Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-04-02213/USCOURTS-ca8-04-02213-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 04-2213

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North American Coal Corporation *

Retirement Savings Plan, and its Plan *

Administrator, the North American *

Coal Corporation, * Appeal from the United States

* District Court for the

Appellees, * District of North Dakota.

*

v. * [TO BE PUBLISHED]

*

Todd Roth; Mitchell Schlaht, *

*

Appellants. *

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Submitted: January 5, 2005

Filed: January 25, 2005

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Before BYE, MELLOY, and COLLOTON, Circuit Judges.

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PER CURIAM.

Todd Roth and Mitchell Schlaht appeal the district court’s adverse partial grant

of summary judgment in a lawsuit brought by the North American Coal Corporation

(NACCO)’s Retirement Savings Plan--an Employee Retirement Income Security Act

(ERISA) plan--and NACCO, the Plan’s administrator. The suit arose when NACCO

mistakenly overpaid monies from a retirement savings account to Roth, who then

endorsed the disbursement check over to Schlaht. Schlaht and Roth refused to return

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The Plan referenced the Internal Revenue Code provision on QDROs, but it

is nearly identical to the ERISA provision. 

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the overpaid benefits, and NACCO brought suit. The district court designated its

order as appealable under Federal Rule of Civil Procedure 54(b).

Contrary to appellants’ assertions, the district court had subject matter

jurisdiction over the action, and the complaint stated a claim. See 29 U.S.C.

§ 1132(a)(3) (fiduciary may bring civil action to enjoin act or practice which violates

terms of ERISA or ERISA plan, or to obtain other equitable relief to redress such

violations); In re Minn. Mut. Life Ins. Co. Sales Practices Litig., 346 F.3d 830, 834

(8th Cir. 2003) (reviewing de novo challenges to subject matter jurisdiction).

Specifically, the lawsuit involved a plan fiduciary seeking to enforce plan terms and

ERISA provisions regarding the segregation of plan funds while a former spouse

secures a qualified domestic relations order (QDRO). See 29 U.S.C. § 1056(d)(3)(G)-

(H);1

 Hogan v. Raytheon Co., 302 F.3d 845, 857 (8th Cir. 2002) (recognizing 18-

month period under ERISA to secure QDRO). We also disagree with appellants’

suggestion that Schlaht was not a proper party to the lawsuit. See Bombardier

Aerospace Employee Welfare Benefits Plan v. Ferrer, Poirot & Wansbrough, 354

F.3d 348, 352-53 (5th Cir. 2003) (§ 1132(a)(3) does not limit universe of possible

defendants, and § 1132(a)(3) liability does not depend on whether ERISA’s

provisions impose specific duty on party being sued), cert. denied, 124 S. Ct. 2412

(2004).

As to whether plaintiffs were entitled to summary judgment, see United States

v. Taylor, 338 F.3d 947, 950 (8th Cir. 2003) (summary judgment standard of review),

there were no material facts in dispute: the record showed that as of July 28, 2003,

65% of Roth’s 401(k) monies belonged to his former wife, a fact confirmed by a

QDRO received well within the eighteen-month period for the former wife to secure

one; that Roth knew he was not entitled to the monies at issue and so informed

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NACCO before filing his August 2003 distribution-request form; that the September

2003 overpayment arose from NACCO’s administrative error; and that Roth endorsed

the check NACCO issued over to Schlaht, who deposited the funds in a credit union.

It was thus proper for the district court to impose a constructive trust over the

overpaid benefits, permanently enjoin appellants from disposing of or transferring any

of the funds still in their possession and control, and require the return of such funds

and a tracing of any portion of the funds no longer in appellants’ possession or

control. However, the district court’s award of restitution of a sum certain, and its

finding of personal liability as to Roth, constituted legal remedies not authorized by

section 1132(a)(3). See Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S.

204, 212-14 (2002) (clarifying scope of § 1132(a)(3), and explaining that not all relief

under rubric of restitution is available in equity). Further, because there is no gap in

ERISA’s text regarding a fiduciary’s right to bring a civil action for legal remedies

to enforce plan terms or ERISA provisions, a federal common law remedy cannot be

recognized. See id. at 220-21 (vague ideas of statute’s underlying purpose are

inadequate to overcome words of its text regarding specific issue being addressed);

Coop. Benefit Adm’rs, Inc. v. Ogden, 367 F.3d 323, 332 (5th Cir. 2004) (in drafting

§ 1132(a)(3) to allow only “equitable relief,” Congress specifically contemplated

possibility of extending fiduciaries’ right to sue participant for money damages, but

chose instead to limit remedies to those typically available in equity); cf. Shipley v.

Ark. Blue Cross & Blue Shield, 333 F.3d 898, 902 (8th Cir. 2003) (where there is no

express ERISA provision governing issue, courts should fashion federal substantive

law to fill gap).

Accordingly, we vacate those portions of the district court order finding Roth

personally liable and ordering him to make restitution of a sum certain, and we

otherwise affirm.

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