AGI Consulting LLC v. American National Insurance Company
Filing
22
ORDER denying 18 Motion for New Trial. Signed by Honorable Charles Goodwin on 03/28/2019. (jb)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
AGI CONSULTING L.L.C., by Assaf
Al-Assaf as Trustee/Owner/Plan
Administrator of an Alleged NonIntegrated Defined Benefit Plan,
Plaintiff,
v.
AMERICAN NATIONAL
INSURANCE COMPANY,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
)
)
Case No. CIV-18-252-G
ORDER
Now before the Court is the Motion for a New Trial filed by Plaintiff AGI
Consulting L.L.C., by Assaf Al-Assaf as Trustee/Owner/Plan Administrator of an Alleged
Non-Integrated Defined Benefit Plan, pursuant to Federal Rules of Civil Procedure
59(a)(1)(B) and 59(a)(2). See Pl.’s Mot. (Doc. No. 18). Defendant American National
Insurance Company has responded in opposition (Doc. No. 19), and Plaintiff has replied
(Doc. No. 20).
BACKGROUND
On July 30, 2018, the Court granted Defendant’s Motion to Dismiss after Plaintiff
confessed that its cause of action for fraud against Defendant was time-barred. See Order
of July 30, 2018 (Doc. No. 16) (West, J.). The Court further denied Plaintiff’s request, set
forth in its response to Defendant’s Motion to Dismiss, to amend its complaint, after
finding that amendment would be futile because Plaintiff’s proposed claims for rescission,
reformation, and breach of contract would likewise be untimely under Okla. Stat. tit. 12, §
95. See id. at 12.
Plaintiff has now moved the Court to vacate its Order and Judgment (Doc. Nos. 16,
17) entered on July 30, 2018, and permit Plaintiff to file an amended complaint alleging
claims for breach of fiduciary duty against Defendant under the Employee Retirement
Income Security Act, 29 U.S.C. § 1001 et seq., as amended (“ERISA”). See Pl.’s Reply ¶
23 (Plaintiff’s “sole purpose [in filing the Motion for a New Trial is] to amend its
Complaint to [set forth] an ERISA cause of action for breach of a fiduciary duty”).1
STANDARD OF REVIEW
In support of its motion, Plaintiff has relied on Federal Rules of Civil Procedure
59(a)(1)(B) and (a)(2). These rules provide, respectively, that the Court “may . . . grant a
new trial . . . after a nonjury trial, for any reason for which a rehearing has heretofore been
granted in a suit in equity in federal court” and “may, on motion for a new trial, open the
judgment if one has been entered, take additional testimony, amend findings of fact and
conclusions of law or make new ones, and direct the entry of a new judgment.” Fed. R.
Civ. P. 59(a)(1)(B), (a)(2).
1
Plaintiff has cited Federal Rule of Civil Procedure 15 and its mandate that leave to amend
“should [be] freely give[n] . . . when justice so requires.” Fed. R. Civ. P. 15(a)(2). In light
of the Court’s disposition of Plaintiff’s motion, the Court has not considered whether
amendment is allowed under Federal Rule of Civil Procedure 15(c), which permits “[a]n
amendment to a pleading [to] relate[ ] back to the date of the original pleading . . . .” Fed.
R. Civ. P. 15(c)(1).
2
There has been no trial, nonjury or otherwise, in this matter, however. Neither Rule
59(a)(1)(B) nor Rule 59(a)(2), therefore, applies as a method for challenging the Court’s
Order and Judgment. See Soto v. Bd. of Cty. Comm’rs of Caddo Cty., No. CIV-16-416-F,
2017 WL 6551295, at *1 (W.D. Okla. Oct. 4, 2017).
The instant motion is more properly characterized as a motion to alter or amend the
Court’s Order and Judgment under Federal Rule of Civil Procedure 59(e), which permits
relief in certain “limited circumstances.” Hayes Family Tr. v. State Farm Fire & Cas. Co.,
845 F.3d 997, 1004 (10th Cir. 2017). See Soto, 2017 WL 6551295, at *1 (Fed. R. Civ. P.
59(e) is “appropriate vehicle to review the court’s order and judgment” after court has
granted a motion to dismiss under Fed. R. Civ. P. 12(b)(6)). Those circumstances include
“(1) an intervening change in the controlling law, (2) [when] new evidence
previously [was] unavailable, and (3) the need to correct clear error or
prevent manifest injustice.”
Hayes Family Tr., 845 F.3d at 1004 (alterations in original) (quoting Servants of the
Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000)). See Monge v. RG Petro-Mach.
(Grp.) Co., 701 F.3d 598, 611 (10th Cir. 2012) (quoting Webber v. Mefford, 43 F.3d 1340,
1345 (10th Cir. 1994) (“‘purpose of [Fed. R. Civ. P. 59(e)] motion is to correct manifest
errors of law’”)). While a Rule 59(e) motion “is not appropriate to revisit issues already
addressed or [to] advance arguments that could have been raised in prior briefing,” relief
under this rule may be available if a “court has misapprehended the facts, a party’s position,
or the controlling law.” Servants of the Paraclete, 204 F.3d at 1012 (citation omitted).
Plaintiff has stated, “[b]y way of explanation and not as an excuse,” that “when
Plaintiff [first] sought to amend its [c]omplaint, Plaintiff was not clear about the fact that
3
[r]escission, [r]eformation, and [b]reach of [c]ontract all presuppose the existence of a
contract and therefore ERISA would apply.” Pl.’s Mot. ¶ 9. Plaintiff has argued that the
Court nevertheless should have understood that Plaintiff was seeking relief under ERISA
in its proposed amended complaint and not under state law for rescission, reformation, and
breach of contract (as Plaintiff had argued), and more particularly should have recognized
that, because Defendant was a fiduciary, it was charged with the duties imposed by 29
U.S.C. § 1104(a) and that Plaintiff was seeking relief under 29 U.S.C. § 1109 for breach
of fiduciary duty.2
Plaintiff has contended that if the Court had done so, it would have applied 29
U.S.C. § 1113, the statute applicable “to actions brought to redress a fiduciary’s breach of
its obligations to enforce the provisions of ERISA,” Trs. of Wyo. Laborers Health &
Welfare Plan v. Morgen & Oswood Constr. Co., 850 F.2d 613, 618 n.8 (10th Cir. 1988)
(citation omitted), as opposed to Okla. Stat. tit. 12, § 95, and Plaintiff’s proposed claims
would have been deemed timely. See Pl.’s Mot. ¶¶ 6, 8-9, 13.
Plaintiff has conceded, however, that it did not “raise[] the application of ERISA”
in response to Defendant’s argument that amendment would be futile, (b) acknowledge in
its submissions that it was seeking relief under ERISA, or (c) cite § 1113. Id. ¶ 8. Plaintiff
has argued that despite “this lack of clarity” in its pleadings and papers, the Court should
See 29 U.S.C. § 1109(a) (providing that a “fiduciary . . . who breaches any of the
responsibilities, obligations, or duties imposed upon” it by 29 U.S.C. § 1104(a) “shall be
personally liable to make good . . . any losses to the plan resulting from each such breach,
and . . . shall be subject to such . . . equitable or remedial relief as the court may deem
appropriate”).
2
4
now vacate its Order and Judgment and permit Plaintiff to file an amended complaint, this
time “clearly stat[ing] an ERISA [claim and] statute of limitations . . . .” Id. ¶¶ 9, 32.
Because the Court’s and the parties’ reliance on a state statute of limitations (and
failure to address whether ERISA had pre-empted Defendant’s proposed state law claims3)
may be deemed a manifest error of law or a misapprehension of the controlling law that
warrants revisitation, the Court reconsiders the matter to determine whether amendment as
proposed by Plaintiff would be futile.4
29 U.S.C. § 1113
Section 1113 provides that “[n]o action may be commenced . . . with respect to a
fiduciary’s breach of any responsibility, duty, or obligation,”
after the earlier of—
(1) six years after (A) the date of the last action which constituted a part of
the breach or violation, or (B) in the case of an omission the latest date on
which the fiduciary could have cured the breach or violation, or
3
In what is known as conflict preemption, ERISA provides that in certain circumstances it
“shall supersede any and all State laws insofar as they may now or hereafter relate to any
employee benefit plan described in [29 U.S.C. §] 1003(a) . . . and not exempt under [29
U.S.C. §] 1003(b) . . . .” 29 U.S.C. § 1144(a). The Tenth Circuit has identified four
categories of state law “causes of action that ‘relate to’ a benefit plan for purposes of
ERISA preemption,” one of which pertains to “laws and common-law rules providing
remedies for misconduct growing out of the administration of such plans.” Woodworker's
Supply, Inc. v. Principal Mut. Life Ins. Co., 170 F.3d 985, 990 (10th Cir. 1999) (citation
omitted). Plaintiff has now contended that Defendant breached certain fiduciary duties and
that Defendant’s alleged “misconduct grow[s] out of [its] . . . administration of [an ERISA]
. . . plan.” Id. Therefore, Plaintiff’s state law claims seeking relief for reformation,
rescission, and breach of contract would be preempted.
4
In doing so, the Court may consider not only the proposed complaint itself, but also
exhibits attached thereto and documents incorporated by reference therein.
5
(2) three years after the earliest date on which the plaintiff had actual
knowledge of the breach or violation,
except that in the case of fraud or concealment, such action may be
commenced not later than six years after the date of discovery of such breach
or violation.
29 U.S.C. § 1113.
By its express terms, then, § 1113 creates two periods for filing suit for breach of
the duties imposed on ERISA fiduciaries by 29 U.S.C. § 1104(a): three years and six years.
If plaintiff knew of defendant’s nonfraudulent breach, § 1113(2)’s three-year limitations
period applies, measured from “the earliest date on which the plaintiff had actual
knowledge of the breach or violation.” Id. § 1113(2).
The Tenth Circuit has characterized § 1113(1)’s six-year period as a “statute of
repose.” Fulghum v. Embarq Corp., 785 F.3d 395, 413 (10th Cir. 2015) (citations omitted).
“[S]tatutes of repose operate to ‘extinguish a plaintiff’s cause of action whether or not the
plaintiff should have discovered within that period that there was a violation or an injury.’”
Id. (quoting Nat'l Credit Union Admin. Bd. v. Nomura Home Equity Loan, Inc., 764 F.3d
1199, 1224 (10th Cir. 2014)). Under § 1113(1), a plaintiff has six years to file its lawsuit,
with this six-year period beginning to run either on the date defendant last acted, if
defendant’s breach involves an affirmative act, see 29 U.S.C. § 1113(1)(A), or on “the
latest date on which [defendant] . . . could have cured the . . . violation,” id. § 1113(1)(B),
if defendant’s breach is the result of an omission.
In addition to the six-year statute of repose, Ҥ 1113 contains language providing
that ‘in the case of fraud or concealment,’ a civil enforcement action ‘may be commenced
6
not later than six years after the date of discovery of [the] breach or violation.’” Fulghum,
785 F.3d at 413 (quoting 29 U.S.C. § 1113). The Tenth Circuit views “the ‘fraud or
concealment’ provision” not as “a separate statute of limitations,” but rather as “a
legislatively created exception to the six-year statute of repose.” Id. at 414 (citation
omitted). The circuit reads “[t]he fraud or concealment exception . . . in the disjunctive[,]”
id. at 415, and “‘[c]anons of construction indicate that terms connected in the disjunctive .
. . be given separate meanings.’” Id. (quotation and further citations omitted). “[T]he
exception to the general six-year statute,” therefore
applies when the alleged breach of fiduciary duty involves a claim the
defendant made “a false representation of a matter of fact, whether by words
or conduct, by false or misleading allegations or by concealment of that
which should have been disclosed, which deceives and is intended to deceive
another so that he shall act upon it to his legal injury” or when the defendant
conceals the alleged breach of fiduciary duty.
Id. (quotation and footnote omitted).
DISCUSSION
Defendant has argued that whether the Court applies § 1113’s three-year limitations
period, the six-year statute of repose, or § 1113’s six-year “fraud or concealment”
provision, Plaintiff’s proposed breach of fiduciary claims are time-barred and amendment
as Plaintiff has now suggested would be futile. The Court agrees.
Plaintiff’s original complaint was filed on March 21, 2018. See Compl. (Doc. No.
1). In that pleading, Plaintiff alleged that in June 2011 it negotiated and entered into a
contract with Defendant to purchase a Defined Benefit Plan (“DBP” or “Plan”), see id. ¶
2, that was to be administered according to the handwritten terms on a form titled
7
“Adoption Agreement for American National Insurance Company Standardized NonIntegrated Defined Benefit Prototype Plan” (“Adoption Agreement”). See id. Ex. 1 (Doc.
No. 1-2). Plaintiff contended that Defendant, without Plaintiff’s knowledge, replaced that
form with a typewritten form prepared by Defendant and, in doing so, changed certain
material terms in the Plan. See id. Ex. 3 (Doc. No. 1-4).
In the proposed amended pleading which Plaintiff had attached to its response to
Defendant’s Motion to Dismiss, see Pl.’s Resp. Ex. 2 (Doc. No. 12-3), and which Plaintiff
has now contended should have been evaluated under § 1113 (and not Okla. Stat. tit. 12, §
95), Plaintiff has alleged:
(1) prior to the date Plaintiff executed the Adoption Agreement to purchase the DBP,
Robyn Assaf on behalf of Plaintiff had numerous telephone conversations with
Andre Fleener, Defendant’s sales agent, concerning the DBP, see Pl.’s Resp. Ex.
2 ¶ 9;
(2) on the date the Adoption Agreement was executed, June 22, 2011, Assaf and
Fleener together with Defendant representative Greg Valley “discussed [the form]
line by line,” id. ¶ 10;
(3) the Adoption Agreement “modifie[d] . . . [Defendant’s] Prototype Plan to
[Plaintiff’s] . . . specification[s],” id. ¶ 8, and once the Adoption Agreement had
been executed, Defendant was to administer the DBP according to the Adoption
Agreement’s terms;
(4) “the preprinted [Adoption Agreement] form . . . had been partially filled out by
[Defendant] . . . in typewritten form and then was partially filled out by
handwritten entries either by . . . Assaf, or by . . . Valley to complete the
agreement,” id. ¶ 10, although “[s]ome items on the form . . . remained blank,”
id.;
(5) “[i]n addition to the Adoption Agreement[,] . . . Valley prepared a ‘New Plan
Installation Transmittal’ . . . to send . . . to . . . Defendant,” id. ¶ 12; see Compl.
Ex. 2 (Doc. No. 1-3);
(6) “to implement the Plan, a list or ‘census’ of all eligible employees[ ] . . . [had to]
be furnished to . . . [Defendant] . . . to calculate . . . the [Plan’s] funding
requirements,” Pl.’s Resp. Ex. 2 (Doc. No. 12-3) ¶ 16; e.g., id. ¶ 22 (“The census
8
affects the amount of funding necessary to operate the DBP[.]
employees who qualify for participation, the greater the funding.”);
The more
(7) Defendant first requested the 2011 census on December 29, 2011, and Plaintiff
furnished the same on February 8, 2012, see id. ¶ 18; censuses were thereafter
provided for years 2012 and 2013, see id.;
(8) “[f]rom the very beginning of the contract term the parties disagreed on [which
employees were] . . . to be included in the census,” id. ¶ 19, “as well as [on] other
substantial matters,” id. ¶ 20;
(9) on August 27, 2013, Defendant notified Plaintiff “of a substantial increase in the
funding requirements,” id. ¶ 23, and after Plaintiff “complain[ed] about the
dramatic increase,” id., “the DBP was [f]rozen [on September 12, 2013],” id. ¶ 24,
at Fleener’s instruction, id. ¶ 23; and
(10) the Plan started on January 1, 2011, id. ¶ 21, and from that time until September
12, 2013, “Defendant was managing a DBP that was materially different than the
Adoption Agreement . . . Plaintiff had executed on June 22, 2011.” Id. ¶ 20.
Plaintiff has alleged in its proposed pleading that on August 10, 2016, three years
after “the DBP was [f]rozen,” id. ¶ 24, Plaintiff “discovered the existence of the two
different . . . [P]lans,” id. ¶ 25, learned that “[t]he DBP that Defendant operated was
materially different than the DBP Plaintiff had purchased,” id. ¶ 26, and further learned
that “[t]he signature page from . . . Plaintiff’s [handwritten] Adoption Agreement [had
been] . . . attached to . . . Defendant’s [typewritten] Adoption Agreement.” Id. ¶ 27. But
see Pl.’s Resp. (Doc. No. 12) ¶ 9 (“Plaintiff believed the first date of discovery of the
switched signature pages was March 24, 2016”).
Papers filed in this matter revealed, however, that Plaintiff had in its possession as
early as March 14, 2012, a copy of the typewritten Adoption Agreement that contained the
materially different terms. See id. at 3, n.1.5 As Plaintiff has conceded, that copy “would
Plaintiff advised the Court and Defendant that “[o]n June 12, 2018, while looking for a
lease form for a new tenant, on an old staff computer that had been archived for four (4)
5
9
have put Plaintiff on notice of the two different plans, which in turn would have started the
statute of limitations running at a date much earlier than Plaintiff[ ] . . . reasonably
believed.” Id. ¶ 9.
The Court finds, upon review of Plaintiff’s proposed pleading and other documents
properly considered, that Plaintiff had notice by March 14, 2012, that: (1) Defendant had
“not provide[d] the same Adoption Agreement . . . Plaintiff [had] purchased,” id. Ex. 3
(Doc. No. 12-3) ¶ 31; (2) the DBP that Defendant was managing required only six months
of employment to be eligible as a Plan participant, as opposed to one year of employment
as stated in the handwritten Adoption Agreement, compare Compl. Ex. 3 (Doc. No. 1-4)
at 4, with id. Ex. 1 (Doc. No. 1-2) at 4;6 (3) the DBP indicated for purposes of calculating
accrued benefits “200%” of an employee’s average compensation, while the handwritten
form had no percentage assigned, compare id. Ex. 3 (Doc. No. 1-4) at 8, with id. Ex. 1
years, [Plaintiff] . . . found a computer file labeled ‘Pension’ containing a downloaded copy
of the typewritten plan from March 14, 2012. [Plaintiff was] . . . surprised to find the
electronic document as the past employee did not make [Plaintiff] . . . aware of the
downloaded material or print out a copy of the documents and forward them to . . .
[Plaintiff].” Pl.’s Resp. (Doc. No. 12) at 3, n.1. The Court finds, under these circumstances
and absent any contrary authority cited by Plaintiff, that the employee’s knowledge of the
typewritten Adoption Agreement is imputed to Plaintiff and Plaintiff is charged with the
knowledge of its employee. See W. Diversified Servs., Inc. v. Hyundai Motor Am., Inc.,
427 F.3d 1269, 1276 (10th Cir. 2005) (as a “general principle” “an employee’s knowledge
gained in the course and scope of the employment is imputed to the corporation, and,
therefore, to all of its departments”).
6
Although Plaintiff has claimed that it intended that employees would be eligible to
participate after one year of service, the New Plan Installation Transmittal which was
prepared by Valley and signed by Robyn Assaf on behalf of Plaintiff and which was
attached to Plaintiff’s complaint, indicates the contrary: that Plaintiff intended employees
would be eligible after six months of service. See Compl. Ex. 3 (Doc. No. 1-3) at 3, ¶ 1.
10
(Doc. No. 1-2) at 8; and (4) the DBP stated that participation and average compensation
would be measured from January 1, 2010, in contrast to Plaintiff’s form that stated that
participation and average compensation would be measured from January 1, 2011,
compare id. Ex. 3 (Doc. No. 1-4) at 7, with id. Ex. 1 (Doc. No. 1-2) at 7.
Plaintiff has alleged in its proposed pleading that Defendant fraudulently
“manag[ed] a DBP that was materially different than the Adoption Agreement . . . Plaintiff
had executed on June 22, 2011.” Pl.’s Resp. Ex. 3 (Doc. No. 12-3) ¶ 20; e.g., id. ¶ 38 (the
freezing of the DBP and the increase in funding requirements “are a direct result of . . .
Defendant’s fraud in using its DBP terms rather than the Adoption Agreement . . . Plaintiff
signed on June 22, 2011”). Further, Plaintiff has alleged that Defendant concealed the fact
that two plans existed by attaching “[t]he signature page from . . . Plaintiff’s Adoption
Agreement . . . to . . . Defendant’s Adoption Agreement.” Pl.’s Resp. Ex. 3 (Doc. No. 123) ¶ 27.
Under § 1113’s “fraud or concealment” provision, an “action ‘may be commenced
not later than six years after the date of discovery of [the] breach or violation.’” Fulghum,
785 F.3d at 413 (quoting 29 U.S.C. § 1113). It is undisputed that Plaintiff had in its
possession as early as March 14, 2012, a copy of the typewritten Adoption Agreement.
That copy not only revealed the materially different terms, see Pl.’s Resp. (Doc. No. 12) at
3, n.1, but also had attached to it the Plaintiff’s signature page.
As Plaintiff has
acknowledged, the document “would have put Plaintiff on notice of the two different
plans.” Id. ¶ 9.
11
Plaintiff therefore had six years after the date of discovery of Defendant’s alleged
fraudulent conduct and its alleged concealment, or until March 14, 2018, to assert causes
of action under § 1109 for breach of fiduciary duty. Because Plaintiff did not seek relief
until March 21, 2018 (assuming Plaintiff’s claims relate back under Fed. R. Civ. P. 15(c)),
amendment of Plaintiff’s complaint at this stage of the litigation to more clearly articulate
its ERISA claims would be futile.
Plaintiff also has alleged in its proposed pleading that Defendant also breached its
fiduciary duty by failing to resolve the census issue on September 12, 2013, after Plaintiff
complained that date about the increase in funding. Plaintiff has contended that Defendant
“made its first request for a 2011 census [on December 29, 2011],” Pl.’s Resp. Ex. 2 (Doc.
12-3) ¶ 18, and that Plaintiff responded to that request on February 8, 2012, see id. Plaintiff
has argued that “[w]ith each census, [Plaintiff] questioned and challenged incorrect
inclusions by Defendant.” Pl.’s Mot. ¶ 21. Plaintiff has alleged in its proposed pleading
that “from the first year’s census and every census thereafter, disagreements on the census
. . . arose.” Pl.’s Resp. Ex. 2 (Doc. 12-3) ¶ 20. Plaintiff has alleged that Defendant notified
Plaintiff on August 27, 2013, “of a substantial increase in funding,” id. ¶ 23, and the DBP
was thereafter frozen on September 12, 2013, see id. ¶ 24.
Section 1113(2) provides that “[n]o action may be commenced . . . with respect to
a fiduciary’s breach of any responsibility, duty, or obligation . . . after . . . three years after
the earliest date on which the plaintiff had actual knowledge of the breach or violation.”
12
29 U.S.C. § 1113(2).7 The Tenth Circuit has “yet to define the phrase ‘actual knowledge,’”
Mid-S. Iron Workers Welfare Plan v. Harmon, 645 F. App’x 661, 665 (10th Cir. 2016),
used in § 1113(2), and has instead looked to “sister circuits” whose definitions “fall[ ] for
the most part into two schools of thought: those that require some understanding that the
conduct is unlawful under ERISA and those that merely require knowledge of the conduct
itself.” Id.; see Fish v. GreatBanc Tr. Co., 749 F.3d 671, 679 (7th Cir. 2014) (“strictest
test applies the three-year bar only when the plaintiff knows not only the facts underlying
the alleged violation but also that those facts constitute a violation under ERISA”).
Compare Maher v. Strachan Shipping Co., 68 F.3d 951, 954-56 (5th Cir. 1995) (“‘[actual
7
The Court may take judicial notice of case filings in determining when Plaintiff had
knowledge of the facts underlying its causes of action. See Wei v. Univ. of Wyo. Coll. of
Health Sch. Pharmacy, 2019 WL 117081, at *3 (10th Cir. Jan. 7, 2019) (district court
entitled to glean relevant date for limitations calculation by taking judicial notice of its own
case files). Here, the Court has reviewed the pleadings and papers filed in AGI Consulting
LLC v. Am. Nat’l Ins. Co., Case No. CIV-18-245-W (W.D. Okla.), wherein Plaintiff sought
a declaration that no DBP existed between Plaintiff and Defendant. See id. Compl. (Doc.
No. 1) ¶ 8. Attached to the complaint in that matter is a partial copy of the “AGI Consulting
Pension Plan and Trust Summary Plan Description” (“SPD”), see id. Compl. Ex. 15 (Doc.
No. 1-9), that Plaintiff states was “first provided” by Defendant on September 12, 2013.
See id. at 1. A complete copy of the SPD is attached to Defendant’s Motion to Dismiss,
see Def.’s Mot. Ex. 1 (Doc. No. 12-1), and the Court has considered the SPD, the
authenticity of which has not been challenged, as “part of the Plan.” Eugene S. v. Horizon
Blue Cross Blue Shield, 663 F.3d 1124, 1131 (10th Cir. 2011).
These documents reflect that, as of September 12, 2013, Plaintiff would have had
actual knowledge of the terms of the DBP that Defendant was managing, absent any
allegations of fraud or concealment, including the following provisions: (1) Article I, titled
“Participation in the Plan,” see id. at 4 (capitalization modified to initial capitals only),
which advises employees that they will be eligible to participate after “completion of six
(6) months of service,” id.; and (2) Article II, titled “Determination of Benefits,” see id. at
5 (capitalization modified to initial capitals only), which advises employees that “[a]ccrued
[b]enefit[s] will be determined based upon a retirement benefit formula . . . equal to 200%
of Your Average Compensation,” id.
13
knowledge] requires a showing that plaintiffs actually knew not only of the events that
occurred which constitute the breach or violation but also that those events supported a
claim for breach of fiduciary duty or violation under ERISA’” (alteration in original)), and
Int'l Union of Elec., Elec., Salaried, Mach. & Furniture Workers v. Murata Erie N.A., Inc.,
980 F.2d 889, 900 (3d Cir. 1992) (“actual knowledge” “requires a showing that plaintiffs
actually knew not only of the events that occurred which constitute the breach or violation
but also that those events supported a claim of breach of fiduciary duty or violation under
ERISA”), with Wright v. Heyne, 349 F.3d 321, 330 (6th Cir. 2003) (“relevant knowledge
required to trigger the statute of limitations under 29 U.S.C. § 1113(2) is knowledge of the
facts or transaction that constituted the alleged violation; it is not necessary that the plaintiff
also have actual knowledge that the facts establish a cognizable legal claim under ERISA
in order to trigger the running of the statute”), Martin v. Consultants & Adm'rs, Inc., 966
F.2d 1078, 1086 (7th Cir. 1992) (“it is not necessary for a potential plaintiff to have
knowledge of every last detail of a transaction, or knowledge of its illegality,” but “plaintiff
must know of the essential facts of the transaction or conduct constituting the violation”),
and Brock v. Nellis, 809 F.2d 753, 755 (11th Cir. 1987) (“[t]o charge [plaintiff] . . . with
actual knowledge of an ERISA violation, it is not enough that he had notice that something
was awry; he must have had specific knowledge of the actual breach of duty upon which
he sues”). See also Caputo v. Pfizer, Inc., 267 F.3d 181, 193 (2d Cir. 2001) (quoting Gluck
v. Unisys Corp., 960 F.2d 1168, 1177 (3d Cir. 1992) (“[P]laintiff has ‘actual knowledge of
the breach or violation’ within the meaning of ERISA . . . , when he has knowledge of all
material facts necessary to understand that an ERISA fiduciary has breached his or her duty
14
or otherwise violated the Act. While a plaintiff need not have knowledge of the relevant
law, he must have knowledge of all facts necessary to constitute a claim. Such material
facts ‘could include necessary opinions of experts, knowledge of a transaction’s harmful
consequences, or even actual harm.’” (citations omitted)).
Following the more prevalent view8 that only knowledge of the essential facts
constituting the alleged violation or breach is required to trigger § 1113(2)’s three-year
limitations period9 (as opposed to the Third and Fifth Circuit’s narrower interpretation of
§ 1113(2)), the Court finds that Plaintiff’s proposed cause of action would be time-barred.
Plaintiff had actual knowledge of the increased funding and about Defendant’s alleged
“incorrect inclusions”—which form the basis of this breach of fiduciary claim—as early as
August 22, 2013, and no later than September 12, 2013. See Pl.’s Mot. (Doc. No. 18) ¶
14.e (“8-22-13 Date Plaintiff was notified of a substantial increase in funding, and the
inclusion of ineligible persons on the census.”); id. ¶ 24 (“On 8-27-13, Plaintiff was notified
of a substantial increase in the funding requirements.”); id. ¶ 14.f (“9-12-13 Date the DBP
was frozen at the direction of [Defendant] . . . and resolution of Plaintiff due to dispute
See Wright, 349 F.3d at 330 (broader view of actual knowledge “furthers the policies
underlying statutes of limitations. Among the basic policies served by statutes of
limitations is preventing plaintiffs from sleeping on their rights and prohibiting the
prosecution of stale claims.”).
8
9
Though the Tenth Circuit has not expressly adopted this view, see Mid-S. Iron Workers
Welfare Plan, 645 F. App’x at 665, it appears to be the view taken by the Tenth Circuit in
Russell v. Chase Inv. Servs. Corp., 384 F. App’x 753 (10th Cir. 2010). In that case, the
Tenth Circuit held that the plaintiff’s breach of fiduciary duty claim was barred by 29
U.S.C. § 1113(2) because the lawsuit was filed “more than three years after [the plaintiff]
had actual knowledge of the facts on which [the plaintiff] based her complaint.” Id. at 754.
15
over the census.”). Plaintiff therefore knew more than three years before this lawsuit was
filed on March 21, 2018, of the facts constituting the alleged violation. It was “not
necessary that . . . [P]laintiff also have actual knowledge that th[ose] facts establish[ed] a
cognizable legal claim under ERISA . . . to trigger the running of the statute.” Wright, 349
F.3d at 330. Accordingly, any claim for breach of fiduciary duty based on these allegations
would be untimely.
CONCLUSION
In its Motion for a New Trial, Plaintiff has prayed that this Court vacate its Order
and Judgment entered on July 30, 2018, reconsider the timeliness of Plaintiff’s proposed
claims under § 1113, and allow Plaintiff to file another amended complaint “to clearly state
an ERISA statute of limitations among other things.” Pl.’s Mot. (Doc. No. 18) ¶ 32.
As stated, the Court’s and the parties’ reliance on a state-law statute of limitations
may be deemed a manifest error of law or a misapprehension of the controlling law that
required revisitation. Having now reexamined Plaintiff’s proposed claims under § 1113
and having determined that amendment would be futile because those claims would be
time-barred, the Court again FINDS that dismissal of this lawsuit is warranted.
Accordingly, the Court DENIES Plaintiff’s Motion for a New Trial (Doc. No. 18).
IT IS SO ORDERED this 28th day of March, 2019.
16
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?