Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-02179/USCOURTS-casd-3_10-cv-02179-12/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.: Civil Enforcement of Employee Benefits

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

GEOFFREY MOYLE, an individual;

PAULINE ARWOOD, an individual;

THOMAS ROLLASON, an

individual; and JEANNIE SANDERS,

an individual, on behalf of themselves,

Plaintiff,

CASE NO.10cv2179-GPC(MDD)

ORDER GRANTING IN PART AND

DENYING IN PART

DEFENDANTS’ SUPPLEMENTAL

MOTION FOR SUMMARY

JUDGMENT

[Dkt. No. 296.]

vs.

LIBERTY MUTUAL RETIREMENT

BENEFIT PLAN; LIBERTY

MUTUAL RETIREMENT PLAN

RETIREMENT BOARD; LIBERTY

MUTUAL INSURANCE GROUP,

INC., a Massachusetts company;

LIBERTY MUTUAL INSURANCE

COMPANY, a Massachusetts

company,

Defendants.

On October 28, 2016, Defendants filed a supplemental brief in support of their

motion for summary judgment following remand. (Dkt. No. 296.) On November 10,

2016, Plaintiffs filed a supplemental brief in opposition to Defendants’ motion for

summary judgment following remand. (Dkt. No. 298.) On November 18, 2016,

Defendants filed a reply brief. (Dkt. No. 299.) A hearing was held on December 16,

2016. (Dkt. No. 301.) At the hearing, the Court noted additional briefing was needed

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on certain issues, and on December 19, 2016, the Court issued an order directing the

parties to address three issues that were not fully briefed in their supplemental briefs.

1

(Dkt. No. 302.) On January 6, 2017, Defendants filed a supplemental brief in response

to the Court’s order. (Dkt. No. 304.) Plaintiffs filed a response and Defendants filed

a reply. (Dkt. Nos. 305, 307.) After a review of all the briefs, supporting

documentation, hearing oral argument, and the applicable law, the Court GRANTS in

part and DENIES in part Defendants’ supplemental motion for summary judgment

following remand. 

Procedural Background

Prior to the filing of the instant case, on March 14, 2005, Plaintiff Geoffrey

Moyle (“Moyle”) filed a complaint in this Court against Golden Eagle Insurance

Corporation (“Golden Eagle”) and Liberty Mutual Insurance Company (“Liberty

Mutual”). (Case No. 05cv507-DMS(WMC), Dkt. No. 1). On August 23, 2005, Moyle 2

The Court sought additional briefing on: 1

1. whether equitable tolling applies to 29 U.S.C. § 1113 as to Moyle

2. whether “date of discovery of such breach or violation” under the

“fraud or concealment” exception differs from the “actual knowledge

of the breach or violation”

3. whether Defendants have waived the affirmative defense of statute

of limitations. 

(Dkt. No. 302.)

Prior to the case filed in 2005, Plaintiff Moyle also filed two complaints in San 2

Diego Superior Court that were removed to this Court. 

On November 5, 2002, Plaintiff Moyle filed an action against Golden Eagle,

Liberty Mutual and John Davis in San Diego Superior Court alleging eleven causes of

action related to employment and pension benefits due under the Plan. (Case No.

02cv2468-H(JAH).) On December 16, 2002, the case wasremoved to this Court. (Id.,

Dkt. No. 1.) On December 23, 2002, Defendants filed a motion for partial dismissal

of Plaintiff’s complaint arguing that the state law claims were preempted by ERISA 

as to the past service credit under the Plan. (Id., Dkt. Nos. 7, 10.) Subsequently,

Plaintifffiled a notice of voluntary dismissal of action without prejudice. (Id., Dkt. No.

14.)

On February 13, 2003, Plaintiff Moyle filed an action against Defendants Golden

Eagle, LibertyMutual, and John Davisin San Diego Superior Court alleging ten causes

of action related to employment and past service credit under the Plan. (Case No.

03cv509-IEG(JAH).) On March 13, 2003, Defendants removed the action to this

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filed a first amended complaint adding Defendant Liberty Mutual Retirement Benefit

Plan (“Plan”). (Id., Dkt. No. 12.) The first amended complaintsought causes of action

for determination of his future rights to benefits under the plan pursuant to 29 U.S.C.

§ 1132(a)(1)(B), and breach of fiduciary duty pursuant to 29 U.S.C. § 1132(a)(3). (Id.) 

On November 14, 2005, District Judge Dana Sabraw granted Defendants’ motion to

dismiss for failure to exhaust administrative remedies. (Id., Dkt. No. 32.) The court

also dismissed with prejudice the § 1132(a)(3) claimpursuant to Varity Corp. v. Howe,

516 U.S. 489 (1996), stating that “§ 1132(a)(3) is a ‘catchall provision’ that authorizes

lawsuits for equitable relief for breach of fiduciary duty and other injuries for

“violation that [1132] does not elsewhere adequately remedy.” (Id. at 9.) Plaintiff

appealed and on August 23, 2007, the Ninth Circuit affirmed the district court’s

dismissal requiring Plaintiff to exhaust and the dismissal of § 1132(a)(3) claim based

on the rule in Varity concluding that Moyle “has no claimunder 29 U.S.C. § 1132(a)(3)

because he has adequate relief under 29 U.S.C. § 1132(a)(1). Moyle v. Golden Eagle

Ins. Corp., 239 Fed. App’x 362 (9th Cir. 2007). 

On January 26, 2008, Moyle filed a claim with Liberty Mutual. (Administrative

Record (“AR”) 783-86.) On July 18, 2008, Plaintiff Thomas Rollason (“Rollason”)

filed a claim. (AR 639-43.) On August 21, 2008, Plaintiff Pauline Arwood

(“Arwood”) filed a claim. (AR 1016-20.) Lastly, on December 4, 2008, Plaintiff

Jeannie Sanders (“Sanders”) filed her claim. (AR 1511-16.) 

On April 23, 2008, Moyle’s claim and subsequently Rollason, Arwood and

Sanders’ claims for benefits were initially denied by John R. St. Martin, Manager of

Court. (Id., Dkt. No. 1.) On March 20, 2003, Golden Eagle and Liberty Mutual filed

motions to dismiss the complaint. (Id., Dkt. Nos. 5, 8.) On April 3, 2003, Plaintiff

filed a motion to remand. (Id., Dkt. No. 13.) On July 17, 2003, District Judge Irma E.

Gonzalez issued an order denying Plaintiff’s motion to remand and granted in part

Golden Eagle and Liberty Mutual’s motions to dismiss. (Id., Dkt. No. 23.) The Court

concluded that the claims relating to the question of past service credit under the

Benefit Plan were preempted by ERISA. (Id.) Accordingly, the Court dismissed

Plaintiff’s state law claims without prejudice and granted leave to amend the complaint

to allege claims under ERISA. (Id.) On August 5, 2003, the Court granted Plaintiff’s

ex parte application to remand remaining causes of action to state court. (Id., Dkt. No.

25.) 

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Pension and Savings, Benefits at Liberty Mutual. (AR 712-718 (“Moyle”); 590-96

(“Rollason”); 991-97 (“Arwood”); 1497-1503 (“Sanders”).) 

On June 20, 2008, Plaintiffs sought review of the initial decision and all four

claims were consolidated for purposes of the administrative appeal. (AR 426.) On

October 23, 2009, Plaintiffs’ appeals were denied by Helen Sayles, Senior Vice

President of Human Resources & Administration, on behalf of the Retirement Board. 

(AR 4365-4414.) 

After having exhausted administrative remedies, on October 19, 2010, Plaintiffs

Moyle, Arwood, Rollason, and Sandersfiled the instant class action complaint against

Defendants Liberty Mutual Retirement Benefit Plan (“Plan”); Liberty Mutual

Retirement Benefit PlanRetirement Board (“Board”); LibertyMutual InsuranceGroup,

Inc. (“LMGI”); and Liberty Mutual Insurance Company (“Liberty Mutual”). (Dkt. No.

1.) On October 21, 2010, Plaintiffs filed a first amended complaint alleging causes of

action for determination of his future rights to benefits under the plan pursuant to 29

U.S.C. § 1132(a)(1)(B), promissory estoppel, and denial of claimrights afforded under

29 C.F.R. § 2560.503-1(h)(2)(i). (Dkt. No. 3.) On April 25, 2011, DistrictJudge Dana

Sabraw denied Defendants’ motion to dismiss the second and third claims; granted in

part motion to dismiss improperly named Defendants; denied Defendants’ motion to

dismiss the first claim as to Plaintiff Moyle and granted Defendants’ motion to strike

demand for trial by jury. (Dkt. No. 18.) On September 14, 2011, the Court granted

Plaintiffs’ motion for leave to file a second amended complaint. (Dkt. No. 41.) On

September 20, 2011, Plaintiffs filed a second amended complaint which added a claim

for equitable relief under 29 U.S.C. § 1132(a)(3). (Dkt. No. 47.) 

After briefing by the parties on Plaintiffs’ motion for class certification, on April

10, 2012, District Judge Sabraw certified the class as to the first, second, and fourth

causes of action. (Dkt. No. 113 at 19.) On April 24, 2012, Defendants filed a petition

for permission to appeal the Court’s order granting class certification to the Ninth

Circuit. (Dkt. No. 120.) In the meantime, the Court denied Defendants’ motion for

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reconsideration and granted their motion for stay pending appeal. (Dkt. No. 126.) On

July 11, 2012, the Ninth Circuit denied Defendants’ petition for permission to appeal. 

(Dkt. No. 128.) 

On October 12, 2012, the case was transferred to the undersigned judge. (Dkt.

No. 174.) On October 17, 2012, Plaintiffs filed a third amended complaint against

Defendants Liberty Mutual Retirement Benefit Plan (“Plan”); Liberty Mutual

Retirement Benefit Plan Retirement Board (“Board”), the Plan administrator; Liberty

Mutual Insurance Group, Inc. (“LMGI”), the Plan sponsor; and Liberty Mutual

Insurance Company (“Liberty Mutual”), the entity that purchased Old Golden Eagle,

and established Golden Eagle, a subsidiary of LMGI. (Dkt. No. 178.) The operative

third amended complaint alleges four causes of action: payment of benefits under the

Plan pursuant to 29 U.S.C. § 1132(a)(1)(B); equitable relief under 29 U.S.C. §

1132(a)(3); violation of 29 C.F.R. § 2560.503-1(h)(2)(i); and violation of 29 C.F.R. §

2520.102-3(l) and 29 C.F.R. § 2520.102-2(a). 

On January 3, 2013, Defendants filed a motion for summary judgment on all four

causes of action while Plaintiffs filed a motion for partial summary judgment on the

second and fourth causes of action and on certain of Defendants’ affirmative defenses. 

(Dkt. Nos. 212, 213.) On July 1, 2013, the Court granted Defendants’ motion for

summary judgment on all four causes of action in the third amended complaint, and

denied Plaintiffs’ motion for summary judgment. (Dkt. No. 252.) Plaintiffs appealed

the Court’s ruling on the first, second and fourth causes of action while Defendants

cross-appealed that the suit wastime-barred and that class certification was not proper. 

Moyle v. Liberty Mutual Retirement Benefit Plan, 823 F.3d 948, 952 (9th Cir. 2016). 

On May 20, 2016, the Ninth Circuit affirmed the district court’s ruling on summary

judgment on the first and fourth causes of action and reversed the district court’s ruling

on the second cause of action for equitable relief under 29 U.S.C. § 1132(a)(3). Id. 

The Ninth Circuit also found that class certification was proper. Id. The court

concluded there was a factual dispute whether “Liberty Mutual breached its fiduciary

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duty by failing to inform Golden Eagle employees that past service credit for the

purpose of benefit accrual did not include the period prior to October 1, 1997, when

they were first employed by Golden Eagle.” Id. at 962. The Ninth Circuit remanded

“for determinations of fact and equitable relief in the form of reformation and

surcharge.” Id. at 965. The Ninth Circuit also declined to consider “Liberty Mutual’s

argument that the statute of repose in 29 U.S.C. § 1113 acts to bar some of Appellants’

claims under 29 U.S.C. § 1132(a)(3). The district court may consider such arguments

on remand.” Id. at 959 n. 5.

Factual Background

The Court recites the facts from its prior order on summary judgment and from

the Ninth Circuit’s opinion. Plaintiffs Moyle, Arwood, Rollason, and Sanders are four

former employees of Golden Eagle Insurance Company (“Old Golden Eagle” or

“OGE”). On January 31, 1997, the Superior Court of San Diego County placed OGE

into conservatorship proceedings under the supervision of the California Insurance

Commissioner. Liberty Mutual took an interest in acquiring OGE and wasin a bidding

war with American International Group, Inc. (“AIG”) for the acquisition of OGE. In

order to increase its chances to win the bidding war, Liberty Mutual submitted an

enhanced bid which included improved employee benefits such as a retirement plan,

which had not been offered by OGE. The increased employee benefits were used to

retain OGE employees and to increase the likelihood of court approval of its bid. 

On May 29, 1997, the Conservation Court held an evidentiary hearing to

evaluate Liberty Mutual’s and AIG’s competing bids. One of Liberty Mutual’s exhibit

expressly stated that the value that it added was to “increase employee benefits (credit

for prior year’s of service and participation in the benefits plan).” Liberty Mutual also

told the Conservation Court that OGE employees would have the rights that Liberty

Mutual employees had with “X years of service.” This representation was later

repeatedly made to OGE employees. 

On May 30, 1997, the Conservation Court approved the sale and transfer of

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certain OGE assets and liabilities to Liberty Mutual. The approval was memorialized

in a Rehabilitation Agreement drafted by LibertyMutual on June 18, 1997. (AR 3013.)

Article 5.1(c) of the Rehabilitation Agreement states:

As to the employees of [OGE] who become employees of New Eagle

or another Subsidiary of LMIC by reason of the transactions

contemplated by this Agreement . . . [s]uch employees shall be

provided benefits which are at least comparable to those offered by

[OGE] and shall be credited for all prior years of service with [OGE]

. . . for purposes of eligibility, vesting and early retirement subsidies

under the LMIC Retirement Benefit Plan . . . provided, thatsuch period

of service with [OGE] will not be credited for purposes of benefits

accruals under the LMIC Thrift Incentive Plan and Retirement Benefit

Plan . . . .

The Rehabilitation Agreement was never provided to OGE employees and the

Conservator was not required to send notification ofthe agreement to OGE employees. 

The Rehabilitation Agreement is the only document that expressly states that past

service credit with OGE would not be credited for purposes of benefits accrual. This

language does not appear elsewhere during the transition period or in any

communications with OGE employees. 

As former employees of OGE, Plaintiffs had the opportunity to participate in a

401(k) Plan and profit-sharing plan. OGE did not offer a traditional defined benefit

pension plan to its employees. OGE did not contribute any assets to the Plan at issue

in this case and Plaintiffs did not make any contributions to the Plan. 

During August 1997, Liberty Mutual hosted a series of benefits enrollment

meetings so that OGE employees could obtain information about the transition. The

presenters used a “Facilitator Guide” developed by LibertyMutual as a script to convey

the terms and conditions of employee benefits. The Facilitator Guide did not mention

that past service credit with OGE would not be credited for benefits accrual. OGE

employees, including Plaintiffs, testified that after attending the meetings, it was their

understanding that pastservice credit with OGE would apply to the retirement plan and

that is why everybody stayed with the company. When specifically asked about prior

years of service at these meetings, Plaintiffs were told past years of service with OGE

would count. During the enrollment period, the operative 1987 Plan and 1996

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Summary Plan Descriptions (“SPD”) were available to OGE employees, but the 1987

Plan and the 1996 SPD did not address past service credit.

On October 1, 1997, pursuant to the Rehabilitation Agreement, Liberty Mutual

purchased certain assets of OGE and formed and incorporated a new entity, Golden

Eagle Insurance Corporation, (“Golden Eagle”), as a subsidiary of Liberty Mutual. 

The Plan and the SPD were not amended to address pastservice credit until 2001

when the Plan and the 2002 SPD specifically addressed OGE employees stating that

pastservice credit for OGE employees would be “credited for eligibility, vesting, early

retirement, and spouse’s benefits . . . .” In 2009, the word “solely” was added. 

Subsequently, Liberty Mutual Retirement Benefit Plan Retirement Board, the

Retirement Plan’s administrator, denied the claims of a dozen former OGE employees

who sought past service credit, including the named plaintiffs in this case. Liberty

Mutual explained that it had “informed former Golden Eagle employees about when

past service credit applied and therefore, former Golden Eagle employees should have

known when past service credit did not apply.” Moyle, 823 F.3d at 955. 

On October 19, 2010, Plaintiffs filed the class action complaint in this Court. 

(Dkt. No. 1.) Upon remand by the Ninth Circuit, Defendants move for summary

judgment arguing that the remaining cause of action for breach of fiduciary duty under

29 U.S.C. § 1132(a)(3) is barred by the statute of repose and statute of limitations

under 29 U.S.C. § 1113. They also argue that the equitable relief of reformation and

surcharge under 29 U.S.C. § 1132(a)(3) are not available as remedies to Plaintiffs. 

Plaintiffs oppose arguing that Defendants waived the statute of limitation defense, that

the breach of fiduciary claim is timely under the fraud or concealment exception under

29 U.S.C. § 1113, and as to Moyle, he is entitled to equitable tolling. They further

argue that they have provided sufficient facts to entitle them to equitable relief in the

form of reformation and surcharge.

/ / / /

/ / / /

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Discussion

A. Legal Standard on Motion for Summary Judgment

Federal Rule of Civil Procedure (“Rule”) 56 empowers the Court to enter

summary judgment on factually unsupported claims or defenses, and thereby “secure

the just, speedy and inexpensive determination of every action.” Celotex Corp. v.

Catrett, 477 U.S. 317, 325, 327 (1986). Summary judgment is appropriate if the

“pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(c). A fact is material when it affects the outcome of the case. Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986). 

The moving party bears the initial burden of demonstrating the absence of any

genuine issues of material fact. Celotex Corp., 477 U.S. at 323. The moving party can

satisfy this burden by demonstrating that the nonmoving party failed to make a

showing sufficient to establish an element of his or her claim on which that party will

bear the burden of proof at trial. Id. at 322-23. If the moving party fails to bear the

initial burden, summary judgment must be denied and the court need not consider the

nonmoving party’s evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60

(1970). 

Once the moving party has satisfied this burden, the nonmoving party cannot rest

on the mere allegations or denials of his pleading, but must “go beyond the pleadings

and by her own affidavits, or by the ‘depositions, answers to interrogatories, and

admissions on file’ designate ‘specific facts showing that there is a genuine issue for

trial.’” Celotex, 477 U.S. at 324. If the non-moving party fails to make a sufficient

showing of an element of its case, the moving party is entitled to judgment as a matter

of law. Id. at 325. “Where the record taken as a whole could not lead a rational trier

of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’” 

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The

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court must view all inferences from the evidence in favor of the nonmoving party. Id.;

Fontana v. Haskin, 262 F.3d 871, 876 (9th Cir. 2001) (“the court must “view[] the

evidence in the light most favorable to the nonmoving party.”) The Court does not

engage in credibility determinations, weighing of evidence, or drawing of legitimate

inferences from the facts; these functions are for the trier of fact. Anderson, 477 U.S.

at 255. 

B. Waiver of Statute of Limitations Affirmative Defense

In their original opposition to Defendants’ motion for summary judgment, and

in their recent supplemental opposition in response to the Court’s order, Plaintiffs

argue that Defendants waived their 29 U.S.C. § 1113 statute of limitations affirmative

defense by failing to raise it until the motion for summary judgment. (Dkt. No. 233 at

40; Dkt. No. 305 at 14.) Defendants argue that they did not waive the affirmative

defense of statute of limitations because it was raised as to the contractual claim

underlying breach of fiduciary duty.

Despite Rule 8(c)’s requirement that an affirmative defense be raised in the

3

answer, the Ninth Circuit has liberalized its requirement such that a defendant may

raise an affirmative defense for the first time in a motion for summary judgment aslong

as the plaintiff is not prejudiced. Rivera v. Anaya, 726 F.2d 564, 566 (9th Cir. 1984)

(defendant did not waive defense of statute of limitations by failing to include it in his

initial pleading because plaintiff had not claimed any prejudice); see also Camarillo v.

McCarthy, 998 F.2d 638, (9th Cir. 1993) (defense of qualified immunity not waived

even though it was not raised in the answer, and plaintiff had not claimed prejudice). 

The first two counts in the first amended complaint, filed on October 21, 2010,

alleged causes of action for determination of terms of plan and clarification of rights

to future benefits under 29 U.S.C. § 1132(a)(1)(B) and promissory estoppel. (Dkt. No.

3, FAC.) The promissory estoppel claim was based on promises by Defendants that if

Rule 8(c) provides, “In responding to a pleading, a partymust affirmatively state

3

any . . . affirmative defense, including: . . . statute of limitations . . . .” Fed. R. Civ. P.

8(c).

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Plaintiffs accepted employment with Defendants, Plaintiffs would be credited for time

employed at OGE for purposes of benefits under the Plan. (Id., FAC ¶¶ 78-82.) In

their answer, Defendants’ fifteenth affirmative defense alleged, “Plaintiffs’ claims for

benefits under 29 U.S.C. § 1132(a)(1)(B) and/or estoppel are barred by the statute of

limitations and the doctrine of laches.” (Dkt. No. 11 at 11.) Over a year later, on

September 20, 2011, Plaintiffs obtained leave of court and filed a second amended

complaint (“SAC”). (Dkt. No. 47.) The first count remained the same as in the FAC

but the second count now alleged a cause of action under 29 U.S.C. § 1132(a)(3)

instead of promissory estoppel. (Id., SAC ¶¶ 77-84.) Defendants’ answer to the SAC

asserted the same fifteenth affirmative defense ofstatute of limitations asthey asserted

in their answer to the FAC. (Dkt. No. 59 at 13.) 

On October 17, 2012, a third amended complaint wasfiled due to clerical errors. 

(Dkt. No. 178.) Based on a joint stipulation to correct clerical errors within the second

amended complaint, Plaintiffs filed a third amended complaint and Defendants’ answer

to the second amended complaint was deemed to be the answer to the third amended

complaint. (Dkt. No. 170.) 

The issue is whether Plaintiffs are prejudiced by Defendants assertion of the 

statute of limitation’s defense in their motion for summary judgment. Plaintiffs appear

to argue that they were prejudiced because they did not receive any statute of

limitations discovery from Defendants during discovery and they believed that

Defendants would assert the one year statute of limitations asserted in the Plan as

asserted in prior litigation and in the administrative process. Plaintiffs’ arguments are

not persuasive. 

When Plaintiffs filed a second amended complaint alleging the breach of

fiduciary duty under 29 U.S.C. § 1132(a)(3), they merely altered the legal cause of

action from promissory estoppel to equitable relief. (Dkt. No. 47.) However, the

underlying facts generally remained the same. (Compare Dkt. No. 3, FAC ¶¶ 78-82

with Dkt. No. 47, SAC ¶¶ 77-84.) In fact, paragraphs 78, 80 and part of 81 of the FAC

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are nearly identical to paragraphs 78, 81, 82 of the SAC. The promissory estoppel and

breach offiduciary causes of action are based on Defendants’ representations/promises

that if Plaintiffs accepted employment with Liberty Mutual, their time of employment

with Old Golden Eagle would be credited for purposes of benefits under the Plan. 

Plaintiffs relied on Defendants’ representations/promises by accepting employment but

Defendants refused to grant credit to Plaintiffs for their time employed at Old Golden

Eagle. While the label of the cause of action changed, the underlying facts did not and

Plaintiffs had notice that Defendants would be asserting the affirmative defense of

statute of limitations. Thus, Plaintiffs were not prejudiced. The Court concludes that

the statute of limitations affirmative defense was not waived by Defendants. 

C. 29 U.S.C. § 1113

Defendants argue that the claim for breach of fiduciary duty is barred by the

statute of repose and the statute of limitations under 29 U.S.C. § 1113. Plaintiffs

respond that their claim is not governed by the statute of repose because their claim

falls under the “fraud or concealment” exception that applies to both the statute of

limitations and statue of repose under 29 U.S.C. § 1113, and is therefore, timely. 

ERISA’s statute of repose and statute of limitations provide:

No action may be commenced under this subchapter with respect to a

fiduciary’s breach of any responsibility, duty, or obligation under this

part, or with respect to a violation of this part, 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

(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. 29 U.S.C. § 1113(1) is considered the statute of repose while 29

U.S.C. § 1113(2) is considered the statute of limitations. See Landwehr v. DuPree, 72

F.3d 726, 733 (9th Cir. 1995) (distinguishing between three year statute of limitations

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with six year “interest in repose”); Bruno v. Time Warner Pension Plan, 534 F. App’x

654, 655 (9th Cir. 2013) (noting repose period to be provided in § 1113(1).) While

statutes of limitations and statutes of repose both limit the “temporal extent or duration

of liability for tortious acts” and can bar a plaintiff’s case, the “time periods are

measured from different points, and the statutes seek to attain different purposes and

objectives.” CTS Corp. v. Waldburger, 134 S. Ct. 2175, 2182 (2014). Ordinarily, a

statute of limitations creates “a time limit for suing in a civil case, based on the date

when the claim accrued” while a statute of repose “puts an outer limit on the right to

bring a civil action. That limit is measured not from the date on which the claim

accrues but instead from the date of the last culpable act or omission of the defendant.” 

Id. “The statute of repose limit is ‘not related to the accrual of any cause of action; the

injury need not have occurred, much less have been discovered.’” Id. (citation

omitted). This reflects a legislative decision that there should be a specific time when

a defendant should be free from liability. Id. at 2183. Therefore, a statute of repose is

not subject to equitable tolling. Id. 

1. Fraud or Concealment Exception 

Defendants contend that the breach of fiduciary claim is barred by the six year

statute of repose under § 1113(1), three year statute of limitations under § 1113(2) and 

that the “fraud or concealment” exception of § 1113 does not apply because the facts

in the case do not support an allegation of “fraud or concealment.” Plaintiffs respond

first by arguing that the “fraud or concealment” tolling exception applies to their claim,

and alternatively, even if the “fraud or concealment” exception does not apply, their

claims are timely because the breach was not completed until Liberty Mutual issued its

final denial in 2009, the latest date Liberty Mutual could have cured the violation or

breach. 

4

Plaintiffs analyze, in some depth, whether the § 1113 is a statute of repose

4

and/or statute of limitations. (Dkt. No. 298 at 6-8.) Based on their statutory

construction analysis, Plaintiffs contend that § 1113 is not a statute of repose and that

the fraud or concealment exception applies to both § 1113(1) and § 1113(2). Despite

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Ziegler presented a two step analysis in analyzing the statute of limitation under

29 U.S.C. § 1113. The two step analysis asks 1) “when did the alleged ‘breach or

violation’ occur” and then “when did [the defendant] have ‘actual knowledge’ of the

breach or violation?” Ziegler v. Connecticut Gen. Life Ins. Co., 916 F.2d 548, 550

(1990) (analyzing the three year statute of limitations under § 1113(2)). On the first

step, to determine when the alleged breach or violation occurred, “we must first isolate

and define the underlying violation upon which . . . [plaintiff’s] claim is founded.” Id.

at 550-51. On this first step, the court need not consider when the plaintiffs suffered

actual harm except it may shed light on the second question of when a plaintiff gains

“actual knowledge” injured. Id. at 551-52. In Ziegler, the breach occurred upon the

contract’s creation, not at the time of termination or at the time of injury. Id. at 551. 

Defendants argue that the “last action which constituted a part of the breach or

violation” was when Plaintiffs accepted employment with New Golden Eagle on

October 1, 1997 which was when they could have avoided the detriment of giving up

the opportunity to seek other employment. Plaintiffs do not address this argument. 

Therefore, it appears that Plaintiffs concede that October 1, 1997 is the date of the

alleged breach. 

The “fraud or concealment” exception of 29 U.S.C. § 1113 tolls the statute of

limitations only “until the plaintiff in the exercise of reasonable diligence discovered

or should have discovered the alleged fraud or concealment.” DeFazio v. Hollister,

Inc., 854 F. Supp. 2d 770, 783 (E.D. Cal. 2012). “Plaintiffs bear the burden of proving

‘fraud or concealment’ under 29 U.S.C. § 1113.” Id. at 782 (quoting Harris v. Koenig,

815 F. Supp. 2d 12, 20 (D.D.C. 2011)). 

Under 29 U.S.C. § 1113, the “fraud or concealment” exception applies when an

ERISA fiduciary either “made knowingly false misrepresentations with the intent to

defraud the plaintiffs” or took “affirmative steps . . . to conceal any alleged fiduciary

their analysis, Defendants do not dispute that the “fraud or concealment exception”

applies to the statute oflimitations under § 1113(2) and tolls the limitations period until

after Plaintiffs’ discovery of the breach or violation. 

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breaches.” Barker v. American Mobil Power Corp., 64 F.3d 1397, 1401 (9th Cir.

1995). In Barker, the fact that funds were transferred from the Plan to the parent

company, replaced with promissory notes executed by the parent company and never

repaid do not establish fraud or false misrepresentations with the intent to defraud the

plaintiffs. Id. at 1401. The court explained there was no specific evidence that the

defendants “made knowingly false misrepresentations with the intent to defraud” or

evidence that defendants took affirmative steps to conceal any alleged fiduciary

breaches. Id. Passive concealment is not sufficient to toll the statute of limitations

unless the defendant has a fiduciary duty to disclose material information. Thorman

v. Am. Seafoods Co., 421 F.3d 1090, 1096 (9th Cir. 2005). 

Under § 1113, “‘[f]raud’ involves false statements or misrepresentations, made

with knowledge of their falsity and with the intent to wrongfully deprive the plaintiff.”

Zelhofer v. Metro. Life Ins. Co., No. 16cv991 TLN AC, 2016 WL 4126724, at *4 (E.D.

Cal. Aug. 3, 2016) (citing Barker v. American Mobil Power Corp., 64 F.3d 1397, 1401

(9th Cir. 1995)). “‘Concealment’ requires active steps to prevent plaintiff from

discovering the violation.” Id.; see Kurz v. Philadelphia Elec. Co., 96 F.3d 1544, 1552

(3d Cir. 1996) (“The relevant question is . . . not whether the complaint ‘sounds in

concealment,’ but rather whether there is evidence that the defendant took affirmative

steps to hide its breach of fiduciary duty.”). 

Defendants argue that Plaintiffs’ claim is based on the failure of Defendants to

provide complete information that they would not get benefit accrual credit for OGE

years of employment which constitutes passive concealment and does not rise to the

level of “fraud or concealment” as defined under § 1113. Plaintiffs dispute

Defendant’s characterization of their claims; instead they claim that Defendants

misrepresented the significance of facts and concealed its “intent not to give [past

service credit] for accrual, burying specific exculpatory language in transactional

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documents while omitting it in employee communications.” (Dkt. No. 233 at 42 .) 5

After the approval of Liberty Mutual’s bid with the Conservation Court, the

Rehabilitation Agreement, dated June 18, 1997, isthe only document explicitly stating

pastservice credit would count for purposes of eligibility, vesting, and early retirement

subsidies but past service credit with OGE would not be credited for the purpose of

benefit accrual. Moyle, 823 F.3d at 954. A copy of the Rehabilitation Agreement was

never provided to Golden Eagle employees and the statement, concerning PSC for

benefit accrual, was not communicated to Golden Eagle employees or appear anywhere

else during the transition. Id. It was in June 1997 that Liberty Mutual expressly

indicated its intention to not provide past service credit for benefit accrual to OGE

employee. However, that intention was never communicated to OGE employees. 

In August 1997, Liberty Mutual hosted a series of benefits enrollment meetings

so OGE employees could obtain information about their benefits during the transition

to Liberty Mutual. (Dkt. No. 232-1, Ds’ Response to Ps’ SSUF No. 99.) The purpose

of the meetings was to welcome the employees and provide participants with all the

important benefit information related to the Plan in a strong, positive attitude. (Id., No.

100.) The meetings were to provide all the “necessary data available” to employees to

“make the decisions they need as employees of Liberty.” (Id., No. 104.) Liberty

prepared a “Facilitator Guide” which the presenters used, as a script, to control the

manner and content of the information provided. (Id., Nos. 105, 106.) The Facilitator

Guide provided a consistent and accurate message about the terms and conditions of

the benefits available under the Plan. (Id., No. 107.) Retirement benefits were a small

portion of the benefit enrollment meetings and the Facilitator Guide did not define

“benefit accrual.” (Id., No. 113.) From these meetings, OGE employees had the

understanding that they would receive past service credit with OGE for all purposes. 

George Kaerth was the Senior Vice President of Underwriting for Old Golden

Eagle from 1991-1997 and during the transition, he was Executive Vice President of

Page numbers are based on the CM/ECF pagination.

5

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Underwriting and Marketing. (Dkt. No. 214-18, Butler Decl., Ex. 39, Kearth Depo. at

16:5-25; 17:14-22.) During the bidding process, Kaerth interacted with two members

of the due diligence team from Liberty Mutual, David Long, who is now Liberty’s

CEO, and Timothy Sweeney, and on several occasions, between February-June 1997,

Kaerth asked them whether years of service credit would be credited for purposes of

benefit accrual and they responded that the issue was still under consideration and

being negotiated. (Dkt. No. 214-27, Butler Decl. Ex. 48, Kaerth Decl. ¶ 3; Dkt. No.

214-18, Butler Decl., Ex. 39, Kaerth Depo. at 25:6-19.) 

Later in July 1997, Kaerth was informed the Rehabilitation Agreement was

finalized but he never got a copy of it and was informed that employees would not be

receiving a copy. (Dkt. No. 214-27, Butler Decl. Ex. 48, Kaerth Decl. ¶ 4.) During the

transition period to LibertyMutual, fromJuly-September 1997, Kaerth asked Long and

Sweeney again whether years of service would be credited for purposes of benefit

accrual under the retirement plan and was again told it was under consideration and

still being negotiated. (Id. ¶ 5.) During the same time, he was asked on a dozen

occasions by former OGE employees whether their years of service with OGE would

count under the retirement plan. (Id.) The OGE employees informed Kaerth that they,

as well as other OGE employees, understood past years of service would be credited. 

(Id.) Kaerth told Long and Sweeney that former OGE employees told him that they

believed that years of service would be credited for all purposes and told Long and

Sweeney that they needed to promptly clarify with employees whether years ofservice

would be applied for all purposes including the calculation of accrued benefits. (Id.) 

Long and Sweeney told Kaerth that the issue was being negotiated and still under

consideration. (Id.) LibertyMutual also indicated it would address these questions and

clarify whether years of service with OGE would be credited for all purposes. (Id.) 

But Kaerth was not aware of any meetings, actions taken or any written

communications that clarified thisissue. (Id. ¶ 6.) Kaerth does not recall attending the

meetings in August or September 1997 but he had discussions with employees who

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attended and they believed all benefits would be calculated based on their date of hire

with OGE. (Id. ¶ 7.) 

In October 1997, Kaerth was informed by Liberty Mutual that the transition

period had ended and was informed at this time that his years of service with OGE

would not be credited for purposes of benefit accrual under the plan. (Id. ¶ 8.) As a

result, he left employment in February 1998 because he did not receive credit for his

past years of service. (Id.) Between October 1997 and February 1998, about a dozen

former OGE employees asked him whether their years of service would apply under

the plan, and after these discussions, Kaerth promptly informed Liberty Mutual that

former OGE employee had informed him that they believed their years of service

would be credited for all purposes. (Id. ¶ 9.) He informed Long and Sweeney that they

needed to immediately tell former OGE employees that years of service would not be

credited for the purpose of benefit accrual under the plan and they told him that they

would address the problem. (Id.) However, he is unaware of Liberty Mutual

responding to these question or clarifying the issue. (Id.) 

Helen Sayles, the Senior Vice President of Human Resources & Administration,

on behalf of the Retirement Board, was involved in preparing the SPDs before they

were finalized and testified that Liberty did not identify items that the employees were

not entitled to in the plan documents. (Dkt. No. 214-19, Ex. 40, Sayles Depo. at

197:19-24; 200:18-22.) Golden Eagle was not referenced in an SPD until 2001. (Dkt.

No. 214-14, Butler Decl., Ex. 35, Connolly Depo. at 223:19-224:1.) Defendants did

not update the SPD to include Golden Eagle until the transition of all the acquisitions

were complete in 2000, although they could have included Golden Eagle in 1998 after

it was purchased. (Dkt. No. 214-19, Ex. 40, Sayles Depo. at 198:4-199:1.) 

The 2001 SPD referenced Golden Eagle for the first time and stated that “[p]ast

service credit with certain employers who either became part of the Liberty Mutual

Group and adopted the Retirement Plan, or from whom you are directly hired into the

Liberty Mutual Group, is credited for eligibility, vesting, early retirement and spouse’s

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benefits purposes as defined below . . . .” (Dkt. No. 213-10, Butler Decl., Ex. 7 at 22.) 

Then in 2009, the SPD language concerning past service credit changed to add the

word “solely” and stated “[p]ast service credit with certain employers who either

became Participating Employers, or from whom you are directly hired by or into a

Participating Employer, is credited solely for eligibility, vesting, early retirement and

spouse’s benefits purposes as defined below . . . .” (Dkt. No. 213-18, Buter Decl., Ex.

15 at 28.) 

Here,theCourt concludes that Plaintiffs have presented facts that LibertyMutual

engaged in acts to hinder the discovery of the breach of fiduciary duty or breached its

duty by making a knowing misrepresentation concerning past service credit and

intentionally took steps to conceal information about whether past service credit with

OGE would count towards benefits accrual. 

In Evanson, the district court held that the alleged concealment of an

independent trustee’s letters questioning the fairness of a new compensation plan was

evidence that the defendants “took affirmative steps to hide [their] breach of fiduciary

duty” and satisfied Rule 12(b)(6). Evanson v. Price, No. 06cv795-GEB-KJM, 2006

WL 2829789, at *5 (E.D. Cal. Sept. 29, 2006). In the case, the defendants adopted a

new compensation plan for executives designed by a third party plan administrator. Id.

at *1. The defendants then retained an independent trustee, Watson Wyatt, to evaluate

the fairness of this plan due to their conflict of interest. Id. at *2. In letters, Watson

Wyatt recommended that the defendants reconsider adopting the new compensation

plan concluding that the plan exceeded market compensation rates by about thirty to

fifty percent. Id. The defendants concealed the letters by placing them in a file in an

office that was inaccessible to others and by keeping secret the existence and contents

of the letters. Id. The plaintiff learned of the letters ten years later when he discovered

them among one of the defendant’s files. Id. The court found that the alleged

concealment of the letters was evidence that the defendants took affirmative steps to

hide their breach of fiduciary duty and that the alleged breach fell within the fraud or

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concealment exception of the statute of limitations. Id. at *5. 

Similarly, in this case, at least as of June 18, 1997, when the Rehabilitation

Agreement was finalized, Liberty Mutual had decided that it would not be providing

past service credit to employees of OGE for purposes of benefits accrual. The

Conservator was not mandated to provide copies of the Rehabilitation Agreement to

OGEemployees and LibertyMutual did not provide the Agreement to OGE employees. 

Defendants were on notice that OGE employees were questioning whether pastservice

credit would apply to benefits accrual when Kaerth questioned Long and Sweeney

about the issue and informed them that OGE employees believed their years of service

would be credited for purposes of benefit accrual. Despite this knowledge and their

response that they would address and clarify the issue, Defendants failed to do so and

kept that information secret during the transition process and after. Moreover, Long

and Sweeney, falsely represented, after the Rehabilitation Agreement was approved,

that the issue of past service credit was still under consideration and being negotiated,

when in fact it was not. TheRehabilitation Agreement isthe sole document evidencing

Defendants’ intent and decision not to provide past service credit during the transition

period. The facts presented by Plaintiffs demonstrate an affirmative misrepresentation

and affirmative concealment by Liberty Mutual to hide its policy on past service credit

despite numerous inquiries made by OGE employees. Thus, the Court concludes that

Plaintiffs have provided sufficient proof that the “fraud or concealment” tolling

exception applies to this case. 

2. Discovery of Breach or Violation

The “fraud or concealment” exception to the statute of limitations beginsto runs

“no later than six years after the date of discovery of such breach or violation.” 29

U.S.C. § 1113(2). In their supplemental briefs, both parties, and the Court agree that

the federal common law discovery rule applies to the “date of discovery” under §

1113(2). See Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 644 (2010) (“in the statute

of limitations context, the word ‘discovery’ is often used as a term of art in connection

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with the ‘discovery rule,’ a doctrine that delays accrual of a cause of action until the

plaintiff has ‘discovered it.’”); DeFazio v. Hollister, 854 F. Supp. 2d 770, 783 (E.D.

Cal. 2012) (“The Court’s holding applies equally to § 1113, especially because the

Court's analysis in Merck is centered around concepts embodied in the general

‘discovery rule.’”). 

In Merck the United States Supreme Court held that under the “discovery rule”

used in fraud cases under § 10(b) of the Securities Exchange Act of 1934, “where a

defendant’s deceptive conduct may prevent a plaintiff fromeven knowing he orshe has

been defrauded,” . . . [the rule] “encompasses not only those facts the plaintiff actually

knew, but also those facts a reasonably diligent plaintiff would have known.” Id. at

644, 648 (“the limitations period in § 1658(b)(1) begins to run once the plaintiff did

discover or a reasonably diligent plaintiff would have ‘discover[ed] the facts

constituting the violation’ - whichever comes first.”). The Supreme Court noted that

“inquiry notice” or “storm warnings” do not trigger the running of the statute of

limitations but “may be useful to the extent that they identify a time when the facts

would have prompted a reasonably diligent plaintiffto begin investigating.” Id. at 653. 

In Merck, the Court held that the discovery rule does not require that the actual plaintiff

undertake a reasonably diligent investigation but a court may look to when a

“reasonably diligent plaintiff would have discovered the necessary facts.” Id. at 652-

53; see also DeFazio, 854 F. Supp. 2d at 783 (“Therefore, assuming plaintiffs in this

case were not reasonably diligent, they would be precluded from relying on the ‘fraud

or concealment’ exception onlyif a reasonably diligent plaintiff would have discovered

the misconduct). “[W]hat [a plaintiff] knew and when [he] knew it are questions of

fact.” Simmons v. United States, 805 F.2d 1363, 1368 (9th Cir. 1986); O’Connor

Spear v. Fenkell, No. 13-2391, 2016 WL 5661720, at *19 (E.D. Pa. Sept. 30, 2016)

(when a party should have discovered or did discover the alleged fiduciary violations

is a genuinely disputed fact question). 

The Ninth Circuit has not yet applied the discovery rule to the fraud or

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concealment exception pursuant to 29 U.S.C. § 1113 although it has applied the

discovery rule to other causes of actions. See O’Connor v. Boeing North American,

Inc., 311 F.3d 1139, 1147 (9thCir. 2002) (CERCLA case holding that under the federal

common law discovery rule, a “plaintiff knows or reasonably should know of a claim

when he or she knows ‘both the existence and the cause of his injury.’”); United States

v. Kubrick, 444 U.S. 111, 113, 122 (1979) (applying discovery rule to FTCA statute

of limitations to be brought “within two years after such claim accrues”); Bibeau v.

Pacific N.W. Research Fdn. Inc., 188 F.3d at 1105, 1108 (9th Cir 1999) amended by

208 F.3d 831 (9th Cir. 2000) (applying discovery rule to state law personal injury

statute of limitation under § 1983 where the statute begins to run “once a plaintiff has

knowledge of the ‘critical facts’ of his injury, which are ‘that he has been hurt and who

has inflicted the injury.’”). In these cases, the statute of limitations under the discovery

rule runs “once a plaintiff has knowledge of the ‘critical facts’ of his injury, which are

‘that he has been hurt and who has inflicted the injury.’” Bibeau, 188 F.3d at 1108. 

In the context of 29 U.S.C. § 1113, other circuits have applied the discovery rule

to the “fraud or concealment” exception holding that the “statute of limitationsistolled

until the plaintiff in the exercise of reasonable diligence discovered or should have

discovered the alleged fraud or concealment.” Kurz v. Philadelphia Elec. Co., 96 F.3d

1544, 1552 (3d Cir. 1996); J. Geils Band Emp. Ben. Plan v. Smith Barney Shearson,

Inc., 76 F.3d 1245, 1253 (1st Cir. 1996) (“By its very language, then, Section 1113

explicitly incorporates the federal common law “discovery rule,” which postpones the

beginning of the limitation period from the date when the plaintiff isinjured to the date

the injury is discovered.”). 

Defendants argue Plaintiffs had actual knowledge and discovered the facts that

constituted the breach of fiduciary duty no later than 2002 based on their deposition

testimony. In response to the Court’s tentative ruling that Sanders did not have actual

6

Prior to the hearing on Defendants’ supplemental motion for summary 6

judgment, the Court issued a tentative ruling. (Dkt. No. 300.) 

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knowledge that she would not be receiving past service credit based on her years at

OGE until she received her first retirement statement shortly after November 2004, 

Defendants argue that the clock began ticking for Sanders in 2000 or 2001 when she

had a “storm warning” that something was amiss and she admitted she did not inquire

further because she believed it was futile. Thus, they argue all Plaintiffs’ claims are

barred as a matter of law since the lawsuit was not filed until 2010. In response,

Plaintiffs argue that the discovery rule applies when Plaintiffs knew or should have

known the facts to support each element of the breach of fiduciary duty which is only

after “clear repudiation” by Liberty Mutual denying their administrative appeal in

2009. They claim that they did not know of the resulting harm, an element of a breach

of fiduciary duty claim, until their administrative appeal was denied by Liberty Mutual

in 2009. According to Plaintiffs, the complaint filed in 2010 is timely. 

7

The Court disagrees with Plaintiffs’ position that under the discovery rule, the

statute of limitations only begins to run after the Plaintiffs are on notice of the facts

supporting each element ofthe cause of action, including the resulting harm. In Merck,

the applicable statute of limitations provided that a § 10(b) fraud action may be

brought “2 years after the discovery ofthe facts constituting the violation.” Merck, 559

U.S. at 638 (quoting 29 U.S.C. § 1658(b) (emphasis added)). The Court observed that

“scienter” is assuredly a “fact.” Id. at 648. More importantly, the “fact” of scienter

constitutes an important element of a § 10(b) violation for which Congress enacted

special heightened pleading requirements. Id.; see 15 U.S.C. § 78u-4(b)(2). Given the

prominence ofscienter in a § 10(b) fraud suit, it would frustrate the very purpose of the

In their response to Defendants’ supplemental motion for summary judgment, 7

Plaintiffs argued that the statute of limitations is also met if you consider other points

in time to establish actual knowledge such as when Liberty revised its SPD in 2009 to

clarify and inserted the word “solely”, when Liberty produced the Rehabilitation

Agreement in the administrative record in August 2008 - June 2009, and when Liberty

attached the Rehabilitation Agreement to the motion to dismiss in 2005. (Dkt. No.

298.) However, since Defendants’ argument at the time was based on “actual

knowledge”, not the discovery rule as discussed in their most recent brief, the Court

need not consider these other points in time to determine when Plaintiffs discovered

the facts concerning the breach or violation. 

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discovery rule, which specifically applies only in fraud cases, to allow the limitations

period to run regardless of whether a plaintiff had discovered any facts suggesting

scienter. Merck, 559 U.S. at 649. Therefore, the Court held that a claim accrues when

the plaintiff has actually discovered the facts constituting the defendant’s scienter or

when a reasonably diligent plaintiff would have discovered such facts. Id. at 653. The

Merck court did not address whether this rule extended to the element of loss or harm. 

However, it observed that the United States in its Amicus Curiae brief suggested that

it did not because facts concerning plaintiff’s reliance, loss, and loss causation are not

among those that constitute the violation and need not be discovered for a claim to

accrue. Id. at 649. 

Applying the analysis in Merck to the instant case, the element of harm in a §

1113 action does not possess the same significance asthe element ofscienter in a fraud

case. Unlike scienter, there are no heightened pleading requirements for the element

of harm and it is not tethered in any way to the discovery rule. Consequently, the Court

disagrees with Plaintiffs’ assertion that they are charged with discovery only when they

know or should know facts to support each element of breach of fiduciary duty,

including harm. See Martin v. Consultants & Administrators, Inc., 966 F.2d 1078,

1098 (7th Cir. 1992) (court looked to determine when plaintiff had actually discovered

or should have discovered the kickback scheme or unlawful scheme, not discussing

discovery of the facts to support the legal elements of the scheme); Diduck v.

Kasyzycki & Sons Contractors, Inc., 874 F.2d 912, 919 (2d Cir. 1989) (fraud or

concealment six years applied from when he discovered the wrongdoing). 

Furthermore, without providing binding or persuasive legal authority, Plaintiffs

ask the Court to extend the “clear repudiation” requirement that applies to determine

the beginning of the statute of limitations under § 1132(a)(1)(B) for a claim to recover

benefits due under the terms of the plan to a breach of fiduciary claim under §

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1132(a)(3) because both provisions use the language “knows or has reason to know.”8

Plaintiffs argue that because § 1132(a)(1)(B) requires a clear repudiation, this legal

standard should also apply to § 1132(a)(3). Plaintiffs provide no legal authority to

support their assertion and the Court declines to extend the “clear repudiation” rule to

a breach of fiduciary claim. 

Moyle was employed by Liberty Mutual until approximately March 15, 2002. 

(Dkt. No. 75-4, Moyle Decl. ¶ 3.) As of April 2001, Moyle’s Personal Data Sheet led

him to believe that he had a total employment period of “18 years and 4 months” for

purposes of his benefits. (Dkt. No. 75-17, Moyle Decl. at 3; Dkt. No. 212-14 at 52.) 

Moyle testified that shortly after his employment ended he discovered that he was not

going to get the extent of the retirement that he expected. (Dkt. No. 304-2, Abel Decl.,

Ex. A, Moyle Depo. at 3.) Moyle testified that at least as of March 2002, shortly after

his termination, he learned he would not be receiving credit for benefit accrual for his

past years of service with OGE even though he believed that Liberty Mutual

represented that it would be providing pastservice credit. (Dkt. No. 304-2, Abel Decl.,

Ex. A, Moyle Depo. at 94:21-95:3.) Shortly after his retirement, he called Liberty

Mutual after he received his personal data statement and was informed at that time, he 9

was not entitled to retirement. (Dkt. No. 212-24, Abel Decl., Ex. 10, Moyle Depo. at

51:6-15.) Meanwhile, Moyle’s state court complaint filed in 2002, avers that, on May

23, 2002, he was advised by Liberty Mutual that he would not be receiving credit for

his past years of service with OGE. 

10

An ERISA § 1132(a)(2)(B) claim accrues “either at the time benefits are 8

actually denied, or when the insured has reason to know that the claim has been

denied.” Wise v. Verizon Commc’ns, Inc., 600 F.3d 1180, 1188 (9th Cir. 2010).

The April 30, 2002 Retirement Benefit Plan Calculation Statement gave Moyle 9

4.41667 years of credited service. (Dkt. No. 212-15 at 24.) 

The Court notes that the state court complaint filed in 2002 and removed to 10

federal court asserts that he received his “Liberty Mutual Retirement Benefit Plan

Calculations Statement” around April 30, 2002 shortly after he was terminated

reflecting that his credited service years was only 4.416670 years which wasin contrast

to his April 30, 2001 statement reflecting 18 years and 4 months less his Liberty past

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After learning the facts concerning an alleged violation or breach, Moyle

diligently contacted an attorney and even filed state court complaints, on November 5,

2002 and February 13, 2003 that addressed certain facts underlying the breach of

fiduciary duty but not the legal cause of action. (Case No. 02cv2468-H(JAH), Dkt. No.

1 at 23-26; Case No. 03cv509-IEG(JAH), Dkt. No. 1 at 29-30. ) Therefore, the Court

11

concludes that Moyle discovered the alleged breach at some point between March 15

and May 23, 2002. 

12

Similarly, Arwood testified that when she called Liberty Mutual around

November 2001 to discuss her retirement the following year, she was told she would

not be getting credit for her prior years of service with OGE. (Dkt. No. 212-16, Abel

Decl., Ex. 2, Arwood Depo. at 66:12-22; 78:2-24.) She said it was her understanding

that when Liberty Mutual took over, it would be providing credit for years of service

with OGE and it applied to all benefits. (Id. at 31:10-13; 60:22-25; 63:1-9.)

Rollason first learned that he would not be getting past service credit from

Arwood when she went in to apply for retirement in November 2001 and came back

and said she would not be receiving retirement benefits for her time at OGE. (Dkt. No.

212-25, Abel Decl., Ex. 11, Rollason Depo. at 73:23-74:25.) He was shocked and

irritated since it was clear at the meetings that they would get retirement benefits for

their years of service at OGE. (Id. at 74:18-25; 91:1-5.) When Arwood alerted

Rollason about this issue, he investigated by making calls because he was thinking

about retiring early. (Id. at 92:21-93:4; 99:3-6.) Shortly thereafter, in 2002, he spoke

to Laura Bond of the human resource department and she confirmed what he heard

from Arwood, and that is when he started to look into talking with an attorney. (Id. at

service credit of 64 months. (Case No. 02cv2468-H(JAH), Dkt. No. 1, Compl. ¶¶ 24,

50.) Then on May 23, 2002, after numerous inquiries to Liberty Mutual, he was

advised he would not be receiving credit for his years of employment with OGE. (Id.

¶ 51.) 

The two state court complaints were eventually removed to this Court. 11

The Court notes that Moyle timely filed a complaint in 2005 for breach of 12

fiduciary duty. 

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91:8-15; 99:3-100:24.) When Rollason talked with Laura Bond, he discovered the

facts concerning the alleged breach or violation. Since the complaint in this case was

filed on October 19, 2010, Moyle, Rollason and Arwood’s claims for breach of

fiduciary duty are barred by the six year statute of limitations under the “fraud or

concealment” tolling provision in 29 U.S.C. § 1113(2). 

Lastly, Sanders testified that around 2000 or 2001, she learned from other

employees at work, in the break room, that they would not get past service credit

because a former employee who was expecting her full retirement did not get it. (Dkt.

No. 212-27, Abel Decl., Ex. 13, Sanders Depo. at 67:8-68:25.) Sanders testified that

what she heard in the break room about not receiving past service credit from other

employees was “conjecture.” (Id. at 77:4-12.) Sanders retired on November 19, 2004

and she testified that it was not until the end of 2004 and beginning of 2005 when she

received her first pension check that she became aware that her specific benefit would

not include past service credit. (Id. at 75:20-21; 77:13-24.) 

Defendants acknowledge that Sanders was not aware of her specific benefits

until the end of 2004 and the beginning of 2005 but argue that she received a “storm

warning” that something was not right in 2000 or 2001 when she heard in the break

room that she might not be getting past service credit for her years at OGE. Despite

knowing she might not get her past credit for her prior years of service, she did not

contact human resources because “there would be no point.” (Dkt. No. 212-27, Abel

Decl., Ex. 23, Sanders Depo. at 69:5-12.) According to Defendants, Sanders’ clock did

not begin ticking when she received her first pension check after she retired on

November 19, 2004 but began earlier in the year 2000 or 2001 when she knew

something was amiss and failed to diligently investigate. 

However, in Merck, the Court held that the discovery rule does not require that

the plaintiff undertake a reasonably diligent investigation but the Court looks to

determine when a “reasonably diligent plaintiff would have discovered the necessary

facts.” Merck, 559 U.S. at 652-53. According to Sanders, what she heard in the break

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room from other employees in 2000 or 2001 was conjecture. The comments about past

service credit were not made by representatives of Liberty Mutual as the comments

made to Rollason and Arwood but were hearsay statements made by employees while

chatting in the break room. Since the transition to Liberty Mutual in 1997, Sanders

believed that she would be receiving past credit service for her years at OGE based on

her understanding of the benefits she learned about when she attended the benefit

enrollment meetings. (Dkt. No. 212-27, Sanders Depo. at 57:21-24; 61:1-6, 61:13-

62:2.) Therefore, unsubstantiated comments made nearly four yearslater by employees

discussing the retirement of another employee in the break room, when viewed in the

light most favorable to Sanders, could have been ignored or disregarded as conjecture,

speculative, and/or gossip and creates a genuine issue of material fact whether a

reasonable person would have discovered the alleged breach or violation prior to

October 19, 2004. 

In summary, the Court concludes that Plaintiffs Arwood and Rollason’s claims

are barred by the six year limitations period for fraud or concealment under § 1113 but

that there are genuine issues of material fact asto whether Plaintiff Sanders’ claims are

barred by the six year limitations period under the fraud or concealment exception.

Finally, as to Moyle, the Court finds that his complaint was filed more than six years

after discovery of the claim. However, Moyle claims that he is entitled to equitable

tolling which is an issue that the Court will address below in section E. 

D. Last Opportunity to Cure

Alternatively, Plaintiffs argue that even if the fraud or concealment exception

does not apply, the case is timely based on Liberty Mutual’s last opportunity to cure

which is the date of final denial in 2009. Since Plaintiffs’ claims are premised on an

omission of material fact, a six year statute of limitations from the latest date on which

the fiduciary could have cured the breach or violation applies. Defendants argue that

the last opportunity to cure in an omissions case is on the last date the defendant could

have averted Plaintiffs’ detrimental reliance on the omitted information which was

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when Plaintiffs accepted employment with New Golden Eagle on October 1, 1997. 

The last opportunity to cure provision provides, 

No action may be commenced under this subchapter with respect to a

fiduciary's breach of any responsibility, duty, or obligation under this

part, or with respect to a violation of this part, 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, . . . 

29 U.S.C. § 1113(1). Not many cases have addressed this issue and the cases that have

looked at thisissue have held that the “last opportunity to cure” an omission isthe “last

date on which Defendant could have averted Plaintiff’s detrimental reliance on the

incomplete information.” Fischer v. Carpenters Pension and Annuity Fund of

Philadelphia and Vicinity, No. 10-3048, 2012 WL 602170, at *5 (E.D. Pa. Feb. 24,

2012) (citing Librizzi v. Children’s Mem’l Med. Ctr., 134 F.3d 1302, 1307 (7th Cir.

1998)). 

The Seventh Circuit warned about confusing the two meanings of the term

“cure” in the sense of “to fix” with “to find a remedy.” Olivo v. Elky, 646 F. Supp. 2d

95, 102 (D.C. Cir. 2009) (quoting Librizzi, 134 F.3d at 1307). Defining “cure” in the

sense “to find a remedy” would extend a fiduciary’s liability indefinitely asit is always

possible to remedy a breach. Id. In Olivo, the plaintiffs claimed that the defendants

breached their fiduciary duty by failing to notify them of their eligibility to enroll in the

Plan in 1994, 1999 and 2000. Id. The plaintiffs suffered the injury, the inability to

make income contributions and receive matching employer contributions, in the year

they should have been notified of their eligibility. Id. In Olivo, the court noted that the

last opportunity to cure wasthe time when plaintiff firstsuffered the injury complained

of. Id. 

Here, Plaintiffs misconstrue Defendants’ last opportunity to cure to be the date

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of remedying the breach. See Aull v. Cavalcade Pension Plan, 988 F. Supp. 1360,

13

1364 (D. Colo. 1997) (rejecting plaintiffs’ argument that defendant could still cure the

breach today and therefore the statue of limitations had not yet run). The last

opportunity to cure regarding notification that past service credit for time employed

with OGE would not count for accrued benefits would have been October 1, 1997

when Plaintiffs accepted employment with New Golden Eagle. October 1, 1997 was

the date Plaintiffs decided to forego looking for other employment opportunities and

stayed with New Golden Eagle and became a beneficiary under the Plan. Since the

complaint was not filed until 2010, Plaintiffs’ claim is not timely under § 1113(1)(B).

E. Equitable Tolling as to Plaintiff Moyle

Lastly, Moyle argues that his claims should be equitably tolled during the time

periods when his 2002, 2003 and 2005 lawsuits were pending or being appealed, and

his administrative claim was being processed. Defendants argue that Moyle has failed

to cite any authority that applies equitable tolling to ERISA to any of these time

periods. Further, Defendants argue that even if the Court tolls the applicable time

limits for the period that the 2005 lawsuit was pending and Moyle exhausted his

administrative remedies, the claim is untimely. In his initial supplemental opposition

to the motion for summary judgment, (Dkt. No. 298 at 12), Moyle argued that state

equitable tolling applies to him; however, in his supplemental opposition pursuant to

the Court’s order, (Dkt. No. 305), he shifts course arguing that federal equitable tolling

applies to him. 

In this case, the Court has already found that the “fraud or concealment”

exception applies to the facts of the case. The next question is whether the “fraud or

concealment” exception is a statute of limitations or a statute of repose in order to

permit equitable tolling of the six-year filing deadline. In the absence of statutory

In their opposition to Defendants’ motion for summary judgment, in arguing 13

that Plaintiffs met the statute of limitations from the latest date Defendants could cure

they state, “[H]ere, Defendants could still cure the ERISA violations.” (Dkt. No. 233,

Ps’ Opp. at 46.) 

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exceptions, federal statutes of limitations are generally subject to equitable principles

of tolling. Rotella v. Wood, 528 U.S. 549, 560 (2000). However, if the “fraud or

concealment” exception is a statute of repose, equitable tolling would not apply. CTS

Corp. v. Waldburger, 134 S. Ct. 2175, 2183 (2014) (“[s]tatutes of limitations, but not

statutes of repose, are subject to equitable tolling”). The Ninth Circuit has not ruled

on whether the fraud or concealment exception is a statute of repose or a statute of

limitations. An out-of-circuit district court case has concluded that the “fraud or

concealment” exception is a statute of limitations, rather than a statute of repose, and

is thus subject to tolling. Dykema Excavators, Inc. v. Blue Cross & Blue Shield of

Michigan, 77 F. Supp. 3d 646, 655 (E.D. Mich. 2015). 

Analysis of the language in § 1113 supports the conclusion that the “fraud or

concealment” exception is a statute of limitations. Clearly, § 1113(1) is a statute of

repose and focuses on the conduct of the fiduciary asthe trigger for the commencement

of the time under the statute. Bruno, 534 F. App’x at 655 (Section 1113 contains

statutes of limitations and repose, the repose period requires an action be filed within

six years of (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). By concentrating on the fiduciaries’ actions, §

1113(1) operates as a statute of repose and creates an outer limit for breaches of

fiduciary duties. Meanwhile, § 1113(2) is plainly a statute of limitations which directs

itself to the plaintiff’s knowledge of the existence of a breach or violation. In this way,

it sets time limits based upon when the plaintiff learns of the existence of a cause of

action. Similarly, the “fraud or concealment” exception also focuses on the plaintiff

and his discovery of the breach or violation. By directing itself to what a plaintiff

knows about the breach, this exception operatessimilarly to a statute of limitations and

for purposes of equitable tolling should be treated as one. 

The next question is whether Moyle is entitled to equitable tolling of the six year

statute of limitations under the “fraud or concealment” exception from the filing of the

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2005 federal complaint until his claims were dismissed by the district court and the

ruling was affirmed by the Ninth Circuit. Defendants argue that Moyle should receive,

at most, tolling for the period during which the case was pending at the district court

level. 

Equitable tolling may apply in ERISA cases “when the participant has diligently

pursued both internal review and judicial review but was prevented from filing suit by

extraordinary circumstances. . . .” Heimeshoff v. Hartford Life & Accident Ins. Co.,

134 S. Ct. 604, 615 (2013) (concerning bringing ERISA action within a period that the

parties agreed to by contract). “Long-settled equitable-tolling principles instruct that

generally, a litigant seeking equitable tolling bears the burden of establishing two

elements: (1) that he has been pursuing his rights diligently, and (2) that some

extraordinary circumstances stood in his way.” Kwai Fun Wong v. Beebe, 732 F.3d

1030, 1052 (9th Cir. 2013), aff'd and remanded sub nom United States v. Kwai Fun

Wong, 135 S. Ct. 1625 (2015) (internal quotations and citations omitted). Equitable

tolling has been applied sparingly, Scholar v. Pacific Bell, 963 F.2d 264, 267 (9th Cir.

1992), and does not apply to “garden variety claim of excusable neglect.” Irwin v.

Dep’t of Veterans Affairs, 498 U.S. 89, 96 (1990). “Equitable tolling is typically

granted when litigants are unable to file timely [documents] as a result of external

circumstances beyond their direct control.” Harris v. Carter, 515 F.3d 1051, 1055 (9th

Cir. 2008). 

In Kwai Fun Wong, the plaintiff “inform[ed] the parties and the court of her

desire to file an FTCA claimwell before the filing deadline” and before filing the claim

in the same action. 732 F.3d at 1053. The Court of Appeals found that the plaintiff

“took special care in exercising due diligence” by filing a pleading, which included a

request to file her FTCA claims in the case, prior to the expiration of the six-month

window set forth by 28 U.S.C. § 2401(b). Id. at 1052-53. The Court of Appeals found

the plaintiff’s FTCA “claim was rendered untimely because of external circumstances

beyond her control.” Id. at 1053. 

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Here, on March 14, 2005, Moyle filed an equitable relief claim within the

applicable six-year statute of limitations. On November 4, 2005, the district court,

relying on Varity, held that Moyle could not pursue a claimunder § 1132(a)(3) because

he had adequate relief under § 1132(a)(1)(B). On August 23, 2007, the Ninth Circuit

affirmed. Then in 2011, the Supreme Court decided CIGNA Corp. v. Amara, 563 U.S.

421, 440-42 (2011), which did not address the holding in Varity, and did not overturn

or overrule Varity, but outlined the scope of the meaning of “appropriate equitable

relief” under § 1132(a)(3). In the recent appeal of the summary judgment order in the

instant case, the Ninth Circuit held that Moyle could plead relief in the alternative

under both § 1132(a)(3) and § 1132(a)(1)(B) as long asthe recovery is not duplicative. 

Moyle, 823 F.3d at 961. 

Because Moyle pursued his equitable relief claimdiligently in March 2005, well

within the statute of limitations, and it was dismissed based upon law that was

subsequently clarified in Moyle’s favor, the Court concludes that extraordinary

circumstances prevented him from pursuing his equitable relief claim in a timely

fashion. Consequently, the Court finds that the limitations period wastolled while the

2005 lawsuit was pending from March 14, 2005 through August 23, 2007, a period of

29 months and 9 days. Cf. Outler v. United States, 485 F.3d 1273, 1281 (11th Cir.

2007) (analyzing equitable tolling based on an intervening change in law by citing to

Gonzalez v. Crosby, 545 U.S. 524 (2005), a case addressing whether a change in law

constituted an extraordinary circumstance under Rule 60(b) and noting it was

“analogous.”). 

Here, Moyle learned that he would not receive credit for his OGE years of

service for purposes of benefit accrual at some point between March 15 and May 23,

2002. The Court also concludes that he also had actual knowledge of the breach at the

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same time. The instant class action complaint was filed on October 19, 2010. From

14

the discovery date of May 23, 2002 through October 19, 2010, 100 months and 26 days

lapsed. Given that the statute of limitations was tolled for 29 months and 9 days, 71

months and 17 days passed before the instant case was filed. With a discovery date of

May 23, 2002, Moyle’s complaint is timely under the six year statute of limitations

provided for cases involving “fraud and concealment.” However, with a discovery 15

date of March 15 through May 11, 2002, the claim would be untimely. Given the

question of fact regarding the date that the claim was discovered, summary judgment 

 would be inappropriate. 

In addition to seeking tolling during the course of the 2005 lawsuit, Moyle seeks

tolling during the period that he administratively exhausted his claims. In their papers,

Defendants conceded this time frame for tolling purposes based upon the view that

there was a three year statute of limitations. Given that the Court has applied the six

year time limits provided under the “fraud or concealment” exception, the Court

expects that the Defendants are not prepared to concede that equitable tolling is

available for this period of time and it will analyze whether tolling during this time

frame is appropriate. 

The Ninth Circuit has not ruled on whether exhaustion of administrative

remedies for an ERISA claim is subject to equitable tolling. In analyzing whether

equitable tolling applies to ERISA cases, courts in other circuits have concluded that

if a court requires a plaintiffto exhaust administrative remedies under ERISA, itshould

also allow for tolling of the statute of limitations during this period or it would lead to

In its tentative order, the Court conducted a detailed analysis, albeit incorrect

14

and based on the failure ofthe partiesto distinguish “actual knowledge” and “discovery

of such breach or violation” in their initial briefing, and concluded that Moyle had

“actual knowledge of the breach or violation” in 2002, when he learned he would not

be receiving past service credit for his prior years at OGE. (Dkt. No. 300 at 22.) 

Plaintiff Moyle also seeks equitable tolling for the time periods during which 15

the 2002 and 2003 state lawsuits were pending. Given the lack of Ninth Circuit

precedent to support these requests and the fact that the lawsuit is timely based upon

the tolling under the 2005 lawsuit and exhaustion of administrative remedies, it is

unnecessary to decide whether tolling is justified based upon these other actions. 

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unfair results. See Pettaway v. Teachers Ins. And Annuity Ass’n of America, 547 F.

Supp. 2d 1, 5-6 (D.D.C. 2008) (equitable tolling applied during internal appeal of

denial of benefits where the plaintiff wasrequired to exhaust before filing suit); Jeffries

v. Trustees of the Northop Grumman Savings & Inv. Plan, 169 F. Supp. 2d 1380, 1382

(M.D. Ga. 2001) (time for exhausting administrative remedies wastolled for equitable

relief claim that required exhaustion); Wolfe v. 3M Short-Term Disability Plan, 176

F. Supp. 2d 911, 917-18 (D. Minn. 2001) (applying equitable tolling while the plaintiff

exhausted administrative remedies); Hoffman v. Central States SE & SW Areas

Pension Fund, No. 90 CV 4132, 1992 WL 336376, at *9 (N.D. Ill. May 8, 1992) (“[A]

policy favoring exhaustion of remedies is undermined unless the statute of limitations

is tolled during the period of exhaustion.”). 

In these cases, the courtsrecognized the unfairness orthe “procedural quagmire”

that could result if a plaintiff is required to exhaust prior to filing a complaint and if

that time period is not tolled. See Wolfe, 176 F. Supp. 2d at 918; Pettaway, 547 F.

Supp. 2d at 6.

If a plaintiff files her complaint to avoid the running of the limitations

period but prior to fully exhausting her internal remedies, she risks

dismissal of her claim for failure to exhaust her administrative

remedies. Conversely, a plaintiff who exhausts her internal remedies

as required under the plan itself, ERISA and applicable caselaw, there

is a risk that, absent tolling, the limitations period will expire before

she files suit in federal court.

Wolfe, 176 F. Supp. at 918. Such a situation arose in the instant case. Moyle timely

filed his complaint in 2005 without exhausting his administrative remedies and he bore

the risk and his complaint was dismissed for failing to exhaust. (Case No. 05cv507-

DMS(WMC), Dkt. No. 32.) Therefore, following the appeal and the directive of the

Ninth Circuit, Moyle sought to exhaust his administrative remedies. See Moyle, 239

F. App’x at 363 (“Moreover, on this record, Moyle is not precluded from raising his

request for clarification of his rights to future benefits or, at the appropriate time, a

claim for such benefits, in federal court after exhausting his administrative remedies

pursuant to the plan.”). To require a plaintiff to exhaust administrative remedies

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without tolling the limitations period while he proceeds to exhaust is “manifestly

unfair.” See Pettaway, 547 F. Supp. at 6. 

Therefore, in Moyle’s case, the Court concludes that equitable tolling should

apply while he exhausted his administrative remedies from January 26, 2008 until

October 23, 2009. Tolling thistime period renders Moyle’s complaint timely under the

six year statute of limitations for fraud or concealment.16

F. Equitable Relief under 29 U.S.C. § 1132(a)(3)

17

Defendants argue that the remaining equitable relief at issue is reformation and

surcharge based on the Ninth Circuit’s ruling and summary judgment should be 18

granted asthose remedies are not available to Plaintiffs. In opposition, Plaintiffs argue

they have sufficiently provided facts to support the equitable remedies of reformation

and surcharge. 

29 U.S.C. § 1132(a)(3) provides that “a civil action may be brought . . . (3) by

The Court recognizes that the Fifth Circuit and Eighth Circuit have declined 16

to apply equitable tolling while a plaintiff exhausts administrative remedies. See

Radford v. General Dynamics Corp., 151 F.3d 396, 399-400 (5th Cir. 1998); Mason v.

Aetna Life Ins. Co., 901 F.2d 662, 664 (8th Cir. 1990). However, the facts and

reasoning in both cases are not applicable to the instant case. In Radford, even though

exhaustion was required for a breach of fiduciary duty claim, the Fifth Circuit

concluded that the six year period § 1113(1) was a statute of repose; therefore,

equitable tolling could not apply. Radford, 151 F.3d at 400. Radford did not address

equitable tolling of the six year statute of limitations for the fraud or concealment

exception. In Mason, the Eighth Circuit held that equitable tolling during the alleged 

exhaustion period was not justified as the defendant provided proper notice, although

late, and the plaintiff failed to request review of the defendant’s decision until three

years later; therefore, the plaintiff was not diligent. Mason, 901 F.2d at 664. 

To the extent Plaintiffs Arwood and Rollason’s claims are barred by the statute

17

oflimitations, the equitable relief analysis only applies to Plaintiffs Moyle and Sanders. 

Relying on the Ninth Circuit ruling stating that the case is remanded for 18

determinations of fact and equitable relief in the form of reformation and surcharge,

Defendants maintain that based on the law of the case, the only equitable relief

remaining is reformation and surcharge. Plaintiffs respond that they seek all available

equitable remedies such as reformation, restitution and surcharge but only address

reformation and surcharge in response to Defendants’ supplemental brief. Since the

parties only address the relief ofreformation and surcharge, and do not provide updated

briefing on restitution, the Court only addresses the equitable relief of reformation and

surcharge. 

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a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates

any provision of this subchapter or the terms of the plan, or (B) to obtain other

appropriate equitable relief (i) to redress such violations or (ii) to enforce any

provisions of this subchapter or the terms of the plan.” 29 U.S.C. § 1132(a)(3). The

United States Supreme Court has recognized that equitable estoppel, reformation and

surcharge are three available equitable remedies provided under § 1132(a)(3). CIGNA

Corp. v. Amara, 563 U.S. 421, 440-42 (2011). 

1. Whether Plaintiffs have Identified a Breach by a Fiduciary

Defendants argue that Michael Plavnicky, the individual that Plaintiffs allege

committed the breach of duty by misrepresenting they would receive pastservice credit

for purposes of benefit accrual, was not a plan fiduciary when he made those alleged

statements. (Dkt. No. 212-1 at 32.) Plaintiffs respond to another argument raised by

Defendants that LMIC Liberty Mutual and LMGI are not fiduciaries as to count four

and argue that Liberty Mutual and LMGI engaged in fiduciary conduct and delegated

administration to the Retirement Board, who delegated drafting SPDs to the Human

Resources Director. (Dkt. No. 233 at 47.) 

ERISA defines fiduciary as the following, 

a person is a fiduciary with respect to a plan to the extent (i) he

exercises any discretionary authority or discretionary control

respecting management of such plan or exercises any authority or

control respecting management or disposition of its assets, (ii) he

renders investment advice for a fee or other compensation, direct or

indirect, with respect to any moneys or other property of such plan, or

has any authority or responsibility to do so, or (iii) he has any

discretionary authority or discretionary responsibility in the

administration of such plan.

29 U.S.C. § 1002(21)(A). 

In Varity Corp.,in determining whether Varity’s actionsfell within the definition

of a “fiduciary” with discretionary acts of plan “management” and “administration”,

the Supreme Court explained that “[c]onveying information about the likely future of

plan benefits, thereby permitting beneficiaries to make an informed choice about

continued participation, would seem to be an exercise of a power ‘appropriate’ to

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carrying out an important plan purpose.” Varity Corp., 516 U.S. at 502-03 (offering

beneficiaries detailed plan information in order to help them decide whether to remain

with the plan is essentially the same kind of plan-related activity). Determining

whether an individual is a fiduciary is a fact based inquiry into the “factual context in

which the statements were made, combined with the plan-related nature of the activity,

engaged in by those who had plan-related authority to do so . . . .” Id. at 503. 

Here,the parties dispute who made the allegedmisrepresentation or affirmatively

omitted information and whether those persons or entities are “fiduciaries” as defined

under 29 U.S.C. § 1002(21)(A). As there are genuine issue of material fact, the Court

DENIES Defendants’ motion for summary judgment on their argument that the alleged

breach of fiduciary duty was not committed by fiduciaries. 

2. Reformation

In their original summary judgment motion, Defendants argued that summary

judgment should be granted on the equitable relief of reformation because Plaintiffs

have failed to identify any evidence indicating the terms of the plan or Plaintiffs’

alleged reliance on the alleged misrepresentations were induced by any malfeasance. 

(Dkt. No. 212-1 at 43.) In their supplemental motion, Defendants argue that

reformation is not applicable in this case because it would be inconsistent with the

unambiguous terms of the plan document; that Plaintiffs have not met the requirement

of fraud or mistake and where the remedy sought equates to money damages for past

harm. (Dkt. No. 296.) Plaintiffs oppose arguing they seek reformation based on

Liberty Mutual’s fraudulent concealment paired with Plaintiffs’ unilateral mistake. 

(Dkt. No. 233 at 54.) Plaintiffs argue that under § 1132(a)(3), reformation is available

to remedy the false, misleading or omitted information, and § 1132 (a)(1)(B) then

allows interpretation of the reformed plan to provide benefits. (Id. at 53.) 

Reformation is a form of equitable relief used to remedy false or misleading

information provided by a plan fiduciary. Amara, 563 U.S. at 440. It is the power to

reform contracts that failed to express the agreement of the parties and is available

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“only in the event of mistake or fraud.” Gabriel v. Alaska Elect. Pension Fund, 773

F.3d 945, 955 (9th Cir. 2014) (citing Amara, 563 U.S. at 440); see also Skinner v.

Northrop Gumman Retirement Plan B, 673 F.3d 1162, 1166 (9th Cir. 2012). In the

case of a mistake, reformation is an appropriate relief “(1) ‘if there is evidence that a

mistake of fact or law affected the terms of [a trust] instrument and if there is evidence

of the settlor’s true intent’; or (2) ‘if both parties [to a contract] were mistaken about

the content or effect of the contract’ and the contract must be reformed ‘to capture the

terms upon which the parties had a meeting of the minds.’” Gabriel, 772 F.3d at 955

(quoting Skinner, 673 F.3d at 1166).

“Under a fraud theory, a plaintiff may obtain reformation when either (1) ‘[a

trust] was procured by wrongful conduct, such as undue influence, duress, or fraud,’

or (2) a ‘party’s assent [to a contract] was induced by the other party’s

misrepresentations as to the terms or effect of the contract’ and he ‘was justified in

relying on the other party’s misrepresentations.’” Id. “A plaintiff must prove mistake

and fraud by clear and convincing evidence.” Amara v. CIGNA Corp., 925 F. Supp.

2d 242, 252 (D. Conn. 2012) (plaintiff established basis for reformation based on

defendant’s fraud along with plaintiffs’ unilateral mistake). On remand from the

Supreme Court in Amara, the district court held that there was mistake on one side and

fraud or inequitable conduct on the other which justified reformation to accord with the

parties’ intent. Id. at 254-55, aff’d by Amara v. CIGNA Corp., 775 F.3d 510 (2d Cir.

2014). The district court concluded that CIGNA’s deficient notice led the employees’

misunderstanding as to the content of the contract and CIGNA did not take steps to

correct the mistake. Id. at 253. “Instead, CIGNA affirmatively misled and prevented

employees from obtaining information that would have aided them in evaluating the

distinctions between the old and new plans.” Id. “A contract may be reformed due to

the mutual mistake of both parties, or where one party is mistaken and the other

commits fraud or engages in inequitable conduct.” Amara, 775 F.3d at 525.

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Here, similar to the facts in Amara , Plaintiffs have raised issues of fact to 19

survive summary judgment. Similar to Amara, here, as discussed above, Defendants

misrepresented whether past service credit would apply to OGE employees and they

“actively prevented employees” from learning this fact, see Amara, 775 F.3d at 526. 

Plaintiffs assert they were left with the mistaken impression that past service credit

applied to the plan overalls while Liberty Mutual intentionally misrepresented and

affirmatively omitted information about whether past service credit would apply to

benefits accrual. When Kaerth questioned Long and Sweeney about whether past

service credit would be counted towards benefits accrual after the Rehabilitation

Agreement had been approved, Long and Sweeney responded that the issue was still

under consideration and being negotiated. When Kaerth specifically told Long and

Sweeney that OGE employees were under the impression that pastservice credit would

apply to accrual of benefits, and they should clarify with employees, they indicated

they would address the problem but they did not. The misleading statements and

Liberty Mutual’s failure to disclose despite notice that OGE employees had concerns

about past service credit caused Plaintiffs’ mistaken understanding that past service

credit would apply to time they were employed with OGE. Accordingly, the Court

DENIES Defendants’ motion for summary judgment on the equitable relief of

reformation. 

The Court declinesto address Defendants’ new argumentsin their supplemental

motion for summary judgment. Defendants argue, in one sentence, that the Gabriel

case precludesreformation where it would be inconsistent with the unambiguous terms

of the plan documents. However, they conduct no analysis concerning this new

argument raised and the Court declines to conduct a sua sponte analysis on this issue. 

As to Defendants’ argument that reformation is foreclosed where the remedy sought

On appeal of this case, the Ninth Circuit noted that the factual allegations were 19

“highly analogous” to Amara; therefore, the Court looks to the district court and

subsequent Second Circuit appeal of Amara following remand from the United States

Supreme Court for guidance. 

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would equate to money damages for past harms citing to Parsons v. Bd. of Trustees of

the Nevada Resort Assoc. - I.A.T.S.E. Local 702 Retirement Plan, No 12cv299, 2012

WL 3319742 (D. Nev. Aug. 13, 2012) is not supportive. This case does not address

recent binding authority on the issue of reformation. 

3. Surcharge

Defendants argue thatsurcharge requires a showing of harmand causation which

has not been made in this case including detrimental reliance or extraordinary

circumstances. They argue that Plaintiffs had no pension benefits until LibertyMutual

purchased the assets of OGE around October 1, 1997 and therefore, Plaintiffs cannot

show that “but for” Defendants’ alleged breach, they would be entitled to the benefits

they now seek. In addition, Plaintiffs failed to demonstrate the Liberty Mutual was

unjustly enriched or that the fiduciaries gained a benefit as a result of the breach. 

Plaintiffs argue that Liberty Mutual was unjustly enriched by the value of the past

service credit that was included in Liberty Mutual’s bid. 

Under the doctrine ofsurcharge, “[e]quity courts possessed the power to provide

relief in the form of monetary ‘compensation’ for a loss resulting from a trustee’s

breach of duty, or to prevent the trustee’s unjust enrichment.” Amara, 563 U.S. at 441. 

In the Ninth Circuit, beneficiaries can obtain surcharge under an unjust enrichment

theory where a fiduciary that obtained a benefit through a breach of duty can be

ordered to return that benefit to the beneficiaries or through compensatory damagesfor

actual harm caused by its breach of duty also known as make-whole surcharge. 

Skinner, 673 F.3d at 1167; Gabriel, 773 F.3d at 957. 

“To obtain relief by way of surcharge, a beneficiary must show a breach of

fiduciary duties by an ERISA trustee, that the violation injured her or him, and that the

remedy of surcharge is available for the claimed injury by reference to traditional

equitable principles.” Monper v. Boeing Co., 104 F. Supp. 3d 1170, 1185 (W.D. Wash.

2015) (citing Gabriel, 773 F.3d at 958). An ERISA fiduciary “can be surcharged under

[Section 1132(a)(3)] only upon a showing of actual harm–proved (under the default

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rule for civil cases) by a preponderance of the evidence.” Amara, 563 U.S. at 444. 

Detrimental reliance is not required for surcharge but actual harm may consist of

detrimental reliance. Id. The NinthCircuit has applied the “but for” causation standard

where “[t]he beneficiary can pursue the remedy that will put the beneficiary in the

position he orshe would have attained but for the trustee’s breach.” Skinner, 673 F.3d

at 1167. 

The district court, in Amara, determined that to evaluate a make-whole surcharge

claim under § 502(a)(3), it should first consider whether Plaintiffs have met their

burden of establishing “(1) that CIGNA breached its fiduciary duty, and (2) that

Plaintiffs suffered a “related loss.” Amara, 925 F. Supp. 2d at 259. Once Plaintiffs

havemet their burden, the Court must then decide whether Defendants can demonstrate

that “the loss would have occurred in the absence of a breach of duty.” Id. 

Here, the threshold issue of whether Defendants breached their fiduciary duty

has not been raised in Defendants’ motion for summary judgment or supplemental

summary judgment. This issue remainsto be tried at trial. Because the threshold issue

cannot be determined at this time,theCourt DENIES Defendants’ supplemental motion

for summary judgment on the issue of surcharge. 

Conclusion

Based on the reasoning above, the Court GRANTS in part and DENIES in part

Defendants’ supplemental motion for summary judgment. The Court GRANTS

Defendants’ motion to the extent that Plaintiffs Rollason and Arwood’s claims are

barred by the statute of limitations and DENIES Defendants’ motion as to the

remaining claims.

IT IS SO ORDERED. 

DATED: April 11, 2017

HON. GONZALO P. CURIEL

United States District Judge

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