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Thomas v. First Southern Bank

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

September 29, 2017

R. D. THOMAS, JR., Plaintiff,
v.
FIRST SOUTHERN BANK F/K/A THE PATTERSON BANK, LYNN SCHROEDER AND WILLIAM "BILL" HUGHES Defendants.

          ORDER

          LISA GODBEY WOOD, UNITED STATES DISTRICT JUDGE

         Before the Court are Defendant Lyn Schroeder's (misidentified as Lynn Schroeder} ("Schroeder"}/ Defendant William Hughes's ("Hughes") and The Patterson Bank's ("the Bank") Motions to Dismiss pursuant to Federal Rule of Civil Procedure 12(b) (6) for failure to state a claim upon which relief can be granted. These Motions have been fully briefed and are now ripe for review. For the following reasons, Defendant Schroeder's Motion is hereby DENIED at this time, Defendant Hughes's Motion is hereby DENIED at this time, and Defendant Bank's Motion is hereby denied at this time.

         BACKGROUND

         The facts stated herein are taken solely from Plaintiff's Complaint and are assumed to be true pursuant to Rule 12 (b) (6} . Plaintiff R.D. Thomas was the CEO of Defendant Bank until January 2012. Dkt No. 1, Ex. 1 ¶ 5. Plaintiff and the Bank entered into a Salary Continuation Agreement ("the Agreement"} in August 1997. Id. ¶ 7. The Agreement provided an annual accrual of benefits peaking at fifteen years of employment with a salary continuation and annual benefit of $77, 500 per year, paid in monthly installments over fifteen years. Id. ¶ 8. Plaintiff voluntarily terminated his employment in January 2012. Id. ¶ 11. Accordingly, the Bank began paying benefits to Plaintiff the next month, in February 2012, in the amount of $6, 458.33 per month. Id. ¶ 12. On behalf of the Bank, Defendant Schroeder, the Bank's attorney, notified Plaintiff on December 20, 2012 that the Bank was ceasing its fully vested benefits because of loans made to Plaintiff and his sister in 2008. Id. ¶ 13.

         Plaintiff then met with CEO Defendant Hughes, and they agreed to a present value reduction of Plaintiff's benefits under the Agreement for the balance of the two notes. Id. ¶ 14. This new agreement ("Second Agreement") was reduced to writing and signed by Plaintiff. Id. ¶ 15. The Bank then, through its attorneys, informed Plaintiff on December 16, 2015 of termination of payment. Id. % 16. Meanwhile, the Bank sued Plaintiff on his promissory note that the Plaintiff alleges the Second Agreement had satisfied. Id. ¶ 25.

         Accordingly, Plaintiff sued Defendants in the State Court of Pierce County, bringing claims of breach of contract and fraud. Defendant then removed the case to this Court pursuant to 28 U.S.C § 1441, articulating that although Plaintiff only stated claims under state law, those claims were preempted by the federal Employee Retirement Income Security Act ("ERISA") and thus invoked federal question jurisdiction under 28 U.S.C. § 1331.

         LEGAL STANDARD

         Ordinarily, in order to state a claim for relief, a plaintiff's complaint must include "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007}. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court accepts the allegations in the complaint as true and draws all reasonable inferences in favor of the plaintiff. Ray v. Spirit Airlines, Inc., 836 F.3d 1340, 1347 (11th Cir. 2 016} . However, the Court does not accept as true threadbare recitations of the elements of the claim and disregards legal conclusions unsupported by factual allegations. Iqbal, 556 U.S. at 678-79. At a minimum, a complaint should "contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory." Fin. Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282-83 (11th Cir. 2007) (per curiam} (quoting Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683 (11th Cir. 2001)).

         The standard, for stating a fraud claim is even higher. " [A] party must state with particularity the circumstances constituting fraud . . . ." Fed.R.Civ.P. 9(b). Rule 9(b) "plainly requires a complaint to set forth (1) precisely what statements or omissions were made in which documents or oral representations; (2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) them; (3) the content of such statements and the manner in which they misled the plaintiff; and (4) what the defendant obtained as a consequence of the fraud." FindWhat Inv'r Grp. V. FindWhat.Co, 658 F.3d 1282, 1296 (11th Cir. 2011).

         DISCUSSION

         I. Subject Matter Jurisdiction

         District courts have removal jurisdiction over " [a] ny civil action brought in a [s]tate court of which the district courts have original jurisdiction." 28 U.S.C. § 1441(a). District courts have original jurisdiction based either on diversity jurisdiction or federal question jurisdiction. 28 U.S.C. §§ 1331, 1332.

         Generally, a cause of action invokes federal question jurisdiction only when "the plaintiff's well-pleaded complaint raises issues of federal law." Brown v. Conn. Gen. Life Ins. Co., 934 F.2d 1193, 1195 (11th Cir. 1991) (citing Taylor, 481 U.S. at 63). Because preemption is ordinarily a defense to a state claim, "it does not appear on the face of a well-pleaded complaint, and, therefore, does not authorize removal to federal court." Id. at 63. "One corollary of the well-pleaded complaint rule developed in the case law, however, is that Congress may so completely pre-empt a particular area that any civil complaint raising this select group of claims is necessarily federal in character." Id. at 63-64. In this way, complete preemption provides an exception to the well-pleaded complaint rule and the requirement that federal law appear on the face of the complaint. In these cases, federal law does not merely preempt a state law but substitutes a federal cause of action for a state cause of action.

         ERISA provides such an example of complete preemption, substituting a state for a federal cause of action whenever a plaintiff seeks to recover benefits under a plan as the rightful beneficiary. Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 60 (1987) ("[S]tate common law causes of action asserting improper processing of a claim for benefits under an employee benefit plan regulated by [ERISA] are pre-empted by ERISA.") (citations omitted). The preemptive force of ERISA is "so powerful as to displace entirely any state cause of action" for violation of contracts between an employee and his employer regarding retirement benefits. Beneficial Nat'l ...


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