Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_19-cv-00225/USCOURTS-caed-2_19-cv-00225-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.-Employee Benefits

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

HARLEY DELANO,

Plaintiff,

v.

UNIFIED GROCERS, INC., aka Unified 

Western Grocers, a California corporation; 

SUPERVALU, INC., a Delaware 

corporation,

Defendant.

No. 2:19-cv-00225-TLN-DB

ORDER

This matter is before the Court on Defendants Unified Grocers, Inc. (“UGI”) and 

Supervalu, Inc.’s (“SI”) (collectively “Defendants”) Motion to Dismiss under Federal Rule of 

Civil Procedure (“Rule”) 12(b)(6). (ECF No. 8.) Plaintiff Harley Delano (“Plaintiff”) opposes 

Defendants’ motion. (ECF No. 13.) Defendants filed a reply. (ECF No. 14.) After carefully 

considering the parties’ briefing and for the reasons set forth below, the Court hereby DENIES 

Defendants’ Motion to Dismiss. 

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I. FACTUAL AND PROCEDURAL BACKGROUND1

Plaintiff was employed by Defendant UGI from February 20002until January 2, 2002. 

(ECF No. 1-1 ¶ 6.) In 2001, Plaintiff and UGI discussed Plaintiff retiring early. (ECF No. 1-1 ¶ 

6.) During the discussions, UGI agreed to a severance package for Plaintiff which included UGI 

maintaining a life insurance policy until Plaintiff’s death. In return, Plaintiff would retire, 

meaning UGI would no longer have to pay his salary. (ECF No. 1-1 ¶¶ 6–7.)

These discussions were put into a written agreement (“Delano Retirement Plan”) on 

December 20, 2001, which established the benefits UGI agreed to provide. These included: (1) 

retiree medical coverage beginning January 2, 2002; (2) Executive Life Insurance coverage equal 

to 1.5 times the Plaintiff’s final earnings beginning January 2, 2002; and (3) an Executive Salary 

Protection Plan which provided a supplemental pension benefit. (ECF No. 1-1 ¶ 7.) The Delano 

Retirement Plan allowed Plaintiff to retire on January 2, 2002, instead of in September of 2002. 

(ECF No. 1-1 at ¶ 7.) Plaintiff agreed to the terms. (ECF No. 1-1 ¶ 8.) Defendant was able to 

select the promised life insurance plan and elected to use a split-dollar life insurance policy,

meaning that a portion of the premiums paid each year by UGI would be included in Plaintiff’s 

income for income tax purposes. (ECF No. 1-1 ¶ 13.)

Plaintiff contends that the Delano Retirement Plan is an employee benefit plan within the 

meaning of 29 U.S.C. § 1002(2)(A) and (3) and therefore governed by the Employee Retirement 

Income Security Act of 1974 (“ERISA”). (ECF No. 1-1 ¶ 10.) Plaintiff further contends that the 

Delano Retirement Plan was established to provide life insurance benefits to Plaintiff after 

retirement, rendering it an ERISA plan. (ECF No. 1-1 ¶ 10.)

From January 2, 2002, through December 31, 2017, UGI honored its agreement to 

Plaintiff and maintained Plaintiff’s insurance policy. (ECF No. 1-1 ¶¶ 11-14.) On June 23, 2017, 

Supervalu Inc. (“SI”) merged with UGI and became the successor-in-interest to the Delano 

Retirement Plan. (ECF No. 1-1 ¶ 14.) On October 20, 2017, SI sent a letter to Plaintiff stating it 

 

1 The Court takes the following recitation of facts, sometimes verbatim, from Plaintiff’s 

Complaint. (ECF No. 1-1 at 3–10.)

2 Plaintiff does not allege the specific date he began his employment.

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would be terminating Plaintiff’s life insurance benefit at the end of the 2017 year. (ECF No. 1-1 

¶ 16.) In the letter, SI acknowledged that Plaintiff’s life insurance provided a death benefit of 

$287,135. (ECF No. 1-1 ¶ 16.) The letter gave Plaintiff the option of purchasing the policy and 

assuming its continuing obligations by paying SI the policy’s cash surrender value and continuing 

to pay the premiums. (ECF No. 1-1 ¶ 17.) The letter stated that if Plaintiff decided against 

assuming the policy obligations, then SI would cancel the policy and receive the cash surrender 

value. (ECF No. 1-1 ¶ 17.) However, because UGI — before merging with SI — initially elected 

to finance the policy through a split-dollar arrangement and failed to pay the policy’s premiums 

on several occasions, the premium for the policy increased over the years. (ECF No. 1-1 ¶¶ 18-

19.) 

On November 1, 2017, SI sent a second letter to Plaintiff stating that all of his benefits 

under the Delano Retirement Plan would be unilaterally terminated on December 31, 2017. (ECF 

No. 1-1 ¶ 20.) On November 20, 2017, Plaintiff’s attorney sent a letter to SI in which Plaintiff 

alleged that Plaintiff and Defendants had entered into a severance agreement where Defendants 

agreed to maintain the policy until Plaintiff’s death. (ECF No. 1-1 ¶ 21.) The letter also 

requested that Defendants deliver certain documents related to the Delano Retirement Plan and 

Plaintiff’s employment. (ECF No. 1-1 ¶ 22.) According to Plaintiff, Defendants only produced 

some of the documents. (ECF No. 1-1 ¶ 22.) 

On December 12, 2017, Defendants responded to Plaintiff’s letter by treating it as a claim 

under ERISA. (ECF No. 1-1 ¶ 23.) SI rejected Plaintiff’s claim by stating that SI considered the 

Delano Retirement Plan as part of SI and UGI’s other ERISA plans. (ECF No. 1-1 ¶ 23.) 

Plaintiff contends that the clear language in the Delano Retirement Plan shows that it was the 

only agreement between Plaintiff and SI. (ECF No. 1-1 ¶ 23.) In its letter, SI also stated that 

since it was treating this letter as a determination of Plaintiff’s benefits under the Delano 

Retirement Plan for ERISA benefits, Plaintiff could appeal SI’s decision within 60 days. (ECF 

No. 1-1 ¶ 23.)

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On February 9, 2018, Plaintiff appealed SI’s rejection and asserted the Delano Retirement 

Plan constituted the entire agreement between the parties as to the severance package and 

qualified as a separate benefit plan under ERISA. (ECF No. 1-1 ¶ 25.) On April 9, 2018, SI 

denied Plaintiff’s appeal. (ECF No. 1-1 ¶ 28.) Having exhausted all his administrative remedies, 

Plaintiff filed his Complaint on January 3, 2019. (ECF No. 1-1 ¶ 28.)

Plaintiff alleges three causes of action: (1) 29 U.S.C.§ 1132(a)(1)(B) – wrongful denial of 

ERISA benefits against all defendants; (2) 29 U.S.C. § 1132(a)(2) and (3) – breach of fiduciary 

duty by ERISA Fiduciary against SI, UGI and DOES 1 through 10; and (3) violation of California 

Welfare & Institutions Code § 15610, et seq. – Financial Elder Abuse against all Defendants. 

(ECF No. 1 at 10-13.) Defendants move to dismiss Plaintiff’s Third Cause of Action pursuant to 

Rule 12(b)(6) arguing that it is preempted under ERISA. (ECF No. 8.) 

II. STANDARD OF LAW

A motion to dismiss for failure to state a claim under Rule 12(b)(6) tests the legal 

sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Federal Rule of 

Civil Procedure 8(a) requires that a pleading contain “a short and plain statement of the claim 

showing that the pleader is entitled to relief.” See Ashcroft v. Iqbal, 556 U.S. 662, 678–79 

(2009). Under notice pleading in federal court, the complaint must “give the defendant fair notice 

of what the claim . . . is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 

544, 555 (2007) (internal quotations omitted). “This simplified notice pleading standard relies on 

liberal discovery rules and summary judgment motions to define disputed facts and issues and to 

dispose of unmeritorious claims.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).

On a motion to dismiss, the factual allegations of the complaint must be accepted as true. 

Cruz v. Beto, 405 U.S. 319, 322 (1972). A court is bound to give plaintiff the benefit of every 

reasonable inference to be drawn from the “well-pleaded” allegations of the complaint. Retail 

Clerks Int’l Ass’n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege 

“‘specific facts’ beyond those necessary to state his claim and the grounds showing entitlement to 

relief.” Twombly, 550 U.S. at 570. “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 

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for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. 544, 556 (2007)). 

Nevertheless, a court “need not assume the truth of legal conclusions cast in the form of 

factual allegations.” United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 

1986). While Rule 8(a) does not require detailed factual allegations, “it demands more than an 

unadorned, the defendant–unlawfully–harmed–me accusation.” Iqbal, 556 U.S. at 678. A 

pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the 

elements of a cause of action.” Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 678 

(“Threadbare recitals of the elements of a cause of action, supported by mere conclusory 

statements, do not suffice.”). Moreover, it is inappropriate to assume that the plaintiff “can prove 

facts that it has not alleged or that the defendants have violated the . . . laws in ways that have not 

been alleged[.]” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 

459 U.S. 519, 526 (1983).

Ultimately, a court may not dismiss a complaint in which the plaintiff has alleged “enough 

facts to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 697 (quoting 

Twombly, 550 U.S. at 570). Only where a plaintiff has failed to “nudge[] [his or her] claims . . . 

across the line from conceivable to plausible[,]” is the complaint properly dismissed. Id. at 680. 

While the plausibility requirement is not akin to a probability requirement, it demands more than 

“a sheer possibility that a defendant has acted unlawfully.” Id. at 678. This plausibility inquiry is 

“a context–specific task that requires the reviewing court to draw on its judicial experience and 

common sense.” Id. at 679. 

If a complaint fails to state a plausible claim, “‘[a] district court should grant leave to 

amend even if no request to amend the pleading was made, unless it determines that the pleading 

could not possibly be cured by the allegation of other facts.’” Lopez v. Smith, 203 F.3d 1122, 

1130 (9th Cir. 2000) (en banc) (quoting Doe v. United States, 58 F.3d 484, 497 (9th Cir. 1995)); 

see also Gardner v. Marino, 563 F.3d 981, 990 (9th Cir. 2009) (finding no abuse of discretion in 

denying leave to amend when amendment would be futile). Although a district court should 

freely give leave to amend when justice so requires under Rule 15(a)(2), “the court’s discretion to 

deny such leave is ‘particularly broad’ where the plaintiff has previously amended its 

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complaint[.]” Ecological Rights Found. v. Pac. Gas & Elec. Co., 713 F.3d 502, 520 (9th Cir. 

2013) (quoting Miller v. Yokohama Tire Corp., 358 F.3d 616, 622 (9th Cir. 2004)).

III. ANALYSIS 

Plaintiff’s Complaint alleges three separate causes of action against Defendants. In 

Defendants’ Motion to Dismiss, Defendants assert that Plaintiff’s Third Cause of Action is 

expressly preempted under § 514(a) and conflict preempted under § 502(a) of ERISA. (ECF No. 

8 at 4.) 

In his Opposition, Plaintiff asserts preemption only applies where it is demonstrated or 

conceded that an ERISA-covered plan is at issue. (ECF No. 13 at 6.) Plaintiff argues Defendants 

have failed to establish that ERISA applies to the Delano Retirement Plan. (ECF No. 13 at 8.) At 

the same time, Plaintiff asserts he pleaded his Third Cause of Action in the alternative in the 

event the Court determines that ERISA does not apply to the Delano Retirement Plan and 

contends that, at this early junction, it is inappropriate to dismiss his third claim on the basis of 

ERISA preemption. (ECF No. 13 at 7–8.) 

Defendants’ Reply argues there is no need to assert that ERISA is applicable to the Delano 

Retirement Plan because of Plaintiff’s numerous assertions of its applicability in the Complaint. 

(ECF No. 14 at 4.) Defendants urge that under the motion to dismiss standards, Plaintiff’s 

statements are to be taken as true and Defendants need not do anything further to establish 

ERISA’s applicability. (ECF No. 14 at 4.) Still, Defendants argue ERISA is applicable because 

the allegations in the Complaint confirm that the benefits are a plan which Defendants established 

and maintained for the purpose of providing medical and death benefits to Plaintiff and any 

beneficiaries. (ECF No. 14 at 5.) Finally, Defendants contend Plaintiff did not state or imply that 

he was pleading in the alternative. (ECF No. 14 at 3.) According to Defendants, Plaintiff’s 

statements in his counsel’s pre-lawsuit letters to Defendant and Plaintiff’s Complaint show that 

Plaintiff firmly believes ERISA applies and expresses no doubt as to its applicability. (ECF No. 

14 at 4.)

Rule 8 of the Federal Rules of Civil Procedure provides the starting point for evaluating 

the viability of Plaintiff’s claim. Rule 8 states in relevant part:

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A party may set forth two or more statements of a claim or defense 

alternately or hypothetically, either in one count or defense or in 

separate counts or defenses. A party may also state as many separate 

claims or defenses as the party has regardless of consistency and 

whether based on legal, equitable, or maritime grounds.

Fed.R.Civ.P. 8(e)(2). Under Rule 8, a Plaintiff does not need to use particular words to 

plead in the alternative so long as it can be reasonably inferred he was doing so. Holman v. 

Indiana, 211 F.3d 399, 407 (7th Cir. 2000).

Additionally, “[i]n light of the liberal pleading policy embodied in Rule 8(e)(2) ... a 

pleading should not be construed as an admission against another alternative or inconsistent 

pleading in the same case.” Molsbergen v. United States, 757 F.2d 1016, 1019 (9th Cir. 1985).

The Court now turns to alternative pleadings in the ERISA context, which has been 

addressed in this district. Coleman v. Standard Life Ins. Co., 288 F. Supp. 2d 1116, 1120 (E.D. 

Cal. 2003). Generally, there is good reason for alternatively pleading state and federal claims 

when there is doubt as to whether a particular plan falls under ERISA. Id.; see also Tillotson v. 

Valley Paving, Inc., No. CV S-08-1623 LKK/EFB, 2008 WL 11387037, at *3 (E.D. Cal. Oct. 9, 

2008). “If the plaintiff brings only state law claims and the court determines there is an ERISA 

plan, the state law claims are preempted. But if the plaintiff brings only an ERISA claim and the 

plan turns out not to be an ERISA plan, the plaintiff is also out of luck.” Id. As the Coleman

court properly noted, Rule 8 is designed for the situation ERISA preemption often presents. Id. 

In the instant case, whether or not ERISA applies to the document in question has not 

been established. At this stage in the litigation, there has been no determination as to whether 

ERISA applies and given the uncertainties concerning whether the Delano Retirement Plan is an 

ERISA plan, it would be against the spirit of the Federal Rules to force Plaintiff to run a risk 

which Rule 8(e)(2) is designed to alleviate. Further, Plaintiff’s Complaint properly pleads the 

Third Cause of Action in the alternative. Because the Court finds the Plaintiff can plead in the

alternative at this early juncture, it need not reach the parties’ remaining arguments. Therefore, 

Defendants’ Motion to Dismiss Plaintiff’s Third Cause of Action based on ERISA preemption is 

DENIED.

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IV. CONCLUSION

For the reasons set forth above, Defendants’ Motion to Dismiss is hereby DENIED. 

IT IS SO ORDERED.

Dated: February 21, 2020

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