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HEALY v. AXELROD CONSTR. CO. DEFINED BEN. PENSION

March 24, 1992

WILLIAM P. HEALY, Plaintiff,
v.
AXELROD CONSTRUCTION COMPANY DEFINED BENEFIT PENSION PLAN AND TRUST, an employee benefit plan, AXELROD CONSTRUCTION COMPANY, an Illinois corporation, ESTATE OF VICTOR AXELROD and IRWIN AXELROD, individually, Defendants.



The opinion of the court was delivered by: CHARLES RONALD NORGLE, SR.

 ORDER

 Before the court is the defendants' motion to dismiss. For the reasons set forth below, the motion is denied.

 FACTS

 Plaintiff William P. Healy ("Healy") brought this action under Section 502 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132, seeking declaratory and other equitable relief. In a four count complaint, Healy claims he is entitled to benefits in excess of $ 150,000 from a pension plan ("the Plan") set up by defendant Axelrod Construction Company ("Axelrod Construction"), and alleges breach of fiduciary duties, interference with protected rights under Section 510 of ERISA, 29 U.S.C. § 1140, and estoppel. On September 1, 1991, defendants filed the instant motion to dismiss under Fed. R. Civ. P. 12(b)(6) on the ground that plaintiff failed to exhaust his available intra-plan remedies as required by the Plan. Defendants Irwin Axelrod and the Estate of Victor Axelrod also seek dismissal of Count II for failure to state a claim, asserting that their duties as trustees do not extend to the administration of the plan. Last, the defendants contend that Healy failed to allege an effect on the employer-employee relationship in Count III as is required to state a claim under 29 U.S.C. § 1140.

 Healy was an employee of Axelrod Construction or its affiliates, including defendant Banner Contracting Company, Inc. ("Banner"), from 1960 until April 16, 1991. Axelrod Construction established the Plan effective August 1, 1978. The Plan is a defined employee benefit plan within the meaning of ERISA, 29 U.S.C. §§ 1002(3) and 1002(35), established for the purpose of providing retirement benefits. Healy was eligible to participate in the Plan when it became effective in 1978, having completed the minimum six months of employment and having satisfied the age requirement.

 Victor Axelrod, now deceased, was an officer and the sole shareholder of Axelrod Construction. The complaint alleges that, when Axelrod Construction adopted the Plan, Victor Axelrod discussed Healy's participation on various occasions. Victor Axelrod allegedly informed Healy of the Plan but persuaded Healy not to participate, stating that "the benefits under that plan were not generous." Healy, however, did not sign a written waiver at that time. Healy also alleges that no one informed him of the specific terms, conditions, or benefits of the Plan.

 The Plan provided that, to become a participant, an employee must apply in writing to his or her employer. Employers, however, were required to file applications on behalf of an eligible employees who failed to apply on their own. Nonetheless, neither Healy nor an employer filed an application on his behalf. Allegedly, no funds were contributed to the Plan for Healy's benefit, no insurance was purchased as the Plan required, and no "plan-related communications" were distributed to Healy.

 At some time in the 1980s, Healy informed Victor Axelrod that he wished to participate in an employer-sponsored plan. Healy alleges that Victor Axelrod then induced him to sign a waiver form by claiming that Axelrod Construction could not establish a so-called 401(k) plan for its employees unless Healy signed the waiver. Victor Axelrod also told Healy that the Plan had to be terminated, and afterward Healy would receive benefits if he signed the waiver. Allegedly in reliance on these representations, Healy executed the waiver. The Plan, however, was not terminated until 1991.

 After learning in January 1991 that Victor Axelrod's spouse received a payment from the Plan of approximately $ 400,000 and that another employee of Axelrod Construction received in 1990 approximately $ 42,000 in benefits, Healy suspected that he had been deceived and discriminated against concerning his pension rights. On March 28, 1991, Healy sent a letter to Irwin Axelrod requesting an accounting and claiming any benefits due him under the Plan. *fn1"

 This request and claim was denied by letter dated April 4, 1991 stating that Healy had waived his benefits and thus had no accrued benefits. The letter also explained the Plan's claim review procedures, which provided that a request for a hearing must be filed within 60 days after a participant receives notice that his claim was denied.

 In May 1991, participants were notified that the Plan would be terminated. On June 21, 1991, Healy requested a hearing to "complete the claim review process." Defendants responded on July 1, 1991, rejecting the request as untimely.

 DISCUSSION

 On a motion to dismiss under Rule 12(b)(6), the court accepts the allegations of the complaint as true as well as the reasonable inferences to be drawn from the allegations. Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). The court also takes into account the exhibits attached to the complaint. Goodman v. Board of Trustees of Community College, 498 F. Supp. 1329, 1337 (N.D. Ill. 1980). The court, however, need not strain to find inferences favorable to the plaintiff which are not apparent on the face of the complaint. Coates v. Illinois State Bd. of Educ., 559 F.2d 445, 447 (7th Cir. 1977). The plaintiff need not set out in detail the facts upon which a claim is based, but must allege sufficient facts to outline the cause of action. Coates, 559 F.2d at 447. The complaint must state either direct or inferential allegations concerning all material elements necessary for recovery under the relevant legal theory. Mescall v. Burrus, 603 F.2d 1266 (7th Cir. 1979). The court is not required to accept legal conclusions either alleged or inferred from pleaded facts. Carl Sandburg Village Condominium Ass'n No. 1 v. First Condominium Dev. Co., 758 ...


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