UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

__________________________________________ ) NATHAN LINDELL, ) ) Plaintiff, ) ) v. ) Civil Action No. 08-1462 (PLF) ) THE LANDIS CORPORATION 401(K) PLAN; ) LANDIS CONSTRUCTION COMPANY; ) ETHAN LANDIS, individually and in his capacity ) as an officer; HUGH JEFFREY FOX, PLAN ) ADMINISTRATOR of the LANDIS ) CORPORATION 401(K) PLAN; and JOHN ) DOES 1-5, Fiduciaries, ) ) Defendants. ) __________________________________________)

MEMORANDUM OPINION

This matter is before the Court on defendants’ motion to dismiss for failure to

state a claim upon which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil

Procedure (“Mot.”), plaintiff’s opposition (“Opp.”) and defendants’ reply. For the reasons

discussed below, the Court finds that the issues raised in this motion are better understood as a

challenge to subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil

Procedure. Having carefully considered the parties’ arguments and the relevant case law, the

Court will grant defendants’ motion to dismiss as to defendants Landis Construction Company

and Ethan Landis, individually and in his capacity as an officer, and the Court will deny

defendants’ motion to dismiss as to defendants Landis Corporation 401(k) Plan, Hugh Jeffrey

Fox, and John Does 1-5, Fiduciaries. I. BACKGROUND

Plaintiff Nathan Lindell, a former employee of Landis Construction Company

(“the company”), brought this action under the Employee Retirement Income Security Act of

1974, as amended,

et seq., (“ERISA”), for unpaid and untimely contributions

by the company to its 401(k) Plan in which Mr. Lindell was a participant. Plaintiff also alleges

that defendant Fox and the John Doe fiduciaries breached their fiduciary duty to him in their

capacity as administrators of the plan. Defendants now move to dismiss on the ground that the

claim is barred by a settlement agreement entered into by the parties in a related case concerning

unpaid overtime wages. Defendants further argue that this claim is barred by the doctrine of res

judicata in light of the same settlement agreement.

II. DISCUSSION

A. Standard of Review

Federal courts are courts of limited jurisdiction. Under Article III’s case or

controversy requirement, federal courts may only decide “real and substantial controvers[ies]”.

North Carolina v. Rice,

(1971) (quoting Aetna Life Ins. Co. v. Haworth,

(1937)). Federal courts have no jurisdiction over moot cases, see Worth v. Jackson,

(D.C. Cir. 2006), and such cases must be dismissed for lack of subject matter

jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. The Court has “an

affirmative obligation to ‘ensure that it is acting within the scope of its jurisdictional authority’

. . . which includes the obligation to consider the possibility of mootness.” Abu Ali v. Gonzales,

(D.D.C. 2005) (quoting Grand Lodge of Fraternal Order of Police v.

2 Ashcroft,

(D.D.C. 2001)). Claims that have been resolved by earlier

settlement agreements, and therefore present no ongoing controversy, are moot. See Allen v.

Nicholson,

(D.D.C. 2008) (citing Aulenback, Inc. v. Federal Highway

Admin.,

(D.C. Cir. 1997)). Accordingly, the Court will analyze defendants’

motion to dismiss for failure to state a claim based on a prior settlement agreement as a motion to

dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1).

Under Rule 12(b)(1), the plaintiff bears the burden of establishing subject matter

jurisdiction. See Brady Campaign to Prevent Gun Violence v. Ashcroft,

(D.D.C. 2004). When deciding a motion to dismiss for lack of subject matter jurisdiction under

Rule 12(b)(1), the Court must construe the complaint in the plaintiff’s favor and treat all well-

pled factual allegations as true. See Allen v. Nicholson,

. The Court is not

required, however, to accept unsupported inferences or “legal conclusions cast as factual

allegations.”

at 38 (quoting Rann v. Chao, 154 F. Supp 2d 61, 64 (D.D.C. 2001)) (internal

quotation marks omitted). Under Rule 12(b)(1), the Court may dispose of the motion on the

basis of the complaint alone or it may consider materials beyond the pleadings, such as the

proffered settlement agreement, “as it deems appropriate to resolve the question whether it has

jurisdiction to hear the case.” Scolaro v. D.C. Board of Elections and Ethics,

(D.D.C. 2000).

B. The Settlement Agreement

On February 11, 2008, plaintiff sued the company and its CEOs, Ethan Landis and

Christopher Landis, in their individual capacities for unpaid overtime wages. See Lindell v.

3 Landis Constr. Corp., Civil Action No. 08-0229, Complaint, Dkt. No. 1 (D.D.C. February 11,

2008). On August 26, 2008, the parties in that case agreed to prepare a joint stipulation of

dismissal. See Mot. at 2. On September 8, 2008, the parties filed a stipulation, agreeing to

dismiss the case under Rule 41(a)(1)(A)(ii) of the Federal Rules of Civil Procedure. See Lindell

v. Landis Constr. Corp., Stipulation of Dismissal, Dkt. No. 15 (D.D.C. Sept. 8, 2008). The one-

page handwritten settlement agreement was signed by Ethan Landis on behalf of all the

defendants in the case. See Mot., Exhibit 1 (the “Settlement Agreement”). For the purpose of

this action, the relevant information in the Settlement Agreement is contained in its paragraph

four, which states simply: “This is a settlement and release of all claims between the parties.”

After signing the Settlement Agreement, Mr. Lindell filed the lawsuit currently before the Court.

The parties do not dispute the legitimacy of the Settlement Agreement. Rather,

the question is whether the earlier settlement bars all of plaintiff’s current claims. Settlement

agreements are contracts, and courts interpret them accordingly. See 13B CHARLES ALAN

WRIGHT , ARTHUR R. MILLER & EDWARD H. COOPER , FEDERAL PRACTICE AND PROCEDURE

§ 3533.2 (2d ed. 2002); see also Dodge v. Trustees of Nat. Gallery of Art,

(D.D.C. 2004) (“When a case is settled extra-judicially through settlement agreements, this Court

has applied the principles of contract law . . . . to determine what claims the parties intended to

foreclose from future litigation.”) (internal citations omitted). In such situations, “‘the judicial

task . . . is to give effect to the mutual intent of the parties,’ and ‘when the language of a contract

is clear and unambiguous on its face, a court will assume that the meaning ordinarily ascribed to

those words reflects the intention of the parties.’” Pigford v. Schafer,

(D.D.C. 2008) (quoting Mesa Air Group, Inc. v. Dep’t of Transp.,

, 503 (D.C. Cir.

4 1996)). Any assertions of ambiguity in the terms of the agreement must be established by

objective evidence. See id.

Plaintiff argues that the Settlement Agreement is limited to his wage payment

claims. Nothing in the plain language of the Settlement Agreement provides for such a

limitation, however. The unambiguous and expansive language provides for the release of “all

claims” between the parties. Settlement Agreement ¶ 4. The Settlement Agreement therefore

bars all of Mr. Lindell’s claims, including the ones in the instant lawsuit before this Court,

against the signatories to the agreement — namely, the company and Ethan Landis, individually

and in his capacity as an officer. The Court concludes that plaintiff’s claims against these

defendants are moot and will grant the motion to dismiss as to those defendants.

The Settlement Agreement does not, however, bar Mr. Lindell’s claims against

parties who were not signatories to the agreement. In the settled case Mr. Lindell sued the

company, but he did not name as defendants the 401(k) Plan or any of its administrators.1

Defendants obliquely suggest that these parties are functionally identical to the signatories to the

Settlement Agreement, but they have not given the Court adequate evidence or authority to

support such a conclusion.2 The Court concludes therefore that the Settlement Agreement does

1 ERISA specifies that an employee benefit plan may be sued as an entity. See

(d). 2 The parties’ exhibits raise a factual dispute over whether defendant Hugh Jeffrey Fox is the 401(k) Plan administrator, and therefore, whether he is an appropriate defendant to this action. Exhibit 2 of defendants’ motion is a declaration by Mr. Fox denying that he has ever served as a plan administrator of the company’s 401(k) plan, see Mot., Exhibit 2 ¶ 3, while Exhibit 1 of plaintiff’s opposition shows Mr. Fox’s signature as a plan administrator on plaintiff’s plan enrollment form. See Opp., Exhibit 1. Construing the facts alleged in plaintiff’s favor, as the Court must do at this point, the Court for now will treat Mr. Fox as the plan administrator and as an appropriate defendant in this action.

5 not moot Mr. Lindell’s claims against these parties.

C. Res Judicata

Defendants also argue that this action is barred by the doctrine of res judicata.

Under the doctrine of res judicata, a final judgment on the merits in an action precludes the same

parties from litigating claims that were or could have been raised in that action. See Medelius

Rodriguez v. U.S. Citizenship and Immigration Service,

(D.D.C. 2009)

(quoting Allen v. McCurry,

(1980)). If the settlement agreement reached by the

parties in Lindell v. Landis Construction Corporation, Civil Action No. 08-0229, had been

approved by the Court as a judgment on the merits or in the form of a consent decree, res

judicata might bar plaintiff’s claims. But “[r]es judicata cannot operate in the absence of a

judgment. A settlement agreement that has not been integrated into a consent decree [or order of

a court] is not a judgment and cannot trigger res judicata.” Carver v. Nall,

(7th Cir. 1999); see also Bailey v. DiMario,

(D.D.C. 1995) (precluding

claims on res judicata grounds that were the subject of a court-approved class action settlement).

To have preclusive effect, a court judgment must be rendered in some form; otherwise a

settlement agreement on its own is effective only as a contract. See 18A WRIGHT , MILLER &

COOPER , § 4443 (2d ed. 2002). In Civil Action No. 08-0229, the parties entered into a

stipulation of dismissal under Rule 41(a)(1)(A)(ii), with no judgment entered by the Court. Rule

41(a)(1)(A)(ii) provides: “[T]he plaintiff may dismiss an action without court order by filing . . .

a stipulation of dismissal signed by all the parties who have appeared.” FED . R. CIV . P.

41(a)(1)(A)(ii). In the absence of a court order, the settlement agreement has no preclusive

6 effect. Defendants’s arguments as to res judicata therefore are misplaced, and the Court will not

dismiss the case on those grounds.

D. Plaintiff’s Proposed Amendment

In his opposition to defendants’s motion to dismiss, plaintiff requested that he be

permitted to amend his complaint to include Ethan Landis and Christopher Landis in their

capacities as plan administrators of the Landis Construction Corporation 401(k) plan as

defendants. Under Rule 15(a)(1)(A), a party may amend its pleading once as a matter of course

before being served with a responsive pleading. See FED . R. CIV . P. 15(a)(1)(A). To do so,

however, Local Civil Rule 7(i) requires that the party file an original of the proposed pleading as

amended. See L. CV . R. 7(i). The plaintiff has not done so and until he does, the Court will

continue to rely upon the original complaint.

III. CONCLUSION

The Court will grant defendants’ motion to dismiss with respect to defendants

Landis Construction Company and Ethan Landis, individually and in his capacity as an officer.

Defendants’ motion to dismiss is denied with respect to defendants Landis Construction

Company 401(k) Plan, Hugh Jeffrey Fox and John Doe fiduciaries. An Order accompanying this

Memorandum Opinion will issue this same day.

/s/ PAUL L. FRIEDMAN United States District Judge DATE: July 28, 2009

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