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John D. Crawford v. Citadel Broadcasting Corporation

August 24, 2012

JOHN D. CRAWFORD, PLAINTIFF,
v.
CITADEL BROADCASTING CORPORATION, BY WAY OF MERGER,
CUMULUS MEDIA, INC., DEFENDANT.



The opinion of the court was delivered by: Judge Caputo

MEMORANDUM

Presently before the Court is Defendant Citadel Broadcasting Corporation ("Citadel"), by way of merger, Cumulus Media, Inc.'s ("Cumulus") Motion to Dismiss Plaintiff's Complaint. (Doc. 5.) Plaintiff John D. Crawford alleges that Defendant violated the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq., by refusing to provide benefits under the terms of an employee benefit plan. In moving to dismiss Plaintiff's Complaint, Defendant argues that Plaintiff was not eligible for benefits under the plain language of the plan and he failed to exhaust available internal remedies before commencing this action. Because Plaintiff was not a participant of Defendant's plan and he failed to exhaust available internal remedies, Defendant's motion will be granted and the Complaint will be dismissed.

I. Background

The facts as alleged in Plaintiff's Complaint are as follows: On or about July 31, 2006, Citadel hired Plaintiff as Director of Sales. (Compl., ¶ 7.) The terms of Plaintiff's employment were memorialized in a Sales Manager Standard Agreement (the "Agreement"). (Id. at ¶ 8, Ex. A.) The Agreement did not include or refer to a severance plan. (Id. at ¶ 9, Ex. A.) Plaintiff was originally compensated at a base salary of $80,000.00 and he eventually secured a raise of his base salary to approximately $84,000.00. (Id. at ¶¶ 10-11.)

On or about September 19, 2011, Citadel merged with Cumulus (the "Merger"). (Id. at ¶ 13.) Upon the closing of the Merger, certain existing full time employees of Citadel became subject to a severance pay plan (the "Plan"). (Id. at ¶ 13, Ex. B.) The Plan qualifies as an employee benefit plan within the meaning of ERISA § 3(3). (Id. at ¶ 14.)

The Plan was "designed to provide severance allowances to Full-Time Employees upon a qualifying termination of employment." (Id. at Ex., B.) The Plan provides that "the legal rights and obligations of any person having an interest in the Plan are determined solely by the provisions of the Plan." (Ex. B, 1.) A "Full-Time Employee" includes any "non-exempt or exempt employee of the Company . . . who is scheduled by his employer to work at least 40 hours per week on a regular basis but excluding (i) any employee with a personal services agreement or other written severance agreement, . . ." (Id. at 2.) The Plan also provides that "an employee is not eligible for severance pay in any of the following circumstances: . . . 7. The employee has an employment contract or personal services agreement (regardless of whether severance is specifically addressed therein)." (Id. at 2-3 (emphasis in original)). The Plan provides that:

No person may bring an action for any alleged wrongful denial of Plan benefits in a court of law unless the claims procedures set forth above are exhausted and a final determination is made by the Plan Administrator. If the terminated employee or other interested person challenges a decision of the Plan Administrator, a review by the court of law will be limited to the facts, evidence, and issues presented to the Plan Administrator during the claims procedure set forth above. Facts and evidence that become known to the terminated employee or other interested person after having exhausted the claims procedure must be brought to the attention of the Plan Administrator for reconsideration of the claims determination. Issues not raised with the Plan Administrator will be deemed waived. (Id. at 6-7.) And:

The Plan Administrator will be the sole judge of the application and interpretation of the Plan, and will have the discretionary authority to construe the provisions of the Plan, to resolve disputed issues of fact, and to make determinations regarding eligibility for benefits. The decisions of the Plan Administrator in all matters relating to the Plan that are within the scope of his/her authority (including, but not limited to, eligibility for benefits, Plan interpretations, and disputed issues of fact) will be final and binding on all parties. (Id. at 7.)

Pursuant to the Merger, Plaintiff was terminated on November 9, 2011. (Compl., ¶ 17.) Upon termination, Plaintiff sought certain severance benefits under the Plan based upon his compensation. (Id. at ¶ 19.) The benefits included wages, unreimbursed businesses expenses, and unreimbursed vacation pay. (Id. at ¶ 20.) Cumulus, however, denied payment of those benefits. (Id. at ¶ 21.)

As a result of the foregoing events, Plaintiff commenced this action on February 24, 2012 asserting a claim for enforcement of benefits pursuant to ERISA § 502(a)(1)(B). (Compl.) On July 2, 2012, Defendant filed the instant motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. 5.) Now, as the motion to dismiss has been fully briefed, it is ripe for disposition.

II. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). When considering a Rule 12(b)(6) motion, the Court's role is limited to determining if a plaintiff is entitled to offer evidence in support of their claims. See Semerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir. 2000). The Court does not consider whether a plaintiff will ultimately prevail. See id. A defendant bears the burden of establishing that a plaintiff's complaint fails to state a claim. See Gould Elecs. v. United States, 220 F.3d 169, 178 (3d Cir. 2000).

"A pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). The statement required by Rule 8(a)(2) must give the defendant fair notice of what the ... claim is and the grounds upon which it rests. Erickson v. Pardus, 551 U.S. 89, 93, 127 S. Ct. 2197, 167 L. Ed. 2d 1081 (2007) (per curiam) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). Detailed factual allegations are not required. Twombly, 550 U.S. at 555. However, mere conclusory statements will not do; "a complaint must do more than allege the plaintiff's entitlement to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). Instead, a complaint must "show" this entitlement by alleging sufficient facts. Id. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009).

As such, the inquiry at the motion to dismiss stage is "normally broken into three parts: (1) identifying the elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the ...


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