Hanson v. Wilcox Veterinary Clinic PLLC

596 F.Supp.3d 742

Brady HANSON, Jayna Mobley, Amanda Totten, Julia Monarch, Madison Andis, and Erica Heredia, Plaintiffs,

v.WILCOX VETERINARY CLINIC PLLC, Robert B. Wilcox Jr., DVM, Rebecca Wilcox, Kacie Wilcox Barbay, Wilcox Veterinary Clinic 401(k) Plan, and Wilcox Veterinary Clinic Cash Balance Plan, Defendants.

CIVIL ACTION NO. 1:20-CV-210

United States District Court, E.D. Texas, Beaumont Division.

Signed August 11, 2021

Christopher David Johnsen, Johnsen Law, Kingwood, TX, Tamara Danielle Stiner Toomer, Johnsen Law PLLC, Humble, TX, for Plaintiffs Brady Hanson, Jayna Mobley, Julia Monarch, Brenda Morvant.

Tamara Danielle Stiner Toomer, Johnsen Law PLLC, Humble, TX, for Plaintiffs Madison Andis, Erica Heredia.

Elizabeth F. Eoff, Deryck Van Alstyne, Michael Allen Harvey, Brenna Renee Lermon, Munsch, Hardt, Kopf & Harr, PC, Houston, TX, for Defendants Wilcox Veterinary Clinic PLLC, Robert B. Wilcox, Rebecca Wilcox, Kacie Wilcox Barbay.

Michael Allen Harvey, Brenna Renee Lermon, Munsch, Hardt, Kopf & Harr, PC, Houston, TX, for Defendants Wilcox Veterinary Clinic 401(K) Plan, Wilcox Veterinary Clinic Cash Balance Plan.

ORDER ON DEFENDANTS’ MOTIONS TO DISMISS

Michael J. Truncale, United States District Judge

Before the Court are Defendants Wilcox Veterinary Clinic, PLLC (the "Clinic"), Robert B. Wilcox Jr. DVM ("Dr. Wilcox"), Rebecca Wilcox ("Ms. Wilcox"), and Kacie Wilcox Barbay's ("Ms. Barbay") separate Motions to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). [Dkts. 30, 31, 32]. The Court has considered the motions, relevant pleadings, and the applicable law. For the reasons stated below, the Clinic's Motion to Dismiss [Dkt. 32] is DENIED in part and GRANTED in part ; Dr. Wilcox and Ms. Wilcox's Motion to Dismiss [Dkt. 31] is DENIED ; and Ms. Barbay's Motion to Dismiss [Dkt. 30] is DENIED .

I. BACKGROUND

Plaintiffs bring this action against Defendants for alleged violations of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1101, et seq. ("ERISA") and the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. ("FLSA"). [Dkt. 28]. Plaintiffs Brady Hanson ("Dr. Hanson"), Jayna Mobley, Amanda Totten, Julia Monarch, Madison Andis, and Brenda Morvant are former employees of the Clinic. Id. at 2. At all relevant times, Plaintiffs were participants of the Wilcox Veterinary Clinic Cash Balance Plan ("Cash Balance Plan") and the Wilcox Veterinary Clinic 401(k) Plan ("401(k) Plan"). Id. at 4. The Clinic was the named Plan Administrator of both the Cash Balance Plan and the 401(k) Plan (collectively, "the Plans"). Id. Dr. Wilcox owned and operated the Clinic, and he and his wife, Ms. Wilcox, were Trustees of the Plans. Id. at 4–5. Ms. Barbay, the daughter of Dr. Wilcox and Ms. Wilcox, allegedly served as the contact person for employment matters relating to the Clinic and helped administer the Plans. Id. at 4. Plaintiffs allege that Defendants violated ERISA's reporting and disclosure requirements by failing to furnish Plaintiffs with statutorily required plan documents meant to provide participants with general information about the Plans and their financial performance. Id. at 5–9, 13–16. Plaintiffs further allege that the individual Defendants, as Trustees or knowing participants, breached their fiduciary duties to Plaintiffs. Id. at 9–12; 16–17. Plaintiffs also allege that Defendants violated the FLSA by failing to pay them overtime. Id. at 12–13, 17–19.

The Clinic, Ms. Barbay, and Dr. and Ms. Wilcox filed separate motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), [Dkts. 6, 7, 8], and separate motions for more definite statement pursuant to Federal Rule of Civil Procedure 12(e), [Dkts. 9, 10, 11]. Thereafter, Plaintiffs filed an Amended Complaint [Dkt. 28], and the Court dismissed Defendants’ pending motions as moot [Dkt. 42]. Defendants filed new separate motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). [Dkts. 30, 31, 32]. Plaintiffs filed an omnibus response in opposition. [Dkt. 33]. Defendants filed separate replies. [Dkts. 34, 35, 36]. The Court held an oral hearing on the pending motions. [Dkt. 38].

II. LEGAL STANDARD

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides that a party may move for dismissal of an action for failure to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). To survive a motion to dismiss, the "complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp.v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is facially plausible if the plaintiff pleads factual content that allows a court "to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. To meet this standard, the facts alleged "must be enough to raise a right to relief above the speculative level," but the complaint need not contain "detailed factual allegations." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. While the court must accept the facts in the complaint as true, it will "not accept as true conclusory allegations, unwarranted factual inferences, or legal conclusions." Gentilello v. Rege , 627 F.3d 540, 544 (5th Cir. 2010) (quoting Plotkin v. IP Axess Inc. , 407 F.3d 690, 696 (5th Cir. 2005) ).

III. DISCUSSION

Plaintiffs assert four causes of action against Defendants for ERISA violations: (1) Failure to Provide Summary Plan Descriptions; (2) Failure to Provide Documents Following a Written Request; (3) Breach of Fiduciary Duty in Investing Plan Assets; and (4) Knowing Participation; and a fifth cause of action for FLSA violations; (5) Failure to Pay Overtime. The Clinic moves to dismiss counts one, two, and five. [Dkt. 32]. Ms. Barbay moves to dismiss counts one, two, three, and four. [Dkt. 30]. Dr. Wilcox moves to dismiss counts one, two, and three. [Dkt. 31]. Ms. Wilcox moves to dismiss count three. Id.

A. ERISA Disclosure Violations

In counts one and two, Plaintiffs allege that the Clinic, Dr. Wilcox, and Ms. Barbay failed to satisfy certain ERISA disclosure requirements under 29 U.S.C. §§ 1132(c)(1), 1022(a), and 1024(b). Defendants move to dismiss these claims. For the reasons stated below, the Court denies Defendants’ motions.

ERISA imposes several disclosure obligations upon administrators of employee benefit plans. See 29 U.S.C. §§ 1132(c)(1), 1022(a), 1024(b). Congress enacted these provisions "to ensure that ‘the individual participant knows exactly where he [or she] stands with respect to the plan.’ " Newell ex rel. Snow v. Aetna Life Ins. Co. , No. CIV.A. 302-CV-0475M, 2002 WL 1840925, at *3 (N.D. Tex. Aug. 8, 2002) (quoting Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101, 118, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989) ). Two sets of ERISA disclosure requirements are relevant here. The first, § 1132(c)(1), requires the plan administrator to, among other things, timely comply with a participant or beneficiary's request for specified types of information. If the administrator does not provide the requested information "within 30 days after such request," the administrator "may in the court's discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper." 29 U.S.C. § 1132(c)(1). Section 1132(a)(1)(A) affords a plan participant or beneficiary a private cause of action for the relief provided in § 1132(c). Id. § 1132(a)(1)(A).

The second set of disclosure requirements, set forth in §§ 1022(a) and 1024(b), requires the administrator to affirmatively provide a summary plan description ("SPD") to the participant or beneficiary that contains the information described in § 1022(b). Brown v. Aetna Life Ins. Co. , 975 F. Supp. 2d 610, 618 (W.D. Tex. 2013) (finding that §§ 1022(a) and 1024(b) require the administrator to provide the SPD or modification whether or not one is requested). The SPD must "be written in a manner calculated to be understood by the average plan participant" and "be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan." 29 U.S.C. § 1022(a) ; see Manuel v. Turner Indus. Grp., L.L.C. , 905 F.3d 859, 865 (5th Cir. 2018) ("SPDs are ... important because they are often the primary source of information for participants trying to understand their benefits."). Section 1024(b) sets forth timing requirements for publishing and furnishing SPDs and all material modifications and changes. Id. § 1024(b).

Defendants present two main arguments in their motions to dismiss. First, Dr. Wilcox and Ms. Barbay argue that they cannot be found liable for failing to comply with disclosure requirements because they are not the named administrators of the Plan, and only the Clinic is the designated administrator. Second, the Clinic, Dr. Wilcox and Ms. Barbay argue that Plaintiffs did not make a proper request for documents under § 1132(c)(1). The Court finds that both arguments are without merit.

First, Plaintiffs plausibly allege that the Clinic, Dr. Wilcox and Ms. Barbay are plan administrators. ERISA defines the term "administrator" as "the person specifically so designated by the terms of the instrument under which the plan is operated," or, "if an administrator is not so designated, the plan sponsor." Id. § 1002(16)(A). According to the Plan documents,¹ the Clinic is the only named administrator of the Plan. Plaintiffs do not contest this. Plaintiffs, instead, allege that Dr. Wilcox and Ms. Barbay may also have been appointed as administrators pursuant to the terms of the Plan, and therefore are liable in that capacity.

According to the Cash Balance Plan, the Clinic, as the "employer," has the authority to appoint the administrator. The Plan...