Perkins v. PM Realty Group, L.P.

IN THE UNITED STATES DISTRICT COURT September 12, 2024

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION Nathan Ochsner, Clerk

GLEN PERKINS, PAMELA PERKINS, §

JAMES PROEHL, WILLIAM WEGHORST, §

and MARK MATTIS, §

§

Plaintiffs, §

§

v. § CIVIL ACTION NO. H-24-0566

§

PM REALTY GROUP, L.P., §

PM REALTY GROUP, L.P. EXECUTIVE §

DEFERRED COMPENSATION PLAN, §

RICK KIRK, and MADISON §

MARQUETTE REAL ESTATE SERVICES §

LLC, §

§

Defendant. §

MEMORANDUM AND ORDER

Plaintiffs, Glen Perkins, Pamela Perkins, James Proehl

(“Proehl”), William Weghorst (“Weghorst”), and Mark Mattis

(“Mattis”), bring this action against defendants, PM Realty Group,

L.P. (“PMRG”), the PM Realty Group, L.P. Executive Deferred

Compensation Plan (“EDCP”), Rick Kirk (“Kirk”), and Madison

Marquette Real Estate Services, LLC (“Madison Marquette”) asserting

federal law claims for benefits, equitable relief, and interference

pursuant to § 502 and § 510 of the Employee Retirement Income

Security Act (“ERISA”), 29 U.S.C. § 1132 and 1140, as well as state

law claims for anticipatory repudiation, fraud, tortious

interference with contract and/or business relationships, unjust

enrichment, equitable accounting, constructive trust, and punitive

damages. Pending before the court is Defendants’ Motion to

Dismiss Complaint (“Defendants’ Motion to Dismiss”) (Docket Entry

No. 21). Also pending are Plaintiffs’ Response in Opposition to

Defendants’ Motion to Dismiss (“Plaintiffs’ Response”) (Docket

Entry No. 24), and Defendants’ Reply in Support of Motion to

Dismiss Complaint (“Defendants’ Reply”) (Docket Entry No. 27).

Having reviewed Plaintiffs’ Complaint and the documents attached

thereto, Defendants’ Motion to Dismiss, Plaintiffs’ Response,

Defendants’ Reply, and the governing law, Defendants’ Motion to

Dismiss will be granted in part and denied in part.

I. Standard of Review

Citing Federal Rule of Civil Procedure 12(b)(6), Defendants

seek dismissal of all causes of action asserted in the Plaintiffs’

Complaint. A Rule 12(b)(6) motion tests the formal sufficiency of

the pleadings and is “appropriate when a defendant attacks the

complaint because it fails to state a legally cognizable claim.”

Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert.

denied sub nom. Cloud v. United States, 122 S. Ct. 2665 (2002). To

defeat a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff

must plead “enough facts to state a claim to relief that is

plausible on its face.” Bell Atlantic Corp. v. Twombly, 127 S. Ct.

1Complaint for Damages and Equitable Relief, Docket Entry

No. 1 (“Plaintiffs’ Complaint”). See also PM Realty Group, L.P.

Amended and Restated Executive Deferred Compensation Plan (“Plan”),

Exhibit A to Plaintiffs’ Complaint, Docket Entry No. 1-2.

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1955, 1974 (2007). “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.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949

(2009) (citing Twombly, 127 S. Ct. at 1965). When considering a

motion to dismiss, the court must accept the factual allegations of

the complaint as true, view them in a light most favorable to the

plaintiff, and draw all reasonable inferences in the plaintiff’s

favor. Id. Courts are “limited to the complaint, any documents

attached to the complaint, and any documents attached to the motion

to dismiss that are central to the claim and referenced by the

complaint.” Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC,

594 F.3d 383, 387 (5th Cir. 2010).

II. Plaintiffs’ Factual Allegations2

Plaintiffs allege that they are all former employees of PMRG,

a commercial real estate firm, and that at all relevant times, Kirk

was PMRG’s Chief Executive Officer (“CEO”) and Chairman who

directed all aspects of PMRG’s operations.

Plaintiffs allege that PMRG adopted the EDCP effective

December 1, 2004, and amended it effective January 1, 2009.

2This section summarizes the section of Plaintiff’s Complaint

titled, “Facts Relevant to All Counts,” Docket Entry No. 1, pp. 2-

12 ¶¶ 13-86. All page numbers for docket entries refer to the

pagination inserted at the top of the page by the court’s

electronic filing system, CM/ECF.

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participate in the Plan, and that

Kirk, PMRG President Jimmy Gunn (“Gunn”), Chief Financial

Officer W. Roger Gregory (“Gregory”), and Executive Vice

President, Risk Management and Human Resources Pat Rains

(“Rains”) represented to one or more Plaintiffs that the

Plan was a “great deal,” that it was “just like a

401(k),” and that it was “governed under ERISA rules,” or

words to that effect.3

Plaintiffs allege that “Rains sent a summary plan description

(“SPD”) to one or more [of them] representing that the Plan offered

‘investment options representing a broad range of well-known asset

managers’ and ‘“model” investment portfolios to help you

automatically diversify your investments.’”4 Plaintiffs each

accepted the offer to participate in the EDCP, albeit on different

dates. Asserting that “[t]hese representations were not true,”5

Plaintiffs argue that

[i]n reality, the [EDCP] offered [them] what turned out

to be an illusory investment option that they called

“shadow” investments. The amounts credited to Plaintiffs

were not used to purchase any investments. Rather, PMRG

credited Plaintiffs’ accounts with hypothetical shares of

the “shadow” funds and investments they selected, and

credited their accounts with a rate of return equal to

what would have been earned by these hypothetical fund

shares. In reality, PMRG and its officers including Kirk

sold the Plan to Plaintiffs on the strength and security

of the name brand investment options and then diverted

Plaintiffs’ payroll withholding savings to their own

purposes.6

3Id. at 4 ¶ 20.

4Id. ¶ 23.

5Id. ¶ 24.

6Id. at 4-5 ¶ 25.

privately held commercial real estate investment and operating

company, announced its intent to merge with PMRG. Plaintiffs

allege that although they had opportunities to leave PMRG before or

after the effective date of the merger, “PMRG induced [them] to

remain in their positions and not resign before or after the merger

by promising that they would be paid the amounts in their [EDCP]

accounts.”7 Plaintiffs allege that in an email dated

January 13, 2019, Rains represented to [them] that

effective January 1, 2019, (a) the Plan “will continue to

operate in accordance with all the terms of the Plan”;

(b) their “Employment transition from PMRG to [Madison

Marquette] was effective 1/1/2019”; (c) “it is expected

that the EDCP will be terminated in 2019 which will

trigger a payout of each Participant Account in 2020

(within 12 months of the EDCP termination date)”; and

(d) “Current analysis indicates that Participant Account

payouts upon EDCP termination will need to be made as

lump sum in lieu of any existing Participant installment

payout elections.”8

Asserting that unbeknownst to them, “Madison Marquette acquired

PMRG’s assets but did not assume liability for Plaintiffs’ deferred

compensation benefits,”9 Plaintiffs allege that “the transaction

between PMRG and Madison Marquette was fraudulent and/or otherwise

intended to provide an escape from liability under the Plan.”10

7Id. at 6 ¶ 40.

8Id. ¶ 41 (quoting January 13, 2019, email from Rains to

Proehl, Exhibit B to Plaintiff’s Complaint, Docket Entry No. 1-3.

9Id. at 7 ¶ 47.

10Id. ¶ 49.

Plaintiffs allege that they were each discharged from Madison

Marquette on the following effective dates: Weghorst, January 31,

2021;11 Glen and Pamela Perkins, April 15, 2022;12 Proehl and Mattis,

September 30, 2022.13 Plaintiffs allege that they are all entitled

to benefits from the EDCP, that they have all claimed benefits in

accordance with the Plan, and that their claims have all been

denied. PMRG denied Pamela Perkins’ claim because she elected to

begin receiving distributions five years after her Separation from

Service, and would not be entitled to payment until May of 2027.14

PMRG told the other Plaintiffs that their claims for benefits were

denied because PMRG “does not have sufficient liquidity or cash

flow to pay [its obligations].”15 Plaintiffs allege that on

September 19, 2023, all of them except Mattis timely appealed the

denial of their claims,16 that on November 16, 2023, Kirk sent a

letter to Plaintiffs’ counsel identifying himself as “the sole

11Id. at 8 ¶ 60.

12Id. at 9 ¶ 63.

13Id. ¶ 69.

14See August 18, 2023, Letter to Pamela Perkins, included in

Exhibit F to Plaintiffs’ Complaint, Docket Entry No. 1-7, p. 4.

15Plaintiffs’ Complaint, Docket Entry No. 1, p. 11 ¶ 80

(quoting August 18, 2023, Letters to Glen Perkins, Proehl, and

Weghorst, included in Exhibit F to Plaintiffs’ Complaint, Docket

Entry No. 1-7, pp. 2, 6, and 8).

16Id. ¶ 81 (citing Exhibit G to Plaintiffs’ Complaint, Docket

Entry No. 1-8, p. 2).

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member of the Committee and the Appeals Committee,” and that on

January 19, 2024, all of them except Mattis received letters from

Kirk denying their appeals.18 Plaintiffs allege that Mattis has

exhausted the Plan’s administrative process or, alternatively, that

the EDCP’s failure to respond to his timely claim, combined with

the denials of the claims submitted by the other similarly situated

plaintiffs establishes that further appeals would be futile.19

III. Analysis

Defendants argue that

Plaintiffs’ Complaint should be dismissed pursuant to

Rule 12(b)(6) because they have not alleged a breach of

the Plan documents, as is required to maintain their

claim[s] for benefits. Their state law claims are

closely related to their ERISA claims and are therefore

preempted by ERISA’s extremely broad preemption

provision.20

Defendants argue that Plaintiffs’ claims against Kirk and Madison

Marquette should be dismissed for the additional reasons that

neither of them are entities that can be held liable for the claims

asserted.21

17Id. ¶ 82 (citing Exhibit H to Plaintiffs’ Complaint, Docket

Entry No. 1-9).

18Id. at 12 ¶ 83 (citing Exhibit I to Plaintiffs’ Complaint,

Docket Entry No. 1-10).

19Id. ¶ 86.

20Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 6.

21Id. at 11.

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Plaintiffs assert ERISA claims seeking EDCP benefits under

ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B); equitable relief

under ERISA § 502(a)3), 29 U.S.C. § 1132(a)(3); and damages for

interference with existing contracts and/or business relationships

under ERISA § 510, 29 U.S.C. § 1140.22 Defendants argue that

Plaintiffs’ ERISA claims are subject to dismissal because the EDCP

“is a specific type of deferred compensation plan called a ‘top

hat’ plan, which is exempt from many of ERISA’s substantive

requirements,”23 that claims for top hat plan benefits require

allegations that Defendants breached plan documents, but that

Plaintiffs have made no such allegations, and that the denials of

benefits were consistent with Plan documents.24 Defendants argue

that the ERISA claims asserted against Kirk and Madison Marquette

should be dismissed because Plaintiffs have not pleaded any basis

for their liability under ERISA, and that Plaintiffs’ ERISA

interference claims should be dismissed because Plaintiffs have not

alleged that Plaintiffs suffered adverse employment actions, or

that Defendants acted with specific discriminatory intent.25

Defendants have not challenged Plaintiffs’ claims for equitable

relief under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3).

22Plaintiffs’ Complaint, Docket Entry No. 1, pp. 12-15 ¶¶ 87-

115.

23Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 11.

24Id.

25Id.

1. Count 1: Claim for EDCP Benefits

Under ERISA § 502(a)(1)(B), a plan participant or beneficiary

may assert a claim to recover benefits due under the terms of a

plan, to enforce rights under the terms of a plan, or to clarify

rights to future plan benefits. 29 U.S.C. § 1132(a)(1)(B). The

remedy for claimants under § 502(a)(1)(B) is payment of benefits or

declaration of rights to future benefits. See Pedersen v. Kinder

Morgan Inc., 622 F. Supp. 3d 520, 532 (S.D. Tex. 2022). Asserting

that they are entitled to benefits accrued in accordance with the

Plan, Plaintiffs allege that

[t]he decision denying [them] their rights and benefits

due them under the Plan was arbitrary, illegal,

capricious, unreasonable, discriminatory and not made in

good faith and violates the terms of the Plan and is

subject to enforcement by the power of this Court . . .

under ERISA § 502(a)(1)(B) (29 U.S.C. § 1132(a)(1)(B)).26

Defendants argue that Plaintiffs’ claims for Plan benefits are

subject to dismissal because the Plan is a “top hat” plan, a

specific type of deferred compensation plan that is exempt from

many of ERISA’s substantive requirements, including ERISA’s minimum

participation and vesting standards,27 and because Plaintiffs have

not pleaded a breach of the Plan documents.28 Defendants also argue

that Plaintiffs bear the burden of proving that the EDCP is not a

26Plaintiffs’ Complaint, Docket Entry NO. 1, p. 13 ¶ 92.

27Defendants’ Motion to Dismiss, Docket Entry No. 21, pp. 12-

14.

28Id. at 14-16.

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top hat plan.29 Plaintiffs respond that their claims for benefits

should not be dismissed because whether the EDCP is a top hat plan

is not susceptible of determination on a motion to dismiss, and

because they have pleaded a breach of the Plan documents.30

Plaintiffs also argue that Defendants bear the burden of proving

top hat plan status because they are the parties asserting that the

EDCP is a top hat plan.31

(a) The Issue of the EDCP’s “Top Hat” Status Is Not Ripe

“A ‘top hat’ plan is a plan that is (1) unfunded and

(2) maintained ‘primarily for the purpose of providing deferred

compensation for a select group of management or highly compensated

employees.’” Tolbert v. RBC Capital Markets, Corp., 758 F.3d 619,

627 (5th Cir. 2014) (quoting 29 U.S.C. § 1101(a)(1) and Reliable

Home Health Care, Inc. v. Union Central Insurance Co., 295 F.3d

505, 512 (5th Cir. 2002)). Top hat plans are exempt from ERISA’s

fiduciary provisions as well as its participation, vesting, and

funding provisions, but are not exempt from ERISA’s reporting,

administration, or enforcement provisions. Reliable Home, 295 F.3d

at 512 and 515 (citing 29 U.S.C. §§ 1021-1045 (reporting,

disclosure, administration, and enforcement provisions), 1051(2)

29Id. at 13.

30Plaintiffs’ Response, Docket Entry No. 24, pp. 11-17.

31Id. at 10-11.

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(exempting top hat plans from participation and vesting

requirements), 1081(a)(3) (exempting top hat plans from minimum

funding standards), and 1101(a)(1) (exempting top hat plans from

fiduciary responsibilities)). Whether a plan qualifies as a top

hat plan is a question law, but “may require factual determination

regarding, for example, selectivity and high compensation.” Tolbert

v. RBC Capital Markets Corp., Civil Action No. H-11-0107, 2015 WL

2138200, at *3 (S.D. Tex. April 28, 2015)(quoting Tolbert, 758 F.3d

at 627).

Citing selected terms of the Plan attached to Plaintiffs’

Complaint, Defendants argue that the EDCP is a top hat plan because

the Plan’s plain language states that “the purpose of the Plan [is]

to attract and retain key employees by providing Participants with

an opportunity to defer receipt of a portion of their salary,

bonus, commission, and other specified compensation,” and that

“[t]he Plan is unfunded for federal tax purposes and is intended to

be an unfunded arrangement for eligible employees who are part of

a select group of management or highly compensated employees of the

Participating Employers within the meaning of Sections 201(2),

301(a)(3), and 401(a)(1) of ERISA.”32 While the parties do not

dispute that the EDCP provides deferred compensation, the Plan

language alone is not sufficient to establish that the primary

32Defendants’ Motion to Dismiss, Docket Entry No. 21, pp. 13-14

(quoting the Plan, Docket Entry No. 1-2, p. 4 Article I).

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purpose of the plan is to provide deferred compensation for a

select group of management or highly compensated employees. The

Fifth Circuit has made clear that these factors can constitute fact

issues. See Tolbert, 758 F.3d at 627 (“The resolution of the

dispute over the ‘top hat’ exemption may require factual

determinations regarding, for example, selectivity and high

compensation.”). Moreover, Defendants have not cited any case in

which a court granted a motion to dismiss upon concluding that an

ERISA plan is a top hat plan based solely on review of plan

language before discovery has occurred. Instead, the cases on

which Defendants rely in support of their argument that the EDCP is

a top hat plan were all decided on more developed records. See

e.g., Sikora v. UPMC, 876 F.3d 110 (3d Cir. 2017) (summary

judgment); and Reliable Home, 295 F.3d at 505 (bench trial).

Plaintiffs have, however, cited several cases in which courts have

denied motions to dismiss based on similar records. See e.g.,

Loftus v. Federal Deposit Insurance Corp., 989 F. Supp. 2d 483, 492

n. 3 (D.S.C. 2013); MacDonald v. Summit Orthopedics, Ltd., 681 F.

Supp. 2d 1019, 1023-24 (D. Minn. 2010). Regardless of which party

bears the burden of proving the EDCP’s top hat plan status, the

current record is not sufficient for the court to find that the

EDCP is a top hat plan. Therefore, Plaintiffs’ claims for EDCP

benefits are not subject to dismissal on that basis.

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(b) Plaintiffs Have Pleaded a Breach of Plan Documents

Defendants argue that regardless of whether the court finds

that the EDCP is a top hat plan, Plaintiffs’ claims for benefits

should be dismissed because Plaintiffs have not pleaded a breach of

the plan documents.33 Defendants argue that

Plaintiffs allege that they “are entitled to payment of

retirement benefits under the Plan’s terms” and that

Defendants’ decision to deny Plaintiffs those benefits

“violates the terms of the Plan.” Compl. ¶¶ 89-92, 100-

03. However, Plaintiffs fail to explain how the decision

to deny benefits violated the terms of the Plan. With

the exception of Pamela Perkins, whose claim was denied

because her installment payments are not scheduled to

begin until May 2027, Dkt. 1-7 at 4, the claims for

benefits were denied because [PMRG] lacks funds to pay

those benefits. Dkt. 1-4; Dkt. 1-7.

This denial is consistent with the terms of the

Plan[, which . . . provides that the “[o]bligations

established under the terms of the Plan may be satisfied

from the general funds of [PMRG]” and that Participants

have no “right, title or interest whatever” in [PMRG]’s

assets. Dkt. 2-1 at Art. 11.1. The Plan states that

nothing in the Plan established a trust or fiduciary

relationship of any kind, and “[t]o the extent that any

person acquires a right to receive payments [under this

Plan], such rights are no greater than the right of an

unsecured general creditor of [PMRG].” Id. [PMRG] is

insolvent and thus cannot pay Plaintiffs’ benefits.34

Citing ¶¶ 92 and 103 of their Complaint, Plaintiffs respond

that they have alleged breach of the Plan.35 Plaintiffs have also

33Id. at 14-16.

34Id. at 14-15. See also Defendants’ Reply, Docket Entry

No. 27, pp. 6-7 (arguing that “[r]egardless of top hat status, the

plain terms of the Plan provide that Plaintiffs are unsecured

creditors with no right to [PMRG]’s assets”).

35Plaintiffs’ Response, Docket Entry No. 24, p. 15.

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alleged that at all relevant times they were qualified and vested

participants in the Plan,36 and that Defendants refused to perform

as required by the Plan documents.37 Plaintiffs acknowledge that

Kirk sent four of them letters stating that PMRG could not pay

their claims “due to [PMRG]’s cash flow deficiency,”38 but allege

“on information and belief” that “the information in Kirk’s letters

was not true; PMRG’s LinkedIn page reflects that it currently

‘provides leasing and management services to a diverse portfolio of

330 assets in 24 states and manages an investment portfolio valued

at over $6 billion.’”39 In their Reply, Defendants acknowledge that

“Plaintiffs’ claims rely on a breach of the terms of the Plan,”40

but argue that “the Plan’s terms clearly foreclose [Plaintiffs’]

claims for benefits.”41

Even though top hat plans are exempt from many of ERISA’s

substantive requirements, they are not exempt from ERISA’s

reporting, disclosure, administration, or enforcement provisions.

Reliable Home, 295 F.3d at 515 (citing 29 U.S.C. §§ 1021–1045).

36Id. (citing Plaintiffs’ Complaint, p. 5 ¶ 33).

37Id. (citing Plaintiffs’ Complaint, pp. 9-12 ¶¶ 73-83).

38Plaintiffs’ Complaint, pp. 9-10 ¶ 74 (quoting March 1, 2023,

letter from Kirk to Weghorst) and 10 ¶ 75 (alleging that “Glen

Perkins, Pamela Perkins, and Proehl received similar letters from

Kirk”).

39Id. at 10 ¶ 76 (quoting PMRG’s LinkedIn page, Exhibit D to

Plaintiffs’ Complaint, Docket Entry No. 1-5, p. 2).

40Defendants’ Reply, Docket Entry No. 27, p. 6.

41Id.

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Top hat plans are controlled by the terms of the plan documents,

and enforcement of those terms is governed by the federal common

law of contracts. See Spacek v. Maritime Association, 134 F.3d

283, 287-288, 296-298 (5th Cir. 1998), abrogated on other grounds

by Central Laborers’ Pension Fund v. Heinz, 124 S. Ct. 2230, 2235

(2004). “The elements of a breach of contract claim under federal

common law are: (1) a valid contract between the parties, (2) an

obligation or duty arising out of the contract, (3) a breach of

that duty, and (4) damages caused by the breach.” United States v.

Charter Home Health, L.L.C., Civil Action No. 19-00881-BAJ-RLB,

2020 WL 7311347, at * 3 (M.D. La. December 11, 2020) (quoting

Express Damage Restoration, LLC v. Wright National Flood Insurance

Co., No. 1:19-cv-24127-JLK, 2019 WL 6699702, at * 2 (S.D. Fla.

December 9, 2019)). Plaintiffs’ allegations that at all relevant

times they were qualified and vested participants in the Plan,

which constitutes a valid contract,” that Defendants were obligated

by the Plan documents to pay their claims for benefits,**? that

Defendants refused to perform as obligated,** and that Plaintiffs

were damaged thereby,*? are sufficient to state an ERISA claim for

benefits based on the Plan documents even if the EDCP is, as

Defendants contend, a top hat plan.

“Plaintiffs’ Complaint, pp. 5 7 33, and 12 7 88.

“Td. at 3 If 18-19, 9 7 71, and 12 89-90.

“Td. at 9-12 491 73-83.

“Td. at 12 9 85, and 13 □ 96.

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subject to dismissal regardless of the EDCP’s top hat status

because PMRG is insolvent does not warrant dismissal of Plaintiffs’

claims for benefits. Although Defendants argue that ¶ 105 of

Plaintiffs’ Complaint admits that PMRG is insolvent,46 Plaintiffs

have not admitted that PMRG is insolvent. To the contrary,

Plaintiffs have acknowledged that Defendants told them that PMRG is

insolvent as the reason for denying their claims for benefits,47 but

Plaintiffs allege that Defendants’ assertion of PMRG’s insolvency

is not true,48 and that “[n]otwithstanding its alleged insolvency,

PMRG has continued to sell and transfer substantial commercial real

estate . . .”49 Like the issue of the EDCP’s status as a top hat

plan, whether Defendants’ assertion of PMRG’s insolvency is a valid

basis for denying the Plaintiffs’ claims for benefits is an issue

that cannot be decided on the pleadings alone.

(c) Claims for EDCP Benefits Asserted Against Kirk in

His Personal Capacity Are Subject to Dismissal

Citing 29 U.S.C. § 1132(d)(2), and asserting that “[t]o hold

a corporate officer personally liable under ERISA for the alleged

46Defendants’ Reply, Docket Entry No. 27, p. 6.

47Plaintiffs’ Complaint, Docket Entry No. 1, pp. 9-10 ¶¶ 74-75.

48Id. at 10 ¶ 76 (citing PMRG’s LinkedIn page, Exhibit D to

Plaintiffs’ Complaint, Docket Entry No. 1-5, p. 2).

49Id. at 14 ¶ 107. See also Plaintiff’s Response, Docket Entry

No. 24, pp. 15-16 n. 2 (“Defendants’ only basis for non-payment

appears to be alleged inability to pay. . . [T]he Plan does not

excuse non-payment for alleged inability to pay.”).

veil,”50 Defendants seek dismissal of the claims asserted against

Kirk in his individual capacity because “Plaintiffs have not

pleaded any basis on which Rick Kirk can be held liable in his

individual capacity.”51 Plaintiffs do not dispute that Kirk cannot

be held personally liable for their claims for ERISA benefits.

Instead, citing a number of cases including Graham v. Metropolitan

Life Insurance Co., Civil Action No. H-09-3803, 2009 WL 5205354, at

*1 (S.D. Tex. December 23, 2009), for holding that “[t]he only

proper defendants for an ERISA claim are the ERISA Plan, the Plan

Administrator, and the Plan Sponsor,”52 Plaintiffs argue that “Kirk

is the administrator of the Plan; he therefore is a proper

defendant to a claim for unlawful denial of benefits in his

capacity as such.”53 Because Plaintiffs acknowledge that any claims

asserted against Kirk must in his capacity as Plan administrator,

Plaintiffs’ claims for benefits against him in his personal

capacity will be dismissed.

(d) Claims for EDCP Benefits Asserted Against Madison

Marquette Are Not Subject to Dismissal

Asserting that Madison Marquette is a mere continuation of

PMRG and that the transaction between PMRG and Madison Marquette

50Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 18.

51Id.

52Plaintiffs’ Response, Docket Entry No. 24, p. 18.

53Id. at 19.

was intended to provide an escape from liability for the EDCP,

Plaintiffs allege that Madison Marquette is liable to them for

benefits as PMRG’s successor.55 Citing Articles 2.12 and 2.27 of

the Plan, Defendants argue that Plaintiffs’ ERISA claims for

benefits and equitable relief asserted against Madison Marquette

should be dismissed because Madison Marquette is neither the

Company nor a Participating Employer under the Plan, Madison

Marquette is not a successor of PMRG with respect to the Plan, and

Plaintiffs have not alleged that Madison Marquette controls Plan

administration.56

Citing inter alia Schutze v. Financial Computer Software,

Civil Action No. 3:04-CV-0276-H, 2006 WL 2842008, at * 10 (N.D.

Tex. September 29, 2006), Plaintiffs respond that Madison Marquette

can be held liable for their ERISA claims as PMRG’s successor.57

Defendants reply that Plaintiffs’ arguments are foreclosed by the

Fifth Circuit’s holding in Taylor v. Bank One Texas, 992 F.2d 324,

1993 WL 152149 (5th Cir. 1993), which rejected the district court’s

holding that corporate successorship theories made the purchaser

entity liable for ERISA benefits after an asset sale.58

54Plaintiffs’ Complaint, Docket Entry No. 1, pp. 7-8 ¶¶ 47-59.

55Id. at 13 ¶ 95.

56Defendants’ Motion to Dismiss, Docket Entry No. 21, pp. 18-

19.

57Plaintiffs’ Response, Docket Entry No. 24, pp. 19-22.

58Defendants’ Reply, Docket Entry No. 27, pp. 10-11.

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“[T]he general rule of corporate liability is that, when a

corporation sells all of its assets to another, the latter is not

responsible for the seller’s debts or liabilities, except [under

certain enumerated circumstances. Smith v. Regional Transit

Authority, 827 F.3d 412, 421 (5th Cir. 2016) (quoting Golden State

Bottling Co., Inc. v. NLRB, 94 S. Ct. 414, 424 n. 5 (1973)

(identifying the “enumerated circumstances” as “where (1) the

purchaser expressly or impliedly agrees to assume the obligations;

(2) the purchaser is merely a continuation of the selling

corporation; or (3) the transaction is entered into to escape

liability.”). Successor liability is a common law exception to the

general rule of corporate liability enunciated by the Supreme Court

in labor law cases to vindicate important federal statutory

policies. See Rojas v. TK Communications, Inc., 87 F.3d 745, 749-

50 (5th Cir. 1996) (citing inter alia John Wiley & Sons, Inc. v.

Livingston, 84 S. Ct. 909, 915 (1964) (holding successor employer

had duty to arbitrate under preexisting agreement where there was

“substantial continuity” in the business both before and after the

change in ownership); Howard Johnson Co., Inc. v. Detroit Local

Joint Executive Board, Hotel and Restaurant Employees and

Bartenders International Union, AFL-CIO, 94 S. Ct. 2236, 2243 n. 9

(1974) (recognizing that the question of whether to hold a new

employer to the obligations of the former employer is one that must

be considered “in light of the facts of each case and the

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particular legal obligation at issue”); and Fall River Dyeing &

Finishing Corp. v. National Labor Relations Board, 107 S. Ct. 2225,

2234 (1987) (holding that a new employer was free to disregard the

terms of its predecessor’s collective bargaining agreement in

hiring the predecessor’s employees and that it had no duty to

arbitrate unless there was substantial continuity between the

former and latter’s business operations)). In Rojas, the Fifth

Circuit reasoned that the doctrine of successor liability applied

to claims asserted under Title VII of the Civil Rights of 1964,

explaining that the doctrine is intended “to protect an employee

when the ownership of his employer suddenly changes.” Id. at 750.

In Rojas the Fifth Circuit adopted a nine-factor test for showing

successor liability in a Title VII discrimination case:

(1) [W]hether the successor company had notice of the

charge or pending lawsuit prior to acquiring the business

or assets of the predecessor; (2) the ability of the

predecessor to provide relief; (3) whether there has been

a substantial continuity of business operations;

(4) whether the new employer uses the same plant;

(5) whether he uses the same or substantially the same

work force; (6) whether he uses the same or substantially

the same supervisory personnel; (7) whether the same jobs

exist under substantially the same working conditions;

(8) whether he uses the same machinery, equipment, and

methods of production; and (9) whether he produces the

same product.

Id.

In Powe v. May, 62 F. Appx 557, 2003 WL 1202795, at * 1 (5th

Cir. 2003) (per curiam), the Fifth Circuit assumed, without

deciding, that the successor liability doctrine applies to Fair

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Labor Standards Act cases, and identified the three main criteria

for determining successor liability as “(1) a substantial

continuity of business operations from the previous entity to its

successor; (2) notice to the successor; and (3) the successor’s

ability to provide relief.” Since Rojas district courts in this

circuit have extended the doctrine of successor liability to other

areas of federal law, including ERISA. See Schutze, 2006 WL

2842008, at * 10. A number of circuit courts have done the same.

See __e.g., New York State Teamsters Conference Pension and

Retirement Fund v. C&S Wholesale Grocers, Inc., 24 F.4th 163, 176

& n. 52 (2d Cir.), cert. denied, 142 S. Ct. 2876 (2022) (“Federal

courts have further expanded the boundaries of ‘successor

liability’ to include other federal statutory schemes, such as

ERISA”) (citing inter alia EBinhorn v. M.L. Ruberton Construction

Co., 632 F.3d 89, 99 (3rd Cir. 2011) (holding that a purchaser of

assets may be held liable for a seller’s delinquent ERISA fund

contributions))). See _also Trustees for Alaska Laborers-

Construction Industry Health & Security Fund v. Alaska Laborers v.

Ferrell, 812 F.2d 512, 515-16 (9th Cir. 1987) (finding successor may

be held liable for predecessor’s failure to make retirement plan

contributions).

Plaintiffs have alleged that Madison Marquette retained the

same employees, the same supervisory personnel, the same facilities

and physical locations, provided the same services, retained the

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same name, and held itself out as the continuation of PMRG. If

true, these allegations are sufficient to establish a substantially

continuity of business operations from PMRG to Madison Marquette.59

Plaintiffs have also alleged that Madison Marquette acquired PMRG’s

assets but did not assume liability for their deferred compensation

benefits.60 These allegations, which Defendants do not dispute,

show that Madison Marquette not only had notice of Plaintiffs’

claims under the Plan before it acquired PMRG’s assets, but also

that Madison Marquette has the ability to provide relief. Assuming

without deciding that the successor liability may be applied to

Plaintiff’s ERISA benefits claims, the court concludes that

Plaintiffs have plausibly alleged that Madison Marquette may be

held liable as PMRG’s successor. The Fifth Circuit’s holding in

Taylor, 992 F.2d at 324, 1993 WL 152149, at *7-*8, does not

preclude this conclusion because the plan at issue there was a

welfare benefits plan that was exempt from ERISA’s participation,

coverage, vesting, and funding requirements. Defendants’ reliance

on Taylor is based on their argument that the EDCP is a top hat

plan that is similarly exempt from ERISA’s participation, coverage,

vesting, and funding rules.61 However, for the reasons stated above

59Plaintiffs’ Complaint, Docket Entry No. 1, p. 8 ¶ 54

60Id. at 7 ¶¶ 47-49.

61Defendants’ Reply, Docket Entry No. 27, p. 10 (comparing the

welfare benefit plan at issue in Taylor to the top hat plan that

they argue is at issue here).

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in § III.A.1(a), the court has already concluded that whether the

EDCP is a top hat plan cannot be determined on the current record.

The court concludes that Plaintiffs’ allegations against Madison

Marquette based on successor liability for the failure to pay their

claims for Plan benefits are plausible, but makes no finding on

whether Madison Marquette actually bears successor liability.

2. Count 3: Claims for Interference with ERISA Rights

Plaintiffs allege that Defendants violated ERISA § 510, 29

U.S.C. § 1140, by “discriminat[ing] against [them] for the purpose

of interfering with the attainment of rights or benefits to which

they may become entitled under the Plan or ERISA.”62

ERISA § 510 makes it unlawful

for any person to discharge, fine, suspend, expel,

discipline, or discriminate against a participant or

beneficiary for exercising any right to which he is

entitled under the provisions of an employee benefit plan

. . . or for the purpose of interfering with the

attainment of any right to which such participant may

become entitled under the plan . . .

29 U.S.C. § 1140. ERISA § 510

consists of two components: (1) an anti-retaliation

component, which prohibits an employer from retaliating

against an employee for exercising ERISA rights; and

(2) an anti-interference component, which prohibits an

employer from interfering with an employee’s future

rights to benefits.

Miles-Hickman v. David Powers Homes, Inc., 589 F. Supp. 2d 849, 876

(S.D. Tex. 2008). To sustain an interference claim, Plaintiffs

62Plaintiffs’ Complaint, Docket Entry No. 1, p. 15 ¶ 114.

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must allege facts capable of establishing: “(1) [a] prohibited

(adverse) employer action; (2) taken for the purpose of interfering

with the attainment of (3) any right to which the employee is

entitled.” Bodine v. Employers Casualty Co., 352 F.3d 245, 250

(5th Cir. 2003).

Citing inter alia Sherrod v. United Way Worldwide, 821 F. Appx

311, 316 (5th Cir. 2020) (per curiam), cert. denied, 141 S. Ct.

1389 (2021), Defendants argue that

Plaintiffs’ § 510 must be dismissed because they have

pleaded neither a prohibited adverse employment action

nor specific discriminatory intent. Plaintiffs do not

allege they were “discharge[d], fine[d], suspend[ed],

expel[led], or discipline[d]” by [PMRG]. Instead, they

claim they were “discriminated against,” Comp. ¶ 114, but

they do not plead any facts explaining how, nor do they

identify a specific right Defendants interfered with.

This is insufficient to plead a § 510 claim.63

Plaintiffs respond that their § 510 claims should not be

dismissed because their “termination by [PMRG] is certainly an

adverse employment action,”64 and

[a]lternatively, their transfer to Madison Marquette . .

. is because Defendants claimed that it did not

constitute a “separation of service” that would have

triggered [their] right to payment of benefits under the

Plan, i.e., rights to which they were entitled or may

become entitled.65

Asserting they have “alleged that Defendants structured the merger

63Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 17.

64Plaintiffs’ Response, Docket Entry No. 24, p. 17.

65Id.

to evade liability under the Plan,”66 Plaintiffs argue that they

have satisfied their burden.67 Defendants reply that the transfer

of Plaintiffs’ employment from PMRG to Madison Marquette was not an

adverse employment action, and that the decision that a Separation

of Service would occur only upon termination of employment from

Madison Marquette is expressly condoned by Treasury Regulation, 26

C.F.R. 1.409A-1(h)(4).68

As a legal matter, what constitutes an adverse action in the

context of ERISA § 510 is unclear. Most cases involve a

termination of employment, and cases that do not tend to focus on

the “intent” element more than the “adverse act” element. See

Cervantes v. 3NT, LLC, No. EP-19-CV-00383-DCG, 2022 WL 1308830, at

* 6 (W.D. Tex. May 2, 2022) (citing inter alia McGann v. H&H Music

Store, 946 F.2d 401, 404-08 (5th Cir. 1991), cert. denied sub nom.

Greenberg v. H&H Music Co., 113 S. Ct. 482 (1992) (recognizing

specific intent to interfere with a specific plaintiff’s benefits

as an element of a § 510 claim)). Plaintiffs’ allegations that

Defendants transferred their employment from PMRG to Madison

Marquette without recognizing a Separation of Service triggering

their rights to payment of Plan benefits, and that “the transaction

between PMRG and Madison Marquette was fraudulent and/or otherwise

66Id. at 18.

67Id.

68Defendants’ Reply, Docket Entry No. 27, pp. 11-12.

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intended to provide an escape from liability under the Plan,”69

plausibly alleges that Plaintiffs experienced an adverse employment

action undertaken with specific intent to interfere with their

rights to Plan benefits. Defendants’ motion to dismiss Plaintiffs’

ERISA § 510 claims for interference with ERISA rights will be

denied.

B. Plaintiffs’ State Law Claims

Citing ERISA § 514, 29 U.S.C. § 1144, Defendants argue that

Plaintiffs’ state law claims for anticipatory repudiation, fraud,

tortious interference with contract and/or business relationships,

unjust enrichment, equitable accounting, constructive trust, and

punitive damages, should all be dismissed as preempted by ERISA.70

Plaintiffs respond that their state law claims are not preempted.71

1. ERISA Preemption Law

“The purpose of ERISA is to provide a uniform regulatory

regime over employee benefit plans. To this end, ERISA includes

expansive pre-emption provisions, see ERISA § 514, 29 U.S.C.

§ 1144, which are intended to ensure that employee benefit plan

69Plaintiffs’ Complaint, Docket Entry No. 1, p. 7 ¶ 49.

70Defendants’ Motion to Dismiss, Docket Entry No. 21, pp. 19-

22. See also Defendants’ Reply, Docket Entry No. 27, pp. 12-18.

71Plaintiffs Response, Docket Entry No. 24, pp. 22-32.

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regulation would be ‘exclusively a federal concern.’” Aetna Health

Inc. v. Davila,124 S. Ct. 2488, 2495 (2004) (quoting Alessi v.

Raybestos-Manhattan, Inc., 101 S. Ct. 1895, 1906 (1981)). There

are two types of ERISA preemption: (1) Express or conflict

preemption; and (2) complete preemption. E.1I. DuPont de Nemours &

Co. v. Sawyer, 517 F.3d 796, 799 (5th Cir. 2008).

ERISA’s express preemption clause states that with certain

exceptions not applicable in this case, ERISA “shall supercede any

and all State laws insofar as they may now or hereafter relate to

any employee benefit plan.” 29 U.S.C. § 1144(a). “A law ‘relates

to’ an employee benefit plan, in the normal sense of the phrase, if

it has a connection with or reference to such a plan.” Shaw v.

Delta Air Lines, Inc., 103 S. Ct. 2890, 2900 (1983). “Although the

term ‘relate to’ is intended to be broad, ‘preemption does not

occur . . . if the state law has only a tenuous, remote, or

peripheral connection with covered plans.” Lewis v. Bank of

America, N.A., 343 F.3d 540, 544 (5th Cir. 2003), cert. denied, 124

S. Ct. 1426 (2004) (quoting New York State Conference of Blue Cross

& Blue Shield Plans v. Travelers Insurance Co., 115 S. Ct. 1671,

1680 (1995)). When “the facts underlying the state law claim bear

some relationship to an employee benefit plan, [the court’s] task

is to evaluate the nexus between the state law and ERISA, in view

of ERISA’s statutory objectives.” Lewis, 343 F.3d at 544.

Relevant statutory objectives include establishing

uniform national safeguards “with respect to the

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establishment, operation, and administration of [employee

benefit] plans,” . . . and “establishing standards of

conduct, responsibility, and obligation for fiduciaries

of employee benefit plans.”

Id. (quoting 29 U.S.C. § 1001(a) and (b), respectively).

With these objectives in mind, the Fifth Circuit has adopted

a two-part test for conflict preemption. Under this test

[a] defendant pleading preemption must prove that:

(1) the claim “addresses an area of exclusive federal

concern, such as the right to receive benefits under the

terms of [an ERISA] Plan; and (2) the claim directly

affects the relationship[s] among traditional ERISA

entities — the employer, the plan and its fiduciaries,

and the participants and beneficiaries.”

Bank of Louisiana v. Aetna U.S. Healthcare, Inc., 468 F.3d 237, 242

(5th Cir. 2006), cert. denied, 127 S. Ct. 1826 (2007) (quoting

Mayeaux v. Louisiana Health Service and Indemnity Co., 376 F.3d

420, 432 (5th Cir. 2004)). This type of preemption “provid[es] a

federal defense to a state law claim, but does not completely

preempt the field of state law so as to transform a state law claim

into a federal claim.” Arana v. Ochsner Health Plan, 338 F.3d 433,

439 (5th Cir. 2003). State law claims that require inquiry into

plan administration or challenge a denial of benefits under an

ERISA plan can implicate an area of federal concern. See id. See

also Smith v. Texas Children’s Hospital, 84 F.3d 152, 155 (5th Cir.

1996) (“[A] state-law claim by an ERISA plan participant against

her employer is preempted when based upon a denial of benefits

under the defendant’s ERISA plan.”). For the second part of the

test, “the critical distinction is not whether the parties to a

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claim are traditional ERISA entities in some capacity, but instead

whether the relevant state law affects an aspect of the

relationship that is comprehensively regulated by ERISA.” Bank of

Louisiana, 468 F.3d at 243.

Complete preemption arises under ERISA § 502(a), 29 U.S.C.

§ 1132(a), which “set[s] forth a comprehensive civil enforcement

scheme that would be completely undermined if ERISA-plan

participants and beneficiaries were free to obtain remedies under

state law that Congress rejected in ERISA.” E.I. DuPont, 517 F.3d

at 797 (internal quotation marks and citations omitted).

Therefore, “any state-law cause of action that duplicates,

supplements, or supplants the ERISA civil enforcement remedy

conflicts with the clear congressional intent to make the ERISA

remedy exclusive and is therefore pre-empted.” Id.

2. Application of ERISA Preemption Law to Plaintiff’s State

Law Claims

(a) Count 4: Anticipatory Repudiation

Defendants argue that Plaintiffs’ anticipatory repudiation

claim is preempted because it “makes explicit reference to the Plan

and is premised on an alleged denial of benefits.”72 Plaintiffs

argue that this claim is not preempted,73 but acknowledge that it

72Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 20

(citing Plaintiffs’ Complaint, Docket Entry No. 1, p. 15 ¶ 117).

73Plaintiffs’ Response, Docket Entry No. 24, p. 30.

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is based on “affirmative statements to [them] that Defendants will

not perform under the Plan.”74 Because Plaintiffs allege that “PMRG

absolutely repudiated its obligations to pay Plaintiffs their

benefits under the Plan without just excuse,”75 this claim clearly

references and relates to an ERISA-governed employee benefit plan.

This claim is preempted because by raising Plaintiffs’ right to

receive benefits under the Plan, it addresses an area of exclusive

federal concern that requires construction of plan terms and

directly affects the relationships between the plan and the

participants. See Bank of Louisiana, 468 F.3d at 242-43. See also

Tilton v. Radiation Oncologists, P.A., 409 F. Supp. 2d 560, 567 (D.

Del. 2006) (holding that ERISA preempted anticipatory repudiation

claim similarly based on defendants’ stated intent to stop making

deferred compensation payments required by an ERISA plan).

(b) Count 5: Fraud

Defendants argue that Plaintiffs’ fraud claim is preempted

because the “alleged fraud resulted in them not being paid ‘their

deferred compensation benefits in full.’”76 Plaintiffs argue that

this claim is not preempted, because Defendants fraudulently

74Id. at 31 (citing

75Plaintiffs’ Complaint, Docket Entry No. 1, p. 15 ¶ 117.

76Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 21

(quoting Plaintiffs’ Complaint, Docket Entry No. 1, p. 16 ¶ 128).

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induced them to remain in their positions and not resign both

before and after the merger by promising that they would be paid

the amounts in their deferred compensation plans.77 Plaintiffs

argue that their “fraudulent inducement claims are not preempted by

ERISA because they do not seek solely to recover ERISA plan

benefits; rather, they also seek damages for injuries incurred when

Defendants induced them to give up other employment

opportunities.”78 This argument is not supported by Plaintiffs’

allegations of fraud, where the only injury alleged is not lost

employment opportunities but, instead, that “had [they] terminated

employment prior to January 1, 2019, PMRG and/or the Plan would

have paid them their deferred compensation benefits in full.”79 The

cases that Plaintiffs cite in support of the argument that their

fraud claims are not preempted are distinguishable on this basis.

In Smith, 84 F.3d at 155, the alleged injury was the loss of

benefits accrued in an ERISA plan maintained by another employer,

and in Hobson v. Robinson, 75 F. App’x 949, 956 (5th Cir. 2003),

the defendant “allegedly fraudulently induced Hobson to surrender

his pre-existing insurance coverage in order to obtain an ERISA

plan.” Because the only injury that Plaintiffs allege as a result

77Plaintiffs’ Response, Docket Entry No. 24, p. 22 (citing

Plaintiffs’ Complaint, Docket Entry No. 1, pp. 6-7 ¶¶ 36, 40-41,

and 50).

78Id. at 25.

79Plaintiffs’ Complaint, Docket Entry No. 1, p. 16 ¶ 128.

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of Defendants’ fraud is Defendants’ denial of their claims for Plan

benefits, Plaintiffs’ fraud claims are preempted. See Reliable

Home, 295 F.3d at 515-16 (holding a fraud claim preempted because

“[t]he underlying conduct alleged by Reliable cannot be severed

from its connection to the Plan”). See also Metropolitan Life

Insurance Co. v. Taylor, 107 S. Ct. 1542, 1546 (1987) (holding that

suits by beneficiaries to recover benefits from a covered plan are

preempted because ERISA § 502(a)(1)(B) provides an exclusive

federal cause of action for such disputes).

(c) Count 6: Tortious Interference with Contract and/or

Business Relationships

Defendants argue that Plaintiffs’ claims for tortious

interference with contract and/or business relationships is

preempted because it “makes explicit reference to the Plan and the

participants’ right to receive benefits thereunder.”80 Plaintiffs

argue that this claim is not preempted because it “does not lie

against a party to the contract[, . . . and t]o the extent that

Madison Marquette is not PMRG’s successor, [their] tortious

interference claims against Madison Marquette are not preempted by

ERISA.”81 Plaintiffs do not dispute that their tortious

interference claims are preempted as asserted against PMRG, the

80Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 21

(citing Plaintiffs’ Complaint, Docket Entry No. 1, p. 17 ¶ 134).

81Plaintiffs’ Response, Docket Entry No. 24, p. 25.

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Plan, and Kirk in his capacity as Plan administrator.

In pertinent part Plaintiffs allege:

131. The Plan was a valid and enforceable contract

between Plaintiffs and PMRG.

132. Madison Marquette was not a party to the Plan.

. . .

136. Plaintiffs sustained actual harm, damage and loss

due to PMRG’s failure to provide the benefits and

payments required by the Plan.

137. . . . Madison Marquette’s interference was a

proximate cause of Plaintiffs’ damage.

138. Madison Marquette therefore is liable to Plaintiffs

for tortious interference with contract and/or

business relations.82

The only allegation of fact underlying this claim is that “Madison

Marquette conspired with PMRG to induce Plaintiffs to remain in

their positions and not resign before or soon after the merger.”83

Because Plaintiffs’s tortious interference claims are based

solely on allegations that they “sustained actual harm, damage, and

loss due to PMRG’s failure to provide the benefits and payments

required by the Plan,”84 this claim clearly references and relates

to an ERISA-governed employee benefit plan, and to the denial of

their claims for Plan benefits. Because Plaintiffs’ allege that

82Plaintiffs’ Complaint, Docket Entry No. 1, pp. 16-17 ¶¶ 131-

32 and 136-38.

83Id. at 7 ¶ 50.

84Id. at 17 ¶ 136.

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Madison Marquette tortiously interfered with PMRG’s payment of

benefits required by the Plan, this claim cannot be resolved

without first determining whether the payment of benefits was in

fact required by the Plan. This claim is therefore preempted

because it cannot be resolved without construing the terms of the

Plan, and because the denial of Plan benefits affects the

relationship between the Plan and the plan participants. See

Ingersoll-Rand Co. v. McClendon, 111 S. Ct. 478, 483 (1990) (“We

have no difficulty in concluding that the cause of action which the

Texas Supreme Court recognized here — a claim that the employer

wrongfully terminated plaintiff primarily because of the employer’s

desire to avoid contributing to, or paying benefits under, the

employee’s pension fund — ‘relate[s] to’ an ERISA-covered plan

within the meaning of § 514(a), and is therefore pre-empted.”).

See also In re IT Group, Inc., 305 B.R. 402, 414 (Bankr. D. Del.

2004) (“Courts have generally held that, to the extent that

recovery is sought of sums deferred under employee benefit plans,

ERISA preempts . . . claims for tortious interference.”)

(collecting cases), aff’d, 323 B.R. 578 (D. Del. 2005), aff’d as

amended, 448 F.3d 661 (3d Cir. 2006).

(d) Count 7: Unjust Enrichment

Defendants argue that Plaintiffs’ unjust enrichment claim is

preempted because

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Plaintiffs contend that they “conferred benefits on PMRG,

Madison Marquette, and Kirk,” that those benefits were

unjustly retained, and that conduct “proximately caused

financial damages to Plaintiffs.” Compl. ¶¶ 141, 143,

144. The benefits retained must be those allegedly owed

to Plaintiffs under the Plan, as those are the only

benefits referenced in the Complaint.85

Plaintiffs argue that this claim is not preempted,86 because it

“does not rely upon the existence of the Plan for recovery[, and]

. . . does not solely seek recovery of benefits under the Plan.”87

Plaintiffs allege that they “conferred benefits on PMRG, Madison

Marquette, and Kirk,”88 but fail to allege facts capable of

establishing that the benefits conferred on Defendants differ from

the only benefits otherwise referenced in their Complaint, i.e.,

the Plan benefits that they allege Defendants wrongfully denied

them. The court therefore concludes that this claim is preempted

because it relates to an ERISA-governed employee benefit plan, and

seeks as damages benefits allegedly due under the Plan. See Shaw,

103 S. Ct. at 2900. See also Access Mediquip L.L.C. v.

UnitedHealthcare Insurance Co., 662 F.3d 376, 386 (5th Cir. 2011),

adhered to on reh’g en banc, 698 F.3d 229 (5th Cir. 2012)(en banc),

cert. denied, 133 S. Ct. 1467 (2013) (holding an unjust enrichment

claim preempted because recovery depended on the participant’s

right to ERISA plan benefits).

85Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 21.

86Plaintiffs’ Response, Docket Entry No. 24, p. 31.

87Id. at 32.

88Plaintiffs’ Complaint, Docket Entry No. 1, p. 17 ¶ 141.

(e) Count 8: Equitable Accounting

Defendants argue that Plaintiffs’ equitable accounting claim

is preempted because “the alleged wrongful conduct is the failure

to pay Plaintiffs the benefits they claim they are owed under the

Plan.”89 Plaintiffs argue that this claim is not preempted,90 but

in support of this argument cite two cases in which courts denied

motions to dismiss claims for equitable accounting asserted under

ERISA § 502(a)(3), not state law: Providence Groups, LLC v. Omni

Administrators, Inc., No. 2:20-CV-05067-FB-SJB, 2021 WL 3675149, at

*3 (E.D.N.Y. August 19, 2021) (denying motion to dismiss claim for

equitable accounting against ERISA fiduciary pursuant to 29 U.S.C.

§ 1132(a)(3); and Sturm, Ruger Co. v. Connecticut General Life

Insurance Co., No. CIV. 93-38-SD, 1994 WL 470583, at *3-*4 (D.N.H.

August 29, 1994) (denying motion to dismiss claim for equitable

accounting under the federal common law of ERISA).91 Because

Plaintiffs’ equitable accounting claim is based on allegations that

they “are entitled to an accounting from Defendants and the return

of all monies unjustly received by Defendants as a result of their

aforesaid wrongful, tortious, and inequitable conduct,”92 and

89Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 21

(citing Plaintiffs’ Complaint, Docket Entry No. 1, p. 18 ¶ 147).

90Plaintiffs’ Response, Docket Entry No. 24, pp. 29-30.

91Id. at 30.

92Plaintiffs’ Complaint, Docket Entry No. 1, p. 18 ¶ 147.

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because the wrongful conduct alleged is the failure to pay

Plaintiffs the benefits they claim they are owed under the Plan,

this claim relates to an ERISA-governed employee benefit plan and,

therefore, is preempted. See Shaw, 103 S. Ct. at 2900.

(f) Count 9: Constructive Trust

Defendants argue that Plaintiffs’ constructive trust claim is

preempted because it “is premised on their allegation that funds

from the sale of the Properties should be used to pay their

benefits under the Plan.”93 Plaintiffs argue that this claim is not

preempted, because it “is not a separate substantive claim that is

preempted by ERISA but is merely a remedy which is not preempted by

ERISA.”94 In support of this argument Plaintiffs rely on In re

Washington Mutual, Inc., 450 B.R. 490, 495-97 (Bankr. D. Del.

2011), a case in which the plan participants asserted entitlement

to a constructive trust not as a separate claim for relief, but as

an equitable remedy for the defendants’ violation of ERISA

§ 502(a)(1)(B).95 Unlike the plaintiffs in Washington Mutual, the

Plaintiffs in this case have not asserted a claim for constructive

trust as an equitable remedy for violation of ERISA § 502(a)(1)(B)

93Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 21

(citing Plaintiffs’ Complaint, Docket Entry No. 1, pp. 14-15

¶¶ 107-08, 112).

94Plaintiffs’ Response, Docket Entry No. 24, p. 28.

95Id. at 28-29.

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but, instead, as a separate claim for relief under state law.

Because Plaintiffs’ constructive trust claim is based on

allegations that they “obtained or hold the legal right to

property which they ought not, in equity and good conscience, hold

and enjoy,”96 and because the wrongful conduct at issue in this case

is the failure to pay Plaintiffs the benefits they claim they are

owed under the Plan, this claim relates to an ERISA-governed

employee benefit plan and, therefore, is preempted. See Shaw, 103

S. Ct. at 2900.

(g) Count 10: Punitive Damages

Defendants argue that Plaintiffs’ claim for punitive damages

is preempted because “[t]he alleged ‘actual damages’ caused to

Plaintiffs were a denial of benefits allegedly due under the

Plan.”97 Plaintiffs argue that this claim is not preempted because

they would have “viable claims for punitive damages if either or

both state law tort claims [for fraud and tortious interference]

remain in the case.”98 Since, however, the court has already

concluded that Plaintiffs’ state law claims for fraud and tortious

interference are preempted by ERISA, Plaintiffs’ state law claims

for punitive damages are also preempted. See North Cypress Medical

96Plaintiffs’ Complaint, Docket Entry No. 1, p. 18 ¶ 149.

97Defendants’ Motion to Dismiss, Docket Entry No. 21, p. 21.

98Plaintiffs’ Response, Docket Entry No. 24, p. 28.

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Center Operating Co. Ltd. v. Fedex Corp., 892 F. Supp. 2d 861, 870

(S.D. Tex. 2012) (declining to dismiss state law punitive damage

claims because “some state law tort claims survive[d] preemption

and could, therefore, be the basis for punitive damages”).

IV. Conclusions and Order

For the reasons stated in § III.A.1, above, Defendants’ Motion

to Dismiss Plaintiffs’ claims for Plan benefits asserted under

ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), is GRANTED with

respect to the claims for benefits asserted against Kirk in his

personal capacity and otherwise DENIED because the current record

does not provide a basis for finding that the EDCP is a top hat

plan, that Defendants’ assertion of PMRG’s insolvency was a valid

reason for denying Plaintiff’s benefit claims, that Kirk cannot be

held liable for these claims in his capacity as Plan administrator,

or that Madison Marquette cannot be held liable for these claims

under the doctrine of successor liability.

For the reasons stated in § III.A.2, above, Defendants’ Motion

to Dismiss Plaintiffs’ claims for interference asserted under ERISA

§ 510, 29 U.S.C. § 1140, is DENIED because Plaintiffs have

plausibly alleged that Defendants subjected them to an adverse

employment action undertaken with specific intent to interfere with

their rights to Plan benefits.

For the reasons stated in § III.B, above, Defendants’ Motion

-39-

to Dismiss Plaintiffs’ state law claims for anticipatory

repudiation, fraud, tortious interference with contract and/or

business relationships, unjust enrichment, equitable accounting,

constructive trust, and punitive damages, is GRANTED because these

claims are all preempted by ERISA.

Therefore, Defendants’ Motion to Dismiss, Docket Entry No. 21

is GRANTED in PART and DENIED in PART.

Having ruled on the Defendants’ Motion to Dismiss, the court

concludes that this action would be appropriate for early mediation

after limited paper discovery. If the parties are unable to settle

this case before October 11, 2024, they will provide the court with

the name and contact information of an agreed upon mediator, or

request that the court refer the case to Magistrate Judge Christina

A. Bryan for a settlement conference.

SIGNED at Houston, Texas, this 12th day of September, 2024,

BL

SENIOR UNITED STATES DISTRICT JUDGE

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