Labouve v. Metso Minerals Indus., Inc.

MARK LABOUVE PLAINTIFF v. METSO MINERALS INDUSTRIES, INC. a/k/a Metso Minerals Frozen Pension Plan, et al. DEFENDANTS

NO. 4:17-CV-95-DMB-JMV

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF MISSISSIPPI GREENVILLE DIVISION

March 28, 2018

MEMORANDUM OPINION AND ORDER

Before the Court is Metso Minerals Industries, Inc.'s motion to dismiss, Doc. #3; and Mark LaBouve's motion for summary judgment, Doc. #16.

IProcedural History

On July 3, 2017, Mark LaBouve filed a complaint in this Court against Metso Minerals Industries, Inc. alleging breach of contract and breach of fiduciary duty based on Metso's refusal to pay him certain benefits under its pension plan governed by the Employee Retirement Income Security Act ("ERISA"). Doc. #1. On July 26, 2017, Metso filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Doc. #3. LaBouve timely responded, Doc. #13; and Metso timely replied, Doc. #21.

On the same day he responded to Metso's motion to dismiss, LaBouve filed a motion for summary judgment. Doc. #16. Metso timely responded to the summary judgment motion. Doc. #25. LaBouve did not reply.

IIRule 12(b)(6) Standard

"To survive a Rule 12(b)(6) motion to dismiss, the complaint does not need detailed factual allegations, but it must provide the plaintiff's grounds for entitlement for relief—including factual allegations that, when assumed to be true, raise a right to relief above the speculative level." Ruiz v. Brennan, 851 F.3d 464, 468 (5th Cir. 2017) (citing Taylor v. City of Shreveport, 798 F.3d 276, 279 (5th Cir. 2015)). Under this standard, a court must "accept all well-pleaded facts as true." New Orleans City v. Ambac Assur. Corp., 815 F.3d 196, 199-200 (5th Cir. 2016) (internal quotation marks omitted).

IIIFactual Allegations

As an employee of Metso, LaBouve participated in Metso's ERISA-governed pension plan. Doc. #1 at ¶¶ 4, 7-8. At some point during his employment with Metso, LaBouve was injured on the job. Id. at ¶ 12. On January 29, 2014, LaBouve and Metso executed a "Global Settlement Agreement and General Release" ("Agreement"), which settled, among other things, LaBouve's worker's compensation claim.¹ Id. at ¶¶ 12-13; Doc. #1-2.² Pursuant to the Agreement, LaBouve received from Metso $190,000.00 related to his worker's compensation claim and $3,750.00 related to his other pending claims, and LaBouve's counsel received $1,250.00. Doc. #1-2 at ¶ 4. The Agreement includes a "Waiver and Release of Claims" provision. Id. at ¶ 7.

Sometime after the Agreement's execution, LaBouve requested disability benefits and, in the alternative, retirement benefits he believed were rightfully due to him under Metso's pension plan. Doc. #1 at ¶ 14. On February 19, 2016, Metso denied LaBouve's request based on the "Waiver and Release of Claims" provision in the Agreement. Id. at ¶ 15. Thereafter, on July 3, 2017, LaBouve filed this lawsuit seeking the "full amount of his Disability Benefits and/or Retirement Benefits." Id. at 4.

IVAnalysis

As explained above, LaBouve's complaint asserts claims for breach of contract and breach of fiduciary duty. Metso seeks dismissal of both claims.

A. Breach of Contract

Metso concedes that LaBouve is entitled to his retirement benefits upon attaining the age of sixty-five, or may apply for reduced-rate retirement benefits before reaching the age of sixty-five. Doc. #21 at 5-6 & n.1. Accordingly, the Court will only consider whether LaBouve has sufficiently stated a claim for disability benefits. In that regard, the sole issue is whether LaBouve, by executing the Agreement, released³ his right to disability benefits under Metso's pension plan.

1. ERISA's Anti-Alienation provision

At the outset, LaBouve argues that ERISA's anti-alienation provision, 29 U.S.C. § 1056(d)(1),⁴ strictly prohibits the waiver or release of vested ERISA benefits and, because his benefits are vested, any such waiver or release is void. Metso contends that the Fifth Circuit has concluded that ERISA benefits may be waived or released despite § 1056(d)(1), provided such is knowing and voluntary.

In Rhoades v. Casey, the Fifth Circuit held that "the anti-alienation provision of ERISA is not absolute." 196 F.3d 592, 598 (5th Cir. 1999). One of the exceptions to the anti-alienation provision is "a knowing and voluntary waiver of retirement benefits that is executed to reach asettlement." Id.; see Stobnicki v. Textron, Inc., 868 F.2d 1460, 1465 (5th Cir. 1989) ("[A] controversy between good-faith adverse claimants to pension plan benefits is subject to settlement like any other, and that an assignment made pursuant to a bona fide settlement of such a controversy is not invalidated by the anti-alienation provision ...."). Accordingly, LaBouve's argument that § 1056(d)(1) necessarily precludes the release or waiver of his benefits is without merit.

2. Knowing and voluntary

LaBouve submits that if the release is not void, it is invalid. The parties do not dispute that "[f]ederal common law controls the interpretation of a release of federal claims." Chaplin v. NationsCredit Corp., 307 F.3d 368, 372 (5th Cir. 2002); see, e.g., Guardian Life Ins. Co. of Am. v. Finch, 395 F.3d 238, 243 (5th Cir. 2004) (Fifth Circuit has "longstanding approach of relying on federal common law to determine if an ERISA plan's beneficiary has effected a common law waiver"). Under Rhoades, a party may waive ERISA benefits as part of a settlement agreement if the waiver is knowing and voluntary.⁵ Rhoades, 196 F.3d at 598. The Fifth Circuit employs a two-step, burden-shifting framework to assess a release's validity and enforceability:

Once a party establishes that his opponent signed a release that addresses the claims at issue, received adequate consideration, and breached the release, the opponent has the burden of demonstrating that the release was invalid because of fraud, duress, material mistake, or some other defense. We examine the totality of the circumstances to determine whether the releasor has established an appropriate defense.

Clayton, 722 F.3d at 292 (quoting Williams v. Phillips Petroleum Co., 23 F.3d 930, 935 (5th Cir. 1994)).

a. First step

It is undisputed that LaBouve signed the Agreement that addresses the claims at issue here. Additionally, assuming the release is valid, LaBouve's instant action constitutes a breach. The final inquiry under the first step of the Clayton framework is whether there was consideration paid for the release. For example, in Ralser v. Winn Dixie Stores, Inc., at the first step of the Clayton framework, the court concluded that a general waiver and release was unsupported by consideration because the general waiver was supported by the same consideration supporting a separate "Joint Petition for Compromise." 35 F.Supp.3d 799, 804-05 (E.D. La. 2014).

LaBouve argues that this case is similar to Ralser and that "there was no consideration mentioned, much less paid, in exchange for Mr. LaBouve purportedly waiving vested disability retirement benefits." Doc. #14 at 6. Specifically, LaBouve contends that, because the Agreement made clear he was paid $190,000.00 for the worker's compensation claim and "[t]he additional nominal consideration was paid" for the threatened ADA claim and union grievance, there was no compensation paid to release his disability benefits. Id. at 7.

Metso, on the other hand, contends that compensation was paid because the disability benefits LaBouve now seeks were related to his worker's compensation claim, for which he received $190,000.00 in consideration. Metso asserts that because LaBouve's claimed entitlement "stemmed directly from his workplace injury," the $190,000.00 payment contemplated his future disability benefits at issue here.

The Court finds the Agreement distinguishable from the dual releases executed in Ralser. The Ralser court, in reasoning that there was no consideration paid in exchange for the general waiver, relied on the fact that there were two different documents, the "Joint Petition for Compromise," which was supported by $15,000.00, and a much broader, any-and-all generalrelease, which was supported by the same $15,000.00. The court held that because "Winn Dixie gave Ralser no additional compensation for signing the general waiver and release, which was not part of the workers' compensation settlement and which extended the release to all causes of action regardless of their relationship to his workers' compensation claim," the general release was invalid. Ralser, 35 F.Supp.3d at 805. However, the court noted that "[t]his would be a much different case if Ralser's present lawsuit had some relationship to his work-related injury," as "Ralser would be barred from bringing such a suit because he waived all claims arising out of that work-related injury in his workers' compensation settlement." Id.

Here, LaBouve's disability benefits arose out of the work-related injury that was settled in the Agreement. See Peters v. Reliance Standard Life Ins. Co., 238 F.Supp.3d 905, 912-13 (S.D. Tex. 2017) (release of long-term disability claim released along with underlying negligence claim). Accordingly, the Court concludes that there was consideration paid to LaBouve to release his disability benefits, and the burden shifts to LaBouve to show the release is invalid.

b. Second step

The Fifth Circuit employs a six-factor, totality of the circumstances balancing test to determine whether a release is invalid: (1) the plaintiff's education and business experience; (2) the amount of time the plaintiff had possession of or access to the agreement before signing it; (3) the role of the plaintiff in deciding the terms of the agreement; (4) the clarity of the agreement; (5) whether the plaintiff was represented by counsel; and (6) whether the consideration given in exchange exceeds employee benefits to which the employee was already entitled by contract or law. O'Hare v. Global Nat. Res., Inc., 898 F.2d 1015, 1017 (5th Cir. 1990). "This list is not exclusive,...