Davis v. Old Dominion Tobacco Co. Inc.

• Decision Date: 10 December 2010
• Docket Number: Civil Action Nos. 2:09cv603, 2:10cv130.
• Citation: 755 F.Supp.2d 682
• Parties: James L. DAVIS, Plaintiff,v.OLD DOMINION TOBACCO COMPANY, INC., d/b/a Atlantic Dominion Distributors, Inc., and Robin D. Ray, Individually, and Old Dominion Tobacco Company, Inc. Deferred Compensation Agreement, and Old Dominion Tobacco Company, Inc. Board of Directors, Defendants.James L. Davis, Plaintiff,v.Old Dominion Tobacco Company, Inc., d/b/a Atlantic Dominion Distributors, Inc., Defendant.
• Court: U.S. District Court — Eastern District of Virginia

755 F.Supp.2d 682

James L. DAVIS, Plaintiff,

v.OLD DOMINION TOBACCO COMPANY, INC., d/b/a Atlantic Dominion Distributors, Inc., and Robin D. Ray, Individually, and Old Dominion Tobacco Company, Inc. Deferred Compensation Agreement, and Old Dominion Tobacco Company, Inc. Board of Directors, Defendants.James L. Davis, Plaintiff,

v.Old Dominion Tobacco Company, Inc., d/b/a Atlantic Dominion Distributors, Inc., Defendant.

Civil Action Nos. 2:09cv603, 2:10cv130.

United States District Court, E.D. Virginia,Norfolk Division.

Dec. 10, 2010.

James Matthew Mundy, John Ignatius Paulson, Louis George Paulson, Paulson & Paulson PLC, Virginia Beach, VA, for Plaintiff.Mark Edward Warmbier, Scott William Kezman, Kaufman & Canoles P.C., Norfolk, VA, for Defendants.

OPINION

REBECCA BEACH SMITH, District Judge.

This action is before the court on the defendants' Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons stated below, the Motion for Summary Judgment is GRANTED.

Procedural History

The plaintiff, James L. Davis, filed an Amended Complaint (“Complaint”) ¹ in the Circuit Court for the City of Virginia Beach, Virginia, alleging fraud, constructive fraud, and undue influence against the defendants, and breach of contract against Old Dominion Tobacco Company, Inc. (“Old Dominion”). On December 9, 2009, the defendants removed the plaintiff's causes of action to this court, pursuant to 28 U.S.C. § 1441(b), asserting that the plaintiff's breach of contract claim “arises under” a question of federal law, namely the Employee Retirement Income Security Act (“ERISA”). On February 26, 2010, the court found that the plaintiff's breach of contract claim, Count VI of the Complaint, was completely preempted by ERISA, and was, therefore, properly removed to this court. Additionally, the court found that the plaintiff's state law tort claims were properly removed to this court under this court's supplemental and pendent jurisdiction, pursuant to 28 U.S.C. §§ 1367(a) and 1441(c), respectively. On March 8, 2010, the court found that all the plaintiff's claims were completely preempted by ERISA, and granted the plaintiff leave to amend the Complaint so that he could clarify his claims under ERISA, and raise all claims, as appropriate, for any purported violations of ERISA's provisions.

On March 26, 2010, the plaintiff filed a Second Amended Complaint (“Amended Complaint”), stating causes of action under ERISA.² As in the Complaint, the plaintiff claims that his employer, defendant Old Dominion, fired him, at the behest of defendant Robin Ray (“Ray”), while he was disabled, in order to preclude him from collecting benefits purportedly due under an ERISA plan.³ Accordingly, in Count I, the plaintiff seeks recovery of ERISA benefits, pursuant to 29 U.S.C. §§ 1132(a)(1)(B) and (3); in Count II, the plaintiff states a claim for interference with rights protected by ERISA, pursuant to 29 U.S.C. § 1140; and, in Count III, the plaintiff states a claim for breach of fiduciary duty, pursuant to 29 U.S.C. §§ 1104 and 1109. On March 25, 2010, the plaintiff filed, as a separate cause of action in this court, a complaint (“ADEA/ADA Complaint”) stating causes of action arising under the Age Discrimination in Employment Act (“ADEA”) and the American with Disabilities Act (“ADA”).⁴ In the ADEA/ADA Complaint, the plaintiff alleges the same factual background as he alleges in the Amended Complaint. In Count I, he states a claim for discrimination in violation of the ADEA, pursuant to 29 U.S.C. 621 et seq. In Count II, he states a claim for discrimination in violation of the ADA, pursuant to 42 U.S.C. § 12101 et seq. On April 28, 2010, upon joint motion by all parties, the court consolidated the two actions, with both to proceed under Civil Action No. 2:09cv603.

On May 21, 2010, the court denied the defendants' Motion to Dismiss Count I of the Amended Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6). On September 7, 2010, the defendants filed the instant Motion for Summary Judgment, pursuant to Federal Rule of Civil Procedure 56(b). On September 28, 2010, the plaintiff filed an untimely Response in Opposition (“Response”). On October 13, 2010, the court granted the plaintiff's Motion for Leave to File his Response After the Expiration of the Specified Time, and on October 15, 2010, the defendants filed their Reply. The Motion for Summary Judgment is now ripe for review.

Factual History

Unless otherwise noted, the following facts have been stipulated by the parties, see Final Pretrial Order, ECF No. 60, and/or admitted.⁵ The plaintiff was an employee of defendant Old Dominion for more than forty years. Defendant Robin Ray (“Ray”) is a co-owner and President of Old Dominion, and is the plaintiff's cousin. During the course of the plaintiff's employment with Old Dominion, he was promoted to Vice President of the Beverage, CO2, and Vending Department. In 1992, after becoming Vice President, the plaintiff entered into a Deferred Compensation Agreement with Old Dominion (“1992 Agreement”).⁶ Under the 1992 Agreement, the plaintiff (or designated beneficiary) was eligible to receive monthly benefit payments for 180 consecutive months upon: 1) retirement from Old Dominion at the age of sixty-five or older; 2) retirement due to permanent or indefinite disability; or 3) death, as long as he was employed by Old Dominion at the time of retirement or death. 1992 Agreement, Art. III(A)-(C), Am. Compl. Ex. 1, ECF No. 14–1. If the plaintiff sought to retire due to disability, he had to be deemed permanently or indefinitely disabled by a licensed physician chosen by Old Dominion. Id. at Art. I(A); ⁷ see also id. at Art. III(B). However, if the plaintiff's employment was terminated “for any reason other than death, disability, or retirement at age 65,” he would receive no benefits under the 1992 Agreement and the Agreement would become “null and void.” Id. at Art. III(D). Old Dominion was not required to fund the plan and the plaintiff did not “have any lien nor right, title or interest in or to any specific funding investment or to any assets of [Old Dominion].” Id. at Art. IV.⁸

In 2006, the plaintiff began receiving treatment for various health problems, including depression and addictions to alcohol and pain medication. ⁹ The plaintiff confided in Ray about his health issues, and she met with him periodically to monitor his progress in dealing with his depression. Despite suffering from these health issues, the plaintiff never made any request to retire due to disability nor did he make any request for accommodations due to disability.¹⁰ Similarly, the plaintiff never submitted any documentation regarding a disability or inability to work. ¹¹ Old Dominion never sought to initiate any procedures to determine the plaintiff's eligibility to retire with benefits under the 1992 Agreement. On September 16, 2008, Old Dominion fired the plaintiff and allegedly replaced him with his brother, Phillip Davis.¹² At the termination meeting, Old Dominion's stated reason for firing the plaintiff was “poor performance of [his] job and excessive unaccounted absent days from [his] job.” ¹³ See Acknowledgment of Termination, Mem. in Supp. of Mot. for Summ. J. Ex. 6, ECF No. 46–6,¹⁴ At that time, the plaintiff was sixty-two years old.

On September 18, 2010, the plaintiff met with Allen Patrick (“Patrick”) of Old Dominion and they decided that the plaintiff should request a severance package of $85,020.00. Within two weeks of that meeting, the plaintiff and his wife spoke in person to his wife's brother, an attorney, regarding the termination, the severance issues, and not receiving benefits under the 1992 Agreement.¹⁵ On September 29, 2010, after meeting with his wife's brother, the plaintiff entered into a Separation and Release Agreement with Old Dominion (“2008 Document”), which provided the plaintiff $72,000 in severance pay, in exchange for his release of any and all claims against, among others. Old Dominion and Ray, including any obligations under the 1992 Agreement and/or any claims under the ADEA and ADA.¹⁶ To date, he has not tendered, either in whole or in part, the $72,000 back to Old Dominion.

In Count I of the Amended Complaint, the plaintiff alleges that, at the time he was terminated, he was entitled to recover retirement benefits under the 1992 Agreement's disability provisions in the total amount of $639,253.13, paid over the course of 180 months. In Count II, he alleges that the defendants interfered with his right to collect under the 1992 Agreement. Specifically, he alleges that the defendants fired him with the specific intent to interfere with his right to collect benefits due under the 1992 Agreement, and, prior to signing the 2008 Document, Old Dominion representatives did not inform him that the 1992 Agreement had a disability provision and that he was eligible to retire and receive retirement benefits. To the contrary, the plaintiff alleges that the defendants fraudulently induced him into signing the 2008 Document by falsely representing that he was not entitled to any benefits under the 1992 Agreement, and that only if he signed the 2008 Document would he receive any compensation. Moreover, the plaintiff contends that at the time he executed the 2008 Document, his mental conditions had worsened and diminished his ability to understand the effect of signing the 2008 Document. Finally, in Count III, the plaintiff alleges that Ray and the Old Dominion Board of Directors are fiduciaries under ERISA, charged with the duty to ensure that the plaintiff receive disability benefits he may be entitled to under the 1992 Agreement; to inform the plaintiff that he may qualify for such benefits; and to inform him how to apply for and gain access to such benefits. The plaintiff argues that they breached that duty when they failed to inform him he may qualify for disability benefits under the 199...