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Shepherd v. Community First Bank

United States District Court, D. South Carolina, Anderson/Greenwood Division

February 24, 2017

FREDERICK D. SHEPHERD, JR., Plaintiff,
v.
COMMUNITY FIRST BANK, COMMUNITY FIRST BANK SERP PLAN, RICHARD D. BURLESON, GARY V. THRIFT, DR. LARRY S. BOWMAN, WILLIAM M. BROWN, JOHN R. HAMRICK, JAMES E. TURNER, CHARLES L. WINCHESTER, and ROBERT H. EDWARDS, Defendants.

          MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DISMISSING WITHOUT PREJUDICE IN PART DEFENDANTS' MOTION TO DISMISS OR STAY

          MARY GEIGER LEWIS, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This is an action for the recovery of retirement benefits under a plan (the Plan) governed by the Employee Retirement and Income Security Act of 1974 (ERISA or the Act). The Court has jurisdiction over this matter under 28 U.S.C. § 1331.

         Pending before the Court is Defendants Community First Bank (the Bank), Community First Bank SERP Plan, Richard D. Burleson, Gary V. Thrift, Dr. Larry S. Bowman, William M. Brown, John R. Hamrick, James E. Turner, Charles L. Winchester, and Robert H. Edwards' (collectively Defendants) Motion to Dismiss or Stay (Motion to Dismiss). ECF No. 44.

         Having carefully considered the Motion to Dismiss, the response, the reply, the record, and the applicable law, it is the judgment of the Court Defendants' Motion to Dismiss will be granted in part and dismissed without prejudice in part. The Court will grant the portion of Defendants' Motion to Dismiss that seeks to require Plaintiff to exhaust administrative remedies available under the Plan. The Court will dismiss without prejudice and with leave to refile the remainder of the Motion to Dismiss.

         II. FACTUAL AND PROCEDURAL HISTORY

         The Court draws the relevant background facts largely from Plaintiff's Amended Complaint and, for purposes of this Order, assumes their veracity.

         Plaintiff previously served as President and CEO of the Bank. ECF No. 36, ¶ 7. The Bank and Plaintiff entered into the Plan on July 31, 2007, under which the Bank agreed to provide certain supplemental retirement benefits to Plaintiff. Id. ¶ 10. The Plan is governed by ERISA. ECF No. 34 at 3-5. The Plan provides the Bank shall pay Plaintiff certain yearly benefits for twenty years if Plaintiff continues to work at the Bank past the age of seventy-one. ECF No. 36-1 at 2-4. The Plan further establishes it will terminate in the event Plaintiff's employment with the Bank is terminated for cause. Id. at 6.

         Article 6 of the Plan sets forth a claim and review procedure for disputes regarding the payment of benefits under the Plan. Id. at 8-9. Article 6.1.1 provides a person who believes benefits have been wrongfully withheld shall submit a written claim for benefits to the Administrator.[1] Id. at 8. Under article 6.1.2, the Bank “shall respond to the claimant within 90 days after receiving the claim.” Id. If warranted by special circumstances, the Bank may extend the response period an additional 90 days by notifying the claimant of the extension in writing before the end of the initial response period. Id. Article 6.1.3 states “[i]f the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of the denial.” Id. Article 6.1.3 further specifies certain information the notification of the Bank's denial must contain. Id.

         Article 6.2 outlines the appellate procedure for reviewing the Bank's denial of a claim made under Article 6.1. Id. To initiate a review of the Bank's denial of a claim, a claimant must file a written request for review with the Bank within 60 days after receiving the denial. Id. The Bank must notify the claimant in writing of its decision upon review within 60 days of receiving the request for review. Id. The Bank's notification of its decision must contain certain information, including the “specific reasons for the denial” and a “statement of the claimant's right to bring a civil action under ERISA section 502(a).” Id. at 9.

         In accordance with the terms of the Plan, the Bank began making monthly payments to Plaintiff after December 20, 2011, when Plaintiff reached the age of seventy-one. ECF No. 36, ¶ 23. Plaintiff retired from the Bank on December 30, 2014. Id. ¶ 25. On May 26, 2015, the Bank, the Bank's Board of Directors, and the Plan Administrators notified Plaintiff the Bank would cease making payments under the Plan. Id. ¶ 32.

         Plaintiff sent a written notice and claim to the Bank on June 19, 2015, requesting the Bank and Plan Administrators review the decision to cease making payments under the Plan and reinstate his benefits. Id. ¶ 36. The Bank and Plan Administrators sent a notice to Plaintiff acknowledging receipt of his claim. Id. ¶ 37. The notice indicated the Bank treated Plaintiff's claim as originating under Article 6.1.1 of the Plan and would respond accordingly. Id. The Bank, however, failed to notify Plaintiff of its decision regarding his claim within 90 days of receiving the claim as required by the Plan. Id. ¶ 39. The Bank also neglected to notify Plaintiff it needed additional time to respond to his claim. Id.

         Subsequent to Plaintiff's June 19, 2015, demand for benefits, the Bank filed an action in state court against Plaintiff alleging fraud, breach of contract, and unjust enrichment. Id. ¶ 41.

         Plaintiff filed his initial Complaint in this matter on September 25, 2015, in the Court of Common Pleas for Oconee County, South Carolina. ECF No. 1-1. Defendants removed the case to this Court on October 23, 2015. ECF No. 1. Plaintiff filed his Amended Complaint (Complaint) on March 31, 2016. ECF No. 36. The Complaint asserts claims against Defendants for recovery of benefits, administrative remedy, equitable relief under ERISA, anti-retaliation, and attorneys' fees and costs.

         Defendants filed their Motion to Dismiss on May 9, 2016. ECF No. 44. Plaintiff responded to the Motion to Dismiss on May 26, 2016, ECF No. 45, and Defendants replied on June 6, 2016, ECF No. 46. The Court, having been fully briefed on the relevant issues, is now prepared to discuss the merits of Defendant's Motion to Dismiss.

         III. STANDARD OF REVIEW

         “The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint.” Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). To survive a motion to dismiss, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).

         Although Rule 8(a) does not require “‘detailed factual allegations, '” it requires “more than an unadorned, the-defendant-unlawfully-harmed-me accusation, ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)), to “‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests, '” Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). In other words, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible ...


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