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Brixius v. American Transfer Co.

United States District Court, E.D. California

April 20, 2017





         Before the Court is Defendant American Transfer Company and American Transfer Company Pension Plan's (collectively, "Defendants" or "ATC") motion to dismiss Plaintiff's complaint. (Doc. 7.) The complaint seeks benefits pursuant to the Employee Retirement Security Act of 1974 ("ERISA") under a "de facto" pension plan established by his former employer, ATC, in 2005. Defendants contend Plaintiff has failed to allege the existence of an ERISA plan that meets the necessary prerequisites for a claim for benefits under 29 U.S.C. § 1132(a)(1)(B). The matter was found suitable for a decision without oral argument, and the hearing on Defendants' motion was vacated. For the reasons set forth below, Defendants' motion to dismiss is granted; Plaintiff's complaint is dismissed without prejudice and with 14-days leave to amend.


         The complaint alleges that Plaintiff was employed by ATC from 1968 through 2004 where he worked full-time as a non-union internal accountant and bookkeeper. On several occasions during the 1980s, attempts or discussions were had about trying to have the office employees become unionized. Plaintiff had conversations with the owner and President of ATC, Glenn Prickett, about whether ATC employees would become unionized. Mr. Prickett proposed that, if Plaintiff would continue to work at ATC and refrained from unionizing office workers, ATC would "take care of providing a retirement plan" for Plaintiff that would equal Plaintiff's salary at the time of retirement, plus the amount paid towards his health benefits.

         Plaintiff refrained from unionizing activities and maintained his employment with ATC until the end of 2004 when he retired. At the time of his retirement, he was receiving a salary of $45, 000 per year and group medical benefits of 258.76 per month. From January 2005 through 2010, ATC paid $45, 000 per year plus $3, 105.12 for his medical benefits. As to the $45, 000 annual amount, ATC paid in bi-monthly installments through its payroll system as though Plaintiff were still employed, deducting federal taxes, social security, medical, state taxes, and state disability from these payments. Starting in January 2011, the $45, 000 yearly retirement amount was, without any notice or explanation, reduced to $24, 000 per year and paid at the amount of $2, 000 per month, although payment of the medical benefit amount continued as before. Upon inquiry, Plaintiff was not provided any information about the reduction or any process how to appeal or purse a claim for the unilateral reduction of his benefits.

         In January 2012, the retirement benefits were further reduced to $12, 000 per year, paid monthly through ATC's payroll system subject to all the payroll deductions, which continued through 2015. The amount paid for medical benefits remained unchanged. On December 29, 2015, Plaintiff received a hand-written note from ATC indicating ATC would be closing and his last check would be paid in June 2016. Upon inquiring with John Moffatt, ATC's CPA, Plaintiff was told that the lifetime payments promised to Plaintiff were for the life of ATC, not for Plaintiff's life.

         Plaintiff claims the representations made to him during his employment that he would receive a retirement benefit if he refrained from attempting to unionize office employees, in conjunction with the last 11 years of payments since his retirement, constitute a pension plan under ERISA. Plaintiff maintains ATC improperly reduced the amount of his retirement benefits in 2011 and 2012, and then improperly discontinued payments in 2016.

         Defendants filed a motion to dismiss arguing Plaintiff has failed to adequately allege the existence of a de facto pension plan under ERISA. According to Defendants, Plaintiff's allegations of the details of a "plan" are vague and conclusory. Moreover, an ERISA plan requires an "administrative program, " which must involve an ongoing, particularized, administrative discretionary analysis. Defendants maintain Plaintiff's allegations do not establish an administrative program, and no viable ERISA plan is alleged.


         A motion to dismiss pursuant to Rule 12(b)(6) is a challenge to the sufficiency of the allegations set forth in the complaint. Dismissal under Rule 12(b)(6) is proper where there is either a "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balisteri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990). In considering a motion to dismiss for failure to state a claim, the court generally accepts as true the allegations in the complaint, construes the pleading in the light most favorable to the party opposing the motion, and resolves all doubts in the pleader's favor. Lazy Y. Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).

         To survive a 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "The plausibility standard is not akin to a 'probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at 556). "While a complaint 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.” Twombly, 550 U.S. at 555 (internal citations omitted). Thus, "bare assertions . . . amount[ing] to nothing more than a 'formulaic recitation of the elements'. . . are not entitled to be assumed true." Iqbal, 556 U.S. at 681. "[T]o be entitled to the presumption of truth, allegations in a complaint . . . must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). In practice, "a complaint...must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Twombly, 550 U.S. at 562. To the extent that the pleadings can be cured by the allegation of additional facts, a plaintiff should be afforded leave to amend. Cook, Perkiss and Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 247 (9th Cir. 1990) (citations omitted).

         IV. ANALYSIS

         The parties dispute whether Plaintiff has adequately alleged a "plan" that implicates ERISA. The existence of an ERISA plan requires (1) a plan, fund, or program; (2) established or maintained; (3) by an employer; (4) for the purpose of providing benefits; (5) to its employees. See ...

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