Western Nevada Supply Company Profit-Sharing Plan and Trust et al v. Aneesard Mgmt., LLC, et al

Filing 108

ORDERED that Ds' # 25 Motion to dismiss, as it relates to D Barry Downs, is GRANTED IN PART AND DENIED IN PART: ( see pdf order for specifics ). IT IS FURTHER ORDERED that the 401(k) Plan and the Plan&Trust are dismissed as Plaintiffs against Barry Downs. The action remains stayed against Plaintiff Walter J. Salvadore, Jr. Signed by Judge Edward C. Reed, Jr on 3/23/2011. (Copies have been distributed pursuant to the NEF - DRM)

-VPC Western Nevada Supply Company Profit-Sharing Plan and Trust et al v....esard Mgmt., LLC, et al

Doc. 108

1 2 3 4 5 6 ) 7 WESTERN NEVADA SUPPLY COMPANY PROFITSHARING PLAN AND TRUST, a tax qualified ) 8 retirement plan established for eligible) employees of Western Nevada Supply ) ) 9 Company, Inc., a Nevada corporation; WESTERN NEVADA SUPPLY COMPANY 401(k) ) ) 10 PLAN, a tax qualified retirement plan established for eligible employees of ) 11 Western Nevada Supply Company, Inc., a ) Nevada corporation; JACK T. REVIGLIO ) 12 and RICHARD J. REVIGLIO, individually ) and as Co-Trustees of the Western Nevada) 13 Supply Company Profit-Sharing Plan and ) Trust, ) 14 ) Plaintiffs, ) 15 ) vs. ) 16 ) ANEESARD MGMT., LLC, a Nevada limited ) 17 liability company; DRASEENA FUNDS GROUP,) CORP., an Illinois corporation; THREE ) 18 OAKS SENIOR STRENGTH FUND, LLC, a ) Nevada limited liability company; US ) 19 FIRST FUND, LLC, a Nevada limited ) liability company; KENZIE FINANCIAL ) 20 MANAGEMENT, INC., a United States ) Virgin Islands corporation; DN ) 21 MANAGEMENT COMPANY, LLC, a Nevada ) limited liability company; DANIEL H. ) 22 SPITZER; BARRY DOWNS; and WALTER J. ) SALVADORE, JR., ) 23 ) Defendants. ) 24 ________________________________________) 25 Now pending is a motion to dismiss (#25) filed on behalf of 26 Defendants Aneesard Mgmt., LLC, Draseena Funds Group, Corp., Three 27 Oaks Senior Strength Fund, LLC, US First Fund, LLC, Kenzie Financial 28 3:09-CV-00737-ECR-VPC UNITED STATES DISTRICT COURT DISTRICT OF NEVADA RENO, NEVADA

Order

Dockets.Justia.com

1 Management, Inc., DN Management Company,LLC, individuals Daniel H. 2 Spitzer ("Spitzer") and Barry Downs ("Downs"). On November 22,

3 2010, we denied (#89) the motion (#25) with respect to all 4 Defendants except Downs. 5 6 7 8 I. Background Plaintiff Western Nevada Supply Company and Profit-Sharing Plan The motion is ripe, and we now rule on it.

9 and Trust ("Plan&Trust") is a qualified retirement plan and employee 10 benefit plan within the meaning of the Employee Retirement Income 11 Security Act ("ERISA") for eligible and participating employees of 12 Western Nevada Supply Company, Inc. ("WNS"), a Nevada corporation, 13 as the employer. (Compl. ¶¶ 4-6 (#1).) The source of funds for the

14 Plan&Trust is contributions made by WNS to participants' company 15 contribution accounts in the Plan&Trust. (Id. ¶ 7.) Plaintiff

16 Western Nevada Supply Company 401(k) Plan ("401(k) Plan") is a 17 qualified retirement plan under the Internal Revenue Code and an 18 ERISA employee benefit plan established by WNS as a defined 19 contribution and 401(k) deferral plan for eligible and participating 20 WNS employees. (Id. ¶¶ 9-10.) The source of funds for the 401(k)

21 Plan consists of elective deferrals by employees and other employer 22 contributions within the meaning of ERISA. (Id. ¶ 11.) The

23 Plan&Trust and 401(k) Plan are referred to collectively as "Plan" or 24 "Plans" and assets from both plans are referred to as "Plan assets." 25 The individual Plaintiffs and other Plan&Trust participants are 26 beneficiaries of Plan&Trust benefits and participants in the 401(k) 27 Plan. 28 (Id. ¶¶ 8, 13.) Plaintiffs Jack T. Reviglio and Richard J.
2

1 Reviglio are individuals who are employees, officers and directors 2 of WNS, Co-Trustees of the Plan&Trust, administrators of the 3 Plan&Trust, and participants in the Plan&Trust and 401(k) Plan 4 within the meaning of ERISA. 5 (Id. ¶ 14.)

Aneesard Mgmt., LLC ("Aneesard"), Draseena Funds Group, Corp.

6 ("Draseena"), Three Oaks Senior Strength Fund, LLC ("TOSS Fund"), US 7 First Fund, LLC ("USFirst Fund"), Kenzie Financial Management, Inc. 8 ("Kenzie"), DN Management Company, LLC ("DN Management") 9 (collectively, "entity defendants" or "legal entity defendants") are 10 corporations and limited liability companies doing business in 11 Nevada and elsewhere. (Id. ¶¶ 15-20.) Defendant Spitzer is an

12 individual residing in the U.S. Virgin Islands who is allegedly the 13 sole owner and President of Draseena, Kenzie, and DN Management, and 14 the manager of Aneesard with DN Management, and a salesman on behalf 15 of the TOSS Fund and USFirst Fund to the Plan&Trust, the 401(k) 16 Plan, the individual Plaintiffs, and other plan participants or 17 beneficiaries ("Individual Investors"). (Id. ¶ 21.) Spitzer is

18 also alleged to have been an investment manager and trading manager 19 who has and had dominion and control over the fund administration of 20 Aneesard, Draseena, TOSS Fund, USFirst Fund, and Kenzie, and who had 21 and has discretionary dominion and control over assets that have 22 been entrusted to him by Plaintiffs and Individual Investors. 23 Plaintiffs allege that Spitzer, Kenzie, Aneesard, and Draseena 24 became investment managers of the assets of the Plan&Trust, the 25 401(k) Plan, and the Individual Investors that were invested in and 26 entrusted to the TOSS Fund and USFirst Fund. 27 28
3

(Id.)

(Id. ¶ 32.)

1 Plaintiffs allege that through this role, Defendants are fiduciaries 2 of the Plan&Trust and the 401(k) Plan. 3 (Id. ¶ 34.)

Plaintiffs allege that Defendant Barry Downs is "an individual

4 associate and salesman working with Co-Defendants to solicit 5 investors in, among other funds, the TOSS Fund and USFIRST FUND, and 6 who met with Plaintiffs' representatives in that effort in or about 7 mid-and/or late 2006." (Id. ¶ 23.) Plaintiffs also allege that (Id. ¶ 25.)

8 each Defendant was the agent of the other Defendants. 9

Plaintiffs contend that around summer or fall of 2006, an

10 employee of Western Nevada Supply Company learned about Draseena 11 through Defendant Barry Downs. (Id. ¶ 57.) Plaintiffs allege that

12 they entrusted funds and assets from the Plan&Trust, 401(k) Plan, 13 and Individual Investors to Defendants based on representations made 14 by Barry Downs. (Id. ¶ 33.) Plaintiffs also contend that upon

15 information and belief, Defendant Barry Downs is "paid a fee by the 16 Trading Manager, and is considered by DRASEENA to be a consultant 17 for the WNS 401(k) Plan." (Id. ¶ 58.) (The term "Trading Manager"

18 refers to Defendant Kenzie, allegedly working through its principal, 19 Defendant Spitzer.) (Id. ¶ 47.) Plaintiffs claim they and their

20 representatives had many discussions with Defendants Spitzer, 21 Gerebizza, Downs, and/or Salvadore to discuss how funds or plan 22 assets were invested, and were provided with written promotional 23 materials through those Defendants. 24 Plaintiffs also allege generally, against all Defendants, that

25 they are investment managers and functional fiduciaries for 26 Plaintiffs within the meaning of ERISA. 27 28
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(Id. ¶ 84.)

1

By the end of 2008, Plaintiffs began having difficulty

2 obtaining information from Defendants, and were thwarted in their 3 efforts to redeem their funds/assets from the TOSS Fund and USFirst 4 Fund. (Id. ¶¶ 78, 102.) On December 15, 2009, Plaintiffs filed

5 suit alleging that Defendants engaged in purposeful depletion of, 6 and/or wrongful exercise of dominion and control over, the 7 funds/assets of Plaintiffs. (Id. ¶ 79.) On March 25, 2010,

8 Defendants, excluding Walter J. Salvadore, Jr., filed the motion to 9 dismiss (#25). On April 30, 2010, Plaintiffs filed their opposition On June 1, 2010, Defendants

10 (#39) to the motion to dismiss (#25). 11 filed their reply (#50). 12

On May 27, 2010, Adam P. Segal, the attorney for Spitzer, Barry

13 Downs, and the legal entity Defendants, filed a motion to withdraw 14 as attorney (#47) for all Defendants excepting Barry Downs. On June

15 14, 2010, the motion to withdraw as attorney (#47) was granted (#59) 16 as to all Defendants except for Barry Downs. Magistrate Judge

17 Valerie P. Cooke ordered (#47) Defendants Aneesard Mgmt., LLC, 18 Draseena Funds Group, Corp., Three Oaks Senior Strength Fund, LLC, 19 US First Fund, LLC, Kenzie Financial Management, Inc., DN Management 20 Company, LLC, and Daniel H. Spitzer to substitute new counsel no 21 later than July 14, 2010. Defendants failed to comply, and

22 Magistrate Judge Cooke further ordered (#76) that Defendant Spitzer 23 may represent himself pro se but the six legal entity defendants 24 named above must be represented by counsel as required by law. 25 Defendants were warned (#76) that a failure to respond within 26 thirty-three (33) days shall be grounds for entry of default and a 27 default judgment against them. Defendants again failed to comply, 28
5

1 and the Clerk entered default (#81) against the seven Defendants. 2 On November 10, 2010, Plaintiffs filed a motion for default judgment 3 against select defendants (#83). On January 24, 2011, we held a We granted

4 hearing on the motion for default judgment (#83).

5 default judgment against Daniel H. Spitzer and the legal entity 6 defendants, and final judgment (#105) was entered against them. 7 case against Walter J. Salvadore, Jr. is stayed (#66) due to 8 bankruptcy proceedings. 9 The motion to dismiss (#25), however, is still pending with We ordered (#89) that both parties submit The

10 respect to Barry Downs.

11 points and authorities regarding which claims in the complaint (#1) 12 and motion to dismiss (#25) are relevant to Downs. We also granted

13 Plaintiffs the option to file an amended complaint as an alternative 14 to pursuing the original complaint (#1) against Barry Downs. 15 Plaintiffs did not file an amended complaint. 16 On December 20, 2010, Defendant Barry Downs submitted

17 supplemental points and authorities (#90) in support of the motion 18 to dismiss (#25). On the same day, Plaintiffs submitted their On January 17, 2011,

19 supplemental points and authorities (#91).

20 Plaintiffs submitted their supplemental reply (#99), and on January 21 18, 2011, Defendant Barry Downs submitted his reply (#100). 22 23 24 II. Motion to Dismiss Standard Courts engage in a two-step analysis in ruling on a motion to

25 dismiss. Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009); Bell Atlantic 26 Corp. v. Twombly, 550 U.S. 544 (2007). First, courts accept only

27 non-conclusory allegations as true. Iqbal, 129 S. Ct. at 1949. 28
6

1 "Threadbare recitals of the elements of a cause of action, supported 2 by mere conclusory statements, do not suffice." Id. (citing Twombly, 3 550 U.S. at 555). Federal Rule of Civil Procedure 8 "demands more

4 than an unadorned, the-defendant-unlawfully-harmed-me accusation." 5 Id. Federal Rule of Civil Procedure 8 "does not unlock the doors of

6 discovery for a plaintiff armed with nothing more than conclusions." 7 Id. at 1950. The Court must draw all reasonable inferences in favor

8 of the plaintiff. See Mohamed v. Jeppesen Dataplan, Inc., 579 F.3d 9 943, 949 (9th Cir. 2009). 10 After accepting as true all non-conclusory allegations and

11 drawing all reasonable inferences in favor of the plaintiff, the 12 Court must then determine whether the complaint "states a plausible 13 claim for relief." Iqbal, 129 S. Ct. at 1949. (citing Twombly, 550 14 U.S. at 555). "A claim has facial plausibility when the plaintiff

15 pleads factual content that allows the court to draw the reasonable 16 inference that the defendant is liable for the misconduct alleged." 17 Id. at 1949 (citing Twombly, 550 U.S. at 556). This plausibility

18 standard "is not akin to a `probability requirement,' but it asks 19 for more than a sheer possibility that a defendant has acted 20 unlawfully." Id. A complaint that "pleads facts that are `merely

21 consistent with' a defendant's liability...'stops short of the line 22 between possibility and plausibility of `entitlement to relief.'" 23 Id. (citing Twombly, 550 U.S. at 557). 24 25 26 III. Discussion Plaintiffs' complaint (#1) alleges six causes of action against The claims are: (1) ERISA violation for breach of
7

27 all Defendants. 28

1 fiduciary duties, (2) liability for Defendants' refusal to provide 2 requested ERISA information, (3) breach of oral contract, (4) 3 equitable estoppel, (5) accounting, and (6) contractual breach of 4 covenant of good faith and fair dealing. Defendant Barry Downs

5 argues that all claims against him must be dismissed, inter alia, 6 for failure to state a claim. 7 8 A. ERISA Claims Defendants argue that Plaintiffs' first and second claims, for

9 breach of fiduciary duties under ERISA and refusal to provide 10 requested ERISA information, must be dismissed because Plaintiffs 11 have failed to allege any facts from which we could find that 12 Defendant Barry Downs is a fiduciary in the meaning of ERISA. 13 Defendants also contend that the second claim for refusal to provide 14 requested ERISA information must be dismissed because ERISA 15 communication and disclosure claims may only be brought against plan 16 administrators. 17 18 1. ERISA Claim for Breach of Fiduciary Duties ERISA provides that a person is a fiduciary with respect to a

19 plan to the extent that (i) he exercises any discretionary authority 20 or control respecting management of such plan or its assets, (ii) he 21 renders investment advice for compensation with respect to any 22 moneys or other property of such plan, or has authority or 23 responsibility to do so, or (iii) he has any discretionary authority 24 or responsibility in the administration of such plan. 25 1002(21)(A). 26 While Plaintiffs concede that Downs did not manage Plaintiffs' 29 U.S.C. §

27 plans, and therefore the first part of section 1002(21)(A)(i) does 28
8

1 not apply, they argue that Downs satisfied the second part of that 2 section by having control or authority over plan assets. 3 Supp. at 4-5 (#91).) We disagree. (Pls'

Plaintiffs' allegations

4 regarding Downs amount to the accusation that Downs, allegedly under 5 payment by Kenzie, met with Plaintiffs and recommended the Three 6 Oaks Senior Strength Fund and USFirst Fund, and Plaintiffs, upon 7 that recommendation, invested into those funds. Plaintiffs never While Plaintiffs

8 alleged that Downs ever possessed any Plan assets.

9 do have additional allegations that every defendant is an agent of 10 the other defendants, and that the defendants are fiduciaries, these 11 statements are conclusions devoid of supporting facts. Rather,

12 Plaintiffs' complaint suggests that Downs never had any control or 13 authority over the funds, as other Defendants are alleged to have. 14 More compelling is Plaintiffs' assertion that Downs is a A person "render[s]

15 fiduciary under section 1002(21)(A)(ii).

16 investment advice" to an employee benefit plan, within the meaning 17 of ERISA, only if: 18 19 20 21 22 23 24 25 26 27 28 (i) [s]uch person renders advice to the plan as to the value of securities or other property, or makes recommendation as to the advisability of investing in, purchasing, or selling securities or other property; and (ii) [s]uch person either directly or indirectly.... .... (B) Renders any advice . . . on a regular basis to the plan pursuant to a mutual agreement, arrangement or understanding, written or otherwise, between such person and the plan . . . that such services shall serve as a primary basis for
9

1 2 3 4 5 6

investment decisions with respect to plan assets, and that such person will render individualized investment advice to the plan based on the particular needs of the plan regarding such matters as, among other things, investment policies or strategy, overall portfolio composition, or diversification of plan investments.

7 Thomas, Head & Grelsen Employ. Trust v. Buster, 24 F.3d 1114, 1117 8 (9th Cir 1994) (quoting 29 C.F.R. § 2510.3-21(c)(1)(1992)). 9 Plaintiffs' allegations are few when it comes to Downs.

10 Plaintiffs do, however, allege that "[u]pon information and belief, 11 DOWNS is paid a fee by the Trading Manager, and is considered by 12 DRASEENA to be a consultant for the WNS 401(k) Plan." While this

13 statement is somewhat threadbare, when taking all inferences in 14 favor of Plaintiffs, we conclude that Plaintiffs have passed the 15 minimum threshold required to survive a motion to dismiss as to 16 Downs' fiduciary status. 17 The inquiry, however, does not end with a discussion of Downs' Plaintiffs allege, inter alia, that as a

18 fiduciary status.

19 fiduciary within the meaning of ERISA, Downs was responsible for the 20 investment of the assets of Plaintiffs that were entrusted to 21 Defendants. Plaintiffs assert that in April 2009, "Plaintiffs made

22 a detailed request for information to a DRASEENA `consultant,' 23 Defendant DOWNS, who disclaimed any responsibility for any Plan 24 assets." (Compl. ¶ 91 (#1).) Plaintiffs allege that Downs'

25 response was "contrary to the fiduciary duties" owed to Plaintiffs, 26 and therefore actionable under ERISA. The status of fiduciary

27 "carries with it the responsibility to act in the best interest of 28
10

1 the client at all times, and to serve with scrupulous good faith." 2 Buster, 24 F.3d at 1120. As we concluded above, while the

3 allegations against Downs are thin, we are unable to dismiss the 4 ERISA claims when taking all inferences in favor of Plaintiffs. 5 Plaintiffs' first claim for breach of fiduciary duty, therefore, may 6 proceed against Downs on the limited grounds that in his capacity as 7 a paid consultant, Downs was an ERISA fiduciary subject to various 8 fiduciary duties that he may have breached through alleged 9 misrepresentations to Plaintiffs, and through any involvement in the 10 improper investment of Plaintiffs' assets. 11 The complaint (#1) contains additional allegations that

12 Defendants advised Plaintiffs that arrangements had been made for 13 redemption of Plaintiffs' assets, and thereafter, Spitzer, Draseena, 14 and Aneesard failed to deliver any of the redemption proceeds. 15 Requests for redemption also appear to have been made only to 16 Spitzer, Draseena, and Aneesard. Therefore, a claim that Downs

17 breached his fiduciary duties by refusing to redeem the assets was 18 not properly pled in the complaint, and cannot be pursued against 19 Downs. 20 Finally, Defendants' argument that an ERISA breach of fiduciary

21 duties claim cannot be brought because the Plan assets lost their 22 status as Plan assets by being used to purchase hedge fund shares is 23 denied on the basis that it is premature. 24 25 2. Claim for Refusal to Provide Requested ERISA Information Plaintiffs' second claim for refusal to provide requested ERISA

26 information, however, will be dismissed because Downs is not alleged 27 to be a plan administrator. 28 Plaintiffs bring their second claim
11

1 under 29 U.S.C. § 1025(a) and 29 U.S.C. §§ 1132(a)(1) and (c). 2 Those sections "provide[] a remedy against persons designated by 3 Congress as plan administrators." 4 F.2d 296, 300 (9th Cir. 1989). Moran v. Aetna Life Ins. Co., 872

In Moran, the Ninth Circuit

5 concluded that "the Supreme Court's refusal to expand the remedies 6 available under ERISA . . . precludes us from extending liability 7 under section 1132(c) to other persons not named by Congress." 8 In this case, Downs is not alleged to be a plan administrator. 9 Rather, Plaintiffs Jack and Richard Reviglio are the plan 10 administrators. Despite this, Plaintiffs argue that their claim Id.

11 should be allowed to proceed because it comports with the spirit of 12 ERISA. Plaintiffs point out that if the plan administrators are

13 unable to get information due to Defendants' conduct, they would 14 necessarily be unable to provide it to Plan participants. 15 Nevertheless, the plain language of the provisions and binding Ninth 16 Circuit decisions demand that any disclosure claims brought under 29 17 U.S.C. §§ 1025(a) and 1132 may only be brought against plan 18 administrators. 19 dismissed. 20 21 B. Accounting Claim An accounting is an equitable remedy, not an independent cause See Dairy Queen, Inc. v. Wood, 369 U.S. 469, 478 (1962). On that basis, Plaintiffs' second claim must be

22 of action.

23 "The necessary prerequisite to the right to maintain a suit for an 24 equitable accounting, like all other equitable remedies, is . . . 25 the absence of an adequate remedy at law." Id. Here, there is

26 nothing in the complaint, nor in the arguments presented by 27 Plaintiffs in opposition to the present motion, that would tend to 28
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1 indicate that Plaintiffs' remedy at law might be inadequate.

To

2 maintain a suit for an equitable accounting on a cause of action 3 cognizable at law, "the plaintiff must be able to show that the 4 accounts between the parties are of such a complicated nature that 5 only a court of equity can satisfactorily unravel them." 6 (internal quotation marks omitted). Id.

In this case, there is nothing

7 that appears to require the intervention of "a court of equity." 8 The procedures of discovery exist precisely to allow parties to 9 obtain such information as Plaintiffs apparently seek by way of an 10 accounting. There is no apparent reason why a jury could not

11 effectively resolve any factual disputes that may arise regarding 12 the accounts between the parties. As such, Plaintiff's fifth claim

13 for an accounting will be dismissed. 14 15 C. Plaintiffs' Remaining Claims The remaining claims against Downs must also be dismissed.

16 Following the entry of default against the other Defendants, we 17 ordered both parties to submit points and authorities regarding 18 which claims in the complaint (#1) are relevant to Downs. Plaintiff

19 failed to make any argument regarding the remaining claims and how 20 they relate to Downs. 21 The complaint (#1) is woefully deficient in allegations against

22 Downs. Plaintiffs have not made any argument, other than through 23 their tactic of lumping all defendants together, that Downs made any 24 oral contract with Plaintiffs. The same is true for the equitable

25 estoppel and contractual breach of the covenant of good faith and 26 fair dealing claims. Through the supplemental briefing, in which

27 Plaintiffs failed to address the remaining claims, Plaintiffs have 28
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1 highlighted the deficiencies of the complaint as it relates to 2 Downs. This is not a case in which Plaintiffs should be allowed to The role, if any,

3 separate out the Defendants through discovery.

4 that Downs played in the events leading up to this lawsuit, based on 5 the few mentions of Downs in the complaint, seems distinct from that 6 of Defendant Spitzer, or the legal entity defendants that are 7 allegedly under Spitzer's control. Those defendants are actively

8 alleged to have control or authority over the 401(k) Plan, the WNS 9 Profit-Sharing Plan & Trust, and plan assets. They are specifically It

10 alleged to have been parties to agreements with the Plaintiffs.

11 would be inequitable to allow Plaintiffs to plead claims broadly and 12 generally without asserting any factual allegations against Downs 13 specifically, considering that he is not indistinguishable, even 14 pre-discovery, from the other Defendants. He is not alleged to have

15 been a Plan manager, nor to have had any control over the assets, 16 other than through conclusory language that all Defendants are 17 agents of other Defendants. He is not alleged to have been a party Nor is he a party to

18 from whom Plaintiffs requested information.

19 the agreements Plaintiffs allege were made between them and certain 20 Defendants. For example, Plaintiffs described an agreement, labeled

21 "Confidential Private Placement Memorandum" ("PPM") to be an 22 agreement regarding "investment decisions concerning investment 23 funds placed into the TOSS FUND and USFIRST Fund, through ANEESARD, 24 DRASEENA, SPITZER and KENZIE." (Compl. ¶ 50 (#1).) There is simply

25 no basis on which to find that Downs should be a party to the 26 remaining claims in this action. 27 28
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Based on the foregoing, we do not

1 consider the merits of Defendants' argument that the state claims 2 are pre-empted by ERISA. 3 4 D. Standing of the Plan Plaintiffs The Plan&Trust and the 401(k) Plan must be dismissed from this

5 action against Downs because a claim for breach of fiduciary duty 6 under ERISA may only be brought by the Secretary of Labor, a plan 7 participant, beneficiary or fiduciary. 29 U.S.C. § 1132(a)(2);

8 Local 159, 342, 343 & 444 v. Nor-Cal Plumbing, Inc., 185 F.3d 978, 9 983 (9th Cir 1999). Plaintiffs oppose only on the basis that "ERISA

10 does not preempt state law claims of plaintiffs who are without 11 standing to challenge ERISA violations." (Pls' Opp. at 7 (#39).)

12 There are no state law claims remaining in the case against Downs, 13 and therefore the Plan&Trust and 401(k) Plan are not proper 14 plaintiffs, and shall be dismissed against Downs. 15 16 E. Plan Benefits Defendants further argue that Plaintiffs Jack and Richard

17 Reviglio, as Plan participants, may only bring claims against the 18 Plan for plan benefits. Plaintiffs counter that the Reviglios are

19 not seeking plan benefits, but rather the "redemption of 20 assets/investments that were entrusted to Defendants." 21 at 12 (#39).) (Pls' Opp.

While ERISA only permits suits to recover benefits

22 against the plan as an entity, suits may be brought for breach of 23 fiduciary duty against an ERISA fiduciary. 29 U.S.C. §§

24 1132(a)(1)(B); 1109(a); 1105(a); Gelardi v. Pertec Computer Corp., 25 761 F.2d 1323, 1324 (9th Cir. 1985). Because the only remaining

26 claim against Downs is a breach of fiduciary claim, we decline to 27 dismiss any of the Plaintiffs at this time. 28
15

1 2

IV. Conclusion Plaintiffs' claim for breach of fiduciary duty under ERISA

3 narrowly survives the motion to dismiss based on their allegation 4 that Downs was considered a paid consultant for the 401(k) Plan. 5 Plaintiffs' second claim for refusal to provide requested ERISA 6 information, however, must be dismissed because only plan 7 administrators are liable under ERISA disclosure provisions. 8 Plaintiffs' claim for an accounting shall be dismissed because 9 accounting is an equitable remedy, not a legal cause of action. 10 Plaintiffs' remaining claims for breach of oral contract, equitable 11 estoppel, and contractual breach of the covenant of good faith and 12 fair dealing must be dismissed because Plaintiffs have failed to 13 allege any factual bases to maintain such claims against Downs. 14 Furthermore, the 401(k) Plan and the Plan&Trust Plaintiffs must be 15 dismissed as plaintiffs against Downs because ERISA plans are not 16 proper plaintiffs in ERISA civil enforcement suits. 17 18 19 IT IS, THEREFORE, HEREBY ORDERED that Defendants' motion to

20 dismiss (#25), as it relates to Defendant Barry Downs, is GRANTED IN 21 PART AND DENIED IN PART on the following basis: Plaintiffs' first 22 claim, ERISA violation for breach of fiduciary duties shall not be 23 dismissed, but Plaintiffs' remaining claims for failure to provide 24 requested ERISA information, breach of oral contract, equitable 25 estoppel, accounting, and contractual breach of the covenant of good 26 faith and fair dealing are dismissed. The only claim against Downs

27 that survives this motion to dismiss (#25) is the narrow one that 28
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1 Downs, as an ERISA fiduciary, breached his duty to act in the best 2 interests of the 401(k) Plan as an investment advisor. 3 4 IT IS FURTHER ORDERED that the 401(k) Plan and the Plan&Trust The action remains

5 are dismissed as Plaintiffs against Barry Downs. 6 stayed against Plaintiff Walter J. Salvadore, Jr. 7 8 DATED: March 23, 2011. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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____________________________ UNITED STATES DISTRICT JUDGE