Summary
considering agreement and general release on 12(b) motion where plaintiff's allegations were based on release and it was attached as an exhibit to both supporting memoranda
Summary of this case from Grupp v. Bank of N.Y. Mellon Corp.Opinion
Civil Action No. 03-6573.
April 8, 2004
MEMORANDUM AND ORDER
We presently have before us Defendants' Motion To Dismiss Plaintiffs' Complaint pursuant to Fed.R.Civ.P. 12(b)(6). Plaintiff Stephen Cuchara ("Plaintiff" or "Mr. Cuchara") is a duly qualified disabled person under the Americans With Disabilities Act of 1990, as amended, 42 U.S.C. §§ 12101 et seq., ("ADA"). Defendant Gai-Tronics Corporation ("Gai-Tronics") manufactures telecommunications products, and is a wholly-owned subsidiary and affiliate of Defendant Hubbell Incorporated ("Hubbell"), an industrial technologies corporation. Plaintiff was employed by Defendants as a Certified Public Accountant on or about January 7, 2002, and was subsequently terminated on December 10, 2002.
Plaintiff claims that he was unlawfully discriminated against and retaliated against during the course of his employment, in violation of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000(e) et seq., ("Title VII"), the ADA, and the Pennsylvania Human Relations Act, 43 P.S. § 955 et seq., ("PHRA"). He further maintains that Defendants violated the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., ("ERISA"). In addition, Plaintiff Ronaleen Cuchara ("Mrs. Cuchara") asserts a claim for loss of consortium. In response, Defendants' Motion to Dismiss contends, inter alia, that all claims are barred by an Agreement and General Release ("Agreement" or "Release") that Plaintiff executed for consideration at the time he was terminated from employment. Plaintiff, in turn, avers that said Release was the product of duress and fraudulent inducement, and is void as involuntarily executed.
For the reasons expressed below, this Court finds that Plaintiff executed the Release for adequate consideration knowingly and willfully and, therefore, the Release is valid and enforceable barring all federal and state claims that accrued prior to its execution. With respect to Plaintiffs' accusation that Defendants breached the Agreement, we find that Plaintiffs are unable to adduce any set of facts that would afford them relief on this ground. Accordingly, Defendants' Motion To Dismiss is granted.
II. Background
We present the relevant facts as Plaintiffs allege them in the Complaint, and in part as set forth in the additional matter both parties submitted for this Court's review.
Plaintiff was diagnosed with Guillian Barre Syndrome ("GBS"), a neuromuscular disorder, in April or May of 1971. (Pls.' Compl. ¶ 14.) This disorder causes Plaintiff to experience, inter alia, abnormal sensations (numbness, tingling, electrical type vibrations), muscle pain, and long term recurrence of fatigue and exhaustion caused by his immune system attacking the peripheral and cranial nerves. (Id.) Defendants hired Plaintiff as a Certified Public Accountant ("CPA") on or about January 7, 2002, and became aware of Plaintiff's disability via a pre-employment physical examination on or about January 11, 2002. (Id. at ¶¶ 17-18.) Despite their knowledge of Plaintiff's disability and its ramifications, Defendants forced Plaintiff to work long hours and perform the duties of a supervisor, or senior CPA. (Id. at ¶¶ 20-21.) Because these work conditions exacerbated Plaintiff's disability, Plaintiff complained to Jim Popely, Defendants' Super Controller, Melinda Andreyo, Gai-Tronics' Assistant Controller, and Darrin Wegman, Division Controller, in April 2002. (Id. at ¶¶ 21-22.) Defendants, however, knowingly disregarded the impact Plaintiff's work conditions exerted on his ailment and applied continual pressure on Plaintiff to perform an inordinate amount of work. (Id. at ¶¶ 24.) Indeed, Plaintiff's request for reasonable accommodations were ignored, and Defendants failed to ascertain whether any accommodations could be created. (Id. at ¶¶ 27.) Plaintiff again complained of his working conditions and requested reasonable accommodations on several occasions between July 2002 and December 2002, when Plaintiff was terminated. (Id. at ¶¶ 28-29.) These requests, along with a letter sent to Defendants from Plaintiff's doctor on August 9, 2002, conveying same, remained unaddressed. (Id. at ¶¶ 30-33, 35-36.) As a result, Plaintiff's health deteriorated. (Id. at ¶ 36.) Defendants retaliated against Plaintiff for the latter's complaints and disclosures through intimidation tactics, (Id. at ¶ 37) such as failing to oblige Plaintiff's request for a parking spot that was closer to the building and not on an angle, (Id. at ¶ 39) instead providing him with a space that had a sloping angle and remarking that he should not park immediately in front of the building, (Id. at ¶¶ 40, 42) and moving Plaintiff from an office to a cubicle, despite being informed by Plaintiff that the latter environment exacerbated his disability. (Id. at ¶¶ 43-44.) Defendants, however, made reasonable accommodations for other employees. (Id. at ¶¶ 45-49.)
In addition to suffering from GBS, Plaintiff is further afflicted with Central Retinal Vein Occlusion. (Id. at ¶ 15.) As a consequence of a stroke in his right eye that occurred between November 1 and December 6, 2002, Plaintiff is legally blind in that eye. (Id.) Surgery was performed on Plaintiff's right eye on January 22, 2002. (Id. at ¶ 65.)
Jim Popley informed Plaintiff of Defendants' decision to terminate him via email on December 10, 2002. (Id. at ¶ 67.) Plaintiff was verbally offered a severance package consisting of the following: (1) four weeks of salary continuation; (2) two weeks of vacation pay; (3) paid medical and dental insurance through January 31, 2003; and (4) continuation of COBRA benefits for seventeen months following January 2003 at the employee's expense. (Id. at ¶ 71.) Tom Warneka, Vice President of Human Resources, stated to Plaintiff that if Plaintiff "did not accept the severance package and sign the [severance] agreement, Defendants would move for immediate termination, and Plaintiff Cuchara would receive no consideration." (Id. at ¶ 72.)
In addition, Tom Warneka sent Plaintiff a letter dated December 10, 2002, and enclosed with it an Agreement and General Release. The December 10, 2002 correspondence states in pertinent part:
This letter confirms that we delivered to you the enclosed Agreement and General Release. You have until January 3, 2003 to consider this Agreement and General Release, in which you waive important rights, including those under the Age Discrimination in Employment Act of 1967. To this end, we advise you to consult with an attorney of your choosing prior to executing this Agreement and General Release.
(Letter from Warneka to Cuchara of 12/10/02, at 1.) The letter further outlines the consideration Defendants were prepared to furnish Plaintiff in exchange for Plaintiff's execution of the Release. (Id.) In addition to listing the consideration described above, the Agreement and General Release explains that the consideration offered would only be tendered in exchange for execution of the Agreement and General Release:
Paragraph 3 of the Agreement and General Release states:
Consideration. In consideration for signing this Agreement and General Release and compliance with the promises made herein, Employer agrees:
a. to pay Employee four (4) week's of salary at his normal rate of pay for each year of service, less lawful deductions, within ten (10) business days after receiving the letter from Employee in the form attached hereto as Exhibit "A";
b. to pay to the Employee two (2) week's of vacation at his normal rate of pay, less lawful deduction, within ten (10) business days after receiving the letter from Employee in the form attached hereto as Exhibit "A";
c. if Employee elects to continue medical and dental coverage under the 2002 Severance Program in accordance with the continuation requirements of COBRA, the Employee shall pay for the Employee cost of said coverage beginning on the last day of employment and ending on January 31, 2003. Thereafter, Employee shall be entitled to elect to continue such COBRA coverage for the remainder of the COBRA period, at his own expense.
(Pls.' Ex. C.)
Employee understands and agrees that he would not receive the monies and/or benefits specified in paragraph "3" above except for his execution of this Agreement and General Release and the fulfillment of the promises contained herein.
(Pls.' Ex. C.) Plaintiff executed the release on December 31, 2002, twenty-one days after receiving the December 10, 2002 correspondence. (Id.) In doing so, Plaintiff acknowledged that he had been advised that he had at least twenty-one days to consider the Agreement, that he had been advised in writing to consult with an attorney prior to executing the Release, and that he knowingly and voluntarily executed the Agreement and General Release. (Id.) These advisements appear in full caps immediately preceding Plaintiff's signature. Significantly, by signing the Agreement, Plaintiff further acknowledged that:
Having elected to execute this Agreement and General Release, to fulfill the promises set forth herein and to receive thereby the sums and benefits set forth in paragraph "3" above, Employee freely and knowingly, and after due consideration, enters into this Agreement and General Release intending to waive, settle and release all claims he has or might have against employer.
(Id.) Specifically, the Agreement and General Release discharges Defendants "of and from any and all claims, known and unknown, which the employee has or may have against Employer as of the date of execution of this Agreement and General Release" including, inter alia, claims arising under Title VII, ERISA, the ADA, the PHRA, the Age Discrimination in Employment Act of 1967, as amended, the Civil Rights Act of 1991, "[a]ny other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance," and "[a]ny public policy, contract, tort or common law." (Id.)
The Agreement and General Release provides Plaintiff an opportunity to revoke in writing the Release for a period of seven days following the day of execution. (Id.) After seven days had elapsed, Plaintiff executed a second document admitting that he executed the Release on December 31, 2002, that he was advised by Hubbell in writing to consult with an attorney prior to that execution, that more than seven days have passed since executing the Release, and that he had at no time revoked his acceptance or execution of the Release. Furthermore, Plaintiff reaffirmed his acceptance of the Agreement and General Release. (Defs.' Ex. C.)
Plaintiffs contend that Defendants breached the Agreement and General Release by failing to provide the consideration promised in the Agreement. (Pls.' Compl. ¶ 83.) Specifically, Plaintiffs claim that Defendants improperly denied Plaintiff Cuchara COBRA benefits in violation of Paragraph 3, section c of the Agreement and General Release, (Id. at ¶¶ 93-94) which provides that an Employee who "elects to continue medical and dental coverage under the 2002 Severance program in accordance with the continuation requirements of COBRA" shall "pay for the Employee cost of said coverage beginning on the last day of employment and ending on January 31, 2003. Thereafter, Employee shall be entitled to elect to continue such COBRA coverage for the remainder of the COBRA period, at his own expense." (Pls.' Ex. C.) Having elected Long-Term Disability Coverage and Life Insurance Coverage, Plaintiff did not possess any medical or dental plan coverage at the time he signed the Agreement. (Pls.' Compl. ¶ 77.) In an attempt to receive benefits for his Central Retinal Vein Occlusion, Plaintiff requested Long Term Disability Claim and Conversion forms in December 2002. (Id. at ¶ 78.) Despite repeated requests, Defendants never sent Long Term Disability Claim and Conversion applications. (Id. at ¶ 81.) Michele Hart, Defendants' Human Resources Assistant, notified Plaintiff on December 23, 2002 that he could not convert his disability group policy. (Id. at ¶¶ 78, 88.) Accordingly, Plaintiffs allege that Defendants' denial of disability benefits constitutes a breach of Agreement through failure to provide promised consideration. (Id. at ¶¶ 93-96.)
Plaintiffs instituted the instant lawsuit on December 4, 2003. As noted above, Counts I-V of Plaintiffs' Complaint sets forth claims under Title VII, the ADA, the PHRA, and ERISA. Count VI of the Complaint, entitled "Promissory Estoppel," alleges that Defendants violated the Agreement and General Release by denying Plaintiff disability benefits and by failing to comply with COBRA. In Count VII, Plaintiffs allege that Stephen Cuchara was fraudulently induced to believe that if he did not involuntarily execute the said Agreement and General Release, he would not receive any of the specified consideration. Count VIII of the Complaint asserts loss of consortium on behalf of Mrs. Cuchara.
III. Discussion
A. Jurisdiction
We have original, subject matter jurisdiction over claims arising under Title VII, ADA, and ERISA under 28 U.S.C. § 1331. We may consider Plaintiffs' state law claims by exercising our supplemental jurisdiction under 28 U.S.C. § 1367(a).
B. Standard of Review
A motion to dismiss, pursuant to Fed.R.Civ.P. 12(b)(6), tests the legal sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Accordingly, an action will be dismissed under 12(b)(6) only when the plaintiff has failed to state a claim upon which relief can be granted. The criteria for deciding whether a plaintiff has met this standard have been clearly established. "In reviewing a motion to dismiss a complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6), all allegations in the complaint and all reasonable inferences that can be drawn therefrom must be accepted as true and viewed in the light most favorable to the non-moving party." Sturm v. Clark, 835 F.2d 1009, 1011 (3d Cir. 1987). This Court need not credit, however, any conclusory allegations of law, unsubstantiated conclusions, and/or unwarranted factual inferences. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). In addition, a complaint should be dismissed only if it appears to a legal certainty that a plaintiff could prove no set of facts which would entitle him or her to relief. D.P. Enterprises v. Bucks County Cmty. Coll., 725 F.2d 943, 944 (3d Cir. 1984).
Generally, a court may not take into account materials extraneous to the pleadings when considering a motion to dismiss.Angelastro v. Prudential-Bache Sec., Inc., 764 F.2d 939, 944 (3d Cir. 1985). If, however a document is "integral to or explicitly relied upon in the complaint," it may be considered "without converting the motion [to dismiss] into one for summary judgment." Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996), superceded by statute on other grounds, as noted in Greebel v. FTP Software, Inc., 194 F.3d 185, 197 (1st Cir. 1999); see also In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (finding district court's reliance on document provided by defendants in ruling on motion to dismiss appropriate because plaintiff's complaint was based on that document, even though complaint did not explicitly refer or cite to it); In re Donald J. Trump Casino Sec. Litig., 7 F.3d 357, 368 n. 9 (3d Cir. 1993) ("a court may consider an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document") (quoting Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1996)).
Plaintiffs' allegations, as set forth in the Complaint, are heavily based upon the Agreement and General Release, and the December 10, 2002 correspondence from Thomas Warneka to Plaintiff. The Agreement is attached as an exhibit to both Plaintiffs' and Defendants' supporting Memoranda, and the December 10, 2002 correspondence is attached as an exhibit to Defendants' Brief. The authenticity of these documents is not in dispute. Thus, it is proper for this Court to consider these documents in adjudicating Defendants' Motion to Dismiss.
C. The Agreement and General Release is Valid and Enforceable
1. Waiver of claims arising under federal laws.
Defendants' Motion To Dismiss argues that Plaintiff Cuchara's execution of the Agreement and General Release on December 31, 2002 bars his right to raise all of the claims set forth in the Complaint, including those claims arising under Title VII, the ADA, the PHRA, ERISA, and Pennsylvania state law. (Defs.' Br. at 8-11.)
An employee may validly waive claims pursuant to a general release so long as the waiver is executed "`knowingly and willfully.'" Coventry v. U.S. Steel Corp., 856 F.2d 514, 522 (3d Cir. 1988) (quoting Alexander v. Gardner-Denver Co., 515 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974)). To ascertain whether a general release was made knowingly and voluntarily, the Third Circuit endorses a totality of the circumstances test. Id. at 524. This test examines the circumstances and conditions under which the release was executed, and includes, but is not limited to, a review of the following considerations: (1) the clarity and specificity of the release language; (2) the plaintiff's education and business experience; (3) the amount of time the plaintiff had for deliberation of the release before signing it; (4) whether plaintiff knew or should have known of her rights upon execution of the release before signing it; (5) whether plaintiff was encouraged to seek, or in fact received, the benefit of counsel; (6) whether there was opportunity for negotiation of the terms of the agreement; (7) whether the consideration given in exchange for the waiver and accepted by the employee exceeds the benefits to which the employee was already entitled to by law; (8) the absence of fraud or undue influence. Id. at 522-23; Cirillo v. Arco Chem. Co., 862 F.2d 448, 451 (3d Cir. 1988.) It may be appropriate to undertake this inquiry on a motion to dismiss.See, e.g., Town of Newton v. Rumery, 480 U.S. 386, 107 S.Ct. 1187, 94 L.Ed.2d 405 (1987). A review of these factors in the case sub judice leads the court to find that the Agreement and General Release signed by Plaintiff was voluntary executed, and thereby valid and enforceable.
First, the language of the release is clear and unambiguous, and effectively imparts to the layperson the consequences of execution. In a separate paragraph labeled "General Release of Claims," it provides that Mr. Cuchara "knowingly and voluntarily releases and forever discharges Employer, . . . of and from any and all claims, known and unknown, which the Employee has or may have against Employer as of the date of execution of this Agreement and General Release, . . ." The Agreement continues on to specifically reference in a bulleted listing the very claims at issue in this case that Plaintiff foregoes by signing the Agreement. Furthermore, contrary to Plaintiffs' characterization, the Release indicates in a very straightforward fashion the consideration Plaintiff Cuchara receives in exchange for signing the Release, and succinctly states in a separate paragraph that such consideration will not be tendered by Employer absent Employee's execution of the Agreement. The revocation provision of the Release, contained in a separate paragraph entitled "Revocation" states in a direct manner that "Employee may revoke this Agreement and General Release for a period of seven (7) calendar days following the day he executes this Agreement and General Release." The Agreement is adequately organized and comprehensible.
Second, Mr. Cuchara is an educated professional. Indeed, when confronted with his termination, Mr. Cuchara pointed out to Defendants that he was Defendants' only employed Certified Public Accountant with an active license, and that his termination was unjustified. (Pls.' Compl. ¶ 70.) Plaintiffs do not suggest that Mr. Cuchara was incapable of understanding the language of the General Release.
Third, the Agreement and General Release states in large caps immediately before the signature lines that "Employee has been advised that he has at least twenty-one (21) calendar days to consider this agreement . . ." Plaintiff was furnished the Release on December 10, 2002. He executed the Release on December 31, 2002, a full twenty-one days after receiving it. Plaintiffs do not suggest that Defendants rushed Mr. Cuchara into rendering a decision. Rather, Plaintiffs argue that Mr. Cuchara was too shocked and blind-sided by his termination to focus on the Release, which was provided to him at the time of his termination. This argument is unpersuasive, because the timeframe that Mr. Cuchara was given to render a decision on the Agreement was more than enough to overcome the "shock" of being terminated. In addition, Plaintiff reaffirmed the Release seven days following its execution. That Mr. Cuchara may have felt "threatened" because he was informed by Defendants personally and by the Agreement itself that he would not receive the specified consideration but for his execution of the release does not detract from the fact that he was given adequate time to carefully consider and study the Agreement.
Fourth, Mr. Cuchara was expressly afforded the opportunity to consult with counsel, and was encouraged to do so. The December 10, 2002 correspondence sent from Thomas Warneka advises Plaintiff that he waives certain important rights by signing the enclosed Agreement, and strongly urges Plaintiff to consult with counsel before rendering a decision: "You have until January 3, 2003 to consider this Agreement and General Release, in which you waive important rights, including those under the Age Discrimination in Employment Act of 1967. To this end, we advise you to consult with an attorney of your choosing prior to executing this Agreement and General Release." Equally clear is the Agreement and General Release itself, which states in large caps immediately preceding Plaintiff's signature that "Employee . . . has been advised in writing to consult with an attorney prior to execution of this Agreement and General Release." Mr. Cuchara was thus unambiguously advised to consult with an attorney on two separate documents. That Plaintiff chose not to speak with counsel before executing the Agreement is of no moment, given the express statements advising him to do so. See Ponzoni v. Kraft General Foods, Inc., 774 F.Supp. 299, 312 (D.N.J. 1991), aff'd 968 f.2d 14 (3d Cir. 1992).
Next, the consideration tendered to Mr. Cuchara in exchange for his execution of the release exceeded that to which he was entitled to as a matter of law. Taking as true for purposes of this discussion Mr. Cuchara's assertion that he was already entitled to receive two weeks worth of vacation pay and disability coverage and COBRA benefits, Mr. Cuchara nonetheless also received four weeks worth of salary. Plaintiffs do not allege that Mr. Cuchara was already authorized to receive this payment under applicable law or Defendants' company policy. In other words, as a result of executing the Agreement, Mr. Cuchara received "something of value . . . to which the creditor had no previous right." Maynard v. Durham S. Ry., 365 U.S. 160, 163, 81 S.Ct. 561, 5 L.Ed.2d 486 (1961) (quoting Burns v. N. Pac. Ry., 134 F.2d 766, 770 (8th Cir. 1943)).
Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C.A. § 1161 et seq.
With respect to the issue of whether there was an opportunity for negotiations, Plaintiffs note that no negotiations of the terms of the Agreement ever took place. Plaintiffs further argue that the option presented to Mr. Cuchara by Defendants — to either accept the Agreement or forego the consideration — was oppressive and illustrates that Plaintiff's decision to sign the release was not the product of negotiation. That Plaintiff was told that he would receive the specified consideration only in exchange for execution of the Release does not, however, support the contention that there was no opportunity to negotiate, or that the environment surrounding the Agreement's execution was oppressive. Although the December 10, 2002 correspondence invites Plaintiff to call Thomas Warneka if he had any questions, Plaintiff does not allege that he broached the possibility of negotiation and was rebuffed, or that Defendants indicated that the terms of the Release were "take it or leave it" or "non-negotiable." Plaintiffs allegations, taken in the light most favorable to Mr. Cuchara, do not give rise to a reasonable inference that there was no opportunity to negotiate.
Finally, Plaintiffs allege that Mr. Cuchara signed the Agreement under duress and by coercion. Taking the allegations of the Complaint as true and drawing all reasonable inferences in favor of Plaintiffs, we conclude that Plaintiffs cannot prove any set of facts that would make out a claim of duress or coercion. The Pennsylvania Supreme Court has defined duress in the context of contractual disputes as "that degree of restraint or danger, either actually inflicted or threatened and impending, which is sufficient in severity or apprehension to overcome the mind of a person of ordinary firmness. . . . Moreover, [without] threats of actual bodily harm there can be no duress where the contracting party [can] consult with counsel." Carrier v. William Penn Broad. Co., 233 A.2d 519, 521 (1967) (quoting Smith v. Lenchner, 205 A.2d 626, 628 (Pa.Super.Ct. 1964)); see also Three Rivers Motor Co. v. Ford Motor Co., 522 F.2d 885, 893 (3d Cir. 1975). As explained above, Plaintiff was encouraged, advised, and afforded ample opportunity to consult with counsel. The Complaint fails to allege that any threats of actual physical harm were made. Thus, as a matter of law, Plaintiff cannot establish that he executed the Agreement under conditions of duress.
Assessing the totality of the circumstances using the factors outlined in Coventry and Cirillo, this Court finds that Mr. Cuchara knowingly, willingly, and voluntarily executed the General Release, and has thus waived his right to assert any of his federal claims against Defendants.
2. Waiver of claims arising under state laws.
Defendants assert that all Plaintiffs' claims should be dismissed pursuant to Mr. Cuchara's execution of the Agreement and General Release, including those claims arising under state laws. As noted above, the Release provides that Mr. Cuchara release Defendants from any claims arising out of "the Pennsylvania Human Relations Act, as amended" as well as "[a]ny other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance."
Pennsylvania state law governs the validity of any purported release of Plaintiffs' state law claims. Pennsylvania construes written releases "according to the rules governing the construction of contracts generally." Sparler v. Fireman's Ins. Co., 521 A.2d 433, 434 (Pa.Super.Ct. 1987). In rejecting application of ordinary contract principles to waiver of claims arising under federal anti-discrimination laws, the Third Circuit in Coventry recognized that the test for waiver under contract principles was less rigorous than the totality of the circumstances test applicable to federal anti-discrimination laws. 856 F.2d at 522. Consequently, a release sufficient to waive federal claims necessarily waives state claims under contract law. See, e.g., Mullen v. New Jersey Steel Corp., 733 F.Supp. 1534, 1548 (D.N.J. 1990). Because the Agreement and General Release was sufficient to constitute a waiver of Plaintiff's federal claims, it is valid to effectuate waiver of Plaintiff's state claims.
We note that Mrs. Cuchara's loss of consortium claim is derivative to Mr. Cuchara's claims and is thus waived as well.See Riesberg v. Pittsburgh Lake Erie R.R., 180 A.2d 575 (Pa. 1962).
Accordingly, Defendants' Motion To Dismiss Plaintiffs' Complaint is granted.
C. Fraudulent Inducement
Plaintiffs' Complaint asserts a claim for fraudulent inducement. The law in Pennsylvania is clear: "once fraudulent inducement is alleged the party must either return consideration or abandon the claim." Allied Erecting Dismantling Co. v. USX Corp., 249 F.3d 191, 198 (3d Cir. 2001) (citing Dempsey v. Associated Aviation Underwriters, 141 F.R.D. 248 (E.D.Pa. 1992),aff'd 977 F.2d 567 (3d Cir. 1992); Hess v. Evans, 431 A.2d 347, 348 (Pa.Super.Ct. 1981)). Taking as true for purposes of this discussion Mr. Cuchara's assertion that he was already entitled to receive two weeks worth of vacation pay and disability coverage and COBRA benefits, Mr. Cuchara nonetheless also received four weeks worth of salary that has not been returned to Defendants. Thus, Plaintiffs' fraudulent inducement claim must be dismissed. Alternatively, Plaintiffs urge us to apply the exception to the general rule announced inGreenan v. Ernst, 143 A.2d 32 (Pa. 1957). The Pennsylvania Supreme Court permitted a party in an "insecure financial condition" to retain the consideration while pursuing a claim for fraudulent inducement. We decline to apply that exception in this case because Greenan exception is extremely narrow, and merely provides a "rare exception in an equitable proceeding where the refund of consideration was merely a matter of accounting."Allied, 249 F.3d at 200. Such is not the case confronting this Court. Accordingly, Plaintiffs' fraudulent inducement claim must be dismissed.
D. Breach
Plaintiffs argue that this Court should deny Defendants' Motion To Dismiss and permit Plaintiffs to assert their claims despite Plaintiff's execution of the Agreement and General Release because Defendants allegedly breached the Agreement and General Release, as well as the promises made on December 10, 2002 by:
denying and intentionally stopping Plaintiff Cuchara from obtaining any disability benefits. The Defendants refused to furnish Plaintiff with the disability documents (for which he was legally entitled), Plaintiff repeatedly requested, including LTD and COBRA conversion applications. Defendants failed to inform Plaintiff of his rights under the employee benefits plan, they failed to provide Plaintiff Cuchara with a full and fair review of his disability claim, and they were non-compliant with COBRA. It is clear that the Defendants vitiated the Release and therefore, Plaintiff has not waived any of his claims.
(Pls.' Br. at 18.) More specifically, Plaintiffs allege that Defendants' actions violated Paragraph 3(c) of the Release, which, as stated above, provides that:
if Employee elects to continue medical and dental coverage under the 2002 Severance Program in accordance with the continuation requirements of COBRA, the Employee shall pay for the Employee cost of said coverage beginning on the last day of employment and ending on January 31, 2003. Thereafter, Employee shall be entitled to elect to continue such COBRA coverage for the remainder of the COBRA period, at his own expense.
(Pls.' Ex. C.)
Plaintiffs, however, cannot adduce any set of facts to support a claim that Defendants breached this provision of the Agreement and General Release for the simple reasons that Mr. Cuchara had no medical or dental coverage to continue and, as a matter of law, Mr. Cuchara's Long Term Disability Plan is not covered under COBRA. Plaintiff admits that he did not have medical or dental insurance benefits, but rather elected to receive Long Term Disability coverage. (Pls.' Compl. ¶ 77.) Paragraph 3, section c of the Agreement only applies if the employee elects to continue "medical or dental coverage." Plaintiff did not belong to Defendants' group health plan, but instead elected to participate in a Long Term Disability Plan. An employee cannot collect COBRA benefits pursuant to participation in a Long Term Disability plan because such a plan is not considered a "group health plan" under COBRA. Austell v. Raymond James Assocs. Inc., 120 F.3d 32 (4th Cir. 1997); Lauder v. First Unum Life Ins. Co., 55 F.Supp.2d 269, 274 (S.D.N.Y. 1999). Accordingly, Plaintiffs' allegation that Defendants' breached the Agreement and General Release by failing to grant disability benefits or furnish COBRA conversion forms must fail as a matter of law. Therefore, Plaintiffs cannot be permitted to press their waived claims on this basis.