Stark v. Mars, Inc. et al
Filing
27
ORDER granting in part and denying in part 12 Motion to Dismiss; denying 15 Motion to Amend/Correct. Signed by Judge James L Graham on 5/11/11. (bw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Virginia Stark,
Plaintiff,
v.
Case No. 2:10-cv-642
Mars, Inc., et al.,
Defendants.
OPINION AND ORDER
This is an action brought pursuant to the Employee Retirement
Income Security Act of 1974 (“ERISA”) and federal common law.
Plaintiff Virginia Stark was an employee of Kal Kan Foods, Inc., a
division of defendant Mars, Inc. (“Mars”), from 1982 to 2004.
First Am. Compl., ¶¶ 6-7.
The other named defendants are the Mars
Benefit Plans Committee (“the Committee”) and the Mars Benefit
Plans Appeals Committee (“the Appeals Committee”).1
Plaintiff filed her complaint on July 16, 2010, and her first
amended complaint on September 10, 2010.
Plaintiff alleges in the
first amended complaint that she received a letter on August 4,
2008, advising her that she was eligible to elect pension benefits
under the Associate Retirement Plan (“ARP”) provisions of the U.S.
Retirement Plan (“the Plan”).
First Am. Compl., ¶ 8.
On February
9, 2009, plaintiff utilized the website made available by Mars and
the Committee to research her payment options. This website allows
participants to estimate their pension payments based on the plan
option and the date of election, but did not supply the underlying
1
Defendants indicate that the correct name of the Committee is the Mars,
Incorporated U.S. Benefit Plans Committee, and that the correct name of the
Appeals Committee is the Mars, Incorporated Appeals Committee. Doc. 12, p. 1.
actuarial formulas used to calculate benefits.
¶ 9.
First Am. Compl.,
According to the website, the monthly pension benefit to
plaintiff as of June 30, 2009, and December 30, 2009, for a single
life annuity with a five-year certain payment option was $5,365.
First Am. Compl., ¶ 10.
On February 11, 2009, plaintiff spoke with an employee of Mars
and/or the Committee, and requested a Pension Estimate Calculation
Statement for benefits commencing in April or May of 2009.
First
Am. Compl., ¶ 11. Plaintiff was informed that her pension benefits
would be $5,365 per month as of April, 2009, and $5,468 per month
as of May, 2009.
15,
2009,
First Am. Compl., ¶ 12.
plaintiff
received
a
Pension
On or before February
Estimate
Calculation
Statement from Mars and/or the Committee dated February 11, 2009,
a print-out version of the information plaintiff received on the
website, which stated that the monthly payments to plaintiff as of
June 30, 2009, and December 31, 2009, for a single life annuity
with the five-year certain payment option was $5,364.63. First Am.
Compl., ¶¶ 13-14.
On or before February 15, 2009, plaintiff also
received the benefit calculation she had requested during the
telephone conversation on February 11, 2009, and the monthly
payment amounts in this statement corresponded to the amounts given
to her on the website and on the website statement she received.
First Am. Compl., ¶ 15.
On February 18, 2009, plaintiff spoke with an employee of Mars
and/or the Committee, and asked for confirmation that the $5,364.63
payment was accurate, and she was informed that this amount was
accurate.
First Am. Compl., ¶ 16.
Plaintiff elected during this
conversation to begin receiving pension benefits.
First Am.
Compl., ¶ 17. Plaintiff further alleges that on February 24, 2009,
2
she received a letter dated February 18, 2009, from Mars and/or the
Committee requesting her signature on a USRP-ARP Formula elections
form.
On this form, it was represented that this election would
pay $5,364.63 per month.
First Am. Compl., ¶¶ 19-20.
signed the form and returned it.
Plaintiff
First Am. Compl., ¶ 21.
At the
time of the election, plaintiff had not yet reached the age of 65.
Doc. 17, Ex. B.
Plaintiff further alleges that her decision to elect the
single life annuity option was based solely on the representations
made by Mars and/or the Committee on the website and during the
telephone
conversations,
and
that
she
relied
on
these
representations by making purchase decisions and entertainment
plans,
doing
improvements.
landscaping
projects
First Am. Compl., ¶ 18.
and
undertaking
home
From March 31, 2009,
through July 31, 2009, she received five monthly payments of
$5,364.63, less taxes.
First Am. Compl., ¶ 22.
Plaintiff alleges that on August 3, 2009, she received a
telephone call from Mars and/or the Committee informing her that
her pension benefit had been calculated incorrectly.
Compl., ¶ 23.
First Am.
She then received a letter dated July 31, 2009,
informing her that there was an error in the calculation of her
monthly pension benefit, and that the correct amount of her monthly
benefit was $2,303.12.
The letter further stated that her monthly
payments would be reduced to $2,199.93 to satisfy the overpayment
of $15,307.25, plus interest.
First Am. Compl., ¶ 24.
On August
31, 2009, plaintiff began receiving a monthly payment of $2,199.93.
On September 29, 2009, plaintiff sent a claim letter to the Plan
administrator, and on December 23, 2009, her request for monthly
payments in the amount of $5,364.63 was denied.
3
First Am. Compl.,
¶¶ 26-27.
On February 11, 2010, plaintiff appealed the denial of
the higher benefit amount to the Appeals Committee, and on April
12, 2010, her appeal was denied.
First Am. Compl., ¶¶ 28-29; Doc.
17, Ex. B.
In Count One of the first amended complaint, plaintiff asserts
a claim for breach of fiduciary duty based on defendants’ alleged
misrepresentations.
First Am. Compl., ¶¶ 30-37.
In Count Two,
plaintiff asserts a claim of promissory estoppel.
Compl., ¶¶ 38-42.
equitable estoppel.
First Am.
In Count Three, plaintiff asserts a claim of
First Am. Compl., ¶¶ 43-49.
In Count Four,
plaintiff asserts a claim for denial of benefits pursuant to 29
U.S.C. §1132(a)(1)(b).
I. Motion to Amend Complaint
On October 26, 2010, plaintiff filed a motion for leave to
amend the first amended complaint by deleting Counts One and Four
from the complaint.
Pursuant to Fed.R.Civ.P. 15(a)(2), where a
party has already amended its pleading once as a matter of course,
a party may later amend its pleading “only with the opposing
party’s written consent or the court’s leave.”
15(a)(2).
Fed.R.Civ.P.
Rule 15 further states that the “court should freely
give leave when justice so requires.”
Davis, 371 U.S. 178, 182 (1962).
Rule 15(a)(2); see Foman v.
However, a “district court,
generally speaking, has considerable discretion in deciding whether
to grant” a Rule 15(a)(2) motion.
Leisure Caviar, LLC v. United
States Fish and Wildlife Serv., 616 F.3d 612, 615 (6th Cir. 2010).
“A motion to amend a complaint should be denied if the amendment is
brought in bad faith, for dilatory purposes, results in undue delay
or prejudice to the opposing party, or would be futile.” Colvin v.
Caruso, 605 F.3d 282, 294 (6th Cir. 2010)(quoting Crawford v.
4
Roane, 53 F.3d 750, 753 (6th Cir. 1995)).
Courts have also
expressed reluctance to grant a motion to amend which seeks to drop
claims apparently in order to avoid the impact of a pending
dispositive motion. See Lowe’s Home Ctrs., Inc. v. Olin Corp., 313
F.3d 1307, 1315 (11th Cir. 2002); Parish v. Frazier, 195 F.3d 761,
764 (5th Cir. 1999).
Plaintiff has requested a dismissal of Counts One and Four
“without prejudice so that she can re-assert these causes of action
in the event that this Court determines that they are supported by
the facts of this case.”
Doc. No. 15, p. 2.
However, it is not
the role of this court to advise plaintiff to seek to re-file these
claims if and when future developments in the case indicate that
her chances of prevailing on these claims have improved.
The
request to dismiss without prejudice also raises concerns regarding
the possibility of future prejudice to the defendants and delays.
The four claims in the complaint are factually related, and in the
interests of judicial economy, as well as the parties’ expenditure
of time and money, they should be addressed together.
If Counts
One and Four are dismissed without prejudice and plaintiff later
seeks to amend her complaint to re-assert them after discovery on
the other counts is completed and substantial time has passed, this
could result in delays in the resolution of the case and additional
costs to the defendants.
If plaintiff has any intent to pursue a
claim for denial of benefits under §1132(a)(1)(B) or for breach of
fiduciary duty, the time to do so is now.2
2
Since plaintiff’s
Litigating Counts One and Four along with plaintiff’s other claims in a
single action would also promote the goal of prompt resolution of claims against
the Plan which is evidenced by Plan provisions. For example, under §9.10 of the
Plan, “any further legal action taken against Plan or its fiduciaries ... must
be filed in a court of law no later than 120 days after the Committee’s final
decision regarding the claim.” Doc. 17, Ex. A. Similar plan provisions have
5
motion for leave to amend her complaint is phrased in terms of a
dismissal of Counts One and Four without prejudice, the motion is
denied.
II. Defendants’ Motion to Dismiss
A. Standards
On October 5, 2010, defendants filed a motion to dismiss the
first amended complaint pursuant to Fed.R.Civ.P. 12(b)(6) for
failure to state a claim for which relief may be granted.
In
ruling on a motion to dismiss under Rule 12(b)(6), the court must
construe the complaint in a light most favorable to the plaintiff,
accept all well-pleaded allegations in the complaint as true, and
determine whether plaintiff undoubtedly can prove no set of facts
in support of those allegations that would entitle him to relief.
Erickson v. Pardus, 551 U.S. 89, 94 (2007); Bishop v. Lucent
Technologies, Inc., 520 F.3d 516, 519 (6th Cir. 2008); Harbin-Bey
v. Rutter, 420 F.3d 571, 575 (6th Cir. 2005).
to
dismiss,
the
“complaint
must
contain
To survive a motion
either
direct
or
inferential allegations with respect to all material elements
necessary to sustain a recovery under some viable legal theory.”
Mezibov v. Allen, 411 F.3d 712, 716 (6th Cir. 2005).
allegations
or
legal
conclusions
allegations will not suffice.
While
the
complaint
masquerading
Conclusory
as
factual
detailed
factual
Id.
need
not
contain
allegations, the “[f]actual allegations must be enough to raise the
been enforced. See, e.g., Rice v. Jefferson Pilot Financial Ins. Co., 578 F.3d
450, 454 (6th Cir. 2009)(three-year limitations period provided by plan was
reasonable); Northlake Regional Medical Center v. Waffle House Sys. Employee
Benefit Plan, 160 F.3d 1301, 1303-04 (11th Cir. 1998)(90-day limitations period
in plan was reasonable). Thus, any attempt to re-assert Counts One and Four
following a dismissal without prejudice may also require the court and the
parties to address limitations issues.
6
claimed right to relief above the speculative level,” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007), and must create a
reasonable expectation that discovery will reveal evidence to
support the claim. Campbell v. PMI Food Equipment Group, Inc., 509
F.3d 776, 780 (6th Cir. 2007).
A complaint must contain facts
sufficient to “state a claim to relief that is plausible on its
face.”
Twombly, 550 U.S. at 570.
“The plausibility standard is
not akin to a ‘probability requirement,’ but it asks for more than
a sheer possibility that a defendant has acted unlawfully.”
U.S.
Ashcroft v. Iqbal,
, 129 S.Ct. 1937, 1949 (2009).
Where a complaint pleads facts that are merely consistent with a
defendant’s
liability,
it
stops
short
of
the
line
between
possibility and plausibility of entitlement to relief.
Id.
Determining whether a complaint states a plausible claim for relief
is “a context-specific task that requires the reviewing court to
Id. at 1950.
draw on its judicial experience and common sense.”
Where the facts pleaded do not permit the court to infer more than
the mere possibility of misconduct, the complaint has not shown
that
the
pleader
is
Fed.R.Civ.P. 8(a)(2).
entitled
to
relief
as
required
under
Ibid.
In evaluating a motion to dismiss, a court generally is
limited to the complaint and exhibits attached thereto.
Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001).
consider
a
document
or
instrument
which
is
Amini v.
The court may
attached
to
the
complaint, or which is referred to in the complaint and is central
to the plaintiff’s claim.
Fed.R.Civ.P. 10(c)(“[a] copy of any
written instrument which is an exhibit to a pleading is a part
thereof for all purposes.”); Weiner v. Klais & Co., Inc., 108 F.3d
86, 88 (6th Cir. 1997). In addition, if extrinsic materials merely
7
“fill in the contours and details” of a complaint, such materials
may be considered without converting the motion to one for summary
judgment.
Yeary v. Goodwill Indus.-Knoxville, Inc., 107 F.3d 443,
445 (6th Cir. 1997).
Where the plaintiff fails to introduce a
pertinent document as part of his pleading, defendant may introduce
the
exhibit
as
part
of
his
motion
attacking
the
pleading.
Greenberg v. Life Ins. Co. of Virginia, 177 F.3d 507, 514 (6th Cir.
1999); Weiner, 108 F.3d at 89.
The defendants have filed a copy of
the Plan as Exhibit A to their reply memorandum, and a copy of the
appeal denial letter as Exhibit B to their reply memorandum. Since
both these documents were referenced in plaintiff’s complaint, the
court may consider them along with the complaint.
B. Failure to Specify Statutory Provisions
Defendants argue that the first amended complaint is deficient
because, with the exception of Count Four, which is identified as
a claim for benefits pursuant to §1132(a)(1)(B), plaintiff fails to
specify the ERISA statutory provisions upon which her claims are
based.
This argument is not well taken.
A plaintiff is not
required to plead legal theories or cases, or specify the statute
or common law principle that a defendant has allegedly violated.
Shah v. Inter-Contental Hotel Chicago Operating Corp., 314 F.3d
278, 282 (7th Cir. 2002). Even the failure to correctly categorize
the legal theory giving rise to a claim does not require dismissal
if the complaint otherwise alleges facts upon which relief can be
granted.
See Gean v. Hattaway, 330 F.3d 758, 765 (6th Cir.
2003)(analyzing complaint under the IDEA and the Rehabilitation Act
even though it specifically referred only to 42 U.S.C. §1983).
Count One of the complaint asserts a claim for breach of
fiduciary duty based on the alleged misrepresentations made to
8
plaintiff concerning her retirement benefits.
Since that count
contains no claim for recovery on behalf of the Plan, it cannot be
a claim for breach of fiduciary duty under 29 U.S.C. §1132(a)(2).
Plan participants can only bring a civil action under §1132(a)(2)
for breach of fiduciary duty if they are seeking recovery on behalf
of the plan for an injury to the plan; that section does not permit
participants to recover individually.
See Massachusetts Mutual
Life Ins. Co. v. Russell, 473 U.S. 134, 140 (1985); Loren v. Blue
Cross & Blue Shield of Michigan, 505 F.3d 598, 608 (6th Cir. 2007).
The only other statutory provision which can apply is 29 U.S.C.
§1132(a)(3), which permits a participant to bring an action “to
obtain
other
appropriate
equitable
relief
(i)
to
violations of ERISA such as a breach of fiduciary duty.
§1132(a)(3)(B).
(1996)(holding
redress”
29 U.S.C.
See Varity Corp. v. Howe, 516 U.S. 489, 510
that
§1132(a)(3)
was
broad
enough
to
cover
individual relief for breach of a fiduciary obligation based on
misrepresentations allegedly made by employer acting as an ERISA
fiduciary).
The failure to specifically label that claim as one
under §1132(a)(3) does not warrant dismissal. Counts Two and Three
are labeled as promissory estoppel and equitable estoppel claims.
They are based on federal common law.
See Riverview Health
Institute LLC v. Medical Mutual of Ohio, 601 F.3d 505, 521 (6th
Cir. 2010).
This branch of defendants’ motion is not well taken.
C. Liability of Defendants
Defendants argue that the complaint fails to adequately allege
claims against the particular defendants because plaintiff does not
allege how each of the defendants is liable, how each defendant
qualifies
as
a
fiduciary,
or
how
fiduciary duty.
9
the
defendants
breached
a
Plaintiff alleges in the complaint that she used a website
provided by Mars and/or the Committee for the calculation of
benefits, and that the figure she arrived at was $5,365. First Am.
Compl., ¶¶ 9-10.
She further alleges that she spoke with an
employee or agent of Mars and/or the Committee on February 11,
2009, and was told that her benefits would be $5,365 per month as
of April, 2009.
First Am. Compl., ¶¶ 11-12.
Plaintiff also
contends that she received two written statements from Mars and/or
the Committee verifying that her benefit would be $5,364.63. First
Am. Compl., ¶¶ 13-15.
She further alleges that she again spoke
with an employee and/or agent of Mars and/or the Committee on
February 18, 2009, and was told that this figure was accurate.
First Am. Comp., ¶ 16.
She also allegedly received a letter from
Mars and/or the Committee dated February 18, 2009, along with an
election form which stated that she would receive $5,364.63 per
month.
First Am. Compl., ¶¶ 19-21.
Plaintiff alleges that she
accepted the payment option based solely on her reliance on the
representations made to her on the website, by telephone, and in
writing, as described above.
First Am. Compl., ¶ 18.
In Count One, plaintiff alleges that the defendants exercise
discretionary authority or control respecting the management of the
plan and the disposition of its assets, and/or have discretionary
authority or responsibility in the administration of the Plan.
First Am. Compl., ¶ 31.
Plaintiff further alleges that defendants
are fiduciaries and that they were acting in a fiduciary capacity
when they represented to her that her monthly payments would be
$5,364.63.
First Am. Compl., ¶¶ 32-33.
In Count Two, the promissory estoppel claim, plaintiff alleges
that defendants promised that plaintiff would receive a monthly
10
benefit
of
$5,364.63,
that
defendants
reasonably
should
have
expected that this promise would induce her to choose this option,
and that she did in fact choose this option.
First Am. Compl., ¶¶
38-42.
In
Count
Three,
the
equitable
estoppel
claim,
plaintiff
alleges that the representations made by defendants that her
monthly benefits would be $5,364.63 were material, that defendants
were aware that plaintiff was entitled to no more than $2,303.12
per month under the single life annuity with five-year certain
pension payment option, that plaintiff reasonably believed that
defendants intended for plaintiff to act on their representations,
that plaintiff was unaware that she was only entitled to the lesser
amount, and that plaintiff detrimentally and justifiably relied on
the representations made by defendants.
First Am. Compl., ¶¶ 43-
49.
In Count Four, plaintiff asserts a claim for benefits under
§1132(a)(1)(B).
This claim is based on the allegations that
plaintiff sent a formal claim letter to the Plan administrator,
that her request for benefits in the amount of $5,364.63 was denied
by the Committee, and that her appeal of that decision was denied
by the Appeals Committee.
First Am. Compl., ¶¶ 26-29.
The complaint is sufficient to state a claim against the
Committee on all counts. As to the breach of fiduciary duty claim,
under ERISA,
a person is a fiduciary with respect to a plan to the
extent (i) he exercises any discretionary authority or
discretionary control respecting management of such plan
or exercises any authority or control respecting
management or disposition of its assets, (ii) he renders
investment advice for a fee or other compensation, direct
or indirect, with respect to any moneys or other property
of such plan, or has any authority or responsibility to
11
do so, or (iii) he has any discretionary authority or
discretionary responsibility in the administration of
such plan.
29 U.S.C. §1002(21)(A). A fiduciary within the meaning of ERISA is
someone acting in the capacity of manager,
administrator, or
financial adviser to a plan. Pegram v. Herdrich, 530 U.S. 211, 222
(2000). Under the statute, an administrator or manager of the plan
is a fiduciary only “to the extent” that he exercises discretionary
authority, control, or responsibility respecting the management of
the plan, the disposition of its assets, or the administration of
the plan.
Id. at 225-226; §1002(21)(A).
Under the terms of the Plan, the Committee is designated as
being the administrator of the Plan.
Committee
has
the
authority
to
Doc. 17, Ex. A, §1.4.
adopt
rules,
The
procedures
and
regulations for the administration of the Plan, to construe and
interpret Plan provisions, to make factual determinations, to
determine eligibility for benefits, and to hear and decide claims
for benefits, including benefit claims appeals.
§9.4.
The
Doc. 17, Ex. A,
Thus, the Committee qualifies as a fiduciary under ERISA.
complaint
also
includes
sufficient
facts
concerning
the
Committee’s alleged involvement in the alleged misrepresentations
made to plaintiff and the denial of her claim for benefits.
These
allegations are sufficient to indicate that the Committee acted as
a fiduciary.
The court finds that the allegations in the complaint are
sufficient to identify Mars as a proper defendant to the promissory
and equitable estoppel claims in Counts Two and Three.
As to the
breach of fiduciary duty claim in Count One, the record indicates
that the Plan is maintained by Mars.
12
Doc. 17, Ex. A, §1.1.
Thus,
Mars is a “plan sponsor” as defined in 29 U.S.C. 1002(16)(B).
Plaintiff summarily alleges that Mars “controls and/or exercises
discretion over the funding and control of employee benefit plans,
including” plaintiff’s Plan. First Am. Compl., ¶ 2. The complaint
also
alleges
that
misrepresentations.
Mars
was
involved
in
making
the
alleged
However, the complaint fails to allege facts
sufficient to show how Mars was acting in a fiduciary capacity in
making the alleged misrepresentations to plaintiff.
To establish a claim for breach of fiduciary duty based on
alleged misrepresentations concerning coverage under any employee
benefit plan, a plaintiff must show that the defendant was acting
in
a
fiduciary
representations.
capacity
when
it
made
the
challenged
Moore v. Lafayette Life Ins. Co., 458 F.3d 416,
433 (6th Cir. 2006).
The facts alleged do not show that defendant
Mars had any “discretionary authority or discretionary control
respecting management of such plan” or that it “exercises any
authority or control respecting management or disposition of [Plan]
assets,” or that defendant Mars had “any discretionary authority or
discretionary responsibility in the administration of such plan”
such as giving information or advice to plan participants.
§1002(21)(A).
The Plan itself provides that the Committee is the
Plan administrator which has the binding authority to determine all
questions concerning the eligibility for benefits and the amount of
benefits.
Doc. 17, Ex. A, §§1.4, 9.4.
Under the terms of the
Plan, the Committee has the power to delegate all or part of its
powers, rights and duties to other individuals, committees or third
parties. Doc. 17, Ex. A, §§9.4(a), 9.5(a). However, the complaint
does not allege that the Committee has delegated any of its
authority to defendant Mars or any agents or employees of Mars.
13
Thus, the complaint fails to state a claim for breach of fiduciary
duty against Mars.
The complaint also fails to state a claim for benefits against
Mars under §1132(a)(1)(B). The proper defendant in an ERISA action
concerning benefits is the plan administrator.
Health Institute LLC, 601 F.3d at 522.
party
defendant
in
an
action
See Riverview
An employer is not a proper
concerning
benefits
unless
employer “‘is shown to control administration of the plan.’”
the
Gore
v. El Paso Energy Corp. Long Term Disability Plan, 477 F.3d 833,
842 (6th Cir. 2007)(quoting Daniel v. Eaton Corp., 839 F.2d 263,
266
(6th
Cir.
1988)).
In
other
words,
the
defendant
in
a
§1132((a)(1)(B) action must be the parties or entities which made
the decision to deny benefits, in this case, the Committee and the
Appeal Committee.
Counts One and Four, insofar as they pertain to
defendant Mars, will be dismissed.
In regard to the Appeals Committee, the complaint contains no
allegations that the Appeals Committee made any misrepresentations
to plaintiff about her benefits.
Therefore, Counts One, Two and
Three, insofar as they pertain to the Appeals Committee, will be
dismissed.
In regard to Count Four, the denial of benefits claim,
the record reveals that the letter denying plaintiff’s appeal was
from the Appeals Committee.
Doc. 17, Ex. B.
The letter states
that the Committee “has delegated to the Appeals Committee the
absolute discretionary authority and power to review and decide all
claim appeals under the Plan.”
There is sufficient information in
the complaint and related documents to support the claim against
the Appeals Committee for denial of benefits asserted in Count
Four.
14
D. Counts One through Three as Distinct Claims
Defendants argue that plaintiff cannot pursue the claim for
breach of fiduciary duty in Count One and the estoppel claims in
Counts Two and Three because she has asserted a claim for benefits
in Count Four.
In
Varity
Corp.,
the
Supreme
Court
noted
that
“ERISA
specifically provides a remedy for breaches of fiduciary duty with
respect to interpretation of plan documents and the payment of
claims” through a cause of action under §1132(a)(1)(B).
516 U.S.
at 512. The remedy for “other breaches of other sorts of fiduciary
obligation”
may
be
sought
under
the
“catchall”
provision
in
§1132(a)(3). Id. The Supreme Court concluded that “where 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 would normally not be appropriate.”
U.S.. at 515.
Id., 516
The Sixth Circuit in Wilkins v. Baptist Healthcare
Sys. Inc., 150 F.3d 609 (6th Cir. 1998), interpreted Varity Corp.
as limiting “the applicability of §1132(a)(3) to beneficiaries who
may not avail themselves of §1132's other remedies.”
150 F.3d at
615; see also Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478,
491 (6th Cir. 2009)(relief under §1132(a)(3) not appropriate where
plaintiff merely “repackages” a §1132(a)(1)(B) benefits claim).
Subsequently, in Hill v. Blue Cross and Blue Shield of Mich.,
409 F.3d 710, 718 (6th Cir. 2005), the Sixth Circuit recognized
that there are some circumstances under which an ERISA plaintiff
may simultaneously bring claims under both §1132(a)(1)(B) and
§1132(a)(3).
The court held that where an award of individual
benefits pursuant to §1132(a)(1)(B) could not provide an adequate
remedy for the alleged injury to the plaintiffs caused by a breach
15
of
fiduciary
duties,
outright
§1132(a)(3) claims was in error.
dismissal
of
the
plaintiffs’
Id.
In Gore, 477 F.3d at 840, the court examined the nature of the
plaintiff’s claims, and concluded that plaintiff had alleged two
separate and distinct injuries: an erroneous interpretation of plan
language by the plan administrator resulting in a wrongful denial
of
long-term
disability
benefits,
and
a
claim
based
on
the
misrepresentations of the employer concerning the duration of those
benefits as being for two years rather than one year.
The court
concluded that neither §1132(a)(1)(b) nor §1132(a)(2) provided a
remedy for the alleged misrepresentation by the employer.
court
noted
that
if
plaintiff
had
alleged
that
the
The
plan
administrator breached its fiduciary duty by wrongfully denying
benefits, that claim would be duplicative of his denial of benefits
claim.
Id. at 841.
Instead, the plaintiff in Gore alleged a
distinct injury through a breach of fiduciary duty in the form of
a misrepresentation by the employer concerning the duration of
benefits.
Id.
The court also observed that the fact that
plaintiff’s claim for breach of fiduciary duty in that case would
be rendered moot if plaintiff prevailed on his claim for benefits
against the plan administrator did not mean that the breach of
fiduciary duty claim was nothing more than a “repackaged denial of
benefits claim.”
Id.
Although two fiduciaries were involved in
Gore, the court noted that the Sixth Circuit would recognize a
§1132(a)(3) claim as separate from a §1132(a)(1)(B) claim even
against the same fiduciary.
Id. at 842 (citing Marks v. Newcourt,
342 F.3d 444, 454 n. 2 (6th Cir. 2003)).
The court concluded that
since the plaintiff’s breach of fiduciary duty claim based on
misrepresentation could not have been characterized as a denial of
16
benefits claim, the dismissal of the §1132(a)(3) claim was error.
In Jones v. American General Life and Accident Ins. Co., 370
F.3d 1065, 1071 (11th Cir. 2004), the plaintiffs pled a claim under
§1132(a)(1)(B), but also pled a claim for breach of fiduciary duty
based on misrepresentation under §1132(a)(3) in the alternative,
assuming that they could not recover under §1132(a)(1)(B).
The
court stated that the district court should have considered whether
the allegations supporting the §1132(a)(3) were also sufficient to
state a cause of action under §1132(a)(1)(B), regardless of the
relief
sought,
before
dismissing
duplicate benefits claim.
the
§1132(a)(3)
Id. at 1073-74.
claim
as
a
The court concluded
that because plaintiffs conceded, for purposes of the §1132(a)(3)
claim, that they were not entitled to the benefit they sought under
the terms of their plan, under such circumstances §1132(a)(3) would
provide the only remedy, and that the district court erred in
dismissing that claim.
In the instant case, plaintiff’s claim for breach of fiduciary
duty under §1132(a)(3) is based on misrepresentation.
The Sixth
Circuit has stated that “[a] fiduciary breaches his duty by
providing plan participants with materially misleading information,
regardless of whether the fiduciary’s statements or omissions were
made negligently or intentionally.”
James v. Pirelli Armstrong
Tire Corp., 305 F.3d 439, 449 (6th Cir. 2002).
“Misleading
communications to plan participants regarding plan administration
(for example, eligibility under a plan, the extent of benefits
under a plan) will support a claim for a breach of fiduciary duty.”
Drennan v. General Motors Corp., 977 F.2d 246, 251 (6th Cir. 1992).
A
misrepresentation
is
material
“if
there
is
a
substantial
likelihood that it would mislead a reasonable employee in making an
17
adequately informed decision in pursuing disability benefits to
which she may be entitled.”
Krohn v. Huron Memorial Hosp., 173
F.3d 542, 547 (6th Cir. 1999).
Plaintiff alleges that multiple misrepresentations were made
to her by the Committee on the Committee’s website, by telephone,
and in writing concerning what her monthly benefit would be if she
began receiving benefits in 2009.
21.
First Am. Compl., ¶¶ 9-16, 19-
Plaintiff alleges that she accepted the payment option based
solely on her reliance on the representations made to her on the
website, by telephone, and in writing, as described above.
Am. Compl., ¶ 18.
First
Whether plaintiff is entitled to equitable
relief based on the fact that plaintiff elected to begin receiving
retirement benefits when she did (prior to reaching age 65) based
on the misrepresentations that her benefit would be $5,364.63
involves issues completely distinct from whether plaintiff was
actually
entitled to the greater benefit under the terms of the
Plan. The allegations in plaintiff’s claim for breach of fiduciary
duty do not refer to any entitlement to the greater benefit under
the terms of the Plan, and are not sufficient to state a claim
under §1132(a)(1)(B). Thus, it is not simply a repackaged benefits
claim.
Additionally, if plaintiff is correct when she states in
her memorandum contra, Doc. No. 14 at p. 7, that she is only
entitled to $2,303.12 per month under the terms of the Plan, and
she decides to abandon her §1132(a)(1)(B) claim completely, then
the only other ERISA statute which could conceivably afford her the
relief she seeks is §1132(a)(3), and dismissal of that claim at
this stage of the case would be premature.
Plaintiff’s claims of estoppel in Counts Two and Three are
based on federal common law.
The Sixth Circuit has not resolved
18
the issue of whether an equitable or promissory estoppel claim
based
on
misrepresentations
could
be
categorized
as
a
§1132(a)(1)(B) claim or a §1132(a)(3) claim. See Gore, 477 F.3d at
841-42.
Regardless
of
whether
the
estoppel
claims
can
be
reclassified as falling within the statutory framework of §1132(a),
the
estoppel
claims
are
also
based
on
the
alleged
misrepresentations made to plaintiff, not to plaintiff’s actual
entitlement to benefits under the terms of the Plan, and are not
simply repackaged benefits claims.
Defendants note that in her prayer for relief, plaintiff
requests retirement benefits of $5,364.63.
However, read in
context, plaintiff requests “equitable and injunctive relief in the
form of retirement benefits of $5,364.63.” First Am. Compl., ¶ 51.
The Sixth Circuit has stated that in cases of misrepresentation,
the
court
benefits.”
has
“awarded
equitable
relief,
including
denied
Del Rio v. Toledo Edison Co., 130 Fed.Appx. 746 (6th
Cir. April 29, 2005); see also Krohn, 173 F.3d at 551 (concluding
that
plaintiff’s
employer
was
liable
for
lost
benefits
that
plaintiff sustained due to employer’s failure as a fiduciary to
inform plaintiff about the availability of long-term disability
benefits).
The fact that plaintiff states in her complaint that
she is seeking to obtain the higher retirement benefit by way of
equitable and injunctive relief does not automatically convert her
equitable
claims
into
a
claim
for
Plan
benefits
under
§1132(a)(1)(B).
Plaintiff’s claims of breach of fiduciary duty and estoppel
are not simply restated benefit claims under §1132(a)(1)(B), and
this branch of defendants’ motion to dismiss is denied.
19
E. Viability of Estoppel Claims
In
Count
estoppel,
and
Two,
in
equitable estoppel.
plaintiff
Count
asserts
Three,
a
plaintiff
claim
of
asserts
promissory
a
claim
of
These forms of estoppel have been recognized
as viable theories in ERISA cases, and are treated the same way.
Bloemker v. Laborers’ Local 265 Pension Fund, 605 F.3d 436, 440
(6th Cir. 2010). Defendants argue, based on Armistead v. Vernitron
Corp., 944 F.2d 1287 (6th Cir. 1991), that the Sixth Circuit does
not recognize the estoppel theory in pension plan cases.
Although
the court in Armistead referred to cases which discussed reasons
for not applying the estoppel theory to pension plans, usually
multi-employer plans, the court decided only that the estoppel
theory was available in cases involving welfare benefit plans, and
expressed “no opinion as to the application of estoppel principles
to other situations.”
Id. at 1300.
Thus, the issue of whether
estoppel can be invoked in cases involving pension plans was not
decided in Armistead.
More recently, in Bloemker, the Sixth
Circuit expressly decided that estoppel claims can be asserted in
pension cases where the representation was made in writing and
where plaintiff can demonstrate extraordinary circumstances.
See
605 F.3d at 440.
Defendants also rely on Sprague v. General Motors Corp., 133
F.3d 388 (6th Cir. 1998), in which the Sixth Circuit states that
“[p]rinciples of estoppel, however, cannot be applied to vary the
terms of unambiguous plan documents; estoppel can only be invoked
in the context of ambiguous plan provisions.”
Id. at 404.
The
court reasoned in that case that estoppel requires reasonable
reliance, and that a party’s reliance “can seldom if ever, be
reasonable or justifiable if it is inconsistent with the clear and
20
unambiguous terms of plan documents available to or furnished to
the party.”
Id.
The court also noted that “to allow estoppel to
override the clear terms of plan documents would be to enforce
something other than the plan documents themselves. That would not
be consistent with ERISA.”
Id.
However, the Sixth Circuit decided in Bloemker
that the
reasons articulated in Sprague for not permitting an estoppel claim
in the face of unambiguous plan documents were outweighed in that
case by the extraordinary circumstances which were present.
The
court noted that the first rationale was inapplicable because the
plaintiff alleged that it would have been impossible for him to
determine his correct pension benefit given the complexity of the
actuarial calculations and his lack of knowledge about the relevant
Bloemker, 605 F.3d at 443.
actuarial assumptions.
The court also
noted that the concept of the enforcement of something other than
plan documents being inconsistent with ERISA was not applied in all
cases.
In fact, as the Bloemker court noted, the Sixth Circuit in
Armistead rejected defendant’s argument that applying estoppel was
always
inconsistent
with
ERISA
and
held
that
estoppel
was
permissible even though “[e]quitable estoppel ... precludes a party
from exercising contractual rights because of his own inequitable
conduct toward the party asserting the estoppel.”
Id. at 443-44
(quoting Armistead, 944 F.2d at 1299).
The court in Bloemker
equitable
estoppel
in
the
held that a plaintiff can invoke
case
of
unambiguous
pension
plan
provisions where plaintiff can demonstrate the 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
21
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.
Id. at 444.
The elements of an equitable estoppel claim are : (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.
Plaintiff has alleged sufficient facts in her first amended
complaint to satisfy the elements of estoppel.
The statement that
plaintiff was entitled to a monthly pension benefit in the amount
of $5,364.63 was a material fact.
See Bloemker, 605 F.3d at 443.
As in Bloemker, plaintiff has alleged that defendants were aware of
the true facts, that she was entitled to no more than $2,303.12 per
month under the Plan.
See id.; First Am. Compl., ¶ 45.
The
alleged conduct of the defendants in repeatedly informing plaintiff
that $5,364.63 would be her monthly benefit was such that plaintiff
had a right to believe, as she alleges, that defendants intended
their statements to be acted on by plaintiff.
Compl., ¶ 46.
true facts.
See id.; First Am.
Plaintiff has alleged that she was unaware of the
First Am. Compl., ¶ 47.
Finally, plaintiff has
pleaded sufficient facts that she detrimentally and justifiably
relied on the representations made to her by electing to receive
22
benefits, by making purchase decisions and entertainment plans,
doing landscaping projects and undertaking home improvements.
First Am. Compl., ¶¶ 18, 48.
The additional requirement of a
writing is also satisfied in this case, as plaintiff has alleged
that
she
received
several
written
statements
indicating that her benefit would be $5,364.63.
from
defendants
First Am. Compl.,
¶¶ 13-15, 20.
Defendants argue that plaintiff has not pleaded extraordinary
circumstances, and that she has not pleaded facts sufficient to
show
that
she
justifiably
relied
on
the
representations
received in light of the unambiguous terms of the Plan.
she
The
instant case is similar to the situation in Pell v. E.I. DuPont de
Nemours & Co., Inc., 539 F.3d 292, 304 (3rd Cir. 2008), in which
the court concluded that extraordinary circumstances were shown
where the defendant made repeated misrepresentations to plaintiff
over an extended period of time, and where the plaintiff was
persistent and diligent in trying to obtain accurate answers
regarding his wife’s coverage. In this case, plaintiff has alleged
that she started by using the website provided by the Committee,
then called to see if her calculations were correct and was told
that they were correct.
She received two written statements, and
then called again to ask if the written statements were correct.
She thereafter received an election form which also stated that her
benefit would be $5,364.63.
Thus, plaintiff has also alleged that
defendants’ representations were repeated and consistent, and that
she was diligent in trying to obtain correct information.
Plaintiff has also pleaded sufficient facts to show that her
reliance was justifiable.
As the court stated in Pell, “[i]f we
were to accept DuPont’s argument that Pell could not rely on his
23
pension estimates, employees such as Pell would be required to
continually question their benefits calculations, even if they
agreed with their employers’ estimates.
such a burdensome rule.”
Defendants
note
We decline to formulate
539 F.3d at 302.
that
the
plaintiff
in
Bloemker
received
pension benefits in the enhanced amount for two years and was
required to pay back the excess, whereas the plaintiff in this case
received the erroneous benefit for five months.
Defendants also
note the Appeals Committee denial letter, which reports that Mars
reimbursed the Plan for the overpayment, and that plaintiff was not
required to pay back the excess.
However, the court in Bloemker
also considered as an extraordinary circumstance the fact that the
plaintiff alleged that it would have been impossible for him to
determine his correct pension benefit given the complexity of the
calculations.
Bloemker, 605 F.3d at 443.
Although the plaintiff
in this case does not specifically make such allegations, it is
apparent from the Plan and other documents supplementing the
complaint that, even assuming that the Plan terms are unambiguous,
the actuarial calculations are also complicated.
The Plan itself,
with multiple supplements, is over one hundred pages long.
The
denial
the
letter
from
the
Appeals
Committee
reveals
that
calculation of plaintiff’s benefits was complicated by the fact
that plaintiff was formerly enrolled in the Mars Retirement Plan
and switched to the ARP formula in 2004.
her
ARP
benefit
required
ascertaining
Doc. 17, Ex. B.
her
Thus,
“grandfathered
MRP
benefit” because her ARP benefit could not be lower than the
grandfathered MRP benefit.
Id., p. 2.
The letter further stated
that the Plan’s benefit payment system was erroneously programmed
to compare her ARP benefit to her MRP benefit payable at age 65,
24
instead of her grandfathered MRP benefit.
Because the MRP benefit
payable at age 65 was not subject to an actuarial reduction, that
benefit was greater than the ARP benefit payable, and therefore the
payment system automatically paid the higher amount in error. Id.
The mere fact that even the Plan administrator allegedly was not
capable
of
accurately
calculating
plaintiff’s
benefit
or
of
programming its computer to do so indicates that a case could be
made that plaintiff could not reasonably be expected to catch any
errors in these complex calculations herself.
This court concludes that the rules announced in Bloemker
control the instant case, and that plaintiff’s first amended
complaint and the related documents allege sufficient facts to
support all of the elements necessary for an estoppel claim in a
pension plan case.
III. Conclusion
In accordance with the foregoing, plaintiff’s motion (Doc. No.
15) to amend her complaint by dismissing Counts One and Four of the
first amended complaint without prejudice is denied.
Defendants’
motion to dismiss (Doc. No. 12) is granted in part and denied in
part.
The motion is granted in regard to the claims in Counts One
and Four insofar as they are asserted against defendant Mars, Inc.,
and granted in regard to the claims in Counts One, Two and Three
insofar as they are asserted against defendant Mars Benefit Plans
Appeals Committee.
Date: May 11, 2011
The motion is denied in all other respects.
s/James L. Graham
James L. Graham
United States District Judge
25
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