United States District Court, Southern District of New York
October 10, 1991
DAVID M. HABER AND STEPHEN HERSH, INDIVIDUALLY AND IN THEIR CAPACITIES AS TRUSTEES OF THE MONMOUTH INVESTMENTS, INC. DEFINED BENEFIT PENSION PLAN, PLAINTIFFS,
ARDEN BROWN, JESSE SOFER AND C.B. PLANNING, INC., WASHINGTON NATIONAL LIFE INSURANCE COMPANY OF NEW YORK AND MUTUAL BENEFIT LIFE INSURANCE COMPANY. DEFENDANTS.
The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
OPINION AND ORDER
This is an action for injunctive relief and damages alleging
violations of the Employee Retirement Income Security Act of 1974
(ERISA). Defendant Washington National Life Insurance Company
(Washington National) moves to dismiss the claims against it
pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil
Procedure. For the reasons set forth below, defendant's motion to
dismiss pursuant to Rule 12(b)(6) is granted.
For purposes of this motion, the facts as stated in the
complaint must be taken as true. See Scheuer v. Rhodes,
416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). This action
is brought under ERISA by trustees of and participants in the
Monmouth Investments, Inc. Defined Benefit Pension Plan (the
Plan) against Arden Brown, former president of Monmouth
Investments, Inc. and sole trustee of the Plan, for his alleged
breach of fiduciary duty and acts of self-dealing. Washington
National and Mutual Benefit Life Insurance Company (Mutual
Benefit) were added as defendants in the second amended
complaint. On August 1, 1991, this Court stayed this action as
against Mutual Benefit and placed it on the suspense calendar
until January 1, 1992, pursuant to an order signed by Judge Levy
of the Superior Court of New Jersey, Chancery Division, Mercer
County, enjoining and restraining all parties from maintaining
actions against Mutual Benefit, which is currently in
rehabilitation. Before the stay was issued, on April 25, 1991,
Mutual Benefit had filed a motion to dismiss the claims against
it. Washington National moves upon the papers of Mutual Benefit
to dismiss the claims against Washington National.
The second amended complaint alleges that Washington National
was a fiduciary of the Plan, as defined in
29 U.S.C. § 1002(21)(A), on the grounds that it "issued various insurance
policies or annuities purchased by the Plan, and provided
actuarial service, investment advice and other services to the
Plan" for a fee. Complaint ¶¶ 10, 12. The second cause of action
charges Washington National with breach of its fiduciary duties.
Complaint ¶¶ 20-21. The third cause of action charges that
Washington National "aided, abetted and conspired with Brown" in
his breaches of his fiduciary duties. Complaint ¶ 23.
Rule 8(a) of the Federal Rules of Civil Procedure requires that
a pleading setting forth a claim for relief contain "a short and
plain statement of the claim showing that the pleader is entitled
to relief." In allowing such simplified "notice pleading," the
Federal Rules reject the approach that "pleading is a game of
skill" in which the outcome may turn on a mere technicality.
Conley v. Gibson, 355 U.S. 41, 48, 78 S.Ct. 99, 103, 2 L.Ed.2d 80
(1957). At the same time, Rule 8 is intended to insure that the
opposing party receive "fair notice of what the plaintiff's claim
is and the grounds upon which it rests." Id. at 47, 78 S.Ct. at
102-03 (emphasis added).
While the Federal Rules do not require detailed pleading, it is
well-established that a "bare bones statement" of the legal claim
without any supporting facts warrants dismissal. E.g., Heart
Disease Research Found. v. General Motors Corp., 463 F.2d 98, 100
(1972); see also Ostrer v. Aronwald, 567 F.2d 551, 553 (2d Cir.
1977) (dismissing complaint containing "unsupported allegations,
which fail to specify in detail the factual basis necessary to
enable appellees intelligently to prepare their defense"); Bush
v. Masiello, 55 F.R.D. 72, 74 (S.D.N.Y. 1972) (in determining
legal sufficiency of "claim," the term has been defined as "`the
aggregate of operative facts which give rise to right enforceable
in the courts'" (citation omitted)); Unibrand Tire & Prod. Co. v.
Armstrong Rubber Co., 429 F. Supp. 470, 473 (W.D.N.Y. 1977)
(complaint "must contain sufficient factual allegations from
which every material point necessary to sustain recovery can be
Here, the second amended complaint supports its allegation that
Washington National is a fiduciary as defined in ERISA simply by
incorporating terms directly from the statute. See
29 U.S.C. § 1002(21)(a)(ii) (defining fiduciary under ERISA); Complaint ¶¶
10, 12. Beyond these conclusory statements, not a single fact is
alleged to provide the basis for applying the statute's terms to
Washington National specifically. Similarly, no facts are alleged
to provide grounds for the claim that Washington National
knowingly participated in Brown's fiduciary breaches. Allegations
this bare fail to afford Defendant adequate notice of the grounds
underlying the claim against it. See Reily v. Axe-Houghton
Management, No. 87 Civ. 2817, 1988 WL 18895, at *4 (S.D.N.Y. Feb.
24, 1988) (dismissing claim of breach of fiduciary duty where
plaintiff failed to allege "a single fact to support its
allegation" that defendant was a fiduciary).
Accordingly, the claims against Washington National are
dismissed, with leave to amend the complaint to allege facts
sufficient to notify Defendant of the grounds for the
IT IS SO ORDERED.
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