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Olivo v. Elky

August 20, 2009

RICHARD A. OLIVO, ET AL., PLAINTIFFS,
v.
BARBARA ELKY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Henry H. Kennedy, Jr. United States District Judge

MEMORANDUM OPINION

Plaintiffs Richard Olivo, John Hawkins, and Norman Boone are current and former employees of the National Museum of Women in the Arts ("Museum"). They bring this action against the Museum, the Museum's Defined Contribution Plan ("Plan"), and Plan administrator Barbara Elky, alleging violations of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1500 (2006), and asserting a common law negligence claim.

Before the Court is defendants' motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure [#10]. Upon consideration of the motion, the opposition thereto, and the record of this case, the Court concludes that the motion must be granted.

I. BACKGROUND

ERISA regulates employee benefit plans, "requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto," "establishing standards of conduct, responsibility, and obligation to fiduciaries of employee benefit plans," and "providing for appropriate remedies, sanctions and ready access to the Federal Courts." 29 U.S.C. § 1001.

In 1991, the Museum established the Plan, a defined contribution pension plan under ERISA.*fn1 Pursuant to the Plan, eligible employees contribute a percentage of their earnings to the Plan as tax-deferred retirement savings and the Museum makes a matching contribution. A part-time employee is eligible to enroll in the Plan only if he or she is: credited with 1,000 hours or more of service (including paid absence) during any 12-consecutive calendar month period commencing with his or her Date of Employment or any anniversary date, in which event he or she becomes an Eligible Employee as of the beginning of the 12-month period during which he or she was credited with at least 1,000 hours of service.

Compl. Ex. A, Art XI. The Plan provides, in pertinent part, that "[the Museum] will notify an Eligible Employee when he or she has completed the requirements necessary to become a Participant." Id. Art. II ¶ 2.2; Art. XI.

Olivo, Hawkins, and Boone allege that they became eligible to enroll in the Plan in 1994, 1999, and 2000, respectively, but that defendants failed to notify them of their eligibility until Elky notified them in February 2006. Plaintiffs all enrolled in the Plan after they were notified that they were eligible to do so. According to plaintiffs, in February 2006, Olivo asked Elky to investigate why he and the other employees had not been timely notified of their eligibility to enroll in the Plan and Elky agreed to do so. Subsequently, in May 2006, Olivo sent a memorandum to Judy Larson, the director of the Museum, inquiring about the investigation. Larson responded that Elky would address Olivo's concerns and that the Museum was seeking a fair resolution. Plaintiffs assert that Elky neither responded to their concerns nor attempted to remedy the problem. Plaintiffs allege that they have suffered economic injury due to defendants' untimely failure to notify them of their eligibility to enroll in the Plan.

II. ANALYSIS

Plaintiffs bring four claims. First, they allege that defendants owe them benefits due under the Plan for the years in which they were eligible, but were not informed that they could enroll pursuant to ERISA subsection 502(a)(1)(B). Second, they allege that defendants were negligent when they did not inform plaintiffs of their eligibility to enroll in the Plan. Third, they allege that defendants committed a fiduciary breach pursuant to ERISA subsections 502(a)(2) and (3) when they did not inform plaintiffs of their eligibility to enroll in the Plan. Fourth, they claim civil penalties pursuant to ERISA subsection 502(c)(1)(B) for defendants' alleged failure to comply with their request for information.Defendants move to dismiss all four claims under Rule 12(b)(6). The Court will address defendants' motion to dismiss with respect to each of plaintiffs' claims in turn.

To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead factual allegations sufficient to raise the right to relief beyond the speculative level when the court assumes all allegations in the complaint to be true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A defendant may raise an affirmative defense in a 12(b)(6) motion where the "facts that give rise to the defense are clear from the face of the complaint." Walker v. Pharm. Research & Mfrs. of Am., 569 F. Supp. 2d 209, 216 (D.D.C. 2008) (holding that the court may dismiss a claim on statute of limitations grounds where "no reasonable person could disagree on the date on which the cause of action accrued") (internal citations omitted); see also Stewart v. Nat'l Educ. Ass'n, 471 F.3d 169, 173 (D.C. Cir. 2006) (affirming the trial court's dismissal of state law claims based on a showing of ERISA preemption).

A. Plaintiffs May Not Recover Benefits Due Under the Plan Pursuant to ERISA Subsection 502(a)(1)(B) Because They Did Not Accrue Benefits Under the Plan

Plaintiffs contend that they may recover the benefits they should have earned under the Plan under ERISA Subsection 501(a)(1)(B). Defendants argue that plaintiffs' claim under subsection 502(a)(1)(B) for benefits owed under the Plan must be dismissed because plaintiffs seek benefits they would have earned had defendants notified them of their eligibility to enroll in the Plan as opposed to benefits earned under the Plan. Plaintiffs do not respond to this argument.

Subsection 502(a)(1)(B) provides that "[a] civil action may be brought -- (1) by a participant or beneficiary -- (B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). This subsection allows a plan participant to assert her contractual rights under a benefit plan. Tolle v. Carroll Touch, Inc., 977 F.2d 1129, 1133 (7th Cir. 1992). Recovery under subsection 502(a)(1)(B) is limited to benefits already accrued under a benefit plan. See Eichorn v. AT&T Corp., 484 F.3d 644, 652 (3d Cir. 2007) (holding that plaintiffs may not bring a claim under subsection 502(a)(1)(B) for benefits they would have earned if not for defendants' interference); Tolle, 977 F.2d at 1134 (7th Cir. 1992) ("In order to enforce the terms of a plan under Section 502, the participant must first qualify for the benefits provided in that plan."). Where the plaintiff "seeks past-due ...


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