Eret v. Continental Holding, Inc.

838 F. Supp. 358, 1993 WL 499231
CourtDistrict Court, N.D. Illinois
DecidedNovember 19, 1993
Docket92 C 4758
StatusPublished
Cited by10 cases

This text of 838 F. Supp. 358 (Eret v. Continental Holding, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eret v. Continental Holding, Inc., 838 F. Supp. 358, 1993 WL 499231 (N.D. Ill. 1993).

Opinion

MEMORANDUM OPINION AND ORDER

ALESIA, District Judge.

Plaintiff James P. Eret (“Eret”) brings this two-count Amended Complaint against Continental Holding, Inc., fik/a Continental Group, f/k/a Continental Can Company, Inc., CCC Salaried Pension Plan, Crown Beverage Packaging Inc. Salaried ■ Pension Plan, and Peter Kiewit Sons’ Inc., alleging violations under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132, 1140. In his first count, plaintiff alleges that each of the named defendants violated Section 510 of ERISA, 29 U.S.C. § 1140, by transferring Eret to another plant to avoid pension liability. Amended Complaint, at ¶¶23, 24. In his second count, Eret claims that the General Pension Board’s (“Pension Board”) decision to deny full benefits to Eret was “arbitrary [and] capricious, not made in good faith,” and “erroneous as a matter of law.” Amended Complaint, at ¶ 29.

Defendants Continental Holding, Inc. and Peter Kiewit Sons’, Inc. (collectively “defendants”) 1 filed a motion to dismiss the counts *361 against them. The motion was referred to Magistrate Judge Rosemond for a Report and Recommendation (“Report”). Magistrate Judge Rosemond entered his Report recommending that this court deny the motion to dismiss. The defendants subsequently submitted their objections to the Report, and Eret responded with memoranda in opposition to defendants’ objections. These objections and responses are now before the court.

For the reasons set forth below, the court sustains the defendants’ objections, and dismisses Counts I and II of plaintiffs Amended Complaint without prejudice.

I. FACTS

From April 13, 1959 until January, 1986, defendant Continental employed plaintiff James P. Eret at Continental’s O’Hare plant. In January 1986, Continental temporarily assigned Eret to its West Chicago plant, although Continental still technically classified Eret as an employee of the O’Hare plant. Continental usually gave its employees the opportunity to accept or reject a transfer but, in this instance, Continental transferred Eret without seeking Eret’s consent. At some point in 1988, Continental made Eret’s transfer to West Chicago permanent. At all times that Eret remained in Continental’s employ, Eret participated in a pension plan offered by Continental to its employees (“Pension Plan”).

In September 1988, Continental sold the West Chicago plant to Figgie International (“Figgie”). Eret continued to work for Figgie after the sale, and sometime during 1988 the O’Hare plant closed. Eret subsequently applied for severance pay and early retirement benefits pursuant to Continental’s 75/80 provision of its Pension Plan. The General Pension Board denied Eret’s request, which prompted Eret to file this action. In response, defendants filed a motion to dismiss both counts of Eret’s Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).

In Count I, Eret alleges that Continental violated section 510 of ERISA because Continental transferred him to West Chicago “solely to avoid [pension liability under Continental pension plan’s] 75/80 pension provision.” Amended Complaint, at ¶ 24. Essentially, Eret alleges that he is due all benefits that he would have received if he were employed at the O’Hare plant when it shut down. Eret maintains that the transfer to West Chicago was discriminatory, evidenced in part by the fact that Continental did not transfer a fellow, better qualified employee who happened to be ineligible for 75/80 benefits in the event of a shutdown at the West Chicago plant. Eret contends that the West Chicago plant had “no real need for his services,” and thus the permanent transfer was effectuated only to escape pension liability. 2 Amended Complaint, at ¶24.

Defendants moved -to dismiss Count I pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that Eret had not alleged either discharge or constructive discharge, the only two causes of action recognized by Section 510. The Magistrate Judge recommended denying defendants’ motion to dismiss Count I, reasoning that the legislative history of ERISA supports a more expansive reading of Section 510 than the restricted scope asserted by defendants.

In Count II, Eret asserts that the Pension Board’s decision to deny Eret pension benefits pursuant to the plant shutdown policy was erroneous. Specifically, Eret claims that the Pension Board should have ruled that the sale of the West Chicago Plant was a shutdown which vested Eret’s pension benefits. In his Report, the Magistrate Judge found that the Pension Plan was a document outside the pleadings and, as such, could not be considered on a motion to dismiss. Without the critical information contained in the Pension Plan, the Magistrate Judge concluded that the only proper course of action was to *362 deny the defendants’ motion to dismiss. In all other respects, the Magistrate Judge stated that the analysis regarding Count I also applied to Count II. Defendants objected to the Magistrate Judge’s refusal to consider the Pension Plan, arguing that the court may properly consider the Pension Plan as part of the pleadings. Defendants contended that the Magistrate Judge should have reviewed the Pension Board’s decision under the arbitrary and capricious standard and, viewed as such, the decision to deny Eret benefits was within its discretion. We will address each of defendants’ objections to the Magistrate Judge’s Report and to Eret’s responses in turn.

II. DISCUSSION

A. Standard of Review

1. Motion to Dismiss

In ruling upon a motion to dismiss, this court must accept as true all facts as alleged in the plaintiffs Amended Complaint, and draw all reasonable inferences favorable to the plaintiff. Bowman v. City of Franklin, 980 F.2d 1104, 1107 (7th Cir.1992), cert. denied, — U.S. -, 113 S.Ct. 2417, 124 L.Ed.2d 639 (1993). The motion should not be granted unless it is clear that plaintiffs cannot prove any set of facts consistent with the allegations which would entitle them to relief. Gorski v. Troy, 929 F.2d 1183, 1186 (7th Cir.1991) (quoting Conley v. Gibson, 355 U.S. 41, 45 — 46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957)); Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984). The court need not accept, however, legal conclusions either alleged or inferred from facts in the complaint. Chawla v. Klapper,

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Bluebook (online)
838 F. Supp. 358, 1993 WL 499231, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eret-v-continental-holding-inc-ilnd-1993.