United States District Court, E.D. North Carolina
B. GRANT YARBER, Plaintiff,
CAPITAL BANK, CAPITAL BANK CORPORATION, and CAPITAL BANK FINANCIAL CORP., Defendants
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
For B. Grant Yarber, Plaintiff: William S. Mills, LEAD ATTORNEY, Glenn, Mills, Fisher & Mahoney, P.A., Durham, NC; Stewart W. Fisher, Glenn Mills & Fisher, Durham, NC.
For Capital Bank, Capital Bank Financial Corp., Capital Bank Corporation, Defendants: Curtis J. Shipley, LEAD ATTORNEY, Ellis & Winters LLP, Greensboro, NC; Paul K. Sun, Jr., LEAD ATTORNEY, Ellis & Winters, Raleigh, NC.
JAMES C. DEVER, III, Chief United States District Judge.
On February 17, 2012, B. Grant Yarber (" Yarber" or " plaintiff" ) filed a complaint against Capital Bank, Capital Bank Corporation (collectively, " Capital Bank" ) and Capital Bank Financial Corporation (" CBFC" ) (collectively, " defendants" ) alleging violations of the Employee Retirement Income Security Act of 1974 (" ERISA" ), breach of contract, and tortious interference with a contract in connection with severance pay provisions in Yarber's employment contract. Compl. [D.E. 1]. On April 9, 2012, defendants moved to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure [D.E. 12] and filed a supporting memorandum and exhibits [D.E. 13]. Yarber responded in opposition [D.E. 15], and defendants replied [D.E. 16]. As explained below, the court grants defendants' motion to dismiss.
In analyzing a 12(b)(6) motion, the court determines whether the complaint is legally and factually sufficient. See Fed.R.Civ.P. 12(b)(6); Ashcroft v. Iqbal, 556 U.S. 662, 677-80, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Bell A. Corp. v. Twombly, 550 U.S. 544, 555-56, 563, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007);
Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir. 2010), aff'd, 132 S.Ct. 1327, 182 L.Ed.2d 296 (2012);
Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). A court need not accept a complaint's " legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement." Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc.,
591 F.3d 250, 255 (4th Cir. 2009). However, the court " accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff in weighing the legal sufficiency of the complaint." Id. In considering the motion, the court may take judicial notice of matters of public record. Sec'y of State for Def. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007). The court also may consider documents attached to the complaint and documents attached to the motion to dismiss if those documents are integral to the complaint and authentic. Id.
Yarber worked for Capital Bank as the bank's President and Chief Executive Officer. Compl. [D.E. 1] ¶ 22. Yarber and
Capital Bank entered into a written employment agreement on May 1, 2004, and amended the agreement on January 25, 2007. Compl. ¶ ¶ 23, 24. On or about September 17, 2008, Yarber and Capital Bank entered into an Amended and Restated Employment Agreement (the " Employment Contract" ). Compl. ¶ 25 & Ex. A [" Employment Contract" ]. Under the Employment Contract, Yarber was entitled to a base salary of $350,000, incentive payments, and other benefits. Compl. ¶ 28; Employment Contract. Section 5(c) of the Employment Contract also provided for " change-in-control" severance payments equal to a multiple of Yarber's salary if another corporate entity gained majority control of Capital Bank and Yarber's employment was terminated for any of the reasons specified in the contract. Compl. ¶ 29; Employment Contract § 5(c). Capital Bank or Yarber could terminate his employment at any time, for any reason, with thirty days' notice. Employment Contract § 4(a). Finally, Yarber's contract also specified that " [n]o change or modification of this Agreement shall be valid unless such change or modification is in writing and signed by the parties." Employment Contract § 11.
CBFC, formerly known as North American Financial Holdings, Inc., offered to purchase a controlling interest in Capital Bank in 2010. Compl. ¶ ¶ 14, 30-31. During negotiations, all parties agreed that Yarber would remain the president of Capital Bank after the purchase. Id. ¶ 32.
Before entering negotiations with CBFC, Capital Bank had sold preferred stock to the United States Department of the Treasury (" Treasury Department" ) under the Troubled Asset Relief Program (" TARP" ). Id. ¶ 33. CBFC conditioned its offer to purchase a controlling interest on Capital Bank's ability to obtain a discount on repayment of TARP funds from the Treasury Department, and included the condition in written documents provided to Capital Bank shareholders and the Securities and Exchange Commission. Id. ¶ ¶ 36-37. However, CBFC's highest executive officers orally stated that CBFC would close the deal regardless of whether Capital Bank received a discount on its TARP payments. Id. ¶ 37. On November 19, 2010, Capital Bank sent its shareholders notice of CBFC's offer, including the TARP discount condition and the possibility that Yarber might become eligible for severance pay under the Employment Contract. Id. ¶ ¶ 39, 43-44. The notice also stated that several of Capital Bank's directors would receive hundreds of thousands of dollars in Supplemental Executive Retirement Plan (" SERP" ) payments if CBFC completed the purchase. Id. ¶ 48.
The Treasury Department refused to give Capital Bank a discount on the TARP payments. Id. ¶ 53. In response, CBFC threatened to withdraw its offer to purchase a controlling share of Capital Bank unless Yarber and other bank executives signed amendments to their employment agreements relinquishing their right to change-in-control severance payments. Id. ¶ ¶ 54, 56. CBFC did not require Capital Bank's directors to give up any SERP payments. Id. ¶ 57.
O.A. Keller, the chairman of Capital Bank's board of directors, told Yarber that he " had no option but to give up any payments due under his Employment Contract," and that the board of directors could and would terminate Yarber for cause if he refused to give up his right to change-in-control severance payments. Id. ¶ ¶ 59-60. Keller also told Yarber that Capital Bank's shareholders could sue Yarber for breach of fiduciary duty if Yarber ...