Colin v. Marconi Commerce Sys. Employ. Retirement

Citation335 F.Supp.2d 590
Decision Date01 September 2004
Docket NumberNo. 1:03 CV 00079.,1:03 CV 00079.
PartiesDavid S. COLIN, Hal Craig Hartsell, Jr., Arthur C. Prewitt, Plaintiffs, v. MARCONI COMMERCE SYSTEMS EMPLOYEES' RETIREMENT PLAN, Retirement Committee for the Marconi USA Employees' Retirement Plan, Marconi Commerce Systems Employees Retirement Plan Committee, Gilbarco, Inc., Danaher Corporation, Danaher Corporation and Subsidiaries Pension Plan, Defendants.
CourtU.S. District Court — Middle District of North Carolina

Kenneth Miles Johnson, Tuggle Duggins & Meschan, P.A., Greensboro, NC, for Plaintiffs.

G. Wayne Hillis, Jr., Peter M. Varney, Parker Hudson Rainer & Dobbs LLP, Atlanta, GA, Alan W. Duncan, Allison O. Vanlaningham, Smith Moore, L.L.P., Greensboro, NC, Robert B. Cordle, Rodney E. Alexander, Mayer Brown Rowe & Maw, Charlotte, NC, for Defendants.

MEMORANDUM OPINION and ORDER

OSTEEN, District Judge.

Plaintiffs David S. Colin, Arthur C. Prewitt, and Hal Craig Hartsell, Jr. bring this action against Defendants Marconi Commerce Systems Employees' Retirement Plan (the "Marconi Commerce Plan"), Marconi Commerce Systems Employees' Retirement Plan Committee ("Marconi Commerce Committee"), Danaher Corporation and Subsidiaries Pension Plan (the "Danaher Plan"), Danaher Corporation ("Danaher"), and Gilbarco, Inc. ("Gilbarco") (collectively, the "Gilbarco Defendants"). Plaintiffs also commenced this action against Marconi USA Employees' Retirement Plan (the "Marconi USA Plan") and Retirement Committee for the Marconi USA Employees' Retirement Plan ("Marconi USA Committee"), but have since voluntarily dismissed the Marconi USA Plan as a defendant with the agreement of all parties. Plaintiffs claim that Defendants committed numerous violations of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001 et seq. ("ERISA"), including wrongful denial or reduction of benefits, failure to meet notice requirements, and breach of fiduciary duty.

I. BACKGROUND

The following facts are presented in the light most favorable to Plaintiffs.1

Plaintiffs are each former employees of Gilbarco or Marconi Systems, Inc., a successor of Gilbarco. Originally, Plaintiffs' ERISA benefits were governed by the terms of the Gilbarco, Inc. Retirement Income Plan for Salaried Employees or the G.E.C.-U.S.A. Employees' Retirement Plan. Both plans were predecessors of the Marconi USA Plan administered by Marconi USA Committee. Plaintiffs were each participants in the Marconi USA Plan, which subsequently spun off2 to the Marconi Commerce Plan, administered by Marconi Commerce Committee; the Marconi Commerce Plan was in turn spun off to the Danaher Plan, administered by Danaher. Due to the number of spin offs and proper names associated with all of the plans at issue, as well as a general lack of conclusive evidence as to which plan was in force at a given time, the court will refer generically to "the plan" when referencing the plan under which Plaintiffs' benefits were governed at the time in question.

Following the termination of their employment, Plaintiffs each made claims for benefits that were denied based on the terms of the plan. Plaintiffs appealed these determinations and sought reinterpretation of the plan, but were again denied benefits. Plaintiffs each assert that these claims were wrongfully denied in violation § 204 of ERISA.

Plaintiffs also allege they have not been provided certain documents Defendants are obligated to provide under ERISA notice requirements. Specifically, Plaintiffs claim they have not been given plan descriptions, summaries of material modifications resulting from the plan spin offs, or copies of various plan restatements and amendments in violation of § 104 of ERISA. Plaintiffs further assert Defendants failed to maintain adequate records as required by § 209.

In addition to those claims, Plaintiffs Colin and Prewitt contend that Gilbarco employees showed them certain supplemental documents and represented that these documents were part of the plan. Colin and Prewitt both made claims for benefits based on the terms of these supplemental documents; Defendants denied these benefits on the basis that the documents were not part of the plan. Colin and Prewitt allege that the documents are part of the plan, and that Defendants' denial of benefits due thereunder violated § 204 of ERISA. In the alternative, Colin and Prewitt allege that, if the documents were not part of the plan, the Gilbarco employees' misrepresentations constitute a breach of Defendants' fiduciary duties imposed by ERISA.

Finally, Colin alleges that a Gilbarco employee led him to believe that he would not vest under the plan until age 65. Colin actually vested at age 62, but did not make any claim until age 65 having relied on the misrepresentation. Colin claims the misrepresentation also constitutes a breach of Defendants' fiduciary duties imposed by ERISA.

Having exhausted their administrative appeals, Plaintiffs filed this lawsuit. Now before the court are the following motions, each directed at Plaintiffs' Second Amended Complaint: the Gilbarco Defendants' motion to dismiss Count VI; Marconi USA Committee's motion to dismiss Counts I, II, IV, V, and VI;3 the Gilbarco Defendants' motion for judgment on the pleadings as to Counts I, II, IV, V, and VI; Marconi USA Committee's motion for summary judgment as to Count III;4 and the Gilbarco Defendants' motion for summary judgment as to Count III.

II. DEFENDANTS' MOTIONS TO DISMISS AND MOTION FOR JUDGMENT ON THE PLEADINGS AS TO COUNTS I, II, IV, V, AND VI OF PLAINTIFFS' SECOND AMENDED COMPLAINT
A. Standards of Review

A defendant's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of pleadings, but does not seek to resolve disputes surrounding the facts. Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir.1992). A court must determine only if the challenged pleading fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A pleading "should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). The pleading must be "liberally construed" in the light most favorable to the non-moving party and allegations made therein are taken as true. Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 1849, 23 L.Ed.2d 404 (1969).

These same standards also dictate the court's review of a motion for judgment on the pleadings made pursuant to Federal Rule of Civil Procedure 12(c). See, e.g., Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir.1999). The court may also look to documents extraneous to the complaint without converting the motion into one for summary judgment. Specifically, exhibits "integral to and explicitly relied on in the complaint" may be reviewed, provided their authenticity is not in question. Phillips v. LCI Int'l, Inc., 190 F.3d 609, 618 (4th Cir.1999) (discussing standard in context of a Rule 12(b)(6) motion); see also Eagle Nation, Inc. v. Market Force, Inc., 180 F.Supp.2d 752, 754 (E.D.N.C.2001). "Judgment on the pleadings is appropriate where there are no material facts in dispute and the moving party is entitled to judgment as a matter of law." Cannon v. City of West Palm Beach, 250 F.3d 1299, 1301 (11th Cir.2001).

B. Counts I and II — Claims for Wrongfully Denied Benefits

Plaintiffs allege in Counts I and II of their Second Amended Complaint that Defendants violated § 204 of ERISA by wrongfully denying or reducing benefits due under the plan. In conjunction with these claims, Plaintiffs seek payment of the benefits they allege were provided under the plan, a remedy pursued via § 502(a)(1).

1. Marconi USA Committee's Motion to Dismiss Counts I and II

Marconi USA Committee argues that it cannot be held liable for Plaintiffs' claims for benefits because, pursuant to a 2001 spin-off agreement, Marconi USA Committee released all control and discretion it held over Plaintiffs' plan, with Marconi Commerce Committee assuming all related liabilities. Marconi USA Committee asserts that Plaintiffs lack standing to pursue benefits from it because, as a former plan administrator no longer in control of the plan, Marconi USA Committee lacks any authority to provide the remedy Plaintiffs seek.

Marconi USA Committee is correct in its assertion that, following the spin-off agreement in 2001, it relinquished all discretion and control over the plan in which Plaintiffs participate.5 The Second Amended Complaint contains no allegations to the contrary. Plaintiffs, however, argue that Marconi USA Committee is a proper party to these claims because it once exercised control over the plan and acted as plan administrator when Plaintiffs' claims for benefits were denied.6

The cases Plaintiffs cite do not support their argument; rather, they stand only for the proposition that parties exercising a sufficient degree of control over an ERISA plan may be sued for benefits. See, e.g., Daniel v. Eaton Corp., 839 F.2d 263, 266 (6th Cir.1988); Marcum v. Zimmer, 887 F.Supp. 891, 894 (S.D.W.Va.1995); Beegan v. Associated Press, 43 F.Supp.2d 70, 73-74 (D.Me.1999); International Union v. Auto Glass Employees Fed. Credit Union, 858 F.Supp. 711, 722-23 (M.D.Tenn.1994). These cases do not address the situation in which a former administrator, currently lacking any control or ability to compel payment under the plan, is sued for benefits. Plaintiffs cite only one case in which a former plan administrator was subject to liability for denial of ERISA benefits. See Kinek v. Paramount Communications, Inc., 22 F.3d 503, 504 (2d Cir.1994). Kinek is inapplicable here because the basis of liability was the defendant's failure to fully fund vested benefits as agreed to in its...

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