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Shlikas v. Tiaa-Cref

United States District Court, Fourth Circuit

October 31, 2013



WILLIAM M. NICKERSON, Senior District Judge.

Before the Court is Defendant TIAA-CREF Individual and Institutional Services, LLC's Motion to Dismiss. ECF No. 8. The Motion is fully briefed and is ripe for review. For the reasons stated herein, the Court determines that no hearing is necessary, Local Rule 105.6, and the Motion to Dismiss will be granted.


Plaintiff Edward Shlikas is a participant in his employer's 403(b) Defined Contribution Plan. Under this Plan, Plaintiff had the opportunity to invest his savings in a number of different funds. On April 29, 2013, Plaintiff transferred $73, 772.85 ("the Subject Funds") from his CREF Equity Index Fund into the TIAA Traditional Annuity. Prior to doing so, Plaintiff called TIAA-CREF "and was told and was left with the impression that [he] could freely move money between TIAA-CREF Funds at will, without restriction, at any time." Compl. ¶ 7.

The CREF Equity Index Fund is a variable annuity, "in which the value of Plaintiff's investment changes over time reflecting the investment experience (dividend and interest income, plus capital gains and losses) and expenses of the account.'"[1] ECF No. 8-1 at 4 (quoting ECF No. 8-5). The Traditional Annuity, by contrast, is a low-risk fund, and guarantees that investments will grow "at an assured interest rate, irrespective of market performance, which will accrue to Plaintiff's benefit in the form of lifetime retirement income." ECF No. 8-1 at 2. The Traditional Annuity contains strict transfer restrictions, however. Specifically, the TIAA Annuity Certificate states that "[y]ou can transfer your Traditional Annuity accumulation to your companion CREF certificate or to the Investment Accounts over a 10-year period. You cannot withdraw or transfer your Traditional Annuity accumulation in a lump sum." ECF No. 8-2. Additionally, the plan Enrollment Form, which was signed by Plaintiff, states in relevant part:

The TIAA annuity contract does not allow lump-sum cash withdrawals from the TIAA Traditional Annuity and transfers must be spread over a ten-year period. Transfers from the TIAA Real Estate Account and from all CREF accounts may be made in a lump sum.

ECF No. 8-3 at 2.

On May 1, two days after making the initial transfer, Plaintiff sought to make a lump sum transfer of the Subject Funds back into his CREF Equity Index Fund, but was unable to do so.[2] Plaintiff called Defendant TIAA-CREF and spoke to an employee, who informed Plaintiff that he could not move the Subject Funds from the Traditional Annuity into the CREF Equity Index Fund. According to the CREF Annuity Certificate, Plaintiff was not permitted to revoke his transfer after its effective date, which is "the end of the Business Day in which CREF receives" the request. ECF No. 8-4 at 16. Thus, Plaintiff's transfer was complete, and irrevocable under the terms of the CREF Equity Index Fund, at the close of business on April 29. Plaintiff asserts that, prior to making the initial transfer from his CREF Equity Index Fund to the Traditional Annuity, he was not aware of the Traditional Annuity's ten-year lump sum transfer restriction.

Plaintiff, proceeding pro se, filed a Complaint in the District Court for Baltimore County, which was subsequently removed to this Court by Defendant. Plaintiff's Complaint appears to allege state law claims for breach of contract and negligent misrepresentation, and seeks specific performance and/or compensatory damages. On June 27, Defendant filed the present Motion to Dismiss, contending that Plaintiff's claims are preempted by ERISA and that, even if Plaintiff's Complaint could be construed as asserting an ERISA claim, Defendant complied with the terms of Plaintiff's Annuity.


A motion to dismiss under Fed.R.Civ.P. 12(b)(6) tests the legal sufficiency of a complaint. Edwards v. City of Goldsboro , 178 F.3d 232, 243 (4th Cir. 1999). To survive a 12(b)(6) challenge, a complaint need only present enough factual content to render its claims "plausible on [their] face" and enable 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). A plaintiff filing pro se, like Shlikas, is held to a "less stringent standard" than a lawyer, and the court must construe his or her claims liberally, no matter how "inartfully" pled. Erickson v. Pardus , 551 U.S. 89, 94 (2007). Even a pro se complaint must, however, meet a minimum threshold of plausibility. See, e.g., O'Neil v. Ponzi , 394 F.Appx. 795, 796 (2d Cir. 2010).


A. ERISA Preemption

Defendant first alleges that Plaintiff's state law claims are completely preempted by the Employee Retirement Income Security Act ("ERISA"). ERISA governs and otherwise regulates "employee benefit plans." See 29 U.S.C. §§ 1001, 1002(3). In drafting ERISA, Congress expressed an intent that "the civil enforcement provisions of ERISA § 502(a) be the exclusive vehicle for actions by ERISA-plan participants and beneficiaries..., and that varying State causes of action for claims within the scope of § 502(a) would pose an obstacle to the purposes and objective of Congress.'" Singh v. Prudential Health Care Plan, Inc. , 335 F.3d 278, 289-90 (4th Cir. 2003) (quoting Pilot Life Ins. Co. v. Dedeaux , 481 U.S. 41, 52 ...

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