Opinion
Case No. 4:02-CV-92, Consolidated With, Case No. 4:02-CV-98
February 10, 2003
MEMORANDUM OPINION AND ORDER
Defendants Spectrum Restaurant Group, Inc. ("SRG") and the Group Life and Supplemental Life Plan for Employees of Spectrum Restaurant Group (the "Plan") have filed a Partial Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) (Docket No. 26). Having considered the parties' submissions and the applicable law, the Court finds that Defendants' Partial Motion to Dismiss should be GRANTED IN PART and DENIED IN PART.
BACKGROUND
This case involves Plaintiff Cynthia Blum's ("Mrs. Blum") attempt to recover proceeds under a supplemental life insurance policy that Mrs. Blum claims was in effect when her late husband Robert F. Blum ("Mr. Blum") died. The life insurance was provided through an ERISA plan that was sponsored and administered by SRG, which owned and controlled Grandy's, Inc., Mr. Blum's former employer. Mrs. Blum alleges that the Plan provided Mr. Blum with $50,000.00 in basic life insurance coverage and that Mr. Blum elected additional, supplemental life insurance available under the Plan in the amount of $1,000,000.00. SRG and the Plan contend that Mrs. Blum is only entitled to $50,000.00 in basic life insurance and $200,000.00 in supplemental life insurance.
In her Complaint, Plaintiff asserts three claims against SRG and the Plan: (1) a claim for the plan benefits under ERISA section 502(a)(1)(B); 29 U.S.C. § 1132(a)(1)(B); (2) a claim for breach of fiduciary duties under ERISA section 502(a)(2), 29 U.S.C. § 1132(a)(2); and (3) a claim for breach of fiduciary duties under ERISA section 502(a)(3), 29 U.S.C. § 1132(a)(3). SRG and the Plan have filed the instant motion seeking dismissal of all three claims. The Court will discuss each of these claims in turn.
STANDARD FOR RULE 12(b)(6) MOTION TO DISMISS
Rule 12(b)6) allows for dismissal if a plaintiff fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). On a motion under Rule 12(b)(6), the court must decide whether the facts alleged, if true, would entitle the plaintiff to some remedy. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Dismissal can be based either on a lack of cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Guibeaux v. 3927 Foundation, Inc., 177 F.R.D. 387, 390 (E.D.Tex. 1998).
In determining whether a dismissal is warranted pursuant to Rule 12(b)(6), the Court accepts as true all allegations contained in the plaintiff's complaint. Kaiser Aluminum Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982). In addition, all reasonable inferences are to be drawn in favor of the plaintiff's claims. Id. A plaintiff, however, must allege specific facts, not conclusory allegations. Elliott v. Foufas, 867 F.2d 877, 881 (5th Cir. 1989). A motion to dismiss is viewed with disfavor and is rarely granted. Kaiser Aluminum, 677 F.2d at 1050 (quoting 5A Charles A. Wright Arthur R. Miller, Federal Practice and Procedure § 1357 (1969)).
ERISA SECTION 502(a)(2)
SRG and the Plan first contend that Mrs. Blum cannot assert a breach of fiduciary duty claim under ERISA section 502(a)(2). The Court agrees. ERISA section 502(a)(2) authorizes suits "by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title." Remedies for breaches of fiduciary duties imposed by 29 U.S.C. § 1109 are owed to a plan and not to individual beneficiaries. 29 U.S.C. § 1109 (making fiduciaries "personally liable to make good to such plan any losses to the plan resulting from" breaches of fiduciary duties). Accordingly, section 502(a)(2) authorizes recovery by a plan only, not recovery by an individual. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140-44 (1985); Tolson v. Avondale Indus., Inc., 141 F.3d 604, 610 (5th Cir. 1998). It is evident from Plaintiff's Complaint that she is seeking recovery individually. Consequently, the Court finds that Plaintiff's claim for breach of fiduciary duty under ERISA section 502(a)(2) should be dismissed.
ERISA SECTION 502(a)(3)
SRG and the Plan also contend that Mrs. Blum cannot assert a breach of fiduciary duty claim under ERISA section 502(a)(3). The Court agrees. ERISA section 502(a)(3) authorizes suits by a participant, beneficiary or fiduciary "to obtain other appropriate equitable relief." It is well established that a plaintiff cannot bring a private action for breach of fiduciary duty under the residual, catch-all provision of section 502(a)(3) when the civil enforcement provisions of ERISA provide a possible remedy. See, e.g., Bratton v. Nat'l Union Fire Ins. Co., 215 F.3d 516, 526 (5th Cir. 2000); Rhorer v. Raytheon Engineers Contr., Inc., 181 F.3d 634, 639 (5th Cir. 1999). "It is settled law in this circuit that a potential beneficiary may not sue for breach of fiduciary duty if he has a pending claim under section [502(a)(1)(B)] for benefits allegedly owed." See Metropolitan Life Ins. Co. v. Palmer, 2002 WL 31742928, at *3 (E.D.Tex. 2002). Because Plaintiff is currently pursuing a claim against the relevant plans for benefits, under the law of this circuit, she cannot simultaneously sue SRG and the Plan for breach of fiduciary duty.
Plaintiff asserts that she seeks to hold SRG and the Plan accountable for its wrongful denial of benefits and the
misrepresentations and other breaches of fiduciary duties it made in connection with Mr. Blum's life insurance benefits. If the Court finds that, as related to Defendant SRG, [section 502(a)(1)(B)] only allows Plaintiff to recover for denial of and not Defendant SRG's misrepresentations and other breaches of fiduciary duties-the Court should allow Plaintiff to proceed to trial against Defendant SRG for those misrepresentations and other breaches of fiduciary duties under ERISA's "safety net"-[section 502(a)(3)].
However, Plaintiff's argument is misplaced. If Plaintiff asserts a claim for benefits against the Plan under ERISA section 502(a)(1)(B), she cannot maintain a claim for breach of fiduciary duty, regardless of whether the claim for benefits is ultimately successful or not. See Bratton, 215 F.3d at 526 (holding no breach of fiduciary claim available even where section 502(a)(1)(B) claim failed); Rhorer, 181 F.3d at 639 ("because [section 502(a)(1)(B)] affords [Plaintiff] an avenue for legal redress, she may not simultaneously maintain her claim for breach of fiduciary duty"). Accordingly, even if Plaintiff's claim under section 502(a)(1)(B) is unsuccessful, that would not make her alternative claim for equitable relief viable. Therefore, "equitable relief" under section 502(a)(3) is not appropriate.
ERISA SECTION 502(a)(1)(B)
SRG and the Plan also contend that Mrs. Blum cannot assert a claim under ERISA section 502(a)(1)(B). The Court notes that on October 30, 2002, SRG and the Plan filed a Motion for Summary Judgment addressing this issue (Docket No. 53). However, after filing the Motion for Summary Judgment, the Court issued an Amended Docket Control Order (Docket No. 72) and Amended Discovery Order (Docket No. 73). In light of the Court's Amended Docket Control Order and Amended Discovery Order, the Court has denied as moot Defendants' Motion for Summary Judgment. Accordingly, the Court finds that Defendants' Partial Motion to Dismiss as to Plaintiff's claim under ERISA section 502(a)(1)(B) should be denied without prejudice to reasserting grounds contained therein in a newly filed motion for summary judgment.
CONCLUSION
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART Defendants' Partial Motion to Dismiss.
It therefore ORDERED that Defendants' Partial Motion to Dismiss is GRANTED as to Plaintiff's breach of fiduciary duty claims under ERISA sections 502(a)(2) and 502(a)(3) and these claims are hereby DISMISSED WITH PREJUDICE.
It is further ORDERED that the remainder of Defendants' Partial Motion to Dismiss is DENIED WITHOUT PREJUDICE to reasserting grounds contained therein in a motion for summary judgment.
IT IS SO ORDERED.