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WRIGHT v. BOSCH TRUCKING CO.

September 23, 1992

MERRILL S. WRIGHT, INDIVIDUALLY AND ON BEHALF OF THE BOSCH TRUCKING COMPANY, INC. DEFINED BENEFIT PENSION PLAN AND TRUST
v.
BOSCH TRUCKING COMPANY, INC., A CORPORATION, AND SALLY A. BOSCH.



The opinion of the court was delivered by: Mihm, Chief Judge.

ORDER

This matter is before the Court on the Motion to Dismiss filed by the Defendants on May 28, 1992. For the reasons set forth below this Motion is DENIED.

BACKGROUND

The Plaintiff, Merrill S. Wright, brings this action derivatively on behalf of the Bosch Trucking Company, Inc. Defined Benefit Pension Plan and Trust, ("the Plan"), under 29 U.S.C. § 1132(a)(1). The Plan was established as a legal entity by virtue of 29 U.S.C. § 1132(d)(1) on January 12, 1979, and amended January 12, 1984. Under the terms of the Plan, Bosch Trucking Company, Inc. ("Bosch Trucking") was to fully fund one hundred percent (100%) of the pension benefits of the non-union employees, including those of Merrill S. Wright. On December 14, 1989, the Plan was fully funded in accordance with its terms. Bosch Trucking has always been the Plan administrator, and from approximately 1982, to December 14, 1989, Wright was President and Chief Executive Officer of Bosch Trucking.

On December 14, 1989, Sally A. Bosch owned eighty per cent (80%) and Wright owned twenty per cent (20%) of Bosch Trucking's stock. On that date, Bosch Trucking's Board of Directors convened a special meeting. At that meeting, the Board demoted Wright to Vice President, relieved him of all duties regarding Bosch Trucking and unanimously passed a resolution to terminate the Plan. On December 14, 1989, Sally Bosch assumed one hundred per cent (100%) control of Bosch Trucking and became Trustee of the Plan. On February 12, 1990, Bosch Trucking terminated Wright's employment.

Wright entered into a settlement agreement with Bosch Trucking and Sally Bosch on July 22, 1991, whereby the Plan distributed to Wright ". . . an amount of money equal to the single sum vested value of his Plan benefits". On January 3, 1992, Bosch Trucking and Sally Bosch distributed the single sum vested value of $209,046.26 to Wright on the condition Wright place $88,225.36 of this distribution into a special individual retirement account and grant a security agreement in that account to Sally Bosch, as Plan Trustee, in the event the Plan is terminated while underfunded.

After December 14, 1989, Bosch Trucking failed to fully fund one hundred per cent (100%) of the pension benefits to the Plan. The present status of the Plan is that it is underfunded in excess of $137,000.00 and is in the process of being terminated. As a result, Wright brings this derivative action against Bosch Trucking, the Plan administrator, and Sally Bosch, the Plan Trustee, for breach of their fiduciary duties to the Plan, the participants, and the beneficiaries. Wright alleges that the Defendants breached their duties when they failed to terminate the Plan as directed by the Board of Directors at the December 14, 1989, special board meeting and failed to adequately fund the Plan pursuant to Plan terms.

Defendants Bosch Trucking and Sally Bosch, through their counsel, moved to dismiss Wright's claim on the grounds that Wright lacked standing to bring this action, and alternatively, Wright's interests in the Plan conflict with other Plan participants and beneficiaries.

DISCUSSION

MOTION TO DISMISS

In ruling on a Rule 12(b)(6) motion to dismiss, a court must follow

  the accepted rule that a complaint should not be dismissed for
  failure to state a claim unless it appears beyond a doubt that
  the Plaintiff can prove no set of facts in support of his claim
  which would entitle him to relief. (footnote omitted) Conley
  v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80,
  84 (1957)

This Court must accept "all allegations in the complaint as true." Collins v. County of Kendall, Ill., 807 F.2d 95, 99 (7th Cir. 1986). See also H.J., Inc. v. Northwestern Bell Telephone Company, 492 U.S. 229, 250, 109 S.Ct. 2893, 2906, 106 L.Ed.2d 195 (1989); Hishon v. King and Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59, 65 (1984); and Gomez v. Illinois State Board of Education, 811 F.2d 1030, 1039 (7th Cir. 1987).

  In order to escape dismissal a 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. Marmon Group, Inc. v. Rexnord, Inc.,
  822 F.2d 31, 34 (7th Cir. 1987) ...

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