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Geoffrey Moyle, et al v. Third Claims

April 25, 2011

GEOFFREY MOYLE, ET AL.,
PLAINTIFFS,
v.
THIRD CLAIMS,
DEFENDANTS.



The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge

ORDER (1) DENYING MOTION TO DISMISS SECOND AND (2) GRANTING IN PART MOTION TO DISMISS IMPROPERLY NAMED DEFENDANTS, (3) DENYING MOTION TO DISMISS FIRST LIBERTY MUTUAL RETIREMENT CLAIM AS TO PLAINTIFF BENEFIT PLAN, et al., MOYLE, AND (4) GRANTING MOTION TO STRIKE DEMAND FOR TRIAL BY JURY

Pending before the Court is the motion of Defendants Liberty Mutual Retirement Benefit Plan ("Retirement Plan"), Liberty Mutual Retirement Plain Retirement Board ("Retirement Board"), Liberty Mutual Group Inc. ("LMGI"), and Liberty Mutual Insurance Company ("LMIC")(collectively, "Defendants") to (1) dismiss the second and third claims in the First Amended Complaint ("FAC"), (2) dismiss improperly named Defendants, (3) dismiss the first claim of the FAC with respect to Plaintiff Moyle, and (4) strike Plaintiffs' demand for trial by jury. For the following reasons, Defendants' (1) motionto dismiss the second and third claims is denied, (2) motion to dismiss improperly named Defendants is granted in part and denied in part, (3) motion to dismiss the first claim as to Plaintiff Moyle is denied, and (4) motion to strike the demand for trial by jury is granted.

I.

BACKGROUND

The instant action is a putative class action arising under the Employee Retirement Income Security Act ("ERISA"). Plaintiffs were hired by Golden Eagle Insurance Company ("Old Golden Eagle") between April 1988 and May 1990. (FAC ¶ 34.) On or about October 1, 1997, LMIC obtained control of the assets of Old Golden Eagle and subsequently formed Golden Eagle Insurance Corporation ("GEIC"). (Id. at ¶¶ 24, 35.) During the purchase of Old Golden Eagle and formation of GEIC, Plaintiffs were advised by Defendants that, if they remained in their positions after the acquisition, they would be eligible to participate in the Retirement Plan with full credit for their years of service with Old Golden Eagle. (Id. at ¶ 36.) On or around March 2002, Moyle's employment with GEIC ended. (Id. at ¶ 40.) Each of the other Plaintiffs' employment with GEIC also concluded thereafter. (Id. at ¶¶ 40, 46-48.) Upon retirement, Plaintiffs were sent documentation regarding their benefits under the Retirement Plan. (Id. at ¶ 41.) According to Plaintiffs, "[a]ll Plan documents provided to Plaintiffs and others similarly situated should include within 'credited service' those years employed with Old Golden Eagle." (Id.) On May 23, 2002, Defendants informed Moyle that he would not be provided with any credit for the years of employment with Old Golden Eagle. (Id. at ¶45.)

Plaintiffs filed a Complaint on October 19, 2010 and a First Amended Complaint on October 21, 2010. (Docs. 1, 3.) The FAC sets forth three claims for relief: (1) determination of terms of Plan and clarification of rights to future benefits under 29 U.S.C. § 1132(a)(1)(B), (2) promissory estoppel, and (3) violation of 29 C.F.R. 2560.503-1(h)(2). Defendants filed the instant motion on December 17, 2010. (Doc. 10.) Plaintiffs filed an opposition to the motion. (Doc. 15.) Defendants did not file a reply.

II.

LEGAL STANDARD A party may move to dismiss a claim under Rule 12(b)(6) if the claimant fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). The Federal Rules require a pleading to include a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Supreme Court, however, recently established a more stringent standard of review for pleadings in the context of 12(b)(6) motions to dismiss. See Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). To survive a motion to dismiss under this new standard, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 570). "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." Id. (citing Twombly, 550 U.S. at 556). "Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950 (citing Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007)). The reviewing court must therefore "identify the allegations in the complaint that are not entitled to the assumption of truth" and evaluate "the factual allegations in [the] complaint to determine if they plausibly suggest an entitlement to relief." Id. at 1951.

III.

DISCUSSION

A. Motion to Dismiss Second and Third Claims in the FAC

1. Promissory Estoppel

Defendants argue the Ninth Circuit has rejected the use of promissory estoppel under ERISA. See DeVoll v. Burdick Painting, 35 F.3d 408, 412 (9th Cir. 1994). Defendants further argue, even if Plaintiffs' second claim is construed to assert a claim for equitable estoppel, which Plaintiffs argue it should be, it still must be dismissed because Plaintiffs fail to state a claim upon which relief can be granted. The Ninth Circuit does recognize a claim for equitable estoppel under ERISA under certain circumstances and, for purposes of this motion, the Court construes Plaintiffs' second claim as a claim for equitable estoppel. Id.; Pisciotta v. Teledyne Indus., 91 F.3d 1326, 1331 (9th Cir. 1996). To recover benefits under a theory of equitable estoppel, a plaintiff must establish five elements: (1) a material misrepresentation, (2) reasonable and detrimental reliance upon the representation, (3) extraordinary circumstances, (4) the provisions of the plan at issue are ambiguous such that reasonable persons could disagree as to their meaning or effect, and (5) representations were made to the plaintiff "involving an oral interpretation of the plan." Pisciotta, 91 F.3d at 1331. Defendants assert Plaintiffs have failed to sufficiently allege detrimental reliance, the existence of extraordinary circumstances, and that the terms of the plan at issue were ambiguous.

As to detrimental reliance, Defendants argue, although Plaintiffs have alleged reliance, they have failed to allege they acted or failed to act to their detriment in light of the alleged representations. Defendants argue Plaintiffs' only alleged detriment is deciding to stay in their jobs after the incorporation of the newly-formed GEIC, and that "'merely refraining from seeking other employment is not considered 'detrimental' reliance' for purposes of estoppel claims under ERISA." (MTD at 7 (quoting Biba v. Wells Fargo & Co., No. C 09-3249 MEJ, 2010 WL 4942559, at *11 (N.D. Cal. Nov. 10, 2010).) Plaintiffs argue detrimental reliance may be shown where an employee foregoes opportunities because he expected to receive certain benefits under the plan. (Opp. at 9-10 (citing Bloemker v. Laborers' Local 265 Pension Fund, 605 F.3d 436, 442 (6th Cir. 2010).) "In order to show detriment, or injury, a plaintiff must demonstrate that he relied upon the employer's representations in a way that later led to injury." Pell v. DuPont de Nemours & Co., 539 F.3d 292, 303 (3d Cir. 2008). Plaintiffs allege they were advised by Defendants that, if they remained in their positions after the acquisition, they would be eligible to participate in the Retirement Plan with full credit for their years of service with Old Golden Eagle and that "Plaintiffs and the Class relied upon Defendants' promises regarding crediting time employed at Old Golden Eagle for the purposes of benefits under the Plan and, as a sign of their reliance, accept[ed] employment with Liberty Mutual and/or Golden Eagle Corp. ...


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