Care Plan"), creates severance benefits for selected employees of
Defendant Manor Care, Inc. who satisfy certain conditions
precedent. Under this Plan, employees are eligible for severance
benefits if they voluntarily terminate their employment for "good
reason," or if Manor Care, Inc. terminates them without cause.
(See Defs.' Resp. at 2, Ex.A.) The Plan defines "good reason"
as, among other things, "a significant reduction in the scope of
a Participant's authority, position, title, functions, duties or
Plaintiff, Judy Dabertin, is a former senior executive employee
of Defendant Manor Care, Inc. During the course of her
employment, she became a beneficiary of the Manor Care Plan.
Plaintiff alleges that beginning on or about July 27, 1998, she
suffered a reduction in the scope of her authority, position,
title, functions, duties and responsibilities. Prior to that
date, Plaintiff had a leadership role over the Central Division
and West Division of HCR. After July 27, 1998, that leadership
role was removed and Plaintiff's management responsibilities were
limited only to the West Division. Furthermore, in a letter dated
July 27, 1998, Plaintiff was informed that she would be eligible
to participate in the Manor Care Plan's bonus plan. Plaintiff was
informed that her target bonus would be reduced to 30% of her
salary with a maximum of 45% of outstanding performance.*fn1
Subsequently, on October 21, 1998, Plaintiff's employment with
Manor Care was terminated, allegedly for "good reason." On the
day that her employment was terminated, October 21, 1998,
Plaintiff applied for severance benefits under the Plan, and
Defendants denied Plaintiff's application, refusing to pay the
monies allegedly due her under the Plan.
As a result, Plaintiff filed this action and presently has
before the court a five count First Amended Complaint. Counts I,
II and III are under ERISA, and Counts IV and V are under state
law for breach of contract and violation of the Illinois Wage
Payment and Collection Act, respectively.
Defendants' Fifth Affirmative Defense to the First Amended
Complaint states that "[t]o the extent [the Employee Retirement
Income Security Act ("ERISA")] applies, it preempts Plaintiff's
state law claims." The Plaintiff moves herein for judgment on the
pleadings on Defendants' Fifth Affirmative Defense and for a
consequent judgment order that the Manor Care Plan: (a) is not
an employee welfare benefit plan or an employee benefit plan
within the meaning of ERISA; (b) does not "relate to" an ERISA
plan; and (c) that Plaintiff's Counts IV and V breach of contract
and state wage claims are not preempted by ERISA.
I. DEFENDANTS' ANSWERS DO NOT AMOUNT TO JUDICIAL ADMISSIONS.
In Answer to Plaintiff's First Amended Complaint, Defendants
replied to Plaintiff's ERISA claims, inter alia, by: (1)
denying that this court has subject matter jurisdiction under
ERISA (Ans. ¶ 5); (2) denying that they sponsor certain employee
welfare benefit plans providing benefits to employees within the
meaning of ERISA (Ans. ¶ 7); (3) denying that [the Manor Care
Plan] is an "`employee benefit plan' within the meaning of ERISA,
29 U.S.C. § 1002(3)" (Ans. ¶ 11); (4) denying that they "exercised
control over and authority over [the Manor Care Plan] within the
meaning of ERISA, 29 U.S.C. § 1002(21)" (Ans. ¶ 12); and (5)
denying that "[the Manor Care Plan] is a welfare benefit plan for
purposes of ERISA" (Ans. ¶ 61).
Plaintiff argues that these and related denials in Defendants'
Answer amount to judicial admissions which are fatal to
Defendants' Fifth Affirmative Defense. It is
Plaintiff's position that Defendants cannot judicially "admit"
that the Manor Care Plan is not an ERISA plan or otherwise
not subject to ERISA, while raising the affirmative defense
that to the extent ERISA applies, Plaintiff's state law claims
are preempted. (See Pl. Mot. at 5.)
Plaintiff's argument, however, is premised entirely on the
assumption that Defendants' "admissions" are binding. "As a
general rule, factual admissions are binding on a party as a
judicial admission unless withdrawn or amended." (emphasis added)
Canon U.S.A., Inc. v. Nippon Liner System, Ltd., 1992 WL
137406, *2 (N.D.Ill. 1992) (citing Morales v. Department of
Army, 947 F.2d 766, 769 (5th Cir. 1991); American Title Insur.
Co. v. Lacelaw Corp., 861 F.2d 224, 226 (9th Cir. 1988); United
States v. One Heckler-Koch Rifle, 629 F.2d 1250, 1253 (7th Cir.
1980)). "Counsel's legal conclusions, however, are not binding as
judicial admissions." (emphasis added) Canon U.S.A., Inc. v.
Nippon Liner System, Ltd., 1992 WL 137406, *2 (N.D.Ill. 1992)
(citing Glick v. White Motor Co., 458 F.2d 1287, 1291 (3d Cir.
1972) (citations omitted)). It is well established that judicial
admissions on questions of law have no legal effect. See Charter
Bank v. Eckert, 223 Ill. App.3d 918, 166 Ill.Dec. 282, 287,
585 N.E.2d 1304, 1309 (1992).
An examination of the relevant denials set forth in Defendants'
Answer inexorably leads to the determination that these denials
are legal conclusions, and therefore, not binding against
Defendants as judicial admissions. All of the answers in question
are conclusions regarding whether or not the Manor Care Plan is
subject to the provisions of ERISA.*fn2 As Defendants' correctly
point out, such conclusions are legal in nature and are not
binding as judicial admissions. See Brock v. Gillikin,
677 F. Supp. 398, 401 (E.D.N.C. 1987) (holding that whether a
profit-sharing plan and trust agreement is an employee benefit
plan within the meaning of ERISA is a "conclusion of law.");
Benvenuto v. Schneider, 678 F. Supp. 51, 53 (E.D.N.Y. 1988)
(finding that whether a particular health and welfare fund was an
employee welfare plan within the meaning of ERISA is a
"conclusion of law."); DeVito v. Pension Plan of Local 819
I.B.T. Pension Fund, 975 F. Supp. 258 (S.D.N.Y. 1997) (concluding
that the question of whether a particular pension plan complies
with the accrual provisions of ERISA is a legal issue.)
In light of the fact that the subject Answers set forth by
Defendants' do not amount to judicial admissions, as alleged by
Plaintiff, Plaintiff's Motion herein cannot be sustained.*fn3
In view of the foregoing, Plaintiff's Motion for Judgment on
the Pleadings Regarding Defendants' Fifth Affirmative Defense and
for an Order that Counts IV and V are Not Preempted by ERISA is