Gerzog v. London Fog Corp.

907 F. Supp. 590

Marvin GERZOG and Eleanor Gerzog, Plaintiffs, v. LONDON FOG CORPORATION f/k/a Londontown Holdings Corp., M.L. Offshore LBO Partnership No. B-VIII, Merrill Lynch Capital Appreciation Partnership, No. B-VIII L.P., Merrill Lynch Capital Partners, Inc., "John Doe" and "Jane Doe" in their capacity as plan administrators and trustees and fiduciaries of the Pension/Retirement Plan of London Fog Corporation, Defendants.

No. 95 CV 2350.

United States District Court, E.D. New York.

November 18, 1995.

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Finkel Goldstein Berzow & Rosenbloom by Harvey Goldstein, Kevin J. Nash, Richard M. Howard, New York City, for Plaintiffs.

Kaye, Scholer, Fierman, Hays & Handler by Peter A. Walker, Lori Bienstock, New York City, for the "London Fog" and "Doe" Defendants.

Orrick, Herrington & Sutcliffe by Stuart H. Bompey, Ira G. Rosenstein, New York City, for the "Merrill Lynch" Defendants.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge:

The plaintiffs Martin Gerzog ("Gerzog" or the "plaintiff"), and his wife Eleanor Gerzog ("Eleanor") brought this lawsuit alleging that Gerzog was unlawfully discharged from his job. Gerzog was an employee of twenty-six years with the defendant London Fog Corporation, formerly known as Londontown Holdings Corp. ("London Fog"). The essence of the Complaint is that after more than two decades of successful employment with London Fog, Gerzog was terminated because of his age in violation of federal, state and local laws, and he was informed that he would be receiving a reduced monthly pension based only on a portion of his actual salary, rather than his entire salary in violation of his Employer's benefit plan. In addition, Gerzog makes claims for accrued vacation pay and intentional infliction of emotional distress. Eleanor makes a related claim for loss of consortium.

The defendants now move to dismiss the Complaint in its entirety pursuant to Fed. R.Civ.P. 12(b)(6) arguing that Gerzog has failed to state a claim upon which relief can be granted. The plaintiffs respond that they have sufficiently alleged their claims, but in the alternative move to amend the Complaint should the defendants' motion be granted in whole or in part.

Background

Martin Gerzog and his wife, Eleanor, are residents of Nassau County in the state of New York. According to the Complaint, the defendant, London Fog, is a foreign corporation authorized to do business in the State of New York with offices located at 8 West 40th Street, New York, New York. M.L. Offshore LBO Partnership No. B-VII and Merrill Lynch Capital Appreciation Partnership No. B-VII L.P. are partnerships, organized under the laws of the State of New York. Merrill Lynch Capital Partners, Inc. is a New York corporation, maintaining offices at 767 Fifth Avenue, New York, New York (collectively referred to as "Merrill Lynch"). The defendants John Doe and Jane Doe are named defendants in their official capacity as administrators, trustees, and/or fiduciaries of the London Fog Pension/Retirement Plan.

Marvin Gerzog began working for Londontown Manufacturing Company, the predecessor in interest to London Fog Corporation in 1968 as Director of the London Fog's "Jeffrey Division," which sold off-price goods such as irregulars and otherwise distressed products. In 1969, Gerzog created a new division at London Fog entitled "Special Sales/Uniform and Airlines" ("Special Sales") which specialized in sales to Airlines and other uniform trades on a "quick response basis." Gerzog was made Director of this division, apparently from its inception. On October 12, 1988, Gerzog was named Vice President of London Fog responsible for both the Jeffrey and Special Sales Divisions.

Gerzog's compensation had two components. He received a fixed salary as Director of the Jeffrey Division and a fluctuating salary based on gross sales as Director of the Special Sales Division. According to the Complaint, Gerzog performed both of these jobs "in an exemplary fashion" and was "routinely complimented on his diligence, tenacity, vitality, business acumen and overall successful performance."

In 1991 Merrill Lynch became the controlling shareholder of London Fog and placed a number of people on London Fog's Board of Directors. Gerzog alleges that, upon information and belief, Merrill Lynch was "involved in the hiring and firing of all executive employees of London Fog" at all times relevant to this litigation.

In early 1994, Gerzog discovered that London Fog was replacing its older employees. Because he was 68 years old at the time, the plaintiff met with Douglas Hillman ("Hillman"), the Chief Operating Officer of London Fog, on May 3, 1994, to discuss his job security. Hillman informed the plaintiff that he need not be concerned. Hillman further told Gerzog that he could either continue to work full time or reduce his work load without risking his continued employment. Gerzog replied that he would continue to work on a full time basis.

On June 29, 1994, Gerzog received a message from his secretary that he was required to attend a meeting the next morning at 9:00 a.m. in Maryland with David Adair, Vice President in charge of Marketing Administration. In anticipation of a meeting regarding marketing strategies, Gerzog stayed up late that night preparing business plans and projections for his divisions in spite of the fact that he would have to leave New York at 5:00 a.m. the next morning to reach Maryland by 9:00 a.m. However, when Gerzog arrived at the meeting on June 30, 1994, he found three executives already present, Hillman, Harvey Cohen, another divisional vice president, and Nancy Lynch, the Employee and/or Personnel Administrator of London Fog. To Gerzog's surprise, Hillman informed him that he was being terminated effective July 29, 1994. According to the plaintiff, he was also offered a severance package of $15,500 in return for which he was asked to sign a release no later than July 5, 1994. In addition, Gerzog was informed that he would be receiving a reduced pension based only on the fixed portion of his salary stemming from his employment as the Director of the Jeffrey Division, without any compensation for his service as Director of the Special Sales Division, and that he would not receive any accrued vacation pay. Gerzog further alleges, upon information and belief, that Merrill Lynch had "input and/or approved" these termination and benefits decisions. The plaintiff later discovered that his former responsibilities have been delegated to younger employees.

On July 5, 1994, prior to the plaintiff's last scheduled day of work, Gerzog injured his back aiding another employee replace a file drawer. Gerzog's injury was later diagnosed as a herniated disk which disabled him and prevented him from working. Since the time of his injury, Gerzog has been receiving disability benefits from London Fog.

On September 30, 1994, Gerzog filed a Charge of Discrimination with the New York State Division of Human Rights ("NYDHR"). The Charge was transferred to the Equal Employment Opportunity Commission ("EEOC") on October 6, 1994 which later issued to Gerzog a Right to Sue letter on March 22, 1995. Gerzog subsequently filed his Complaint in federal court on June 12, 1995. The Complaint contains nine causes of action against all the defendants as follows:

1. For violations of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq.;

2. For violations of the New York City Administrative Code, §§ 8-107(1)(a), 8-107(6) and 8-107(13);

3. For violations of the New York State Executive Law § 296 et seq.;

4. For violations of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq.;

5. For violations of New York Labor Law § 198-C;

6. For attorneys' fees;

7. For treble damages pursuant to ERISA;

8. For intentional infliction of emotional distress; and

9. For loss of consortium.

Counts one through three based on ADEA, the New York City Administrative Code and the New York State Executive law are based on the alleged age discrimination. Count four based on ERISA stems from the defendants' alleged refusal to pay Gerzog the pension benefits to which he is entitled. Count five arises from the defendants' refusal to pay the plaintiff accrued vacation pay. Count six seeking attorneys' fees is also based on the age discrimination and ERISA claims. Count seven for treble damages is based on ERISA. Count eight for intentional infliction of emotional distress is based on the defendants' "cold, calculated and premeditated" conduct, requiring Gerzog to travel to Maryland to be terminated. Count nine is based on the damages to Marvin and Eleanor Gerzog's marital relationship as a result of his discharge.

The defendants move to dismiss the Complaint in its entirety pursuant to Fed.R.Civ.P. 12(b)(6) arguing that the plaintiffs have failed to allege a claim for which relief can be granted. The plaintiffs respond that they have sufficiently stated their claims, but move in the alternative for leave to amend the Complaint in the event that the defendants' motion is granted.

Discussion

1. Rule 12(b)(6) Standard

A complaint will be dismissed under Fed.R.Civ.P. 12(b)(6) for failure to state a claim, if it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); accord Gagliardi v. Village of Pawling, 18 F.3d 188, 191 (2d Cir.1994); Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir.1991). In addition, such a motion is addressed solely to the face of the pleading, and "the court's function ... is not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient." Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.1985).

In assessing the sufficiency of...