Hall v. United Technologies Corp., Civ. No. 3:93cv1948(AHN).

• Decision Date: 12 January 1995
• Docket Number: Civ. No. 3:93cv1948(AHN).
• Citation: 872 F. Supp. 1094
• Parties: HALL v. UNITED TECHNOLOGIES, CORP.
• Court: U.S. District Court — District of Connecticut

872 F. Supp. 1094

HALL v. UNITED TECHNOLOGIES, CORP.

Civ. No. 3:93cv1948(AHN).

United States District Court, D. Connecticut.

January 12, 1995.

COPYRIGHT MATERIAL OMITTED

Robert J. Williams, Fisher & Daley, Suffield, CT, for plaintiffs.

Edward J. Dempsey, Hartford, CT, for defendant.

RULING ON DEFENDANT'S MOTION TO DISMISS AND PLAINTIFFS' REQUEST FOR LEAVE TO AMEND

NEVAS, District Judge.

The plaintiffs, thirteen former employees of the defendant, the Hamilton Standard Division of United Technologies Corp. ("United Technologies"), bring this action pursuant to the Employee Retirement Income Security Act, 29 U.S.C.A. § 1001-1461 (West 1985 & Supp.1994) ("ERISA"). In their Second Amended Complaint, the plaintiffs allege that United Technologies either intentionally or negligently misled them in 1991 when they agreed to voluntarily terminate their employment with the company. Consequently, according to the plaintiffs, United Technologies violated its fiduciary duty under ERISA § 404, 29 U.S.C.A. § 1104.

Currently before the court is United Technologies's motion to dismiss the Second Amended Complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P. The plaintiffs request that, if the court grants the motion to dismiss, they be permitted to amend the Second Amended Complaint to cure the pleading deficiencies raised in United Technologies's motion to dismiss.¹

For the reasons that follow, the defendant's motion to dismiss the Second Amended Complaint doc. # 25 is GRANTED, the plaintiffs' request for leave to amend the Second Amended Complaint doc. # 28 is DENIED, and the Second Amended Complaint doc. # 24 is DISMISSED WITH PREJUDICE.

STANDARD OF REVIEW

In deciding a motion to dismiss under Rule 12(b)(6), the court is required to accept as true all factual allegations in the complaint and must construe any well-pleaded factual allegations in the plaintiff's favor. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Easton v. Sundram, 947 F.2d 1011, 1014-15 (2d Cir.1991), cert. denied, ___ U.S. ___, 112 S.Ct. 1943, 118 L.Ed.2d 548 (1992). A court may dismiss a complaint only where "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); see also Allen v. West-point-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir.1991). "The issue on a motion to dismiss is not whether the plaintiff will prevail, but whether the plaintiff is entitled to offer evidence to support his or her claims." United States v. Yale New Haven Hosp., 727 F.Supp. 784, 786 (D.Conn.1990) (citing Scheuer, 416 U.S. at 232, 94 S.Ct. at 1684).

FACTS

For the purposes of this ruling, the court accepts the following factual allegations as true.

In 1991, United Technologies employed the plaintiffs at its Hamilton Standards Division in Windsor Locks, Connecticut. (See Second Am. Compl. at Count One, ¶ 5.) During January, February, and March of 1991, United Technologies held informational sessions concerning its offer of a voluntary separation program. (See id. ¶ 6.) The plaintiffs either attended these sessions or had individual conversations with United Technologies's representatives about the voluntary separation program. (See id. ¶ 6, 8, 9.) During the informational sessions and individual conversations, the United Technologies's representatives informed the plaintiffs that the 1991 voluntary separation program "would be the only one offered, that it would be the best program ever offered, and that no additional voluntary separation program increasing pension benefits would be offered." (Id. ¶ 7, 8, 9.) United Technologies's representatives made similar representations to three of the plaintiffs individually between January 1991 and March 1991 (See id. ¶ 8, 9.)

Relying on such statements, the plaintiffs each executed a voluntary separation agreement in 1991. (See id. ¶ 10.) These voluntary separation agreements either were employee benefit plans subject to ERISA, (see id. ¶ 11), or amended an existing employee benefit plan. (See id. at Count Two, ¶ 13.) The plaintiffs either were participants in these plans or beneficiaries of the plans. (See id. at Count One, ¶ 13; Count Two, ¶ 14.) Since the plaintiffs executed their agreements, United Technologies has offered additional voluntary separation programs to its employees. (See id. at Count One, ¶ 11; Count Two, ¶ 16.) These post-1991 programs provided greater benefits than the plaintiffs received under their 1991 agreements. (See id. at Count One, ¶ 14; Count Two, ¶ 16.) At the time United Technologies offered the 1991 voluntary separation programs to the plaintiffs, the company "was contemplating, and seriously considering," offering other voluntary separation programs. (Id. at Count One, ¶ 15; Count Two, ¶ 17.) United Technologies, a fiduciary subject to ERISA, (see id. at Count One, ¶ 12; Count Two, ¶ 15), either intentionally or negligently misled the plaintiffs in 1991 when they agreed to voluntarily terminate their employment with the company. (See id. at Count One, ¶ 15; Count Two, ¶ 17.)

DISCUSSION

The Second Amended Complaint alleges that United Technologies "violated its fiduciary duty under ERISA, 29 U.S.C. Section 1104," (id. Count One, ¶ 19; Count Two, ¶ 20), by making negligent or intentional misrepresentations concerning whether it would offer additional voluntary separation programs after 1991, the year in which each plaintiff voluntarily retired from the company after executing a separation agreement.² The plaintiffs seek "damages, attorneys' fees and costs, punitive damages, and such other relief as the Court deems appropriate." (Id.)

The Second Amended Complaint does not clearly specify the statutory basis on which the plaintiffs bring suit. Moreover, as a whole, its allegations are vague and confusing.³ Accordingly, the court will examine the remedies available under ERISA for breach of fiduciary duty to determine whether, given the allegations of the Second Amended Complaint, any basis upon which the plaintiffs could recover exists. See Lee v. Burkhart, 991 F.2d 1004, 1008 (2d Cir.1993).

The plaintiffs identify ERISA § 404, 29 U.S.C.A. § 1104, as the basis for United Technologies's liability. (See Second Am. Compl. at Count One, ¶ 19; Count Two, ¶ 20.) Section 404, however, does not impose liability on a fiduciary for a breach of its duties; it merely provides the general rule that a fiduciary is to discharge its duties with the care and diligence of "a prudent person acting in a like capacity ... with like aims...." 29 U.S.C.A. § 1104(a)(1)(B). Section 409, 29 U.S.C.A. § 1109(a), on the other hand, imposes liability on "any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter...." 29 U.S.C.A. § 1109(a). Where a person asserts a claim based on a breach of fiduciary duty, as the plaintiffs do here,⁴ the person may bring a civil action under ERISA § 502, 29 U.S.C.A. § 1132.

In relevant part, section 502(a) provides that

A civil action may be bought —

(1) by a participant or beneficiary ...

(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of his plan, or to clarify his rights to future benefits under the terms of the plan;

(2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title (setting forth liability for breach of fiduciary duty);

(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or terms of the plan.

29 U.S.C.A. § 1132.

The plaintiffs do not identify the specific section on which they rely. Claims for breach of fiduciary duty, however, must be brought under ERISA §§ 502(a)(2) or 502(a)(3), 29 U.S.C.A. §§ 1132(a)(2), (a)(3), and not § 502(a)(1)(B), 29 U.S.C.A. § 1132(a)(1)(B), which provides for the recovery of plan benefits.⁵ See Anweiler v. American Elec. Power Serv. Corp., 3 F.3d 986, 992 (7th Cir.1993); McMahon v. McDowell, 794 F.2d 100, 109 (3d Cir.), cert. denied, 479 U.S. 971, 107 S.Ct. 473, 93 L.Ed.2d 417 (1986); see also Mullins v. Pfizer, Inc., 23 F.3d 663, 667 (2d Cir.1994).

Section 502(a)(2)

Section 502(a)(2) permits a plan participant or beneficiary to sue a "fiduciary with respect to a plan" for breach of fiduciary duty in violation of section 409. The Supreme Court, however, has made clear that the fiduciary duties imposed by section 409 run to the plan and not to the individual beneficiary. See Massachusetts Life Ins. Co. v. Russell, 473 U.S. 134, 140-144, 105 S.Ct. 3085, 3089-3091, 87 L.Ed.2d 96 (1985); Lee v. Burkhart, 991 F.2d 1004, 1009 (2d Cir.1993). Although an individual may bring a claim for breach of fiduciary duty under section 502(a)(2), the "action ... must be brought in a representative capacity on behalf of the plan as a whole." Russell, 473 U.S. at 142 n. 9, 105 S.Ct. at 3090 n. 9.

Here, plaintiffs seek relief on their own behalf, not on the behalf of an employee benefit plan. In addition to being barred from recovery under section 502(a)(2) because they are seeking individual relief, the type of relief that the plaintiffs seek — compensatory and punitive damages — also is not available under that section. See Russell, 473 U.S. at 144, 105 S.Ct. at 3091 ("We do not find in § 409 express authority for an award of extracontractual damages to a beneficiary."). Russell therefore bars plaintiffs from suing under section 502(a)(2). Accord Burkhart, 991 F.2d at 1009. Consequently, the plaintiffs fail to state a claim for relief under section 502(a)(2).

Section 502(a)(3)

Section 502(a)(3) permits a plan beneficiary...