United States District Court, S.D. California
November 10, 2005.
GEOFF MOYLE, Plaintiff,
GOLDEN EAGLE INS. CORP., et al., Defendants.
The opinion of the court was delivered by: DANA SABRAW, District Judge
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S FIRST
AMENDED COMPLAINT WITH PREJUDICE
Presently before the Court is a motion by Defendants Golden
Eagle Insurance Corporation ("Golden Eagle"), Liberty Mutual
Insurance Company ("Liberty Mutual") and Liberty Mutual
Retirement Benefit Plan ("Benefit Plan"), seeking to dismiss
Plaintiff Geoff Moyle's First Amended Complaint ("FAC") for
failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6).
Defendants filed their motion on September 12, 2005. On October
7, 2005, Plaintiff filed an Opposition to the motion, and
thereafter Defendants filed a Reply.
The Court heard oral argument on Defendants' motion to dismiss
on November 4, 2005. Jack B. Winters, Jr., Esq appeared on behalf
of the Plaintiff, and Ashley B. Abel, Esq. appeared on behalf of
Defendants. For the reasons discussed below, the Court grants
Defendants' motion to dismiss Plaintiff's FAC for failure to
state a claim with prejudice. I.
A. The First Amended Complaint
Plaintiff's complaint arises from his employment at Golden
Eagle and Liberty Mutual. In 1988, Plaintiff was hired by Golden
Eagle's predecessor company, Golden Eagle Insurance Company. (FAC
at ¶ 8.) In 1997, Liberty Mutual acquired Golden Eagle. (Id. at
¶ 9.) After the acquisition by Liberty Mutual, Plaintiff contends
Defendants advised him that Golden Eagle employees would be
eligible for participation in the Liberty Mutual Benefit Plan.
(Id.) On April 30, 2001, Plaintiff alleges he received a
personal benefits statement from Liberty Mutual, which indicated
that his hire date was in 1988, and that he had a total
employment credit of 18 years and 4 months. (Id. at ¶ 11.) This
calculation included all of his years of service with Golden
Eagle prior to Liberty Mutual's acquisition.
On March 15, 2002, Plaintiff was discharged from his employment
with Golden Eagle and Liberty Mutual. (Id. at ¶ 19.) Shortly
after his discharge, Plaintiff received a "Retirement Benefit
Plan Calculations Statement" from Liberty Mutual; the statement
provided that he would be credited 4.416670 service years. (Id.
at ¶ 20.) Subsequently, in May of 2002, Plaintiff was advised by
Liberty Mutual representatives that he would not receive past
service credit for his term of employment prior to the date on
which Liberty Mutual acquired Golden Eagle. (Id. at ¶ 21.)
Plaintiff admits he has not made any claim for benefits or any
request for a plan distribution under the terms of the Benefit
Plan. (Id. at ¶ 22.) In addition, Plaintiff claims he has not
sought payment of any amounts under the terms and conditions of
the Benefit Plan. (Id.) Rather, Plaintiff claims that under the
terms of the Plan, he was under no obligation to file a claim
with the Plan Administrator. (See Plaintiff's Opposition to
Defendants' Motion to Dismiss at 3) ("[B]y the terms of the Plan,
there has been no claim. . . .")
B. Procedural History
On February 13, 2003, Plaintiff filed an action in the Superior
Court of the State of California, County of San Diego, alleging
ten causes of action. On March 13, 2003, Defendants removed the
action to this Court pursuant to 28 U.S.C. §§ 1331 and 1441(b).
On March 20, 2003, Golden Eagle and Liberty Mutual filed a joint
motion to dismiss Plaintiff's complaint pursuant to Federal Rule
of Civil Procedure 12(b)(6). On April 3, 2003, Plaintiff filed a
motion to remand. On July 17, 2003, the Honorable Irma E.
Gonzalez, United States District Judge, issued an Order denying
Plaintiff's motion to remand and granting in part Golden Eagle
and Liberty Mutual's motion to dismiss. Specifically, the Court
concluded the claims relating to the question of past service
credit under the Benefit Plan were preempted by the Employee
Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001, et
seq. ("ERISA"). (See July 17, 2003 Order at 14.) Accordingly,
the Court dismissed Plaintiff's state claims without prejudice
and granted leave to amend the complaint to allege claims under
ERISA. (Id. at 17.) Thereafter, Plaintiff's prior counsel
stipulated that an amended complaint would not be filed under
ERISA, and the Court remanded the remaining state law employment
claims to state court.
C. Plaintiff's Instant Action
On August 23, 2005, Plaintiff filed a FAC with this Court,
alleging two claims for relief under ERISA. Under the first claim
for relief, Plaintiff seeks a judicial determination of the terms
of the Benefit Plan and clarification of his rights to future
benefits under 29 U.S.C. § 1132(a)(1)(B).*fn1 (FAC at ¶
35-46.) Second, based on the alleged representations of
Defendants, Plaintiff seeks equitable relief for Defendants'
alleged violations of fiduciary obligations under
29 U.S.C. § 1132(a)(3).*fn2 (Id. at ¶ 47-58.) Under the second claim
for relief, Plaintiff seeks issuance of a permanent injunction
precluding Defendants from denying him benefits and past service
credits to which he claims entitlement. (Id. at ¶ 56.)
In their motion to dismiss, Defendants contend: (1) Plaintiff's
claim pursuant to § 1132(a)(1)(B) for clarification of rights to
future benefits under the Plan should be dismissed because this
action was not filed within the time established by the Benefit
Plan; (2) Plaintiff's claim for clarification of rights should be
dismissed because he failed to exhaust his administrative
remedies under the Plan; (3) Plaintiff's claim for breach of
fiduciary duty under § 1132(a)(3) fails because that claim seeks the same relief as the first cause of action for
clarification of future benefits under § 1132(a)(1)(B); and (4)
the doctrine of laches bars the claim for breach of fiduciary
duty under § 1132(a)(3).
Under Federal Rule of Civil Procedure 12(b)(6), a district
court must dismiss a complaint if it fails to state a claim upon
which relief can be granted. The question presented by a motion
to dismiss is not whether the plaintiff will prevail in the
action, but whether the plaintiff is entitled to offer evidence
in support of the claim. Fed.R.Civ.P. 12(b)(6). See Scheuer v.
Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds
by Davis v. Scherer, 468 U.S. 183 (1984). In answering this
question, the Court must assume that the plaintiff's allegations
are true and must draw all reasonable inferences in plaintiff's
favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th
Cir. 1987). Even if the face of the pleadings suggests that the
chance of recovery is remote, the Court must allow the plaintiff
to develop the case at this stage of the proceedings. See United
States v. City of Redwood City, 640 F.2d 963, 966 (9th Cir.
1981). If the Court dismisses the complaint, it must then decide
whether to grant leave to amend. The Ninth Circuit has
"repeatedly held that a district court should grant leave to
amend even if no request to amend the pleading was made, unless
it determines that the pleading could not possibly be cured by
the allegation of other facts." Lopez v. Smith, 203 F.3d 1122,
1130 (9th Cir. 2000) (citations and internal quotation marks
A. Defendants' Motion to Dismiss Plaintiff's Claim Under
29 U.S.C. § 1132(a)(1)(B)
Defendants contend Plaintiff's claim under
29 U.S.C. § 1132(a)(1)(B) should be dismissed on two grounds. First,
Defendants argue Plaintiff's claim fails because his complaint
was not filed within the Plan's one year disputed-claims
limitation period. The Benefit Plan provides, "Beginning January
2, 1001, you must file any action in federal or state court with
respect to a claim within one year from the date the Plan
Administer denies, or is deemed to deny, the claim on review."
(See Benefit Plan at H-17, Exhibit A attached to Plaintiff's
Opposition.) Plaintiff contends this lawsuit is not controlled by the Plan's
one year limitations period because he did not, at any time,
make a claim for benefits under the Plan to the Plan
Administrator. (See FAC at ¶ 22) ("At no time has Plaintiff
made any claim for benefits. . . ."). According to the Plan, a
party seeking to initiate legal action against the Plan regarding
a claim must do so within one year after the claim was denied, or
deemed to have been denied, by the Plan Administrator.
Application of the Plan's statute of limitations is predicated
upon two elements first, that a claim was brought by the plan
participant or beneficiary; and second, that the claim was
subsequently denied by the Plan Administrator. Because Plaintiff
never made a claim (and the Administrator had no opportunity to
deny such a claim), the one year limitations period in the
Benefit Plan does not apply, and Plaintiff is not precluded from
raising his ERISA claim at this time, in this forum.
Second, Defendants argue Plaintiff's claim should be dismissed
because he failed to exhaust his administrative remedies under
the Benefit Plan. Defendants argue a plan participant, such as
Plaintiff, must avail himself of the plan's own internal review
procedures before bringing suit in federal court. See Diaz v.
United Agr. Employee Welfare Ben. Plan, 50 F.3d 1478, 1483 (9th
Cir. 1995) (citing Amato v. Bernard, 618 F.2d 559, 566-68 (9th
Cir. 1980)). The Diaz court noted, "[a]lthough not explicitly
set out in the statute, the exhaustion doctrine is consistent
with ERISA's background, structure and legislative history and
serves several important policy considerations, including the
reduction of frivolous litigation, the promotion of consistent
treatment of claims, the provision of a nonadversarial method of
claims settlement, the minimization of costs of claim settlement
and a proper reliance on administrative expertise." Diaz,
50 F.3d at 1483. "Consequently the federal courts have the authority
to enforce the exhaustion requirement in suits under ERISA, and
. . . as a matter of sound policy they should usually do so."
Plaintiff contends that because he never made a "claim for a
benefit or a request for a plan distribution" under the Plan, he
was not required to exhaust any administrative remedies before
filing this action. Plaintiff also argues ERISA does not require
exhaustion in any event. Moreover, Plaintiff argues that even if
exhaustion were required, "there is no internal review procedure
provided by the Plan which requires an administrative review of a
request for a statement of future benefits, explanation of future
benefits and what the status of one's employment benefits might
be." (Plaintiff's Opposition to Defendants' Motion to Dismiss at 6.) Therefore, according to
Plaintiff, there was no available administrative procedure for
him to exhaust. Plaintiff's arguments lack merit.
As an initial matter, the Ninth Circuit has long held that
where a plan participant seeks to assert a claim under an
employee benefit plan, he or she must exhaust their
administrative remedies under the plan before filing suit in
federal court. See, e.g., Diaz, 50 F.3d at 1483; Horan v.
Kaiser Steel Retirement Plan, 947 F.2d 1412, 1416 (9th Cir.
1991); Graphic Communications Union, District Council No. 2,
AFL-CIO v. GCIU-Employer Retirement Benefit Plan, 917 F.2d 1184,
1187 (9th Cir. 1990); Amato, 618 F.2d at 567. Plaintiff
contends this precedent is inapplicable because his action is
"not a claim for a plan benefit but a request for a determination
of what [his] benefits might be in the future when ultimately a
claim is made." (Plaintiff's Opposition to Defendants' Motion to
Dismiss at 5) (emphasis added). In other words, Plaintiff argues
his entitlement to service credits for past employment with
Golden Eagle (Liberty Mutual's predecessor) need not have been
filed with the Plan Administrator because it is not a present
claim for benefits or a request for distribution under the Plan.
Plaintiff, however, reads the Plan too narrowly.
The Plan generally provides that the "Plan Administrator . . .
shall make all determinations as to the right of any person to a
distribution under the plan. . . ." (See Benefit Plan at
H-16, Exhibit A attached to Plaintiff's Opposition.) (emphasis
added). The Plan also provides: "If a claim for a benefit or a
request for a plan distribution by a participant . . . is denied,
in whole or in part, the Plan Administrator . . . will provide
[the participant] with a comprehensible written notice setting
forth[,]" among other things, the reasons for denial, a
description of the Plan's claim review procedure and time frames,
and a statement of the participant's right to bring a civil
action under ERISA following an adverse decision on appeal.
(Id. at H-16.)
Moreover, the Plan provides, under the heading "Interpretation
of the Plan," that "[t]he Plan Administrator has the authority,
in its sole discretion, to construe the terms of this Plan and to
determine benefit eligibility. Decisions of the Plan
Administrator regarding construction of the terms of this Plan
and benefit eligibility are conclusive and binding." (Id. at
H-19, H-20) (emphasis added). Immediately below this section, the
Plan discusses under "Additional Provisions" a participant's
"Past service credit" for "Golden Eagle Insurance Corporation
employees who were employed as of October 1, 1997 for service with Golden Eagle Insurance Co." (Id. at
Despite Plaintiff's protestations to the contrary, the Plan
clearly contemplates that its Administrator will hear and
determine eligibility for benefits under the Plan, including past
service credits. Plaintiff, therefore, had an obligation to first
file a claim with the Plan regarding his dispute over past
service credits. Having failed to file such a claim, Plaintiff is
barred from relief in this action for failure to pursue, let
alone exhaust, his administrative remedies.*fn3 See Meza v.
General Battery Corp., 908 F.2d 1262, 1279 (5th Cir. 1990) ("We
believe that [ERISA policies] require claimants to make some
attempt at obtaining their benefits through the administrative
route, or, at the very least, to make some effort to learn of the
procedures applicable to them.) To hold otherwise would allow
Plaintiff and other ERISA claimants to simply characterize their
claim as outside the plan, and thereby subject the plan to
litigation without first resorting to internal administrative
procedures and review. This would be contrary to ERISA's
policies. See Diaz, 50 F.3d at 1483.
B. Defendants' Motion to Dismiss Plaintiff's Claim Under
29 U.S.C. § 1132(a)(3)
Defendants argue a claim under 29 U.S.C. § 1132(a)(3) may be
raised only when adequate relief is not available to the
complaining party under ERISA's other enforcement provisions,
citing Varity Corp. v. Howe, 516 U.S. 489, 515 (1996).
Plaintiff's claim for breach of fiduciary duty under §
1132(a)(3), according to Defendants, falls squarely within the
parameters of a claim under § 1132(a)(1)(B) to recover benefits
due, to enforce a participant's rights under the terms of a plan,
or to clarify a participant's rights to future benefits.
(Defendants' Motion to Dismiss at 8.)
In opposition, Plaintiff provides two grounds for the
proposition he may allege a claim under § 1132(a)(3). First,
Plaintiff contends that the Defendants in the second claim for
relief are different from the Defendant in the first claim for
relief. The first claim is against the Plan only, while the
second claim is against Golden Eagle and Liberty Mutual. Second,
Plaintiff argues that the two claims do not seek the same relief. The first claim seeks to "`clarify' his rights to
future benefits", while the second claim seeks to require Golden
Eagle and Liberty Mutual to "make good to the PLAN any funds that
are necessary to fund Plaintiff's future retirement benefits" and
to preclude these Defendants "in the future from denying
Plaintiff his future benefits." (Plaintiffs Opposition to
Defendants' Motion at 13.)
Plaintiff's attempt to distinguish the two claims is
unavailing. At bottom, the relief sought is the same: an award of
past service credits under his retirement plan for prior service
with Golden Eagle. As stated in Varity, § 1132(a)(3) is a
"catchall provision" that authorizes lawsuits for equitable
relief for breach of fiduciary duty and other injuries for
"violations that [§ 1132] does not elsewhere adequately remedy."
Varity, 516 U.S. at 490. Other courts have interpreted Varity
to "clearly limit the applicability of § 1132(a)(3) to
beneficiaries who may not avail themselves of § 1132's other
remedies." Wilkins v. Baptist Healthcare System, Inc.,
150 F.3d 609, 615 (6th Cir. 1998).
In Wilkins, the court held that a plan participant has no
claim under any other subsection of § 1132 where the participant
avails himself of a remedy under § 1132(a)(1)(B). Wilkins,
150 F.3d at 615. Moreover, the bar to other subsections of § 1132
applies even when the participant's claim under § 1132(a)(1)(B)
is unsuccessful. The court held:
Wilkins availed himself of the remedy available to
him under [§ 1132(a)(1)(B)]. The district court
reviewed his claim de novo and concluded that
LINA's denial of benefits was correct. Wilkins
therefore has no cause of action under any other
subsection of § 1132 (citing Varity,
516 U.S. at 515). Consequently, he cannot recover compensatory
damages for an alleged breach of fiduciary duty.
150 F.3d at 615.
While the plan participant in Wilkins, unlike Plaintiff here,
had pursued and exhausted his administrative remedies with his
plan, that distinction does not render the holding inapplicable.
Plaintiff here, as in Wilkins, has availed himself of the
remedies under § 1132(a)(1)(B). Those remedies, absent his
failure to pursue administrative remedies with the Plan, would
have been adequate to address his alleged grievances. He cannot
therefore avail himself of alternative remedies under other
subsections of § 1132, because he had an adequate remedy under §
1132(a)(1)(B).*fn4 Because Plaintiff cannot cure the deficiencies of his FAC with
leave to amend, the Court grants Defendants' motion with
prejudice. See Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir.
CONCLUSION AND ORDER
For the reasons discussed above, the Court GRANTS WITH
PREJUDICE Defendants' motion to dismiss Plaintiff's First
Amended Complaint for failure to state a claim. The Clerk of the
Court shall enter judgment accordingly.
IT IS SO ORDERED.
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