United States District Court, D. New Jersey
DAVID J. CAIVANO, Plaintiff,
PRODUCTION WORKERS UNION LOCAL 148 WELFARE FUND; PRODUCTION WORKERS UNION LOCAL 148 SALARIED EMPLOYEES' PENSION PLAN; PRODUCTION WORKERS LOCAL 148 PENSION FUND; AMALGAMATED LOCAL 1931 HEALTH FUND; AMALGAMATED LOCAL 1931 PENSION FUND; RED BANK PENSION SERVICES, INC., and ABC CORPS. #1-5, Defendants.
the Court are defendants' motions to dismiss the amended
complaint. (DE 20, 21) The Court rules as follows:
David Caivano's claims for breach of contract, breach of
the implied covenant of good faith and fair dealing,
promissory estoppel, and punitive damages are dismissed.
Because those claims are entirely preempted by the Employee
Retirement Income Security Act of 1974 ("ERISA"),
further pleading would be futile, so this dismissal is with
prejudice. Caivano's retaliation claim is also dismissed
on preemption grounds, but without prejudice to submission of
version of this claim that arises under ERISA (or is not
preempted by ERISA).
counts seeking a declaratory judgment and alleging breach of
fiduciary duty state viable causes of action under ERISA, and
therefore will not be dismissed on the basis of preemption.
However, the breach of fiduciary duty claim, which is only
alleged against defendant Red Bank Pension Services, Inc.
("Red Bank"), will be dismissed for failure to
state a claim. This dismissal is without prejudice.
I will deny defendants' motions to dismiss based on a
release in a 2015 settlement agreement and New Jersey's
entire controversy doctrine. The complaint, read as it must
be in the plaintiff's favor, adequately alleges that he
did not learn of the termination of his benefits until 2017,
and that this then-unknown claim was not encompassed by the
2015 settlement of the prior state lawsuit.
Summary of the Allegations and Procedural History
allegations of the amended complaint (DE 3, cited as "AC
") are treated as true for purposes of these motions to
dismiss. See Section II, infra.
Production Workers Union Local 148 Welfare Fund
("Welfare Fund") administers health and welfare
benefits for a labor union, Local 148.(AC ¶¶1, 12,
14, 2 5). The Welfare Fund employed Caivano as an
administrator from January of 2007 until his termination on
August 29, 2012. (Id. ¶¶16-18, 25).
Caivano is a vested member of the Salaried Employees'
Pension Plan ("SEPP") and the Production Workers
Local 148 Pension Fund ("Pension Fund").
(Id. ¶1). The SEPP provides pension benefits to
employees of the Welfare Fund. (Id.
his termination, on August 15, 2013, Caivano filed suit in
New Jersey Superior Court against Local 148, the Welfare
Fund, and the Pension Fund. (Id. ¶¶20,
26-27; DE 20-1, at 26-48 (Caivano v. Prod. Workers Union
Local 148, Docket No. HUD-L-13928-13 ("State Court
Litigation"))). The SEPP was not a named defendant in
that matter. Caivano brought claims based on the
New Jersey Conscientious Employee Protection Act
("CEPA"), the New Jersey Law Against Discrimination
("LAD"), wrongful discharge, breach of contract,
promissory estoppel, unjust enrichment, and breach of the
implied covenant of good faith and fair dealing. (AC
¶¶27-30; 20-1, at 26-48). He sought lost wages and
benefits, as well as severance pay and lifetime medical
benefits. (DE 20-1, at 26-48). Caivano's claim for unjust
enrichment asserted that he contributed to his pension fund,
but that defendants retained those contributions despite his
rightful attempt to withdraw them. [Id. at 47).
Caivano's breach of the implied covenant of good faith
and fair dealing asserted that defendants improperly denied
Caivano access to his pension account, and failed to provide
him information as to his balances and other matters.
(Id. at 47). The State Court complaint did not
allege that Caivano had been improperly terminated from the
State Court Litigation settled in August of 2015. (AC
¶31; 20-1, at 50-53). Under the terms of the settlement
agreement, Caivano was paid $125, 000. Caivano acknowledged
in return that this figure "exceed[ed] any payment,
benefit or other thing of value of which he would be
otherwise entitled under any policy, plan or contract with
defendants." (DE 20-1, at 50). As part of the
settlement, Caivano released his claims against defendants.
The release provision, which is at issue in the Local 148
defendants' motion in this case, reads as follows:
In consideration for the payment and commitments described in
paragraph one, plaintiff further acknowledges, understands,
and agrees that he releases, waives and discharges Production
Workers Union Local 148, Productions Workers Union Local 148
Welfare Fund, and Production Workers Union Local 148 Pension
Fund, and their parents, subsidiaries, affiliates,
predecessors, successors and assigns, officers, directors,
trustees, employees (including, former officers, directors,
trustees and employees), owners, agents, insurers, and
attorneys, but specifically excluding co-defendant
International Union Of Allied Novelty And Production Workers,
AFL-CIO (all of the foregoing are collectively referred to
hereinafter as the "Releasees"), from all
liability, actions, causes of action, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever, in law, admiralty
or equity, which against Releasees, that Caivano,
Caivano's heirs, executors, administrators, successors
and assigns ever had, now have or hereafter can, shall or may
have for, upon or by reason of any matter, cause or thing
whatsoever, from the beginning of the world to the date of
this agreement, including, but not limited to any claims
arising out of Caivano's employment with, or providing
services to, the Releasees, or the termination of that
employment or other relationship, based upon any theory of
tort, contract, partnership, corporate or other law, any
express or implied agreement between plaintiff and Releasees,
and any other prohibited acts under local, state or federal
employment, corporate or benefits laws, including, but not
limited to, any claims arising under Title VII of the Civil
Rights Act of 1964, as amended; the Americans with
Disabilities Act of 1990, as amended; the Family Medical
Leave Act, as amended; the National Labor Relations Act or
other federal labor laws; the Employee Retirement Income
Security Act of 1974, as amended; the Equal Pay Act, as
amended; the Fair Labor Standards Act, as amended; the
Conscientious Employee Protection Act, as amended
("CEPA"); the New Jersey Law Against
Discrimination; the New Jersey Workers' Compensation Act,
N.J.S.A. 34:15-39.1 et seq., or any other claim of
discrimination based on sex, age, religion, national origin,
handicap, disability, veteran status, union activity, marital
status, retaliation, or any other basis. This release shall
cover all claims that plaintiff knows about and those he may
not know about at this time.
(Id. at 51). Caivano further agreed to never
"make a claim or file a complaint, charge, grievance,
arbitration, or lawsuit against Releasees asserting any
claims that" were released in the settlement agreement.
(Id. at 52).
two and a half years later, on February 9, 2018, Caivano
filed this action in federal court. (DE 1). That same day, he
filed an amended complaint (DE 3), which is the pleading
addressed by the motions to dismiss that are the subject of
claims that he regularly contributed to the Pension Fund and
the SEPP from the date of his hiring in 2006 through die date
of his termination in August of 2012. (Id.
¶¶32-34). During his employment, Caivano
received statements that confirmed his "vested"
benefits in the SEPP. (Id. ¶35). He received
annual statements from the SEPP and die Pension Fund, which
showed his yearly contributions and die date upon which he
would become vested in the pension. [Id. at 22). At
the beginning of 2012, third-party administrator Red Bank
stated that Caivano was "100%" vested in the SEPP,
and that he would receive a monthly benefit of $773.75
beginning on April 1, 2020. (Id. ¶23).
2017, Caivano sent a request to Red Bank and Local 1931,
seeking a statement of his pension account. (Id.
¶37). In response, Caivano received a letter from Local
1931 stating that Caivano had been terminated from the SEPP
and die Pension Fund based upon the settlement of the State
Court Litigation. (Id. ¶39). Caivano alleges
that the settlement agreement did not release any claim for
future pension benefits. (Id. ¶¶40-41).
Caivano claims that it was Local 148 or Amalgamated Local
1931 which directed Red Bank to terminate his pension
account, and that Red Bank has refused to provide him with
any documentation related to his account. (Id.
amended complaint asserts six causes of action: (1)
declaratory judgment; (2) breach of contract; (3)
retaliation/punitive damages; (4) promissory estoppel; (5)
breach of the implied covenant of good faith and fair
dealing; and (6) breach of fiduciary duty against Red Bank.
The thrust of these causes of action is that Caviano has been
denied pension benefits to which he believes he is entitled.
seeks a declaratory judgment that Caivano is a vested member
of the SEPP and the Pension Fund, and that defendants'
actions are in violation of the Employee Retirement Income
Security Act of 1974 ("ERISA"). (Id.
2 and 5, the contract claims, assert that the SEPP
"agreement" and Pension Fund are
"contracts" that defendants have breached by
refusing to acknowledge his vested status and terminating him
from the pension plans. (Id. ¶¶55-61).
Count 2 alleges an explicit breach; Count 5 alleges that the
denial of pension benefits breached the implied covenant of
good faith and fair dealing. (Id. ¶¶
3, the retaliation claim, asserts that Caivano was terminated
from the pension plans for filing a State lawsuit related to
his termination. (Id. 163). The statutory or common
law source of this claim is not specified.
4, promissory estoppel, asserts that defendants promised
Caivano pension benefits, that he has been "100%"
vested since 2009, and that he relied to his detriment on
defendants' promises to receive these benefits. (Id.
6, the fiduciary claim, is asserted against third-party
administrator Red Bank only. It alleges that Red Bank
breached its fiduciary duty to Caivano by terminating him
from the SEPP and Pension Fund. (Id. ¶81).
12(b)(6) provides for the dismissal of a complaint if it
fails to state a claim upon which relief can be granted. The
defendants, as the moving parties, bear the burden of showing
that no claim has been stated. Animal Science Products,
Inc. v. China Minmetals Corp., 654 F.3d 462, 469 n.9 (3d
Cir. 2011). For the purposes of a motion to dismiss, the
facts alleged in the complaint are accepted as true and all
reasonable inferences are drawn in favor of the plaintiff.
New Jersey Carpenters & the Trustees Thereof v.
Tishman Const. Corp. of New Jersey, 760 F.3d 297, 302
(3d Cir. 2014).
Rule of Civil Procedure 8(a) does not require that a
complaint contain detailed factual allegations. Nevertheless,
"a plaintiffs obligation to provide the
'grounds' of his 'entitlement to relief requires
more than labels and conclusions, and a formulaic recitation
of the elements of a cause of action will not do."
BellAtl Corp. v. Twombly, 550 U.S. 544, 555 (2007).
Thus, the complaint's factual allegations must be
sufficient to raise a plaintiffs right to relief above a
speculative level, so that a claim is "plausible on its
face." Id. at 570; see also West Run
Student Hous. Assocs., LLC v. Huntington Nat. Bank, 712
F.3d 165, 169 (3d Cir. 2013). That facial-plausibility
standard is met "when the plaintiff pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citing Twombly, 550 U.S. at 556). While
"[t]he plausibility standard is not akin to a
'probability requirement'. . . it asks for more than
a sheer possibility." Iqbal, 556 U.S. at 678.
deciding a motion to dismiss, a court typically does not
consider matters outside the pleadings. However, a court may
consider documents that are "integral to or explicitly
relied upon in the complaint" or any "undisputedly
authentic document that a defendant attaches as an exhibit to
a motion to dismiss if the plaintiffs claims are based on the
document[.]" In re Rockefeller Ctr. Props., Inc.
Sec. Litig., 184 F.3d 280, 287 (3d Cir. 1999) (emphasis
and citations omitted); see In re Asbestos Prods. Liab.
Litig. (No. VI), 822 F.3d 125, 133 n.7 (3d Cir. 2016);
Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014).
regard, courts may consider matters of public record,
including prior judicial proceedings. Schmidt, 770
F.3d at 249 ("To decide a motion to dismiss, courts
generally consider only the allegations contained in the
complaint, exhibits attached to the complaint and matters of
public record"); Iacaponi v. New Amsterdam Cos.
Co., 379 F.2d 311, 311-12 (3d Cir. 1967) (considering
previous litigation referred to in complaint); Arcand v.
Brother Int'l Corp., 673 F.Supp.2d 282, 292 (D.N.J.
2009) (court may consider documents referenced in complaint
that are essential to plaintiffs claim).
on these types of documents does not convert a motion to
dismiss into a motion for summary judgment. "When a
complaint relies on a document... die plaintiff obviously is
on notice of the contents die document, and the need for a
chance to refute evidence is greatly diminished."
Pension Benefit Guar. Corp. v. White Consol Indus.,
Inc., 998 F.2d 1192, 1196-97 (3d Cir. 1993).
Local 148 defendants and Red Bank have filed separate motions
to dismiss, both of which seek dismissal of Caivano's
amended complaint under Rule 12(b)(6). The bases of the
motions differ and will be addressed separately.
Red Bank's Motion
Bank moves to dismiss Caivano's amended complaint on two
grounds, discussed in subsections III.A(i) and A(ii),
Red Bank asserts tiiat Caivano's state law claims are
preempted by ERISA's preemption provision (express, or
complete preemption), or else by ERISA's civil
enforcement mechanism, which is exclusive (conflict
preemption). Preemption, although asserted only by Red Bank,
applies with equal force to the other defendants as a matter
of law. The counts dismissed on preemption grounds will
therefore be dismissed as against all defendants.
Red Bank has moved to dismiss Count 6, the breach of
fiduciary duty claim, because the amended complaint fails to
plead that Red Bank is a fiduciary under ERISA. This argument
is particular to Red Bank, the only defendant named in Count
is a comprehensive legislative scheme for federal regulation
of private employee benefit plans, which is intended to
ensure that the regulation of employee benefit plans would
"exclusively [be] a federal concern."
Aetna Health Inc. v. Davila, 542 U.S. 200,
208, 124 S.Ct. 2488, 2495 (2004). There may be express or
complete preemption of State law pursuant to ERISA's
preemption provision; alternatively, there may be conflict
preemption of State law to the extent it conflicts or
interferes with the ERISA scheme.
"expressly included a broadly worded pre-emption
provision" in ERISA's statutory scheme.
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 138,
111 S.Ct. 478, 482 (1990); see Egelhoff v. Egelhoff ex
rel Breiner, 532 U.S. 141, 146, 121 S.Ct. 1322 (2001)
(noting that Supreme Court has "observed repeatedly that
[ERISA's] broadly worded [preemption] provision is
'clearly expansive.™). That express preemption
provision, ERISA § 514, provides that ERISA "shall
supersede any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan" that is
covered by ERISA. 29 U.S.C. §1144(a) (herein,
"§ 514"). "State law" includes
"all laws, decisions, rules, regulations or other State
action having the effect of law, of any State." 29
U.S.C. § 1144(c)(1). "State Law ... is 'not
limited to state laws specifically designed to affect
employee benefit plans." Menkes v. Prudential Ins.
Co. of Am., 762 F.3d 285, 294 (3d Cir. 2014) (quoting
Pilot Life Ins. Co. v. Dedeawc, 481 U.S. 41, 47-48,
107 S.Ct. 1549 (1987)). Nor is "state law" limited
to formal enactments; "State common law claims, . . .
routinely fall within the ambit of § 514."
Menkes, 762 F.3d at 294 (citing
Ingersoll-Rand, 498 U.S. at 140; Natl Sec. Sys.,
Inc. v. Iola, 700 F.3d 65, 83 (3d Cir. 2012)).
Supreme Court has explained that "[t]he key to §
514(a) is found in the words 'relate to.' Congress
used those words in their broad sense, rejecting more limited
pre-emption language." Ingersoll-Rand, 498 U.S.
at 138. "But at the same time, ... the term 'relate
to' cannot be taken 'to extend to the furthest
stretch of its indeterminacy,' or else 'for all
practical purposes preemption would never run its
course." Egelhoff, 532 U.S. at 146 (quoting
N.Y. State Conference of Blue Cross & Blue Shield
Plans v. Travelers Ins. Co., 514 U.S. 645, 655, 115
S.Ct. 1671 (1995)); see Menkes, 762 F.3d at 293-94
("*Relate to' has always been given a broad,
law "relates to" an ERISA plan, and is thus
expressly preempted, "if it has a connection with or
reference to such a plan." Shaw v. Delta Air Lines,
Inc., 463 U.S. 85, 97, 103 S.Ct. 2890 (1983). In
determining if a state law has "the forbidden
connection," courts evaluate "the objectives of the
ERISA statute as a guide to the scope of the state law that
Congress understood would survive, as well as to the nature
of the effect of the state law on ERISA plans."
Egelhoff, 532 U.S. at 147. The ERISA preemption
provision does not apply "if the state law has only a
tenuous, remote, or peripheral connection with covered plans,
as is the case with many laws of general applicability."
District of Columbia v. Greater Wash. Bd. of Trade,
506 U.S. 125, 130 n.l, 113 S.Ct. 580 (1992).
preemption, as applicable here, is more focused on civil
remedies. "Congress intended for the causes of action
and remedies available under ERISA § 502 [ERISA's
civil enforcement provision] to be the exclusive vehicles for
actions by ERISA plan participants asserting improper plan
administration." Menkes, 762 F.3d at 294
(citing Pilot Life, 481 U.S. at 54). §502 of
ERISA confers a cause of action for a plan beneficiary or
participant "to recover benefits due to him under the
terms of his plan, to enforce his rights under the terms of
the plan, or to clarify rights to future benefits under the
terms of the plan." 29 U.S.C. § 1132(a).
is deemed to conflict with ERISA § 502, and is therefore
preempted, "when it 'duplicates, supplements, or
supplants the ERISA civil enforcement remedy.'''
Menkes, 762 F.3d at 294 (quoting Aetna
Health, 542 U.S. at 209); see also Barber v. UNUM
Life Ins. Co. of Am.,383 F.3d 134, 140 (3d Cir. 2004)
(recognizing that § 502 preempts any claim that
"provides a form of ultimate relief in a judicial forum
that add[s] to the judicial remedies provided by
ERISA."). Section 502 preemption has two requirements:
that (1) a plaintiff could have brought the claim under
§ 502(a) ["ERISA availability"]; and (2)
"no other legal duty supports [the plaintiffs]
claim" ["ERISA dependence"]. Pascack
Valley Hosp., Inc. v. Local 464A UFCW Welfare Reimbursement
Plan,388 F.3d 393, 400 (3d Cir. 2004) ...