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LAWFORD v. NEW YORK LIFE INS. CO.

June 18, 1990

RONALD LAWFORD, PLAINTIFF,
v.
NEW YORK LIFE INSURANCE COMPANY, AND NEW YORK LIFE INSURANCE COMPANY OF CANADA, DEFENDANTS.



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

  OPINION AND ORDER

This is an action brought pursuant to Section 510 of the Employee's Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1140, with pendant common law claims. Plaintiff alleges that he was fired from his position in order to limit his accrual of pension benefits and contractual commissions. Defendants have brought the instant motion to dismiss plaintiff's complaint on a variety of grounds, including failure to state a claim on which relief may be granted, lack of personal jurisdiction over defendant New York Life Insurance Company of Canada ("NYLCAN"), lack of subject matter jurisdiction, and for forum non conveniens. Defendants have moved for summary judgment on certain of plaintiff's claims pursuant to Fed.R.Civ.P. 56. Defendants also demand a bond for costs pursuant to Local Rule 39.*fn1 For the reasons stated below, defendants' motion is granted in part and denied in part.

BACKGROUND

Lawford's tenure as General Manager of the Saskatoon office lasted until July 6, 1988, when he received notice of his dismissal, effective July 15, 1988.*fn2 Defendants claim that Lawford was dismissed because the performance of the Saskatoon office declined precipitously during the time Lawford was General Manager. Defendants trace that office's decline directly to Lawford's performance. In particular, defendants claim that Lawford was a poor personnel manager, resulting in a number of sales agents leaving the office prematurely, and failing to get the remaining agents to perform at an optimum level. Plaintiff does not deny that the office's financial performance declined during his tenure. However, plaintiff alleges that that decline was the result of a downturn in the Saskatchewan economy, and of New York Life's decision to make personnel cutbacks in certain offices, including in the office in Saskatoon. Plaintiff alleges the defendants' decision to terminate him was not based on his performance, but was instead motivated by a decision to reduce the cost of Canadian operations. Plaintiff contends that he was dismissed in order to save on costs. In particular, plaintiff maintains that defendants chose to dismiss him to prevent him from obtaining higher pension benefits and to avoid paying him certain commissions that were due and owing to him.

At the time of his termination, plaintiff was offered a severance package. First, New York Life offered plaintiff a job in the "field," which the Court interprets as an offer to return to the position of a sales agent or the equivalent. In the alternative, defendants offered four months salary and relocation assistance. Lawford Aff., Exh. C. Plaintiff apparently indicated to New York Life that he was unsatisfied with that package. Thus, on July 25, 1988, New York Life made a second offer to plaintiff, offering compensation equal to six months pay, as well as continued group and health insurance for up to six months. Lawford Aff., Exh. B. Plaintiff also rejected this offer, indicating that he wished to receive at least nine months compensation and benefits. Lawford Aff. Exh. D. It appears that New York Life did not respond to plaintiff's request for a larger severance package. Indeed, there appears to have been no further communication between the parties regarding severance. It seems that plaintiff has never received any severance pay from New York Life.

At the time of his discharge, plaintiff believed that his pension benefits had not, and would not vest, resulting in the loss of substantial future income. Lawford Aff., Exh. D. In fact, a portion of plaintiff's complaint is based on the contention that plaintiff was terminated just seven months short of when his pension benefits would have vested. Complaint ¶ 24. Defendants have now presented evidence that plaintiff's pension benefits have vested since his pension rights are affected by the liberal pension provisions of Canadian law. See Reply Affidavit of George J. Tripp, sworn to on November 9, 1989.*fn3 Prior to the filing of defendants' reply papers in support of the instant motion, plaintiff had never been informed that his pension rights had survived his termination. Plaintiff asserts that even if his pension benefits have vested, his termination still resulted in a substantial pension savings to defendants, in violation of ERISA.*fn4 It is not clear from the record whether, and to what extent, the scope of those pension rights was affected by plaintiff's termination.

Plaintiff further asserts that defendants terminated him with the additional intent of avoiding paying commissions that would have been due and owing to Lawford for the calendar year 1988. This alleged decision to terminate in avoidance of contractual commission payments is, plaintiff contends, a breach of the covenant of good faith and fair dealing in the employment and compensation agreements between the parties. Plaintiff further maintains that defendants, by their actions, have inflicted emotional distress on him, interfered with plaintiff's legitimate contractual relations, and have harmed his ability to gain future satisfactory employment.

Defendants' instant motion attacks plaintiff's complaint on six grounds. First, defendants contend plaintiff's ERISA claim should be dismissed for failure to exhaust administrative remedies. Second, defendants claim the ERISA claims should be dismissed for failure to make out of prima facie case of improper motive in the termination. Third, defendants assert that compensatory and punitive damages are not available under § 510 of ERISA. Fourth, defendants allege that this Court lacks jurisdiction over the claims against them. Fifth, defendants assert that plaintiff's common law causes of action should be dismissed for failure to state a claim. Sixth, defendants maintain that this action should be dismissed for forum non conveniens. Finally, defendants request that if any or all of plaintiff's claims survive the instant action, that plaintiff be required to post a bond for costs pursuant to Local Civil Rule 39.

DISCUSSION

A) Standards

The majority of defendants' motion is brought pursuant to Fed.R.Civ.P. 12. A portion of the motion is brought as a motion for summary judgment pursuant to Fed.R.Civ.P. 56.

1) Motion to Dismiss

"Dismissal of a complaint for failure to state a claim is a `drastic step.'" Meyer v. Oppenheimer Management Corp., 764 F.2d 76, 80 (2d Cir. 1985) (citations omitted). "The function of a motion to dismiss `is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.'" Ryder Energy Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984) (citations omitted). Thus, a motion to dismiss must be denied "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." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974), citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957); see also Morales v. New York State Dep't of Corrections, 842 F.2d 27, 30 (2d Cir. 1988). In deciding a motion to dismiss, the Court must accept plaintiff's allegations of fact as true together with such reasonable inferences as may be drawn in his favor. Murray v. Milford, 380 F.2d 468, 470 (2d Cir. 1967). See also Scheuer, supra, 416 U.S. at 236, 94 S.Ct. at 1686.

2) Motion for Summary Judgment

Rule 56(c) provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." "`Summary judgment is appropriate when, after drawing all reasonable inferences in favor of the party against whom summary judgment is sought, no reasonable trier of fact could find in favor of the non-moving party.'" Horn & Hardart Co. v. Pillsbury Co., 888 F.2d 8, 10 (2d Cir. 1989), quoting Murray v. National Broadcasting Co., 844 F.2d 988, 992 (2d Cir.), cert. denied, 488 U.S. 955, 109 S.Ct. 391, 102 L.Ed.2d 380 (1988).

The substantive law governing the case will identify those facts which are material, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will probably preclude the entry of summary judgment. . . . While the materiality determination rests on the substantive law, it is the substantive law's identification of which facts are crucial and which facts are irrelevant that governs." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). "[T]he judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there does indeed exist a genuine issue for trial." Id. at 249, 106 S.Ct. at 2510; see also R.C. Bigelow, Inc. v. Unilever N.V., 867 F.2d 102, 107 (2d Cir.), cert. denied sub nom. Thomas J. Lipton, Inc. v. R.C. Bigelow, Inc., ___ U.S. ___, 110 S.Ct. 64, 107 L.Ed.2d 31 (1989). The party seeking summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion" and identifying which materials it believes "demonstrates the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); see also Trebor Sportswear Co. v. Limited Stores, Inc., 865 F.2d 506, 511 (2d Cir. 1989). "[T]he burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex, supra, 477 U.S. at 325, 106 S.Ct. at 2554.

Indeed, once a motion for summary judgment is properly made, the burden then shifts to the nonmoving party, which "must set forth facts showing that there is a genuine issue for trial." Anderson, supra, 477 U.S. at 250, 106 S.Ct. at 2511. The nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Industrial Co. v. ...


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