

severance

benefits.

In

the

instant

motion,

plaintiff

emphasizes that he is seeking leave to file a third amended
complaint

solely

in

response

to

Schieffer.

As

Schieffer

is

inapposite to the case at bar, it provides no support for the
relief plaintiff seeks in his motion.

Permission for leave to

amend may be withheld when such amendment would be futile.

Doe,

340 F.3d at 615-16.
B.

Undue Prejudice and Delay
Permission for leave to amend may be properly denied

where, inter alia, it would cause undue prejudice to the opposing
party.
of

Popp Telecom, 210 F.3d at 943.

this

Court’s

docket

sheet

In the case at bar, review

shows

that

the

defendants’

characterization of the procedural history of this case as “long
and

tortured”

(Docket

No.

187

at

- 14 -

7)

is

dramatic,

but

not

inaccurate.

Defendants have expended significant time, resources

and effort in addressing and responding to the ERISA claims that
plaintiff asserted in his original complaint and all subsequent
amendments thereto.

It is also evident that defendants have

dutifully attempted to move this case forward since its inception.
Defendants have responded to plaintiff’s various complaints and
motions; they have filed motions and supporting memoranda of their
own, including motions for summary judgment; they have engaged in
significant discovery, including exchanging written discovery and
deposing

plaintiff

and

other

witnesses;

and

endured

repeated

instances of plaintiff’s failure to timely respond to their motions
for summary judgment.

As defendants argue, plaintiff’s proposed

third amended complaint would unravel most of the work they have
done thus far to resolve plaintiff’s claims.

Undue prejudice is

one good reason justifying denial of leave to amend. Popp Telecom,
210 F.3d at 943.
Undue delay can also justify denial of leave to amend.
Popp Telecom, 210 F.3d at 943.
2011.

Schieffer was filed on August 11,

Count IX of the Second Amended Complaint (the only count

alleged against the eight individual defendants whom plaintiff now
seeks to re-join) was dismissed on October 12, 2011. Plaintiff did
not mention Schieffer before the Court entered its Memorandum and
Order dismissing Count IX, nor did he attempt any remedial action,
such as filing a motion for reconsideration based upon Schieffer,
after that Memorandum and Order was filed.

Plaintiff failed to

mention Schieffer during the October 21, 2011 status conference, or
- 15 -

when the parties filed a proposed Joint Scheduling Plan on October
28, 2011 and an Amended Joint Scheduling Plan on December 2, 2011,
which included briefing schedules for dispositive motions and a
trial date.

As defendants assert, and as plaintiff should have

known, plaintiff’s proposed third amended complaint would change
the majority of plaintiff’s theory of this case, would render moot
much of the work done thus far by both sides, would re-join the
eight

individual

defendants,

and

would

essentially

make

it

impossible to adhere to the briefing schedules and trial setting.
Plaintiff offers no good reason for why he delayed filing the
instant motion nearly fifteen months after the filing of the case
upon which he states he solely relies, and examination of the
record fails to reveal a logical explanation.

Undue delay is one

good reason to deny permission for leave to amend.

Popp Telecom,

210 F.3d at 943.
Therefore, for all of the foregoing reasons,
IT IS HEREBY ORDERED that plaintiff Hubert Van Gent’s
Motion For Leave To File Third Amended Complaint (Docket No. 173)
is denied.
IT

IS

FURTHER

ORDERED

that

defendants’

request

for

attorney’s fees is denied at this time.

UNITED STATES MAGISTRATE JUDGE
Dated this 27th day of November, 2013.
- 16 -