Jones v. Merchants & Farmers Bank of Holly Springs

Decision Date10 June 2019
Docket NumberCIVIL ACTION NO. 3:18-cv-145-RP
CourtU.S. District Court — Northern District of Mississippi

This matter is before the court on the defendants' Motion to Dismiss State Law Claims (Docket 42) and the defendants' Partial Motion to Dismiss ERISA Claims (Docket 50). The defendants argue that all the plaintiff's state law claims should be dismissed because they are preempted by ERISA, and that all her ERISA claims other than her claim for retirement benefits should be dismissed on various other grounds. The court finds both motions are well taken and should be granted.


The plaintiff began working for Merchants & Farmers Bank in 1984. In 2001 the bank established a Supplemental Executive Retirement Plan ("SERP") and invited the plaintiff to participate, which she did by entering a SERP Participation Agreement that incorporated the SERP. The plaintiff and the bank also entered an Endorsement Split Dollar Insurance Agreement ("Split Dollar Agreement") providing for death benefits, for which the plaintiff executed a Beneficiary Designation. Both plans were employee benefit plans subject to the Employee Retirement Security Act, 29 U.S.C. § 1001 et seq. ("ERISA").

The plaintiff's SERP Participation Agreement provided for vesting in her SERP benefits upon reaching the normal retirement age of 65 years or upon a "change of control" of the bank. Under the agreement, if the plaintiff were to become vested in her benefits by virtue of a change of control, and if she were to retire before reaching age 65, she would not begin receiving her retirement benefits until she reaches age 65.

In 2006 Lanier Robinson, Jr., a major shareholder of the bank's holding company, passed away. In 2007 the board of directors voted to allow for full vesting in SERP benefits after 25 years of service.

In 2012 the bank adopted a SERP Restatement, and the plaintiff entered a SERP Restatement Participation Agreement incorporating the restatement and containing the additional vesting provision that was the subject of the board's 2007 resolution. The agreement provided further that upon the plaintiff's separation of service following a change of control, she shall be entitled to her benefits as if her separation was through normal retirement at age 65. In other words, if the plaintiff were to retire before reaching the age of 65 and following a change of control, she would be entitled to begin receiving her benefits immediately.

After 33 years of employment at the bank, the plaintiff retired in 2017 at the age of 54. In response to her formal request for a determination of her retirement benefits, the SERP plan co-administrators Gregory Taylor (the bank's president) and Kathy Ritts determined that Lanier Robinson's death in 2006 did not constitute a "change of control" for plan purposes, and that even if it had, its effect would be governed by the plaintiff's participation agreement in effect at that time. Under that agreement, a change of control would have resulted in a vesting of the plaintiff's benefits, which she could begin drawing at age 65. The administrators determined that in any event, under the plaintiff's participation agreement she subsequently entered in 2012, in the time since which there had been no change of control, and although she is vested in herbenefits by virtue of her more than 25 years of service, she is not entitled to begin receiving her benefits until reaching the age of 65.

Having exhausted her administrative remedies with respect to her claim for SERP benefits, the plaintiff brings this action under ERISA to enforce her rights to benefits, claiming she became entitled to begin receiving her SERP benefits immediately upon her retirement. In addition, the plaintiff brings a number of other ERISA claims alleging various breaches of fiduciary duty and violations of ERISA disclosure requirements, as well as a number of state law claims. The plaintiff names as defendants the bank, the SERP, the board of directors, the plan administrators, and Gregory Taylor individually. The plaintiff has twice amended her complaint, and the operative pleading is now the Second Amended Complaint. Docket 33.

The defendants' motions to dismiss will be discussed in turn below. Because the plaintiff's ERISA claims are set forth in Claims 1 through 15 of the Seconded Amended Complaint and the plaintiff's state law claims are set forth in Claims 16 through 19 of the Second Amended Complaint, the court will discuss the motion pertaining to the ERISA claims first.


In this motion, the defendants move to dismiss all the plaintiff's ERISA claims except her claim for immediate SERP benefits. The defendants argue as an initial matter that the SERP plan is a "top hat" plan that is exempt from ERISA's fiduciary provisions, and therefore all the plaintiff's ERISA claims for breach of fiduciary duty fail as a matter of law. The defendants argue further that even if the SERP plan is not a "top hat" plan, all the plaintiff's ERISA claims other than her claim for immediate SERP benefits should be dismissed nonetheless on various other grounds, including failure to state a claim, failure to exhaust administrative remedies, and/or failure to bring the claim before expiration of the limitations period.

Standard of Review

When considering a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the court must accept all well-pleaded facts as true and view the facts in the light most favorable to the plaintiff. See Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996); Am. Waste & Pollution Control Co. v. Browning-Ferris, Inc., 949 F.2d 1384, 1386 (5th Cir.1991). Dismissal is warranted if "it appears certain that the plaintiff cannot prove any set of facts in support of his claim that would entitle him to relief." Piotrowski v. City of Houston, 51 F.3d 512, 514 (5th Cir.1995) (quoting Leffall v. Dallas Indep. Sch. Dist., 28 F.3d 521, 524 (5th Cir. 1994)). In deciding whether dismissal is warranted, the court will not accept conclusory allegations in the complaint as true. See Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir.1982).

Under Federal Rule of Civil Procedure 12(d), when "matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material that is pertinent to the motion."

[F]ederal courts have complete discretion to determine whether or not to accept the submission of any material beyond the pleadings that is offered in conjunction with a Rule 12(b)(6) motion and rely on it, thereby converting the motion, or to reject it or simply not consider it. Numerous cases have recognized this authority.

5C Fed. Prac. & Proc. Civ.3d § 1366 (citing e.g., Isquith v. Middle South Utils., Inc., 847 F.2d 146, 193 n. 3 (5th Cir.1988), cert. denied 488 U.S. 926). If the court considers matters outside the pleadings in ruling upon a Rule 12(b)(6) motion to dismiss, the court must convert the motion to one for summary judgment. Tuley v. Heyd, 482 F.3d 590, 592 (5th Cir.1973).

Here, the parties have presented and relied upon matters outside the pleadings in support of their arguments, and as discussed below, the court has considered those matters in resolvingsome of the issues herein, such as whether the SERP constitutes a "top hat" plan that is exempt from ERISA's fiduciary provisions. To the extent the court has considered matters outside the pleadings, the defendants' motion is converted from a Rule 12(b)(6) motion to a Rule 56 motion for summary judgment.

The court recognizes that the parties are entitled to 10 days' notice that a Rule 12(b)(6) motion is being treated as a motion for summary judgment. Hickey v. Arkla Industries, Inc., 615 F.2d 239, 240 (5th Cir. 1980). However, it is not necessary that the court give 10 days' notice after it decides to treat a Rule 12(b)(6) motion as one for summary judgment, "but rather after the parties receive notice that the court could properly treat such a motion as one for summary judgment because it has accepted for consideration on the motion matters outside the pleadings, the parties must have at least ten days before judgment is rendered in which to submit additional evidence." Washington v. Allstate Insurance Company, 901 F.2d 1281, 1284 (5th Cir. 1990) (quoting Clark v. Tarrant County, Texas, 798 F.2d 736, 746 (5th Cir. 1986)). The proper question, therefore, is whether the plaintiff had ten days' notice after the court accepted for consideration matters outside the pleadings. Washington, 901 F.3d at 1284. A plaintiff is on notice that the trial court could treat the motion to dismiss as a motion for summary judgment "[a]t least from the date [the plaintiff] himself submitted to the court matters outside the pleadings." Id. (noting plaintiff had also addressed summary judgment requirements in opposition to defendant's motion to dismiss).

In this case, in her January 13, 2019 response to the subject motion to dismiss, the plaintiff incorporated by reference her affidavit submitted in connection with a previous motion and relied on the facts stated in the affidavit in opposing the subject motion to dismiss on the grounds that "there are genuine issues of material fact demonstrating the ERISA plan in questionis not a top hat plan." Docket 59 at 2. As such the plaintiff has been on notice the court could treat the subject motion to dismiss as a summary judgment motion at least from the date the plaintiff herself submitted to the court matters outside the pleadings and addressed the motion using the summary judgment standard.


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