The Southern Company Employee Savings Plan v. Costa et al

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
THE SOUTHERN COMPANY )
EMPLOYEE SAVINGS PLAN, )
Plaintiff, Counter-Defendant )
)
v. )
)
MARY ROBIN COSTA AND )
BRANDI CHRISTINE NOLEN, )
Defendants, Counter- )
Claimants )
)
) CIVIL ACTION NO. 1:24-00040-KD-N
& )
)
BRANDI CHRISTINE NOLEN, )
Third-Party Plaintiff, )
)
v. )
)
SOUTHERN COMPANY )
EMPLOYEE SAVINGS PLAN )
COMMITTEE, )
Third-Party Defendant. )
REPORT AND RECOMMENDATION
This action is before the court on the Southern Company Employee Savings
Plan’s (the “Plan”) Motion to Dismiss Brandi Christine Nolen’s Amended
Counterclaim (Doc. 41).1 Nolen issued a Response to the Motion on July 8, 2024 (Doc.
50), and the Plan filed a Reply in support on July 16, 2024 (Doc. 54).
1 Nolen’s first pleading was filed 03/29/2024 (Doc. 19). The Court, receiving no
objections, allowed Nolen’s Amended Answer and Counterclaim by Order on May
30, 2024, citing Fed. R. Civ. P. 15(a)(2). (Doc. 37).
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Upon due consideration, and having been fully briefed in the matter, the
undersigned RECOMMENDS that the Plan’s Motion to Dismiss Nolen’s
counterclaims be GRANTED in part and MOOTED in part.2
I. Background
This action arises under the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C §§ 1001, et seq. The Plan filed a complaint for interpleader after
a dispute arose as to whether the second wife – Mary Robin Costa – or the daughter
from the first marriage – Brandi Christine Nolen – was the proper beneficiary for
deceased Plan Participant Joseph Costa, Jr. (Doc. 1).
Nolen responded by filing a “First Amended Answer, Counterclaim and Third
Party Complaint,” (Doc. 30) wherein she makes two counterclaims for (1) “breach of
fiduciary duty” and (2) “claim for benefits.” The Plan now moves to dismiss the
counterclaims pursuant to Federal Rule of Civil Procedure 12(b)(6).
II. Standard of Review
The Court may dismiss a pleading for “failure to state a claim upon which relief
can be granted.” Fed. R. Civ. P. 12(b)(6). Federal Rule of Civil Procedure 8(a)(2)
provides that a complaint need only contain “a short and plain statement of the claim
showing that the pleader is entitled to relief,” to “give the defendant fair notice of
what the ... claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007) (citation and punctuation omitted). The complaint must
2 The District Judge assigned this case has referred the motion to dismiss to the
undersigned Magistrate Judge for appropriate action under 28 U.S.C. § 636(a)-(b),
Federal Rule of Civil Procedure 72 and S.D. Ala. GenLR 72(a); See S.D. Ala. GenLR
72(b) (06/20/2024 elec. ref.)
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“contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quoting Twombly, 550
U.S. at 570). This standard “requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555
(citation omitted). Additionally, “the tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal conclusions.” Iqbal, 556
U.S. at 678 (citation omitted).
“Determining whether a complaint states a plausible claim for relief will ... be
a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense. But where the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct, the complaint has
alleged–but it has not ‘shown’– ‘that the pleader is entitled to relief.’” Id. at 679,
(quoting Fed. R. Civ. P. 8(a)(2)) (other citation omitted). Likewise, dismissal is
warranted under Rule 12(b)(6) if, assuming the truth of the factual allegations of
plaintiff's complaint, there is a dispositive legal issue that precludes relief. Neitzke v.
Williams, 490 U.S. 319, 326 (1989); Brown v. Crawford Cty., 960 F.2d 1002, 1010
(11th Cir. 1992).
III. Analysis
The issue before the Court centers on whether Nolen’s counterclaims meet the
required pleading standard to survive under Federal Rule of Civil Procedure 12(b)(6).
The Plan argues Nolen’s counterclaims are an impermissible shotgun pleading. The
Plan contends three primary deficiencies: First, all factual allegations supporting
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Nolen's initial counterclaim exclusively reference the Plan Administrator's actions;3
second, the second counterclaim merely adopts the allegations of the first; and third,
the pleading fails to identify which facts specifically apply to the Plan. (Doc. 41,
PageID.474).
Nolen responds that the Motion to Dismiss lacks specificity, characterizing it
as “vague and conclusory.” She clarifies that her breach of fiduciary duty claim
targets only the Plan Administrator under 29 U.S.C. §1132(a)(3), while her benefit
claim proceeds under 29 U.S.C. §1132(a)(1)(B) against both the Plan and Plan
Administrator. (Doc. 50, PageID.538). Nolen maintains the Plan is merely “quibbling”
over the count tiles, arguing “[i]t is neither the Court’s nor opposing Counsel’s role to
‘tease out’ the real basis for the motion.” Id.
Regarding the second counterclaim, Nolen asserts it remedies deficiencies in
the Interpleader Complaint’s failure to join the Plan Administrator. (Doc. 50,
PageID.538). She specifically refutes the characterization of her pleading as a
"shotgun pleading" and disputes the assertion that the second counterclaim merely
incorporates the first counterclaim's allegations, though ultimately conceding that
both parties agree the Plan is not a fiduciary.
A. Count One:
3 The Plan Administrator, the Southern Company Employee Savings Plan
Committee, is named as Third-Party Defendant in this action.
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Nolen’s first claim, “Counterclaim and Third Party Claim for Breach of
Fiduciary Duties,” seeks equitable relief under 29 U.S.C. § 1132(a)(3). (Doc. 30, ¶¶
12, 34, PageID.284, 292). This section authorizes civil actions by participants,
beneficiaries, or fiduciaries to enjoin violations of ERISA or plan terms, or to obtain
appropriate equitable relief to redress such violations or enforce ERISA provisions.
The Supreme Court has characterized § 1132(a)(3) as a "safety net" offering relief not
adequately addressed by other ERISA provisions. See Varity Corp. v. Howe, 516 U.S.
489, 512 (1996).
During briefing, Nolen expressly represented to the Court, under Federal Rule
of Civil Procedure 11, that Count One does not target the Plan. Specifically, she
stated, “[t]he claim asserted under 29 U.S.C. §1132(a)(3), does not allege any action
by the Plan, there is no demand for relief for damages against the Plan.” (Doc. 50,
PageID.539).
Given that all parties now agree Count One is not asserted against the Plan,
the undersigned finds the operative Motion to Dismiss moot as to Count One.
B. Count Two:
Nolen’s second count, “Counterclaim and Third Party Claim for Benefits,”
proceeds under § 1132(a)(1)(B). (Doc. 30, ¶ 35, PageID.292-93). This statutory
provision enables participants or beneficiaries to pursue civil action “to recover
benefits due to him under the terms of his plan, to enforce his rights under the terms
of the plan, or to clarify his rights to future benefits under the terms of the plan[.]”
29 U.S.C. § 1132(a)(1)(B). In support of her counterclaim, Nolen states:
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● This Count is brought under 29 U.S.C. §1132(a)(1)(B) and seeks to
recover benefits, damages, and attorney’s fees as may be recoverable
under this code provision and 29 U.S.C. §1132(g).4 Ms. Nolen seeks to
enforce her rights under the ESP in question.
● In the event that Ms. Costa was not legally married to Mr. Costa at the
time of his commencement of distributions of the ESP benefit, then the
beneficiary designation forms from 2012 and 2014 are due to be found
valid and benefits paid to Ms. Nolen and not to Ms. Costa.
● In the alternative and in the event that a spousal waiver form was
furnished to the Plan Administrator and is located, Ms. Nolen is entitled
to the ESP benefit.
● Ms. Nolen has failed to receive ESP benefits as a result and is due to
receive the ESP benefit for that reason.
(Doc. 30, PageID.292-93).
The Plan argues Nolen presents insufficient factual support for her
benefits counterclaim. In response, Nolen relies on Hunt v. Hawthorne Assocs.,
Inc., 119 F.3d 888 (11th Cir. 1997), arguing that ERISA actions cannot target
a plan in isolation but must consider the Plan and Plan Administrator jointly.
(Doc. 50, PageID.541). Nolen interprets Hunt as establishing that the Plan and
Plan Administrator are intertwined entities, citing that "benefits under section
4 This provision allows the court to award attorney’s fee and costs. See 29 U.S.C.
1132(g).
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502(a)(1)(B) must be directed to a person or entity other than the plan itself."
Hunt, 119 F.3d at 908.
However, while Hunt establishes that relief under § 1132(a)(1)(B) must
be directed to a proper defendant capable of providing benefits, it does not
eliminate the basic pleading requirement to state sufficient facts supporting a
plausible claim for relief. As noted in Thomas v. Kamtek, Inc., although Federal
Rule 8(d) permits alternative pleading, this does not relieve a plaintiff of the
obligation under Rule 8(a) to state "enough facts to state a claim to relief that
is plausible on its face." 143 F. Supp. 3d 1179, 1188-89 (N.D. Ala. 2015)
(quoting Twombly, 550 U.S. at 547).
Here, Nolen's counterclaim fails to allege any facts implicating the Plan
beyond conclusory statements about potential benefit entitlement. While there
may be additional dispositive grounds for dismissal, those issues were not fully
briefed by the parties and need not be reached, as the counterclaim fails to
meet basic pleading standards. Therefore, Count Two should be dismissed for
failure to state a claim upon which relief can be granted.
IV. Conclusion
For the reasons stated herein, the undersigned RECOMMENDS that
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the motion to dismiss filed by Counter-Defendant the Southern Company
Employee Savings Plan be GRANTED in part and MOOTED in part, and the
counterclaim DISMISSED without prejudice.
DONE this the 17th day of December 2024.
/s/Katherine P. Nelson
KATHERINE P. NELSON
UNITED STATES MAGISTRATE JUDGE
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