SEGURA v. DR. REDDY'S LABORATORIES, INC.

Filing 28

MEMORANDUM OPINION. Signed by Judge Mary L. Cooper on 12/20/2012. (gxh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
:
JOHN SEGURA,
:
: CIVIL ACTION NO. 11-6188 (MLC)
Plaintiff,
:
:
MEMORANDUM OPINION
v.
:
:
DR. REDDY’S LABORATORIES, INC.,:
:
Defendant.
:
:
COOPER, District Judge
Plaintiff, John Segura, brings this action against
Defendant, Dr. Reddy’s Laboratories, Inc. (“Dr. Reddy’s”),
alleging violations of the Employee Retirement Income Security
Act (“ERISA”), 29 U.S.C. § 1001, et seq., with respect to Dr.
Reddy’s 401(k) Profit Sharing Plan (“the Plan”).

(See dkt.

entry no. 16, Am. Compl.)
Dr. Reddy’s now moves to dismiss the Amended Complaint
pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(6).
(See dkt. entry no. 20, Mot. to Dismiss (“the Motion”).)1
opposes the Motion.
1

Segura

(See generally Pl.’s Opp’n Br.)

The Amended Complaint asserts state law claims against Dr.
Reddy’s for breach of contract and breach of fiduciary duty;
Segura seeks common law damages against Dr. Reddy’s in addition
to the remedies provided for by ERISA. (See Am. Compl. at ¶¶
40-46.) Dr. Reddy’s argued, in support of the Motion, that
Segura’s state law claims and requests for common law damages
are preempted by ERISA. (See dkt. entry no. 20-1, Def.’s Br. in
Supp. of Mot. at 22-25 (“Def.’s Br.”).) In his opposition
papers, Segura concedes that the state and common law claims are

The Court resolves the Motion on the papers and without
oral argument pursuant to Local Civil Rule 78.1(b).

For the

reasons stated below, the Court will deny the Motion in part and
grant the Motion in part.
BACKGROUND2
Segura was a long-time employee of Dr. Reddy’s.
Compl. at ¶ 6.)

(See Am.

Segura, during his employment with Dr. Reddy’s,

was a participant and beneficiary of the Plan; Dr. Reddy’s
administered the Plan.

(Id. at ¶¶ 10-15.)

The Plan’s Trustee

was Capital Bank and Trust Company, known by Segura as American
Funds (“Plan Trustee”).

(Id. at ¶ 13.)

Segura’s employment with Dr. Reddy’s terminated on June 30,
2011, at which point the parties entered into a Confidential
Separation Agreement and General Release (“Separation
Agreement”).

(Id. at ¶¶ 7-8.)

Segura continued to provide

services to Dr. Reddy’s, however, from July 1, 2011, until

preempted by ERISA and asks the Court to dismiss those counts
relating to state law claims and punitive damages. (See dkt.
entry no. 22, Pl.’s Opp’n Br. to Def.’s Mot. at 23-24. (“Pl.’s
Opp’n Br.”).) Thus, the Court will dismiss those counts without
addressing preemption as a ground for dismissal, and will
examine the only count remaining in the Amended Complaint under
the standard for a motion to dismiss.
2

The facts set forth in the Background section have been
taken from the Amended Complaint. On this Motion, the Court
will accept the factual allegations in the Amended Complaint as
true and construe all facts in Segura’s favor.
2

October 7, 2011, as an independent contractor employed by Klein
Hersh International (“Klein Hersh”).

(See id. at ¶ 9.)

Segura informed the Plan Trustee of his desire to roll his
401(k) monies into an Individual Retirement Account (“IRA”) on
July 27, 2011.

(See id. at ¶¶ 18.)

Segura wished to accomplish

this process by August 2, 2011, for financial strategy reasons;
after speaking with the Plan Trustee, Segura was satisfied that
there was time to do so.

(See id. at ¶¶ 19-21.)

By July 29,

2011, Segura had sent Dr. Reddy’s the documents it needed to
initiate the roll-over process.

(See id. at ¶¶ 18-23.)

Dr.

Reddy’s sent Segura a letter on August 9, 2011, stating that it
would not authorize Segura’s 401(k) disbursement because Segura
was still providing services to Dr. Reddy’s through Klein Hersh,
and therefore did not qualify for a 401(k) distribution.

(See

id. at ¶ 27.)
Segura remained in contact with Dr. Reddy’s from August 9,
2011, until October 7, 2011, regarding the status of his request
for distribution from his 401(k) account.

(See id. at ¶ 26.)

Dr. Reddy’s sent another letter on August 23, 2011, confirming
that its position remained that Segura could not receive a
distribution because of his role as an independent contractor to
Dr. Reddy’s.

(See id. at ¶ 27.)

Segura’s 401(k) account lost

in excess of $25,000 in value between July 27, 2011 and October
7, 2011.

(See id. at ¶ 29.)
3

Segura requested disbursement of his 401(k) funds once
again from Dr. Reddy’s after October 7, 2011, when his
consulting agreement with Dr. Reddy’s terminated.
31.)

(See id. at ¶

Dr. Reddy’s sent Segura a letter on November 8, 2011,

which stated that he was now eligible for a distribution
following termination of his services to Dr. Reddy’s through
Klein Hersh.

(See id. at ¶ 32.)

The letter also stated that

his request had been denied previously due to his status as a
“leased employee” providing services to Dr. Reddy’s.
33.)

(Id. at ¶

The letter also included sections of the Plan; this was

the first time that Segura received any Plan documents from Dr.
Reddy’s.

(See id. at ¶ 34.)

Segura requested several Plan documents from Dr. Reddy’s at
different times.

(See id. at ¶ 25.)

On August 9, 2011, Segura

requested a copy of the Plan from Dr. Reddy’s.

(See id.)

Segura received a summary of the Plan from Dr. Reddy’s on
November 9, 2011.

(See id.)

He did not receive a copy of the

Plan until December 23, 2011, after his third request on
November 21, 2011.

(See id.)

Segura resubmitted his July 27, 2011 request to Dr. Reddy’s
and his IRA holder on November 21, 2011.

(See id. at ¶ 35.)

The requested funds from the 401(k) account were disbursed to
the IRA on December 2, 2011.

(See id. at ¶ 36.)

4

DISCUSSION
I.

12(b)(6) Motion to Dismiss Standard
In addressing a motion to dismiss a complaint under Rule

12(b)(6), the Court must “accept all factual allegations as
true, construe the complaint in the light most favorable to the
plaintiff, and determine, whether under any reasonable reading
of the complaint, the plaintiff may be entitled to relief.”
Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir.
2008).

At this stage, “a complaint must contain sufficient

factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’

A claim has facial plausibility

when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable
for the misconduct alleged.”

Ashcroft v. Iqbal, 556 U.S. 662,

677 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
556 (2007)).

“[W]here the well-pleaded facts do not permit the

court to infer more than the mere possibility of misconduct, the
complaint has alleged—but it has not ‘show[n]’—that the ‘pleader
is entitled to relief.’”

Iqbal, 556 U.S. at 679 (quoting Rule

8(a)(2)).
When evaluating a Rule 12(b)(6) motion to dismiss for
failure to state a claim, the Court may consider the complaint,
exhibits attached thereto, matters of public record, and
undisputedly authentic documents if the plaintiff’s claims are
5

based upon those documents.

See Pension Benefit Guar. Corp. v.

White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993).

The

Court can consider such documents without violating Rule
12(b)(6)’s requirement that a motion to dismiss be converted to
a summary judgment motion if a court considers matters outside
the pleadings.

Id.

“The reason that a court must convert a

motion to dismiss to a summary judgment motion if it considers
extraneous evidence submitted by the defense is to afford the
plaintiff an opportunity to respond.”

Id.

The danger of

converting motions to dismiss into motions for summary judgment
lies in defendants preemptively defeating complaints with
documents still unknown to plaintiffs through proper discovery.
Id. at 1196-98.

“When a complaint relies on a document,

however, the plaintiff obviously is on notice of the contents of
the document, and the need for a chance to refute evidence is
greatly diminished.”

Id. at 1196-97.

The Amended Complaint references the Plan extensively, and
indeed Segura’s cause of action is predicated on the rights and
obligations conferred on beneficiaries by their participation in
that contract.

(See generally Am. Compl. at ¶¶ 10-16, 18-31.)

Thus, this document, although not physically incorporated in the
Amended Complaint, may be considered by the Court in deciding
the Motion, so long as it is undisputedly authentic.
Benefit, 998 F.2d at 1196.

Pension

In his opposition brief, Segura did
6

not contest Dr. Reddy’s reliance on the Plan as furnished with
the brief in support of the Motion.
Br. at 2-15.)

(See generally Pl.’s Opp’n

Accordingly, the Court will examine the terms of

the Plan where necessary in deciding the Motion.
II.

Analysis
The Amended Complaint contains one count alleging breach of

fiduciary duty due to several failures on the part of Dr.
Reddy’s, which Segura claims were in violation of 29 U.S.C. §§
1132(a)(1)(B), 1132(a)(2), and 1132(c)(1)(B).
at ¶ 39.)

(See Am. Compl.

Segura alleges that Dr. Reddy’s breached the

fiduciary duty it owed him as a Plan participant by failing to
authorize the requested distributions in July 2011.
¶¶ 37, 39.)

(See id. at

Segura also alleges that Dr. Reddy’s breached its

fiduciary duty by failing to provide him with Plan documents
upon request in August 2011, or with the Plan provisions on
which Dr. Reddy’s based its denial of Segura’s July 2011 request
for the 401(k) disbursement.

(See id. at ¶ 39.)

Dr. Reddy’s argues that Segura fails to state a claim
because the Plan did not permit disbursements unless the
employee experienced a separation, which did not include when an
employee became a “leased employee.”
18.)

(See Def.’s Br. at 1, 16,

Dr. Reddy’s also argues that Segura has not stated a claim

under 29 U.S.C. §§ 1132(a)(1)(B) and 1132(c) because claims for
breach of fiduciary duty can only be brought under 29 U.S.C. §
7

1132(a)(2).

(See id. at 1, 4-7.)

Dr. Reddy’s further argues

that Segura’s claim for breach of fiduciary duty under 29 U.S.C.
§ 1132(a)(2) must be dismissed because, before October 7, 2011,
Segura was providing services to Dr. Reddy’s and was therefore
not eligible for a 401(k) distribution.

(See id. at 9-13, 21-

22.)
A claim under ERISA for breach of fiduciary duty requires
proof that “(1) the defendant was acting in a fiduciary
capacity; (2) the defendant made affirmative misrepresentations
or failed to adequately inform plan participants and
beneficiaries; (3) the misrepresentation or inadequate
disclosure was material; and (4) the plaintiff detrimentally
relied on the misrepresentation or inadequate disclosure.”
Shook v. Avaya, Inc., 625 F.3d 69, 73 (3d Cir. 2010) (internal
quotations and citation omitted).

ERISA does not expressly

enumerate the particular duties of a fiduciary, but rather
relies on the common law of trusts to define the general scope
of a fiduciary’s responsibilities.
482 F.3d 225, 233 (3d Cir. 2007).

Wachtel v. Health Net, Inc.,
A person is a fiduciary with

respect to an ERISA plan “to the extent (i) he exercises any
discretionary authority or discretional control respecting
management of such plan or exercises any authority or control
respecting management or disposition of its assets, . . . or
(iii) he has any discretionary authority or discretionary
8

responsibility in the administration of such plan.”

29 U.S.C. §

1002(21)(A).
The Court will examine each of the alleged breaches of
fiduciary duty under the standard for a motion to dismiss.
A.

Failure to Disburse Funds upon Request

Segura alleges that Dr. Reddy’s failure to disburse his
funds from the Plan constitutes a violation of 29 U.S.C. §§
1132(a)(1)(B) and 1132(a)(2).

(See Am. Compl. at ¶¶ 38-39.)

ERISA provides in pertinent part:
A civil action may be brought by a participant or
beneficiary . . . 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 the plan.
29 U.S.C. § 1132(a)(1)(B).

A denial of benefits challenged

under 29 U.S.C. § 1132(a)(1)(B) is reviewed de novo “unless the
benefit plan gives the administrator . . . discretionary
authority to determine eligibility for benefits or to construe
the terms of the plan.”

Howley v. Mellon Fin. Corp., 625 F.3d

788, 792 (3d Cir. 2010) (internal citations omitted).

When the

administrator is accorded some discretionary authority under the
plan, however, the denial of benefits is reviewed only for abuse
of discretion.

See id.

Thus, an administrator’s decision will

be overturned only if it is shown that the denial of benefits
was “without reason, unsupported by substantial evidence or

9

erroneous as a matter of law.”

Id. (internal citations

omitted).
ERISA also provides for a cause of action in the event of a
breach of fiduciary duty: “A civil action may be brought by the
Secretary, or by a participant, beneficiary or fiduciary for
appropriate relief under [29 U.S.C. § 1109].”
1132(a)(2).

29 U.S.C. §

Section 1109 provides that:

Any person who is a fiduciary with respect to a plan
who breaches any of the responsibilities, obligations,
or duties imposed upon fiduciaries by this title 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, and shall be subject to
such other equitable or remedial relief as the court
may deem appropriate, including removal of such
fiduciary.
29 U.S.C. § 1109.
Dr. Reddy’s argues that the Amended Complaint lacks
sufficient factual allegations to support Segura’s claim that
denial of the requested disbursement in July 2011 was arbitrary,
capricious, or manifestly mistaken.

(See Def.’s Br. at 13-15.)

Dr. Reddy’s also argues that 29 U.S.C. § 1132(a)(1)(B) is not
available for a claim for breach of fiduciary duty.

(See id. at

16.)
Segura argues in response that the terms of the Plan
required Dr. Reddy’s to disburse the funds in his 401(k) account
when he requested it.

(See Pl.’s Opp’n Br. at 8-12.)
10

Moreover,

Segura responds that the Amended Complaint adequately pleads
facts that, taken as true, would establish a breach of fiduciary
duty.

(See id. at 16-17.)

Segura also argues that Rule 8(a)

permits liberal alternative pleading that does not preclude
duplicative claims for breach of fiduciary duty, wrongful denial
of benefits, and non-disclosure of documents.

(See id. at 18-

19.)
Before determining whether the failure to disburse funds
when requested was a breach of fiduciary duty, it is necessary
to determine whether Segura was eligible for disbursement of
funds on July 27, 2011, when he made the request.

The Plan

allows disbursements upon a participant’s “Separation from
Service,” death, or exercise of an In-Service Distribution
right.

(See dkt. entry no. 20-2, Decl. of Clifford Katz, Ex. 2,

The Plan, at Section 6.01.)

Segura pleaded in the Amended

Complaint that he experienced a separation event that terminated
his employment with Dr. Reddy’s on June 30, 2011, prior to his
request for a distribution.

(See Am. Compl. at ¶¶ 6-8, 17, 20.)

Dr. Reddy’s has argued that several other sections of the
Plan made Segura ineligible for a distribution.
at 3-7.)

(See Def.’s Br.

Dr. Reddy’s argues that the definitions of “Employee,”

“Leased Employee,” and “Separation from Service/Severance from
Employment,” when read together, demonstrate that Dr. Reddy’s
decision as plan administrator was neither arbitrary nor
11

capricious and thus does not constitute a breach of fiduciary
duty.

(See id.)

In addition, Dr. Reddy’s relies on language

from a letter and leasing agreement that were provided with its
moving papers.

(See id. at 3.)

Finally, Dr. Reddy’s also

relies on a comment in regulations promulgated by the Internal
Revenue Service (“IRS”), which addresses one type of change in
employee status.

(See id. at 15.)

An “Employee” is defined in the Plan as “any common law
employee, Self-Employed Individual, Leased Employee or other
person the Code treats as an employee of the Employer for the
purposes of the Employer’s qualified plan.

An Employee is

either an Eligible Employee or an Excluded Employee.”

(See

Decl. of Clifford Katz, Ex. 2, The Plan, at Section 1.21.)
Plan defines “Leased Employees” as follows:
Leased Employee means an individual (who otherwise is
not an Employee of the Employer) who, pursuant to an
agreement between the Employer and any other person
(the “leasing organization”), has performed services
for the Employer (or for the Employer and any persons
related to the Employer within the meaning of Code
§144(a)(3)) on a substantially full-time basis for at
least one year and who performs such services under
primary direction or control of the Employer within
the meaning of Code §414(n)(2). Except as described
in Section 1.21(b)(1), a Leased Employee is an
Employee for purposes of the Plan. However, under a
Nonstandardized Plan or under a Volume Submitter Plan,
a Leased Employee is an Excluded Employee unless the
Employer in Appendix B elects not to treat Leased
Employees as Excluded Employees as to any or all
Contribution Types.

12

The

(See id. at Section 1.21(B).)

The Plan defines “Separation from

Service/Severance from Employment” as “an event after which the
Employee no longer has an employment relationship with the
Employer maintaining this Plan or with a Related Employer.”
(See id. at Section 1.55.)

Dr. Reddy’s also relies on

statements by the IRS regarding leased employee status in 2004:
Comments were requested on whether a change in status
from a common law employee to a leased employee
described in section 414(n) should be treated as a
severance from employment that would permit a
distribution to be made. After reviewing the comments,
these final regulations do not add the change to
leased employee to the list of distributable events
and retain the use of the section 410(b) definition of
employee for purposes of section 401(k). Because an
individual who is a leased employee (as defined in
section 414(n)) is treated as an employee of the
recipient of the individual’s services for purposes of
section 410(b) (unless the safe harbor plan
requirements described in section 414(n)(5) are met),
the individual does not incur a severance from
employment as a result of becoming a leased employee.
Retirement Plans, 69 Fed.Reg. 78144, 78148 (Dec. 29, 2004) (to
be codified at 26 C.F.R. pts. 1 and 601).
From these, Dr. Reddy’s argues that Segura did not
experience a Separation from Service, as defined by the Plan,
that would make him eligible for a disbursement.
Br. at 3-5.)

(See Def.’s

Dr. Reddy’s bases this argument on the continued

relationship between the parties between July and October of
2011, which Segura characterizes as that of an independent
contractor and unassociated business, not as an employee and

13

employer relationship.
13.)

(See id.; see also Pl.’s Opp’n Br. at 8-

Dr. Reddy’s also relies on the leasing agreement for the

proposition that it retained a degree of control over Segura
such as an employer would have over an employee.
Br. at 4-5.)

(See Def.’s

Drawing on the language in the Federal Register,

Dr. Reddy’s concludes that the explicit language concerning a
non-qualifying change in status from common law employee to
leased employee would similarly prohibit a disbursement when the
change in status was from employee to leased employee.

(See id.

at 15.)
Segura responds that his employment with Dr. Reddy’s ended
on June 30, 2011, as was pleaded in the Amended Complaint.
Pl.’s Opp’n Br. at 3; see also Am. Compl at ¶¶ 7-8.)

(See

Segura

argues that this qualifies as a separation event under the Plan,
notwithstanding his continued relationship with Dr. Reddy’s as
an independent contractor between July 2011 and October 2011.
(See Pl.’s Opp’n Br. at 8-10.)

Segura also argues that even if

such a relationship made him a “Leased Employee” under the Plan,
the Plan documents show that this status is excluded from
participation in the Plan and thus he would remain eligible for
a distribution.

(See id. at 13-16.)

Segura supports this

argument by referring to language in the Summary Plan

14

Description, as well as his Separation Agreement with Dr.
Reddy’s from June 30, 2011.

(See id. at 10-15.)3

The Court will not determine Segura’s employment status
when deciding the Motion.

The parties both seek to introduce

factual material beyond the face of the Amended Complaint in
order to support their respective positions.
Br. at 10-13; see also Def.’s Br. at 4-5.)

(See Pl.’s Opp’n
Segura points to

language in the Separation Agreement that terminates his
employee benefits as an indication of his separation event.
(See Pl.’s Opp’n Br. at 12.)

Dr. Reddy’s seeks to disprove the

factual allegation of employment status in the Amended Complaint
by way of control language in the leasing agreement with Klein
Hersh.

(See Def.’s Br. at 4-5.)

These pieces of evidence will

not be considered when resolving this Motion.

Such extraneous

documents may not be used to resolve factual disputes between
the parties upon a motion to dismiss; rather, allegations in the
complaint are taken as true and the totality of the complaint is
weighed to see if the plaintiff has stated a claim under the
applicable law.

See Phillips, 515 F.3d at 233.

The letter and staffing agreement exchanged between Dr.
Reddy’s and Klein Hersh addresses Segura’s relationship with the
two entities.

(See Def.’s Br. at 3, 8.)

3

Dr. Reddy’s does not

Neither of these documents was attached to the Amended
Complaint.
15

demonstrate that this material was integrally incorporated in
Segura’s Amended Complaint, but merely notes that “Plaintiff
alleges that ‘Between July 1, 2011 and October 7, 2011, Segura
served as an independent contractor to Dr. Reddy’s through Klein
Hers[]h International.’

(Amended Complaint, ¶ 9).

Therefore,

the letter and Staffing Agreement may properly be considered on
this Motion to Dismiss.”

(Def.’s Br. at 3, n.4.)

The Court is

not persuaded that Segura’s tangential reference to his
employment at Klein Hersh is sufficient for the Court to
consider a private contract between Klein Hersh and Dr. Reddy’s
on a motion to dismiss.

This inference is particularly

inappropriate where Dr. Reddy’s has not established that Segura
was a party to that agreement, or had any prior notice of its
contents.

Thus, the letter and staffing agreement are not

properly before the Court for the purposes of this Motion and
will not be considered.
Taking Segura’s factual allegation of his status as an
independent contractor as true for the purposes of the Motion,
the terms of the Plan would require disbursement of his funds
upon request.4

Thus, Segura argues that Dr. Reddy’s failure to

disburse his funds when the Plan so required qualifies as a
4

The documents beyond the scope of the Amended Complaint
may not be considered, and the IRS regulations do not encompass
a situation, as here, where a separation event allegedly occurs
between the different employee and leased employee statuses.
See Retirement Plans, 69 Fed.Reg. at 78148.
16

misrepresentation or omission that allows him to proceed with
the breach of fiduciary duty claim.
17.)

(See Pl.’s Opp’n Br. at 16-

Under the elements listed in Shook, Segura must plead that

(1) Dr. Reddy’s was acting in a fiduciary capacity; (2) Dr.
Reddy’s made an affirmative misrepresentation or omitted
information in its communications with Segura; (3) the
misrepresentation or omission was material; and (4) Segura
detrimentally relied on the misrepresentation or omission.
Shook, 625 F.3d at 73.

See

The second and third elements are

intertwined: “Determining whether a misrepresentation or
inadequate disclosure bears a substantial likelihood of
misleading a reasonable employee may involve examining whether
the fiduciary, as an objective matter, knew or should have known
that a beneficiary would be confused by the statement or
omission.”

Unisys Corp. Retiree Med. Benefits ERISA Litig. v.

Unisys Corp., 579 F.3d 220, 228-29 (3d Cir. 2009) (internal
citation and quotation omitted).

If the required elements can

be found in the Amended Complaint, construing all inferences in
favor of Segura, then the Motion will be denied with respect to
this claim.
Segura pleaded that Dr. Reddy’s owed him fiduciary duties
in Dr. Reddy’s capacity as the Plan Administrator.
Compl. at ¶¶ 11-12, 44-46.)

(See Am.

Segura claims that Dr. Reddy’s

informed him that he was not eligible for a disbursement under
17

the terms of the Plan and then failed to inform him of the
applicable terms.

(See id. at ¶¶ 24, 25, 28.)

Segura pleaded

that this misrepresentation (regarding his employment status)
resulted in his funds being inaccessible for four months and
that the failure to provide him with the basis for the refusal
left him unable to contest Dr. Reddy’s conduct.
27-31, 37.)

(See id. at ¶¶

Finally, Segura pleaded that the refusal to

disburse his funds from the 401(k) account over that period
ultimately resulted in a loss of almost $25,000.

(See id. at ¶¶

29, 36, 37.)
The Amended Complaint contains allegations that satisfy the
first element, namely that Dr. Reddy’s acted in a fiduciary
capacity as the Plan Administrator.

See Varity Corp. v. Howe,

516 U.S. 489, 527 (1996) (“a person is a fiduciary with respect
to a plan only to the extent that he has any discretionary
authority or discretionary responsibility in the administration
of such plan”) (internal quotation marks omitted).

The final

element is also satisfied with allegations that Segura was
unable to access his funds and the amount in the account
depreciated by $25,000 over the period those funds were
inaccessible due to Segura’s reliance on Dr. Reddy’s
determination.

See Unisys Corp., 579 F.3d at 229 (“detrimental

reliance is not limited to the retirement decision alone; rather
it may encompass decisions to decline other employment
18

opportunities, to forego the opportunity to purchase
supplemental health insurance, or other important financial
decisions pertaining to retirement”).

(See Am. Compl. at ¶¶ 26-

29.)
The second and third elements, requiring a material
misrepresentation or omission, are also present in the
allegations contained in the Amended Complaint.

Segura has

presented a narrative wherein his employment with Dr. Reddy’s
was terminated and he began working for another company.
Am. Compl. at ¶¶ 6-9.)

(See

Yet when he sought to claim benefits

under the Plan, his request was denied because Dr. Reddy’s
informed him that he was still an employee under the Plan.
id. at ¶¶ 24, 27, 32.)

(See

Accordingly, asking under Unisys Corp.

“whether the fiduciary, as an objective matter, knew or should
have known that a beneficiary would be confused by the statement
or omission,” the Court resolves this question in favor of
Segura: a beneficiary would be confused to have signed a
Separation Agreement but still be considered an employee of the
company.

Segura has pleaded that Dr. Reddy’s made a material

misrepresentation or omission, satisfying all four of the
required elements for a breach of fiduciary duty claim.
Dr. Reddy’s has not persuaded the Court that the claim for
breach of fiduciary duty in failing to disburse the funds should
be dismissed for failure to state a claim under 29 U.S.C. §
19

1132(a)(2).

Accordingly, the Motion will be denied with respect

to the claim brought under that provision of the statute.
Dr. Reddy’s also argues that 29 U.S.C. § 1132(a)(1)(B) is
not available for a claim for breach of fiduciary duty.
Def.’s Br. at 16-18.)

(See

At this early stage in the litigation,

however, a complaint pleading both wrongful denial of benefits
and breach of fiduciary duty is not duplicative, nor does it
require that the Court strike one claim to uphold the other.
See Koert v. G.E. Grp. Life Assur. Co., No. 04-5745, 2005 WL
1655888, at *3 (E.D. Pa. July 14, 2005) (denying motion to
dismiss dual claims for wrongful denial of benefits and breach
of fiduciary duty); see also Tannenbaum v. UNUM Life Ins. Co. of
Am., No. 03-1410, 2004 WL 1084658, at *4 (E.D. Pa. Feb. 27,
2004) (denying motion to dismiss claims for both wrongful denial
of benefits and equitable relief because “at this stage, we
cannot know whether Plaintiff will be able to prove his
entitlement to benefits under § 1132(a)(1)(B)”).
Segura alleged that Dr. Reddy’s administers the Plan, that
he requested a distribution he was entitled to, that his request
was denied by Dr. Reddy’s, and that the denial resulted in
Segura’s 401(k) account losing value.
18, 21-24, 27, 29, 41, 45.)

(See Am. Compl. at ¶¶ 12,

The portion of Count I brought

under 29 U.S.C. § 1132(a)(1)(B) will remain as Segura has
pleaded sufficient facts to demonstrate a wrongful denial of
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benefits under the terms of the Plan, resulting in harm to
Segura.

(See Am. Compl. at ¶¶ 29, 39, 41, 46.)

Although styled as a claim for breach of fiduciary duty,
Segura has pleaded his claim under the statute pertaining to a
wrongful denial of benefits and he has alleged facts that, if
true, support such a claim.

While a clearer complaint would

separate the count into its distinct claims, under the
applicable standard, Segura’s claims under 29 U.S.C. §§
1132(a)(1)(B) and 1132(a)(2) will withstand the Motion.
The Motion will be denied as it relates to the failure to
disburse the requested funds.
B.

Failure to Provide Plan Documents

ERISA works to ensure the provision of plan documents to
participants and beneficiaries by exacting penalties from those
administrators who fail or refuse to supply requested
information.

See 29 U.S.C. § 1132(c).

The pertinent section

states:
Any administrator . . . who fails or refuses to comply
with a request for any information which such
administrator is required by this title to furnish to
a participant or beneficiary (unless such failure or
refusal results from matters reasonably beyond the
control of the administrator) by mailing the material
requested to the last known address of the requesting
participant or beneficiary within 30 days after such
request may in the court's discretion be personally
liable to such participant or beneficiary in the
amount of up to $ 100 a day from the date of such
failure or refusal, and the court may in its
discretion order such other relief as it deems proper.
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29 U.S.C. § 1132(c)(1)(B).

To state a claim for relief under

this provision, a plaintiff must allege that (1) he is a plan
participant or beneficiary; (2) he has made a request of a plan
administrator for information that falls within the purview of
ERISA’s disclosure requirements; and (3) the plan administrator
failed to provide the requested documents within thirty days of
the request.

See 29 U.S.C. § 1132(c)(1)(B).

Segura has pleaded that he was a participant and
beneficiary of the Plan.

(See Am. Compl. at ¶¶ 14, 15.)

Segura

has pleaded that Dr. Reddy’s serves as the Plan Administrator
and that he requested information from Dr. Reddy’s on August 9,
2011, after his requested disbursement was denied.
¶¶ 12, 24-25.)

(See id. at

Segura has also pleaded that the documents he

requested were not provided until more than thirty days after
his request was made.

(See id. at ¶¶ 24-25, 28, 34.)

The one

remaining element is whether Segura requested “information which
such administrator is required by this title to furnish to a
participant or beneficiary,” or information that falls within
the scope of ERISA’s disclosure requirements.

See 29 U.S.C. §

1132(c)(1)(B).
In his opposition papers, Segura points to three sections
of ERISA that require plan administrators to provide documents
upon a beneficiary’s request: 29 U.S.C. § 1133(1), 29 U.S.C. §

22

1024(b)(1), and 29 U.S.C. § 1024(b)(4).
20-23.)

(See Pl.’s Opp’n Br. at

Under the first provision, ERISA requires that “every

employee benefit plan shall provide adequate notice in writing
to any participant or beneficiary whose claim for benefits under
the plan has been denied, setting forth the specific reasons for
such denial, written in a manner calculated to be understood by
the participant.”

29 U.S.C. § 1133(1).

Segura also claims that Dr. Reddy’s violated 29 U.S.C. §
1024(b)(1) and 29 U.S.C. § 1024(b)(4).

The first provision

relates to the summary plan description document:
The administrator shall furnish to each participant,
and each beneficiary receiving benefits under the
plan, a copy of the summary plan description, and all
modifications and changes referred to in section
102(a)-(A) within 90 days after he becomes a
participant, or (in the case of a beneficiary) within
90 days after he first receives benefits, or
(B) if later, within 120 days after the plan
becomes subject to this part.
29 U.S.C. § 1024(b)(1).

The final provision is the only one to

require a written request for information before the plan
administrator must provide documentation: “The administrator
shall, upon written request of any participant or beneficiary,
furnish a copy of the latest updated summary plan description,
and the latest annual report, any terminal report, the
bargaining agreement, trust agreement, contract, or other

23

instruments under which the plan is established or operated.”
29 U.S.C. § 1024(b)(4).
Dr. Reddy’s argues that the claim should be dismissed
because the Amended Complaint fails to allege which documents
were specifically requested.

(See Def.’s Br. at 18-19.)

The

Amended Complaint, however, refers to several documents that Dr.
Reddy’s was obligated to provide to Segura.

(See, e.g., Am.

Compl. at ¶ 28 (noting the first failure to provide claims
dispute procedures or a reason for the denial of benefits); id.
at ¶ 34 (noting the first instance when Segura received any Plan
documents).)

A copy of the Plan was requested, Dr. Reddy’s was

obligated to provide certain Plan documents when Segura first
became a beneficiary, and Dr. Reddy’s also was obligated to
provide Segura with an explanation for why his request was
denied and a description of how he could contest that decision.
(See id. at ¶¶ 24-26, 28, 34, 39.)
Dr. Reddy’s also argues that the claim should be dismissed
because Segura did not plead which sections of ERISA would
require Dr. Reddy’s to provide the requested documents.
Def.’s Br. at 18-19.)

(See

Dr. Reddy’s is correct; Segura failed to

include in his allegations a specific identification of what
ERISA sections relate to the requested information.

See Markert

v. PNC Fin. Servs. Grp., 828 F.Supp.2d 765, 781 (E.D. Pa. 2011)
(dismissing claim because “[p]laintiffs fail to identify the
24

corresponding provision within the statute that relates to the
[information] which they requested”).

Moreover, Segura failed

to plead that he made a written request for the Summary Plan
Description, which is required under 29 U.S.C. § 1024(b)(4).
See 29 U.S.C. § 1024(b)(4) (“upon written request of any
participant”).

Accordingly, the claim under 29 U.S.C. §

1132(c)(1) will be dismissed without prejudice for failure to
identify the provisions of ERISA that require the information
sought to be provided and for failure to specify that a written
request was made of Dr. Reddy’s regarding the Summary Plan
Description.

Should Segura seek to revive those portions of the

Amended Complaint which are dismissed for failure to state a
claim, he may do so upon leave from the Magistrate Judge.
CONCLUSION
For the reasons stated supra, the Court will grant
Defendant’s motion to dismiss in part and deny it in part.

The

Court will issue an appropriate Order and Judgment.

s/ Mary L. Cooper
MARY L. COOPER
United States District Judge
Dated: December 20, 2012

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