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Wegmann v. Gupta

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS


March 10, 2008

JOEY WEGMANN, PLAINTIFF,
v.
VEENA K. GUPTA, M.D., ET AL., DEFENDANT.

The opinion of the court was delivered by: Stiehl, District Judge

MEMORANDUM & ORDER

Before the Court is defendants' motion to dismiss (Doc. 16), to which plaintiff filed a response (Doc. 22). Defendants seek to dismiss plaintiff's complaint (Doc. 2) pursuant to Fed R. Civ P. 12 (b)(6) for failure to state a claim upon which relief can be granted.

I. BACKGROUND

Plaintiff filed a three-Count complaint in this Court seeking to recover damages under various provisions of the Employee Retirement Income Security Act of 1974 (ERISA) against his former employer, Care First Medical Center, Inc. (Care First) and against Veena K. Gupta, M.D. in her capacity as administrator of Care First's employee profit-sharing plan (Plan). Dr. Gupta owns Care First.

Care First began the Plan in January of 2002. Wegmann contends that, although Dr. Gupta funded the Plan at five percent (5%) of his gross income 2002 and at an additional twelve percent (12%) in 2003, his Plan was not funded in 2004 and 2005.

In March of 2005, plaintiff notified Dr. Gupta that he would be ending his employment with Care First. Dr. Gupta asserts that, some time thereafter, plaintiff received a distribution (neither party has yet specified an amount) from the Plan. At some point between March and November of 2005, Care First decided to terminate the Plan.

In January of 2006, plaintiff retained counsel and between April 3, 2006, and September 14, 2006, plaintiff's counsel sent five requests to Dr. Gupta for information and an accounting of benefits with respect to his fund in the Plan. Dr. Gupta refused to provide plaintiff the documents he sought unless he was willing to pay $800 for the copies. Plaintiff subsequently filed this complaint (Doc. 2) against Care First and Dr. Gupta in her capacity as administrator of the Plan.

II. MOTION TO DISMISS

Defendants move to dismiss plaintiff's complaint for failure to state a claim upon which relief can be granted under Fed. R. Civ. P. 12(b)(6). In considering a motion to dismiss under Rule 12(b)(6), the Court must take all well pleaded factual allegations as true and construe them in the light most favorable to the petitioner. See Conley v. Gibson, 355 U.S. 41, 45--46 (1957); Hernandez v. City of Goshen, Ind., 324 F.3d 535, 537 (7th Cir. 2003). To survive a motion to dismiss, a complaint must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombley, 127 S.Ct. 1955, 1969 (2007).

A. Count I

Count I alleges that Dr. Gupta violated both 29 U.S.C. § 1024(b)(4) and § 1025(a) when she refused to provide plaintiff with "a copy of the employee pension benefit plan, and all amendments thereto, as well as an accounting of his vested and unvested benefits thereunder." For that alleged violation, plaintiff seeks injunctive relief to provide him with the requested information under 29 U.S.C. § 1132(a)(3)(B). Plaintiff also alleges that § 1132(c)(1) entitles him to statutory damages of $100 dollars per day that he has not received the information, beginning thirty-one (31) days after he made his initial request for the Plan documents, as well as costs and reasonable attorney fees incurred in bringing the action.

Defendants first argue that the Court should dismiss Count I of plaintiff's complaint because § 1024(b) does not require defendants to respond to requests for information regarding accrued benefits. While defendants correctly assert that § 1024(b) does not apply, defendants overlook that § 1025(a) governs such requests. Balzanto v. Nicholas Cuda, Ltd. Profit Sharing Plan, 2002 U.S. Dist. LEXIS 721, *9-10 (N.D. Ill. 2002) ("[T]hese particular requests constitute requests for a statement of his accrued benefits and thus fall under section 10[2]5(a) and not section 10[2]4(b)(4)."); Lumenite Control Tech., Inc. v. Jarvis, 252 F. Supp.2d 700, 710 (N.D. Ill. 2003). Because Count I of plaintiff's complaint alleges that Dr. Gupta violated § 10[2]5(a), Count I survives defendants' motion to dismiss. Defendants have not argued why this Court should dismiss plaintiffs' request for statutory damages under § 1132(c)(1). Accordingly, defendants' motion to dismiss Count I is DENIED.*fn1

B. Count II

Count II alleges that Dr. Gupta violated 29 U.S.C. § 1082 and § 1145 by failing to fund plaintiff's plan account. Plaintiff seeks monetary damages equal to the amount of the allegedly delinquent contributions, plus interest, pursuant to § 1132(a)(1)(B), as well as costs and attorney's fees pursuant to § 1132(g)(1).

Defendants urge the Court to dismiss Count II of plaintiff's complaint on three grounds. First, defendants argue that the minimum funding requirements of § 1082 do not apply to individual account plans pursuant to § 1081(a)(8). The Court notes that the plan at issue falls within the definition of an "individual account plan" under the statute. 29 U.S.C. § 1002(34).*fn2 Upon review of the record, the Court FINDS that the Plan is an individual account plan and, therefore, is exempt from the minimum funding requirements of § 1082. Accordingly, plaintiff is not entitled to relief on his claim that defendants violated the minimum funding requirements of § 1082.

Second, defendants argue that the delinquent contribution requirements of § 1145*fn3 do not apply to the Plan because it is not a multi-employer plan. The Court notes that the delinquent contribution requirements of § 1145 applies only to multi-employer plans. Upon review of the record, the Court FINDS that the Plan is an individual account plan and, therefore, § 1145 requirements do not apply. Accordingly, plaintiff is not entitled to relief on his claim that defendants violated the delinquent contribution requirements of § 1145.

Because neither § 1082 nor § 1145 of ERISA apply to the Plan, plaintiff's claims that defendants allegedly violated those provisions of ERISA are subject to dismissal.*fn4 Therefore, the Court GRANTS defendants' motion and Count II of plaintiff's complaint is DISMISSED.

II. Count III

The Court construes Count III to allege that Dr. Gupta violated her fiduciary duties under 29 U.S.C. § 1104(a) and § 1109(a) by failing to provide him notice that: (1) she did not fund the plan in 2004 and 2005; (2) she was denying his claim for benefits in 2004 and 2005; (3) he was entitled to a full and fair review of her decision denying his claim for benefits under § 1133.*fn5

For these alleged violations, plaintiff seeks damages under § 1132(a)(2) equal to the actual amount of the alleged delinquent contributions, plus interest on those contributions under § 1132(g)(1).

The Court notes that, in contrast to Counts I and II, Count III seeks damages under § 1132(a)(2) for breach of fiduciary duty. Section 1132(a)(2) provides that an action may be brought "by a participant . . . for appropriate relief under section 1109 of this title." 29 U.S.C. §1132(a)(2). Section 1109(a) states that a breaching fiduciary "shall be personally liable to make good to [the] plan any losses to the plan resulting from. . . such breach. . . ." 29 U.S.C. § 1109(a). Therefore, only the plan itself, and not an individual participant, can recover under § 1132(a)(2). Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140 (1985); Anweiler v. Am. Elec. Power Serv. Corp., 3 F.3d 986, 992 (7th Cir. 1993) ("any recovery for a violation of section [1109] goes to the plan and not a beneficiary."). Defendants seek to dismiss Count III on these grounds. Because plaintiff seeks to recover monetary damages for himself and not for the Plan, the claim for relief under § 1132(a)(2) for breach of fiduciary duties in Count III must be dismissed. Therefore, the Court GRANTS defendants' motion and DISMISSES Count III.

III. CONCLUSION

Upon review of the record, the Court GRANTS in part and DENIES in part defendants' motion to dismiss (Doc. 16). The Court DENIES defendants' motion with respect to Count I of plaintiff's complaint. The Court GRANTS defendants' motion with respect to Counts II and III and those counts are DISMISSED. The Court GRANTS plaintiff leave to file an amended complaint that complies with this Court's Order within thirty (30) days.

IT IS SO ORDERED.

WILLIAM D. STIEHL DISTRICT JUDGE


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