Testa v. Becker, 910 F.3d 677

Background

Becker administered the Xerox Corporation Retirement Income Guarantee Plan and applied a "phantom account offset": deducting a hypothetical interest amount from rehired employees' pension benefits to account for earlier lump-sum distributions.
Xerox issued a 1998 Summary Plan Description (SPD) that described the phantom account offset in detail.
Frommert I (2d Cir. 2006) held that Xerox had implemented the offset without proper amendment/notice and stated that the phantom account may not be applied to employees rehired prior to issuance of the 1998 SPD; the court, however, declined to issue broad injunctive or classwide relief and remanded for remedies.
Robert Testa (rehired in 1985; retired 2008) received a pension calculation showing the phantom offset in 2009, then sued asserting (1) an ERISA denial-of-benefits claim and (2) an ERISA § 502(a)(3) fiduciary-duty claim for failing to comply with Frommert I.
The district court dismissed the denial-of-benefits claim as time-barred (six-year New York statute) because the 1998 SPD was a clear repudiation that started the limitations period, but allowed the fiduciary-duty claim to proceed; later, on summary judgment, the district court ruled for Testa on the fiduciary claim.
On appeal, the Second Circuit affirmed dismissal of the denial-of-benefits claim, but reversed the district court’s grant of summary judgment to Testa on the fiduciary claim and entered judgment for Becker.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
When did Testa's ERISA denial-of-benefits claim accrue for statute of limitations purposes?	Testa: 1998 SPD did not clearly repudiate his rights; accrual was later (post-2004) or equitably tolled by Frommert litigation.	Becker: The 1998 SPD unambiguously described the phantom offset; limitations period began then (six-year period expired 2004).	Held: Accrual occurred with the 1998 SPD; claim untimely in 2004; dismissal affirmed.
Whether judicial estoppel or alleged misrepresentations prevented Becker from asserting timeliness?	Testa: Becker made representations (including in later briefs) that he would not apply the offset, so he should be estopped.	Becker: Later statements (e.g., 2014) do not change the 1998 SPD or prejudice Testa.	Held: No judicial estoppel; later statements irrelevant to the SPD's clarity; estoppel rejected.
Whether Frommert I required Becker to stop applying the phantom offset to all employees rehired before 1998 (giving rise to a fiduciary-duty breach when he continued applying it to Testa)?	Testa: Frommert I's language forbids applying the phantom account to rehired employees pre-1998; Becker therefore breached fiduciary duty.	Becker: Frommert I did not order blanket relief for nonparties and expressly declined broad equitable relief; affirmative defenses (timeliness, waiver) remain available.	Held: Frommert I did not mandate blanket relief for all nonparty rehired employees; Becker did not breach fiduciary duty; summary judgment for Becker.
Whether Testa could recharacterize an untimely denial-of-benefits claim as a fiduciary-duty claim to avoid time bar?	Testa: Recharacterization permissible; fiduciary duty claim based on failure to follow Frommert I.	Becker: Recharacterization would circumvent limitations and is effectively the same merits claim; timeliness defense should apply.	Held: Recharacterization does not evade the statute of limitations; fiduciary claim is the untimely denial-of-benefits claim in another form and fails.

Key Cases Cited

Frommert v. Conkright, 433 F.3d 254 (2d Cir. 2006) (held phantom offset was implemented without proper amendment/notice; stated offset may not apply to employees rehired before 1998 but declined sweeping equitable relief)
Frommert v. Conkright, 535 F.3d 111 (2d Cir. 2008) (addressed availability of defenses such as waiver despite Frommert I)
Conkright v. Frommert, 559 U.S. 506 (2010) (Supreme Court decision reversing/remanding aspects of lower-court rulings in the Frommert litigation)
Heimeshoff v. Hartford Life & Accident Ins. Co., 571 U.S. 99 (2013) (declined to apply equitable tolling where plan did not allow it)
Varity Corp. v. Howe, 516 U.S. 489 (1996) (ERISA fiduciary duties do not necessarily favor payment over preservation of plan assets)
Carey v. Int'l Bhd. of Elec. Workers Local 363 Pension Plan, 201 F.3d 44 (2d Cir. 1999) (ERISA denial-of-benefits claims accrue on formal denial or a clear repudiation known to the claimant)
Burke v. PriceWaterHouseCoopers LLP Long Term Disability Plan, 572 F.3d 76 (2d Cir. 2009) (apply most nearly analogous state limitations statute to ERISA benefits claims)