Yarber v. Capital Bank

944 F. Supp. 2d 437, 56 Employee Benefits Cas. (BNA) 2143, 2013 U.S. Dist. LEXIS 36765, 2013 WL 1127082
CourtDistrict Court, E.D. North Carolina
DecidedMarch 18, 2013
DocketNo. 5:12-CV-71-D
StatusPublished
Cited by12 cases

This text of 944 F. Supp. 2d 437 (Yarber v. Capital Bank) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Yarber v. Capital Bank, 944 F. Supp. 2d 437, 56 Employee Benefits Cas. (BNA) 2143, 2013 U.S. Dist. LEXIS 36765, 2013 WL 1127082 (E.D.N.C. 2013).

Opinion

ORDER

JAMES C. DEVER III, Chief Judge.

On February 17, 2012, B. Grant Yarber (‘Yarber” or “plaintiff’) filed a complaint against Capital Bank, Capital Bank Corporation (collectively, “Capital Bank”) and Capital Bank Financial Corporation (“CBFC”) (collectively, “defendants”) alleging violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), breach of contract, and tortious interference with a contract in connection with severance pay provisions in Yarber’s employment contract. Compl. [D.E. 1], On April 9, 2012, defendants moved to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure [D.E. 12] and filed a supporting memorandum and exhibits [D.E. 13]. Yarber responded in opposition [D.E. 15], and defendants replied [D.E. 16]. As explained below, the court grants defendants’ motion to dismiss.

I.

In analyzing a 12(b)(6) motion, the court determines whether the complaint is legally and factually sufficient. See Fed.R.Civ.P. 12(b)(6); Ashcroft v. Iqbal, 556 U.S. 662, 677-80, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56, 563, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir.2010), aff'd, — U.S. -, 132 S.Ct. 1327, 182 L.Ed.2d 296 (2012); Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir.2008). A court need not accept a complaint’s “legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement.” Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir.2009). However, the court “accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff in weighing the legal sufficiency of the complaint.” Id. In considering the motion, the court may take judicial notice of matters of public record. Sec’y of State for Def. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir.2007). The court also may consider documents attached to the complaint and documents attached to the motion to dismiss if those documents are integral to the complaint and authentic. Id.

Yarber worked for Capital Bank as the bank’s President and Chief Executive Officer. Compl. [D.E. 1] ¶22. Yarber and [442]*442Capital Bank entered into a written employment agreement on May 1, 2004, and amended the agreement on January 25, 2007. Compl. ¶¶ 28, 24. On or about September 17, 2008, Yarber and Capital Bank entered into an Amended and Restated Employment Agreement (the “Employment Contract”). Compl. ¶ 25 & Ex. A [“Employment Contract”]. Under the Employment Contract, Yarber was entitled to a base salary of $350,000, incentive payments, and other benefits. Compl. ¶ 28; Employment Contract. Section 5(c) of the Employment Contract also provided for “change-in-control” severance payments equal to a multiple of Yarber’s salary if another corporate entity gained majority control of Capital Bank and Yarber’s employment was terminated for any of the reasons specified in the contract. Compl. ¶ 29; Employment Contract § 5(c). Capital Bank or Yarber could terminate his employment at any time, for any reason, with thirty days’ notice. Employment Contract § 4(a). Finally, Yarber’s contract also specified that “[n]o change or modification of this Agreement shall be valid unless such change or modification is in writing and signed by the parties.” Employment Contract § 11.

CBFC, formerly known as North American Financial Holdings, Inc., offered to purchase a controlling interest in Capital Bank in 2010. Compl. ¶¶ 14, 30-31. During negotiations, all parties agreed that Yarber would remain the president of Capital Bank after the purchase. Id. ¶ 32.

Before entering negotiations with CBFC, Capital Bank had sold preferred stock to the United States Department of the Treasury (“Treasury Department”) under the Troubled Asset Relief Program (“TARP”). Id. ¶ 33. CBFC conditioned its offer to purchase a controlling interest on Capital Bank’s ability to obtain a discount on repayment of TARP funds from the Treasury Department, and included the condition in written documents provided to Capital Bank shareholders and the Securities and Exchange Commission. Id. ¶¶ 36-37. However, CBFC’s highest executive officers orally stated that CBFC would close the deal regardless of whether Capital Bank received a discount on its TARP payments. Id. ¶ 37. On November 19, 2010, Capital Bank sent its shareholders notice of CBFC’s offer, including the TARP discount condition and the possibility that Yarber might become eligible for severance pay under the Employment Contract. Id. ¶¶ 39, 43-44. The notice also stated that several of Capital Bank’s directors would receive hundreds of thousands of dollars in Supplemental Executive Retirement Plan (“SERP”) payments if CBFC completed the purchase. Id. ¶ 48.

The Treasury Department refused to give Capital Bank a discount on the TARP payments. Id. ¶ 53. In response, CBFC threatened to withdraw its offer to purchase a controlling share of Capital Bank unless Yarber and other bank executives signed amendments to their employment agreements relinquishing their right to change-in-control severance payments. Id. ¶¶ 54, 56. CBFC did not require Capital Bank’s directors to give up any SERP payments. Id. ¶ 57.

O.A. Keller, the chairman of Capital Bank’s board of directors, told Yarber that he “had no option but to give up any payments due under his Employment Contract,” and that the board of directors could and would terminate Yarber for cause if he refused to give up his right to change-in-control severance payments. Id. ¶¶ 59-60. Keller also told Yarber that Capital Bank’s shareholders could sue Yarber for breach of fiduciary duty if Yarber refused to amend his Employment Contract and his refusal caused CBFC to withdraw its offer. Id. ¶ 60. Yarber believed [443]*443that he could not be fired for cause or sued, but was concerned that his reputation would be damaged if the board of directors terminated him, even for false reasons. Id. ¶¶ 61, 64. On January 14, 2011, Yarber signed an amendment (the “2011 Amendment”) to his Employment Contract. Id. ¶ 65. The 2011 Amendment effectively eliminated Yarber’s right to severance payments under the Employment Contract. Id. ¶ 66. The amendment also created a term of employment, with the employment term and contract both expiring on November 4, 2011. Id. ¶ 70; PL’s Mem. Opp. Mot. Dismiss [D.E. 15] 12.

On January 31, 2011, CBFC closed the deal to purchase a controlling share of Capital Bank. Id. 1171. Thereafter, Yarber was removed from his position as president and chief executive officer, and was assigned to work as a commercial and retail manager. Id. ¶ 74. Later, Yarber became manager of retail operations in the Carolinas. Id. ¶ 75. Yarber continued his employment with Capital Bank until his termination on November 14, 2011. Id. 11100. Yarber never received any change-in-control severance payments under the Employment Contract. Id. ¶ 109.

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944 F. Supp. 2d 437, 56 Employee Benefits Cas. (BNA) 2143, 2013 U.S. Dist. LEXIS 36765, 2013 WL 1127082, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yarber-v-capital-bank-nced-2013.