* Pursuant to Local Rule 47.5, the court has determined that this opinion should not be

published and is not precedent except under the limited circumstances set forth in Local Rule

47.5.4. UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 96-20562

Summary Calendar

NICK DIMINICO,

Plaintiff-Appellant,

versus

LEHMAN BROTHERS, INC., formerly

known as Shearson Lehman Brothers, Inc.,

Defendant-Appellee.

Appeal from the United States District Court

For the Southern District of Texas

(H-95-CV-1057)

April 25, 1997

Before POLITZ, Chief Judge, DUHÉ and STEWART, Circuit Judges.

POLITZ, Chief Judge: *

Nick Dim inico worked as a stockbroker in the Houston, Texas office of

Lehman Brothers, formerly Shearson Lehman Brothers, and was fully vested in his

employer’s Executive and Select Employees Deferred Compensation Plan (ESEP).

On several occasions Diminico borrowed money from his employer and the loans2

were consolidated into one promissory note. On April 2, 1992 Diminico’s attorney

r equested payment of his ESEP funds by April 7, 1992. The following day

Diminico resigned. In response Lehman Brothers applied the ESEP funds in

payment of Diminico’s debt and the remainder of the funds were seized by the IRS

for past due taxes.

In June 1994 Diminico filed a federal court action against Lehman Brothers

alleging state law claims based on the disposition of the ESEP funds. This

liti g ation was dismissed without prejudice for want of prosecution. Diminico

refiled in state court in February 1995, alleging violations of the Employee

Retirement Income Security Act (ERISA). Lehman Brothers removed to federal

court and moved to dismiss or, in the alternative, to compel arbitration. Lehman

Brothers maintained that the statute of limitations barred the ERISA claim and that

the deferred compensation fund contract contained an arbitration clause.

Noting that the action was the same as that previously dismissed, the district

court dismissed it without a hearing. A panel of this court vacated and on remand

the trial court held a hearing on the motion to dismiss. The court concluded that

the state law claim most closely analogous to Diminico’s cause of action is

conversion, subject to a two-year limitations period. Noting that the first suit in

June 1994 was filed more than two years after the April 1992 demand for payment,1 29 U.S.C. § 1132(a)(1)(B).

2 Hogan v. Kraft Foods , 969 F.2d 142 (5th Cir. 1992).

3 Id.

4 Edlund v. Bounds , 842 S.W.2d 719 (Tex.App. - 1992, writ denied).

5 Gronberg v. York , 568 S.W.2d 139 (Tex.App. - 1978, writ ref’d n.r.e.).

3 the trial court dismissed the action as time-barred and Diminico timely appealed.

Analysis

We review de novo the trial court’s legal conclusion that Diminico’s claim

is barred by the statute of l i mitations. The asserted claim is based on section

502(a)(1)(B) of ERISA 1 which permits a plan participant to recover certain

benefits. The parties appropriately agree that ERISA preempts any state law claim.

Because ERISA does not contain a limitations provision we look to state law and

apply the limitations period for the cause of action most closely analogous to the

claim at bar. 2 In this instance we apply Texas law, mindful that an ERISA cause

of action accrues when a demand for benefits is denied. 3

The trial court concluded that Diminico’s claim is most closely analogous to

common law conversion. Under Texas law, conversion is the unauthorized

assumption and exercise of control over the property of another to the exclusion of

the owner. 4 Money may be converted only if identified as a specific chattel. 5 An6 Edlund at 727.

7 Gronberg at 144.

4 action for conversion may lie when “money is (1 ) delivered for safe keeping;

(2) intended to be kept segregated; (3) substantially in the form in which it is

received or an intact fund; and (4) not the subject of a title claim by the keeper.” 6

An action for conversion cannot lie, however, when the amount is ascertainable but

there is no “obligation to return specific money” and the debt may be discharged

by the payment of money generally. 7

Leh man Brothers maintains that Diminico’s benefit funds meet the foregoing

criteria because his accounts were separate and distinct and could be identified as

a specific chattel. The language of the deferred compensation plan drafted by

Shearson Lehman Brothers belies this assertion. Diminico’s ESEP contract

provides that “the amounts credited to the deferred compensation account

hereunder shall be dealt with in all respects as capital of Shearson, shall be subject

to the risks of the business, and may be deposited in an account or accounts in

Shearson’s name i n any bank or trust company.” This clause makes abundantly

manifest that Diminico’s money was not segregated and cannot be conside red

specific chattel for the purposes of conversion. The court erred in applying the8 T EX

. C IV

. P RAC

. & R EM

. C ODE A NN . § 16.003 (West Supp. 1996).

9 T EX

. C IV

. P RAC

. & R EM

. C ODE A NN . § 16.004 (West 1986).

5 two-year statute of limitations for conversions. 8

D iminico contends that his claims against Lehman Brothers are more

analogous to breach of contract , which is subject to a four-year statute of

limitations. 9 We agree. In doing so we necessarily express no opinion on the

merits of Diminico’s claim.

We VACATE and REMAND for further proceedings consistent herewith.