Dapron v. Spire Missouri Inc. et al

Filing 26

MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Plaintiff Harry Daprons Motion for Discovery (ECF No. 16 ) is GRANTED IN PART and DENIED IN PART. IT IS FURTHER ORDERED that the Court will hold a supplemental scheduling conference on Thursday, Augu st 23, 2018, at 10:30 a.m. in the chambers of the undersigned. In advance of the conference, the parties must meet and confer and attempt to reach agreement on the scope of discovery, in light of these rulings, and on an amended schedule, if neces sary, for the remainder of the case. The parties must file a joint proposed scheduling order no later than Thursday, August 16, 2018, setting out their proposed schedule and any disputes that remain. If disputes remain over the scope of discovery, the joint filing must set forth with specificity what discovery Dapron wants that Defendants oppose. ( Supplemental Scheduling Conference set for 8/23/2018 10:30 AM before Magistrate Judge John M. Bodenhausen.) Signed by Magistrate Judge John M. Bodenhausen on 7/27/18. (KJS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
HARRY DAPRON,

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Plaintiff,
v.
SPIRE MISSOURI, INC., and LACLEDE
GAS COMPANY EMPLOYEES’
RETIREMENT PLAN,
Defendants.

No. 4:17 CV 2671 JMB

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff Harry Dapron’s (“Dapron”) Motion for
Discovery (ECF No. 16). Defendants Spire Missouri, Inc. f/k/a Laclede Gas Company (“Spire”)
and Laclede Gas Company Employees’ Retirement Plan (“Plan”) (collectively “Defendants”)
have filed a response in opposition and the issues are fully briefed. The parties consented to the
jurisdiction of the undersigned pursuant to 28 U.S.C. § 636(c). For the reasons set forth below,
the Court grants in part and denies in part Dapron’s motion for discovery.
This case arises under the Employee Income Security Act (“ERISA”), 29 U.S.C. §1001,
et seq.. Dapron seeks to attempt to recover benefits under an employee retirement plan and for
breach of fiduciary duty. Dapron seeks alternative relief both for the wrongful denial of
disability benefits claim under ERISA § 502(a)((1)(3) (Count I) and for equitable relief for
breach of fiduciary duty claim under ERISA § 502(a)(3) (Count II). Spire denied Dapron’s
claim for disability benefits because he did not “apply for Disability Retirement benefits in
connection with [his] termination.” (Complaint, ECF No. at ¶ 35)

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In the Complaint, Dapron alleges that Defendants breached their fiduciary duty by failing
“to provide the information necessary to ensure [Dapron] understood his rights despite his
condition [disabling mental illness impairing his judgment]. This silence allowed [Dapron’s]
delusions to mislead him for years which prevented him from applying for the benefits he was
owed until 2016.” (Complaint, ECF No. at ¶¶ 47-48) Defendants deny that they owed a
fiduciary duty to Dapron. Defendants assert an affirmative defense denying liability for breach
of fiduciary duty because the Plan cannot be a fiduciary. Defendants also assert that any breach
of fiduciary claim arising from events occurring in 2010 is barred by the applicable statute of
limitations. Defendants further assert that Spire, as employer and as plan sponsor, did not act in
a fiduciary capacity, and the Plan cannot be a fiduciary and thus Defendants cannot be liable for
breach of fiduciary duty. (Defendants’ Amended Joint and Separate Answer, ECF No. 20, at 10
¶¶ 2-3)
I.

Background
Dapron alleges that beginning in 2009, he started experiencing mental health issues that

impacted his ability to work and function. (Complaint, ECF No. at ¶ 8) In September 2009,
Dapron was hospitalized at St. Anthony’s Hospital for psychiatric treatment of acute psychosis,
paranoia, hallucinations, and delusions. (Id. at ¶ 9) After being discharged on October 2, 2009,
Dapron returned to work. (Id. at ¶¶ 10-11)
On February 22, 2010, Dapron was readmitted to St. Anthony’s Hospital and kept under
voluntary observation until discharged on February 24, 2010. (Id. at ¶ 12)
Dapron alleges that his employment was terminated on March 2, 2010.1 (Id. at ¶ 13)

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The administrative record shows that Dapron voluntarily resigned from employment on March
2, 2010. (Adm. Rec. at 467)
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On March 24, 2010, the police returned Dapron to St. Anthony’s Hospital, and he was
involuntarily transferred to St. Anthony’s Behavioral Health Unit for treatment of his
schizophrenia. (Id. at ¶ 14) On March 31, 2010, Dapron was discharged and released to an
intensive outpatient program. (Id. at ¶ 15) After his discharge, Dapron became intermittently
homeless and his schizophrenia went untreated. (Id. at ¶ 16)
In April, 2011, Dapron returned to St. Anthony’s Hospital where he received treatment
for acute psychosis and chronic schizophrenia but he returned to his intermittent homelessness.
(Id. at ¶¶ 17-18)
On November 30, 2011, Dapron sought treatment at Missouri Baptist Medical Center and
was diagnosed with acute psychosis and delusional disorder. (Id. at ¶ 19)
On December 21, 2011, an emergency room doctor at Barnes Hospital involuntarily
committed Dapron for 96 hours with full precautions, (Id. at ¶ 21)
On March 4, 2012, Dapron filled out a social security application, alleging that he suffers
from paranoia and poor social interaction and needs assistance caring for himself. (Id, at ¶ 23)
The Social Security Administration determined that Dapron’s mental illness left him disabled no
later than February 20, 2010. (Id. at ¶ 24)
Between February 11, 2013, and July 2016, Dr. Jeffrey Pevnick treated Dapron twentyseven times for depression and schizophrenia with delusions and auditory hallucinations. (Id. at
¶ 26)
On May 16, 2016, Dapron filed for his disability retirement benefits with Laclede Gas
Company. (Id. at ¶ 28) On June 20, 2016, the Retirement Board, the plan administrator for the
Plan, denied benefits because Dapron did not “apply for Disability Retirement benefits in

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connection with [his] termination.”2 (Id. at ¶¶ 29, 35, Adm. Rec. at 412) The Retirement Board
found that “[Dapron’s] employment with Laclede Gas Company terminated on or about March 2,
2010, and [his] application for Disability Retirement benefits did not occur until on or about May
16, 2016. [Dapron] did not apply for Disability Retirement benefits in connection with [his]
termination. Therefore, [his] claim for Disability Retirement benefits is hereby denied." (Adm.
Rec. at 412) Thereafter, Dapron appealed the Defendants’ decision to deny disability benefits,
contending the decision was arbitrary and capricious. His appeal was denied. (Id. at ¶¶ 30, 42)
Dapron alleges that Defendants are fiduciaries, and they “failed to provide information
necessary to ensure [Dapron] understood his rights despite his condition. This silence allowed
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The Employees’ Retirement Plan (“Plan”) of Laclede Gas Company in 2010 provided:
7.1 Disability Date. Any Participant who, at a time when he is employed in
Covered Employment, has fifteen or more Years of Credited Service and has then
attained age forty but not age sixty-five, and in the judgment of the Retirement
Board, based on competent medical evidence, is unable by reason of any
medically determinable physical or mental impairment to perform the duties
required by his job, shall be deemed Totally and Permanently Disabled
(“Disability”) if there is no work that he is able to perform available to him within
the Company.

(Adm. Rec. at 27)
The Summary Plan Description explained:
RETIREMENT PROCEDURE
You must apply for retirement by submitting a written statement to the Retirement
Board of your intention to retire and the date chosen; and apply at least 30 days
and no more than 90 days before your intended retirement date. Employee
Benefits will provide a form suitable for this if you request it. Retirement dates
are limited to the first day of a month.
For Disability Retirement, you must also submit competent medical evidence of
total and permanent disability with your application. Totally and Permanently
Disabled is defined in the Plan. If you are unable to apply for yourself, a member
of your immediate family or your legal representative may make the application.
(Adm. Rec. at 118)
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[Dapron’s] delusions to mislead him for years which prevented him from applying for the
benefits that he was owed until 2016.” 3 (Id. at ¶¶ 46, 48)
II.

Motion for Discovery and Responsive Briefs Thereto
In their Joint Proposed Scheduling Plan, counsel included the following paragraph

summarizing their disagreement about conducting discovery in this case:
While Plaintiff believes he is entitled to discovery relating to the claims for
equitable relief and discovery of any conflicts of interest and procedural
irregularities regarding the claims for denial of benefits, Defendant believes the
evidence before the Court should be limited to the administrative record, no
discovery should be permitted, and the ERISA plan in this matter grants its
administrator sufficient discretion to trigger the abuse of discretion standard of
review. 4
(ECF No. 11 at 1-2)
In his motion for leave to conduct discovery, Dapron seeks a Court order permitting
limited discovery beyond the administrative record including: (1) procedural irregularities; (2)
Defendants’ conflict of interest for the (a)(1)(b) claim for benefits; and (3) Defendants’ breach of
fiduciary of duty.
Defendants resist the motion, arguing that the exceptions permitting discovery in ERISA
cases are not applicable to this case because: (1) neither of the defendants is a fiduciary of the
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In their Joint and Separate Answer, Defendants denied they owed a fiduciary duty to Dapron by
pleading that “[t]his Court should dismiss Count II as to the Plan because the Plan cannot be a
fiduciary and thus cannot be liable for ‘breach of fiduciary duty.’ The Court should dismiss
Count II as to Spire because Spire, as employer and as plan sponsor, did not act in a fiduciary
capacity and thus cannot be liable for ‘breach of fiduciary duty.’” (ECF No. 5 at ¶¶ 2-3)
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Dapron’s breach of fiduciary claim, although alleged pursuant to ERISA statutes and in
conjunction with a denial-of-benefits claim, is subject to a separate and distinct standard of
review from the Court’s review of administrative benefit determinations. If an administrator
made a decision that seriously breaches its duties to the beneficiary, this breach prompts more
searching review of the denial-of-benefits claim. See Waldoch v. Medtronic, Inc., 757 F.3d 822,
830 (8th Cir. 2014) (explaining that a “serious breach of the plan trustee’s fiduciary duty to the
plan beneficiary” will either “alter the standard of review or affect [the court’s] review under the
abuse-of-discretion standard.”).
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Plan so that Dapron cannot have a viable claim for breach of fiduciary duty; (2) a fiduciary does
not have a duty to provide individualized advise to a plan participant; and (3) any breach of
fiduciary duty claim arising from the events allegedly occurring in 2010 are barred by the
applicable limitations period.
In his Reply, Dapron maintains that the Court is not limited to the terms of the plan
documents when determining who owes a participant a fiduciary duty, but the Court must look at
individual actions. Dapron argues that his breach of fiduciary duty claim is viable because
Defendants employed a flawed claims process contrary to its fiduciary obligation to carry out its
duty solely for participants by disregarding information showing Dapron was disabled prior to
his resignation, and by refusing to consider Dapron’s medical records in review of his claim and
the Social Security Administration’s determination of disability. Dapron asserts that Spire acted
in a plan fiduciary capacity because Gery Gorla, the Vice President of Human Resources,
decided Dapron’s administrative appeal as an officer of Spire, not as a fiduciary of the Plan.
In their Sur-Reply, Defendants submitted documents explaining that the Plan
Administrator delegated to Mr. Gorla the responsibility and discretion for deciding all appeals
from adverse benefit determinations, and that Mr. Gorla serving in that capacity as a plan
fiduciary, not as a corporate officer, made his determination regarding Dapron’s appeal.
III.

Legal Standards
In ERISA cases, the general rule is that review is limited to evidence that was before the

administrator, LaSalle v. Mercantile Bancorporation, Inc. Long Term Disability Plan 498 F.3d
805, 811 (8th Cir. 2007), since Congress enacted ERISA to provide for the quick and
inexpensive adjudication of benefit disputes. See Winterbauer v. Life Ins. Co. of N. Am., 2008
WL 4643942, at *3 (E.D. Mo. Oct. 20, 2008). “[A]dditional evidence gathering is ruled out on

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deferential review, and discouraged on de novo review.” Brown v. Seitz Foods, Inc. Disability
Benefit Plan, 140 F.3d 1198, 1200 (8th Cir. 1998).
Nonetheless, a court may allow expanded discovery if the plaintiff shows good cause.
Id.; see Menz v. Procter & Gamble Health Care Plan, 520 F.3d 865, 871 (8th Cir. 2008) (“[I]f a
conflict of interest is not apparent from the record, the district court may permit discovery and
supplementation of the record to establish these facts if the plaintiff makes a showing of good
cause.”). A plaintiff can show good cause by establishing that the administrative record is
insufficient to establish a “palpable conflict of interest” or a “serious procedural irregularity.”
See Farley v. Ark. Blue Cross and Blue Shield, 147 F.3d 774, 776 n.4 (8th Cir. 1998). “A
palpable conflict of interest or serious procedural irregularity will ordinarily be apparent on the
face of the administrative record or will be stipulated to by the parties. Thus, the district court
will only rarely need to permit discovery and supplementation of the record to establish these
facts.” Id. Even if a plaintiff can show a conflict of interest or serious procedural irregularity,
that plaintiff is not necessarily entitled to discovery. See Jones v. ReliaStar Life Ins. Co., 615
F.3d 941, 945 (8th Cir. 2010) (upholding district court’s denial of discovery where plan
administrator admitted that there was a conflict of interest). A procedural irregularity is said to
exist where the plan administrator, in the exercise of its power, acted dishonestly, from improper
motive, or failed to use sound judgment in reaching its decision. Menz, 520 F.3d at 871.
Although discovery of information outside the administrative record is generally not
allowed, this limitation “does not apply to claims involving ERISA plans when the claims are for
equitable relief under § 1132(a)(3) or for equitable estoppel.” Kostecki v. Prudential Ins. Co. of
Am., 2014 WL 5094004, at *1 (E.D. Mo. Oct. 10, 2014). “This is so because these types of
actions ‘do not benefit from the administrative process.’” Id. (quoting Jensen v. Solvay Chems.,

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Inc. 520 F.Supp.2d 1349, 1355 (D. Wyo. Oct. 18, 2007) (“Case law does not constrain discovery
under ERISA § [1132](a)(3) actions.”).
IV.

Discussion
A. Conflict of Interest
Dapron fails to set forth any arguments explaining why discovery is necessary to

determine whether Defendants’ relationship with the plan administrator constituted a conflict of
interest. Dapron has not asserted any factual allegations in the Complaint or provided any
evidence showing that Defendants attempted to influence the plan administrator’s decision to
deny his claim. Therefore, Dapron’s assertion rests on mere speculation and fails to show good
cause. See Westbrook v. Georgia-Pac Corp., 2006 WL 2772822, at *4 (E.D. Ark. Sept. 26,
2006) (internal quotation marks omitted) (“It is not enough to allege generally that a conflict of
interest may exist or that the case may have procedural irregularities”).
Even if the undersigned could infer a possible conflict of interest from the administrative
record, Dapron has failed to argue why the existing record precludes him for properly pursuing
his claim. The existence of a possible or actual conflict of interest does not automatically justify
additional discovery. See Jones, 615 F.3d at 945 (noting that additional discovery is
discouraged). Accordingly, Dapron has failed to show good cause justifying discovery of a
purported conflict of interest.
B. Procedural Irregularities
Dapron also fails to set forth any arguments showing why discovery is necessary into
purported procedural irregularities. In the Complaint, Dapron alleges that the denial of benefits
was the product of procedural irregularities in the review process, but Dapron has failed to assert

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any facts that would demonstrate that any procedural irregularities occurred in this case, despite
making that general assertion.
Procedural irregularities will not warrant a less-deferential standard of review absent a
showing that such irregularities cause the court to have “serious doubt as to whether the result
reached was the product of an arbitrary decision of the plan administrator’s whim, or
demonstrate that the actual decision was reached without reflection and judgment.” Neumann v.
AT & T Commc’n, Inc., 376 F.3d 773, 781-82 (8th Cir. 2004) (internal citations omitted). A
court may infer an absence of reflection and judgment in cases “where the plan trustee does not
inquire into the relevant circumstances at issue; where the trustee never offers a written decision,
so that the applicant and the court cannot properly review the basis for the decision; or where
procedural irregularities are so egregious that the court has a total lack of faith in the integrity of
the decision making process.” Buttram v. Cent. States, SE & SW Areas Health & Welfare Fund,
76 F.3d 896, 900 (8th Cir. 1996).
Dapron has failed to show good cause for discovery because Dapron has not established
any basis for a finding that the Retirement Board, serving as the plan administrator, acted
dishonestly, from improper motive, or failed to use sound judgment in reaching its decision.
Menz, 520 F.3d at 871. Here, the Retirement Board sent a letter of explanation for denying
Dapron’s claim under the Plan, finding that his claim was untimely because he waited more than
six years after voluntarily terminating his employment to file a claim for Disability Retirement
benefits under the Plan. (Adm. Rec. at 412) The Retirement Board has provided an explanation
for its decision that relates to the Plan terms. Accordingly,

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the instant record reflects no procedural irregularities that rise to the level that this Court has a
total lack of faith in the integrity of the decision making process.5
C. Breach of Fiduciary Duty
Dapron also alleges that Defendants breached their fiduciary duty by failing “to provide
the information necessary to ensure [Dapron] understood his rights despite his condition
[disabling mental illness impairing his judgment]. This silence allowed [Dapron’s] delusions to
mislead him for years which prevented him from applying for the benefits he was owed until
2016.” (Complaint, ECF No. at ¶¶ 47-48)
In the context of ERISA claims, additional evidence gathering beyond the administrative
record is traditionally prohibited on deferential review, “to ensure expeditious review of ERISA
benefit decisions and to keep district courts from becoming substitute plan administrators.”
Brown, 140 F.3d at 1200. But these principals do not apply to claims for breach of fiduciary
duty. Dapron’s breach of fiduciary claim, although alleged pursuant to ERISA statutes and in
conjunction with a denial-of-benefits claim, is subject to a separate and distinct standard of
review from the Court’s review of administrative benefit determinations.
ERISA defines plan fiduciaries as follows:
Except as otherwise provided in subparagraph (B), a person is a fiduciary with
respect to a plan to the extent (i) he exercises any discretionary authority or
discretionary control respecting management of such plan or exercises any
authority or control respecting management or disposition of its assets, (ii) he
renders investment advice for a fee or other compensation, direct or indirect, with
respect to any moneys or other property of such plan, or has any authority or
responsibility to do so, or (iii) he has any discretionary authority or discretionary
responsibility in the administration of such plan….
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Even if Dapron could establish procedural irregularity, the full abuse of discretion standard still
applies unless the irregularity was “so egregious that the court has a total lack of faith in the
integrity of the decision making process.” Buttram, 76 F.3d at 900. There was nothing so
egregious.
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29 U.S.C. § 1002(21)(A). Whether an entity qualifies for fiduciary status under ERISA is a
question of fact. See, e.g., Anoka Ortho. Assocs., P.A. v. Lechner, 910 F.2d 514, 517 (8th Cir.
1990); Tussey v. ABB, Inc., 746 F.3d 327, 336 (8th Cir. 2014) (ERISA fiduciary cases are
inevitably fact intensive.). The Eighth Circuit has opined that “[t]he term fiduciary is to be
broadly construed” and “consistent with ERISA’s policies and objectives.” Olson v. E.F. Hutton
& Co., 957 F.2d 622, 625 (8th Cir. 1992) (internal citation and quotation marks omitted).
The undersigned finds it would be premature to determine a defendant’s fiduciary status
at this early stage before the filing of any dispositive motions. See, e.g., In re Xcel Energy, Inc.
Sec., Derivative & ERISA Litig., 312 F. Supp. 2d 1165, 1181 (D. Minn. 2004) (“[I]t would be
premature to determine a defendant’s fiduciary status at the motion to dismiss stage of the
proceedings, because a determination of fiduciary status based on function is a mixed question of
law and fact.”) (internal citations and quotations omitted).
The Court’s determination regarding fiduciary status under 29 U.S.C. § 1002(21)(A)
requires consideration of facts not likely contained in the administrative record. Dapron has
made a sufficient showing, at this stage, to allow discovery. Moreover, the Court’s analysis
regarding whether a fiduciary owed a duty to disclose relevant information to the plan
participant, as alleged in the Complaint, also benefits from consideration of facts and
circumstances likely outside of the administrative record. Because Dapron’s breach of fiduciary
claim requires consideration of facts falling outside of the administrative record, the Court will
grant Dapron’s motion for discovery to the extent it seeks an order expanding the scope of
discovery beyond the administrative record only with regard to Dapron’s breach of fiduciary
claim.

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The parties should confer with one another and attempt to agree, in light of this decision,
on the additional discovery that is needed and on the appropriate scope of discovery. The
undersigned will then hold a supplemental scheduling conference, and will resolve any disputes
that may remain. Accordingly,
IT IS HEREBY ORDERED that Plaintiff Harry Dapron’s Motion for Discovery (ECF
No. 16) is GRANTED IN PART and DENIED IN PART.
IT IS FURTHER ORDERED that the Court will hold a supplemental scheduling
conference on Thursday, August 23, 2018, at 10:30 a.m. in the chambers of the undersigned. In
advance of the conference, the parties must meet and confer and attempt to reach agreement on
the scope of discovery, in light of these rulings, and on an amended schedule, if necessary, for
the remainder of the case. The parties must file a joint proposed scheduling order no later than
Thursday, August 16, 2018, setting out their proposed schedule and any disputes that remain. If
disputes remain over the scope of discovery, the joint filing must set forth with specificity what
discovery Dapron wants that Defendants oppose.

/s/ John M. Bodenhausen
JOHN M. BODENHAUSEN
UNITED STATES MAGISTRATE JUDGE
Dated this 27th day of July, 2018

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