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Daniel Markert, Individually and As Executor For the Estate of v. the Pnc Financial Services Group

November 14, 2011


The opinion of the court was delivered by: Robert F. Kelly, Sr. J.


Presently before the Court are a Motion to Dismiss filed by the Defendant, the PNC Financial Services Group, Inc., formerly known as PNC Financial Corporation, doing business as PNC ("Defendant"), and a Motion for Leave to File an Amended Complaint filed by Daniel Markert, individually and as Executor for the Estate of Michael Markert, deceased (hereafter, the "Decedent"), Joseph Markert, and Thomas Markert (collectively, "Plaintiffs"). For the reasons stated below, we will grant the Defendant's Motion to Dismiss and we will grant the Plaintiffs' Motion for Leave to File an Amended Complaint with instructions.


Prior to his death on June 6, 2008, the Decedent was employed by the Defendant. (Compl. ¶¶ 5, 8.) The Decedent began to participate in the Defendant's Incentives Savings Plan (hereafter, "401K") in the third quarter of 1983. (Id. ¶ 8.) On January 1, 1989, the 401K became a contributory plan.*fn1 (Id.) On the date of the Decedent's passing, his 401K was valued at $405, 941.24. (Id. ¶ 9.) The Decedent designated Plaintiffs as the beneficiaries of the 401K plan, entitling each to a one third share. (Id. ¶¶ 11-12.) Plaintiffs, however, did not receive their shares of the 401K promptly after the Decedent's death. (Id. ¶ 13.) Rather, the Plaintiffs received their shares six months after the Decedent's death. (Id.) When Plaintiffs finally received them, they were transferred to three bank accounts established by the Defendant. (Id.) Each bank account required access passwords created and sent by the Defendant. (Id.) The Decedent also participated in the Defendant's Employee Stock Purchase Plan ("ESPP"). Under the ESPP, the Defendant established an account with its transfer agent, Computershare Investor Services in the Decedent's name. (Id. ¶ 14.) As of June 17, 2008, 511 shares of the Defendant's stock were held in safekeeping with the transfer agent. (Id. ¶ 15.) Plaintiffs allege that they are each entitled to a one third share of the ESPP along with any residual cash balance associated with the ESPP. (Id. ¶ 16.) On the date of the Decedent's death, the stock was worth $31,495.41. (Id. ¶ 17.) The Defendant directed the Plaintiffs to contact its employee if they had questions regarding the ESPP information provided to them. (Id. ¶ 18.) Thereafter, Plaintiffs requested that the Defendant transfer the shares to them individually. (Id. ¶ 19.) On or about October 17, 2008, the Defendant distributed the shares into three separate accounts maintained by the Defendant for the Plaintiffs. (Id. ¶ 20.)

Defendant for the Plaintiffs. (Id. ¶ 20.)

The Decedent also participated in the Defendant's Pension Plan ("Pension"). (Id. ¶ 21.) As of June 11, 2008, a pre-retirement death benefit in the estimated amount of $135,322.01 was to be paid to the Decedent's Estate. (Id. ¶ 22.) Around August 3, 2008, Daniel Markert received correspondence from the Defendant indicating that it would disburse the Pension benefit on or about September 1, 2008. (Id. ¶ 23.) Plaintiffs allege that the Defendant incorrectly issued the disbursement check twice before the correct amount was received and deposited by the Executor, Daniel Markert. (Id. ¶ 24.)

Plaintiffs claim that the Defendant failed to make a timely and efficient distribution of the assets under the 401K, ESPP, and Pension plans (collectively, the "Plans") as they requested it to do. (Id. ¶ 28.) As a result, Plaintiffs claim that the market value of the Plans experienced a steep and significant decline. (Id. ¶ 28.)*fn2

Plaintiffs commenced this action in the Philadelphia County Court of Common Pleas by filing a writ of summons in May of 2010. On July 14, 2011, Plaintiffs filed a six-count Complaint against the Defendant alleging state law claims for breach of contract (Count I), breach of fiduciary duty (Count II), negligence (Count III), conversion (Count IV), detrimental reliance/promissory estoppel (Count V), and violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (Count VI).

On August 1, 2011, the Defendant removed the action to this Court alleging that the Plaintiffs' claims are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. (Def.'s Not. Removal ¶¶ 1, 15-19.) On August 8, 2011, the Defendant filed a motion to dismiss Plaintiffs' Complaint. Specifically, the Defendant argued that the Plaintiffs' state law claims were preempted by ERISA, Plaintiffs' suit was premature because they did not exhaust their administrative remedies, and Plaintiffs lacked standing because they did not suffer an "injury-in-fact" because they received the benefits. (Mot. to Dismiss ¶¶ 4-6.) Apparently, Plaintiffs were unable to amend their Complaint within the 21 day deadline required by Federal Rule of Civil Procedure 15*fn3 because they needed to acquire counsel familiar with ERISA practice. (Pltfs.' Mot. to File Am. Compl. ¶ 5.) The Defendant agreed to extend the time to respond to its Motion to Dismiss. (Id. ¶ 6.) On September 12, 2011, the Plaintiffs filed a Motion for Leave to File Amended Complaint with an attached Proposed Amended Complaint. (Doc. No. 7.) On September 26, 2011, the Defendant filed a Response in Opposition to Plaintiffs' Motion for Leave to File Amended Complaint. (Doc. No. 9.) The parties disagree about whether the filing of an amended complaint is a response to a motion to dismiss. (Pltfs.' Mot. to File Am. Compl. at 1) (Plaintiffs "move[] this Court for leave to file an Amended Complaint in response [sic] the pending Motion to Dismiss Complaint"), (Def.'s Resp. at 2) ("Plaintiffs did not respond to [Defendant's] Motion to Dismiss. Rather . . . they moved to file an amended complaint pursuant to Fed. R. Civ. P. 15."). Notwithstanding this dispute, the Defendant argues that we should deny the Plaintiffs leave to file the Proposed Amended Complaint because the amendments are futile. On October 21, 2011, the Plaintiffs submitted a Reply Memorandum (Doc. No. 10).*fn4


A. Leave to Amend

Federal Rule of Civil Procedure 15(a)(1)(B) allows a plaintiff to amend a complaint once as a matter of course within twenty-one days after the service of a responsive pleading if the pleading is one to which a responsive pleading is required or twenty-one days after service of a motion under Rule 12(b), whichever is earlier. Fed. R. Civ. P. 15(a)(1)(B). Otherwise, a party may amend its pleading only with the opposing party's written consent or the court's leave. Fed. R. Civ. P. 15(a)(2). Rule 15 provides that courts should freely give leave to amend when justice so requires. Id.

The Third Circuit adopts a liberal approach to the amendment of pleadings to ensure that "a particular claim will be decided on the merits rather than on technicalities." Lorah v. Home Helpers Inc. Del. Respite, No. 10-237-SLR, 2011 WL 4464540, at *5 (D. Del. Sept. 26, 2011) (citing Dole v. Arco Chem. Co., 921 F.2d 484, 486-87 (3d Cir. 1990)). Amendment, however, is not automatic. Id. (citing Dover Steel Co., Inc. v. Hartford Accident and Indem., 151 F.R.D. 570, 574 (E.D. Pa. 1993)). "Leave to amend should be granted absent a showing of 'undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of the allowance of the amendment, futility of the amendment, etc.'" Id. (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).

In this case, the Defendant's singular argument against granting the Plaintiffs leave to amend is that their Proposed Amended Complaint fails to state any cognizable causes of action and is, therefore, futile. Futility of amendment occurs when the complaint, as amended, does not state a claim upon which relief can be granted. Id. (citing In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir. 1997)). The standard for deciding whether claims are futile for the purpose of granting leave to amend a complaint is the same as a motion to dismiss. Manning v. Haggerty, No. 11-cv-302, 2011 WL 4527818, at *2 n.3 (M.D. Pa. Sept. 28, 2011) (citing Massarsky v. Gen. Motors Corp., 706 F.2d 111, 125 (3d Cir. 1983)).

B. Motion to Dismiss*fn5

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). Under Rule 12(b)(6), the defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed. R. CIV. P. 12(b)(6); see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atl. Corp. v. Twombly, the Supreme Court stated that "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." 550 U.S. 544, 555 (2007). Following Twombly, the Third Circuit has explained that the factual allegations in the complaint may not be "so undeveloped that it does not provide a defendant the type of notice which is contemplated by Rule 8." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Moreover, "it is no longer sufficient to allege mere elements of a cause of action; instead 'a complaint must allege facts suggestive of [the proscribed] conduct.'" Id. (alteration in original) (quoting Twombly, 550 U.S. at 563 n.8). Furthermore, the complaint's "factual allegations must be enough to raise a right to relief above the speculative level." Id. at 234 (quoting Twombly, 550 U.S. at 555). "This 'does not impose a probability requirement at the pleading stage,' but instead 'simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element.'" Id. (quoting Twombly, 550 U.S. at 556).

Notwithstanding Twombly, the basic tenets of the Rule 12(b)(6) have not changed. The Knit With v. Knitting Fever, Inc., No. 08-4221, 2009 U.S. Dist. LEXIS 30230, at *6 (E.D. Pa. Apr. 8, 2009). The general rules of pleading still require only a short and plain statement of the claim showing that the pleader is entitled to relief, not detailed factual allegations. Phillips, 515 F.3d at 231. Moreover, when evaluating a motion to dismiss, the court must accept as true all well-pleaded allegations of fact in the plaintiff's complaint, and must view any reasonable inferences that may be drawn therefrom in the light most favorable to the plaintiff. Id.; Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006). Finally, the court must "determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief."

Pinkerton v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 ...

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