position of Associate Agency Manager of the Saskatoon,
Saskatchewan, Canada office. On March 31, 1986 he was appointed
as General Manager of the Saskatoon office. Prior to his
assumption of the General Manager's position, Lawford signed a
"General Manager's Employment Agreement" with New York Life.
That one-page employment contract on its terms cancelled any
other employment agreements between plaintiff and New York
Life. The agreement further stated that "The General Manager's
employment under this Agreement may be terminated with or
without cause, by the Company upon written notice, such
termination to take effect as of the date specified in such
notice." Affidavit J. Carl Copeland, sworn to on August 11,
1989 ("Copeland Aff."), Exh. B, ¶ 4. In addition to a regular
salary, general managers at New York Life received commissions
depending upon the performance of the office in their charge.
See General Managers' Compensation Plan, attached as Exh. C to
Copeland Aff. Further, Lawford received a full benefits package
which included medical insurance and the right to accrue
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 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
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.
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
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. Zenith Radio Corp., 475 U.S. 574, 586,
106 S.Ct. 1348, 1355, 89 L.Ed.2d 538 (1986) (citations
B) Exhaustion of Administrative Remedies Under ERISA
Defendants assert that plaintiff failed to exhaust the
administrative remedies available to him under his pension plan
that would have allowed for determination and adjudication of
his pension rights and might have made the instant action
unnecessary or moot. It is uncontested that plaintiff has never
made any claim against his pension plan for the benefits sought
in this action. Plaintiff also does not contest that such
administrative procedures were available under the plan.
There is a substantial disagreement among the Circuits
regarding the need for exhaustion of administrative remedies
before an ERISA action may be heard by a
federal court. The Seventh Circuit has held that "application
of the exhaustion doctrine in ERISA cases by requiring a
claimant to exhaust administrative remedies prior to bringing
suit is a matter within the discretion of the trial court."
Kross v. Western Electric Co., 701 F.2d 1238, 1244 (7th Cir.
1983). "[T]he well-established federal policy, and supporting
case law, favor exhaustion of administrative remedies prior
to bringing an ERISA-based lawsuit in federal court." Id. at
1245. The Eleventh Circuit has agreed with the position of the
Seventh Circuit. Mason v. Continental Group, Inc.,
763 F.2d 1219 (11th Cir. 1985), cert. denied, 474 U.S. 1087, 106 S.Ct.
863, 88 L.Ed.2d 902 (1986).
The Third and Ninth Circuits, however, have not followed the
holding in Kross. In Amaro v. Continental Can Co., 724 F.2d 747
(9th Cir. 1984), the Court found that a plaintiff suing under §
510 of ERISA need not exhaust his grievance or arbitration
procedures prior to bringing a federal court action. In Zipf v.
American Telephone & Telegraph Co., 799 F.2d 889 (3rd Cir.
1986), the Third Circuit explicitly rejected the Seventh
Circuit's position in Kross. In Zipf, the Court was faced with
a situation similar to the one before this Court. The plaintiff
alleged that she was dismissed in order to avoid paying her
disability benefits. There were internal administrative
procedures available to the plaintiff under the defendant's
disability plan, but the plaintiff failed to avail herself of
them prior to filing suit. In reviewing the issue of exhaustion
of remedies in ERISA actions, the Third Circuit stated that
[W]e find no indication in the Act or its
legislative history that Congress intended to
condition a plaintiff's ability to redress a
statutory violation in federal court upon the
exhaustion of internal remedies. The provision [in
the ERISA statute] relating to internal claims and
appeals procedures, Section 503, refers only to
procedures regarding claims for benefits. There is
no suggestion that Congress meant for these
internal remedial procedures to embrace Section 510
claims based on violations of ERISA's substantive
guarantees. On the contrary, the legislative
history suggests that the remedy for Section 510
discrimination was intended to be provided by the
courts. Indeed, an amendment that would have
created an administrative remedy for Section 510
claims, to be established by the Department of
Labor, was defeated.
799 F.2d at 891-92 (citations omitted) (emphasis in original).