Stephens v. Time Customer Serv., Inc.
| Decision Date | 24 October 2017 |
| Docket Number | Case No. 8:17-cv-1338-T-33AEP |
| Parties | NINA STEPHENS, Plaintiff, v. TIME CUSTOMER SERVICE, INC., SEVERANCE PLAN and HENRY LESCAILLE, as Plan Administrator, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This matter comes before the Court pursuant to Plaintiff and Counterclaim-Defendant Nina Stephens's Motion to Dismiss Counterclaim (Doc. # 26), filed on September 24, 2017. Defendants and Counterclaim-Plaintiffs Time Customer Service, Inc. Severance Plan ("TCS Plan") and Henry Lescaille responded on October 10, 2017. (Doc. # 29). For the reasons that follow, the Motion is granted in part as set forth herein.
The following facts are taken from the TCS Plan and Lescaille's Counterclaim. On September 3, 2015, Time, Inc. and Stephens "entered into a contractual written Separation Agreement and General Release." (Doc. # 22 at 14). "The Agreement explained that Time Customer Service, Inc. was establishing a severance program in accordance with the terms of the Plan, and that [Stephens] would be eligible for $34,693.65 in severance benefits under the terms of the severance program." (Id.). But, "as a condition precedent to receiving such benefits," Stephens had to sign and return the termination letter Agreement and attached release. (Id.).
Stephens signed and returned both the termination letter and release. (Id. at 14-15). The termination letter stated, in relevant part:
You acknowledge and agree that the payment(s) and/or benefit(s) provided to you and/or on your behalf under the Severance Plan and pursuant to this Agreement are in full discharge of any and all liabilities and obligations of the Company to you, monetarily or with respect to employee benefits or otherwise, including but not limited to any and all obligations arising under any alleged written or oral agreement, policy plan or procedure of the Company and/or any alleged understanding or arrangement between you and the Company. You further agree that other than what you will receive under this Agreement and the Severance Plan, you have received all compensation, benefits, notice and leave to which you were entitled in connection with your employment and separation from employment with the Company. In the event you breach any of the terms of this Agreement, you acknowledge and agree that you shall forfeit any remaining amounts due to you under this Agreement, and the Company may seek all available relief under law or in equity, including, but not limited to, recoupment of amounts paid to you pursuant to this Agreement.
Among other things, the release provided that:
this General Release is intended to and shall release the Time Inc. Entities and Persons from any and all claims, whether known or unknown, which Releasors ever had or may now have against any of the Time Inc. Entities and Persons arising out of my employment, the terms and conditions of such employment, and/or the termination or separation of my employment, including but not limited to . . . (ii) any claims under the Employee Retirement Income Security Act of 1974 . . .
(Id. at 8).
"The Plan is an employee benefit plan sponsored by Time Customer Service, Inc., a subsidiary and affiliated entity of Time Inc., one of the 'Time Inc. Entities and Persons' as defined by the Agreement, and therefore a third-party beneficiary under the Agreement." (Id. at 16). And "Lescaille is an employee of Time Inc., the named fiduciary of the Plan, one of the 'Time Inc. Entities and Persons' as defined in the Agreement, and therefore a third-party beneficiary under the Agreement." (Id.). The TCS Plan and Lescaille "have performed all conditions, covenants and promises required by them to be performed in accordance with the terms and conditions of the Agreement, including payment to [Stephens] of $34,693.65 in severance pay." (Id. at 17). According to the TCS Plan and Lescaille, "[b]y asserting her [ERISA] claims against [them]in this action, [Stephens] has breached and continued to breach the Agreement and the General Release." (Id.).
Stephens filed her three-Count Complaint in this Court on June 6, 2017, against the TCS Plan and Lescaille as Plan Administrator for the TCS Plan. (Doc. # 1). The Complaint asserts claims under ERISA §§ 502(a)(1)(B), 502(a)(3), and 502(c)(1), as codified in 29 U.S.C. § 1132, for denial of benefits, breach of fiduciary duty, and failure to respond to document requests. (Id.). The TCS Plan and Lescaille filed their Motion to Dismiss on August 1, 2017, (Doc. # 8), which the Court denied on August 22, 2017. (Doc. # 15).
Then, on September 5, 2017, the TCS Plan and Lescaille filed their Amended Answer and Counterclaims. (Doc. # 22). The TCS Plan and Lescaille, as Counterclaim-Plaintiffs, assert four counterclaims against Stephens: Count I is for breach of contract; Count II is for specific performance; Count III is for declaratory relief, seeking a declaration that the release agreement is binding on Stephens; and Count IV for equitable restitution pursuant to § 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3). Stephens now moves to dismiss the counterclaims, arguing that Count I and II are preempted by ERISA and the Court lacks jurisdiction over Counts III andIV. (Doc. # 26). The TCS Plan and Lescaille have responded, (Doc. # 29), and the Motion is ripe for review.
A motion to dismiss a counterclaim under Rule 12(b)(6) of the Federal Rules of Civil Procedure is evaluated in the same manner as a motion to dismiss a complaint. Stewart Title Guar. Co. v. Title Dynamics, Inc., No. 2:04-cv-316-FtM-33SPC, 2005 WL 2548419, at *1 (M.D. Fla. Oct. 11, 2005). A counterclaim must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a court must accept all factual allegations in the counterclaim as true and construe them in the light most favorable to the counterclaim plaintiff. See United Techs. Corp. v. Mazer, 556 F.3d 1260, 1269 (11th Cir. 2009).
"While a [counterclaim] attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, . . . a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal citations and quotations marksomitted). "Factual 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. (internal citations omitted).
A counterclaim plaintiff must plead enough facts to state a plausible basis for the claim. Id.; James River Ins. Co. v. Ground Down Eng'g, Inc., 540 F.3d 1270, 1274 (11th Cir. 2008)("To survive dismissal, the [counterclaim's] allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a speculative level; if they do not, the plaintiff's [counterclaim] should be dismissed."). Additionally, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Stephens first requests that the Court decline to exercise supplemental jurisdiction over the Counterclaim. She does not identify over which specific counterclaims she believes the Court should not exercise its supplementaljurisdiction. (Doc. # 26 at 3-4). But she notes that the "Counterclaim is based on allegations that Stephens breached an agreement" and is thus "a state law based claim that can require a jury trial." (Id.). Therefore, it appears Stephens is addressing only Count I for breach of contract and Count II for specific performance of a contract. According to Stephens, because jury trials are not permitted under ERISA, these two state law claims "threaten[] to disrupt what is a straightforward ERISA case." (Id. at 4).
"[I]n any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution." 28 U.S.C. § 1367(a). Pursuant to 28 U.S.C. § 1367(c), a district court has discretion to decline supplemental jurisdiction under four circumstances:
The Court agrees with the TCS Plan and Lescaille that "[n]one of these circumstances are present here." (Doc. # 29 at 14). Stephens's ERISA claims have not been dismissed. Neither party alleges the counterclaims raise novel or complex issues of state law or that the breach of contract or specific performance counterclaims predominate over Stephens's ERISA claims. And the Court does not consider Stephens's concern over a potential jury trial of these claims an exceptional circumstance that warrants declining jurisdiction. Therefore, the Court determines that the exercise of supplemental jurisdiction over the claims is proper.
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