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Lane v. S Bank

United States District Court, S.D. Georgia, Savannah Division

April 27, 2017

JULIAN C. LANE, Plaintiff,
S BANK, Defendant.



         Before the Court is Plaintiff's Motion to Remand (Doc. 36) and Defendant's Motion to Dismiss (Doc. 29). For the following reasons, Plaintiff's Motion to Remand (Doc. 36) is DENIED. Plaintiff shall have thirty days from the date of this order to file an amended complaint alleging claims under Employee Retirement Income Security Act of 1974 ("ERISA"). As a result, Defendant's Motion to Dismiss (Doc. 29) is DISMISSED AS MOOT.[1]Defendant shall have thirty days from the date Plaintiff files an amended complaint to refile a motion to dismiss.


         Plaintiff Julian C. Lane, Jr. was employed as the President of First Citizens Bank-the predecessor to Defendant S Bank. (Doc. 26 at 1.) On June 2, 2003, Plaintiff signed a Salary Continuation Agreement with First Citizens Bank ("the bank"). The agreement provided Plaintiff with a valuable retirement benefit that was subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. ("ERISA"). (Id. at 3.) Plaintiff continued working for the bank for the next several years.

         In 2008, the economy began to negatively affect many Georgia banks. (Id. at 2.) By 2009, the bank was experiencing difficulties meeting its loan repayment obligations. (Id.) Plaintiff offered to resign in order to reduce the bank's overhead. (Id.) The bank declined Plaintiff's offer, and Plaintiff continued working. (Id.)

         In May 2010, the Chairman and Vice Chairman of the bank asked Plaintiff to surrender the benefits provided by his Salary Continuation Agreement in order to strengthen the bank's capital position. (Id. at 3.) The Chairman and Vice Chairman told Plaintiff that if he agreed to release the benefits provided under the Salary Continuation Agreement, Plaintiff could remain employed by the bank. (Id.) Contrary to those assertions, the agreement Plaintiff actually signed stated that "[n]o portion of this Termination Agreement shall be construed as an obligation on the part of the Bank to continue the employment of the Executive by the Bank or any of its affiliates or to retain the services of the Executive in any other capacity." (Doc. 1 at 60.) On June 1, 2010, Plaintiff signed the agreement to surrender his Salary Continuation Agreement. (Id.)

         Unbeknownst to Plaintiff, members of the bank's board had contacted an individual named Mr. Worel to replace Plaintiff as CEO of First Citizens. (Doc. 26 at 5.) In December 2011, members of Defendant's board asked Plaintiff to retire. (Id. at 4.) Plaintiff refused this request stating that he needed to continue working to make up the money he lost by terminating his Salary Continuation Agreement. (Id.) Later that month, the board terminated Plaintiff and replaced him with Mr. Worel. (Id.) As a result, Plaintiff lost both his job and his retirement benefits.

         In April 2014, Plaintiff filed a complaint in the State Court of Liberty County. (Doc. 1.) Although that complaint set out the facts of the case as discussed above and alleged damages in excess of $840, 000.00, it failed to allege any cause of action. (Id.) Nevertheless, Defendant removed the case to this Court on May 8, 2014, arguing that the complaint alleged a federal question because Plaintiff's claims were subject to ERISA. (Id. at 2.) Defendant argued that Plaintiff's agreement was a "top hat plan" that was "unfunded and [] maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees." (Id. at 3.) Defendant reasoned that any complaint brought subject to the Salary Continuation Agreement was removable to federal court by virtue of ERISA preemption. (Id.)

         On May 15, 2014, Plaintiff filed a motion to remand, arguing that his claims were not subject to ERISA. (Doc. 5.) On May 23, 2014, Defendant filed a Motion for Judgment on the Pleadings. (Doc. 8.) On July 1, 2015, this Court denied both motions and ordered Plaintiff to re-plead the complaint because the initial complaint was wholly underdeveloped. (Doc. 24.)

         Plaintiff filed an amended complaint on July 17, 2015. (Doc. 21.) That amended complaint included one claim of fraud in the inducement, one claim of promissory estoppel, one claim of breach of fiduciary duty, and one claim for attorney's fees. Defendant then filed a Motion to Dismiss (Doc. 29) and Plaintiff filed a renewed Motion to Remand (Doc. 36) . Plaintiff argues that the case should be remanded because he has not raised any claims pursuant to ERISA. (Id.) Defendant argues that removal was proper because ERISA preempts all of Defendant's state law claims. (Doc. 38.)


         In general terms, federal courts are courts of limited jurisdiction: they may only hear cases that they have been authorized to hear by the Constitution or Congress. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994). For cases first filed in state court, a defendant may remove the matter to federal court only if the original case could have been brought in federal court. 28 U.S.C. § 1441(a). Conversely, if no basis for subject matter jurisdiction exists, a party may move to remand the case back to state court. See 28 U.S.C. § 1447(c). When a defendant removes a case filed in state court, the defendant normally has the burden of proving the existence of federal subject matter jurisdiction. Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th Cir. 2001). One type of case for which district courts have original jurisdiction are those "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. These cases are typically referred to as cases involving a federal question.

         Whether a case involves a federal question is determined by evaluating the plaintiff's complaint for a federal cause of action. Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Tr. for S. Cal., 463 U.S. 1, 9-10 (1983). Even where a plaintiff's complaint alleges only state law claims, the case may be removed "when a federal statute wholly displaces the state-law cause of action through complete pre-emption." Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 8 (2003). One such statute is ERISA. Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004). As the Supreme Court has acknowledged,

Congress enacted ERISA to protect . . . the interests of participants in employee benefit plans and their beneficiaries by setting out substantive regulatory requirements for employee benefit plans and to provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts. The purpose of ERISA is to provide a uniform regulatory regime over employee benefit plans. To this end, ERISA includes expansive pre-emption provisions, ...

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