Metaxas v. Gateway Bank F.S.B.

Background

Poppi Metaxas alleged that Gateway Bank agreed in 2004 to provide her deferred compensation and later established a Supplemental Executive Retirement Plan. The plan offered disability and termination benefits. Metaxas alleged that she sought disability and termination benefits in 2013, that Gateway Bank denied her claim in 2016, and that the Bank’s Administrative Committee upheld the denial in 2017.

After an earlier remand, the Administrative Committee determined in March 2023 that Metaxas was entitled to termination benefits of $9,252.95 per month beginning May 1, 2013. Metaxas disputed the amount and sought at least $19,626.16 per month, interest on past benefits, and additional relief concerning tax withholding and documents. Her supplemental complaint asserted three claims under the Employee Retirement Income Security Act (ERISA): a claim for benefits, a claim for equitable relief, and a claim for penalties based on failure to provide required documents.

Claim for Plan Benefits

The court held that Metaxas adequately stated a claim for termination benefits under ERISA § 502(a)(1)(B). She identified the Gateway Bank Supplemental Executive Retirement Plan and Section 5.3(b), which addresses termination benefits. The court also noted that the Administrative Committee had determined on remand that she was entitled to a specific termination-benefit amount.

The court nevertheless held that Metaxas did not adequately plead entitlement to interest, tax-withholding benefits, financial costs, or increased taxes. She had not identified a plan term or statute establishing entitlement to those additional amounts. The court therefore denied in part the motion to dismiss the plan-benefits claim, but granted dismissal of the claims for interest and tax withholding, with leave to amend. The order’s opening disposition describes the dismissal of the denial-of-benefits claim as without prejudice and with leave to amend.

Claim for Equitable Relief

Metaxas sought relief including an equitable lien, a constructive trust involving the cash value of the life-insurance policy, an accounting, an injunction, appointment of an independent trustee, disgorgement, interest, financing costs, and compensation for increased taxes.

The court explained that the plan was a “top-hat” plan—an unfunded plan maintained primarily to provide deferred compensation to a selected group of management or highly compensated employees—and that such plans are exempt from ERISA’s fiduciary-duty requirements. The court assumed, for purposes of its analysis, that Gateway Bank had the knowledge needed for a claim against a non-fiduciary. It found that Metaxas adequately alleged a remediable violation but did not adequately seek an appropriate equitable remedy.

In particular, the court characterized her request for additional monetary compensation as an equitable surcharge. It held that such a surcharge was available only against a fiduciary, while Metaxas sued Gateway Bank. The court also rejected her reliance on a general contractual duty of good faith because she had not alleged misleading conduct and sought a surcharge rather than plan reformation or equitable estoppel. The court granted the motion to dismiss the equitable-relief claim, with leave to amend, and separately granted dismissal of the contractual good-faith claim, also with leave to amend.

Claim for Required Documents

Metaxas sought penalties under ERISA § 502(c) for Gateway Bank’s alleged failure to provide requested documents. The court held that penalties under that provision may be asserted only against the plan administrator. The plan identified an Administrative Committee, consisting of at least three people appointed by Gateway Bank’s Board of Directors, as the plan administrator. The court therefore granted dismissal of the claims against Gateway Bank on the ground that it was not the proper defendant, with leave to amend to name the proper defendants.

The court also found that Metaxas had not identified a specific ERISA provision requiring disclosure of the documents she requested. It allowed her to amend by identifying the documents requested and the specific ERISA provision governing each request. The court further stated that requests made more than three years before the filing of the initial complaint were outside the applicable limitations period. The court’s conclusion granted the motion to dismiss the claim for failure to produce ERISA-required documents, with leave to amend.

Disposition

The court granted in part and denied in part Gateway Bank’s motion to dismiss the denial-of-benefits claim, with leave to amend. It granted dismissal of the equitable-relief claim, the contractual good-faith claim, and the claim for failure to produce ERISA-required documents, with leave to amend.