Trechak v. Seton Co. Supplemental Executive Ret. Plan, CIVIL ACTION NO. 10-0227

PERRY TRECHAK Plaintiff,

v.SETON COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, et al., Defendants.

CIVIL ACTION NO. 10-0227

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

FILED: November 24, 2010

MEMORANDUM RE: MOTION TO DISMISS AMENDED COMPLAINT

Baylson, J.

I. Introduction

Plaintiff Perry Trechak, a former employee of the Seton Company, brings this action for payment of employee benefits pursuant to Sections 502(a)(1)(B) and 502(a)(3) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq., and applicable supplemental state law. Plaintiff names as Defendants Seton Company Supplemental Executive Retirement Plan ("the SERP"), the SERP Plan Administrator, Seton Company Supplemental Plan to Provide Pre-TRA 86 Benefits ("the FAS 87 Supp"), the FAS 87 Supp Plan Administrator, the Middle Management 1986 Supplemental Retirement Plan ("the MMSR 86"), the MMSR 86 Plan Administrator, the Middle Management 1994 Supplemental Retirement Plan ("the MMSR 94"), the MMSR 94 Plan Administrator, the Seton Company Deferred Compensation Plan ("the DCP"), the DCP Plan Administrator, ¹ the Seton Company ("Seton"), Seton Chairman, Chief Executive Officer ("CEO"), and substantial shareholder Philip Kaltenbacher, and Seton President Hermann Kampling (collectively, "Defendants").

Plaintiff alleges the following four Counts: (1) wrongful denial of benefits by the Plans and the Plan Administrators pursuant to ERISA Section 501(a)(1)(B); (2) breach of contract by Seton; (3) interference with payment of benefits by Seton, Kaltenbacher, and Kampling pursuant to ERISA Section 510; and (4) unjust enrichment by Seton and Kaltenbacher.²

Presently before the Court is Defendants' Motion to Dismiss Counts Two, Three, and Four of the Complaint; to dismiss Defendants Kaltenbacher and Kampling; and to dismiss claims for damages for future benefits not yet due.³

For the reasons that follow, Defendants' motion will be granted in part and denied in part.

II. Factual and Procedural Background

Plaintiff alleges the following facts in his Complaint. Plaintiff was an employee of Seton from October 1, 1974 until December 1, 2004. Compl. ¶¶ 9, 11. Following a brief retirement, Plaintiff was reinstated as an employee from April 1, 2005 until February 28, 2009, when he became a consultant. Compl. ¶ 11. As a Seton employee, Plaintiff was entitled to participate in the employee benefit plans named in this action and to receive benefit payments upon retirement. Compl. ¶ 10. Each of the Plans at issue is a "top hat" employee benefit plan subject to ERISA.⁴Compl. ¶ 3.

Plaintiff began receiving monthly benefit payments under the FAS 87 SUPP, the MMSR 86, and the MMSR 94 in December 2004, under the SERP in January 2005, and under the DCP in January 2008. Compl. ¶¶ 12-14. Plaintiff and Seton agreed to reduce by 50% Plaintiff's monthly benefit payments during 2009 under the SERP and DCP, and to increase future payments beginning in 2010. Compl. ¶¶ 15-16. In a letter dated April 29, 2009, Kampling informed Plaintiff that Seton was delaying all deferred compensation payments to Plaintiff "until further notice" due to "difficult business conditions." Compl. ¶ 17. Plaintiff unsuccessfully sought to meet with Kaltenbacher to discuss his benefits. Compl. ¶ 18. Kampling again advised Plaintiff of the delay in benefit payments in a letter dated August 14, 2009. Compl. ¶ 19.

On August 28, 2009, Plaintiff filed an Initial Benefit Claim with the Plan Administrators and requested copies of the Plans. Compl. ¶¶ 20-21. Plaintiff received from Seton's General Counsel and Secretary a letter dated September 28, 2009 enclosing the plan documents that Plaintiff attached to his Complaint. Compl. ¶ 22; Exs. A-E. Plaintiff did not receive a timely response to his Initial Benefit Claim and filed this Complaint. Compl. ¶ 23.

On May 3, 2010, the Defendants filed the Motion to Dismiss and Stay. (Doc. 12). On May 17, 2010, Plaintiff filed a Response Brief in Opposition. (Doc. 14). On May 21, 2010, the Defendants filed a reply. (Doc. 15). On November 9, 2010, Plaintiff filed a sur-reply with leave of the Court. (Doc. 23).

The Court held oral argument on October 1, 2010, which focused primarily on identifying the governing Plan documents and clarifying the arguments related to arbitration. In response to the Court's order, the Defendants filed a Supplemental Brief on October 15, 2010, in which they withdrew the portion of their motion seeking arbitration and a stay. (Doc. 19). On October 21, 2010, Plaintiff filed his Supplemental Brief. (Doc. 20).

III. The Parties' Contentions

Defendants contend that ERISA preempts Plaintiff's claims for breach of contract and unjust enrichment, which are grounded in state law. Defs.' Mot. to Dismiss 5-7, 15-16. Additionally, Defendants argue that Plaintiff did not adequately plead all elements required for his claims of unjust enrichment and interference with benefits. Id.. at 8, 10. Defendants contend that because the claims pled against Kaltenbacher and Kampling are inadequate, they should be dismissed from the suit. Id.. at 18-19. Lastly, Defendants argue that Plaintiff's claims for lump sum payments, including benefits not yet due under the Plans, should be dismissed as an improper remedy under ERISA. Id. at 16-18.

Plaintiff contends that he properly pled his claims, including state law claims pled in the alternative. Pl.'s Resp. 2, 10. Plaintiff further argues that his claim for unjust enrichment may properly be characterized as a claim for equitable relief under 29 U.S.C. § 1132(a)(3), rather than a state law claim. Id. at 12-15. Finally, Plaintiff contends that the motion to strike his prayer for relief is premature. Id.. at 17.

IV. Legal Standard

When deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the Court may look only to the facts alleged in the complaint and its attachments. Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994). The Court must accept as true all well-pleaded allegations in the complaint and view them in the light most favorable to the plaintiff. Angelastro v. Prudential-Bache Sec., Inc., 764 F.2d 939, 944 (3d Cir. 1985).

A valid complaint requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "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, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The requirement that the court accept as true all factual allegations contained in the complaint does not apply to legal conclusions; therefore, pleadings must include factual allegations to support the legal claims asserted. Id.. at 1949, 1953. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 1949 (citing Twombly, 550 U.S. at 555); see also Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citing Twombly, 550 U.S. at 555 n.3)) ("We caution that without some factual allegation in the complaint, a claimant cannot satisfy the requirement that he or she provide not only 'fair notice, ' but also the 'grounds' on which the claim rests."). Accordingly, to survive a motion to dismiss, a plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 556).

V. Discussion

A. Count Two: Breach of Contractual Duties

The federal framework for ERISA preempts state law claims to recover benefits allegedly due. 29 U.S.C. § 1144(a) (2004) ("Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan..."). The purpose of the preemption provision is to "avoid a multiplicity of regulation in order to permit the nationally uniform administration of employee benefit plans." N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 657 (1995). The Third Circuit has rejected the "conten[tion] that state law and ERISA co-exist for purposes of enforcement of the plan." Pane v. RCA Corp., 868 F.2d 631, 635 (3d Cir. 1989) (affirming the district court's dismissal of state law claims for breach of contract and intentional infliction of emotional distress that were related to an ERISA plan and preempted).

In Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983), the Supreme Court interpreted the ERISA preemption provision broadly to include any state law that "'relates to' an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan." Id. at 96-97. For example, in Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987), the Court held that tort and breach of contract claims, which were common law causes of action "based on alleged improper processing of a claim for benefits under an employee benefit plan, undoubtedly meet the criteria for pre-emption under § 514(a)." Id.. at 48. Likewise, in Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (1990), the Supreme Court held that state common law contract and tort claims, premised on the existence of an ERISA plan, were preempted. Id.. at 141. The Court explained that "the existence of a pension plan is a critical factor in establishing liability" on the state law claim, which "relates not merely to pension benefits, but to the essence of the pension plan itself." Id.. at 139-40 (reversing the judgment entered by the Texas Supreme Court in favor of the plaintiff on the state law claim).

Here, Plaintiff alleges and Defendants do not dispute that the employee benefit plans at issue are "top...