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Clark v. Ford Motor Co.

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

December 26, 2019

ANDRE L. CLARK, Plaintiff
v.
FORD MOTOR COMPANY and FORD MOTOR COMPANY GENERAL RETIREMENT PLAN, Defendants.

          OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' PARTIAL MOTION TO DISMISS PURSUANT TO FED. R. CIV., P. 12(B)(6) (ECF NO. 15)

          PAUL D. BORMAN UNITED STATES DISTRICT JUDGE.

         In this action, Plaintiff Andre L. Clark asserts claims against his former employer, Ford Motor Company ("Ford"), and the Ford Motor Company Genera! Retirement Plan ("the Plan"), under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq, for wrongful denial of benefits, equitable estoppel, breach of fiduciary duty, and interference with benefits. Plaintiff claims that Ford wrongfully refused to credit him with contributions to the Ford Contributory Service Fund ("CSF") from 2004 to 2017, resulting in reduced benefits under the Plan, and that Defendants' responses to his demands for these additional contributions, and his purported reliance on them, discouraged him from taking advantage of various separation programs and packages offered by Ford. Defendants now move to partially dismiss Plaintiffs First Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(6), arguing that Plaintiffs breach of fiduciary duty claim under ERISA Section 502(a)(2) (Count II) and his ERISA Section 502(a)(3) claim for equitable estoppel (in Count 171) should be dismissed, and that his ERISA Section 502(a)(3) claim for breach of fiduciary duty (Count III) should be partially dismissed. This matter is fully briefed and the Court held a hearing on December 19, 2019, For the reasons that follow, Defendants' motion is GRANTED IN PART and DENIED IN PART.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. Plaintiffs First Amended Complaint[1]

         1. Plaintiffs Employment with Ford and Participation in the Plan

         Plaintiff is a former Ford Motor Company ("Ford") employee and a Ford Motor Company General Retirement Plan (the "Plan") participant, having worked for Ford from December 1986 to May 2019. (EOF No. 14, First Amended Complaint ("FAC") ¶¶ 7, 17, 1.29-31.) At the beginning of Plaintiff s employment, he elected to participate in the Contributory Service Fund ("CSF"), a fund within the Plan, which would deduct 1.5% from each of Plaintiffs paychecks and place those funds into the CSF on Plaintiffs behalf as an investment for his retirement. (Id. ¶ 44.) According to Plaintiff, "[t]he [CSF] is the main element of Ford's secure-retirement promise to its employees," and the Plan's Summary Plan Description states: "Contributing to the Plan can significantly increase the amount of your retirement benefits. These increased benefits are not paid if you do not make contributions." (Id. ¶| 45.) Deductions were taken from Plaintiffs paycheck, in accordance with the CSF, from 1986 until April 2004, and then resumed in 2017. (Id. ¶ 46.) However, Plaintiff asserts that he believed he was a continuous participant in the CSF during the entirety of his employment with Ford. (Id. ¶ 47.)

         2. The 2017 Ford "Special Incentive Program" Retirement Package

         In June 2017, Ford offered select employees, including Plaintiff, the opportunity to voluntarily separate under its Special Incentive Program ("SIP"). (Id. ¶ 48.) Under the SIP, employees who elected to separate would receive, among other things, eighteen months of salary in addition to other separation benefits available to them. (Id. ¶ 49.) Plaintiff asserts that this offer amounted to at least an additional $200, 000.00 in value upon electing retirement, and he initially accepted the SIP offer. (Id. ¶¶ 50-51.) Because the SIP "election documents included a full liability release," Plaintiff was advised to review his benefit calculations before signing, (Id. ¶ 52.) Plaintiff called Ford's in-house benefit management company, the National Employee Services Center ("NESC"), requesting a calculation of his pension benefits. (Id. ¶ 53.) The benefits calculation was allegedly lower than Plaintiff projected, (Id. ¶¶ 54-55, ) When Plaintiff called the NESC to discuss the calculation, he was informed that his CSF deductions ceased after March 2004 because records indicated that he had opted out of the CSF at that. time. (Id. ¶¶ 57-58.) According to Plaintiff, prior plan documents stated that opting out of the plan requires written forms to disenroll from contributing to the CSF, stating in part: "You may stop your contributions by completing a form and returning it to your benefit representative." (Id. ¶ 59, citing Ex. 2 to FAC (Excerpt from the Ford Motor Company General Retirement Plan, dated November 1985), ECF No. 14-3, at 2, PgID 120.) The NESC representative told Plaintiff that they has a copy of his signed "opt-out" card and would forward that document to him. (FAC ¶ 58.)

         Plaintiffs SIP Package election-revocation deadline expired on July 31, 2017. (Id. ¶ 60.) Plaintiff emailed the NESC regarding the impending deadline on July 24 and July 25 regarding the "urgency to a resolution of the CSF matter." (Id. ¶¶ 61-62.) He then met with Adam Blake, a Ford Human Resources representative, on July 31, who allegedly "informed Plaintiff that if he wanted to retire under the SIP offer, he would be accepting his current pension calculations as they were, however if he revoked his election of the SIP offer, and remained employed with Ford, they would 'work on fixing it.'" (Id. ¶¶ 63-64.) Plaintiff also wrote to Fowl's Chairman, Bill Ford, to explain the situation and request assistance, (Id. ¶ 65.) Plaintiff subsequently revoked his SIP acceptance that same day, without receiving a response, (Id. ¶ 66.)

         3. Plaintiffs Claim for CSF Contributions

         At that same time, Plaintiff also submitted a claim to Ford MR for the missing CSF contributions and service credits, as well as interest from 2004 to July 2017. (Id. ¶ 67.) Ford acknowledged receipt of Plaintiffs claim on August 7, 2017, and his CSF deductions resumed in August 2017. (Id. ¶¶ 70-71.) In October or November 2017, Plaintiff spoke with a NESC representative and was informed that his claim for additional CSF benefits was "still open" and "in process." (Id. ¶ 73.)

         4. The 2018 Retirement Buy-Out Package and Denial of Claim for Benefits

         In June 2018, Ford offered "select employees," including Plaintiff, another "buy-out package [] like the SIP [offer], ” (Id. ¶ 75.) Upon learning of the new buyout package, Plaintiff asked the NESC about the status of his claim, at which time he was informed that it had been closed. (Id. ¶ 76.) Ken Mitchell, Ford's pension manager, informed Plaintiff by phone on July 18, 2018 that a letter denying his claim had been issued in December 2017 or January 2018 (the "Initial Claim Denial Letter"). (Id. ¶ 77.) Plaintiff alleges, however, that he never received the denial letter and that it had not been uploaded to the NESC portal which was intended to be used for employee benefits-related correspondence. (Id. ¶ 78.) In fact, upon further inquiry by Plaintiff, the NESC informed him that it did not have access to any letter regarding a determination of his claim for CSF contributions. (Id. ¶ 80.) Plaintiff did not receive the Initial Claim Denial Letter until "at some point" in July or August 2018. (Id. ¶ 83.) The Initial Claim Denial Letter explained that Ford's "records indicate that you stopped contributing to the Plan on April 1, 2004." and that Ford could not grant "Contributory Service for any period in which contributions were not made to the Plan." (Id. ¶ 84.)

         Ford's Retirement Benefit Committee (the "Committee") issued an appeal denial in September 2018, and a November 2018 letter informed Plaintiff that the appeal denial was "final, conclusive and binding." (Id. ¶¶ 85, 91.) After receiving the November 2018 letter, Plaintiff retained legal counsel, who issued an ERISA request to Ford for all relevant Plan communications and Plan documents. (Id. ¶¶ 91-92.) Plaintiff claims that he did not receive a copy of the September 2018 appeal denial until it was mailed to his legal counsel in March 2019 and that it "is a near duplicate of the initial Claim Denial Letter." (Id. ¶¶ 85, 87.) In March 2019, Plaintiff filed a second appeal with the Committee, which was denied in an April 8, 2019 letter stating that "Plan provisions do not permit... Contributory Service credit, for the period during which [Plaintiff] chose not to contribute to the Plan." (Id. ¶¶ 96, 121-22.)

         5. Plaintiffs Lawsuit and Termination

         On May 13, 2019, Plaintiff filed this lawsuit. (ECF No. 1, Complaint.) On May 21, 2019, his employment with Ford was terminated through a group involuntary separation program, the 2019 Salaried Involuntary Reduction Process ("SIRP"), instituted as part of Ford's recently announced "Smart Redesign" initiative to reorganize the Company's salaried workforce. (FAC ¶¶ 129-32, 136-37.) Following an agreement between the parties and entry of a Stipulated Order by the Court (ECF No. 13). Plaintiff filed his First Amended Complaint on August 16, 2019. alleging four counts. (FAC.) In Count I, Plaintiff alleges that Ford violated ERISA § 502(a)(1)(B) by improperly denying him benefits through its decision to deny him "Credited Service Contributions toward his Contributory Benefit to which [he] is entitled." (Id. ¶¶ 162-73.) In Count II, he claims Ford breached its fiduciary duty to the Plan under ERISA § 502(a)(2) because it was allegedly "negligent in the initial administration of Plaintiffs Contributory Service Fund contributions and throughout the resulting internal administrative review process" and allegedly "unilaterally halted Plaintiffs contributions to the [CSF], without following the Plan's procedures and failing to ever notify Plaintiff of its actions." (Id. ¶¶ 174-85.) Count III alleges that Defendants breached their fiduciary duties to Plaintiff under ERISA § 502(a)(3), and that Ford should be equitably estopped "from denying that it is responsible for liability for all sums owed to Plaintiff." (Id. ¶¶ 186-226.) Finally, Count IV asserts that Ford interfered with Plaintiffs benefits in violation of ERISA § 510 by discriminating against him in denying his claim and terminating him allegedly in retaliation for filing the present lawsuit. (Id. ¶¶ 227-44.)

         B. Defendants' Partial Motion to Dismiss

         On August 30, 2019, Defendants filed their Partial Motion to Dismiss Plaintiff s First Amended Complaint. (ECF No. 15, Defs.' Mot.) Defendants argue that Plaintiffs ERISA § 502(a)(2) claim against Ford (Count II) fails as a matter of law because it is barred by the applicable statute of limitations. (Id. at 9-12, PgID 139-42.) Defendants also contend that Count II should be dismissed to the extent it challenges Ford's response to Plaintiffs claim for additional CSF contributions because it is duplicative of Plaintiffs ERISA § 502(a)(1)(B) claim in Count L (Id. at 12-17, PgID 142-47.) Defendants assert that Plaintiffs equitable estoppel claim in Count III fails because Plaintiff fails to plead all essential elements of the claim; i.e., a written material misrepresentation and extraordinary circumstances, and that Plaintiffs Count III ERISA. § 502(a)(3) claim improperly relies, in part, on representations made by Ford agents in a ministerial, as opposed to a fiduciary, capacity, (Id. at ¶7-25, PgID 147-55.)

         Plaintiff filed a response opposing Defendants" motion, on September 27, 2019. (ECF No. 20, Pl.'s Resp.) He asserts that his ERISA § 502(a)(2) claim is timely, not duplicative, and necessary to accord "make whole" relief. (Id. at 10-21, PgID 261-72.) He also argues that be has adequately pleaded an equitable estoppel claim, and that Defendants' motion should be denied. (Id. at 21-25, PgID 272-76.)

         On October 18, 2019, Defendants filed their reply in. support of their motion to dismiss, reasserting the arguments made in their opening motion. (ECF No. 21, Defs.' Reply.)

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 12(b)(6) allows for the dismissal of a case where the complaint fails to state a claim upon which relief can be granted. When reviewing a motion to dismiss under Rule 12(b)(6), a court must "construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff." Handy-Clay v. City of Memphis,695 F.3d 531, 538 (6th Civ. 2012) (citation omitted). To state a claim, a complaint must provide a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "[T]he complaint 'does not need detailed factual allegations' but should identify 'more than labels and conclusions.'" Casias v.Wal-Mart Stores, Inc., 695 F.3d 428, 435 (6th Cir. 2012) (quoting Bell Atlantic Corp. v. Twombly,550 U.S. 544, 555 (2007)). The court "need not accept as true a legal conclusion couched as a factual allegation, or an unwarranted factual inference." Handy-Clay, 695 F.3d at 539 (internal citations and quotation marks omitted). In other words, a plaintiff must provide more than a "formulaic recitation of the elements of a cause of action" and his or her "[f]actual allegations must be enough to raise a right to relief above the speculative level," Twombly, 550 U.S. at 555-56. The Sixth Circuit has explained that "[t]o survive a motion to dismiss, a ...


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