District Court Dismisses ERISA Claims, Highlights Plaintiff’s Failure to Allege Entitlement to Prejudgment Interest, Tax Withholdings, Penalties or Equitable Relief

In Metaxas v. Gateway Bank F.S.B, et al., No. 20-CV-01184-EMC, 2025 WL 550749 (N.D. Cal. Feb. 19, 2025), California Northern District Judge Edward M. Chen granted Defendants’ Motion to Dismiss Plaintiff’s First Amended Supplemental Complaint alleging supplemental claims for tax withholdings, prejudgment interest, equitable relief and penalties, finding that the only remaining claim available to Plaintiff was for termination of benefits under the Employee Retirement Income Security Act of 1974,  29 U.S.C. § 1132(a)(1)(B).

The central issue of this case concerns the denial of benefits claimed by Plaintiff Poppi Metaxas. Metaxas served as the President and CEO of Gateway Bank, a federally chartered savings bank, and was a beneficiary under the bank’s Supplemental Executive Retirement Plan (SERP). In 2004, as part of an agreement to retain her services, Gateway Bank allegedly agreed to enhance her compensation through deferred compensation, annually amounting to approximately $300,000. This compensation was to be reflected in a $5 million life insurance policy intended to fund the SERP, with the plan commencing in 2005. The SERP provided specific benefits, including Disability and Termination benefits, to key employees like Metaxas. However, the plan’s administration and accounting practices became contentious. Metaxas’s position with the bank ended following allegations of engaging in fraudulent transactions to manipulate the bank’s financial statements, leading to her resignation and subsequent criminal charges. In 2014, she was indicted and later pled guilty to conspiracy to commit bank fraud, resulting in a sentence of 18 months’ imprisonment and three years of supervised release.

Before her indictment, Metaxas filed a claim for disability and termination benefits under the SERP in 2013, which Gateway Bank denied in 2016. Her subsequent appeal was also denied by the bank’s Administrative Committee. In response, Metaxas initiated legal proceedings in 2020, seeking benefits under 29 U.S.C. § 1132(a)(1)(B), alongside equitable relief and penalties for alleged failures in document production under 29 U.S.C. § 1132(c). The Court, at a summary judgment stage in 2022, found she was entitled to termination benefits but not disability benefits. The case was remanded to Gateway Bank’s Plan Administrator to reconsider the termination benefits claim, resulting in a determination that she was entitled to $9,252.95 per month since her retirement.

In May 2023, Metaxas filed an appeal of the Administrative Committee decision. The appeal addressed: (1) the correct amount of past and future benefits due, which she argued should be at least $19,626.16 per month; (2) her entitlement to interest on back benefits due for the past thirteen years; and (3) Defendants’ failure to produce documents and information relevant to Plaintiff’s claim. In June 2023, Defendants issued checks for the benefits it conceded were owed, although various taxes were withheld on the checks. Plaintiff filed a supplemental complaint asserting three claims (1) failure to pay all benefits in violation of 29 U.S.C. § 1132(a)(1)(B); (2) equitable relief from breach of duty of good faith pursuant to 29 U.S.C. § 1132(a)(3); and (3) penalties for failure to produce documents under 29 U.S.C. § 1132(c). The Court granted Defendants’ Motion to Dismiss with leave to amend and directed Metaxas in her amendment to include statutory basis or Plan terms entitling her to interest and tax withholding benefits.

Defendants again filed the instant Motion to Dismiss Metaxas’s First Amended Supplemental Complaint. The Court granted Defendants’ motion and the sole remaining claim is Metaxas’s claim for termination of benefits under 29 U.S.C. § 1132(a)(1)(B). The court found that:

1. Metaxas failed to identify specific Plan terms or ERISA provisions entitling her to additional tax withholdings or prejudgment interest on termination benefits. The court noted that while prejudgment interest could be awarded at its discretion, it was not a statutory entitlement under 29 U.S.C. § 1132(a)(1)(B).

1. The Court rejected Metaxas’s request for equitable relief in the form of reformation and equitable estoppel, (with the stated aim of including her salary deferrals in the calculation of benefits) emphasizing that equitable remedies cannot contradict the express terms of the Plan.
2. The Court dismissed the claim for penalties citing Metaxas’s failure to identify specific documents requested and the relevant ERISA provisions that mandated their disclosure, particularly since the Plan was a top-hat plan with distinct disclosure obligations.
3. Metaxas’s claim to enforce her right to examine pertinent documents under the Plan was dismissed as moot because Defendants had produced all documents relevant to the review of her claim.

If your Plan or Plan Administrator has denied or otherwise limited your ERISA benefits claim, contact us for assistance.