IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

Craig S. Jones, et al., 

Plaintiffs, 

v. Case No. 2:11-cv-380

Kerry A. Allen, Plan JUDGE MICHAEL H. WATSON

Administrator, et al., Magistrate Judge Kemp

Defendants. 

REPORT AND RECOMMENDATION

Plaintiffs are five individuals who were employed by Red

Mortgage Capital, Inc., Red Capital Markets, Inc., Red Capital

Advisors, LLC, or Red Capital Community Development Company, LLC,

(collectively “Red Capital”). Plaintiffs filed this action against

Red Capital, certain severance plans, a plan administrator, and a

company that acquired Red Capital, alleging that those Defendants

wrongly denied them benefits and otherwise infringed on their

rights under ERISA and their contractual rights. There are several

motions pending, which have been referred to the Magistrate Judge

for the issuance of a Report and Recommendation. This Report and

Recommendation will address only Defendants’ motion to dismiss and

Plaintiffs’ motion to strike argument in reply, both of which have

been fully briefed. For the reasons that follow, the Magistrate

Judge RECOMMENDS that Defendants’ Motion to Dismiss (doc. #21) be

DENIED. The Magistrate Judge also RECOMMENDS that Plaintiffs’

motion to strike argument in reply (doc. #33) be DENIED as moot. 

I.

As an initial matter, Plaintiffs argue that a motion to

dismiss is not the proper vehicle for the Court’s review of ERISA

benefits cases. In support for this argument, Plaintiffs cite to

the concurrence in Wilkins v. Baptist Healthcare Sys., Inc., 150

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F.3d 609 (6th Cir. 1998) and a more recent decision, Buchanan v.

Aetna Life Ins. Co., 179 Fed. Appx. 304, 306 (6th Cir. 2006),

which consider the propriety of resolving an ERISA action through

a motion for summary judgment. 

The Wilkins concurrence notes that a district court’s review

of an ERISA administrator’s decision should be limited to the

evidence that was before that administrator. Wilkins, 150 F.3d

at 618. Because a bench trial “would inevitably lead to the

introduction of testimonial and/or other evidence that the

administrator had no opportunity to consider,” a district court

should not adjudicate an ERISA action as if it were conducting a

bench trial. Id. at 618. The concurrence went on to reason that

“[b]ecause this court's precedents preclude an ERISA action from

being heard by the district court as a regular bench trial, it

makes little sense to deal with such an action by engaging a

procedure designed solely to determine ‘whether there is a

genuine issue for trial,’” i.e., a motion for summary judgment. 

Id. at 619 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 249 (1986)). The Court of Appeals in Buchanan agreed that

“[t]raditional summary judgment concepts are inapposite to the

adjudication of an ERISA action for benefits . . . .” Buchanan,

179 F. App'x at 306. However, neither of these decisions

suggests that it is inappropriate, in an ERISA benefits case, for

a defendant to file a Rule 12(b)(6) motion for failure to state a

claim upon which relief can be granted. 

Unlike a motion for summary judgment pursuant to Rule 56, a

motion to dismiss pursuant to Rule 12(b)(6) does not look to

whether an action is appropriate for trial. Rather it tests the

sufficiency of the pleadings. As a result, the reasoning of

Wilkins and Buchanan does not bar all Rule 12(b)(6) motions in

ERISA actions. Furthermore, in addressing motions to dismiss

ERISA actions, the Court of Appeals has not held that such

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motions are improper but rather has discussed exactly what must

be pleaded in an ERISA action in order to survive a motion to

dismiss. Pfeil v. State St. Bank & Trust Co., 671 F.3d 585 (6th

Cir. 2012). The Court of Appeals has not exempted ERISA

pleadings from Rule 12(b)(6) scrutiny as a general matter, so

there is nothing inherently wrong with Defendants having filed

that motion here. 

II.

Plaintiffs also raise additional arguments as to why Rule

12(b)(6) dismissal may be inappropriate here even if such a

motion is not categorically improper. They assert that

Defendants’ motion should be denied because it asks the Court to

dismiss Plaintiffs’ claims based on the reasonableness of a

claims administrator’s determinations, and “it is not clear to

Plaintiffs from Defendants’ filing that the entire record is

before the Court.” (Pls.’ Br. Opp’n at 13.) Unlike cases where

the pleadings fail to set forth the elements of a claim or fail

to allege sufficient facts, Defendants argue that the documents

attached to the pleadings and the motion to dismiss demonstrate

that the decisions of the plan administrator should be upheld. 

While consideration of such documents is proper in the context of

a motion to dismiss, Defendants’ arguments require review of the

determinations of the Committee administering the plan or plans

at issue, which cannot be properly done without the whole record

upon which the Committee based its determinations.

By way of example, a threshold question in this case is

which of the ERISA plans under which Plaintiffs claim relief were

in effect at the relevant time. One of the plans under which

Plaintiffs have claimed benefits is the National City Corporation

Amended and Restated Management Severance Plan effective January

1, 2005 (“2005 National City Plan”). Defendants contend that the

2005 National City Plan was amended by 2008 National City Plan,

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but Plantiffs argue that the amendment was invalid under the

terms of the 2005 National City Plan, which prohibited amendment

during a defined period of time before and after a change in

control. Specifically, the 2005 National City Plan provided that

it could not be amended during a “Protection Period,” which

begins on the date when “uninterrupted discussions or

negotiations commenced” ultimately resulting in a “Change in

Control.” (Compl. Exh. 1 at §2.1(i) & §15.) The Committee

administering the plan determined that the amendment was

effective because “uninterrupted discussions or negotiations”

resulting in a “Change in Control” commenced on October 3, 2008,

three days after the adoption of the 2008 National City Plan. 

The Committee based that determination on a one-line email

written more than a year and a half after the “Change in Control”

by an employee of the company that acquired Red Capital. In

their administrative appeal, Plaintiffs provided another document

in support of their argument that the “uninterrupted discussions

or negotiations” commenced earlier, but it is not clear whether

there were additional documents reviewed by the Committee in

making its determination. 

The Court’s review of this decision as well as other

decisions requires the Court to examine the complete

administrative record. Defendants concede that the complete

record is not before the Court by way of the pleadings, stating

that Plaintiffs “attached nearly the entire administrative record

to their Complaint.” (Defs.’ Brief. Supp. Mot. Dismiss at 14

(emphasis supplied).) Nor does Defendants’ reply brief confirm

that the entire record is before the Court, instead stating

“Defendants respectfully submit that the Court has what is needed

to determine whether the Complaint states a claim for relief.” 

(Reply at 5.) The Court cannot assume that the entire

administrative record is before the Court. Further, once the

Court is assured that the entire administrative record is before

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the Court, the Court will, in fact, be reviewing the

reasonableness of the claims administrator’s determination, which

is more appropriately reviewed in a motion for judgment on the

administrative record. 

III.

For all the foregoing reasons, the Magistrate Judge

RECOMMENDS that the Motion to Dismiss (doc. #21) be DENIED. Of

course, such denial would be without prejudice to Defendants’

ability to file a motion for judgment on the administrative

record, to which they attach the entire administrative record,

and which raises essentially the same arguments advanced in their

motion to dismiss. In light of this recommendation, the

Magistrate Judge also RECOMMENDS that Plaintiffs’ motion to

strike argument in reply (doc. #33) be DENIED as moot. In

addition, the Court RECOMMENDS that further briefing be requested

from the parties regarding the standard of review that should

apply to the Committee’s determination of whether the amendment

to the 2005 National City Plan was valid and effective. See,

e.g., Halbach v. Great-West Life & Annuity Insurance Co., 561

F.3d 872, 875 (8th Cir. 2009) (distinguishing between the

standard of review that applied to the process of amendment and

the decision to amend a plan). 

IV.

If any party objects to this Report and Recommendation,

that party may, within fourteen (14) days of the date of this

report, file and serve on all parties written objections to those

specific proposed findings or recommendations to which objection

is made, together with supporting authority for the objection(s). 

A judge of this Court shall make a de novo determination of those

portions of the report or specified proposed findings or

recommendations to which objection is made. Upon proper

objections, a judge of this Court may accept, reject, or modify,

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in whole or in part, the findings or recommendations made herein,

may receive further evidence or may recommit this matter to the

magistrate judge with instructions. 28 U.S.C. §636(b)(1).

The parties are specifically advised that failure to object

to the Report and Recommendation will result in a waiver of the

right to have the district judge review the Report and

Recommendation de novo, and also operates as a waiver of the

right to appeal, the decision of the District Court adopting the

Report and Recommendation. See Thomas v. Arn, 474 U.S. 140

(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981). 

The parties are further advised that, if they intend to

file an appeal of any adverse decision, they may submit arguments

in any objections filed, regarding whether a certificate of

appealability should issue. 

/s/ Terence P. Kemp ________

United States Magistrate Judge

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