Schempp v. GC Acquisition, LCC

• Decision Date: 30 September 2014
• Docket Number: Case No.: 1:13 CV 2558
• Citation: 161 F.Supp.3d 584
• Parties: Albert H. Schempp, Plaintiff v. GC Acquisition, LCC, et al., Defendants
• Court: U.S. District Court — Northern District of Ohio

161 F.Supp.3d 584

Albert H. Schempp, Plaintiff

v.GC Acquisition, LCC, et al., Defendants

Case No.: 1:13 CV 2558

United States District Court, N.D. Ohio, Eastern Division.

Signed September 30, 2014

Jeffrey D. Zimon, Zimon Law Firm, Cleveland, OH, for Plaintiff.

Mary C. Dirkes, Stephen P. Dunn, Howard & Howard, Royal Oak, MI, for Defendants.

ORDER

SOLOMON OLIVER, JR.

, CHIEF JUDGE, UNITED STATES DISTRICT COURT

Currently pending before the court in the above-captioned case is Defendants GC Acquisition, LLC, Glastic Corporation Supplemental Executive Plan “A”, and Rochling Glastic Composites' (together, “Defendants”) Motion to Dismiss (ECF No. 13) and Plaintiff Albert Schempp's (“Plaintiff” or “Schempp”) Motion for Summary Judgment on a limited issue in the case (ECF No. 21). For the following reasons, the court grants Defendants' Motion to Dismiss, treated as Motion for Summary Judgment, and denies Plaintiff's Motion for Summary Judgment.

I. BACKGROUND

Plaintiff retired from Glastic Corporation (“Glastic”) in 1992 as its President. (Pl.'s Resp. at 3, ECF No. 20.) Starting in January 1994, Plaintiff began receiving monthly pension benefits under the Glastic Corporation Supplemental Executive Retirement Plan A (“SERP A”) totaling $4,556 per month. (Id. ) SERP A was adopted to supplement ordinary retirement benefits for certain highly-compensated Glastic executives, and the plan provided for lifetime monthly pension benefits. (Id .; Defs.' Mem. Supp. Mot. Dismiss at 3, ECF No. 14.) SERP A was a “top hat” plan for Employee Retirement Income Security Act (“ERISA”) purposes,¹ meaning that it was an unfunded plan. (Compl. at ¶¶ 1, 5, ECF No. 1.) Plaintiff received payments under SERP A until December 31, 2005. (Defs.' Mot. Dismiss Mem. at 3.)

In late 2005, after a downturn in business, Glastic's board of directors decided to terminate payments under SERP A. (Id. ) In November 2005, Glastic notified Plaintiff of its intention to terminate SERP A. (Pl.'s Resp. at 3.) The Glastic Board of Directors then prepared a board action to effectuate the termination of SERP A, which Plaintiff alleges was unsigned. (Id. at 4.) SERP A required any amendment to the plan to be agreed to in writing by the Board of Directors, G.E. Grant (“Grant”), and R.E. Donnelly (“Donnelly”). At the time of SERP A's execution, Grant and Donnelly served as President and Vice President of Glastic, respectively, and were also intended recipients of SERP A benefits. (Supplemental Executive Retirement Plan A at § 1.1, Defs.' Mot. Dismiss Mem. Ex. A, ECF No. 14-2.) Although Grant and Donnelly did not agree in writing to the discontinuation of SERP A, the unsigned board action was accompanied by an acknowledgment by Patrick Greene (“Greene”) and Mark Diampietro (“Diampietro”), who served as Glastic's President and Vice President, respectively, at the time SERP A was terminated. (Id. at 4-5.)

Plaintiff stopped receiving SERP A payments in December 2005. (Pl.'s Resp. at 4.) On March 6, 2006, at a Glastic Board of Directors meeting, Glastic resolved to adopt new Deferred Compensation Agreements to compensate those who had previously received payments under SERP A and other such plans. (Id. at 5-6.) Plaintiff was presented with a model version of the new Deferred Compensation Agreements (“2006 Agreement”). (Id. at 6.) Plaintiff, through his counsel, negotiated the terms of the 2006 Agreement with Glastic. (See Defs.' Mot. Dismiss Mem. Ex. E, ECF No. 14-6; id. at Ex. F, ECF No. 14-7; id. at Ex. G, ECF No. 14-8.) Plaintiff executed the new agreement on March 11, 2006. (Pl.'s Resp. at 6.)

The 2006 Agreement contains an opening section (“Recitals”) explaining that the 2006 Agreement was being put in place to “provide a limited supplemental retirement benefit” to participants in SERP A who had stopped receiving benefits at the end of 2005. (Deferred Compensation Agreement at 1, Defs.' Mot. Dismiss Mem. Ex. B, ECF No. 14-3.) The Recitals then state that “[i]t is the intent of the parties that this Agreement, a modification of the Original Plan ... complies with Section 409A of Internal Revenue Code of 1986

, as amended.” (Id. )

The 2006 Agreement states that beneficiaries will receive “a maximum of one hundred three monthly payments substantially equal to $4,555.20 per month ... following the receipt of a fully executed copy of this Agreement.” (Id. ) In other words, the 2006 Agreement differs principally from SERP A in that payments are capped at 103 months, whereas SERP A provided for lifetime payments. The 2006 Agreement also provides for back payments for those participants who had stopped receiving SERP A payments in December 2005. (Id. at 2.) In the case of a participant's death, participants may assign the remaining payments pursuant to the 2006 Agreement to a beneficiary. (Id. ) Payments under the 2006 Agreement were scheduled to end on July 1, 2014. (Id. ) After the termination of payments under the 2006 Agreement, any payments not made to participants or their beneficiaries because of these persons' deaths would be totaled and distributed evenly in a single lump sum among the remaining participants. (Id. ) The 2006 Agreement contains a one-year Limitations on Actions provision, barring any action based on the Agreement after one year “from the date of the alleged act or omission in respect of which such right of action first arises in whole or in part.” (Deferred Compensation Agreement at § 15.) Plaintiff has received payments under the 2006 Agreement since it was implemented. (Pl.'s Resp. at 7.)

In January 2007, Glastic was sold to Rochling Glastic Composites, LP (“Rochling”) through its parent company, Glastic Acquisitions. (Id. ) In 2013, Plaintiff, through counsel, sought a determination that SERP A was not properly terminated. (Id. ) After he was unsuccessful, Plaintiff filed the instant lawsuit on November 19, 2013, asserting two causes of action under ERISA 29 U.S.C. §§ 1132(a)(1)(b)

and 1132(a)(3) seeking unpaid SERP A benefits dating back to January 2006 and ending upon Plaintiff's death, in addition to any profits realized by Defendants to Plaintiff's detriment. (Compl. at ¶ 1, ECF No. 1.) Plaintiff also asserted a cause of action under 29 U.S.C. § 1132(c) seeking statutory damages for failure to produce all requested documents related to Plaintiff's SERP A benefits. (Id. ) Defendants filed their Motion to Dismiss on January 17, 2014.

On February 14, 2014, Plaintiff filed his Opposition to the Motion to Dismiss (ECF No. 20) and a Motion for Summary Judgment on a Limited Issue in the Case (ECF No. 21). Plaintiff relies on the same brief for both his Opposition and his Motion for Summary Judgment because “Defendants ... presented facts [in their Motion to Dismiss] that were not in dispute that permita [sic] Mr. Schempp to file this Motion for Summary Judgment on the narrow issue presented.” (Pl.'s Mot. Summ. J. at 1-2, ECF No. 21.)

II. STANDARD OF REVIEW

The court examines the legal sufficiency of the plaintiff's claim under Federal Rule of Civil Procedure 12(b)(6)

. See

Mayer v. M

y

lod , 988 F.2d 635, 638 (6th Cir.1993). The Supreme Court in Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and in Ashcroft v. Iqbal , 556 U.S. 662, 677–78, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), clarified the law regarding what the plaintiff must plead in order to survive a Rule 12(b)(6) motion.

When determining whether the plaintiff has stated a claim upon which relief can be granted, the court must construe the Complaint in the light most favorable to the plaintiff, accept all factual allegations as true, and determine whether the Complaint contains “enough facts to state a claim to relief that is plausible on its face.” Twombly , 550 U.S. at 570, 127 S.Ct. 1955

. The plaintiff's obligation to provide the grounds for relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555, 127 S.Ct. 1955. Even though a Complaint need not contain “detailed” factual allegations, its “[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the Complaint are true.” Id. A court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain , 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986).

The Court in Iqbal , 556 U.S. at 678, 129 S.Ct. 1937

, further explains the “plausibility” requirement, stating that “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Furthermore, “[t]he plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant acted unlawfully.” Id. This determination is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679, 129 S.Ct. 1937.

The Sixth Circuit has held that a court may consider allegations contained in the Complaint, as well as exhibits attached to or otherwise incorporated in the Complaint, all without converting a Motion to Dismiss to a Motion for Summary Judgment. Fed. R. Civ. P. 10(c)

; Weiner v. Klais & Co. , 108 F.3d 86, 89 (6th Cir.1997). However, because the Parties have not only referred to the two documents at issue—SERP A and the 2006 Agreement—, which may be considered as part of the complaint, but also, without objection, other documents outside of the pleadings, the court treats Defendants' Motion to Dismiss as a Motion for Summary Judgment pursuant to Rule of Federal Procedure 12(d).

Federal Rule of Civil Procedure 56(a)

governs summary judgment motions and provides:

The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. The court

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