Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-03506/USCOURTS-cand-3_04-cv-03506-22/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.: Employee Benefits

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

JOSEPH MINIACE, 

Plaintiff,

 v.

PACIFIC MARITIME ASSOCIATION, 

Defendant.

______________________________________/

PACIFIC MARITIME ASSOCIATION, et al.,

Counterclaimants and

Cross-Claimants,

v.

JOSEPH N. MINIACE; JEANNETTE COBURN;

MICHAEL E. CORRIGAN; BENMARK, INC.;

CORRIGAN & COMPANY; and BENMARK

WEST,

Counterdefendant and 

Cross-Defendant. /

No. C 04-03506 SI

ORDER RE: PMA’S FIFTEENTH CLAIM

FOR RELIEF 

On the eve of trial, the parties bring before the Court a dispute over Pacific Maritime

Association’s (“PMA”) fifteenth counterclaim in this matter. For the following reasons, the Court finds

that PMA’s fifteenth counterclaim is a viable cause of action, and therefore DENIES Corrigan’s request

to dismiss the counterclaim.

DISCUSSION

PMA’s fifteenth counterclaim concerns PMA’s secured executive benefit plan (“SEBP”), an

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United States District Court

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ERISA plan that PMA instituted to provide retirement benefits for senior executives. PMA claims that

Miniace and McMahon breached their fiduciary duties to the plan in a number of ways. The most

significant of these allegations is that Miniace and McMahon executed amendments to the SEBP in

2002, causing approximately $10 million in death benefits to be paid to McMahon’s estate rather than

to PMA. PMA’s fifteenth counterclaim seeks to hold Corrigan, an insurance broker who assisted with

the amendments, and his affiliated companies vicariously liable for this breach of fiduciary duty.

Corrigan maintains that he cannot be held vicariously liable for any breach of fiduciary duty by

Miniace and McMahon. He argues, first, that Ninth Circuit law bars any claims for vicarious liability

against a non-ERISA fiduciary for breach of fiduciary duty. Corrigan’s second argument is that he did

not violate any duty under California law, and that he therefore may not be held vicariously liable for

Miniace’s and McMahon’s actions.

The Court agrees with PMA that Ninth Circuit law does not bar PMA’s claim. The case

Corrigan relies on, Nieto v. Ecker, 845 F.2d 868 (9th Cir. 1988), concerned only whether a party who

was not an ERISA fiduciary could be held vicariously liable for breach of fiduciary duty under the

provisions of ERISA. See id. at 872-73 (“Congress has provided a remedy against fiduciaries alone in

section 409(a) and we see no basis for reading into that section a remedy against non-fiduciaries as

well.”). Nieto did not concern whether a third-party could be held liable under state law for assisting

ERISA fiduciaries with a breach of their fiduciary obligations. The Court declines to give Nieto as

expansive a reading as Corrigan suggests.

Corrigan also argues that PMA’s fifteenth counterclaim does not state a claim under California

law because he owed no independent duty to PMA. With respect to PMA’s conspiracy allegations

against Corrigan, Corrigan is correct. Under California law, a party may not be held liable for

conspiring to commit a tort where he owed the victim no independent duty. See, e.g., Applied

Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th 503, 511 (1994) (“By its nature, tort liability

arising from conspiracy presupposes that the coconspirator is legally capable of committing the tort, i.e.,

that he or she owes a duty to plaintiff recognized by law and is potentially subject to liability for breach

of that duty.”). Here, it is undisputed that Corrigan owed PMA no fiduciary duty under ERISA. In

addition, this Court has previously found that Corrigan owed PMA no fiduciary duty under state law.

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September 19, 2005 order, at 15 (Docket No. 137). Thus, no source of law creates a fiduciary duty that

Corrigan owes to PMA. Accordingly, Corrigan may not be held liable for conspiring with Miniace and

McMahon to breach their fiduciary duties to PMA.

The same is not true, however, for aiding and abetting:

No California case . . . holds that a party must owe the plaintiff a duty before he or she

can be held liable as an aider and abettor. Rather, California cases outlining the elements

of aiding and abetting liability have consistently cited the elements of the tort as they are

set forth in the Restatement (Second) of Torts, § 876, and have omitted any reference to

an independent duty on the part of the aider and abettor. Under this formulation, liability

may properly be imposed on one who knows that another’s conduct constitutes a breach

of duty and substantially assists or encourages the breach.

Neilson v. Union Bank of Cal., N.A., 290 F. Supp. 2d 1101, 1133 (C.D. Cal. 2003); see also Berg & Berg

Enters., LLC v. Sherwood Partners, Inc., 131 Cal. App. 4th 802, 823 n.10 (Cal. App. 2005) (“Despite

some conceptual similarities, civil liability for aiding and abetting the commission of a tort, which has

no overlaid requirement of an independent duty, differs fundamentally from liability based on

conspiracy to commit a tort.”). In fact, California courts have specifically held that liability could exist

for aiding and abetting a breach of fiduciary duty even where the defendant owed no independent

fiduciary duty to the plaintiff. See Casey v. U.S. Bank Nat. Ass’n, 127 Cal. App. 4th 1138, 1145 n.2

(Cal. App. 2005).

PMA’s fifteenth counterclaim seeks to hold Corrigan liable for conspiring with Miniace and

McMahon, and for aiding and abetting their breaches of fiduciary duties. PMA may proceed under the

latter theory, but not under the former.

CONCLUSION

For the foregoing reasons and for good cause shown, the Court hereby DENIES Corrigan’s

motion to dismiss PMA’s fifteenth counterclaim for relief, but limits that counterclaim to the assertion

of aiding and abetting the breaches of fiduciary duty by Miniace and McMahon. (Docket Nos. 398,

399).

IT IS SO ORDERED.

Dated: May 18, 2006

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SUSAN ILLSTON

United States District Judge

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