Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-02179/USCOURTS-casd-3_10-cv-02179-10/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

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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)

NOTICE OF TENTATIVE RULING

ON DEFENDANT’S

SUPPLEMENTAL MOTION FOR

SUMMARY JUDGMENT

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.

Before the Court is Defendant’s supplemental motion for summary judgment. 

(Dkt. No. 296.) The motion is fully briefed and a hearing is set on calendar for

December 16, 2016. After a review of the briefs, supporting documentation and the

applicable law, the Court issues the following tentative ruling and outstanding issues

in advance of Friday’s hearing. 

Procedural Background

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

- 1 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 1 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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 1

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.) Plaintiff

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

dismissal requiring Plaintiff to exhaust. 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”)

Prior to the case filed in 2005, Plaintiff Moyle also filed two complaints in San 1

Diego Superior Court that were removed to this Court. 

On November 5, 2002, Plaintiff Moyle filed an action against GEIC, LMIC 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 was removed 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, Plaintiff filed a

notice of voluntary dismissal of action without prejudice. (Id., Dkt. No. 14.)

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

LMIC and John Davis in 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 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, Judge Irma E. Gonzalez, United

States DistrictJudge, 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 pastservice 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.) 

- 2 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 2 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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 Sanders filed the instant class action complaint against

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

Retirement Benefit PlanRetirement Board (“Board”);LibertyMutual Insurance Group,

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

1.) On October 21, 2010, Plaintiffs filed a first amended complaint. (Dkt. No. 3.) On

April 25, 2011, District Judge 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. (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.)

- 3 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 3 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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 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 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 was time-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

- 4 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 4 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

was proper. Id. The court concluded there was a factual dispute whether “Liberty

Mutual breached its fiduciary 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 was not 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. 

- 5 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 5 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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

- 6 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 6 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

count. During the enrollment period, the operative 1987 Plan and 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 with the Stateappointed conservator, 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 or the SPD was not amended to address past service credit until 2001

where the Plan and the 2002 SPD specifically addressed OGE employees and that past

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

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

From2002 and 2006, LibertyMutualRetirement Benefit PlanRetirement 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 pastservice 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.) 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 statue 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. 

Discussion

A. Statute of Repose and Statute of Limitations under 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

- 7 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 7 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

with six year statue of 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 statutesseek 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 where a defendant should be

free from liability. Id. at 2183. Therefore, a statute of repose is not subject to equitable

- 8 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 8 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

tolling. Id. 

B. Fraud or Concealment Exception 

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

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

and further argue 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. 

2

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

§ 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). 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 beach

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

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

2

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

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. 

- 9 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 9 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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

- 10 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 10 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

documents while omitting it in employee communications.” (Dkt. No. 233 at 42 .) 3

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 with 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 benefit enrollment meetings

so OGE employees could obtain information about 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

Page numbers are based on the CM/ECF pagination.

3

- 11 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 11 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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, around 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 under consideration and still

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 Liberty Mutual, from July - 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

- 12 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 12 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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.) Liberty Mutual also indicated they would address these questions

and clarify whether years ofservice with OGE would be credited for all purposes. (Id.) 

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

that clarified this issue. (Id. ¶ 6.) Kaerth does not recall attending the meetings in

August or September 1997 but he had discussions with employees who 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 about 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,

- 13 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 13 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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, the Court 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 the Watson

Wyatt letters is evidence that Defendants “took affirmative steps to hide [their] breach

of fiduciary duty” and satisfied Rule 12(b)(6). Evanson v. Price, No. 06cv795-GEBKJM, 2006 WL 2829789, at *5 (E.D. Cal. Sept. 29, 2006). In the case, the defendants

- 14 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 14 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

adopted a new compensation plan for executives designed by a third party plan

administrator obtained. Id. at *1. 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 Defendants reconsider adopting the

new compensation plan concluding that the plan exceeded market compensation rates

by about thirty to fifty percent. Id. 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. Plaintiff learned of the letters ten years letter when he

discovered them among one of the defendant’s files. Id. The court noted that the

alleged concealment ofthe lettersis evidence that the defendants took affirmative steps

to hide their breach of fiduciary duty. Id. at *5. 

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

Agreement was finalized, it was clear that Liberty Mutual 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 OGE

employees and Liberty Mutual 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 Plaintiff demonstrate an affirmative misrepresentation

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

- 15 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 15 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

Plaintiffs have sufficiently provided evidence that the “fraud or concealment” tolling

exception applies to this case. 

1. 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). The analysis to determine the “date of discovery” is the same as

“actual knowledge.” See Ziegler v. Connecticut Gen. Life Ins. Co., 916 F.2d 548, 552

n.2 (9th Cir. 1990) (noting that tolling provision in cases of fraud or concealment

complements the requirement “to ascertain when an ERISA plaintiff gained actual

knowledge of a breach of violation”); Spragg v. Pacific Telesis Grp., 1999 WL 51489,

at *4 n. 1 (9th Cir. 1999) (unpublished) (even if plaintiff had alleged fraud or

concealment, statute of limitations would still have run after he obtained actual

knowledge of the alleged breaches of duty). Actual knowledge is a factual inquiry. 

Ziegler, 916 F.2d at 552. 

“We stress that an ERISA plaintiff’s cause of action cannot accrue and the

statute of limitations cannot begin to run until the plaintiff has actual knowledge of the

breach regardless of when the breach actually occurred.” Ziegler v. Connecticut Gen.

Life Ins., Co., 916 F.2d 548, 552 (9th Cir. 1990). In Ziegler, analyzing “actual

knowledge” based on the three year statute of limitations, the Ninth Circuit held that

the plaintiffs had “actual knowledge” of the alleged ERISA violation at least as ofJuly

1984 when the defendant informed the plaintiffs, when they inquired of the defendant

of its desire to terminate its investment agreement, that the “market value” option, as

provided in the investment agreement, would result in its retention of a substantial

portion of his investment account, and not when the plaintiffs decided to terminate and

liquidate the account in March 1985. Id. at 549-550. According to the Ninth Circuit,

the statute oflimitations began to run when the defendantspecifically told the plaintiffs

the consequences of the “market value” option on the account which gave them “actual

- 16 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 16 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

knowledge” of the breach. Id. at 552.

“The Ninth Circuit has recognized that ‘actual knowledge of the breach or

violation’ is not satisfied by knowledge that the fiduciary acted but, rather, requires

knowledge of the breach of duty.” Spragg, 1999 WL 51489, at *3 (quoting Waller v.

Blue Cross of California, 32 F.3d 1337, 1341 (9th Cir. 1994)). “[O]nce an individual

has actual knowledge of the act that constitutes the breach and knows the harmful

effect of the act, a cause of action for breach of fiduciary duty accrues.” Id. (citing

Ziegler, 916 F.2d at 552). 

In Spragg, the Ninth Circuit affirmed the district court’s dismissal of the

complaint on a Rule 12(b)(6) motion as time barred. Id. at 4. The plaintiff was

informed he would be hired as an independent contractor with AT&T in 1983. Id. at

2. In June 1988, the plaintiff alleged in the complaint that he was informed by his

former employer that his retirement assets had been transferred to AT&T and his

retirement could not be bridged because AT&T deemed him an employee and not an

independent contractor. Id. at 3. In 1996, AT&T told him directly for the first that it

wasrefusing his request to reclassify his 1983 status. Id. at 2. The court explained that

in June 1988, Spragg had actual knowledge of the allegedly wrongful

acts that underlie his instant claim against AT & T for breach of its

fiduciary duty. Likewise, in June 1988, Spragg had actual knowledge

of the effect the allegedly wrongful acts would have on his pension

benefits.

Id. at 3. In Spragg, the Ninth Circuit concluded that the plaintiff had actual knowledge

of the breach or violation when he learned of the underlying acts to support his claim

and the negative consequences of these acts. 

In Waller, the defendant decided to terminate its retirement plan by using $62

million of the Plan’s assetsto purchase annuities fromselect annuity providersto cover

plan liabilities and subsequently obtained a reversion ofthe residual assets of about $32

million. Waller, 32 F.3d at 1338. Plaintiffs alleged that the defendant breached its

fiduciary duty by imprudently choosing annuity providers to cover plan liabilities as

part of terminating plaintiffs’ plan. Id. Plaintiffs did not challenge the decision to

- 17 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 17 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

terminate the retirement. Plan but the “gravamen of plaintiffs’ action isthat defendants

breached their fiduciary duties by unlawfully employing an infirm bidding process

geared solely toward selecting those annuity providers who would enable defendants

to obtain the maximum reversion possible.” Id. at 1339. 

The Ninth Circuit explained that the complaint was filed more than four years

after the defendant purchased the annuities; however, the court rejected the defendant’s

argument that the statute of limitation began to run when Plaintiffs learned that it had

purchased the annuities and stated “[w]e decline to equate knowledge of the purchase

of annuities in this case with actual knowledge of the alleged breach of fiduciary duty.” 

Id. at 1341. The court held that under the Rule 12(b)(6) standard, “actual knowledge”

was sufficiently alleged in the complaint when it asserted that the action was filed

within three years of actual knowledge, and plaintiffs “did not have actual knowledge

. . . until the publicized account of ELIC’s [one of the annuity providers] financial

difficulties and its ultimate insolvency and the subsequent investigation by counsel for

plaintiffs and the Class.” Id. In Waller, plaintiffs did not dispute the termination of the

plan and therefore knowledge of the annuity purchase did not put them on actual notice

that the choice of annuity providers were improper. It was not until after the plaintiffs

had knowledge of the effects of the selection of annuity providers that actual

knowledge was properly alleged. In Waller, the Ninth Circuit held that actual

knowledge requires knowledge of facts to support the claim and the consequences of

these acts. 

NinthCircuit cases defining “actual knowledge” require that Plaintiffs must have

actual knowledge of the underlying facts giving rise to the alleged violation, not

knowledge that the underlying facts violates ERISA, and knowledge of the

consequences or effects of the alleged breach of fiduciary duty. See also Meagher v.

Int’l Ass’n of Machinist and Aerospace Workers Pension Plan, 856 F.2d 1418, 1422-23

(9th Cir. 1988) (reversing the district court’s ruling of summary judgment in favor of

the defendants on the basis of the statute of limitations, holding that the date of accrual

- 18 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 18 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

was when the plaintiff was harmed by the “wrongful application of the amendment”

which was when his accrued benefits decreased which was whenever he received

checks with reduced benefits and not when he learned the amendment, which resulted

in decreased benefits, passed); Blanton v. Anzalone, 760 F.2d 989, 992 (9th Cir. 1985)

(“The statute oflimitationsistriggered by the defendants’ knowledge ofthe transaction

that constituted the alleged violation, not by their knowledge of the law.” ). 

Other circuits have acknowledged the Ninth Circuit’s standard of “actual

knowledge” to not require knowledge that the underlying facts give rise to a cause of

action under ERISA. See Wright v. Heyne, 349 F.3d 321, 322 (6th Cir. 2003); 

Browning v. Tigers Eye Benefits Consulting, 313 Fed. Appx. 656, 660 (4th Cir. 2009)

(unpublished decision). In Wright, the plaintiffs alleged that the defendants breached

certain fiduciary duties in making investment decisions and engaged in conduct

prohibited under ERISA with regard to the receipt of commissions. Wright, 349 F.3d

at 322. The Sixth Circuit affirmed the district court granted defendants' summary

judgment based on the three year statute of limitations bar under § 1113. Id. at 321. 

The court in Wright examined the different approaches circuits have taken to

define “actual knowledge” noting that the Seventh, Ninth, and Eleventh Circuits, on

the one hand, require knowledge of all the relevant facts and not facts to establish a

“cognizable legal claim”, while the Third and Fifth Circuits’ view that “‘actual

knowledge’ requires a showing that plaintiffs actually knew not only of the events that

occurred which constitute the breach or violation but also that those events supported

a claim for breach of fiduciary duty or violation under ERISA.” Id. at 327-28. The

court also noted a “hybrid view” adopted by the Second Circuit adopting both the Third

and Fifth Circuits’ view along with the Seventh, Ninth and Eleventh Circuits view. Id.

at 328. In conclusion, the Sixth Circuit, joining the Seventh, Ninth and Eleventh

Circuits held that “the relevant knowledge required to trigger the statute of limitations

under 29 U.S.C. § 1113(2) is knowledge of the facts or transaction that constituted the

alleged violation; it is not necessary that the plaintiff also have actual knowledge that

- 19 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 19 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the facts establish a cognizable legal claim under ERISA in order to trigger the running

of the statute.” Id. at 330. 

Recently, a district court rejected the plaintiff’s argument concerning “actual

knowledge” as it relied on Second, Third and Fifth Circuit cases which apply a

different standard than the Ninth Circuit. In re Northrop Grumman Corp. ERISA

Litigation, Case No. CV 06-06213 MMM(JCx), 2015 WL 10433713, at *19 (C.D. Cal.

Nov. 24, 2015). In applying the Ninth Circuit standard of “actual knowledge”, the

court explained that the plaintiffs must have “knowledge of the facts or transaction that

constituted the alleged violation; it is not necessary that the plaintiff also have actual

knowledge that the facts establish a cognizable legal claim under ERISA in order to

trigger the running of the statute” id. at 18 (citations omitted), and the court held that

the plaintiffs’ claim were time barred under the three year statute of limitations. Id. at

22.

Defendants argue that as to either of the statute’s provision, Plaintiffs actually

knew all the facts that constituted the breach of fiduciary duty no later than 2002 when

Plaintiffs testified that is when they learned past service credit would not apply to

benefits accrual, and thus, the claims are barred as a matter of law since the lawsuit was

not filed until 2010. In response, Plaintiffs assert that the statute of limitation began

when Moyle had actual knowledge of the facts establishing the cause of action which

was when Liberty Mutual denied his claim in 2009. They also argue 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. It was at these points

Plaintiffs were on notice as to the facts establishing the cause of action. 

Similar to the plaintiffs in In re Northrop Grumman, in this case, Plaintiffs

improperly cite to the standard of “actual knowledge” applied in the Second and Third

- 20 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 20 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Circuits, a standard distinct from the Ninth Circuit, to support their argument that the

statue of limitations accrues at the time Plaintiffs learned the facts to support a cause

of action for breach of fiduciary duty. (Dkt. No. 233 at 43.) However, even if the

Court applied Plaintiffs’ argument that they did not have actual knowledge to support

their cause of action for breach of fiduciary until 2009, when their claims were denied

as well as early as September 12, 2005, when the Rehabilitation Agreement was

attached to Liberty Mutual’s motion to dismiss, Plaintiffs’ arguments are belied by the

record. 

On March 14, 2005, Moyle filed a complaint seeking a determination of his

future rights to benefits under 29 U.S.C. § 1132(a)(1)(B) and breach of fiduciary duty

under 29 U.S.C. § 1132(a)(3). On that date, and most likely sometime prior to March

14, 2005 when Moyle consulted with counsel, he had actual knowledge of the facts to

establish a cognizable legal claimunder ERISA. According to Plaintiffs’ interpretation

of actual knowledge requiring knowledge of facts to assert an ERISA claim, Moyle had

actual knowledge in 2005. Therefore, Plaintiffs’ argument that Moyle did not have

actual knowledge until the earliest date of September 12, 2005 when Defendants’

attached the Rehabilitation Agreement to their motion to dismiss, has no merit since

Moyle had actual knowledge when he filed his complaint on March 14, 2005 or some

earlier date. (Dkt. No. 05cv507, Dkt. No. 24 at 79.) 

In applying the Ninth Circuit’s interpretation of “actual knowledge”, defined as

knowledge of the facts underlying the alleged violation, not actual knowledge to

establish a cognizable ERISA claim, and knowledge of the negative consequences of

these facts, Defendants argue that the named Plaintiffs had actual knowledge as early

as 2002 when they were informed that they would not be receiving past service credit

for purposes of pension benefits accrual. 

Moyle testified that, in 2002, he called Liberty Mutual after he received his

personal data statement and was informed at that time, he was not entitled to

retirement. (Dkt. No. 212-24, Abel Decl., Ex. 10, Moyle Depo. at 51:6-15.) Once he

- 21 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 21 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

learned about that, he spoke with his attorney. (Id. at 12-13.) 

In 2002, Moyle learned he would not be receiving pastservice credit for his prior

years at OGE, even though he believed that Liberty Mutual represented that it would

be providing pastservice credit, and Moyle had actual knowledge that thisinformation

would have detrimental effect on his pension benefits. In fact, Moyle contacted an

attorney at this time and even filed state court complaints that were removed to this

Court in November 2002 and February 2003 that address facts underlying the breach

of fiduciary duty but not the legal cause of action. Therefore, based on Ninth Circuit

authority, Moyle had actual knowledge of the alleged breach in 2002. 

4

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 with OGE. (Dkt. No. 212-16, Abel Decl., Ex.

2, Arwood Depo. at 66:12-22; 78:2-24.) Rollason first learned that he would not be

getting past service credit from Arwood when he retired in 2001. (Dkt. No. 212-25,

Abel Decl., Ex. 11, Rollason Depo. at 73:23-74:25.) Shortly thereafter, maybe in 2002,

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

heard from Arwood. (Id. at 99:3-100:7.) 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.) However, it was not

until the end of 2004 and beginning of 2005, when Sanders retired on November 19,

The Court notes that Moyle timely filed a complaint in 2005 for breach of 4

fiduciary duty; however, it was dismissed with prejudice on November 14, 2005 based

on the ruling in Varity Corp v. Howe, 516 U.S. 489 (1996) which held that a plaintiff

cannot bring suit under other subsections of § 1132 if he orshe has an adequate remedy

under § 1132(a)(1)(B), . (05cv507-DMS-WMC, Dkt. No. 32 at 9.) 

- 22 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 22 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2004, that she became aware that her specific benefit would not include past service

credit when she received her first pension check. (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 learned that she

might not be getting past service credit in 2000 or 2001. However, Sanders testified

that what she heard in the break room about not receiving pastservice credit from other

employees was “conjecture.” (Dkt. No. 212-27, Abel Decl., Ex. 13, Sanders Depo. at

77:4-12.) Sanders testified that she did not learn she would not be receiving past

service credit for her years at OGE until she received her first pension paycheck shortly

after she retired on November 19, 2004. (Id. at 77:13-17.) Since the complaint was

filed on October 19, 2010, the claim as to Sanders is timely. 

At the motion hearing, the Court would like the parties to address what effect

Sanders’ timely claim has on the case and on the Class. Moreover, the Court would

like the partiesto address equitable tolling. While Plaintiffs raise state equitable tolling

for the first time in their supplemental opposition, their argument is presented only two

paragraphs without any legal authority to support their argument that state equitable

tolling applies to § 1113. Moreover, if equitable tolling applies, it would only apply

to Moyle and not the other named Plaintiffs and the Class; this issue should be

addressed by the parties. 

C. 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

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

- 23 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 23 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The last opportunity to cure provision provides, 

No action may be commenced under thissubchapter 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 casesthat 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.C 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 defendants

breached their fiduciary duty by failing to notify themof 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

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

5

In their opposition to Defendants’ motion for summary judgment, in arguing 5

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

they state, “Here, Defendants could still cure the ERISA violations.” (Dkt. No. 233,

- 24 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 24 of

 25
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

breach today and therefore the statue of limitations has 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).

Conclusion

Counsel are advised that the Court’s rulings are tentative and the Court will

entertain additional arguments at the hearing on December 16, 2016 at 1:30 p.m. in

Courtroom 2D.

IT IS SO ORDERED. 

DATED: December 15, 2016

HON. GONZALO P. CURIEL

United States District Judge

Ps’ Opp. at 46.) 

- 25 - [10cv2179-GPC(MDD)]

Case 3:10-cv-02179-GPC-MDD Document 300 Filed 12/15/16 PageID.<pageID> Page 25 of

 25