Gabriel v. Alaska Electrical Pension Fund
773 F.3d 945
9th Cir.2014Background
- Gabriel participated in the Alaska Electrical Pension Plan (Plan) 1968–1975, then became sole proprietor of Twin Cities (1975–1978); Fund later determined employer contributions for Gabriel during 1975–1978 were erroneous and removed those hours.
- Fund notified Gabriel in 1979 that improper contributions would be refunded and that his credited service would be reduced; Gabriel signed a release in 1980 accepting a small refund.
- In 1997 a Fund representative told Gabriel he would receive a $1,236/month pension; Gabriel retired and began receiving benefits in 1997.
- Fund suspended benefits in 2001 for post-retirement work, then reinstated benefits in 2004 after administrative proceedings; later the Fund rediscovered the 1979 determination and terminated benefits asserting Gabriel never vested.
- Gabriel sued under ERISA §§ 1132(a)(1)(B) and (a)(3), alleging denial of benefits, equitable estoppel, reformation, and breach of fiduciary duty; the district court denied estoppel and reformation and deferred to the Fund on vesting.
- Ninth Circuit affirms rejection of estoppel and reformation, affirms that the Fund did not waive the non‑vesting defense, but vacates and remands on whether surcharge (an equitable monetary remedy recognized in CIGNA v. Amara) may be available and whether Gabriel has shown a remediable wrong.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Equitable estoppel to require Plan to treat Gabriel as vested | Gabriel relied on 1997 letter promising pension and retired; Fund should be estopped from denying benefits or changing records | Fund says 1979 letter warned Gabriel he was ineligible, Plan terms control, and administrative mistake cannot rewrite plan | Reversed for estoppel: court held 1997 communication was a benefit-calculation mistake, not an interpretation of ambiguous plan language; Gabriel knew or should have known from 1979 letter, so estoppel fails |
| Reformation of Plan/records to reflect erroneous credited hours | Reform records to match the 1997 misinformation so Gabriel qualifies for benefits | Plan terms were correct and Gabriel was ineligible as a proprietor; records are administrative and cannot change plan terms | Reformation denied: no mistake in the Plan instrument and no fraud; reformation cannot be used to create eligibility contrary to written plan |
| Availability of surcharge (equitable monetary relief) for fiduciary breach | If fiduciary breach caused loss, Gabriel seeks monetary relief equivalent to benefits he would have received | Fund relied on Mertens (money damages unavailable) and asserted no remediable fiduciary breach causing compensable harm | Vacated and remanded: because Amara recognizes surcharge may be "appropriate equitable relief" against a trustee, the district court must reconsider availability of surcharge and whether Gabriel alleged remediable wrong/harm |
| Procedural ERISA requirements / waiver of non-vesting defense | Fund delayed raising non-vesting; thus waived it or violated ERISA notice/appeal procedures | Fund notified Gabriel during pending administrative proceedings and Gabriel had opportunity to litigate; no procedural prejudice | Affirmed: Fund did not violate ERISA procedure or waive non-vesting; remand ruling on surcharge does not alter this conclusion |
Key Cases Cited
- Mertens v. Hewitt Assocs., 508 U.S. 248 (1993) (money damages for fiduciary breach are not available under § 1132(a)(3))
- CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011) (surcharge and certain equitable monetary remedies may be available against plan fiduciaries as "appropriate equitable relief")
- Skinner v. Northrop Grumman Ret. Plan B, 673 F.3d 1162 (9th Cir. 2012) (surcharge available in equity but requires proof of harm; unjust‑enrichment/disgorgement principles applied)
- Greany v. W. Farm Bureau Life Ins. Co., 973 F.2d 812 (9th Cir. 1992) (equitable estoppel in ERISA barred where relief would conflict with unambiguous written plan terms)
- Spink v. Lockheed Corp., 125 F.3d 1257 (9th Cir. 1997) (plan ambiguity plus reliance can support estoppel; used to contrast with Gabriel’s facts)
- Great–West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002) (distinguishing restitution in law from equitable restitution; limits on equitable relief under ERISA)