United States District Court, D. Colorado
MARK D. BINGHAM, TONY W. CHURCH, JEFFERY C. DELANEY, ANNETTE M. MONTOYA, RICK L. PARKS, AMBER D. SHETTRON, STEWARD G. SQUIRES, and CHARLES L. ZORIO, Plaintiffs,
FIML NATURAL RESOURCES, LLC, DEVONSHIRE INVESTORS (DELAWARE) LLC, and DEVONSHIRE INVESTORS, LLC, Defendants.
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS THIRD AMENDED COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(6)
CHRISTINE M. ARGUELLO, District Judge.
This matter is before the Court on Defendants' Motion to Dismiss Third Amended Complaint Pursuant To Fed.R.Civ.P. 12(b)(6). (Doc. # 46.) The motion is ripe for the Court's review. For the following reasons, the Court grants Defendants' motion.
Plaintiffs are former employees of Defendant FIML Natural Resources, LLC ("FIML"), a company that invests in oil and natural gas exploration and development. (Doc. # 42 at 2, 17.) As a part of their compensation package, Plaintiffs and other high-level employees were provided incentive compensation through participation in the Amended and Restated FIML Natural Resources Phantom Carried Interest Plan ("the Plan"). ( Id. at 2.) The Plan awarded participants "Pool Points, " representing ownership interests in two separate pools of assets. ( Id. ) This case concerns only FIML's most recent payments based on Plaintiffs' Pool 2 points. ( Id. at 7.)
The Plan required FIML to buy Plaintiffs' Pool points if they separated from the company. Plaintiffs resigned on June 29, 2012, and were entitled to a payout. However, the Plan provided for a reduced payment if its Precipitous Decline in Value provision ("PDIV") was triggered. ( Id. at 17.) Having determined that a PDIV had occurred, Defendants paid Plaintiffs just over $10 million for their Pool 2 points. Plaintiffs allege that no PDIV occurred and that they should have instead received more than $29 million. ( Id. at 19, 21.)
II. STANDARD OF REVIEW
The purpose of a motion to dismiss under Fed.R.Civ.P. 12(b)(6) for failure to state a claim is to test "the sufficiency of the allegations within the four corners of the complaint." Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). A complaint will survive such a motion only if it contains "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). For a motion to dismiss, "[t]he question is whether, if the allegations are true, it is plausible and not merely possible that the plaintiff is entitled to relief under the relevant law." Christy Sports, LLC v. Deer Valley Resort Co., Ltd., 555 F.3d 1188, 1192 (10th Cir. 2009). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation marks and citation omitted).
In reviewing a Rule 12(b)(6) motion, a court must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff. Williams v. Meese, 926 F.2d 994, 997 (10th Cir. 1991). Nevertheless, a complaint does not "suffice if it tenders naked assertion[s]' devoid of further factual enhancement.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). "The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted." Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).
In general, the Court may not consider materials outside of the pleadings on a motion to dismiss without converting the motion to one for summary judgment. See Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir. 2007). However, "the district court may consider documents referred to in the complaint if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity." Id.
In the third amended complaint, Plaintiffs allege one claim for relief: to recover benefits due under the terms of the Plan. (Doc. # 42, at 23.) Defendants move to dismiss this claim arguing that the two bases for relief-that FIML improperly (1) reduced benefits under the PDIV provision, and (2) delayed payments - are not legally plausible. Therefore, Defendants argue, Plaintiffs' claim fails as a matter of law. The Court will address each of these contentions in turn.
A. THE PDIV PROVISION
First, Defendants argue that Plaintiffs' claim that FIML improperly reduced benefits under the PDIV provision is based on a facially implausible interpretation of the Plan's unambiguous language.
"In interpreting an ERISA plan, the court examines the plan documents as a whole and, if unambiguous, construes them as a matter of law." Admin. Comm. of Wal-Mart Assoc. Health and Welfare Plan v. Willard, 393 F.3d 1119, 1123 (10th Cir. 2004). In doing so, the Court considers the "common and ordinary meaning as a reasonable person in the position of the [plan] participant, not the actual participant, would have understood the words to mean." Id. "Ambiguity exists where a plan provision is reasonably susceptible to more than one meaning, or where there is uncertainty as to the meaning of the term." Id. The Court ...