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Hofland v. Schlumberger Technology Corp.

United States District Court, D. North Dakota

April 30, 2018

Boyd Hofland, Plaintiff,
Schlumberger Technology Corporation, Defendant.


          Daniel L. Hovland, Chief Judge United States District Court

         Before the Court is a Motion to Dismiss filed by Defendant Schlumberger Technology Corporation (“Schlumberger”) on June 14, 2017. See Docket No. 3. Plaintiff Boyd Hofland filed a response on July 6, 2017. See Docket No. 7. Schlumberger filed a reply on July 19, 2017. See Docket No. 11. Because the Court concludes Hofland's suit is time barred, the Court grants Schlumberger's motion to dismiss.

         I. BACKGROUND

         The following facts, which the Court accepts as true for purposes of this Rule 12(b)(6) motion to dismiss, are taken from Hofland's amended complaint. See Joyce v. Armstrong Teasdale, LLP, 635 F.3d 364, 365 (8th Cir. 2011). Schlumberger is a Texas Corporation authorized to conduct oilfield services in North Dakota. See Docket No. 10, p. 2. Hofland is a North Dakota resident and was employed by Schlumberger. Id. During his employment, Hofland earned the right to participate in Schlumberger's retirement benefit package, which included healthcare insurance under a retiree medical plan (“the Plan”). Id. The Plan contains a non-competition clause that bars former Schlumberger employees from receiving benefits if they accept employment from a client or competitor within two years of leaving Schlumberger's employ. Id. Schlumberger provided Hofland with a document titled “Schlumberger Retiree Medical Plan Waiver of Forfeiture Provision Memorandum” (“the Forfeiture Memorandum”). See Docket No. 10, p. 3. The Forfeiture Memorandum defines competitor company as “one that is in direct competition with Schlumberger for business at the time you begin performing services for that company.” See Docket No. 4-3, p. 2. The Memorandum also defines client company as “any company that is a client of Schlumberger at the time you being performing services for that company.” See Docket No. 4-3, p. 2.

         At some point-the exact date is not clear-Hofland left Schlumberger's employ. On January 4, 2012, Hofland accepted employment with Rockpile Energy Services, LLC (“Rockpile”). See Docket No. 10, p. 2. On January 5, 2012, Hofland applied for enrollment in the Plan. Id. On February 10, 2012, Hofland received a letter from Schlumberger notifying him he would not be enrolled in the Plan because his employment with Rockpile violated the Plan's non-competition provision. See Docket No. 10, p. 3. Hofland appealed the decision on February 25, 2012, and Schlumberger denied the appeal. Id. Schlumberger continues to deny Hofland enrollment in the Plan. Id.

         Hofland brought suit against Schlumberger in North Dakota's Southwest Judicial District Court in May of 2017, alleging deceit, breach of contract, unjust enrichment, and conversion. See Docket No. 1-2. On June 8, 2017, Schlumberger removed the case to this Court. See Docket No. 1. On June 14, 2017, Schlumberger moved to dismiss the suit arguing ERISA preempts Hofland's state-law claims, Hofland has failed to state a claim for which relief can be granted, and Hofland's suit is time barred. See Docket No. 3. On July 6, 2017, Hofland filed an amended complaint[1] that is styled as an ERISA action and asserts fraud and breach of the Plan agreement. See Docket No.10, pp. 4-5.


         Rule 12(b)(6) of the Federal Rules of Civil Procedure mandates dismissal of a complaint if it fails to state a claim upon which relief can be granted. To determine whether dismissal is warranted, the court must assume the complaint's factual allegations are true and draw all reasonable inferences in the plaintiff's favor. Monson v. Drug Enf't Admin., 589 F.3d 952, 961 (8th Cir. 2009.). Conclusory legal allegations need not be accepted as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Rule 12(b)(6) dismissal may be warranted when the complaint establishes a statute of limitations defense. Joyce, 635 F.32 at 367.


         Hofland asserts Schlumberger wrongly denied him benefits in violation of ERISA and the Plan. The parties disagree on the meaning of the terms “client company” and “competitor company” as those terms are used in the Plan. Hofland argues the terms are specifically defined in the Forfeiture Memorandum, which he asserts is part of the Plan. Schlumberger, on the other hand, asserts the Forfeiture Memorandum is not part of the Plan. Schlumberger argues it has discretion to determine what constitutes a client or competitor because the Plan does not specifically define those terms. Schlumberger also asserts a statute of limitations defense.

         The Court makes the following determinations, which are discussed in detail below, and concludes Hofland's suit is time barred: (1) The six-year ERISA limitation period governing claims concerning fiduciary duties does not apply to Hofland's suit; (2) Hofland's suit is most analogous to a contract action; (3) Texas's four-year statute of limitations for contract actions applies; (4) Hofland's suit is untimely under the Texas limitation period; and (5) equitable tolling of the limitation period is unwarranted.


         When Congress enacted ERISA, it supplied limitation periods for some of the Act's provisions, but it did not do so for others. Berger v. ACA Network LLC, 459 F.3d 804, 808 (7th Cir. 2006). Generally, when Congress does not provide a statute of limitations for a federal cause of action, a federal court must borrow the state statute of limitations most analogous to the case before it. Robbins v. Iowa Road Builders Co., 828 F.2d 1348, 1353, (8th Cir. 1987); see also Johnson v. State Mut. Life Assurance Co., 942 F.2d 1260, 1262 (8th Cir. 1991).

         Beneficiaries may bring claims to recover benefits under the terms of an ERISA plan pursuant to 29 U.S.C. § 1132(a)(1)(B). ERISA does not contain a statute of limitations for Section 1132(a)(1)(B) actions to recover benefits. Beneficiaries may bring claims for equitable relief and to enforce provisions of ERISA, including provisions that impose liability on ERISA fiduciaries, under Section 1132(a)(3). Jones v. Aetna Life Ins. Co., 856 F.3d 541, 545 (8th Cir. 2017 Johnson, 942 F.2d at 1262-1263. ERISA sets forth a six-year statute of limitations for claims based on breach of fiduciary duties. See 29 U.S.C. § 1113. This limitation period, however, does not apply to other ERISA provisions, including Section 1132(a)(1)(B): “Congress expressly limited ...

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