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Tompkins v. Central Laborers' Pension Fund

November 16, 2009

DONALD J. TOMPKINS, PLAINTIFF,
v.
CENTRAL LABORERS' PENSION FUND, DEFENDANT.



The opinion of the court was delivered by: Joe Billy McDADE United States District Judge

ORDER & OPINION

Before the Court is Magistrate Judge Cudmore's Report and Recommendation ("R&R") (Doc. 12) addressing Defendant's Motion to Dismiss (Doc. 8). The R&R recommends denial of the Motion to Dismiss. Defendant has filed Objections (Doc. 13) to the R&R and Plaintiffs have responded to these Objections (Doc. 15). For the reasons that follow, the R&R is adopted, and Defendant's Motion to Dismiss is denied.

BACKGROUND

Plaintiff filed this complaint on February 12, 2009, alleging that Defendant had violated the Employee Retirement Income Security Act ("ERISA") in its termination of disability benefits paid to him. In 1999, after working as a laborer in Laborers' Local 309, Rock Island, Illinois for over twenty years, Plaintiff applied for disability benefits pursuant to Defendant's Pension Fund Plan ("Plan").*fn1 Plaintiff's application for benefits was approved, and he received disability benefits beginning in August of 1999, retroactive to January 1999. During this period, Plaintiff engaged in work as a non-laborer, which he argues was not prohibited by the Plan's disability benefits rules.*fn2 In June of 2007, Defendant informed Plaintiff that an audit had revealed that his current employment disqualified him from continuing to receive disability payments under the Plan's terms. This lawsuit alleges that this decision by Defendant, as well as Defendant's alleged failure to properly notify Plaintiff of the Plan's terms, violated the Plan, and thus, ERISA.

On March 9, 2009, Defendant filed a Motion to Dismiss Plaintiff's Complaint, alleging that the Complaint as filed violated Federal Rule of Civil Procedure 10(b). (Doc. 8). Plaintiff responded to this Motion to Dismiss (Doc. 11), and on June 1, 2009, Magistrate Judge Cudmore issued an R&R recommending that the Motion to Dismiss be denied (Doc. 12). Defendant Objected to the R&R on June 17, 2009 (Doc. 13), and Plaintiff, in support of the R&R, filed a Memorandum of Law in Opposition to Defendant's Objection (Doc. 15).

In its Motion to Dismiss, Defendant argued that Plaintiff's Complaint should be dismissed pursuant to Federal Rule of Civil Procedure 10(b). Federal Rule of Civil Procedure 10(b) provides, in pertinent part, that "[a] party must state its claims.in numbered paragraphs, each limited as far as practicable to a single set of circumstances..If doing so would promote clarity, each claim founded on a separate transaction or occurrence.must be stated in a separate count." The Rule does not indicate what penalty attaches to violation of the Rule, but courts have held that dismissal of the complaint, or dismissal with leave to file an amended complaint, is appropriate.*fn3 See, e.g., Three D Dep't, Inc. v. K Mart Corp., 670 F.Supp. 1404, 1409 (N.D. Ill.1987) (dismissal of complaint for repleading where count combined three separate factual occurrences) (citing United States v. American Linen Supply Co., 141 F.Supp. 105, 116 (C.D. Ill.1956)) ("courts retain the inherent power to order compliance with the rule").

Plaintiff's Complaint asserts two "causes of action" as alternatives to one another.*fn4 The first cause of action is based on Defendant's allegedly wrongful suspension of his benefits in June 2007, and asserts a right to relief under two clauses of ERISA: 29 U.S.C. § 1132(a)(1)(B) and 29 U.S.C. § 1132(a)(3)(B)(ii). 29 U.S.C. § 1132(a)(1)(B) allows a beneficiary to bring an action to recover benefits or enforce his rights under a plan; 29 U.S.C. § 1132(a)(3)(B)(ii) allows equitable relief to enforce a provision of ERISA or of a plan. The second "cause of action" seeks relief under both of these provisions because of Defendant's allegedly deficient notice to Plaintiff of the Plan's rules governing suspension of benefits.

Defendant asserted in its Motion to Dismiss that, because each cause of action alleges the violation of two sections of ERISA, the Complaint "confusingly and improperly commingles separate and distinct statutory causes of action in such a way that will only serve to unnecessarily complicate this Honorable Court's review of the Plaintiff's claims." (Doc. 9 at 2). In support of this argument, Defendant cites several District Court cases from the Northern District of Illinois, the Northern District of Iowa, and the Northern District of Ohio; it alleges that these courts have held that commingling legal theories in violation of Rule 10(b) requires dismissal or amendment of the complaint. (Doc. 9 at 5).

Plaintiff responded to Defendant's Motion to Dismiss, relying on the "separate transaction or occurrence" language of Rule 10(b) to argue that the Complaint was properly framed, since each "cause of action" addresses a separate action by Defendant that allegedly violated ERISA. In addition, Plaintiff cites Wright & Miller's Federal Practice and Procedure's explanation that Rule 10(b) requires separate counts only for "separate transactions or occurrences," not for separate legal theories based on a single event. See 5A FED. PRAC. & PROC. CIV. §§ 1324 & 1325 (3d ed.).

Magistrate Judge Cudmore's R&R recommended that Defendant's Motion to Dismiss be denied, as Plaintiff's Complaint did not violate Rule 10(b), though "it would have been clearer for Plaintiff to set out each statutory subsection into separate counts." (Doc. 12 at 8). After reviewing the differing legal standards under 29 U.S.C. § 1132(a)(1)(B) and 29 U.S.C. § 1132(a)(3)(B)(ii), he noted that the language of Rule 10(b) "literally applies to separate 'transactions or occurrences,' not to separate statutory remedies based on the same transaction." (Doc. 12 at 8). In addition, he found that "requiring Plaintiff to replead is not necessary to promote clarity," and that any uncertainty about the relief that Plaintiff seeks is best resolved by discovery and dispositive motions, not by dismissal under Rule 10(b). (Doc. 12 at 10).

Defendant objected to the R&R's conclusion that dismissal is not required by Rule 10(b) by arguing that "the purpose of Rule 10(b) is to facilitate a clear presentation of the issues, which will permit the court to rule on an entire count." (Doc. 14 at 3 (emphasis in original)). In addition, Defendant argued that the Complaint's length and complexity "prejudices the Defendant in formulating its responsive pleading." (Doc. 14 at 4). Plaintiff responded to these Objections primarily by noting again that the two counts are based on "separate transactions or occurrences," and thus are in compliance with Rule 10(b), and that the fact that they each contain two legal theories does not violate Rule 10(b). (Doc. 15).

STANDARD OF REVIEW

A district court reviews de novo any portion of a Magistrate Judge's Report and Recommendation to which a "specific written objection has been made." FED. R. CIV. P. 72(b)(3). "The district judge may accept, reject, or modify the recommended disposition; receive further ...


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