Amron v. Yardain Inc. Pension Plan

Background

Kenneth Amron sued the Yardain Inc. Pension Plan, Yardain Inc., and Sandra Adelsberg. He alleged breach of contract and violations of the Employee Retirement Income Security Act of 1974 (ERISA). The defendants moved to dismiss the First Amended Complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim.

Amron and Adelsberg were married. Their divorce judgment said the pension plan would be divided equally and that the parties would complete any required qualified domestic relations orders (court orders assigning pension benefits to a former spouse). A 2015 order awarded Amron 50% of Adelsberg’s vested accrued benefit under the plan as of December 7, 2006.

The plan’s actuary calculated Amron’s share as a lump sum of $263,013 based on the benefit’s value as of December 7, 2006. Amron did not return the distribution forms at that time. Later, actuaries retained by Amron calculated a substantially higher benefit and stated that the lump-sum present value should be calculated using the date of distribution rather than December 2006. Amron then sued.

ERISA Section 502(a)(1)(B) Benefits Claim

The court held that Amron sufficiently stated a claim for benefits under ERISA section 502(a)(1)(B). The parties disagreed about the date used to discount the future pension payments to present value. The defendants argued for December 7, 2006, while Amron argued for the date when the benefits would be paid.

The court applied de novo review, meaning it considered the legal question independently rather than deferring to the plan administrator. It reasoned that the dispute involved statutory interpretation and interpretation of the qualified domestic relations order. The court concluded that, absent a plan provision requiring otherwise, the present value of the assigned benefit should be determined as of the date the lump sum is paid.

The court explained that the qualified domestic relations order fixed Amron’s share based on Adelsberg’s vested benefit as of December 7, 2006, so Amron did not receive increases in the benefit that accrued after that date. But that date did not necessarily determine the separate present-value calculation for a lump-sum payment. Because the complaint plausibly alleged that the benefit had been discounted back to December 2006 unlawfully, the claim survived dismissal.

The court also declined to dismiss the benefits claim based on failure to exhaust administrative remedies, delay, or equitable estoppel. It treated those issues as affirmative defenses and found that the complaint did not establish them conclusively at the motion-to-dismiss stage.

Breach-of-Contract Claim

The court dismissed the breach-of-contract claim. It deemed the claim abandoned because Amron did not respond to the defendants’ arguments seeking its dismissal. The court also stated that, even on the merits, the claim was preempted by ERISA because it was based on the pension plan and sought recovery for the alleged denial of benefits under that plan.

ERISA Section 502(a)(1)(A) Statutory-Penalty Claim

The court dismissed Amron’s claim for statutory penalties under ERISA section 502(c), brought through section 502(a)(1)(A). Amron alleged that the plan administrator failed to provide requested plan documents and sought a penalty of $110 per day.

The complaint identified Yardain Inc., not Adelsberg, as the plan administrator. The court found that Amron’s document requests were not sent to Yardain Inc. as the plan administrator. The court also noted that the complaint did not allege how the delay in providing documents harmed or prejudiced Amron. Because statutory penalties under the cited provision are limited to the plan administrator, the claim was dismissed.

ERISA Section 502(a)(2) Claim

The court dismissed Amron’s claim under ERISA section 502(a)(2). That provision permits a claim brought on behalf of the plan as a whole for certain fiduciary violations; it does not provide individual relief for a participant’s unpaid benefits. Amron sought relief for himself rather than on behalf of the plan. The court also deemed this claim abandoned because he did not address the defendants’ dismissal arguments in his opposition.

Proposed ERISA Section 502(a)(3) Claim

Amron raised a new fiduciary-duty claim under ERISA section 502(a)(3) in his opposition papers rather than in the complaint. The court stated that it could not consider a new claim presented only in opposition to a motion to dismiss. The court further stated that allowing an amendment would be futile because Amron sought money damages identical to those sought under section 502(a)(1)(B), rather than the equitable relief authorized by section 502(a)(3).

Disposition

Judge Schofield granted the defendants’ motion to dismiss in part and denied it in part. The motion was granted as to Amron’s claims under ERISA sections 502(a)(1)(A) and 502(a)(2), and as to the breach-of-contract claim. The motion was denied as to Amron’s claim under ERISA section 502(a)(1)(B). The court stated that a case-management plan would issue separately and directed the clerk to close the motion.