Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Wilson v. Bank of America Pension Plan For Legacy Companies

United States District Court, N.D. California

September 18, 2019

BRUCE E. WILSON, Plaintiff,
v.
BANK OF AMERICA PENSION PLAN FOR LEGACY COMPANIES, et al., Defendants.

          ORDER RE: MOTION FOR RECONSIDERATION AND PARTIAL MOTION TO DISMISS SECOND AMENDED COMPLAINT RE: DKT. NOS. 50, 51

          THOMAS S. HIXSON, UNITED STATES MAGISTRATE JUDGE

         I. INTRODUCTION

         This case concerns a dispute over pension benefits Plaintiff Bruce E. Wilson accrued while working for Bank of America (“BOA”) from 1972 to 1988 and from 1999 to 2000. In its order granting in part and denying in part Fidelity’s first motion to dismiss, the Court denied the motion with respect to the question of whether Wilson’s state-law tort claims are preempted by ERISA. ECF No. 33. Fidelity now asks the Court to reconsider its findings on that issue. ECF No. 50. Wilson filed an Opposition to the Motion for Reconsideration (ECF No. 58) and Fidelity filed its Reply (ECF No. 60). For the reasons set forth below, the Court GRANTS Fidelity’s Motion for Reconsideration, and upon reconsideration, GRANTS dismissal of Wilson’s state-law claims, claims five and six, on preemption grounds.

         Also pending before the Court is Defendants’ Partial Motion to Dismiss the Second Amended Complaint (“SAC”) pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 51. Wilson filed an Opposition to that motion (ECF No. 59) and Defendants filed a Reply (ECF No. 61). The Court finds this matter suitable for disposition without oral argument and VACATES the September 26, 2019 hearing. See Civ. L.R. 7-1. The Court GRANTS the motion to dismiss and dismisses claims two, three, and four.

         Fidelity’s request for judicial notice relevant to its motion to dismiss is also before the Court. ECF Nos. 55. The request is unopposed. The Court GRANTS the request.

         II. BACKGROUND

         In its order addressing Fidelity’s first motion to dismiss (ECF No. 33) the Court detailed the background facts in this case. The Court assumes familiarity with those facts and will not repeat the full discussion here. Broadly, though, this case concerns a dispute over pension benefit amounts Wilson accrued under the Bank of America Pension Plan for Legacy Companies (the “Plan”) while employed by BOA and its predecessor. Central to that dispute is Wilson’s allegation that Fidelity, while contracted with Plan fiduciaries, provided Wilson Plan pension estimates that were grossly exaggerated and inaccurate. Wilson brought against Fidelity an ERISA claim for breach of fiduciary duty and two state-law claims of professional negligence and negligent misrepresentation. In its first motion to dismiss Fidelity argued that the state-law claims were preempted by ERISA. The Court found they were not. It did, however, dismiss with leave to amend Wilson’s ERISA claim against Fidelity and his negligent misrepresentation claim, though on different grounds. In a second order the same day (ECF No. 34), the Court addressed a motion to dismiss filed by the other Defendants (ECF No. 21) and dismissed with leave to amend Wilson’s second and fourth claims for ERISA violations.

         Fidelity filed a motion for leave to file a motion for reconsideration on July 18, 2019, and the Court granted Fidelity leave to file its motion, which it did August 9, 2019. The Motion for Reconsideration is limited to the question of whether Wilson’s professional negligence claim can survive ERISA preemption.[1]

         Wilson filed his SAC on July 19, 2019 asserting the same claims against the same parties as in his First Amended Complaint (“FAC”). Defendants together filed a motion to dismiss claims two, three, four and six in the SAC on August 9, 2019, which Wilson has opposed.

         III. LEGAL STANDARDS

         Trial courts have inherent power to reconsider, set aside, or amend interlocutory orders at any time prior to entry of a final judgment. Fed.R.Civ.P. 54(b). Motions for reconsideration are disfavored and “should not be granted, absent highly unusual circumstances, unless the district court is presented with newly discovered evidence, committed clear error, or if there is an intervening change in the controlling law.” McDowell v. Calderon, 197 F.3d 1253, 1254 (9th Cir. 1999) (per curiam) (internal quotation and citation omitted). Furthermore, “[a] motion for reconsideration ‘may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation.’” Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009) (quoting Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000)).

         The Northern District of California has local rules governing motions for reconsideration. Under Civil Local Rule 7-9, a party must seek leave to file a motion for reconsideration before judgment has been entered. Civ. L.R. 7-9(a). A motion for reconsideration may be made on three grounds: (1) a material difference in fact or law exists from that which was presented to the court, which, in the exercise of reasonable diligence, the moving party did not know at the time of the order for which reconsideration is sought; (2) the emergence of new material facts or a change of law; or (3) a manifest failure by the court to consider material facts or dispositive legal arguments. Civ. L.R. 7-9(b). The moving party may not reargue any written or oral argument previously asserted to the court. Civ. L.R. 7-9(c).

         A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of claims alleged in the complaint. Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (citing Fed.R.Civ.P. 12(b)(6)). A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Thus, to survive a Rule 12(b)(6) motion to dismiss, a complaint must plead “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). Plausibility does not mean probability, but it requires “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 687 (2009). A complaint must provide a defendant with “fair notice” of the claims against it and the grounds for relief. Twombly, 550 U.S. at 555 (quotation marks and citation omitted); Fed.R.Civ.P. 8(a)(2) (A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.”). In considering a motion to dismiss, the court accepts factual allegations in the complaint as true and construes the pleadings in the light most favorable to the nonmoving party. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008); Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). However, “the tenet that a court must accept a complaint’s allegations as true is inapplicable to threadbare recitals of a cause of action’s elements, supported by mere conclusory statements.” Iqbal, 556 U.S. at 678.

         If a Rule 12(b)(6) motion is granted, the “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, 1127 (9th Cir. 2000) (en banc) (citations and quotations omitted). However, the Court may deny leave to amend for several reasons, including “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).

         IV. FIDELITY’S REQUEST FOR JUDICIAL NOTICE

         Defendants request the Court take judicial notice of a portion of a public record, to wit, a portion of the official court files of the Los Angeles Superior Court in the matter of In re Marriage of Bruce E. Wilson and Sheila Wilson, the records from divorce proceedings to which Wilson was a party. Wilson does not oppose the request.

         Under Federal Rule of Evidence 201(b), the Court “may judicially notice a fact that is not subject to reasonable dispute because it . . . can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” F.R.E. 201(b). The Court grants judicial notice of these records, as they are records from a state agency that are not subject to reasonable dispute. Parker v. Dean Transp., Inc., 2013 U.S. Dist. LEXIS 184386, *10 (C.D. Cal. Oct. 15, 2013) (“[Defendants] ask the Court to judicially notice the state court records from Plaintiff[’s] divorce proceedings . . . . The Court grants judicial notice as they are records from a state agency, which are capable of accurate and ready determination within the meaning of Rule 201(b)”).

         V. FIDELITY’S MOTION FOR RECONSIDERATION

         In its order addressing Fidelity’s first motion to dismiss, the Court based its ERISA preemption holding on Paulsen v. CNF, Inc., 559 F.3d 1061 (9th Cir. 2009), which it found controlling on the issue of whether Wilson’s state-law claims were preempted. Fidelity argues that the Court failed to recognize the ways in which Paulsen is distinguishable from this case. It points to Wise v Verizon Comms., Inc., 600 F.3d 1180, 1190 (9th Cir. 2010), a case where the Ninth Circuit found ERISA preemption of various state-law claims, as being more analogous to this case. It argues that Paulsen has been recognized by courts within this Circuit as fact-specific and as not articulating broad principals against preemption. It cites to several decisions post-Paulsen in which state-law negligence claims were held preempted by ERISA and argues those cases are more like this matter. The Court recognizes now that it may have overlooked certain relevant caselaw and accordingly will reconsider the preemption issue.

         As the Court discussed in its earlier order, ERISA preemption can be predicated on either an impermissible “connection with” or “reference” to an ERISA-covered plan. In Paulsen, the Ninth Circuit found that the plaintiff’s professional negligence claims had no forbidden “reference to” an ERISA plan because the claims were “based on common law negligence principles and California Civil Code §§ 1708 and 1714(a).” Those laws, the court wrote, “do not act ‘immediately and exclusively’ on ERISA plans, and the existence of an ERISA plan is not essential to those laws’ operation.” 559 F.3d at 1082. That finding was essential to this Court’s holding that Wilson’s claims were not preempted by a forbidden ‘reference to’ Wilson’s pension Plan. However, as Fidelity points out, not long after Paulsen (and before[2]) the Ninth Circuit said of the ‘reference to’ inquiry that “[s]tated another way,” it means that “where ‘the existence of an ERISA plan is a critical factor in establishing liability’ under a state cause of action, the state law claim is preempted.” Wise, 600 F.3d at 1190 (citing Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 136, 139-140 (1990)). It added, “ERISA’s preemption provision functions ‘even when the state action purports to authorize a remedy unavailable under the federal provision.’” Wise, 600 F.3d at 1190 (quoting Ingersoll, 498 U.S. at 144).[3] The Ninth Circuit found the plaintiff’s state-law claims were preempted because her complaint “necessarily reference[d]” an ERISA plan. “The state law theories of fraud, misrepresentation, and negligence all depend on the existence of an ERISA-covered plan to demonstrate that Wise suffered damages: the loss of insurance benefits.” Id. at 1191.

         Under Wise, it is clearer that Wilson’s professional negligence and negligent misrepresentation claims are preempted.[4] The basis of those claims is that Fidelity allegedly produced Plan pension benefit estimates with grossly inaccurate benefits accrual information, and that Wilson’s reliance on that information caused him harm. While neither professional negligence nor negligent misrepresentation act immediately or exclusively upon ERISA plans- they are common law torts-the success of Wilson’s claims depends on the existence of an ERISA-covered plan. See, e.g., Reichert v. Time Inc., 2011 U.S. Dist. LEXIS 127398, *13 (N.D. Cal. Nov. 3, 2011) (“At the root of this claim is the allegation that Fidelity’s inaccurate estimates related to the Plan, and for this reason plaintiffs claim for professional negligence is preempted by ERISA.”). If Wilson had received the pension benefits Fidelity’s estimates told him he would get, he would not be suing. Put another way, but for the dispute over benefits under the Plan, Wilson would have no state-law claims to bring. See, e.g., Josef K. v. Cal. Physicians’ Serv., 2019 U.S. Dist. LEXIS 92730, *9 (N.D. Cal. June 3, 2019) (“[T]he FAC alleges that Maximus violated these state laws in the course of its review of plaintiffs’ ERISA plan. . . . [B]ut for the . . . ERISA plan, plaintiffs would not have suffered the harm alleged with respect to the interference with contract claim.”); Pizza v. Fin. Indus. Regulatory Auth., 2013 U.S. Dist. LEXIS 64521, *10-11 (N.D. Cal. May 6, 2013) (plaintiff’s fraud claims preempted because they “‘relate[d] to’ an ERISA plan, as the alleged misrepresentation pertains ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.