Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Croxson v. Seneca One Finance, Inc.

United States District Court, D. Maryland, Southern Division

November 1, 2016



          Paul W. Grimm United States District Judge.

         Following his termination as President of Seneca One Finance, Inc. (“Seneca”), Michael Croxson filed suit in the Circuit Court for Montgomery County, alleging that the termination violated Montgomery County's employment-discrimination law and that Seneca breached Croxson's Employment Agreement and violated state law by failing to make severance payments, provide post-termination healthcare benefits, or compensate him for accrued leave. Am. Compl., ECF No. 7. Seneca removed the case to this Court and moved to dismiss, contending that most of Croxson's claims are preempted by the Employment Retirement Income Security Act of 1974 (ERISA) because they “relate to” an employee-benefits plan covered by the Act and, for the others, that Croxson failed to state a claim for which relief can be granted. ECF No. 35. The Motion has been fully briefed, [1] see Def.'s Mem., ECF No. 35-1; Pl.'s Opp'n, ECF No. 37; Def.'s Reply, ECF No. 38; Pl.'s Surreply, ECF No. 41, [2] and no hearing is necessary, see Loc. R. 105.6 (D. Md.).

         This Memorandum Opinion and Order grants Seneca's Motion in part and denies it in part. Croxson's state-law claims that seek damages for the post-termination denial of his healthcare benefits are dismissed with prejudice because they are preempted by ERISA and cannot be reframed as a claim under the statute's civil-enforcement provision; however, Croxson's wrongful-discharge claim, for which he seeks restoration of his healthcare benefits can proceed as an ERISA claim. Determining whether Croxson's breach-of-contract claim for severance pay is preempted by ERISA requires factual determinations that cannot be made at the motion-to-dismiss stage. This claim may proceed. Finally, Croxson has not stated a valid breach-of-contract claim for accrued leave, but has stated a claim for the unpaid leave under the Maryland Wage Payment Collection Act (MWPCL).


         In 2015, Seneca faced financial difficulties and commenced discussions about downsizing its workforce. Am. Compl. ¶ 35. In November of that year, Seneca's health-insurance broker informed the company that it would face a fifteen percent increase in 2016 health-insurance expenses due mostly to the cost of covering medication for Croxson's son, who is diagnosed with cystic fibrosis. Id. ¶ 38. Shortly thereafter, Seneca terminated Croxson's employment. Id. ¶ 39. Based on the timing of the layoff and the absence of Croxson's name from previous layoff discussions, Croxson alleges that the company targeted him for termination in order to avoid the increased healthcare costs. Id. ¶¶ 39-42.

         Croxson's Employment Agreement provides:

We will also provide one year's severance if you are terminated not for cause . . . . This severance is equal to your base salary and will be paid monthly for a year or until you find new employment with a comparable salary if within a year of termination. We will also provide continued comparable healthcare benefits for a year or until new employment is secured.

Id. ¶ 7. Croxson did not receive severance pay or continued healthcare benefits after his termination. Id. ¶ 11. Seneca also did not compensate Croxson for accrued leave, and the Employment Agreement did not explicitly require it to do so. Id. ¶¶ 10-11.

         Croxson seeks actual and enhanced damages for Seneca's omissions under a breach-of-contract theory (Count I) and under the MWPCL (Count II). Id. ¶¶ 15-16, 25. He also alleges that his termination violated Montgomery County's employment-discrimination law, which prohibits termination of an employee because of “family responsibilities, ” id. ¶¶ 43-45 (quoting Montgomery Cnty., Md. Code § 27-19(a)), and seeks actual and enhanced damages as well as restoration of his health-insurance coverage as remedies (Count III, Prayer for Relief ¶¶ 1-4).

         Standard of Review

         Rule 12(b)(6) provides for “the dismissal of a complaint if it fails to state a claim upon which relief can be granted.” Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012). This rule's purpose “is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)). To that end, the Court bears in mind the requirements of Rule 8, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), and must state “a plausible claim for relief, ” as “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice, ” Iqbal, 556 U.S. at 678-79; see also Velencia, 2012 WL 6562764, at *4 (discussing standard from Iqbal and Twombly). “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.” Iqbal, 556 U.S. at 678.


         Wrongful Discharge

         Seneca argues that Croxson's wrongful-discharge claim, which is based upon alleged violations of the Montgomery County Code, is preempted by ERISA because it turns on whether Seneca terminated his employment in order to avoid paying him ERISA benefits. Def. Mem. 6- 7. Before considering this argument, a distinction must be drawn between complete and conflict preemption, two separate doctrines both implicated by ERISA. Conflict preemption occurs “where compliance with both federal and state regulations is a physical impossibility.” Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43 (1963). “Section 514 of ERISA defines the scope of ERISA's preemption of conflicting state laws . . . .” Sonoco Prods. Co. v. Physician Health Plan, Inc., 338 F.3d 366, 371 (4th Cir. 2003). That section dictates that ERISA “supersede[s] any and all State laws . . . [that] relate to any employee benefit plan” enumerated in the statute.” § 514, 29 U.S.C. § 1144(a). The Supreme Court has interpreted § 514 broadly, holding that a state law relates to an employee benefit plan “ ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.