Metaxas v. Gateway Bank F.S.B.

Background

This case concerns benefits under the Gateway Bank Supplemental Executive Retirement Plan, a supplemental executive retirement plan governed by the Employee Retirement Income Security Act (ERISA). Poppi Metaxas was Gateway Bank’s president and chief executive officer before her disability and departure from the bank. She alleged that Gateway Bank agreed to provide deferred compensation and created the plan, which offered disability and termination benefits.

Metaxas filed a claim for disability and termination benefits in March 2013. Gateway Bank denied the claim in February 2016, and its Administrative Committee upheld the denial in May 2017. In an earlier round of this case, the court ruled on summary judgment that Metaxas was entitled to termination benefits but not disability benefits and sent the termination-benefits issue back to the plan administrator for reconsideration. After reconsideration, the Administrative Committee found that she was entitled to $9,252.95 per month beginning May 1, 2013.

Metaxas later appealed the committee’s decision, disputing the amount of past and future benefits, seeking interest on past benefits, and alleging that defendants had not produced documents. After the court allowed her to supplement her complaint, she filed a First Amended Supplemental Complaint asserting four claims: benefits under ERISA § 502(a)(1)(B); equitable relief under ERISA § 502(a)(3); statutory penalties for failure to produce documents under ERISA § 502(a)(1)(A); and enforcement of rights under the plan under ERISA § 502(a)(1)(B). Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim.

Court’s analysis

Tax withholdings and prejudgment interest

The court held that Metaxas did not identify any plan term or ERISA provision entitling her to additional benefits for tax withholdings or prejudgment interest. Alleged implied plan terms were insufficient because a claim for benefits under ERISA § 502(a)(1)(B) must identify the plan provisions that provide the claimed benefits.

The court also explained that prejudgment interest in an ERISA case is generally a discretionary remedy based on fairness, not an automatic entitlement under ERISA § 502(a)(1)(B). Because the parties had not briefed whether the court should exercise that discretion or what factors should apply, the court deferred that issue. It granted the motion to dismiss the claim for tax withholdings and prejudgment interest without prejudice to raising the question of a discretionary prejudgment-interest award.

Equitable relief

Metaxas sought equitable estoppel and reformation based on her contention that deferred compensation used to purchase the life-insurance policy should have been included in calculating her plan benefits. The court rejected those theories because they would produce benefits inconsistent with the plan’s written terms and would effectively amend or modify the plan.

The court also adhered to its earlier conclusion that the additional monetary relief Metaxas sought constituted an equitable surcharge. It had previously concluded that this type of relief was available only against a fiduciary and that a general duty of good faith was not a sufficient basis for the claim. The court therefore granted the motion to dismiss the equitable-relief claim with prejudice.

Penalties for failure to provide documents

The court ruled that penalties under ERISA § 502(c) may be asserted only against the plan administrator. Under the plan documents, the Gateway Bank SERP Administrative Committee—not Gateway Bank, the plan, or the Appeals Committee—was the proper defendant for this claim. The court therefore granted the motion to dismiss the claim as to Gateway Bank, the Gateway Bank Supplemental Executive Retirement Plan, and the Gateway Bank SERP Appeals Committee.

The court also held that Metaxas had not cured the pleading problems identified in the earlier round of this case. She did not identify the specific documents she requested or identify the specific ERISA provision governing each request. In addition, the statutes and regulations she cited did not create the document-disclosure requirement needed to support penalties for this plan. The court therefore granted the motion to dismiss the document-penalty claim.

Enforcement of the plan’s document-review provision

Metaxas separately relied on Section 8.3 of the plan, which allows a claimant under review to examine pertinent documents. The court held that she failed to identify the specific documents requested and explain why they were pertinent under that provision. Defendants represented that they had produced the documents relevant to the committee’s review of her benefits claim. The court agreed that Metaxas’s broader requests, including requests for board resolutions and historical plan documents, were not pertinent to that review.

The court therefore granted defendants’ motion to dismiss the claim seeking enforcement of plan-based document-access rights beyond the documents already produced.

Disposition

Judge Edward M. Chen granted defendants’ motion to dismiss Metaxas’s First Amended Supplemental Complaint. The court dismissed the equitable-relief claim with prejudice; dismissed the tax-withholding and prejudgment-interest claim without prejudice to seeking discretionary prejudgment interest; dismissed the document-penalty claim; and dismissed the claim for additional documents under the plan. The court stated that the termination-benefits claim under ERISA § 502(a)(1)(B) was the sole remaining claim.