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CLAPP v. GREENE

August 29, 1990

ALISON E. CLAPP, PLAINTIFF,
v.
DONALD J. GREENE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.

OPINION AND ORDER

This is an action for injunctive and declaratory relief and damages brought by a former partner in the law firm of LeBoeuf, Lamb, Leiby & MacRae ("LLL & M"). Plaintiff alleges that the individual partners of LLL & M have violated the Employee Retirement Income and Security Act of 1974, 29 U.S.C. § 1132(a)(1)(B), (a)(3) and 1140, as amended, ("ERISA") and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq., as amended, ("RICO"). Plaintiff also alleges various tort and contract violations under state law. Defendants now move for summary judgment dismissing both federal and certain state claims pursuant to Fed.R.Civ.P. 56 and 12(b)(6) for failure to state a cause of action and for failure to plead claims of fraud with particularity under Rule 9(b). Plaintiff cross-moves for summary judgment pursuant to Rule 56 and for injunctive relief pursuant to Rule 65. For the reasons set forth below, defendants' motion is granted and plaintiff's cross-motion is denied.

BACKGROUND

Alison Clapp joined the law firm of LLL & M in 1981 as an associate attorney in the firm's tax department. Her work in the area of tax problems of regulated industries, especially those of public utilities, over the following four years earned her an invitation to join the LLL & M partnership. Clapp signed a Memorandum of Partnership Agreement dated January 1, 1986, (the "1986 Agreement") and in 1987 and 1988 signed amendments to the 1986 Agreement (collectively "the Partnership Agreement"). The Partnership Agreement provided that the term of the LLL & M partnership "shall be indefinite". Greene Aff., Exh. A.

During her years as an associate and continuing after she was made partner, plaintiff received nearly all of her billable work assignments from defendant John Richardson, at that time head of LLL & M's Tax Department. Amended Complaint ¶ 142. Despite her objections, plaintiff failed to obtain meaningful assignments from or involving other LLL & M tax partners. Clapp Aff. ¶ 7-8. In particular, during the years 1982 through 1986, plaintiff performed legal services under the direction of Richardson for one individual client, an English Insurer, amounting to 10-16% of her billable hours. Id. ¶ 145. Richardson also directed plaintiff to perform certain apparently non-billable assignments for the American Bar Association Tax Section, representing to her that he had the approval of the LLL & M Administrative Committee. Id. ¶ 10. Finally, plaintiff claims that Richardson purposely "wrote off," or failed to bill, $300,000 worth of her services performed between 1983 and 1987. Clapp Aff. ¶ 13.

At the same time, plaintiff alleges that Richardson induced her to postpone her efforts to conceive a child until after her advancement to partnership in 1986. Amended Complaint ¶ 166. Richardson allegedly made fraudulent representations assuring plaintiff that the firm would fully accommodate her in her childbearing efforts thereafter if, in consideration, she were to devote herself exclusively to her work prior to becoming a partner. Plaintiff now claims an increased difficulty in sustaining a pregnancy in detrimental reliance on defendants' earlier statements.

On October 26, 1988, Richardson announced his intention to withdraw from the LLL & M partnership and thereafter withdrew on November 15, 1988, taking tax work of the English Insurer client with him to a competing firm. Amended Complaint ¶ 200. Plaintiff claims that, following Richardson's departure, other LLL & M tax partners failed to direct assignments to her and that she was thus unable to maintain an acceptable level of billable hours, having been deprived of client development opportunities over the years. Clapp Aff. ¶ 15.

On February 21, 1989, defendant Greene, a member of the LLL & M Administrative Committee, met with plaintiff and allegedly informed her, in substance, that the firm was dissatisfied with her productivity and that there was no future for her at the firm. Greene Aff. ¶ 14; Clapp Aff. ¶ 10. Greene claims, however, to have offered plaintiff the chance to present a plan for improvement to remedy the situation. Greene Aff. ¶ 14.

In September, 1989, Greene informed plaintiff of the firm's decision to terminate her as a partner. Plaintiff objected to this termination and defendants maintain that the LLL & M partnership was dissolved on December 31, 1989, and a new partnership agreement signed as of January 1, 1990. Plaintiff was not included as a partner in the newly-formed partnership. Plaintiff was offered but declined to accept a lumpsum distribution of all accrued benefits under the LLL & M Retirement and Profit Sharing Plans, the 401(k) plan and her single participant profit sharing plan. Stuken Aff. ¶ 5; Clapp Aff. ¶ 27. Plaintiff has apparently elected to maintain self-financed continuing coverage under the LLL & M group health and medical insurance plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). Stuken Aff. ¶ 6.

Apart from the foregoing actions which apparently are the basis for her claim under ERISA against the defendants, plaintiff outlines a separate series of events for the purposes of establishing a RICO violation. Essentially, the complaint recites that defendants Irving Moskovitz, Peter Schiller and John Young were tax partners in the New York law firm of Graubard, Mollen, Dannett, Horowitz & Pomeranz. These defendants resigned their firm to join LLL & M as partners in 1988, bringing a large client and several other clients with them to LLL & M.*fn1 Amended Complaint ¶ 20-22. Plaintiff complains that LLL & M through its Administrative Committee secretly guaranteed to Moskovitz, Schiller and Young, while each of them was still obligated under a partnership agreement to devote their efforts to the former firm, specific salaries and other benefits if they were successful in transferring a large client account to LLL & M from their former firm. Moskovitz, Schiller and Young agreed and became partners of LLL & M on June 1, 1988. Plaintiff's RICO claim states that these acts were commercial bribery and bribe receiving in violation of New York Penal Law §§ 180.03 and 180.08 as the required two predicate felonies, Amended Complaint ¶¶ 31-41, and deems the continuing receipt of compensation from LLL & M by Moskovitz, Schiller and Young to constitute a pattern of racketeering activity. Id. ¶ 60.

DISCUSSION

ERISA CLAIMS

A court should dismiss a claim under Federal Rule of Civil Procedure 12(b)(6) when it appears that plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957); Philips Business Sys., Inc. v. Executive Communications Sys., Inc., 744 F.2d 287 (2d Cir. 1984). For this purpose, the allegations of the complaint are taken as true, Cruz v. Beto, 405 U.S. 319, 92 S.Ct. 1079, 31 L.Ed.2d 263 (1972), and examination is made whether those allegations constitute a "short and plain" statement of a claim showing that the pleader is entitled to relief. Fed.R.Civ.P. 8(a). See Wright & Miller, Federal Practice and Procedure: Civil 2d § 1357. When examining the sufficiency of the complaint under Rule 8(a), however, conclusory allegations merely stating the general legal conclusions necessary to prevail on the merits and which are unsupported by facts are not taken as true. Packer v. Yampol, 630 F. Supp. 1237, 1241 (S.D.N.Y. 1986); M & M Transportation Co. v. U.S. Industries, Inc., 416 F. Supp. 865, 869 n. 4 (S.D.N.Y. 1976). Examined in this light, plaintiff's allegations constitute a claim not cognizable under ERISA or are not sufficiently alleged to put defendants on notice so that they can form a responsive pleading.

Section 510 of ERISA provides: "It shall be unlawful for any person to discharge . . . a participant or beneficiary . . . for the purpose of interfering with the attainment of any right to which such participant may become entitled under [an employee benefit plan]. . . ." 29 U.S.C. ยง 1140 (1982). Section 510 essentially prohibits employers from, inter alia, "discharging . . . their employees in order to keep them from obtaining vested pension rights." Dister v. ...


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