Potter v. Shoney's, Inc.

108 F. Supp. 2d 489, 1999 U.S. Dist. LEXIS 22244, 1999 WL 1893199
CourtDistrict Court, M.D. North Carolina
DecidedJuly 16, 1999
Docket1:98CV00229
StatusPublished
Cited by2 cases

This text of 108 F. Supp. 2d 489 (Potter v. Shoney's, Inc.) is published on Counsel Stack Legal Research, covering District Court, M.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Potter v. Shoney's, Inc., 108 F. Supp. 2d 489, 1999 U.S. Dist. LEXIS 22244, 1999 WL 1893199 (M.D.N.C. 1999).

Opinion

MEMORANDUM OPINION

OSTEEN, District Judge.

This matter comes before the court on Defendants’ motion for summary judgment on all Plaintiffs claims pursuant to Fed. R.Civ.P. 56(c). For the reasons discussed herein, the court will grant Defendants’ motion for summary judgment on Plaintiffs ERISA claim. Having disposed of the sole federal claim, the court in its discretion declines to exercise supplemental jurisdiction over the remaining state law claims.

I. FACTUAL AND PROCEDURAL BACKGROUND

The events underlying the present lawsuit arise from Plaintiff David A. Potter’s (Potter) employment and termination with Defendant Shoney’s, Inc. Specifically, Potter alleges that in 1986 he began his employment with Shoney’s South, a predecessor in interest of Shoney’s. (Notice, Ex. A — Am.ComplJ 4.) Throughout his employment, Plaintiff received various promotions, and in 1997, assumed the position of regional owner operator. Id. ¶ 5. 1 Defendant Richard Stone (Stone) was also an employee of Shoney’s and held the position of director of operations of the region which included the seven restaurants supervised by Potter. Id. ¶ 7. As director of operations, Defendant Stone supervised 12 regional owner operators and 92 Shoney’s restaurants. Defendant Stone was Potter’s immediate supervisor. Id. ¶ 8.

Plaintiffs seven causes of action arise out of a conference call that Potter participated in. On February 21, 1997, Stone scheduled a conference call with all 12 regional owner operators under his direction. Id. ¶ 10. While the regional owner operators were waiting to be connected, someone allegedly made racist remarks, which included the use of the word “nigger.” (Mem.Law Supp. Defs.’ Mot. Summ.J. at 3.) Sheila Wilde and Herman Lee, two Shoney’s employees and participants in the conference call, overheard the remarks. Id. Both Wilde and Herman independently reported the conversation. Id. at 4. An investigation by Stone followed. Id. at 5. On February 25, 1997, Potter was summoned to a meeting with Stone in which Potter was asked if he made racist remarks to another Shoney’s employee while he was awaiting the conference call. (Notice, Ex. A — Am. Comply 19.) Stone informed Potter that he was under investigation for allegedly making the racist remarks and Potter was suspended from his job for two days. Id. On February 27, 1997, having concluded the investigation, Stone terminated Potter’s employment on the grounds that he made racist remarks on February 21, 1997. Id. ¶ 20.

Although Shoney’s maintained a Severance Plan Benefits Policy, in which terminated employees meeting specific eligibility requirements outlined in the policy could claim severance benefits, Potter did not receive severance pay. Id. ¶¶ 49-50. Plaintiff further alleges that he was never expressly notified that Shoney’s had determined that he was not entitled to receive severance benefits. Id. ¶ 50.

Plaintiff filed an action in state court alleging causes of action for slander, tor-tious interference with contract against Defendant Stone, violations of ERISA, intentional infliction of emotional distress, breach of contract against Defendant Sho- *491 ney’s, and punitive damages arising out of his termination. (Notice, Ex. A — Am. Compl.)

Defendants removed the action from the Superior Court of Guilford County, North Carolina, to this federal court alleging federal question jurisdiction on the grounds that “[Pjlaintiffs Fifth Cause of Action for (breach of contract) is pre-empted by, and within the civil enforcement provisions of, the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001, et seq.” (Notice of Removal ¶ 2.) 2 Defendants contend that since the benefit plan allegedly breached constituted an ERISA plan it was subject to federal jurisdiction. Defendants further contend that removal was proper since the court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332 based on diversity of citizenship. Id. ¶ 5. Defendants subsequently filed a motion for summary judgment on all claims which is now pending before the court.

II. DISCUSSION

A. Standard for Summary Judgment

An issue may be decided on motion for summary judgment when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In determining whether or not to grant summary judgment, the evidence is to be viewed in the light most favorable to the nonmoving party. See Motor Club of Am. Ins. Co. v. Hanifi, 145 F.3d 170, 174 (4th Cir.1998).

1. Defendants are Entitled to Summary Judgment on Plaintiffs ERISA Violation Claim

Plaintiff alleges that Shoney’s violated the ERISA statute by failing to provide Plaintiff with severance pay. See Notice; Ex. A — Am. Compl. ¶¶ 55-58. The parties do not dispute the fact that Shoney’s Severance Benefits Plan constituted an employee welfare benefit plan within the meaning of ERISA. See id. and Notice of Removal ¶ 2; see also Delaye v. Agripac, Inc., 39 F.3d 235, 237 (9th Cir.1994); Aliff v. BP Am., Inc., 26 F.3d 486, 488-89 (4th Cir.1994). An action for benefits under an employee welfare plan governed by ERISA may only be maintained by a “participant” or “beneficiary” of an ERISA plan. 29 U.S.C. § 1132(a)(1); Clark v. E.I. Dupont de Nemours & Co., 105 F.3d 646, No. 95-2845, 1997 WL 6598 (4th Cir. Jan. 9, 1997). The Fourth Circuit has held that a former employee qualifies as a participant of a plan where “the claimant has ... ‘a colorable claim that ... he ... will prevail in a suit for benefits....’” See Sedlack v. Braswell Serv. Group, Inc., 134 F.3d 219, 226 (4th Cir.1998). The Fourth Circuit has found “[t]he requirement that a claim be colorable ‘is not a stringent one’ and is satisfied if the claim ‘is arguable and nonfrivolous, whether or not it would succeed on the merits.’ ” Id.

The parties dispute whether Plaintiff qualifies as a participant such that he has standing to bring the present action.

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108 F. Supp. 2d 489, 1999 U.S. Dist. LEXIS 22244, 1999 WL 1893199, Counsel Stack Legal Research, https://law.counselstack.com/opinion/potter-v-shoneys-inc-ncmd-1999.