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Titus v. Operating Engineers' Local 324 Pension Plan

United States District Court, E.D. Michigan, Southern Division

February 27, 2017

Robert E. Titus, Jr., Plaintiff,
v.
Operating Engineers' Local 324 Pension Plan, Defendant.

          ANTHONY P. PATTI UNITED STATES MAGISTRATE JUDGE

          OPINION AND ORDER DENYING PLAINTIFF'S PROCEDURAL CHALLENGE TO THE SCHEDULING ORDER [14] AND GRANTING DEFENDANT'S MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS [19]

          HON. GERSHWIN A. DRAIN UNITED STATES DISTRICT COURT JUDGE.

         I. Introduction

         This is a denial of benefits case under the Employee Retirement Income Security Act (“ERISA”). This action contests the Operating Engineers' Local 324 Pension Fund's (hereinafter “the Pension Plan”) determination suspending Robert Titus' (“Plaintiff”) pension benefits. Plaintiff's Complaint asserts three claims: (1) illegal suspension of benefits [Count I], (2) failure to provide a full and fair review [Count II], and (3) recovery of suspended benefits [Count III]. Pending before the Court are two motions: Plaintiff's Procedural Challenge to the Scheduling Order [14] and Defendant's Motion for Partial Judgment on the Pleadings [19]. The Motions are interrelated and fully briefed. The critical issue in this case is whether Counts I and II of the Complaint fail as a matter of law. The Court finds that Counts I and II fail to state valid claims under ERISA § 502(a)(3). For the following reasons, the Court will DENY Plaintiff's Procedural Challenge to the Scheduling Order [14] and GRANT Defendant's Motion for Partial Judgment on the Pleadings [19].

         II. Facts

         Robert Titus (“Plaintiff” or “Titus”) worked for Connelly Crane, a crane rental company. Dkt. No. 14, p. 8 (Pg. ID 473). Plaintiff operated and maintained construction cranes. Plaintiff became a member of the Operating Engineers' Local 324 Pension Plan (“the Pension Plan”) in August 1978. Dkt. No. 1, p. 3 (Pg. ID 3). The Pension Plan offers a Service Pension for active participants who are at least 55 years old and have at least 30 years of credited service. Id. In February 2014, Plaintiff became eligible for a Service Pension. Id., p. 4 (Pg. ID 4). That same month, Plaintiff explored retiring and pursuing his own sales and consulting company (BJ Crane Consulting). Id. There were risks to starting his own company. Plaintiff knew he might lose his retirement income. Id. Plaintiff sought to embark on running his own company only if he could still receive his pension benefits. Id., p. 5 (Pg. ID 5). According to ERISA and its regulations:

“A right to an accrued benefit derived from employer contributions shall not be treated as forfeitable solely because the plan provides that the payment of benefits is suspended for such period as the employee is employed, subsequent to the commencement of payment of such benefits--
(i) in the case of a plan other than a multiemployer plan, by an employer who maintains the plan under which such benefits were being paid; and
(ii) in the case of a multiemployer plan, in the same industry, in the same trade or craft, and the same geographic area covered by the plan, as when such benefits commenced.
The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subparagraph, including regulations with respect to the meaning of the term ‘employed'.”

29 U.S.C. § 1053 (a)(3)(B).

“Status determination. If a plan provides for benefits suspension, the plan shall adopt a procedure, and so inform employees, whereunder an employee may request, and the plan administrator in a reasonable amount of time will render, a determination of whether specific contemplated employment will be section 203(a)(3)(B) service for purposes of plan provisions concerning suspension of benefits. Requests for status determinations may be considered in accordance with the claims procedure adopted by the plan pursuant to section 503 of the Act and applicable regulations.”

29 C.F.R. § 2530.203-3 (b)(6).

         In February 2014, Plaintiff requested a Status Determination from the Pension Plan regarding whether his proposed new business would result in suspension of his retirement benefits. Dkt. No. 1, p. 6 (Pg. ID 6). Plaintiff spoke with the Pension Plan's Manager, Duane Menter. Dkt. No. 14, p. 9 (Pg. ID 474). Menter informed the Plaintiff that establishing BJ Crane Consulting and working as a sales representative and consultant would not result in the loss of his retirement benefits provided that he was not operating and maintaining cranes (also called bargaining unit work) or paid directly by his former employer. Id., p. 10 (Pg. ID 475). The conversation with Menter was later confirmed in a letter:

“As Mr. Titus described this opportunity to me, he would be establishing a consulting company, recognized by the IRS and with a unique Tax Identification Number and as proprietor of this Consulting Company would be doing work within the construction industry. I explained to him that as long as he was not personally working for an employer obligated to contribute to the Local 324 Pension and that the work he would be performing would not be that which would be covered under a Collective Bargaining Agreement (Bargaining Unit Work) that he would not be in violation of the Pension Fund's rules regarding retirees who return to work.”

Dkt. No. 14-2.

         According to the Plaintiff, the Pension Plan also allowed retirees to perform less than 40 hours per month of bargaining unit work without having their retirement benefits suspended. Dkt. No. 14, p. 10 (Pg. ID 475). Plaintiff relied on his conversation with Mr. Menter, retired, applied for a Service Pension, and opened BJ Crane Consulting. Id., p. 11 (Pg. ID 476). Plaintiff maintains that he did occasional bargaining unit work, but never exceeding 40 hours per month. Id.

         On February 6, 2015, approximately ten months after starting BJ Crane Consulting, the Pension Plan informed the Plaintiff that his retirement benefits were being suspended. Dkt. No. 14-6, p. 2 (Pg. ID 508). According to the Pension Plan, Plaintiff was working “forty (40) or more hours in the same trade or craft in which [he was] employed while participating in the [Pension Plan].” Id.

         On March 16, 2016 Plaintiff filed the present action. Plaintiff alleges that the Pension Plan violated ERISA by suspending his retirement benefits without providing him a valid Status Determination. Dkt. No. 14, p. 11 (Pg. ID 476). Plaintiff's Complaint asserts three claims: (1) illegal suspension of benefits [Count I], (2) failure to provide a full and fair review [Count II], and (3) recovery of suspended benefits [Count III]. Pending before the Court are two motions: Plaintiff's Procedural Challenge to the Scheduling Order, Dkt. No. 14, and Defendant's Motion for Partial Judgment on the Pleadings, Dkt. No. 19. Defendant's Motion for Partial Judgment challenges the sufficiency of Counts I and II. Plaintiff's Motion seeks to have Count I of the Complaint scheduled as a usual civil matter, not just a review of an ERISA denial of benefits. For the sake of efficiency, the Court will take up Defendant's Motion first.

         III. Standard of Review for Judgment on the Pleadings

         Federal Rule of Civil Procedure 12(c) authorizes either Party to move for judgment on the pleadings “[a]fter the pleadings are closed-but early enough not to delay trial.” Fed.R.Civ.P. 12(c). Motions for judgment on the pleadings are analyzed under the same de novo standard as motions to dismiss under Rule 12(b)(6). Warrior Sports, Inc. v. Nat'l Collegiate Athletic Ass'n, 623 F.3d 281, 284 (6th Cir. 2010). “For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment.” Id.

         In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court explained that “a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level[.]” Id. at 555. A plaintiff's factual allegations, while “assumed to be true, must do more than create speculation or suspicion of a legally cognizable cause of action; they must show entitlement to relief.” LULAC v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (emphasis in original) (citing Twombly, 550 U.S. at 555). “To state a valid claim, a complaint must contain either direct or inferential allegations respecting all the material elements to sustain recovery under some viable legal theory.” Bredesen, 500 F.3d at 527 (citing Twombly, 550 U.S. at 562).

         When deciding a 12(c) motion for judgment on the pleadings, as a general rule, matters outside the pleadings may not be considered unless the motion is converted to one for summary judgment under Fed.R.Civ.P. 56. See Weiner v. Klais & Co., 108 F.3d 86, 88 (6th Cir. 1997). The Court may, however, consider “the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case, and exhibits attached to defendant's motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained ...


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