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Weinberg v. Mizuho Capital Markets Corp.

United States District Court, S.D. New York
Oct 29, 2003
03 Civ. 2612 (SAS) (S.D.N.Y. Oct. 29, 2003)

Opinion

03 Civ. 2612 (SAS)

October 29, 2003

Steven Siegler, Esq., Zuckerman Fisher, LLC, Princeton, New Jersey, For Plaintiff

M.William Munno, Esq., Anne C. Patin, Esq., Seward Kissel LLP, New York, New York, For Defendants


OPINION AND ORDER


Peter Weinberg brings this action against his former employer, Mizuho Capital Markets Corporation ("Mizuho"), alleging that he was terminated because of his age and/or national origin and deprived of severance benefits. Mizuho now moves to dismiss the First Amended Complaint in its entirety for failure to state a claim. Mizuho also moves to dismiss the fraud claim for failure to plead fraud with particularity and to dismiss all state law claims for lack of subject matter jurisdiction. For the reasons set forth below, the motion is granted in part and denied in part.

The Amended Complaint alleges violations of: the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq. ("ADEA"); the Employment Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"); section 296(a) of the New York State Executive Law ("New York State Human Rights Law" or "NYSHRL"), N.Y. Exec. Law § 296 (McKinney 2001); and section 8-107(1)(a) of the New York City Administrative Code ("New York City Human Rights Law"), N.Y.C. Admin. Code § 8-107(1)(a). Weinberg also seeks to recover for breach of contract, promissory estoppel, and fraud.

I. THE AMENDED COMPLAINT

Weinberg alleges the following facts, all of which are deemed true for the purpose of this motion. Mizuho is a New York corporation created by the December 2000 merger between DKB, Financial Products, Inc. ("DKBFP") and Fuji Capital Markets Corporation ("FCMC"). First Amended Complaint ("Am. Compl.") ¶¶ 9, 10, 20. Weinberg worked for DKBFP from December 1991 until the merger, at which time he held the position of Senior Vice President and Global Financial Controller. Id. ¶ 11.

To provide benefits for DKBFP employees who would be terminated as a result of the merger, DKBFP announced the creation of a severance plan ("Merger Severance Plan") in May 2000. Id. ¶ 10; Merger Severance Plan, Ex. C to Plaintiff's Memorandum of Law in Opposition to Defendants' Motion to Dismiss the Complaint ("Pl. Mem."); Ex. 5 to Mizuho's Memorandum of Law in Support of Its Motion to Dismiss the Amended Complaint ("Def. Mem."). Under this plan, eligible employees would receive up to 52 weeks of severance pay, continuation of health benefits for a year, and 9 months of outplacement assistance. Am. Compl. ¶ 15. Eligibility was limited to employees who were not offered "a comparable position" with Mizuho. See Merger Severance Plan. Under the Merger Severance Plan, Weinberg would have been entitled to receive the maximum benefits. Am. Compl. ¶ 15.

In considering a motion to dismiss, courts may not consider matters outside the pleadings. See Chambers v. Time Warner. Inc., 282 F.3d 147, 152 (2d Cir. 2002). For purposes of Rule 12(b), the complaint includes "'any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference.'"Id. (quoting International Audiotext Network, Inc. v. American Tel. Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995)). Because the Merger Severance Plan is referenced in the Amended Complaint, albeit not attached, I shall consider it in deciding this motion.See Am. Compl. ¶¶ 15, 18, 20, 43, 46, 56; Merger Severance Plan.
The same is true of the employment agreements discussed below.See Am. Compl. ¶¶ 16-19; Employment Agreement Dated October 19, 2000 ("October 2000 Employment Agreement"), Ex. D to Pl. Mem., Ex. 3 to Def. Mem.; 12/20/01 Letter to Weinberg from Mizuho ("December 2001 At-Will Employment Agreement"), Ex. 4 to Def. Mem. At oral argument on this motion, counsel for both parties agreed that I should consider the employment agreements in deciding this motion. See 10/20/03 Oral Argument Transcript at 5 (statements of Steven Siegler, counsel for Weinberg, and Anne C. Patin, counsel for Mizuho); 10/22/03 Oral Argument Transcript at 13 (statements of Steven Siegler, counsel for Weinberg, and Anne C. Patin, counsel for Mizuho).

In early October 2000, Weinberg met with DKBFP and FCMC management to discuss employment with Mizuho. Id. ¶ 16. FCMC offered Weinberg a one-year contract, on behalf of Mizuho, with a lower bonus than he had previously been paid at DKBFP. Id. Weinberg "expressed his concern over the term of the contract and the lower bonus" to Mr. Goya, Mizuho management's representative. Id. Consequently, Weinberg and Goya met twice to discuss these concerns. During these meetings, Weinberg alleges that Goya knowingly misled him by promising that if he signed the agreement and Mizuho terminated him, Mizuho would provide him with severance benefits pursuant to the Merger Severance Plan. Id. ¶¶ 18, 57.

On or about October 15, 2000, relying on these misrepresentations, Weinberg entered into a one-year written contract of employment.Id. ¶ 19; October 2000 Employment Agreement. The contract specifically stated that Mizuho could terminate Weinberg for cause and also stated that if Weinberg resigned or was terminated without cause, he would be entitled to the balance of his base salary. Id. ¶ 5.

While the employment contract contains a "benefits" clause, this provision does not mention severance benefits. See October 2000 Employment Agreement ¶ 4(d).

In December 2001, Mizuho informed Weinberg that his employment contract would not be renewed or extended and, in writing, offered him at-will employment until February 28, 2002, for the same base pay, but without bonus. Am. Compl. ¶ 24; December 2001 At-Will Employment Agreement. Weinberg signed the at-will employment agreement on December 24, 2001, believing that he would still receive severance benefits pursuant to the Merger Severance Plan at the end of his employment, as Goya had promised. Am. Compl. ¶ 24. Pursuant to the at-will employment agreement, Weinberg's employment terminated on February 28, 2002. See December 2001 At-will Employment Agreement.

Weinberg alleges that Mizuho failed to renew his employment contract, in part, because of his age (he was 53 years old when terminated, Am. Compl. ¶¶ 1, 24). Id. ¶ 26. On January 17, 2002, he requested benefits under the Merger Severance Plan. This request and all subsequent requests were denied. Id. ¶¶ 27-30. Approximately three months after his February 2002 termination, Mizuho adopted the Mizuho Capital Markets Corporation Severance Pay Plan ("Mizuho Severance Pay Plan"). Id. ¶ 31. Weinberg does not allege that he ever requested benefits under this plan, or that such benefits were denied.

II. LEGAL STANDARD

Under Federal Rule of Civil Procedure Rule 8(a), a plaintiff need only plead "a short and plain statement of the claim" that will provide the defendant with fair notice of what the plaintiff's claim is and the grounds upon which it rests. See Conley v. Gibson, 355 U.S. 41, 47 (1957).

Because general accusations of fraud are thought to be too amorphous to provide a defendant with sufficient notice to permit a response, fraud claims are subject to the heightened pleading standard of Rule 9(b), which requires that "the circumstances constituting fraud or mistake shall be stated with particularity." Fed.R.Civ.P. 9(b);see also In re Initial. Pub. Offering Sec. Litig., 241 F. Supp.2d 281, 325 (S.D.N.Y. 2003).

A motion to dismiss pursuant to Rule 12(b)(6) should be granted only if "'it is clear that no relief could be granted under' any set of facts that could be proved consistent with the allegations.'" Swierkiewicz v. Sorema, N.A., 534 U.S. 506, 514 (2002) (quoting Hishon v. King Spaldina, 467 U.S. 69, 73 (1984)). "The task of the court in ruling on a Rule 12(b)(6) motion is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which. might be offered in support thereof." Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998) (citation and quotation marks omitted). Accordingly, courts must construe the complaint liberally, accept all factual allegations in the complaint as true, and draw all reasonable inferences in the plaintiff's favor.See Chambers, 282 F.3d at 152.

III. DISCUSSION

1. Exhaustion of Administrative Remedies as to the ADEA Claim

A. Employment Discrimination Claims Under the ADEA, NYSHRL, and New York City Human Rights Law

"Under . . . the ADEA, a claimant may bring suit in federal court only if she has filed a timely complaint with the EEOC and obtained a right-to-sue letter." Legnani v. Alitalia Linee Aeree Italiane, S.P.A., 274 F.3d 683, 686 (2d Cir. 2001). Claims that were not asserted before the EEOC, however, may be pursued in federal court where "the conduct complained of would fall within the scope of the EEOC investigation which can reasonably be expected to grow out of the charge of discrimination." Brown v. Coach Stores. Inc., 163 F.3d 706, 712 (2d Cir. 1998).

Weinberg timely filed his Equal Opportunity Employment Commission Charge ("EEOC Charge") see EEOC Charge, Ex. B to Pl. Mem., and received a dismissal and notice of rights on or about February 5, 2003.See Am. Compl. ¶ 5. In his EEOC Charge, Weinberg states that he believes he was "terminated and denied severance pay based upon [his] age." EEOC Charge. Despite this seemingly clear language, Mizuho argues that Weinberg's discriminatory termination claim falls outside of the ambit of his EEOC charge. Mizuho argues that Weinberg "contended only that he was denied severance because of his age, not that his employment ended because of his age." Def. Mem. at 12. The plain language of Weinberg's EEOC charge precludes Mizuho's argument. Thus, he has exhausted his administrative remedies and may pursue his claim in federal court.

The Court may consider the EEOC charge for the purposes of this motion as it is referenced in the Amended Complaint. See Am. Compl. ¶ 5.

Even if Weinberg only claimed in the EEOC Charge that he was denied severance benefits for discriminatory reasons, see Def. Mem. at 12-13, this allegation is reasonably related to, his discriminatory termination claim, as both claims arise out of the same circumstances.

2. Failure to State a Claim

To survive a motion to dismiss, an employment discrimination complaint need only satisfy the basic requirements of Rule 8. See Swierkiewicz, 534 U.S. at 508. The complaint need not "contain specific facts establishing a prima facie case of discrimination." Id. The Amended Complaint alleges that Mizuho terminated Weinberg because of his age in violation of the ADEA, NYSHRL, and New York City Human Rights law. See Am. Compl. ¶¶ 34, 37, 40. It also provides a description of the events leading to his termination as well as the basis for his belief that his termination was discriminatory. See id. ¶¶ 21-26, 32. Accordingly, the Amended Complaint provides Mizuho with fair notice of the basis for Weinberg's discrimination claims and thus comports with the requirements of Rule 8.

The Amended Complaint also alleges that Mizuho terminated Weinberg on account of his national origin. These allegations sufficiently establish a claim under the NYSHRL and the New York City Human Rights Law, neither of which requires, exhaustion of administrative remedies prior to the filing of a complaint. See Am. Compl. ¶¶ 26, 37.

Mizuho makes three additional arguments for dismissing these claims.First, Mizuho cites the following admissions in the Amended Complaint:

[Mizuho] allowed Plaintiff's contract to expire, and did not extend or renew it, in part, because he had outlived his usefulness in facilitating the merger. . . . Plaintiff's services became obsolete and/or duplicative of other employees' duties. Plaintiff's termination was due to the merger.
Id. ¶ 25 (emphasis added); see Def. Mem. at 10. Mizuho argues that these admissions contradict Weinberg's allegation that Mizuho "allowed Plaintiff's contract to expire . . . in part, because of his age." Am. Compl. ¶ 26 (emphasis added);see Def. Mem. at 10. While plaintiffs may not "plead inconsistent assertions of fact," In re Livent, Inc. Noteholders Sec. Litig., 151 F. Supp.2d 371, 407 (S.D.N.Y. 2001) (emphasis in original), all reasonable inferences must be drawn in the non-moving party's favor, see Chambers, 282 F.3d at 152. It could be reasonably inferred that Weinberg's contract was permitted to lapse due to both the merger and to age discrimination.See Am. Compl. ¶¶ 25, 26. Thus, the statements may be construed as consistent with one another.

Second, Mizuho asserts that Weinberg fails to allege that his employment ended, in part, for discriminatory reasons. See Def. Mem. at 10-11. Rule 8, however, only requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). Weinberg adequately alleges he was terminated partly because of his age, see Am. Compl. ¶ 26, which satisfies this liberal pleading standard.

Weinberg provides greater detail, alleging that "[h]ad Plaintiff been younger than his Japanese superiors, they would not have been uncomfortable with him and would not have recommended his termination,"id. ¶ 26; "Plaintiff's Japanese superiors showed open discomfort in having Plaintiff, who was many years their senior, reporting to them," id. ¶ 23; and "Plaintiff . . . was the oldest person whose employment was terminated by [Mizuho] in 2002,"id. ¶ 31. It is reasonable "to infer, based on these allegations, that Weinberg's employment might have been terminated for discriminatory reasons.

Third, Mizuho argues that Weinberg fails to allege that there was an "open position at Mizuho that he could have filled when his employment ended." Mizuho's Reply Memorandum in Further Support of Its Motion to Dismiss the Amended Complaint at 1. Mizuho relies onBernstein v. MONY Group. Inc., 228 F. Supp.2d 415, 419 (S.D.N.Y. 2002), and Johnson v. City University of New York. No. 00 Civ. 4964, 2002 WL 1750841, at *4 (S.D.N.Y. July 24, 2002), in support of this argument. In Bernstein, the court dismissed the plaintiff's claim alleging that her employer's failure to promote her to a new position was the result of gender discrimination. The Bernstein court granted defendant's motion to dismiss, finding that the plaintiff failed to allege "that any position . . . was ever created or that she was rejected from such position." Bernstein, 228 F. Supp.2d at 419. In Johnson, the plaintiff claimed that the City University of New York ("CUNY") failed to hire him for discriminatory reasons. The Johnson court dismissed the claim because the plaintiff did not "indicate for which available position CUNY failed to hire him." Johnson, 2002 WL 1750841, at *4.

There is, however, a difference between a failure to hire or promote and the decision to terminate an employee holding an existing position.Compare. e.g., Bernstein, 228 F. Supp.2d at 419, and Johnson, 2002 WL 1750841, at *4, with Gallo v. Prudential Residential Servs. Ltd. P'ship, 22 F.3d 1219, 1226 (2d Cir. 1994) (finding that termination due to a reduction in force may be shown to be a pretext for discrimination), and Shannon.v. Fireman's Fund Ins. Co., 156 F. Supp. 279, 288 (S.D.N.Y. 2001) (same). Even if it were true that in failure-to-promote and failure-to-hire cases, the plaintiff-employee must allege an open position — and there is good reason to believe it is not true,see Swierkiewicz, 534 U.S. at 514-15; In re Initial Pub. Offering Sec. Litig., 241 F. Supp.2d at 322-24 — Weinberg's claim is based upon his allegedly discriminatory termination, Weinberg is certainly not required to allege that there was an open position at Mizuho.

B. ERISA Claims Under Sections 502 and 510

1. Section 502 Claim

Weinberg seeks relief under section 502(a)(1)(B) of ERISA to recover severance benefits allegedly owed to him under the Merger Severance Plan.See Am. Compl. ¶¶ 42, 43. Section 502(a)(1)(B) provides that a civil action may be brought by "a participant or beneficiary . . . 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).

As a threshold matter, Mizuho claims that the Merger Severance Plan is not subject to ERISA because it was established specifically for the merger. See Def. Mem. at 22. Whether a benefits program qualifies as a "plan" under ERISA depends, in part, on whether it "'requires an ongoing administrative program to meet the employer's obligation.'" Kosakow v. New Rochelle Radiology Assocs., 274 F.3d 706, 736 (2d Cir. 2001) (quotingFort Halifax Packing Co. v. Coyne, 482 U.S. 1, 11 (1987)). Ordinarily, a program involving a single lump-sum payment triggered by a specific event requires no administrative scheme. See id. The Second Circuit has explained that, although not determinative, an ongoing administrative program may exist

(1) where an employer's undertaking "requires managerial discretion" . . . (2) where "a reasonable employee would perceive an ongoing commitment by the employer to provide some employee benefits"; and (3) where "the employer was required to analyze the circumstances of each employee's termination separately in light of certain criteria."
Id. at 737 (quoting Schonholz v. Long Island Jewish Med. Ctr., 87 F.3d 72, 76 (2d Cir. 1996)).

The Merger Severance Plan states that "[s]everance payments are determined by an established formula, and are not subject to the discretion of either managers or Human Resources." Merger Severance Plan. Only employees who were not offered a "comparable position" were entitled to participate in the plan. See id. Although calculation of the payments was formulaic, eligibility determinations for the Merger Severance Plan may have required subjective determinations based on management's power to select employees to whom they would offer comparable positions.

Such discretion could qualify the program for ERISA treatment.See, e.g., Tischmann v. ITT/Sheraton Corp., No. 92 Civ. 2505, 1997 WL 195477, at *7 (S.D.N.Y. Apr. 22, 1997) ("One [potentially determinative] factor is the reservation in the plan of managerial discretion, particularly in the form of a requirement that the administrator apply subjective criteria to determine eligibility for benefits."), aff'd, 145 F.3d 561 (2d Cir. 1998). Thus, it cannot be said, at this stage of the proceedings, that the Merger Severance Plan does not qualify for ERISA coverage.

Mizuho next claims that 'because Weinberg was offered a "comparable position," he was not eligible for severance benefits. See Def. Mem. at 14-15. The Merger Severance Plan does not define what constitutes a "comparable position," and, as Weinberg points out, that determination is fact specific. See, e.g., Boss v. Advanstar Communications. Inc., 911 F. Supp. 109, 112 (S.D.N.Y. 1995). Weinberg claims that while his salary at Mizuho was comparable to his DKBFP salary, "his job duties, responsibilities, and decision-making authority were all drastically reduced." See Am. Compl. ¶¶ 21, 22. Weinberg thus alleges that his position with Mizuho was not a "comparable position." Based on the pleadings alone, there is no basis to conclude otherwise. Mizuho's motion to dismiss Weinberg's section 502 claim is accordingly denied.

2. Section 510 Claim

Section 510 of ERISA states, in relevant part:

It shall be unlawful for any person to discharge . . . 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. "Section 510 was designed primarily to prevent 'unscrupulous employers from discharging or harassing their employees in order to keep them from obtaining vested pension rights.'" Sandberg v. KPMG Peat Marwick, L.L.P., 111 F.3d 331, 334 (2d Cir. 1997) (quoting Dister v. Continental Group. Inc., 859 F.2d 1108, 1111 (2d Cir. 1988)). Weinberg alleges two separate violations of section 510.

Weinberg first alleges that Mizuho violated section 510 by terminating him "to avoid providing [him with] severance benefits pursuant to the [Merger] Severance Plan." Am. Compl. ¶ 46. But this allegation is inconsistent with his assertion that Mizuho promised to provide him with severance pay "in accordance with the [Merger] Severance Plan" upon his termination. Id. ¶ 18. Mizuho's decision to terminate Weinberg cannot have interfered with the attainment of his rights under the Merger Severance Plan, because Weinberg's termination would have triggered, not interfered with, his right to receive severance benefits.

Weinberg also alleges that Mizuho violated section 510 by terminating him to avoid providing severance benefits under the Mizuho Severance Pay Plan. See id. ¶ 46. Weinberg argues that, even though the Mizuho Severance Pay Plan was not adopted' until after his termination, under the Second Circuit's decision in Dister, "[i]f discovery shows that Mizuho had made the decision to implement the Plan prior to its decision to terminate Plaintiff's employment, and had done so in order to avoid paying him benefits, then a prima facie case of ERISA interference would be made out." Pl. Mem. at 9 (citingDister, 859 F.2d at 1115 (2d Cir. 1988)). Weinberg's reliance on Dister is misplaced. The plaintiff in Dister was terminated just before the vesting of his rights in an existing plan. See Dister, 859 F.2d at 1115. Weinberg, by contrast, was never a participant in the Mizuho Severance Pay Plan. Because Weinberg can prove no set of facts entitling him to section 510 relief on the basis of either severance plan, his claim is dismissed.

C. State Common Law Claims

If the Merger Severance Plan is covered by ERISA, all of Weinberg's common law claims are preempted. See 29 U.S.C. § 1444(a);Metropolitan Life Ins. Co. v. Bigelow, 283 F.3d 436, 440 (2d Cir. 2002) ("Generally, ERISA preempts state laws that 'relate to' employee benefits plans"). As noted earlier, there is insufficient information at this time to determine whether the Merger Severance Plan qualifies under ERISA. Thus, Weinberg's common law claims are addressed in the event that the Merger Severance Plan is found not to be covered by ERISA.

1. Breach of Contract

To prevail on a claim for breach of contract, a plaintiff must prove (1) the existence of a contract, (2) performance of the contract by one party, (3) breach by the other party, and (4) damages. See Terwilliger v. Terwilliger, 206 F.3d 240, 245-46 (2d Cir. 2000). Although Weinberg need not plead all of these elements, he has alleged that there was an oral contract to pay severance benefits upon his termination, that Mizuho breached the contract by not paying him severance benefits upon his termination, and as a result he suffered economic loss. See Am. Compl. ¶¶ 48-50. This is more than sufficient to state a claim.

Mizuho argues that the contract is barred by the Statute of Frauds. See N.Y. Gen. Oblig. Law § 5-701 (McKinney 2001) ("Every [oral] agreement is void. . . . if . . . [b]y its terms [it] is not to be performed within one year from [its] making. . . ."). Weinberg alleges only that there was an oral contract to provide severance benefits upon his termination. See Am. Compl. ¶ 49. Because he could have been terminated within one year, the contract is not barred by the Statute of Frauds.
Mizuho also contends that the claim for breach of the oral contract is barred by the parol evidence rule because the "terms of the employment agreements superseded any supposed oral promise." Def. Mem. at 18. The argument fails because the employment agreement ran from January 1, 2001 to December 31, 2001, and he was not terminated during the term of the contract. See generally Taylor v. Blaylock Partners. L.P., 659 N.Y.S.2d 257, 291 (1st Dep't 1997) ("If the contract . . . has been fully performed, the need to avoid false claims by barring parol evidence is eliminated."). If he had been terminated during the period covered by the contract, Mizuho's argument might have merit. Accordingly, the breach of contract claim is not barred by the parol evidence rule.

2. Fraud

An action for fraud, as governed by Rule 9, requires that the complaint "'(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.'" Novak v. Kasaks, 216 F.3d 300, 306 (2d Cir. 2000) (quoting Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994)). Under New York law, an action for fraud "cannot exist when the fraud claim arises out of the same facts as a breach of contract claim with the sole additional allegation that the defendant never intended to fulfill its express contractual obligations." Astroworks, Inc. v. Astroexhibit, Inc., 257 F. Supp.2d 609, 616 (S.D.N.Y. 2003) (quoting PI, Inc. v. Quality Prods., Inc., 907 F. Supp. 752, 761 (S.D.N.Y. 1995)); see also JP Morgan Chase Bank v. Liberty Mut. Ins. Co., 189 F. Supp.2d 24, 26 (S.D.N.Y. 2002). Weinberg's fraud claim rests on two misrepresentations: (1) that he would receive severance benefits and (2) "[s]pecifically . . . that [Mizuho] would treat him like a ten-year man.'" Am. Compl. ¶ 56. The first promise constitutes the basis for Weinberg's breach of contract claim and is thus not separately actionable as a fraud claim. See Astroworks, Inc., 257 F. Supp.2d at 616. The second promise is similarly inseparable from Weinberg's breach of contract claim. As Weinberg alleges, to treat him like a "ten-year man" is just a more specific articulation of the promise to pay severance benefits. Am. Compl. ¶ 56. Accordingly, Weinberg's fraud claim fails.

There may be instances where a plaintiff may allege both a fraud and a contract claim, but not when the two claims are completely duplicative. See Astroworks. Inc., 257 F. Supp.2d at 616. Absent an alleged misrepresentation that is collateral or extraneous to the contract, the fraud claim here is duplicative of the contract claim.See id.

D. Promissory Estoppel

The law of promissory estoppel varies, depending on whether the alleged promise relates to ERISA benefits. First, promissory estoppel may be used in the ERISA setting to redress injury that arises from the denial of ERISA benefits. "ERISA is a federal law regime for regulating employee benefits designed to eliminate the threat of conflicting state and local regulation of benefit plans." Schonholz, 87 F.3d at 79 (noting that the court is "not bound by New York law"). Accordingly, for promissory estoppel cases in the ERISA context, "state law does not control." Devlin v. Empire Blue Cross and Blue Shield, 274 F.3d 76, 85 n. 5 (2d Cir. 2001) (noting that "general common law principles apply"). Second, promissory estoppel may arise under state common law, which here is governed by New York law. But, "New York does not recognize promissory estoppel as a valid cause of action in the employment context." Miller v. Citicorp, No. 95 Civ. 9728, 1997 WL 96569, at *10 (S.D.N.Y. Mar. 4, 1997); see also Deutsch v. Kroll Assocs., No. 02 Civ. 2892, 2003 WL 22203740, at *3 (S.D.N.Y. Sept. 23, 2003); Shapira v. Charles Schwab Co., Inc., 225 F. Supp.2d 414, 419 (S.D.N.Y. 2002); Apsan v. Gemini Consulting, Inc., No. 98 Civ. 1256, 1999 WL 58679, at *5 (S.D.N.Y. Feb. 4, 1999); Van Brunt v. Rauschenberg, 799 F. Supp. 1467, 1473 (S.D.N.Y. 1992); Dalton v. Union Bank of Switz., 134 A.D.2d 174, 176-77, 520 N.Y.S.2d 764 (1st Dep't 1987). Thus, Weinberg may only state a claim for promissory estoppel under ERISA.

Promissory estoppel in ERISA cases requires satisfaction of four elements: "'(1) a promise, (2) reliance on the promise, (3) injury caused by the reliance, and (4) an injustice if the promise is not enforced.'"Abbruscato v. Empire Blue Cross and Blue Shield, 274 F.3d 90, 100-01 (2d Cir. 2001) (quoting Aramony v. United Way Replacement Benefit Plan, 191 F.3d 140, 151 (2d Cir. 1999)), cert. denied, 123 S.Ct. 1015 (2003). To minimize "the danger that commonplace communications from employer to employee will routinely give rise to employees' rights beyond those contained in formal benefit plans," this Circuit has added a fifth element: "extraordinary circumstances." Aramony, 191 F.3d at 151. Extraordinary circumstances are present, for example, where an employer promised severance benefits to persuade an employee to retire and then reneged. See Devlin v. Transportation Communications Int'l Union, 173 F.3d 94, 102 (2d Cir. 1999) (discussingSchonholz, 87 F.3d at 72). Other types of intentional inducement and deception also qualify. See id.

Mizuho promised Weinberg that he would receive severance benefits upon his termination. See Am. Compl. ¶ 18. Weinberg reasonably relied on the promise by entering into a one-year employment contract with Mizuho, thereby forfeiting his right to receive benefits pursuant to the Merger Severance Plan in December 2000. Consequently, he suffered losses equal to the benefits he would have received under the Merger Severance Plan. See id. ¶¶ 52-54. The Amended Complaint alleges facts sufficient to support a finding of "extraordinary circumstances." Weinberg claims that Mizuho knowingly misled him into entering into the employment contract, causing him to forego his immediate right to receive severance benefits. See id. ¶¶ 18, 57. Intentional inducement that extends beyond the concept of reasonable reliance satisfies the extraordinary circumstances pleading requirement. See Devlin, 173 F.3d at 102. Thus, if the Merger Severance Plan is covered by ERISA, Weinberg may have a claim for promissory estoppel.

Mizuho contends that Weinberg cannot claim that he reasonably relied on the oral promise to pay him severance because if he resigned his new position, he would still be entitled to his base salary through December 31, 2001. See Def. Mem. at 19. But Weinberg's claim is that he was promised severance benefits upon termination, not resignation. See Am. Compl. ¶ 18. Weinberg could have believed that if he resigned to pursue other employment opportunities, he would receive the balance of his 2001 salary. But if he stayed and Mizuho terminated him, he would be entitled to full severance benefits. In fact, Weinberg did not resign during the term of his one-year contract but continued to work for Mizuho as an at-will employee. As an at-will employee, Weinberg no longer had a right to any benefits upon resignation or termination. See December 2001 At-Will Employment Agreement. Thus, the Amended Complaint adequately alleges detrimental reliance on the oral promise.

IV. CONCLUSION

For the foregoing reasons, Mizuho's motion to dismiss is granted as to the section 510 and the fraud claims. The motion to dismiss is denied with respect to the claims under the ADEA, the NYSHRL, the New York City Human Rights Law, section '502, promissory estoppel, and breach of contract. A conference is scheduled for November 17, 2003, at 4:00 p.m.

SO ORDERED.


Summaries of

Weinberg v. Mizuho Capital Markets Corp.

United States District Court, S.D. New York
Oct 29, 2003
03 Civ. 2612 (SAS) (S.D.N.Y. Oct. 29, 2003)
Case details for

Weinberg v. Mizuho Capital Markets Corp.

Case Details

Full title:PETER C. WEINBERG, Plaintiff, -against- MIZUHO CAPITAL MARKETS CORP.…

Court:United States District Court, S.D. New York

Date published: Oct 29, 2003

Citations

03 Civ. 2612 (SAS) (S.D.N.Y. Oct. 29, 2003)

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