Brown v. Validata Computer & Research Corp.

ERIC BROWN, Plaintiff,

v.VALIDATA COMPUTER & RESEARCH CORPORATION, et al., Defendants.

CIVIL ACTION NO. 2:12cv775-SRW

DISTRICT COURT OF THE UNITED STATES FOR THE MIDDLE DISTRICT OF ALABAMA NORTHERN DIVISION

DONE: July 8, 2013

MEMORANDUM OF OPINION AND ORDER

In this ERISA action, plaintiff Eric Brown - the personal representative of decedent Shawn Q. Brown's estate and the beneficiary of his interest in the Validata Computer and Research Corporation 401(k) Profit Sharing Plan and Trust - sues Validata Computer & Research Corporation and its President, Warren C. Philips,¹ for their failure to comply with his requests for information about the plan. He asserts two claims against both defendants arising from this failure: (1) a claim styled "Failure to Provide Information," brought pursuant to 29 U.S.C. § 1132(c)(1) and the applicable disclosure provision, 29 U.S.C. § 1024(b)(4); and (2) a claim for "Breach of Fiduciary Duty." (Doc. # 24, First Amended Complaint). This action is presently before the court on the motion to dismiss filed by defendant Philips (Doc. # 27). The motion to dismiss is due to be granted - pursuant to Rule 12(b)(6) - as to Count II, plaintiff's breach of fiduciary duty claim. The court furtherconcludes - applying Rule 56 standards, pursuant to Rule 12(d) - that Philips is entitled to summary judgment on Count I, plaintiff's "Failure to Provide Information" claim.²

RULE 12(b)(6) STANDARD

To overcome a defendant's Rule 12(b)(6) motion, the complaint must include "a short and plain statement of the claim showing that the [plaintiff] is entitled to relief." Fed. R. Civ. P. 8(a)(2). The complaint must include factual allegations sufficient "to raise a right to relief above the speculative level." Bell Atlantic Corp v. Twombly, 550 U.S. 544, 555 (2007). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements" are insufficient to state a claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(citing Twombly, 550 U.S. at 555). "[C]omplaints ... must now contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory." Randall v. Scott, 610 F.3d 701, 707 n. 2 (11th Cir. 2010)(internal quotation marks omitted). Courts considering motions to dismiss first "eliminate any allegations in the complaint that are merely legal conclusions" and, then, determine whether the well-pleaded factual allegations of the complaint - assuming their veracity - "'plausibly give rise to an entitlement to relief.'" See American Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)(citing Iqbal, 129 S.Ct. at 1950). Inconsidering a Rule 12(b)(6) motion, the court "'limits its consideration to the pleadings and exhibits attached thereto.'" Thaeter v. Palm Beach County Sheriff's Office, 449 F.3d 1342, 1352 (11th Cir. 2006)(quoting Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000)(per curiam)).

RULE 56 STANDARD

A movant is entitled to summary judgment if it "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). For summary judgment purposes, an issue of fact is "material" if, under the substantive law governing the claim, its presence or absence might affect the outcome of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). If the movant fails to satisfy its initial burden, the motion for summary judgment will be denied. Kernel Records Oy v. Mosley, 694 F.3d 1294, 1300 (11th Cir. 2012), cert. den., 133 S.Ct. 1810 (2013). If the movant adequately supports its motion, the burden shifts to the opposing party to establish - "by producing affidavits or other relevant and admissible evidence beyond the pleadings" - specific facts raising a genuine issue for trial. Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1315 (11th Cir. 2011); Dietz v. Smithkline Beecham Corp., 598 F.3d 812, 815 (11th Cir. 2010); Fed. R. Civ. P. 56(c)(1)(A). "All affidavits [and declarations] must be based on personal knowledge and must set forth facts that would be admissible under the Federal Rules of Evidence[.]" Josendis, 662 F.3d at 1315; Fed. R. Civ. P. 56(c)(4). The court views the evidence and all reasonable factual inferences in the lightmost favorable to the nonmovant. Miller's Ale House, Inc. v. Boynton Carolina Ale House, LLC, 702 F.3d 1312, 1316 (11th Cir. 2012). However, "'[i]f no reasonable jury could return a verdict in favor of the nonmoving party, there is no genuine issue of material fact and summary judgment will be granted.'" Morton v. Kirkwood, 707 F.3d 1276, 1284 (11th Cir. 2013)(citation omitted).

DISCUSSION

Count II - Breach of Fiduciary Duty

Plaintiff's Allegations and the Claimed Breach of Duty

In his amended complaint, plaintiff alleges that Shawn Q. Brown worked for Validata and was a plan participant until his death on October 26, 2011; defendant Philips is a trustee of the plan; Philips and Validata are administrators and fiduciaries of the plan; and plaintiff is the personal representative of the decedent's estate and the beneficiary of the decedent's interest in the plan. He further alleges that he "and/or" Ileana Brown (the primary beneficiary until she executed a disclaimer of her interest on March 13, 2012) "inquired of Defendants via face-to-face meetings, telephone calls, letters, and e-mail exchanges about the Plan and requested various documents and information related to the Plan,"³ and that, on February 2, 2012, plaintiff and Ileana Brown both signed and sent a letter to Philips, requesting "various documents and information related to the Plan, including the summary plan description,annual benefit statements for the Plan, and/or summary annual reports filed with the Department of Labor." Plaintiff alleges that Ileana Brown executed a disclaimer of her interest in the plan on March 13, 2012 and that, on March 16, 2012, plaintiff "wrote Defendants, transmitted certain documents relating to Decedent's interest in the Plan, including the disclaimer of Iliana Brown" and "requested ... that Defendants provide documents relating to the Plan, including annual benefit statements for the years ending 2010 and 2011." Plaintiff further alleges that, despite repeated requests - by plaintiff on his own behalf and through counsel - the defendants, "[p]rior to the filing of the instant action [on September 7, 2012], ... failed to provide Plaintiff with copies of the documents requested." Plaintiff maintains that defendants' failure to provide the requested documents violates the ERISA document disclosure obligation set forth in 29 U.S.C. § 1024(b)(4)⁴ and resulted in plaintiff's inability "to determine the value of his interest in the Plan, to accurately file a claim for benefits, or to timely choose a payment method." (Doc. # 24, ¶¶ 1, 4-8, 14-26, 29; Docs. ## 24-1 through 24-3).

In Count II, plaintiff claims that "[d]efendants' failure or refusal to timely provide Plaintiff with accurate and complete information and documents and to accurately communicate Plan benefits to Plaintiff constitutes a breach of the fiduciary duties owed byDefendants to Plaintiff." (Doc. # 34). While he notes a trustee's duty "to comply with the disclosure requirements of ERISA" (id., ¶ 33), and the plan administrators' duties, as fiduciaries, to provide "timely, accurate, and complete information and documents" (id., ¶ 32; emphasis added), plaintiff does not allege that Philips conveyed any inaccurate information, nor does he describe - either within Count II or elsewhere in his complaint - the nature of any "information" that Philips withheld from him, other than the documents at issue in Count I, plaintiff's "Failure to Provide Information" claim. (See Doc. # 24). The relief plaintiff seeks in Count II includes, inter alia, the statutory penalty authorized by § 1132(c) for failure of an administrator to mail - within 30 days after a participant's or beneficiary's request for information - material that the administrator is required by ERISA to provide. (Doc. # 24, p. 7). Thus, the court concludes - as defendant argues - that "the sole duty at issue [in Count II] is that of disclosure under 29 U.S.C. § 1024(b)(4)[.]" (Doc. # 27, p. 7).⁵

Defendant's Motion to Dismiss

Philips contends that Count II is due to be dismissed because: (1) plaintiff's remedy for a § 1024(b)(4) violation is the cause of action established by § 1132(c) against the plan administrator rather than a claim against him for breach of fiduciary duty; and (2) an ERISA claim for breach of fiduciary duty may be brought only on behalf of the plan as a whole torecover for losses to the plan caused by the breach, pursuant to 29 U.S.C. § 1109 and § 1132(a)(2). (Doc. # 27, p. 8). The court addresses defendant's latter argument first.

Plaintiff Does Not Assert a Claim on Behalf of the Plan

Plaintiff does not indicate - in either his amended complaint or his response to Philips' motion to dismiss - which subsection of ERISA's civil enforcement provision authorizes his claim for individual relief arising from Philips' alleged breach of fiduciary duty, and does not respond directly to defendant's contention that § 1132(a)(2) does not provide such authorization. Section 502(a)(2) of ERISA⁶ - which permits a cause of action "for appropriate relief under [29 U.S.C.] section 1109"- provides a remedy only for injuries to a plan, either as a whole or to the plan assets within an individual account that is part of a defined contribution plan; it does not provide a remedy for individual injury. LaRue v. DeWolff, Bobert & Associates, Inc., 552 U.S. 248, 254 (2008)(a breach of fiduciary duty that impairs the value of an individual account that is within a defined contribution plan is actionable under § 1109); Varity Corp. v. Howe, 516 U.S. 489, 515 (1996)(plaintiffs could not proceed under ERISA section 502(a)(2) "because that...