United States District Court, D. Maryland, Southern Division
MICHAEL F. CROXSON, Plaintiff,
SENECA ONE FINANCE, INC., Defendant.
MEMORANDUM OPINION AND ORDER
W. Grimm United States District Judge.
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,  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,  and no hearing is
necessary, see Loc. R. 105.6 (D. Md.).
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).
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.
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. ¶¶
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).
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.
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 “