McDowell v. Mercedes-Benz USA LLC Pension Plan

Filing 26

MEMORANDUM OPINION AND ORDER: The court denies Defendant's 16 Motion to Dismiss First Amended Complaint Pursuant to F.R.C.P. 12(b)(6). (Ordered by Judge Sam A Lindsay on 9/30/2017) (axm)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
ANTOINETTE MCDOWELL,

Plaintiff,
v.
MERCEDES-BENZ USA, LLC
PENSION PLAN,
Defendant.

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Civil Action No. 3:16-CV-2096-L

MEMORANDUM OPINION AND ORDER
Before the court is Defendant’s Motion to Dismiss First Amended Complaint Pursuant to
F.R.C.P. 12(b)(6) (Doc. 17), filed October 17, 2016. After careful consideration of the motion,
response, reply, pleadings, and applicable law, the court denies Defendant’s Motion to Dismiss
First Amended Complaint Pursuant to F.R.C.P. 12(b)(6).
I.

Factual and Procedural Background
Antoinette McDowell (“Plaintiff” or “McDowell”) filed this action on July, 19, 2016,

against Mercedes-Benz USA L.L.C. Pension Plan (“Defendant”). On September 8, 2016, Plaintiff
filed her Amended Complaint (“Complaint”) against Mercedes Plan seeking to recover pension
benefits under a plan (the “Plan”) governed by the Employee Retirement Income Security Act
(“ERISA”) and a claim for ERISA estoppel. Defendant contends that Plaintiff’s Complaint should
be dismissed because she failed to state a claim upon which relief can be granted. In particular,
Defendant contends that the Pension Plan Committee’s (the “Committee”) determination was
reasonable and that Plaintiff does not substantively challenge the reasonableness of the Plan. With
respect to Plaintiff’s cause of action for estoppel, Defendant contends that Plaintiff’s claim fails as
Memorandum Opinion and Order - Page 1

a matter of law because she cannot seek recovery based on estoppel by means of a claim brought
under ERISA §502(a)(1)(B).
Plaintiff counters that there is a “question of fact” 1 as to whether the Committee ever
reviewed or made a determination on Plaintiff’s claim for benefits, and she calls into question the
reasonableness of the ultimate denial of benefits under the Plan.
II.

Rule 12(b)(6) Standard
To defeat a motion to dismiss filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil

Procedure, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its
face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Reliable Consultants, Inc. v.
Earle, 517 F.3d 738, 742 (5th Cir. 2008); Guidry v. American Pub. Life Ins. Co., 512 F.3d 177,
180 (5th Cir. 2007). A claim meets the plausibility test “when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged. 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.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (internal citations omitted). While a complaint need not contain detailed factual
allegations, it must set forth “more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citation omitted). The
“[f]actual allegations of [a complaint] must be enough to raise a right to relief above the speculative
level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in
fact).” Id. (quotation marks, citations, and footnote omitted). When the allegations of the pleading

1

As the court only deals with the sufficiency of allegations on a 12(b)(6) motion, it takes Plaintiff’s
statement to mean that she has adequately set forth a claim to relief beyond the speculative level, and the
court must view the allegations in the light most favorable to her at this juncture, as questions of fact deal
with motions for summary judgment under Federal Rule of Civil Procedure 56.
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do not allow the court to infer more than the mere possibility of wrongdoing, they fall short of
showing that the pleader is entitled to relief. Iqbal, 556 U.S. at 679.
In reviewing a Rule 12(b)(6) motion, the court must accept all well-pleaded facts in the
complaint as true and view them in the light most favorable to the plaintiff. Sonnier v. State Farm
Mutual Auto. Ins. Co., 509 F.3d 673, 675 (5th Cir. 2007); Martin K. Eby Constr. Co. v. Dallas
Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.
1996). In ruling on such a motion, the court cannot look beyond the pleadings. Id.; Spivey v.
Robertson, 197 F.3d 772, 774 (5th Cir. 1999). The pleadings include the complaint and any
documents attached to it. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir.
2000). Likewise, “‘[d]ocuments that a defendant attaches to a motion to dismiss are considered
part of the pleadings if they are referred to in the plaintiff’s complaint and are central to [the
plaintiff’s] claims.’” Id. (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429,
431 (7th Cir. 1993)). In this regard, a document that is part of the record but not referred to in a
plaintiff’s complaint and not attached to a motion to dismiss may not be considered by the court
in ruling on a 12(b)(6) motion. Gines v. D.R. Horton, Inc., 699 F.3d 812, 820 & n.9 (5th Cir. 2012)
(citation omitted). Further, it is well-established and ‘“clearly proper in deciding a 12(b)(6) motion
[that a court may] take judicial notice of matters of public record.”’ Funk v. Stryker Corp., 631
F.3d 777, 783 (5th Cir. 2011) (quoting Norris v. Hearst Trust, 500 F.3d 454, 461 n.9 (5th Cir.
2007) (citing Cinel v. Connick, 15 F.3d 1338, 1343 n.6 (5th Cir. 1994)).
The ultimate question in a Rule 12(b)(6) motion is whether the complaint states a valid
claim when it is viewed in the light most favorable to the plaintiff. Great Plains Trust Co. v.
Morgan Stanley Dean Witter, 313 F.3d 305, 312 (5th Cir. 2002). While well-pleaded facts of a
complaint are to be accepted as true, legal conclusions are not “entitled to the assumption of truth.”

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Iqbal, 556 U.S. at 679 (citation omitted). Further, a court is not to strain to find inferences
favorable to the plaintiff and is not to accept conclusory allegations, unwarranted deductions, or
legal conclusions. R2 Invs. LDC v. Phillips, 401 F.3d 638, 642 (5th Cir. 2005) (citations omitted).
The court does not evaluate the plaintiff’s likelihood of success; instead, it only determines
whether the plaintiff has pleaded a legally cognizable claim. United States ex rel. Riley v. St.
Luke’s Episcopal Hosp., 355 F.3d 370, 376 (5th Cir. 2004). Stated another way, when a court
deals with a Rule 12(b)(6) motion, its task is to test the sufficiency of the allegations contained in
the pleadings to determine whether they are adequate enough to state a claim upon which relief
can be granted. Mann v. Adams Realty Co., 556 F.2d 288, 293 (5th Cir. 1977); Doe v. Hillsboro
Indep. Sch. Dist., 81 F.3d 1395, 1401 (5th Cir. 1996), rev’d on other grounds, 113 F.3d 1412 (5th
Cir. 1997) (en banc). Accordingly, denial of a 12(b)(6) motion has no bearing on whether a
plaintiff ultimately establishes the necessary proof to prevail on a claim that withstands a 12(b)(6)
challenge. Adams, 556 F.2d at 293.
III.

Analysis
A.

Abuse of Discretion Claim
1. Plaintiff’s Allegations Regarding ERISA § 502 (a)(1)(B)

The court now sets forth Plaintiff’s allegations regarding her claims against Defendant.
Plaintiff asserts as follows:
5.
Plaintiff worked for Mercedes-Benz USA (“MBUSA”) for some 29 years.
6.
Plaintiff was a participant in the Plan who became eligible for participation
upon satisfaction of the Minimum Service Requirements, as set for in Article II (2)
of the Plan. Further, Plaintiff has vested in retirement benefits under the Plan
pursuant to Article II (3)(A).
7.
Plaintiff had reached her Early Optional Retirement Date under Article II
(5)(C) of the Plan and therefore was entitled to receive accrued pension benefits
under the Plan upon retirement, as calculated under Article II (6) of the Plan.
8.
In September of 2015, as a result of a project she was working on with the
parent company, Daimler, she accepted a position with Daimler Trucks North
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America (“DTNA”), a separate Daimler entity that does not participate in the Plan
and requested early retirement under Article II. The possibility of Plaintiff retiring
from MBUSA and accepting employment with DTNA had been discussed since
December 2014, and per Plaintiff’s discussions with both DTNA and MBUSA, all
parties anticipated that upon the retirement of her employment with MBUSA to
take the new position, Plaintiff would begin collecting her retirement benefits under
the Plan.
9.
Lucy Marrero, then the Coordinator for Employee Benefits for MBUSA,
confirmed Plaintiff’s eligibility to receive pension benefits under the Plan in a
December 18, 2014 email to Plaintiff, in which she plainly stated: “Your
employment with DTNA will not impact your MBUSA Pension benefit since you
are already in the MBUSA Pension Plan, vested and entitled to receive a benefit
because you already met the rule of 80. Also, DTNA does not participate in the
MBUSA Pension Plan, so your service with DTNA will not impact your MBUSA
Pension Plan benefit.” Ms. Marrero never stated that she was not authorized to give
such an opinion, nor that her opinion would need to be reviewed or ratified by
anyone else.
10.
After Plaintiff accepted the position with DTNA based upon her
understanding of her pension eligibility, she confirmed her eligibility to receive
benefits under the Plan in another chain of emails with Ms. Marrero, who
reaffirmed this on September 15, 2015: “I do not see a reason why you cannot
collect your MBUSA Pension Plan benefit and work for DTNA – they are not in
our pension plan.”
11.
Anthony LaSpada of MBUSA’s legal department, then abruptly reversed
course. He sent an email the same date, saying that he would need to discuss this
with Plaintiff because it “requires a factual determination… a transfer or legitimate
termination and rehire within controlled-group.” His interpretation was based on
material not included in the Plan, including his interpretation of IRS regulations
and opinion letters.
12.
Plaintiff continued to press MBUSA for an answer. Valerie Ross, the new
Manager of Compensation and Benefits for MBUSA, told her by phone on
September 18, 2015 that she was not eligible to collect benefits. She clarified this
in a subsequent email, referring to “Page 10 of the Plan”, and concluding: “This is
clearly considered a transfer from an Affiliate and not a retirement.” Consequently,
Defendant denied Plaintiff’s request for retirement benefits under the Plan.
13.
The impact of MBUSA’s re-interpretation of the Plan has a significant
negative impact on Plaintiff. Not only does Plaintiff not collect her monthly benefit,
but she must pay more for medical benefits, she loses the employee Mercedes-Benz
purchase benefit, and she does not have access to her 401(k) funds.
14.
Plaintiff honored her commitment to accept a position with DTNA, as had
been discussed for some 10 months previously. Plaintiff appealed Ms. Ross’s
decision denying her benefits to the Pension Plan Committee, which denied her
appeal.
Pl.’s Original Compl. ¶¶ 5-14.

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2. The Parties’ Contentions
Defendant argues that the Plan administrator’s determination was, at minimum, reasonable
and, therefore, cannot be overturned. 2 The Plan provides that the Committee is responsible for the
administration of the Plan and that the Committee “shall have the exclusive power and discretion
to make determinations of all questions arising out of or in connection with the interpretation,
application, or administration of the Plan . . . including, but not limited to, interpretation, and
construction of the terms of the Plan.” Def.’s Mot. to Dismiss 6. Moreover, “the discretion
granted to the Pension Plan committee includes full authority to determine ‘all questions both legal
and factual relating to the eligibility of Employees to become Participating Employees and
beneficiaries for benefits hereunder.’” Id. Article 1, Section 7 of the Plan states that “no benefit
shall become due and payable to a Participating Employee covered hereby while he remains in the
status of an Employee, as defined in Section 12 of Article 1.” Id. Defendant contends that the
Committee correctly interpreted the terms “Employee” and “Company,” under the Plan and
determined that Plaintiff was not entitled to pension benefits “if after leaving MBUSA and taking
her new position with DTNA, she nonetheless remained an ‘Employee’ for purposes of the Plan.”
Def.’s Mot. Dismiss 8.
Defendant argues that the Plan provides that the term “Employee” includes “each person
now or hereafter employed by the Company.” Id. (emphasis added). The Committee found that
treasury regulations should control the definition of “Company” for the purposes of determining
whether Plaintiff would be entitled to benefits under the Plan. Id. Defendant contends that
Treasury regulations “required treating the ‘Company’ as all business entities that are part of the

2

Plaintiff referred to the terms of Defendant’s Plan in her Complaint, and Defendant attached the
Plan to its motion. As the Plan is central to Plaintiff’s ERISA claim, the court will consider the attached
Plan as part of the pleadings.
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same controlled group under the tax code.” Id. The Committee determined that this interpretation
was required to maintain the tax-qualified status of the Plan. Id. Based upon that determination,
the Committee determined that MBUSA and DTNA are part of the same “Company” for the
purposes of Plaintiff’s benefits claim under the Plan. Accordingly, under the Committees’
interpretation, Plaintiff remained an employee of the “Company” for purposes of the Plan “even
while switching from working for MBUSA to working for DTNA, because both MBUSA and
DTNA constitute part of the ‘Company’” under federal tax law. Id. at 9.
Further, the Defendant contends that Article 1, Section 22 of the Plan “expressly precludes
pension benefits from being triggered merely by an employee’s movement from one affiliated
employer to another.” Id. This provision of the Plan provides that termination of employment for
purposes of the Plan is “termination on account of retirement, and “[an] Employee shall not be
deemed or otherwise regarded as having incurred a termination of employment if he is transferred
to an Affiliate, whether or not [that Affiliate] is participating” in the Plan. Id. The Plan provides
that an “Affiliate” is “any corporation or trade or business” under common control or part of a
controlled group of corporations, including MBUSA, for the purposes of the Internal Revenue
Service. Id. Accordingly, Defendant contends that because Plaintiff left MBUSA to work for
DTNA, she merely left employment with one “Affiliate” to start employment with another
“Affiliate.” Id.
Plaintiff argues that she has stated a claim upon which relief can be granted, and
Defendant’s motion should be denied. Specifically, Plaintiff responds that the allegations of her
complaint question whether the Plan Committee ever reviewed or made a determination on
Plaintiff’s claim for benefits and whether the denial of benefits under the Plan was reasonable.
Plaintiff alleges that Defendant’s interpretation of the Plan with respect to her benefits claim
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conflates the definition of “termination of employment,” and Defendant’s interpretation of a
“controlled group of corporations” is improper.
3. ERISA § 502 (a)(1)(B)
If a person is denied benefits under an employee benefit plan governed by ERISA, such
person may challenge that denial in federal court “to recover benefits due to [her] under the terms
of [her] plan, to enforce [her] rights under the terms of the plan, or to clarify [her] rights to future
benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B); Singletary v. United Parcel Serv.,
Inc., 828 F.3d 342, 346 (5th Cir. 2016) (citing Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105,
108). To maintain a claim under Section [§ 502 (a)(1)(B)], the claimant must show that he or she
“qualif[ies] for the benefits provided in that plan.” Id. at 348. When an ERISA plan contains an
express grant of discretion to the plan administrator to interpret and apply the terms of the plan, its
decision is reviewed under an abuse of discretion standard. Gomez v. Ericsson, Inc., 828 F.3d 367
(5th Cir. 2016); Singletary v. United Parcel Serv., Inc., 828 F.3d 342, 346 (5th Cir. 2016). The
administrator’s interpretation is generally evaluated under a two-step analysis. See Baker v. Metro.
Life Ins. Co., 364 F.3d 624, 629 (5th Cir. 2004). “First, [a court] must determine whether the
administrator’s interpretation was legally correct. If so, [the] inquiry ends. If not, [a court] must
determine whether the administrator’s interpretation was an abuse of discretion.” Singletary, 828
F.3d at 347 (citations omitted).
In determining whether an interpretation was legally correct, a court must consider: “(1)
whether the administrator has given the plan a uniform construction, (2) whether the interpretation
is consistent with a fair reading of the plan, and (3) any unanticipated costs resulting from different
interpretations of the plan.” Gomez, 828 F.3d at 373-74 (citing Stone v. UNOCAL Termination
Allowance Plan, 570 F.3d 252, 258 (5th Cir. 2009)). “[A] court, however, is not limited to this

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test and may skip the first step if it can ‘readily determine that the decision was not an abuse of
discretion.’” Corbello v. Sedgwick Claims Mgmt. Servs., Inc., 856 F. Supp. 2d 868, 881 (N.D.
Tex. 2012) (quoting Holland v. International Paper Co. Ret. Plan, 576 F.3d 240, 251 n.2 (5th Cir.
2009). A plan administrator abuses its discretion when its decision is arbitrary or capricious, and
the decision is not based on evidence that supports the basis for its denial. Singletary, 828 F.3d at
347 (citations omitted). “Ultimately, [a court’s] review of the administrator’s decision need not
be particularly complex or technical; it need only assure that the administrator’s decision fall
somewhere on a continuum of reasonableness—even if on the low end.” Id. (citation omitted)
(internal quotation marks omitted).
4. Discussion
Plaintiff has stated a claim upon which relief may be granted. To state a claim upon which
relief can be granted under § 502(a)(1)(B), Plaintiff must plead sufficient facts that show she
qualifies for benefits under the Plan. Singletary, 828 F.3d at 348. In this regard, Plaintiff has
sufficiently pled facts that show she was an eligible participant in the Mercedes Plan who satisfied
the minimum service requirements set forth under Article II of the Plan. Based upon these
allegations, the court concludes that Plaintiff has set forth sufficient facts to show she qualifies for
benefits under the Plan, and Defendant could be liable for the conduct alleged in her Complaint.
Defendant further argues that the Committee determined that treasury regulations
controlled the definition of “Company” for purposes of determining Plaintiff was not entitled to
recover benefits under the Plan. Also, Defendant contends that the Plan expressly provides that
“termination of employment” for purposes of the Plan is “termination on account of retirement”
only.

The pleadings, however, lack the allegations necessary to support the basis for the

Committee’s denial of benefits, and the court may not consider matters outside the pleadings. The

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court cannot make a determination of reasonableness at this juncture. A further development of
facts is necessary to determine the reasonableness of the Committee’s interpretation of the Plan
and whether Defendant abused its discretion in denying Plaintiff benefits under the Plan. At the
pleadings stage, the court only tests the adequacy of the allegations, not whether a party will
ultimately prevail. Therefore, the court determines that the allegations of Plaintiff’s complaint
raise a plausible claim beyond the speculative level.
B.

Estoppel Claim

Defendant argues that Plaintiff’s cause of action for estoppel fails as a matter of law and
should be dismissed. Defendant contends that, because Plaintiff never specifically alleged a claim
for recovery on the basis of estoppel under ERISA § 502(a)(3), she must be relying on §
502(a)(1)(B). According to Defendant, “a plan participant cannot seek recovery based on estoppel
by means of a claim brought under ERISA § 502 (a)(1)(B).” Def.’s Mot. to Dismiss 12. (citing
Singletary, 828 F.3d at 348). Plaintiff did not respond to Defendant’s argument concerning her
estoppel claim.
Plaintiff’s Complaint has not specified under which part of § 502 section she alleges a
claim for equitable estoppel, and as Defendant points out, a court “has no authority under [ERISA
§ 502 (a)(1)(B)] ‘to change the terms of the plan as they previously existed,’ [because] it only
allows enforcing a plan's provisions.” Singletary, 828 F.3d at 349 (citing CIGNA Corp. v. Amara,
563 U.S. 421, 435 (2011)). To set forth an ERISA estoppel claim under § 502(a)(3), however, a
plaintiff must set forth allegations that show: “(1) a material misrepresentation; (2) reasonable and
detrimental reliance upon the representation; and (3) extraordinary circumstances.” Mello v. Sara
Lee Corp., 431 F.3d 440, 444-45 (5th Cir. 2005) (citations omitted).

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Plaintiff has set forth facts from which a court could reasonably infer that Defendant would
be liable for a claim under § 502(a)(3). Plaintiff alleges that: (1) Defendant made material
misrepresentations to her regarding interpretation of the terms of the Plan; (2) she reasonably relied
upon Defendant’s representations to her detriment and; (3) extraordinary circumstances exist,
because she was denied benefits under the plan and she does not have access to her 401(K) funds.
Pl.’s Original Compl. ¶¶ 22-25. Under § 502(a)(3), Plaintiff’s claim does not fail as a matter of
law. Although Plaintiff did not specify under which part of § 502 she alleges a claim for equitable
estoppel, it is clear to the court that Plaintiff has set forth facts that allege a claim under § 502(a)(3)
and not § 502(a)(1)(B) as Defendant contends. Accordingly, Plaintiff has stated a claim upon
which relief could be granted, and the court will not dismiss Plaintiff’s estoppel claim against
Defendant.
IV.

Conclusion
For the reasons herein stated, the court denies Defendant’s Motion to Dismiss First

Amended Complaint Pursuant to F.R.C.P. 12(b)(6).
It is so ordered this 30th day September, 2017.

_________________________________
Sam A. Lindsay
United States District Judge

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