Hollowell v. Cincinnati Ventilating Co. Inc

711 F.Supp.2d 751

Todd HOLLOWELL, Plaintiffv.CINCINNATI VENTILATING COMPANY, INC., et al., Defendants.

Civil Action No. 09-121-DLB.

United States District Court,

E.D. Kentucky,

Northern Division,

at Covington.

April 29, 2010.

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E. Andre Busald, Gail M. Langendorf, Busald, Funk & Zevely PSC, Florence, KY, for Plaintiff.

Thomas A. Prewitt, Graydon, Head & Ritchey, LLP, Ft. Mitchell, KY, for Defendants.

MEMORANDUM OPINION AND ORDER

DAVID L. BUNNING, District Judge.

After he was terminated in December 2007, Plaintiff, Todd Hollowell, commenced this action against his former employer Defendants Cincinnati Ventilating Company (“CVC”) and its pension plans alleging age and disability discrimination as well as numerous violations of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”), including breach of fiduciary duty, violation of ERISA's anti-cutback provision, and discrimination under ERISA § 510. Plaintiff further alleges procedural violations of ERISA including failure to provide all relevant plan documents within the time specified by statute as well as failure to provide summary plan descriptions reasonably calculated to be understood by the average plan participant. Plaintiff filed this lawsuit on behalf of himself and those similarly situated, in other words, those individuals who participated in CVC's ERISA-regulated pension plans. Defendants seek dismissal on all counts.

This matter is presently before the Court on Defendants Cincinnati Ventilating Company, Inc. and its ERISA-regulated plans' Motion to Dismiss. (Doc. # 5). The motion has been fully briefed (Docs.# 8, 13). On April 22, 2010, oral argument was held on Defendants' motion, and the matter is now ripe for review. For the reasons set forth below, because Plaintiff failed to plead factual allegations sufficient to raise his right to relief beyond a speculative level with respect to his ERISA-based claims, and having concluded amendment would be futile, Defendants' Motion to Dismiss (Doc. # 5) is GRANTED as to Counts I-VI. Defendants' motion will be DENIED with respect to Counts VII-IX, and Plaintiff shall amend his Complaint to properly state claims of age and disability discrimination.

I. FACTUAL AND PROCEDURAL BACKGROUND

CVC is a metal fabricating company located in Florence, KY. Plaintiff, a resident of Indiana, began working for CVC on July 16, 1982. In June 2006, Plaintiff was demoted from his position as Plant Foreman to a second shift foreman. At the time of demotion, Plaintiff alleges Kevin Martin-owner of CVC and plan fiduciary of CVC's retirement plans-expressed that Plaintiff would no longer be eligible to participate in bonuses or the company's profit sharing plan. Plaintiff further alleges he was terminated in December 2007 at the age of fifty-three,¹ and was offered a severance package in exchange for a release of any claims against CVC, its divisions, affiliated entities, employee benefits and pension plan funds, trustees, administrators, and assigns. After his termination, Plaintiff filed a charge of discrimination with the EEOC, alleging age and disability discrimination. Upon receiving his right-to-sue letter on June 22, 2009, Plaintiff filed the instant action.

The Plans

CVC is the plan sponsor of the pension benefit plans at issue in this case. The plans CVC sponsors are ERISA-regulated employee benefit plans. Defendants contend that during CVC's history it has only maintained two retirement plans: (1) a defined benefit plan established in 1971 that was amended over time and ultimately terminated in September 1990 (“defined benefit plan”); and (2) a 401(k) profit sharing plan that became effective on January 1, 1990, has been amended over time, and is currently in effect (“401(k) Plan”). ² According to Plaintiff's Complaint, he received a termination notice on September 17, 1990, indicating the defined benefit plan was terminated effective September 15, 1990, and further that “a notice would be filed with the PBGC [Pension Benefit Guaranty Corporation] regarding the termination of Cincinnati Ventilating Company, Inc. Pension Plan Number 002.”

The 1990 summary plan description (“SPD”) for the 401(k) Plan indicates that it is a defined contribution plan, effective January 1, 1990. The plan identifier is listed as Cincinnati Ventilating Company 401(k) Plan 001. According to his Complaint, Plaintiff's 1994 Statement of Benefits for the 401(k) Plan showed an employee rollover amount of $1523.09, which Defendants contend was Plaintiff's vested benefit accrued under the previous plan. The latest SPD for the 401(k) Plan states a participant is “100% vested in rollover contributions at all times.” (Doc. # 5, Ex. 1).

II. ANALYSIS

A. Standard of Review

Federal Rule of Civil Procedure 8(a) requires only a “short and plain statement of the claim showing that the pleader is entitled to relief,” in order to “give the defendant fair notice of what the ... claim is and grounds upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). To be clear, it can hardly be said that Plaintiff's 66-page, 349-paragraph complaint constitutes a “short and plain statement of the claim” for which Plaintiff seeks relief, a point expressly acknowledged by Plaintiff's counsel at oral argument.

In reviewing a Rule 12(b)(6) motion to dismiss, this Court “must construe the complaint in a light most favorable to the plaintiff, and accept all of [the] factual allegations as true. When an allegation is capable of more than one inference, it must be construed in the plaintiff's favor.” Bloch v. Ribar, 156 F.3d 673, 677 (6th Cir.1998). However, the principle that a court must accept as true all allegations contained in the complaint does not apply to legal conclusions. Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1949-50, 173 L.Ed.2d 868 (2009).

To survive a motion to dismiss, the complaint “does not need detailed factual allegations,” Twombly, 550 U.S. at 555, 127 S.Ct. 1955, but it must present “enough facts to state a claim to relief that is plausible on its face.” Id. at 570, 127 S.Ct. 1955. To satisfy this standard, the complaint must provide “more than labels and conclusions [or] a formulaic recitation of the elements of a cause of action,” and the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. Furthermore, the complaint must “contain either direct or inferential allegations respecting all the material elements [of a claim] to sustain a recovery under some viable legal theory.” Hunter v. Sec'y of U.S. Army, 565 F.3d 986, 992 (6th Cir.2009) (quoting Advocacy Org. for Patients & Providers v. Auto Club Ins. Ass'n, 176 F.3d 315, 319 (6th Cir.1999)). A complaint will be insufficient if it tenders only “naked assertion[s]” devoid of “further factual enhancement.” Twombly, 550 U.S. at 557, 127 S.Ct. 1955. Consequently, while legal conclusions may provide the framework of the complaint, if unsupported by factual allegations, dismissal is appropriate.

Claims brought under ERISA are subject only to the simplified pleading standard of Fed.R.Civ.P. 8. In re Cardinal Health, Inc. ERISA Litig., 424 F.Supp.2d 1002, 1015 (S.D.Ohio 2006); see also Swierkiewicz v. Sorema N.A., 534 U.S. 506, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002). Under Rule 8, the Court will construe pleadings “liberally in order to prevent errors in draftsmanship from barring justice to litigants.” Minadeo v. ICI Paints, 398 F.3d 751, 762 (6th Cir.2005) (quoting Ritchie v. United Mine Workers of Am., 410 F.2d 827, 832 (6th Cir.1969)). In considering a defendant's motion to dismiss, it is appropriate for this Court to take account of any relevant plan documents incorporated into the complaint by reference. Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th Cir.1997); In re Cardinal Health, 424 F.Supp.2d at 1016. Courts may consider ERISA plan documents not attached to a complaint where a plaintiff's claims are “based on rights under plans which are controlled by the plans' provisions as described in the plan documents” and where the documents are “incorporated through reference to the plaintiff's rights under the plans, and they are central to plaintiff's claims.” Weiner, 108 F.3d at 89; see also City of Monroe Employees Ret. Sys. v. Bridgestone Corp., 399 F.3d 651, 659 n. 6 (6th Cir.2005). Accordingly, the plan documents Defendants and Plaintiff attach to the fully briefed motion to dismiss, will be considered as part of the pleadings in ruling on Defendants' motion to dismiss.

B. ERISA-based Claims

1. Count I

In Count I of his Complaint, Plaintiff alleges that “Defendants terminated [his] employment with a specific intent to interfere with Plaintiff's health, pension, life, and other welfare benefits” in violation of ERISA § 510. (Doc. # 1, ¶ 280). Defendants argue that although Plaintiff provided a succinct statement of the law, he did not “allege[ ] that [he] exercised or even attempted to exercise any ERISA-based right prior to being laid off ... [or] that the Company actually interfered with the exercise of a right.” Plaintiff, however, has correctly pointed out that § 510 protects not only the exercise or attempted exercise of any ERISA-based right, but also protects a participant from interference with the future attainment of any ERISA-based right. Despite the statute's recognition of interference-based claims, Plaintiff fails to adequately state a claim of interference under § 510.

Pursuant to § 510, “[i]t shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan ... or for the purpose of interfering...