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Cadell v. Electronics and Unit Record Datacenter

August 24, 2006

JOHN M. CADDELL, PLAINTIFF
v.
ELECTRONICS AND UNIT RECORD DATACENTER, INC., ET AL., DEFENDANTS



The opinion of the court was delivered by: (Judge Conner)

MEMORANDUM

Presently before the court is an emergency motion to remand (Doc. 2) in which plaintiff, John M. Caddell ("Caddell"), asserts that defendants improperly removed the above-captioned action, commenced originally in a Pennsylvania state court. Caddell contends that his claims, premised on the alleged breach of an executive severance agreement ("ESA"), do not include a federal cause of action, and hence this court is without jurisdiction. Defendants counter that Caddell's claims are governed by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1401, permitting removal to this court. The question presented is whether the ESA is an ERISA plan. For the reasons that follow, the court finds that it is not and will grant the motion to remand.

I. Statement of Facts

Caddell is employed by defendant Electronics and Unit Record Datacenter, Inc. ("EUR"). (Doc. 1, Ex. A ¶ 6 at 12.) On July 1, 2002, Caddell and EUR entered into an ESA (Doc. 1, Ex. A ¶ 6 at 17), which, in pertinent part, provides:

3. Obligation of the Company Upon Termination Under Section 1. If the Executive's employment shall have been terminated by [EUR] under Section 1 (other than for Cause) or by the Executive for Good Reason:*fn1

(a) [EUR] shall make a lump sum cash payment to the Executive within 30 days after the Date of Termination of the accrued Amounts, earned by unused Paid Time Off and any money that is normally paid during this time period, except to the extent under the terms of a Plan they are to be paid at a later date;

(b) [EUR] shall pay to the Executive in equal installments, made at least monthly, an aggregate amount equal to two times the Executive's Annual Base Salary in effect on the Date of Termination over the twenty-four months following the Date of Termination and;

(c) until the earlier of eighteen months following the Date of Termination or the date the Executive becomes entitled to comparable benefits from another employer, the Executive shall be entitled to receive medical coverage and life insurance as provided under [EUR's] Plans from time to time and the Executive's cost therefor shall not exceed the cost paid by the other executives of [EUR] for comparable coverage.

8. Successors; Assignment.

(c) [EUR] will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of [EUR] prior to or concurrent with any such event of succession to assume expressly and agree to perform this Agreement in the same manner and to the same extent that [EUR] would be required to perform it if no such succession had taken place and to provide the Executive with written evidence of such assumption and agreement (which may include documents sufficient to evidence a transaction whereby such assumption and agreement is by operation of law). . . .

(Doc. 1, Ex. A §§ 3, 8 at 18, 22-23.)

On July 18, 2006, Caddell filed a complaint in the Court of Common Pleas of Cumberland County, Pennsylvania.*fn2 (Doc. 1, Ex. A at 9-27). The complaint alleges that EUR entered into an asset purchase agreement to sell substantially all of its assets to defendants Intec USA, Inc. and Intec Billing Services, Inc. (collectively, "Intec"), without providing that Intec will assume Caddell's ESA or that EUR will pay any of the promised benefits upon Caddell's termination, in violation of the terms of the ESA. (Doc. 1, Ex. A ¶ 9 at 13.) Caddell asserts claims based on common law breach of contract and seeks injunctive relief.

On August 16, 2006, defendants removed the case to this court, asserting that Caddell's claims were preempted by ERISA and thus subject to removal under federal law.*fn3 On August 17, 2006, Caddell filed an emergency motion to remand (Doc. 2),*fn4 asserting that the ESA is not an ERISA plan and, therefore, ERISA preemption ...


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