Potter v. Ici Americas Inc.

• Decision Date: 04 October 1999
• Docket Number: No. NA98-0177-C-B/G.,NA98-0177-C-B/G.
• Citation: 103 F.Supp.2d 1062
• Court: U.S. District Court — Southern District of Indiana
• Parties: James POTTER, Plaintiff, v. ICI AMERICAS, INC., Plan Administrator ICI Americas Inc. Pension Plan, Plan Administrator INAAP Salaried Pension Plan, Subsidiaries of ICI Americas Inc., any & all Other Employee Benefit Plans, Programs & Arrangements Sponsored or Maintained by Deft and the Administrator of Each Such Plan, Program and Arrangement in Which Plaintiff Would Have Been Eligible to Participate at any Time During his Employment with D, ICI Americas Inc. Special Pension Plan for Salaried Employees Located at Indiana Army Ammunition Plant, ICI American Holdings Inc. Pension Plan Trust, Defendants.

Page 1062

103 F.Supp.2d 1062

James POTTER, Plaintiff, v. ICI AMERICAS, INC., Plan Administrator ICI Americas Inc. Pension Plan, Plan Administrator INAAP Salaried Pension Plan, Subsidiaries of ICI Americas Inc., any & all Other Employee Benefit Plans, Programs & Arrangements Sponsored or Maintained by Deft and the Administrator of Each Such Plan, Program and Arrangement in Which Plaintiff Would Have Been Eligible to Participate at any Time During his Employment with D, ICI Americas Inc. Special Pension Plan for Salaried Employees Located at Indiana Army Ammunition Plant, ICI American Holdings Inc. Pension Plan Trust, Defendants.

No. NA98-0177-C-B/G.

United States District Court, S.D. Indiana, New Albany Division.

October 4, 1999.

Karen R. Goodwell, Mattox & Mattox, New Albany, IN, James Isenberg, Segal Isenberg Sales Stewart Cutler, Louisville, KY, for plaintiff.

David W. Crumbo, Brown Todd & Heyburn, New Albany, IN, Rebecca A. Dernberger, Brown Todd & Heyburn, Louisville, KY, for defendant.

ENTRY GRANTING DEFENDANTS' MOTION TO DISMISS

BARKER, Chief Judge.

Plaintiff, James Potter ("Potter"), has filed a Complaint alleging that he suffered damages resulting from being misclassified as an independent contractor rather than as an employee by the Defendants, ICI Americas, Inc.; Plan Administrator ICI Americas, Inc.; Plan Administrator INAAP Salaried Pension Plan; Subsidiaries of ICI Americas, Inc.; Any and all other employee benefit plans, programs and arrangements sponsored or maintained by Defendant and the Administrator of each such plan, program and arrangement in which Plaintiff would have been eligible to participate at any time during his employment with the Defendants had he been properly classified as an employee rather than as an independent contractor; ICI Americas, Inc. Special Pension Plan for Salaried Employees located at Indiana Army Ammunition Plant; and ICI American Holdings Inc. Pension Plan Trust (collectively "ICI Americas" or "the Defendants"). Potter's complaint seeks benefits arising under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 11001 et seq. ("ERISA"), breach of fiduciary duty owed to Plaintiff both under ERISA for ERISA based plans and under common law for non-ERISA-based plans, interference with Potter's benefits protected by ERISA, breach of contract and a claim for non-ERISA benefits, both under Indiana state law, and a state law claim for wages and benefits under Indiana Code § 22-2-5-2.

The Defendants have moved for dismissal of Potter's complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6), for failing to state a claim upon which relief can be granted. For the reasons discussed below, ICI Americas, Inc. et al.'s motion is GRANTED.

Background¹

Potter worked at a facility owned by ICI Americas, Inc., its subsidiaries or affiliates (collectively "ICI") for a period of at least 33 years. See Compl. ¶ 10. In 1993, Potter was notified that he was going to be laid off which ultimately occurred on November 30, 1993. See id. ¶ 11. ICI required Potter to sign a document that reclassified him as a contractor if he wished to continue working for them. See id. ¶ 12. Potter was not extended the option of remaining with ICI classified as an "employee" so Potter signed the form. See id. The next day, on December 1, 1993, ICI contracted with Potter to perform in-house services which were "identical to the work he performed previously." Id.

From December 1, 1993 until the day Potter instituted this cause of action, he maintained "an unbroken period of employment with [the] Defendant Companies and has been classified as an independent contractor." Id. For the entire period of time that Potter was classified as an independent contractor, his "duties and responsibilities remained identical to those ... he performed as a common law employee [prior to December 1, 1993]." Id. ¶ 13. In fact, Potter alleges that ICI, for the entire time Potter performed work for them subsequent to December 1, 1993,

control[led] and directed the services performed by the Plaintiff, establish[ed] set hours of work for the Plaintiff, required Plaintiff to comply with instructions in the performance of his work, required Plaintiff to attend regular meetings scheduled by [the] Defendant Companies, required regular written reports with respect to Plaintiff's activities, required Plaintiff to finish time records, furnished an office, and continued to furnish office supplies as needed by the Plaintiff.

Id.

On October 16, 1998, Potter's attorney sent the Defendants a letter requesting all benefits to which he was entitled. See Response to Motion to Dismiss at 15-16 ("Response"); Defendants' Memorandum in Support of the Motion to Dismiss, Exhibit B ("Def.Mem. in Supp."). This letter states that the attorney is "prepared to represent Mr. Potter in Federal Court," that the letter "is a proposal for pre-litigation resolution of this matter," and that the letter "is to inform you that on behalf of Mr. Potter, our firm will prepare and file a complaint in federal court." Def.Mem. in Supp., Ex. B.

On November 20, 1998, Potter filed this complaint alleging that he has suffered a number of harms due to this reclassification, including the "loss of future retirement benefits, lost wages, and other benefits available to [the] Defendant Companies' employees." Id. ¶ 14 (punctuation added). He states that he was forced to pay the "Defendant companies' portion of the Federal Insurance Contributions Act ("FICA") tax due by employer's [sic] under Section 3111 of the Internal Revenue Code [26 U.S.C. § 3111] on wages paid to employees." Id. ¶ 15. He further alleges that ICI "failed to pay taxes due from employers on wages paid to employees under the state unemployment insurance laws." Id. ¶ 16. In addition, Potter claims that he was required to pay his own health insurance costs while ICI paid these costs for "other employees" under their "employee health insurance plan." Id. ¶ 17. Finally, Potter asserts that he was improperly excluded from participating in "Defendant Plans" and from receiving "other employer-provided benefits" available to eligible employees" ICI. Id. ¶ 18.

Discussion

A. Standard of Review

On a motion to dismiss pursuant to Rule 12(b)(6), we must determine whether the plaintiff's complaint states a claim upon which relief can be granted. See FED. R.CIV.P. 12(b)(6). We may only grant this motion if it is clear that no relief could be granted under any set of facts consistent with the allegations of the complaint. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)); Jones, 87 F.3d at 211. This is not a review of the merits of the lawsuit, see Triad Associates. v. Chicago Hous. Auth., 892 F.2d 583, 585 (7th Cir.1989); rather, the motion to dismiss may only be granted if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief. See Doherty v. City of Chicago, 75 F.3d 318, 322 (7th Cir.1996). Thus, "in order to resist a motion to dismiss, the complaint must at least set out facts sufficient to `outline or adumbrate' the basis of the claim." Panaras v. Liquid Carbonic Indus., Corp., 74 F.3d 786, 792 (7th Cir.1996). While we generally may not consider matters outside of the pleadings on a motion to dismiss, where the plaintiff supplements his complaint with a brief opposing dismissal, we may consider those allegations as well. See Hrubec v. National R.R. Passenger Corp., 981 F.2d 962, 963 (7th Cir.1992).

B. Defendants' Motion to Dismiss Count I for Failure to Exhaust Administrative Remedies.

Count I is a claim for benefits, pursuant to § 1132(a)(1)(B), under all "plans, programs and arrangements established or maintained" by the Defendants since December 1, 1993 in which Potter "would have been entitled to participate" if he had been "properly classified as an employee." Compl. ¶ 20. The Defendants respond that this claim should be dismissed because Potter has not exhausted his administrative remedies under the plans at issue. See Def.Mem. in Supp. at 11-14. Potter rejoins that exhaustion should be excused in this case. See Response at 13. Because Potter has not exhausted the available administrative remedies and we can find no reason why exhaustion should be excused in this case, we grant the Defendants' motion and dismiss Count I without prejudice to allow Potter to seek redress through the plan administrators.

Section 1132 does not explicitly require exhaustion of administrative remedies as a prerequisite to bringing a civil suit. 29 U.S.C. § 1132; Kross v. Western Elec. Co., 701 F.2d 1238, 1244 (7th Cir.1983). However, the Seventh Circuit has recognized this judicially created doctrine and places the decision to require exhaustion within our discretion. See Ames v. American Nat'l Can Co., 170 F.3d 751, 756 (7th Cir.1999); Lindemann v. Mobil Oil Corp., 79 F.3d 647, 650 (7th Cir.1996); Smith v. Blue Cross & Blue Shield United, 959 F.2d 655, 658 (7th Cir.1992); Powell v. American Tel. & Tel. Communications, Inc., 938 F.2d 823, 825 (7th Cir.1991); Kross, 701 F.2d at 1244. Exhaustion "supports the important public policy of encouraging private rather than judicial resolution of disputes under ERISA." Kross, 701 F.2d at 1246. Moreover, requiring exhaustion serves to "minimize the number of frivolous lawsuits; promote consistent treatment of claims; provide a non-adversarial dispute resolution process; and decrease the cost and time of claims settlement." Powell, 938 F.2d at 826; see also Ames, 170 F.3d at 756 (quoting Lindemann); Lindemann, 79 F.3d at 650 (citing 29 C.F.R. § 2560.503-1).

Failure to exhaust administrative remedies is not an element of a claim under ERISA, rather it is an affirmative defense. See Adamczyk v. Lever Bros. Co., 991 F.Supp. 931, 934 (N.D.Ill.1997). To support a motion to dismiss...