Trent LEBAHN; Wendy Lebahn, Plaintiffs-Appellants, v. NATIONAL FARMERS UNION UNIFORM PENSION PLAN; Pension Committee of the National Farmers Union Uniform Pension Plan; National Farmers Union Pension Consultants, Defendants-Appellees.
No. 15-3201
United States Court of Appeals, Tenth Circuit.
July 11, 2016
828 F.3d 1180
The evidence that complainant presents does not suffice. Complainant claims that the two subject judges are biased in favor of the bar and have a conflict of interest because they are members of the state‘s bar association, have served on bar boards or committees, and have taught CLE sessions for the bar or sat on a CLE panel with one or more of the 50-plus defendants named in complainant‘s suit. Complainant filed motions to disqualify in the underlying case, raising the same concerns, and those motions were denied.
The Code of Conduct for United States Judges, Canon 4(A), provides that “a judge may speak, write, lecture, teach, and participate in other activities concerning the law,” and “may participate in and serve as a member, officer, director, trustee, or nonlegal advisor of a nonprofit organization devoted to the law.” “As a judicial officer and a person specially learned in the law, a judge is in a unique position to contribute to the law... [and] is encouraged to do so, either independently or through a bar association, judicial conference, or other organization dedicated to the law.” Code of Conduct for United States Judges, Commentary to Canon 4; see also Comm. on Codes of Conduct, Advisory Opinion No. 34 (“a judge may properly serve as an officer or member of a board, council or committee of a bar association, subject to the restrictions set forth in Canon 4“). It is not evidence of misconduct that the subject judges are members of the bar and have served on bar committees or as CLE panelists.
Further, complainant offers no evidence to support her allegation that the judges are biased because they have personal friendships with the defendants. See In re Complaint of Judicial Misconduct, 687 F.3d 1188 (9th Cir. Jud. Council 2012) (“adverse rulings alone do not constitute proof of bias“). Accordingly, these allegations of misconduct based on bias or conflicts of interest are dismissed for failure to raise an inference of misconduct. See
DISMISSED.
Jessica L. Skladzien, Lewis Brisbois Bisgaard & Smith, Wichita, Kansas (Alan L. Rupe, Lewis Brisbois Bisgaard & Smith, Wichita, Kansas, on the brief), for Defendants-Appellees.
Before HOLMES, MURPHY, and BACHARACH, Circuit Judges.
BACHARACH, Circuit Judge.
This appeal involves claims under the Employee Retirement Income Security Act of 1974, commonly known as ERISA. Invoking ERISA, Mr. Trent Lebahn and his wife claim that a pension-plan consultant breached a fiduciary duty by misstating the amount of the monthly pension payments that Mr. Lebahn would receive if he were to retire. But under ERISA, the plan consultant could be considered a fiduciary only if she exercised discretionary authority over the plan‘s administration. On appeal, we ask: Does a consultant exercise discretionary authority in administering the plan simply by making a calculation of benefits at the request of a plan participant? We conclude that a consultant does not exercise discretionary authority under these circumstances.
I. The plan consultant‘s computation error resulted in Mr. Lebahn‘s premature retirement, prompting Mr. Lebahn to sue.
Hoping to retire, Mr. Lebahn contacted Ms. Eloise Owens, a consultant hired by1 his company‘s pension plan, to ask what his monthly pension payment would be. Ms. Owens told Mr. Lebahn that if he retired soon, he would be entitled to $8,444.18 per month. At Mr. Lebahn‘s request, Ms. Owens checked her calculations and assured Mr. Lebahn that the figure she had quoted was correct. Mr. Lebahn then retired and soon began receiving monthly checks of $8,444.18.
But Ms. Owens’ calculations proved to be too good to be true. Shortly after Mr. Lebahn retired, a representative of the pension plan contacted Mr. Lebahn and told him that he was being overpaid by almost $5,000 per month. A pension-plan attorney then told Mr. Lebahn that he would need to return over $43,000 in overpayments that he had already received. Unable to retire on his true pension benefit of $3,653.78 per month, Mr. Lebahn tried to go back to work, but he was unable to find a suitable job.
Mr. Lebahn and his wife then sued under ERISA.1 The Lebahns alleged that in incorrectly representing Mr. Lebahn‘s benefits and failing to pay Mr. Lebahn in accordance with those representations, the pension plan, the pension committee, and “National Farmers Union Pension Consultants” incurred ERISA liability under theories of breach of fiduciary duty and equitable estoppel. On the defendants’ motion, the district court dismissed the complaint for failure to state a valid claim. The Lebahns appeal this dismissal, and we affirm.
II. We affirm the dismissal of the Lebahns’ claims for breach of fiduciary duty and equitable estoppel.
On appeal, the Lebahns challenge the dismissal of their claims for breach of fiduciary duty and equitable estoppel. We reject each challenge.
The Lebahns’ claim for equitable estoppel was also properly dismissed. In dismissing this claim, the district court reasoned that the Lebahns had failed to plead facts satisfying two of the five elements of equitable estoppel: awareness of the true facts and justifiable reliance. On appeal, the Lebahns do not challenge the district court‘s conclusion that they failed to adequately plead justifiable reliance. Because the Lebahns fail to challenge one of the grounds relied on by the district court, we affirm the dismissal of the equitable estoppel claim.
III. Our review of the dismissal is de novo.
We review de novo a dismissal under
IV. The Lebahns failed to plead facts showing that Ms. Owens was a plan fiduciary.
The Lebahns argue that Ms. Owens was a plan fiduciary under ERISA. We disagree.
A. ERISA‘s definition of a functional fiduciary requires discretionary authority or discretionary responsibility over plan administration.
To plead a breach of fiduciary duty, the Lebahns must adequately allege fiduciary
There are two types of ERISA fiduciaries: named fiduciaries and functional fiduciaries.
Although the functional-fiduciary provision prescribes three means of becoming a functional fiduciary, the Lebahns focus on only one of these4: “[A] person is a fiduciary with respect to a plan to the extent... he has any discretionary authority or discretionary responsibility in the administration of such plan.”
The Department of Labor has expressed the same view in two interpretive bulletins discussing the functional-fiduciary provision,
In
Only persons who perform one or more of the functions described in [
§ 1002(21)(A) ] with respect to an employee benefit plan are fiduciaries. Therefore, a person who performs purely ministerial functions such as the types described above [which include “calculation of benefits” and “[p]rocessing of claims“] for an employee benefit plan within a framework of policies, interpretations, rules, practices and procedures made by other persons is not a fiduciary because such person does not have discretionary authority or discretionary control respecting management of the plan, does not exercise any authority or control respecting management or disposition of the assets of the plan, and does not render investment advice with respect to any money or other property of
the plan and has no authority or responsibility to do so.
Similarly, in
- provide legal, accounting, actuarial, or consulting services but
- lack discretionary authority and do not offer investment advice to the plan.
In these two interpretive bulletins, the Department of Labor expressed the view that typical consulting services—which would include the calculation of pension benefits—are not per se discretionary.
The Lebahns dispute this reading of the statute, arguing that one can become a fiduciary by conveying information about plan benefits to a plan beneficiary. But the statutory provision at issue restricts fiduciary status to acts involving authority or responsibility to engage in a discretionary act of plan administration. See
To support their position, the Lebahns rely on Varity Corp. v. Howe, 516 U.S. 489 (1996), and Moore v. Lafayette Life Ins. Co., 458 F.3d 416 (6th Cir. 2006). But these opinions have no bearing here, for neither opinion involves an assertion of fiduciary status based on discretionary authority or responsibility over plan administration.
Varity concerned an ERISA suit for breach of fiduciary duty that had been initiated by employees participating in their employer‘s welfare benefit plan. Varity, 516 U.S. at 492. The Supreme Court held that the employer was acting as an ERISA fiduciary under
But in Varity, the Court was not concerned with the meaning of the term “discretionary.” Instead, the Court was addressing whether the defendant‘s actions involved “plan administration.” Id. at 502-05. The Court apparently assumed that the employer had discretionary authority, a safe assumption in light of the facts. The employer had called a special meeting of the employee-beneficiaries and conveyed to them false information about a new subsidiary‘s prospects to entice employees to transfer to the new subsidiary. Id. at 493-94. The meeting was intended to effectuate an administrative change initiated by the employer. And unlike Ms. Owens, the employer in Varity was not calculating future plan benefits according to a formula. Instead, the employer was predicting future business and pension performance, an undertaking that involves considerable decision-making. Id. As a result, Varity does not affect our inquiry into whether Ms. Owens’ duties involved discretionary authority.
The Lebahns also rely on the Sixth Circuit‘s opinion in Moore v. Lafayette Life Insurance Co., which held that “providing plan participants with materially misleading information” constitutes a breach of fiduciary duty. Moore, 458 F.3d at 432; see also Drennan v. Gen. Motors Corp., 977 F.2d 246, 251 (6th Cir. 1992)
The Sixth Circuit did address fiduciary status in Sprague v. General Motors Corp., 133 F.3d 388 (6th Cir. 1998) (en banc). There, the Sixth Circuit remarked that under Varity, an employer “may have acted in a fiduciary capacity when it explained its retirement program to the early retirees.” Sprague, 133 F.3d at 405. But the discussion of the employer‘s fiduciary status constituted dicta because the court ultimately dismissed the case on the separate ground that the employer had not breached a fiduciary duty, even assuming that such a duty existed. Id. at 405-06. We therefore cannot say that the Sixth Circuit has adopted a different view of Varity than we do here.
Some courts have interpreted Sixth Circuit case law to expand ERISA‘s functional-fiduciary provision to encompass persons who lack discretionary authority. See Van Loo v. Cajun Operating Co., 64 F. Supp. 3d 1007, 1017-18 (E.D. Mich. 2014); Weaver v. Prudential Ins. Co. of Am., No. 3:10-CV-438, 2011 WL 4833574, at *7 (M.D. Tenn. Oct. 12, 2011). But we do not regard these opinions as persuasive because their approach would stretch the definition of “fiduciary” beyond any meaningful boundaries.
Rather than follow the lead of those courts, we rely on the plain meaning of the terms “fiduciary” and “discretionary authority [or]... responsibility.” See
B. The Lebahns failed to plead that Ms. Owens had discretionary authority or discretionary responsibility.
Taken as true, the Lebahns’ allegations establish only that Ms. Owens was responsible for calculating pension benefits. But merely calculating benefits, without more, does not establish fiduciary status under ERISA. Thus, the facts alleged by the Lebahns are insufficient for liability.
The complaint contains a number of allegations regarding Ms. Owens’ authorities and responsibilities:
- “The Pension Consultants were supposed to determine benefits, qualification and other certifications of benefits.” Appellants’ App‘x at 4.
- “Mr. Lebahn contacted Eloise Owens, who at the time was the pension consultant for the National Farmers Union Uniform Pension Plan .... The Plan has the authority to manage the plan and, in accordance with that authority, hired Ms. Owens and her company to determine benefits, qualifications and other certifications of benefits. As a pension consultant, Ms. Owens was acting as a functional fiduciary. Ms. Owens indicated that she would make the appropriate calculation and let Lebahn know what his monthly benefits would be. Mr. Lebahn had to contact the pension consultant because the plan was too complicated to determine the benefits without the aid of a consultant.” Id.
- “According to the [sic] Ms. Owens, upon early retirement, Lebahn would be entitled to monthly benefits in the amount of $8444.18. Ms. Owens sent
written confirmation of this benefit calculation.” Id. at 5. - “In response to Mr. Lebahn‘s concerns, Ms. Owens verified her numbers and indicated that the actuaries were low and were missing something.” Id. at 6.
- “In response to [his] application, Mr. Lebahn received a letter from the Pension Consultant for the National Farmers Union Uniform Pension Plan on June 15, 2012, advising him that his pension payment for his retirement beginning on July 1, 2012 would be $8445.39 per month. The pension consultant... was acting as a fiduciary and agent of the Plan and informed Mr. Lebahn on the amount he would receive if retiring.” Id.
Even if these allegations are true, they would not establish that Ms. Owens had discretionary authority or responsibility as required by
V. The Lebahns failed to adequately plead equitable estoppel.
The Lebahns’ second claim is for equitable estoppel. The district court dismissed this claim, and we affirm this ruling because the Lebahns do not challenge both of the independent grounds on which the district court based its dismissal.
A plan beneficiary may seek “appropriate equitable relief” to redress ERISA violations or enforce ERISA provisions. See ERISA § 502(a)(3),
Although we have not definitively identified the elements of an ERISA claim of equitable estoppel, the parties assume that we should apply the elements stated in our unpublished opinion, Palmer v. Metropolitan Life Insurance Co., 415 Fed. Appx. 913 (10th Cir. 2011). Therefore, we assume without deciding that Palmer correctly sets out the elements of an ERISA equitable estoppel claim.
Two of these elements are
- awareness of the true facts by the party to be estopped and
- reliance that is detrimental and justifiable.7
When a district court dismisses a claim on two or more independent grounds, the appellant must challenge each of those grounds. Bones v. Honeywell Int‘l, Inc., 366 F.3d 869, 877 (10th Cir. 2004). But the Lebahns have not challenged the district court‘s ruling on the element of justifiable reliance. Thus, even if we were to adopt the Lebahns’ position on the second element (awareness of the true facts by the party to be estopped), the Lebahns have given us no basis to disturb the district court‘s ruling on the first element, that there was no justifiable reliance. In these circumstances, we must affirm. See id.; see also Starkey ex rel. AB v. Boulder Cty. Soc. Servs., 569 F.3d 1244, 1252 (10th Cir. 2009) (“When an appellant does not challenge a district court‘s alternate ground for its ruling, we may affirm the ruling.“).
In their reply brief, the Lebahns state that the district court‘s dismissal order omitted any “discussion of [the justifiable-reliance] element.” Appellants’ Reply Br. at 9. But as the Lebahns’ counsel conceded at oral argument, this statement is incorrect. In its order, the district court expressly considered whether Mr. Lebahn‘s reliance was justified:
Moreover, plaintiffs have not set forth sufficient facts which would support a finding that their reliance on Owens’ statement was justifiable in light of the fact that the complaint states that Lebahn “questioned the validity of [Owens‘] numbers as the monthly benefits Owens had calculated was substantially greater than the annual statements he had been receiving each year.” (Doc. 1 at 3). In addition, the Plan unambiguously states the formula to calculate pension benefits. See Palmer, 415 Fed.Appx. at 921 (no justifiable reliance when Plan documents unambiguously set forth Plan terms).
Appellants’ App‘x at 240-41.
Because the Lebahns have not challenged this part of the ruling, we affirm the dismissal of the equitable estoppel claim.
VI. Conclusion
We affirm.