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Winn v. Lassen Canyon Nursery Inc.


November 10, 2010



This matter comes before the Court on Defendants' Lassen Canyon Nursery Inc, Lassen Canyon Nursery Inc. 401(k) Profit Sharing Plan, and Liz Elwood-Ponce ("Defendants'") Motion to Dismiss (Doc. 6) Plaintiff Richard Winn, Sr.'s ("Plaintiff's") Complaint (Doc. 1), for failure to state a claim pursuant to Federal Rule of Civil Procedure section 12(b)(6). Plaintiff opposes the motion.*fn1 For the reasons set forth below, Defendants' motion is granted.


The Complaint alleges that Plaintiff was an employee of Defendant Lassen Canyon Nursery (the "Nursery"). Plaintiff was 4 part of the Nursery's Profit Sharing Plan, and entered into a 2007 Plan Agreement (the "plan"). At the time of Plaintiff's separation from the Nursery in November 2007, Plaintiff alleges irregularities in the valuation of his account. Plaintiff alleges that the Nursery then modified the plan without informing plan members, violated plan terms, and dealt unfairly with Plaintiff. Plaintiff brought nine causes of action, alleging breach of the 2007 and 2008 plans, breach of the duty of good faith and fair dealing, misappropriation of interest, breach of contract and breach of fiduciary duty, and requesting (though also captioned as causes of action) declaratory judgment action, inspection of corporate records and accounting and declaratory judgment.

The Complaint was originally filed in the Shasta County Superior Court. Defendants removed the case (Doc. 1) to this Court under 28 U.S.C. §§ 1331, 1441(b) and 1446. The case was removed on the grounds that all claims are completely preempted by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132. Thereafter, Defendants filed the present motion to dismiss, alleging complete preemption under ERISA. Plaintiff filed an opposition brief (Doc. 12), captioned as a reply, in which he opposes dismissal and asks the court to grant leave to amend should the Court decide to dismiss the Complaint. Plaintiff's opposition brief raises a host of new allegations not present in the Complaint. The opposition brief does not address the preemption issue, rather Plaintiff states that each of the claims in the Complaint is actually a claim under ERISA. The original Complaint does not contain any claims for relief under ERISA nor any allegations that ERISA was violated. Defendants' Reply brief (Doc. 14) argues that while Plaintiff appears to agree that the claims should have been brought under ERISA, Plaintiff raised no ERISA allegation in the Complaint, thus the Complaint remains preempted.


A. Legal Standard

In considering a motion to dismiss under Federal Rule of Civil Procedure section 12(b)(6) for failure to state a claim, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheur v. Rhodes, 416 U.S. 232, 236 (1975), overruled on other grounds by Davis v. Schere, 468 U.S. 183 (1984). Assertions that are mere "legal conclusions," however, are not entitled to the assumption of truth." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a plaintiff needs to plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570.

Upon granting a motion to dismiss, a court has discretion to allow leave to amend the complaint pursuant to Federal Rule of Civil Procedure section 15(a). "Absent prejudice, or a strong showing of any [other relevant] factor[], there exists a presumption under Rule 15(a) in favor of granting leave to amend." Eminence Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). Courts may dismiss a case without leave to amend if the plaintiff is unable to cure the defect by amendment. Lopez v. Smith, 203 F.3d 1122, 1120 (9th Cir. 2000).

When ruling on a motion to dismiss, the focus of the Court is on the allegations of the Complaint. The Court may not consider new allegations and arguments raised in the opposition brief. See Schneider v. California Dept. of Corrections, 151 F.3d 1194, 1197 (9th Cir. 1998).

B. ERISA Preemption

"The purpose of ERISA is to provide a uniform regulatory regime over employee benefit plans." Aetna Health, Inc., v. Davilla, 542 U.S. 200, 208 (2004). Though Plaintiff filed his Complaint in State Court, bringing state law claims, when a federal statute wholly displaces the state-law cause of action through complete preemption, the state claim can be removed. This is so because when the federal statute completely preempts the state-law cause of action, a claim which comes within the scope of that cause of action, even if pleaded in terms of state law, is in reality based on federal law. ERISA is one of these statutes." Id. at 207-208.

ERISA contains a comprehensive scheme of civil remedies to enforce its provisions. Cleghorn v. Blue Shield, 408 F.3d 1222, 1225 (9th Cir. 2005). Accordingly, ERISA provides the exclusive procedure for the recovery of benefits, or the enforcement or clarification of rights under the terms of employee benefit plans. See Id., at 1225; Aetna Health, at 208-210.

Here, Plaintiff is seeking to recover benefits he alleges are owed to him under the Nursery's employee benefit plan, and seeking declaratory judgment to clarify and enforce the terms of the plan. Accordingly, his state claims are preempted. Plaintiff's Complaint fails to state a claim upon which relief can be granted, as every claim for relief is preempted by ERISA. However, the Court will grant leave to amend the Complaint, so as to allow Plaintiff an opportunity to correctly plead his claims under ERISA.


Defendants' Motion to Dismiss is GRANTED, without prejudice. An amended complaint must be filed within twenty (20) days of the date of this Order and served on all Defendants, including Dennis Cargile.


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