-LRL Wimberly v. Reliance Standard Life Insurance Company, No. 2:2011cv00430 - Document 15 (D. Nev. 2011)
Court Description: ORDER Granting 6 Motion to Dismiss. Plaintiff Curtis Wimberly's claims against Defendant Tutor Perini Corporation are hereby dismissed with prejudice. Signed by Judge Philip M. Pro on 7/14/11. (Copies have been distributed pursuant to the NEF - MMM)
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-LRL Wimberly v. Reliance Standard Life Insurance Company Doc. 15 1 2 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 *** ) ) ) ) ) ) ) ) ) ) ) ) 6 CURTIS WIMBERLY, Plaintiff, 7 8 v. 9 RELIANCE STANDARD LIFE INSURANCE COMPANY, et. al., 10 Defendants. 11 2:11-CV-00430-PMP-LRL ORDER Before the Court is Defendant Tutor Perini Corporation’s (“Tutor”) Motion to 12 13 Dismiss (Doc. #6), filed on April 8, 2011. Plaintiff Curtis Wimberly (“Wimberly”) filed an 14 Opposition (Doc. #7) on April 25, 2011. Tutor filed a Reply (Doc. #8) on May 5, 2011. 15 This Court held a hearing on this motion on June 30, 2011. (Mins. of Proceedings (Doc. 16 #14).) 17 I. BACKGROUND 18 Wimberly worked for Tutor as a General Superintendent beginning March 22, 19 2004. (Notice of Removal (Doc. #1), Ex. A [“Pl.’s Compl.”] ¶ 14.) One term of his 20 employment was coverage for long term disability under a plan administered by Reliance 21 (the “Plan”). (Id. ¶ 7.) During his employment, Tutor classified Wimberly’s weekly 22 income into several categories, including $2596.16 for “Regular Hours,” $635 for “Living 23 Allowance,” $165 for “Tax Subsistence,” $175 for “Subsistence Ntx,” and $15.00 for a 24 “Company Vehicle.” (Id. ¶ 15.) Tutor also provided Wimberly with life insurance 25 coverage, listed as another category on his paycheck titled “Executive Life,” and valued at 26 $9.45. (Id. ¶¶ 15-16.) To be qualified for Executive Life insurance, an employee had to Dockets.Justia.com 1 have a base income in excess of $150,000. (Id.) However, Tutor employees employed 2 prior to January 1, 2010, like Wimberly, were “grandfathered in” to this policy. (Notice of 3 Manual Filing (Doc. #13) [“Ex. 1”] at 181.) The minimum salary required to be 4 “grandfathered in” under this change was $135,000. (Id.) Wimberly’s gross weekly pay, 5 factoring in each separate category, was $3596.11. (Id. at 005-06.) 6 Wimberly became disabled as a result of surgery to correct a “heart condition” as 7 well as unrelated “degenerative disc disease.” (Pl.’s Compl. ¶ 17.) Plaintiff filed a 8 disability claim with Reliance and pursuant to Reliance’s request, Tutor produced 9 employment records for Wimberly showing his monthly wages were $10,384.64. (Pl.’s 10 Compl. ¶¶ 18-19; Ex. 1 at 106.) 11 In the event of an employee becoming disabled, the Plan provided for a Monthly 12 Benefit which is calculated by first “multiply[ing] an Insured’s Covered Monthly Earnings 13 by the benefit percentage(s), as shown on the Schedule of Benefits Page.” (Ex. 1 at 031.) 14 The Plan defines “Covered Monthly Earnings” as “the insured’s monthly salary . . . prior to 15 any deductions to a 401(k) or Section 125 plan . . . [and] does not include commissions, 16 overtime pay, bonuses or any other special compensation not received as ‘Covered Monthly 17 Earnings.’” (Pl.’s Compl. ¶ 20.) Reliance calculated Wimberly’s monthly wages at 18 $11,250.03, approved the claim, and began payment on January 23, 2010. (Id. ¶¶ 21-22.) 19 Wimberly appealed Reliance’s determination regarding the amount of his 20 monthly benefit and submitted further documentation supporting his contention that his 21 base monthly salary was actually $15,583.14. (Id. ¶¶ 23-24.) Wimberly based his appeal on 22 his long-term receipt of additional benefits, such as his Living Allowance and Tax 23 Subsistence, that he received “regularly and steadily” since 2005. (Ex. 1 at 002.) Reliance 24 rejected this contention, maintaining that only Wimberly’s Regular Hours were included 25 under its definition of Covered Monthly Earnings. (Id. at 002-03.) Wimberly sought to 26 return to work at Tutor following medical leave, but Tutor “found no worksite modification 2 1 program acceptable.” (Pl.’s Compl. ¶¶ 25-26.) Wimberly’s employment at Tutor ended on 2 March 30, 2010. (Ex. 1 at 135.) Reliance denied Wimberly’s appeal. (Pl.’s Compl. ¶ 28.) 3 Wimberly brought suit against Reliance and Tutor in the Eighth Judicial District 4 Court of Nevada. (Id. ¶¶ 30-46.) Wimberly alleged that Reliance violated the Employee 5 Retirement Investment Securities Act (“ERISA”) by paying less disability benefits than he 6 is due and that Tutor interfered with his protected rights under section 510 of ERISA. (Id. 7 ¶¶ 39-43.) Reliance removed the action to this Court. (Notice of Removal.) 8 Tutor now moves to dismiss, arguing that Wimberly failed to plead that he was 9 discharged or suffered any other adverse employment action in violation of section 510 of 10 ERISA. Tutor also argues that Wimberly failed to allege Tutor’s specific intent to deprive 11 him of his ERISA benefits. Tutor thus argues that Wimberly failed to make any factual 12 allegations concerning any interference by Tutor with Wimberly’s ERISA benefits, 13 intentional or otherwise. Additionally, Tutor argues that the Complaint’s allegation that 14 Tutor failed to disclose all documentation and thereby prevented Plaintiff from perfecting 15 his claim is contradicted by the exhibits attached to the Complaint, documents that Reliance 16 reviewed and considered during Wimberly’s administrative appeal. Tutor argues that this 17 contradiction means that Plaintiff effectively pled himself out of his claim because his 18 factual allegations are directly controverted by documents attached to the Complaint.1 19 Tutor also argues that Wimberly’s claim for attorney’s fees should be dismissed along with 20 the Complaint. 21 /// 22 23 24 25 26 1 At the motion to dismiss stage, this Court may consider the Complaint and any attached exhibits supporting those allegations in ruling on a motion to dismiss without converting it to a summary judgment motion. U.S. v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003). The Court is “not required to accept as true conclusory allegations which are contradicted by documents referred to in the complaint.” Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295-96 (9th Cir. 1998). 3 1 Wimberly responds by arguing that the “straight math” taken from the documents 2 submitted with the Complaint show Tutor’s “self-serving under-reporting in order to reduce 3 premium payments.” (Pl.’s Opp’n (Doc. #7) at 6.) Wimberly argues that the circumstances 4 underlying the Complaint demonstrate Tutor’s specific intent to interfere with Wimberly’s 5 rights. Wimberly argues further that dismissing the claim for attorney’s fees and costs 6 would be premature. 7 II. DISCUSSION 8 9 When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court views the complaint’s allegations in the light most favorable to the 10 plaintiff. Doe v. United States, 419 F.3d 1058, 1062 (9th Cir. 2005). The complaint need 11 not contain “detailed factual allegations,” but it must provide more than labels, conclusions, 12 and a “formulaic recitation of the elements.” 13 544, 555 (2007). Factual allegations must be sufficient to rise above the speculative level, 14 and the complaint must allege sufficient facts to establish a plausible claim for relief. Id.; 15 Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Bell Atlantic Corp. v. Twombly, 550 U.S. 16 A. ERISA Section 510 - Interference 17 Tutor argues that Wimberly failed to allege any facts that demonstrate an adverse 18 employment action by Tutor against Wimberly for exercise of his ERISA rights. Tutor 19 argues the only allegation in the Complaint is that Tutor failed to provide the appropriate 20 documentation to Reliance and that this failure prevented Wimberly from perfecting his 21 claim. Tutor contends the alleged failure to provide information does not constitute an 22 adverse employment action under section 510 of ERISA. Tutor also contends that its mere 23 alleged failure to provide the documentation to Reliance does not support an inference that 24 it did so with the specific intent to interfere with Plaintiff’s ERISA rights. 25 26 Wimberly responds that the Complaint alleges facts, including the “straight math” from his exhibits, which show Tutor’s self-serving under-reporting to reduce 4 1 premium payments. Plaintiff restates this argument later in his opposition, stating that the 2 circumstances demonstrate Tutor’s specific intent to reduce premium payments directly 3 resulting in reducing Wimberly’s benefits. 4 Section 510 of ERISA provides that: 5 7 [i]t shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under [a qualifying plan] . . . or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan. 8 29 U.S.C. § 1140. Discrimination under this section manifests in two ways: discrimination 9 “with the purpose of interfering with an employee’s exercise of certain rights,” and 6 10 discrimination “with the purpose of interfering with an employee’s attainment of certain 11 rights.” Stiltner v. Beretta U.S.A. Corp., 74 F.3d 1473, 1482 (4th Cir. 1996) (en banc) 12 (emphasis omitted). Courts use the McDonnell Douglas2 burden shifting framework “for assessing 13 14 an employer’s liability for discriminatory interference with a plaintiff’s exercise of 15 protected rights under section 510,” when there is no direct evidence of discrimination. 16 Lessard v. Applied Risk Mgmt., 307 F.3d 1020, 1025 (9th Cir. 2002). The typical 17 McDonnell Douglas burden shifting framework requires a plaintiff to set forth a prima 18 facie case creating a presumption that the employer discriminated against the employee. 19 Texas Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 254 (1981). The burden then 20 shifts to the defendant to establish a legitimate, nondiscriminatory reason for the action 21 taken. Id. at 254-55. If a defendant can present such a reason, the burden shifts back to 22 the plaintiff to show that the proffered reason is pretext for discrimination. Id. at 256. To establish a prima facie case of interference with the exercise of ERISA 23 24 rights, the plaintiff must show (1) he participated in statutorily protected activity, (2) he 25 26 2 McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). 5 1 suffered a statutorily prohibited action, and (3) a causal relationship between the two.3 2 Kimbro v. Atlantic Richfield Co., 889 F.2d 869, 881 (9th Cir. 1989). Additionally, the 3 defendant must have acted with “specific intent to interfere with the rights under an 4 employer’s benefits plan in violation of ERISA.” Id. at 881. Most cases alleging interference with ERISA rights involve a termination of 5 6 employment. See Bang v. IBM Corp., 600 F. Supp. 2d 430 (E.D.N.Y. 2009) (holding that 7 plaintiff presented evidence creating a genuine issue of material fact that his termination 8 less than one year before his benefits vested was motivated by a specific intent to deprive 9 him of his benefits). Discharge is not the only action proscribed by section 510, however. 10 For example, some courts have held that reduced salary and threats of termination or 11 allegations of employer fraud during the benefit sign-up period would violate section 510. 12 See Tavoloni v. Mount Sinai Med. Ctr., 984 F. Supp. 196, 206-07 (S.D.N.Y. 1997) 13 (holding that a medical school professor stated a section 510 claim by alleging that his 14 employer reduced his salary and threatened termination as a means to reduce the 15 employer’s contributions to an ERISA qualified plan); Healy v. Axelrod Constr. Co. 16 Defined Benefit Pension Plan & Trust, 787 F. Supp. 838, 841 (N.D. Ill. 1992) (holding a 17 retiree stated a section 510 claim by alleging that his employer fraudulently induced him to 18 sign a waiver of his participation in an ERISA qualified retirement plan). However, at 19 least one court has held that a reduction of benefits did not violate section 510 without 20 further evidence of an employer’s specific intent to discriminate against individual 21 employees. Degrooth v. Gen. Dynamics Corp., 837 F. Supp. 485, 488-89 (D. Conn. 1993). 22 23 24 25 26 3 Kimbro refers generally to the statutorily prohibited activity as “adverse employment actions.” 889 F.2d at 881. However, the statute does not use the term “adverse employment action.” Rather, the statute delineates several categories of prohibited activity constituting interference with ERISA rights. Therefore, a plaintiff needs to allege only some form of interference under the statutory language of section 510, rather than an “adverse employment action” akin to employment discrimination jurisprudence under Title VII. 6 1 As to specific intent, speculative allegations are insufficient to establish an 2 employer’s specific intent for interfering with an employee’s rights under ERISA, though a 3 short, plain statement may be sufficient. For example, in Simmons v. Wilcox, an assistant 4 executive director was terminated for her “inability to meet deadlines and unwillingness to 5 follow orders.” 911 F.2d 1077, 1079 (5th Cir. 1990). In ruling in favor of the employer on 6 summary judgment, the Fifth Circuit held the terminated employee failed to demonstrate 7 her former employer’s specific intent to interfere with her ERISA rights by terminating her 8 because her “speculative allegations” that her employer had something to gain were 9 insufficient when the record was “wholly devoid of any evidence supporting an inference 10 of such an intent.” Id. at 1082. However, in Maczko v. Ford Motor Co., the plaintiffs’ 11 statement that their employer reclassified them as “rehires” instead of “transfer[s]” with the 12 intent to deprive them of severance pay in violation of their ERISA rights was sufficient to 13 state a claim and survive a motion to dismiss. No. 08-13819, 2010 WL 5211451, at *5 14 (E.D. Mich. Dec. 16, 2010) (slip copy). 15 Plaintiff’s Complaint does not allege or imply that Wimberly was fined, 16 suspended, expelled, or disciplined in violation of the statute. Plaintiff’s Complaint does 17 allege that his employment with Tutor was terminated, but his discharge is not the alleged 18 action violating section 510. Plaintiff’s allegation is that Tutor’s misrepresentation of his 19 salary led to an adverse benefits determination. 20 Whether this conduct could amount to a prohibited activity is tied to whether the 21 employer acted with specific intent. However, Plaintiff’s Complaint fails to allege Tutor’s 22 specific intent for taking any such action against Wimberly. Plaintiff argues that Tutor 23 under reported Wimberly’s income to lower Wimberly’s benefits and therefore reduce the 24 premiums that it would pay. However, Plaintiff failed to plead this in the Complaint. The 25 Complaint alleges only that Tutor misrepresented Wimberly’s salary and that his benefits 26 determination was adversely affected as a result. Even under Maczko, Plaintiff fails to 7 1 allege that Tutor undertook any actions against Wimberly with the specific intent to 2 deprive him of his ERISA rights. The Court therefore will dismiss Plaintiff’s section 510 3 claim against Tutor for failure to allege Tutor’s specific intent to deprive Wimberly of his 4 ERISA rights. 5 B. Inconsistencies Between the Complaint and its Attached Exhibits 6 Tutor also argues that the factual allegations in Plaintiff’s Complaint are 7 contradicted by the exhibits attached to the Complaint. Plaintiff alleges that Tutor “failed 8 to disclose all documentation and thereby prevented Plaintiff from perfecting his claim.” 9 (Pl.’s Compl. ¶ 43.) Tutor contrasts that allegation with one of the documents Wimberly 10 attached to the Complaint, in which Reliance acknowledged Wimberly’s contention that 11 the Covered Monthly Earnings determination should be based on his total compensation 12 package and not “Regular Hours.” Tutor thus contends that Plaintiff’s own document 13 shows Reliance in fact had access to the information that Tutor allegedly failed to provide 14 and used that information to render its benefit determination. Wimberly responds that 15 Reliance was forced to make its determinations “based on assumption” as a result of 16 Tutor’s failure to supply information because Tutor did not provide certain documents to 17 Wimberly’s counsel until after the administrative record closed before Reliance. The $10,384.64 Tutor filled in on the Reliance claim form is seemingly 18 19 inconsistent with Reliance’s determination of $11,250.03. In fact, the weekly Regular 20 Hours amount accounts for both numbers depending on the arithmetic used. Tutor’s 21 arithmetic is not evident in the record, but the Regular Hours amount totaling $2,596.16 22 per week multiplied by four weeks in a month totals $10,384.64. Reliance’s calculation is 23 to multiply the $2596.16 by 52 weeks, then divide by twelve months, netting the 24 $11,250.03 figure. Thus, to the extent that Plaintiff is claiming this is the relevant 25 discrepancy, Plaintiff has no claim, as Reliance awarded him the higher figure. 26 /// 8 However, the Court understands Plaintiff’s contention to be that Tutor 1 2 misrepresented Wimberly’s salary by not submitting documentation to Reliance that 3 classified Wimberly’s gross income of $3596.11 per week as the appropriate base number 4 for determining his monthly benefit. Plaintiff does not make clear exactly what 5 information Tutor failed to provide to Reliance that Reliance did not already possess in 6 making its benefits determination. Reliance had pay stubs, W-2s, payroll and other 7 records, which showed the difference between the $11,250.03 and $15,583.14 numbers 8 was the various categories of pay other than Wimberly’s “Regular Hours.” Reliance therefore had Wimberly’s salary information via pay stubs and tax 9 10 returns and Plaintiff has failed to identify what information Tutor failed to provide 11 Reliance or how that information would have made a difference in Reliance’s benefit 12 determination. The Complaint’s allegations are contradicted by the attached exhibits, and 13 the Court therefore will dismiss the section 510 claim against Tutor for this additional 14 reason. Because the parties agree the request for attorney’s fees is dependent upon the 15 substantive claim, the Court also will dismiss Wimberly’s claim for attorney’s fees against 16 Tutor. 17 C. Amendment 18 Plaintiff does not request leave to amend the Complaint. At oral argument, 19 Plaintiff failed to explain any way he could amend his Complaint to fix the contradictions 20 between the exhibits and Plaintiff’s Complaint. Given the defects in the Complaint and the 21 futility of amendment, the Court will dismiss with prejudice. 22 /// 23 /// 24 /// 25 /// 26 /// 9 1 2 III. CONCLUSION IT IS THEREFORE ORDERED that Defendant Tutor Perini Corporation’s 3 Motion to Dismiss is hereby GRANTED. Plaintiff Curtis Wimberly’s claims against 4 Defendant Tutor Perini Corporation are hereby dismissed with prejudice. 5 6 DATED: July 14, 2011 7 8 9 _______________________________ PHILIP M. PRO United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 10
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