Graphic Commc'ns Conference Int'l Bhd. of Teamsters Nat'l Pension Fund v. Rollins

MEMORANDUM OPINION

HON. THOMAS T. CULLEN UNITED STATES DISTRICT JUDGE

Following her husband's death, Defendant Sandra D. Rollins (“Rollins”)^[1] received a check from Plaintiff Graphic Communications Conference International Brotherhood of Teamsters National Pension Fund (“the Fund”) for $26, 511.50.^[2] At the time, a representative of the Fund told Rollins that the check was a one-time payment to correct an underpayment to her late husband's pension that had gone unnoticed while he was alive. Rollins eventually deposited the check, paid down some debt, and thought nothing more of it.

As explained in more detail below, a few weeks later, the Fund sent Rollins another check for $26, 511.50. Although this check was not signed, Rollins took it to her bank, her

bank deposited it, and she used the money to pay down other debts. Although the Fund had previously represented that the first check was a one-time thing, when she received the second check, Rollins assumed the Fund owed her more money. As Rollins explained it in her Answer, “[P]eople make mistake[s] every day.” (Ans. at 2 [ECF No. 17].)

Plaintiffs contend that the second check was sent in error. And it now claims that, in accepting the money she was not owed, Rollins became a fiduciary under the Employee Retirement Income Security Act (“ERISA”) and is liable for the misappropriation of plan funds to pay her personal debts. They demand that Rollins repay the $26, 511.55, pay pre- and post-judgment interest on the $26, 511.50, and pay their attorneys' fees and related costs in prosecuting this action. (See Am. Compl. Prayer for Relief [ECF No. 8].) They move for judgment on the pleadings, contending that Rollins has admitted facts sufficient to establish her liability. (See ECF No. 19.) For the reasons discussed below, the court does not agree, and Plaintiffs' motion will be denied.

I. Statement of Facts

Rollins's late husband, James Faulk (“James”), was a participant in the Fund. When he retired, he was married to Naomi Hodges Faulk (“Naomi”), who died on January 20, 2006. (Am. Compl. ¶ 13.) “As a result of [Naomi's] death, [James] was entitled to an increased monthly pension benefit for the remainder of his lifetime . . . .” (Id. ¶ 14.) Unfortunately, either through inadvertence or because he was not aware that he was entitled to more money, James never notified the Fund that Naomi had passed, and his monthly payments did not change. (Id. ¶ 15.)

After Naomi passed away, James married Rollins, and they remained married until 2020, when he passed away. When the Fund learned that James had died, it also apparently learned-for the first time-that Naomi had predeceased him. The Fund asked Rollins for both James's and Naomi's death certificates, which she provided. (Id. ¶ 17-18.) Because James had been entitled to a greater monthly payment after Naomi's death but had not received it, the Fund notified Rollins that it would pay James's estate “the amount owed to [James] as a result of him being predeceased by [Naomi] in the amount of $26, 511.50.” (Id. ¶ 18.) The Fund mailed Rollins a check made out to the “Estate of James Faulk c/o Sandra Faulk Rollins.” (Id. ¶ 19.) When Rollins had difficulty depositing the check, she requested that the Fund resend it, omitting “Estate of” from the payee line. (Id. ¶ 20.) Rollins mailed the check back to the Fund and the Fund issued a new one (“the second check”) made out to “James Faulk c/o Sandra Faulk Rollins, ” but Rollins's bank balked again “because [James's] name was first.” (Id. ¶ 23.) Rollins mailed the second check back, but the Fund “declined to re-issue [the payment] because [James], and not Rollins . . ., [was] entitled to” payment. (Id. ¶ 25.) The Fund returned the second check to Rollins and, on July 20, 2020, Rollins was able to deposit it at a different branch. (Id. ¶ 26-27.)

Plaintiffs allege that on August 1, the Fund accidentally issued another check for $26, 511.50 (“the third check”) and mailed it to Rollins. (Id. ¶ 28.) Although the third check was not signed, Rollins cashed the check on August 17, 2020. (Id. ¶ 29-30.) To recover the $26, 511.50 of Fund assets that Plaintiffs assert they incorrectly sent to Rollins, Plaintiffs filed suit in this court alleging three causes of action: breach of fiduciary duty under ERISA, see 29 U.S.C. § 1104(a); constructive trust; and unjust enrichment. Following some procedural

wrangling, Rollins filed an Answer to Plaintiff's Amended Complaint, and Plaintiffs moved for judgment on the pleadings. See Fed. R. Civ. P. 12(c). The court heard argument on the motion on August 19, 2021. After reviewing the submissions of the parties and the applicable law, this matter is ripe for disposition.

II. Standard of Review

Motions for judgment on the pleadings are reviewed under the same standard that is applied to motions to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). See Williams v. Branker, 462 Fed.Appx. 348, 352 (4th Cir. 2012). The only difference is that, unlike a motion to dismiss, the court may consider a defendant's answer when ruling on a motion for judgment on the pleadings. Jordan v. Caromont Health, Inc., No. 3:12cv798-GCM, 2013 WL 443777, at *2 (W.D. N.C. Feb. 5, 2013).

Motions to dismiss under Rule 12(b)(6) test the legal sufficiency of a complaint. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). To survive a Rule 12(b)(6) motion, the complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007)). A claim is facially plausible when the plaintiff's allegations “allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. While a complaint does not need “detailed factual allegations, ” complaints merely offering “labels and conclusions, ” “naked assertion[s] devoid of ‘further factual enhancement, ” or “a formulaic recitation of the elements of a cause of action will not do.” Id. (alteration in original) (internal quotation marks omitted) (quoting Twombly, 550 U.S. at 555, 557).

III. Discussion

Regarding its first cause of action, Plaintiffs argue that, because Rollins accepted Fund assets to which she was not entitled, she became a fiduciary under the terms of ERISA and thereby owed a fiduciary duty to the Fund and its participants. According to Plaintiffs, any person who accepts any Fund assets to which they are not entitled-regardless of whether they knew they were not entitled to the funds, knew that a mistake had been made, or even if they had been told explicitly by plan administrators that they were entitled to the funds and that no mistake had been made-is a fiduciary. And as a fiduciary, that party is personally liable to repay those...