Russell v. FPS Fire Protection System

• Court: District Court, D. New Hampshire
• Decided: November 25, 2003
• Docket: CV-03-095-JD
• Status: Published

Opinion

Russell v . FPS Fire Protection System CV-03-095-JD 11/25/03 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Leonard D. Russell

v. Civil N o . 03-095 JD Opinion N o . 2003 DNH 201 FPS Fire Protection Systems, Inc., et a l .

O R D E R

The plaintiff, Leonard D. Russell, brought suit in state court against his former employer, FPS Fire Protection Systems, Inc., and the individuals who own and control the company, Diane and David Goodridge, alleging claims for unpaid wages, promissory estoppel, intentional infliction of emotional distress, and fraud. The defendants removed the case to this court. The defendants now move for judgment on the pleadings, contending that Russell’s claims are preempted by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1144.

Standard of Review

“After the pleadings are closed but within such time as not

to delay the trial, any party may move for judgment on the

pleadings.” Fed. R. Civ. P. 12(c). When considering a motion

for judgment on the pleadings, the “court must accept all of the

nonmoving party’s well-pleaded factual averments as true and draw all reasonable inferences in her favor.” Feliciano v . Rhode

Island, 160 F.3d 7 8 0 , 788 (1st Cir. 1998). The court may also

consider the factual allegations in the answer, taken in the

light most favorable to the plaintiff. NEPSK, Inc. v . Town of

Holton, 283 F.3d 1 , 8 (1st Cir. 2002); Hoeft v . Tucson Unified

Sch. Dist., 967 F.2d 1298, 1301 n.2 (9th Cir. 1992). Judgment on the pleadings is not appropriate “‘unless it appears beyond doubt

that the plaintiff can prove no set of facts in support of her

claim which would entitle her to relief.’” Santiago de Castro v .

Morales Medina, 943 F.2d 129, 130 (1st Cir. 1991) (quoting

Rivera-Gomez v . De Castro, 843 F.2d 6 3 1 , 635 (1st Cir. 1988)).

Background

Russell alleges that David and Diane Goodridge are the

officers and principal shareholders of FPS, a company that

designs and installs sprinkler systems. They also own and manage

several other related businesses. Russell began his employment

with FPS in June of 1985 as a designer and estimator.

David Goodridge promised Russell that FPS or the Goodridges

would pay him an additional 10% of his yearly salary each year to

be deposited into a retirement account. Russell alleges that the

promise was recorded in a written document, signed by David

2 Goodridge.1 During the course of his seventeen years of

employment, Russell inquired repeatedly about the retirement

account, and David Goodridge assured him that the account was

fine and that the money would be available when he decided to

retire. Beginning in December of 2001, Russell began to hear

that the Goodridges were denying retirement benefits for other

company employees. When Russell inquired about the status of his

account in early 2002, the Goodridges began to treat him in a

hostile and threatening manner.

The Goodridges and their son and son-in-law, who were also

company officers, began to intimidate Russell through verbal

threats and harassment. Gasoline and gasoline soaked rags were

repeatedly left in Russell’s office, where they clearly did not

belong. On one occasion, David Goodridge indicated he would not

mind if the gasoline caused an explosion, and after Russell

complained again about gasoline fumes, Goodridge asked him how he

and his wife would like to spend the rest of their lives in

wheelchairs. The Goodridges’ son-in-law told Russell the

Goodridges spent all of the money and that David Goodridge would

have Russell killed before paying him anything.

1 That document was not submitted with the complaint, the motion for judgment on the pleadings, or the objection to the motion, and therefore, it is not considered here.

3 On May 9, 2002, Russell stopped working because of the level of intimidation and harassment at FPS. When he returned to retrieve his personal property on May 1 3 , David Goodridge told Russell that they had never put any money in an account for him. Goodridge also refused to allow Russell to get his personal property from his office, which included computer equipment and other personal items. When some of the items were returned, months later, they were damaged beyond repair. On May 2 8 , 2002, David Goodridge sent Russell a letter again denying the existence of any retirement account.

The harassment continued in the form of telephone calls and members of the Goodridge family driving by the Russells’ home, making obscene hand gestures. The experience of losing his expected retirement benefits and his concern about the physical safety and well being of himself and his family took a heavy emotional toll on Russell. He moved to North Carolina to escape the intimidation and stress. In July of 2002, he suffered a complete emotional breakdown, and he is now in the recovery process.

This suit was filed in March of 2003, alleging claims for unpaid wages under New Hampshire Revised Statutes Annotated §§ 275:44, 5 1 , and 5 3 , promissory estoppel, and fraud, based on the defendants’ failure to provide the retirement account. Russell

4 also alleges a claim for intentional infliction of emotional distress. In their answer, the defendants deny that any promise was ever made as to the retirement account and deny that it existed. They also deny all of the allegations pertaining to harassment and intimidation.

Discussion

The defendants move for judgment on the pleadings on the

ground that the retirement account Russell refers to is an

employee pension benefit plan so that Russell’s claims are

preempted by ERISA and must be dismissed. ERISA preempts state

law claims that relate to any employee benefit plan, which

includes an employee pension plan, that are not exempted by the

savings clause. 29 U.S.C. §§ 1002(3) & 1144(a); Hotz v . Blue

Cross & Blue Shield of Mass., Inc., 292 F.3d 5 7 , 59 (1st Cir. 2002). An employee pension benefit plan, under ERISA, i s : any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that by its express terms or as a result of surrounding circumstances such plan, fund, or program . . . provides retirement income to employees, or [ ] results in a deferral of income by employees for periods extending to the termination of covered employment or beyond, regardless of the method of calculating the contributions made to the plan, the method of calculating the benefits under the plan or the method of distributing the benefits from the plan.

29 U.S.C. § 1002(2)(A) (emphasis added).

5 Based on the pleadings, it is undisputed that neither the

Goodridges nor anyone else established or maintained the promised

retirement account. Since no plan was “established or maintained

by an employer,” the promised, but non-existent, retirement

account is not an ERISA plan. See, e.g., Donovan v . Dillingham,

688 F.2d 1387, 1373 (11th Cir. 1982) (“In determining whether a plan, fund or program [pursuant to a writing or not] is a reality

a court must determine whether from the surrounding circumstances

a reasonable person could ascertain the intended benefits,

beneficiaries, source of financing, and procedures for receiving

benefits.”); accord Demars v . Cigna Corp., 173 F.3d 443, 446 (1st

Cir. 1999); Brown v . AMPCO-Pittsburgh Corp., 876 F.2d 546, 550-51

(6th Cir. 1989). Therefore, Russell’s claims related to the

promised retirement account do not fall within ERISA preemption.

Conclusion

For the foregoing reasons, the defendants’ motion for

judgment on the pleadings (document n o . 20) is denied.

SO ORDERED.

Joseph A . DiClerico, J r . United States District Judge November 2 5 , 2003 cc: Michael R. Callahan, Esquire Charles G. Douglas I I I , Esquire