United States District Court, S.D. California
ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO
James Corenz United States District Judge
action alleging denial of benefits under an employee pension
benefit plan pursuant to the Employee Retirement Income
Security Act ("ERISA"), Defendant Crawford and
Company filed a motion to dismiss. Plaintiff filed an
opposition and Defendant replied. The Court decides the
matter on the papers submitted and without oral argument.
See Civ. L. R. 7.1(d.1). For the reasons stated
below, Defendant's motion is granted. Plaintiff is
granted leave to amend.
to the complaint, Plaintiff was employed by Defendant as an
Executive General Adjuster for over fourteen years before
retiring at the age of 70. During his employment, Plaintiff
entered into Defendant's deferred compensation plan
("DCP"). When he retired, Plaintiff had earned over
$76, 000 worth of long-term incentive credits
("LTIC") under the DCP, and was fully vested.
Immediately after retiring, Plaintiff began working for
Defendant's competitor Vericlaim. Shortly thereafter, he
received a letter from Defendant that his LTIC benefits were
forfeited because he violated a non-compete provision
included in the DCP.
unsuccessfully appealed Defendant's decision to deny
benefits, and did not pursue a second-level appeal. Instead,
he filed the instant action alleging claims for denial of
benefits under ERISA, declaratory relief that the non-compete
provision is unenforceable under California law, breach of
contract, tortious breach of the implied covenant of good
faith and fair dealing, and unfair competition in violation
of California Business and Professions Code §17200
et seq. ("Unfair Competition Law" or
"UCL"). The Court has federal question jurisdiction
over the ERISA claim pursuant to 28 U.S.C. §1331, and
supplemental jurisdiction over the remaining state law claims
pursuant to 28 U.S.C. §1367(a).
before the Court is Defendant's motion to dismiss for
failure to state a claim under Federal Rule of Civil
Procedure 12(b)(6). A motion under Rule 12(b)(6) tests the
sufficiency of the complaint. Navarro v. Block, 250
F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted where
the complaint lacks a cognizable legal theory. UMG
Recordings, Inc. v. Shelter Capital Partners LLC, 718
F.3d 1006, 1014 (9th Cir. 2013). Alternatively, the complaint
may be dismissed where it presents a cognizable legal theory,
yet fails to plead essential facts under that theory.
Id. The Court must assume the truth of all factual
allegations in the complaint and “construe them in the
light most favorable to [the nonmoving party].”
Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir.
2002). On the other hand, legal conclusions, even if cast in
the form of factual allegations, “are not entitled to
the assumption of truth.” Ashcroft v. Iqbal,
556 U.S. 662, 664 (2009).
argues that the complaint should be dismissed because
Plaintiff failed to exhaust administrative remedies by not
pursuing a second-level appeal, the ERISA claim lacks merit,
and the state law claims are preempted. In his opposition,
Plaintiff withdrew the second cause of action for declaratory
relief, but opposed all other aspects of Defendant's
Exhaustion of Administrative Remedies
a court action under ERISA, "a claimant must avail
himself or herself of a plan's own internal review
procedures." Diaz v. United Agr. Employee Welfare
Benefit Plan, 50 F.3d 1478, 1483 (9th Cir. 1995).
Failure to exhaust the plan's internal review procedures
precludes a court action. Sarraf v. Standard Ins.
Co., 102 F.3d 991, 993 (9th Cir. 1996).
includes internal review procedures. The pertinent provisions
§13 Claims Procedures
13.1. Presentation of Claim. Any . . . Claimant . .
. may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to
such Claimant from the Plan. If such a claim relates to the
contents of a notice received by the Claimant, the claim must
be made within 60 days after such notice was received by the
Claimant. All other claims must be made within 180 days of
the date on which the event that caused the claim to arise
occurred. . . .. [¶]
13.3. Review of a Denied Claim. Within 60 days after
receiving a notice from the Committee that a claim has been
denied, in whole or in part, a Claimant . . . may file with
the Committee a written request for review of the denial of
the claim. Thereafter, the Claimant . . .:
(a) may review all documents . . .;
(b) may submit written comments or other ...