Soland v. George Wash. Univ.

916 F.Supp.2d 33

Richard SOLAND, Plaintiff,

v.The GEORGE WASHINGTON UNIVERSITY, et al., Defendants.

Civil Action No. 10–cv–2034 (RLW).

United States District Court, District of Columbia.

Jan. 7, 2013.

James Charles Bailey, Jason H. Ehrenberg, Michael A. Tilghman, Bailey & Ehrenberg PLLC, Washington, DC, for Plaintiff.

Christopher A. Weals, Simon Joseph Torres, Morgan, Lewis & Bockius, Washington, DC, for Defendants.

MEMORANDUM OPINION

ROBERT L. WILKINS, District Judge.

Plaintiff Professor Richard Soland (“Soland”) brings this action against his former employer The George Washington University (“GWU”) for alleged violations of the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001–1461, as well as a claim of common law negligent misrepresentation. Soland claims that when he approached GWU about his plans to retire, they failed to inform him of a more generous retirement plan than the one he was offered, despite having the other plan under serious consideration at the time. He also claims GWU improperly refused to allow him to join the other plan when they ultimately announced it despite his being eligible to do so. Defendants GWU, The George Washington University School of Engineering and Applied Science Voluntary Separation Incentive Plan, and Donald Lehman and The George Washington University Office of the Executive Vice President for Academic Affairs moved to dismiss Counts I and III of Soland's complaint (Dkt. No. 14), and moved for summary judgment on Count II (Dkt. No. 17). After careful consideration of the materials submitted by both parties, for the reasons below the Court finds that Defendants' Motion to Dismiss (Dkt. No. 14) is granted in part and denied in part, and Defendants' Motion for Summary Judgment (Dkt. No. 17) is granted.

I. Factual Background

Soland taught at The George Washington University's School of Engineering and Applied Science (“SEAS”) for over 30 years. (Dkt. No. 10 at ¶ 7). Around January 2008, he told the head of his department he planned to retire “at or around the end of 2009[,] and inquired as to whether a voluntary separation package would be available to him at or around the time of his proposed retirement.” ( Id. ¶ 14). After some discussion with staff of The George Washington University (“GWU”), Soland received a memorandum dated January 31, 2008 outlining the terms of a separation agreement. ( See Dkt. No. 14, Ex. 1). It stated that final approval of the terms would need to come from Donald Lehman, the Executive Vice President for Academic Affairs (“Lehman”). ( Id.)

Lehman approved the January 31, 2008 memorandum on April 7, 2008, and wrote Lehman on April 16, 2008 to confirm. ( Id.). The letter from Lehman stated that Soland's “fulltime active status will continue through the 2008 Fall semester,” he would “be granted administrative leave” for 2009, and his retirement “will be effective as of the end of the 2009 Fall semester.” ( Id.) A November 1, 2008 letter confirmed the amount of money Soland would receive for 2009. ( SeeDkt. No. 10 at ¶ 17).

Around one year later, on October 23, 2009, Lehman announced a Voluntary Separation Incentive Program (“VSIP”) “for all full-time regular active status faculty” in Soland's department. ( Id. ¶ 18). GWU did not send notice of the VSIP to Soland. ( Id.). After Soland learned of the VSIP, he wrote to Lehman on December 2, 2009 and expressed interest in participating in it. ( Id. ¶ 22). Lehman told Soland he was not eligible because he was not “fulltime active status.” ( Id.). Nonetheless, Soland sought to register for the program, and mailed in certain paperwork associated with it. ( Id. ¶ 23). On February 16, 2010, Lehman denied Soland's claim for benefits under the VSIP, which Soland appealed on April 14, 2010. ( Id. ¶ 24). Lehman rejected that appeal by letter on June 11, 2010. ( Id. ¶ 25).

Soland filed his complaint in this Court on November 23, 2010, stating claims under ERISA §§ 502(a)(3) & 502(A)(1)(B). (Dkt. No. 1). After Defendants answered and moved to dismiss the claim filed under ERISA § 502(a)(3) (Dkt. Nos. 7 & 8), Soland filed an amended complaint on March 8, 2011, adding an additional count of common law negligent misrepresentation. (Dkt. No. 10).

II. Legal StandardsA. Motion To Dismiss

Defendants have moved to dismiss Counts I and III of Plaintiff's complaint under Rule 12(b)(6). (Dkt. No. 14). “To survive a motion to dismiss, a 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)). In evaluating a Rule 12(b)(6) motion, the court construes the complaint liberally in the Plaintiff's favor and grants him all reasonable inferences. See Stokes v. Cross, 327 F.3d 1210, 1215 (D.C.Cir.2003). Despite the positive inferences granted in considering a motion to dismiss, a complaint must sufficiently “give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal citations omitted). Although the complaint does not require detailed factual allegations, it must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Id.

B. Summary Judgment

Defendants have moved for summary judgment with respect to Count II of Plaintiff's complaint. (Dkt. No. 17). Summary judgment is appropriate when the moving party demonstrates that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Moore v. Hartman, 571 F.3d 62, 66 (D.C.Cir.2009) (citing Fed. R. Civ. P. 56(c) and Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A genuine issue of material fact exists if the evidence “is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248, 106 S.Ct. 2505. “The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonablyfind for the plaintiff.” Id. at 252, 106 S.Ct. 2505.

III. AnalysisA. Soland's Count I Claim For Breach Of Fiduciary Duty

1. Taking Soland's Allegations As True, Defendants Engaged In Fiduciary Action And Should Have Disclosed The VSIP

To state a claim under ERISA § 502(a)(3), Plaintiff must demonstrate Defendants acted in a fiduciary capacity. The ERISA statute states that “a person is a fiduciary with respect to a plan to the extent he exercises any discretionary authority or discretionary control respecting management of such plan ... or he has any discretionary authority or discretionary responsibility in the administration of such plan.” 29 U.S.C. § 1002(21)(A). The Supreme Court has recognized that breach of fiduciary duty under ERISA can be an actionable claim. Varity Corp. v. Howe, 516 U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996).

The motion papers clarify that Soland does not claim a fiduciary duty owed to him from discussions about his severance package. “[E]mployee benefits, such as severance pay, set forth in individually negotiated employment contracts, do not give rise to a ‘plan’ under ERISA.” Johnson v. TCOM Sys., Inc., Civ. A. No. 89–0311(RCL), 1989 WL 517870, at *2 (D.D.C.1989). Soland and the Defendants agree that Soland's separation agreement is not an ERISA plan, and therefore discussions related to it do not constitute fiduciary acts. ( See Dkt. No. 15, at 9 n. 1).

The issue is whether Defendants' comments (or lack thereof) regarding the VSIP constitute fiduciary action. Soland claims that because Defendants “sponsored and/or administered ERISA-covered retirement and benefit plans to which [he] was a participant,” they owed him a fiduciary duty to disclose information regarding the VSIP when he inquired about his retirement in 2008 and during his ongoing negotiations that year. (Dkt. No. 10, at ¶ 28). However Defendants claim Soland's participation in other ERISA plans “is of no moment.” (Dkt. No. 14, at 9). They claim “[t]here is no all-encompassing fiduciary duty ... simply because Dr. Soland participated in other GW plans covered under ERISA.” (Dkt. No. 16, at 4).

Central to whether Defendants breached a fiduciary duty to Soland is whether the VSIP was under serious consideration at the time of the parties' ongoing discussions in 2008. The Third Circuit essentially first devised the serious consideration test. See Fischer v. Phila. Electric Co., 96 F.3d 1533 (3d Cir.1996). “Serious consideration of a change in plan benefits exists when (1) a specific proposal (2) is being discussed for purposes of implementation (3) by senior management with the authority to implement the change.” Id. at 1539. Several Circuit Courts have adopted the serious consideration test as formulated by Fischer, or modified it slightly. See, e.g., Mathews v. Chevron Corp., 362 F.3d 1172, 1180–82 (9th Cir.2004); McAuley v. IBM Corp., 165 F.3d 1038, 1043 (6th Cir.1999); Vartanian v. Monsanto Co., 131 F.3d 264, 272 (1st Cir.1997). In the Second and Fifth Circuits the test is a materiality test, which is assessed through factors that include the serious consideration doctrine's factors but enhanced with others. The materiality test is designed to avoid employers keeping information from employees before the three elements of the serious consideration test are met but after such information would become materially relevant to an employee's decision to retire. See, e.g., Ballone v. Eastman Kodak Co., 109 F.3d 117 (2d Cir.1997); Martinez v. Schlumberger, Ltd., 338 F.3d 407, 428 (5th Cir.2003) (“[L]ack of serious consideration does not equate to a free zone for lying.”). The D.C. Circuit has not yet expressed a preference for the serious consideration test or materiality test in the ERISA co...