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Fisher v. Penn Traffic Co.

February 16, 2007


The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge


Joseph Fisher ("Fisher" or "Plaintiff"), has brought the instant action pursuant to §§ 502(a)(2) and (a)(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C.A. §§ 1132(a)(2) and (a)(3) (West 2007). Plaintiffalleges that his former employer, the Penn Traffic Company ("Penn Traffic" or the "Company"), members of the Board of Directors Byron E. Allumbaugh, Richard P. Brennan, Kevin P. Collins, James A. Demme, Matthew Glass, Robert Hockett, Richard D. Holihan and Peter L. Zurkow (collectively, the "Board"), and the Administrative Committee of the Plan, including member Bernadette Randall-Barber, (the "Committee") (collectively "Defendants") breached their fiduciary duty toward him in their refusal to pay a lump sum benefit as a participant in the Penn Traffic Cash Balance Pension Plan (the "Plan"). Defendants have moved to dismiss the case pursuant to Rule 12(b)(6) for failure to state a claim. For the reasons set forth below, the motion to dismiss this claim is GRANTED.


The following facts are taken from Plaintiff's Complaint as true for purposes of reviewing Defendants' motion to dismiss. See Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991). Plaintiff is a former employee of Penn Traffic and "participant"*fn1 in their cash balance plan. He resigned in early August 2003, and on August 15, 2003, pursuant to the terms of the Plan, filed an application for a lump sum retirement benefit. Compl. ¶¶ 9-10. On September 29, 2003, the Board passed a resolution to terminate the Plan, but continued to process and pay benefits to plan participants. Id. ¶ 22. The Plan's assets and liabilities were subsequently assumed by the Pension Benefit Guaranty Corporation ("PBGC"). Id. ¶ 25. On October 17, 2003, the Committee informed Plaintiff that his request for a lump sum benefit payment was denied but that he was eligible to receive a monthly annuity. Plaintiff declined to receive the monthly annuity. Id. ¶ 11.

Thereafter, on July 31, 2006, Plaintiff filed the instant action and stated three claims for relief. First, Plaintiff alleges that Defendants breached their fiduciary duties imposed by ERISA § 1104(a)(1) when it denied his application for a lump sum benefit (Id. ¶ 26-27) and seeks relief pursuant to ERISA § 502(a)(2), 29 U.S.C. § 1132(a)(2). Second, premised on the same allegations, Plaintiff seeks relief under ERISA § 502(a)(3), 29 U.S.C § 1132(a)(3). Third, Plaintiff alleges that Defendants Penn Traffic and its Board, when it denied his lump sum application, violated ERISA §§ 406 (b)(1) and (b)(2), 29 U.S.C. § 1106 (b)(1) and (b)(2) (Id. ¶¶ 26-27), and seeks relief under ERISA §§ 502(a)(2) and (a)(3), 29 U.S.C § 1132(a)(2) and (a)(3). Plaintiff seeks monetary damages in the amount of his lump sum benefit (Id. at 8), a declaration that the Defendants breached its fiduciary duty and the amount of money to which he is entitled (Id. at 7), and attorneys fees and costs. Id. at 8.


Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the movant must establish that the plaintiff has failed to "state a claim upon which relief can be granted." FED. R. CIV. P. 12(b)(6). In ruling on a Rule 12(b)(6) motion, this Court must construe all factual allegations in the complaint in favor of the non-moving party. See Krimstock v. Kelly, 306 F.3d 40, 47-48 (2d Cir. 2002). The Court's consideration is normally limited to facts alleged in the complaint, documents appended to the complaint or incorporated in the complaint by reference, and to matters of which judicial notice may be taken. Allen, 945 F.2d at 44. A motion to dismiss should not be granted "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Shakur v. Selsky, 391 F.3d 106, 112 (2d Cir. 2004) (quoting McEachin v. McGuinnis, 357 F.3d 197, 200 (2d Cir. 2004)).


Defendants move to dismiss on the grounds that Plaintiff has failed to state a claim under ERISA §§ 502(a)(2) and (a)(3), 29 U.S.C.A. §§ 1132 (a)(2) and (a)(3) (West 2007) ("ERISA §§ 502(a)(2) and (a)(3)").

I will address each argument in turn.

A. Relief Under § 502(a)(2)

It is well established that plan participants may bring actions against plan fiduciaries for breaches of fiduciary duty. See ERISA §§ 409 and 502(a)(2); Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134 (1985). Plaintiff brings this action pursuant to ERISA § 502(a)(2), which authorizes four classes of party-plaintiffs-the Secretary of Labor, a participant, beneficiary, or fiduciary-to bring a civil action. ERISA § 409 provides, in relevant part:

(a) Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to ...

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