Tilton v. Radiation Oncologists, Civ. 05-0251-SLR.
| Decision Date | 18 January 2006 |
| Docket Number | No. Civ. 05-0251-SLR.,Civ. 05-0251-SLR. |
| Parties | Donald C. TILTON, D.O. Plaintiff, v. RADIATION ONCOLOGISTS, P.A., Viroon Donavanik, M.D., Michael F. Dzeda, M.D., Christopher Koprowski, M.D. Adam Raben, M.D., Sunjay Shah, M.D., and Michael D. Sorensen, M.D. Defendants. |
| Court | U.S. District Court — District of Delaware |
Robert A. Penza, and Peter M. Sweeney, of Gordon, Fournaris & Mammarella, Wilmington, DE, for Plaintiffs.
William H. Sudell, Jr., and Curtis S. Miller, of Morris, Nichols, Arsht & Tunnell, Wilmington, DE, for Defendants.
On April 27, 2005, plaintiff Donald C. Tilton, D.O. ("plaintiff") filed a complaint against Radiation Oncologists, P.A., Viroon Donavanik, M.D., Michael F. Dzeda, M.D., Christopher Koprowski, M.D., Adam Raben, M.D., Sunjay Shah, M.D. and Michael Sorensen, M.D. (collectively called "defendants"). (D.I.1) Plaintiff claims payment of deferred compensation benefits related to his employment agreement and separate deferred compensation agreements pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq. Plaintiff further raises claims based on breach of contract, anticipatory repudiation, violation of the Delaware Wage Payment and Collection Act ("DWPCA") and civil conspiracy. (D.I.1) Before the court is defendants' motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). (D.I.10)
This court has jurisdiction pursuant to 29 U.S.C. §§ 1133 and 1367.
Plaintiff is a former shareholder and employee of defendant Radiation Oncologists, P.A. ("ROPA"). (D.I. 1 at ¶ 14) Defendant ROPA is a professional medical association that provides services in the field of radiation oncology. (Id. at ¶ 13) Plaintiff was employed as a radiation oncologist with defendant ROPA at all times between the date of its incorporation, on November 29, 1976, until December 31, 2002, when he retired. (Id. at ¶ 14) Defendants Viroon Donavanik, M.D., Michael F. Dzeda, M.D., Christopher Koprowski, M.D., Adam Raben, M.D., Sunjay Shah, M.D. and Michael D. Sorensen, M.D. (collectively called "defendant doctors"), are present employees of defendant ROPA. (Id. at ¶ 11)
On July 7, 2000, plaintiff entered into the Radiation Oncologists, P.A. Senior Radiologist's Employment Agreement ("SREA") with defendant ROPA. (D.I. 1 at ¶ 15) The SREA governed, among other things,1 the deferred benefit plaintiff would receive upon retirement, death or total disability.2 According to the SREA, plaintiff was entitled to receive deferred benefit in an amount equal to the average reported compensation paid to him within the three years preceding his retirement, death, or disability, payable over a three year period, provided the deferred benefit did not exceed thirty percent of ROPA's gross receipts for the year the deferred payments were made. (Id.) The SREA does not contain any administrative remedy provisions. (Id.)
On February 8, 2001, plaintiff and defendant ROPA entered into an agreement altering the deferred benefit terms of the SREA by executing the Amendment to Radiation Oncologists, P.A. Senior Radiologist's Employment Agreement (the "amended SREA"), which amended paragraphs 5(c) and (d) of the SREA. (Id., ex. B) The amended SREA increased the deferred benefit so that plaintiff received $1,200,000 in deferred benefits payable over a four year period following his retirement. (Id.)
On December 27, 2002, as a result of plaintiff's written notice of his retirement, defendant ROPA and plaintiff entered into a Deferred Compensation Agreement (the "DCA"). (D.I. 1 at ¶ 18) The DCA provides that ROPA agrees to pay plaintiff deferred benefits in the sum of $1,200,000 over four years, subject to non-competition and other conditions enumerated in the SREA, the amended SREA and the DCA (collectively, these documents constitute, and are referred to, as the "Deferred Benefit Plan" or "the Plan"). (D.I.12, ex. C)
Upon plaintiff's retirement on December 31, 2002, defendant ROPA made payments to plaintiff under the terms of the Deferred Benefit Plan for two years, totaling $600,000.3 (D.I. 1 at ¶ 21) In a letter dated January 13, 2005, defendant ROPA sent notice to plaintiff that it was terminating all future payments under the Plan. (Id. at ¶ 23) The letter further stated that plaintiff had the right to request administrative review of the decision to terminate the Plan payments. (D.I.12, ex. D) The letter outlined a procedure whereby plaintiff was to file a written statement indicating why he believed the termination of the payments was incorrect and attend an administrative hearing where plaintiff would be permitted to submit written and oral evidence in support of his position. (Id.) Plaintiff did not pursue the administrative review set out in the letter and, instead, filed the current lawsuit.
Because the parties have referred to matters outside the pleadings, defendants' motion to dismiss shall be treated as a motion for summary judgment. See Fed.R.Civ.P. 12(b)(6). A court shall grant summary judgment only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the burden of proving that no genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n. 10, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "Facts that could alter the outcome are `material,' and disputes are `genuine' if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct." Horowitz v. Fed. Kemper Life Assurance Co., 57 F.3d 300, 302 n. 1 (3d Cir.1995) (internal citations omitted). If the moving party has demonstrated an absence of material fact, the nonmoving party then "must come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 (quoting Fed.R.Civ.P. 56(e)). The court will "view the underlying facts and all reasonable inferences therefrom in the light most favorable to the party opposing the motion." Pa. Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir.1995). The mere existence of some evidence in support of the nonmoving party, however, will not be sufficient for denial of a motion for summary judgment; there must be enough evidence to enable a jury reasonably to find for the nonmoving party on that issue. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Defendants assert that plaintiff's State law claims of breach of contract, anticipatory repudiation, violation of the DWPCA and civil conspiracy are preempted by ERISA. Determining whether state law claims are preempted by ERISA is a two part test. Pane v. RCA Corp., 667 F.Supp. 168, 170 (D.N.J.1987) aff'g 868 F.2d 631 (3d Cir.1989). First, the court must determine if defendants have an ERISA benefit plan. Id. If defendants do have such an employee benefit plan, the court must next analyze whether the state laws "relate to" this plan. Id.
Defendants assert the Deferred Benefit Plan at issue constitutes a plan under ERISA. Plaintiff does not argue that the Deferred Benefit Plan is not an ERISA plan, but rather asserts that an evidentiary hearing is required before the court can determine whether the Plan is an ERISA plan. The court declines to conduct an evidentiary issue on the matter because the determination can be made on the record.
ERISA applies to "any employee benefit plan if it is established or maintained ... by any employer engaged in commerce. ..." 29 U.S.C. § 1003(a). ERISA defines an "employee benefit plan" as an "employee welfare benefit plan or an employee pension benefit plan or a plan which is both an employee welfare benefit plan and an employee pension benefit plan." 29 U.S.C. § 1002(2)(B)(3). An "employee pension benefit plan" is broadly defined as:
[A]ny plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that by its express terms or as such a result of surrounding circumstances such plan, or program —
(i) provides retirement income to employees, or
(ii) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond[.]
Id. at (2)(A)(i)-(ii). "ERISA's coverage extends broadly to include all employee benefit plans." In re New Valley Corp., 89 F.3d 143, 148 (3d Cir.1996). "Whether a plan exists within the meaning of ERISA is a question of fact, to be answered in light of all the surrounding facts and circumstances from the point of view of a reasonable person." Deibler v. United Food and Commercial Workers' Local Union 23, 973 F.2d 206, 209 (3d Cir.1992) (internal citations omitted).
The Third Circuit has emphasized that the "crucial factor in determining whether a `plan' has been established is whether the employer has expressed an intention to provide benefits on a regular and longterm basis." Deibler, 973 F.2d at 209 (citing Wickman v. Northwestern Nat'l Ins. Co., 908 F.2d 1077, 1083 (1st Cir. 1990)). The test for determining whether ERISA applies to an employee benefit plan is set out by the Third Circuit in Deibler. A plan, fund or program under ERISA is established if, "from the surrounding circumstances a...
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...plan existed providing for payments for ten years), rev'd on other grounds, 924 F.2d 718 (7th Cir.1991); Tilton v. Radiation Oncologists, 409 F.Supp.2d 560, 565 (D.Del.2006) (finding deferred compensation agreement requiring payments for a period of four years was a pension plan). Here, the......