United States Court of Appeals

Fifth Circuit

FILED

November 6, 2003

Charles R. Fulbruge III

Clerk

In the

United States Court of Appeals

for the Fifth Circuit

_______________

m 00-51109

_______________

ANDREA D. HATTEBERG,

Plaintiff-Appellant,

VERSUS

RED ADAIR COMPANY INCORPORATED EMPLOYEES’ PROFIT SHARING PLAN

AND ITS RELATED TRUST;

ADAIR ENTERPRISES, INC.;

FULBRIGHT & JAWORSKI, LIMITED LEGAL PARTNERSHIP;

STEWART W. GAGNON; JONATHAN GOLDHOR; DONALD M. JANSEN;

JOY M. SOLOWAY; LISA HARBOR; JERYL GOLUB;

JOETTA JANCZAK; JAMES RICHARD HATTEBERG,

Defendants-Appellees.

_________________________

Appeal from the United States District Court

for the Western District of Texas

m MO-97-CV-209

_________________________
2

Before JOLLY, SMITH, and

EMILIO M. GARZA, Circuit Judges.

PER CURIAM:

*

Andrea Hatteberg (“plaintiff”) appeals a

summaryjudgment in this dispute over various

employee benefit plans. Finding no error, we

affirm.

I.

Plaintiff and James Hatteberg were parties

to a contentious divorce in 1992. Among the

community property divided between them

were the assets owed to James Hatteberg under the Red Adair Profit Sharing Plan; Adair

Enterprises, Inc., was the plan administrator.

In 1992, a state court entered a qualified domestic relations order (“QDRO”) regarding

James Hatteberg’s accrued benefits under the

plan. This first QDRO entitled plaintiff to a

small portion of the plan’s assets, so she appealed. The method of calculation of her entitlements remained a matter of dispute and

litigation until 1997, when all parties reached

a mediated settlementrespecting the substance

and generalformof a finalQDRO, recognizing

a larger entitlement for plaintiff. In 1998,

under a second QDRO obtained pursuant to

the settlement, plaintiff was paid, from the

plan’s trust account, the amount owed her under the settlement.

She was not completely satisfied, however.

She sued the instant defendants in federal

court, asserting claims arising from the prior

dispute. The defendants include Adair Enterprises, Inc. (hereinafter “Adair”), which was

the Plan administrator and a fiduciary to plaintiff, as well as Adair Enterprises employee Joetta Janczak, the law firm of Fulbright & Jaworski (“Fulbright”), several Fulbright attorneys serving as James Hatteberg’s divorce

counsel, and several Fulbright attorneys who

advised the plan administrator. Plaintiff claims

the administrator refused to supply requested

information about the plan and that various

defendants breached their fiduciary duty,

interfered with protected rights, engaged in

prohibited transactions, and committed violations of the Employee Retirement Income

Security Act of 1974 (“ERISA”).

To “bring focus” to the case, the district

court appointed two special masters with expertise in the intricacies of ERISA law. The

masters produced reports helpful to the court

in itsfinaldeterminations. Later, at the court’s

request, plaintiff and defendants filed respective motions for summary judgment. The

court found the bulk of plaintiff’s claims to be

deficient.

The court observed that the first claim,

based on alleged violations of 29 U.S.C.

§ 1132’s requirement that plan administrators

supplycertaininformation to beneficiaries, had

merit. The court, however, in the absence of

a federal limitations period for such a claim,

applied the limitations period of an analogous

Texasstate law claimand found that plaintiff’s

claim fell outside the two-year period.

The court also put aside plaintiff’s claims of

breaches of fiduciary duty. She had argued

that the plan administrator breached its fiduciary duty to her in five ways: first, by failing

to distribute the plan benefits to her on

November 14, 1994, the date of distribution to

other plan participants; second, by making a

passthrough amendment, which provided that

* Pursuant to 5TH CIR. R. 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 5TH CIR. R. 47.5.4.
3

allfuture expenses of the plan’s administration

were to be paid out of plan assets; third, by

failing to replace the Fulbright attorneys advising the plan when it learned that other

Fulbright attorneys were representing James

Hatteberg as divorce lawyers; fourth, that the

administrator failed to operate the plan in accordance with plan documents by improperly

requiring any domestic relations order to be

final before it could be qualified; and fifth, by

engaging in prohibited transactions with Fulbright attorneys through unreasonable

compensation for legalservices “unnecessary”

to the administration of the plan. 

The district court rejected each of the five

theories and plaintiff’s other ERISA-based

theories of prohibited party-in-interest

transactions, deliberate deception, and

interferences with protected ri ghts.

Accordingly, the court denied plaintiff’s

motion, and granted defendant’s motion. It

taxed the cost of the special masters to Adair

and ordered the parties otherwise to bear their

own costs.

II.

We review a summary judgment de novo

and affirm if there is no genuine issue of material fact and the movant is entitled to

judgment as a matter of law. Ramirez v. City

of San Antonio, 312 F.3d 178, 181 (5th Cir.

2002). An issue of fact is material only if its

outcome would affect the outcome ofthe case.

Id. We draw all reasonable inferences in favor

of the nonmoving party, who in this case isthe

plaintiff. Id. We review the district court’s

procedural decisions for abuse of discretion.

Celestine v. Petroleos de Venezuela, S.A., 266

F.3d 343, 349 (5th Cir. 2001).

III.

Irrespective of whether plaintiff established

the elements of a claim under 29 U.S.C.

§ 1132(c)(1) for Adair’s failure to provide requested information to her as a beneficiary of

the trust, the district court was correct in concluding that her claim is barred by a two-year

statute of limitations. ERISA does not

explicitly provide a statute of limitations

period for actions under § 1132(c). Because

there was no Fifth Circuit authority on the

issue, the district court looked to analogous

Texas state law to determine the relevant

limitations period. See McClure v. Zoecon,

Inc., 936 F.2d 777, 778 (5th Cir. 1991).

Plaintiff argued that the court should have

applied either the Texas four-year statute of

limitations for fraud actions or the residual

four-year period for actionsfor which no other

limitations period applies. The district court

was correct in observing that a violation of

§ 1132 is not analogous to fraudSSwithout

more, the withholding of information from a

beneficiary is quite unlike defrauding a

beneficiary. Despite plaintiff’s assertions, the

evidence does not support the conclusion that

the plan administrators engaged in bad faith in

withholding the information plaintiff had requested. The district court also declined to

apply the Texas residualstatute of limitations,

adopting instead the state statute oflimitations

for an action for breach of fiduciary dutySSan

action similar to that described in § 1132.1

Plaintiff also has argued that the four-year

1

In Texas, there are two different limitations

periodsthat might apply, but this court has adopted

the line of cases applying a two-year tort period for

claims of breach of fiduciary duty. Kansa

Reinsurance Co. v. Stewart Title Co., 20 F.3d

1373, 1374 (5th Cir. 1994).
4

limitations period of TEX. CIV. PRAC. & REM.

CODE § 16.004(a)(5) should apply. That statute, regarding breach of fiduciary duty,

became effective on August 30, 1999, some

eighteen months after plaintifffiled the instant

suit. Accordingly, that statute’s limitations

period is inapplicable here.

There is no evidence that plaintiffmade any

request for information after August 30, 1995;

she sued on December 12, 1997. Accordingly,

her claim is barred by the two-year statute of

limitations, and we need not address the

district court’s ruling limiting recovery to $1

per day of violation.

IV.

It is undisputed that Adair was plaintiff’s

fiduciary, but she argues that a number of

other persons should also be considered her

fiduciaries. Among these is Joetta Janczak, a

member of the administration committee that

managed the Plan. The district court declined

to consider her a fiduciary of plaintiff’s, based

on evidence that she exercised no controlling

authority over the plan and undertook only

ministerial functions with respect to it.

Plaintiff contends that Janczak is a “named

fiduciary” under 29 U.S.C § 1102(a)(2) and

that the district court erred in accepting Janczak’s testimony that her duties were “merely

ministerial.” ERISA deems a person a plan

fiduciary to the extent that he orshe “exercises

any discretionary authority or discretionary

controlrespectingmanagement of[the] plan or

exercises any authority or control respecting

management or disposition of its assets,” or

“has any discretionary authority or

discretionary responsibility in the

administration of [the] plan.” 29 U.S.C.

§ 1002(21)(A)(i), (ii). Though plaintiff claims

thatJanczak’s “fiduciarystatus and liabilityare

not dependent on her actual functions with

respect to the plan,” the district court correctly

noted that this court has held that the “actual

authority which a person exercises over a

plan” is a more important factor than their

organization title with respect to a plan. See

Donovan v. Mercer, 747 F.2d 304, 308-09

(5th Cir. 1984).

The key, then, is the factual matter of

whether Janczak was more than a “merely

ministerial” member of the plan committee.

Plaintiff notes that Janczak was extremely

knowledgeable about the plan, sent letters directing distributions from the plan, and often

communicated with the Fulbright attorneys

about the plan. These facts, however, do not

suggest that Janczak exercised a level of discretion that should be characterized as control

or authority. To the contrary, these facts are

quite consistent with the duties and knowledge

that should be expected of a “ministerial”

member of the plan committee. Janczak’s testimony and other evidence support the

conclusion that her duties did not relate to the

substance of the management of the plan. The

district court reasonably concluded that she

was not plaintiff’s fiduciary.

Plaintiff also argues that Adair’s Fulbright

attorneysshould be considered her fiduciaries.

She allegessomething approaching a conspiratorial relationship among them, to hijack the

plan and loot its assets through their control

over the plan administrators. The key issue in

determining whether the Fulbright attorneys

were fiduciaries is the level of control the lawyers exercised over the decisionmaking. Id.;

29 C.F.R. § 2509.75-5. The district court held

that “there is no evidence that any Fulbright &

Jaworski attorney exercised control or

authority over the plan at any time.”
5

Plaintiff contends the district court ignored

evidence in her favor. Particularly, she says

the plan committee relied only on the advice of

Fulbright lawyer Goldhor regarding the requirement of finality before payment. Fulbright lawyerJansen,she says, had authorityto

determine whether the Hatteberg QDRO’s

were qualified under ERISA. 

Certainly, Goldhor, Jansen, and other Fulbright lawyers gave advice to the plan

committee, and doubtless their advice at time

caused the committee to act in ways it

otherwise would not have. But these activities

are consistent with a normal relationship

between lawyer and clientSSthe committee

would not have solicited the aid of attorneysif

it did not intend to act on their advice. It is

unwarranted to infer from the fact that the

Fulbright lawyers shaped the committee’s view

of their legal obligations that they became the

de facto controllers of the plan assets, and we

see no indication that the attorneysformulated

any sort of scheme to loot the plan of its

assets.

Plaintiff also maintained that Fulbright divorce attorneys who represented James Hatteberg should be considered fiduciaries, on the

theory that they were part of the larger

conspiracy among Fulbright attorneys to

control the plan and loot its assets for their

own use. Again, there is no evidence to

support this conclusion. Accordingly, the

district court acted properlyin denying that the

Fulbright divorce attorneys were plaintiff’s

fiduciaries.

Finally, plaintiffinsists that James Hatteberg

was one of her fiduciaries, again by virtue of

exercising “de facto discretionary control and

authority over the Plan’s management . . .”

while working in concert with the Fulbright

attorneys. As the district court observed,

however, James Hatteberg should not be

considered a fiduciary. Although he

improperly requested that the plan

administrator not disclose certain information

to the plaintiff, hisrequest was not tantamount

to control, even if the plan administrators

eventually failed to disclose the requested

information because of their mistaken

understanding of ERISA’s requirements.

As to the fiduciary status of Janczak, the

various other Fulbright lawyers, and James

Hatteberg, there remains no genuine issue of

material fact to be resolved. The district

court’s conclusions are well reasoned.

V.

A.

The district court found no basis to believe

that the plan fiduciaries managed assets so as

to use them as a litigation weapon in the state

court proceedings, in violation of ERISA’s

“exclusive purpose” and “anti-inurement” provisions. The record shows that the

administrators did not illicitly “profit” fromthe

funds, or were unreasonable administrative

expenses were deducted from plan assets.

Retaining the Fulbright attorneys to give

advice on complex and obscure ERISA issues

was reasonable. To support her arguments,

plaintiffprovideslittle more than allegations of

such conspiratorial behavior. There remains

no genuine issue of material fact.

B.

Plaintiff claims the plan administrators

breached their fiduciary duty of prudence by

failing to establish and follow reasonable

QDRO procedures as required by 29 U.S.C.

§ 1056(d)(3). Particularly, she complains that

Adair improperly delayed recognition of the

disputed family court DRO as a QDRO,
6

preventing her timely receipt of benefits. 

There is no requirement under ERISA, or

under the plan, that an order be final before it

is qualified. Though plaintiff became a

fiduciary upon entry of the First QDRO, it was

not established how much of the plan assets

she was entitled to receive until the entry of

the final QDRO in 1997. As the district court

concluded, Adair’s unnecessary delay in qualifying the domestic relations order wasin good

faith and, accordingly, did not constitute a

breach of fiduciary duty. The record does not

show otherwise, and there is no genuine issue

of material fact.

C.

Plaintiff allegesthat the plan administrators

engaged in a prohibited transaction when they

hired Fulbright lawyers to advise the plan on

variouslegal matters. Title 29 U.S.C. § 1106-

(a)(1)(c) prohibits a plan fiduciary from

causing a plan to engage in transactions that

allow the furnishing of services between the

plan and a party in interest. Reasonable

arrangements for legal and other services

necessary to operate the plan are excepted,

however, if the compensation paid is

reasonable. 29 U.S.C. § 1108(b)(2).

The district court properly found that the

$6,389.35 paid to the Fulbright attorneys by

the plan was a reasonable fee for legalresearch

services necessary to the operation ofthe plan.

Certainly, it does not seem an excessive fee,

considering ERISA’s complexities.

As part of her claim of “prohibited

transactions” between the administrators and

the Fulbright lawyers, plaintiff alleges that the

Fulbright lawyers operated primarilyto control

the assets of the plan for their own interests.

There is no substantial evidence for this accusation, so there is no genuine issue of material fact.

D.

Plaintiff argues that because the plan

documents provided to her did not address

whether plan expenses were to be deducted

from plan assets, the administrators were

prohibited from making expense deductions.

Administrators are required under ERISA to

operate a plan in accordance with its written

terms. In this case, however, the plan was

amended, as allowed under its original terms,

so as to permit expense deductions.

Accordingly, it was within the terms of the

Plan to deduct expenses from assets at the

time when the administrators did so.

The district court also noted, convincingly,

that the passthrough amendment did not reduce plaintiff’s vested benefit account, so it

did not thereby violate the anti-cutback

provisions of ERISA; the expenses were paid

before earnings and losses were allocated to

individual accounts. Accordingly, there is no

genuine issue of material fact.

VI.

A.

Aswe have said, plaintiffasserts defendants

engaged in transactions for parties-in-interest

in violation of 29 U.S.C. § 1106(b). She also

argues that even if James Hatteberg and the

Fulbright attorneys advising the plan are not

fiduciaries, she has a claim against them for

engaging inparty-in-interest transactions under

§ 1132(a)(3).

Again, plaintiff arguesthat the Fulbright divorce attorneys’ representation ofJames Hatteberg, while other Fulbright attorneys advised

the plan, constitutes a transaction prohibited

by 29 U.S.C. § 1106. As noted, under 29
7

U.S.C. § 1108(b)(2), there is a safe harbor

from § 1106 for provision of legal services,

such as those provided by the Fulbright

lawyers to the administrators, so long as no

more than reasonable compensation is paid.

The district court observed that there was no

evidence of a legal or ethical conflict of

interest in the administrators’ retention of the

Fulbright attorneys, nor that unreasonable

compensation was paid to them. Even if,

under Wildbur v. ARCO Chem. Co., 974 F.2d

631, 645 (5th Cir. 1992), plaintiff was one of

Fulbright’s clients for purposes of providing

ERISA advice to the plan, the record does not

support a finding of a conflict of interest. As

the district court noted, there services were

very “limited” and the lawyers were not

unreasonably compensated. There is no

genuine issue of material fact.

B.

Plaintiff alleges “deliberate deception” by a

fiduciary under Varity v. Howe, 516 U.S. 489

(1996), in which the Court held that an

employer acted as a fiduciary and breached its

fiduciary duties when it made false

representations to participants in its ERISA

plan about the security of transferring their

accounts. Plaintiff claims Varity is applicable

to the facts of this case. Varity, id. at 502-03.

The district court held that plaintiff had not

established that the plan administrators made

misrepresentations to plaintiff to induce

material reliance. Plaintiff complains,

however, that a joint account was not created

and that plan administratorslacked knowledge

about certain intricacies of the plan. 

If these facts are true and constitute

failings, they are not deliberate deceptions

under Varity, in which the court required

“lying” and “deceiving” in order to premise

liability. Id. at 506. Plaintiff’s inference that

the plan’s fiduciaries and parties-in-interest

intentionally engaged in a plan of deception to

enrich themselves is not supported by

evidence. Moreover, the Varity theory is

inapplicable to any of the Fulbright attorneys

or Janczak, because they were not plaintiff’s

fiduciaries. See id. at 492. Accordingly, there

is no material issue of fact.

C.

Plaintiff presses a claim for “interference

with protected rights” under 29 U.S.C. §

1140. In a § 510 action, usually brought by an

employee against an employer, a plaintiffmust

show intent to discriminate. This court has applied § 510 outside the employer-employee

context since deciding Lynn v. Lynn, 25 F.3d

280, 284 (5th Cir. 1994). A plaintiff must offer evidence from which it can be inferred that

defendant intended to discriminate against him

in realizing benefits under a plan. Id.

Plaintiff contended that Adair’s opposition

to her interests during the contested state proceedings surrounding the first QDRO

constituted “discrimination against a

participant or beneficiary for exercising any

right to which [she] is entitled under the

provisions of an employee benefit plan.” The

district court observed, however, that

throughout the litigation, plaintiff was not in

fact forced to relinquish any rights, but was

fully entitled to, and did avail herself of, the

state appellate system to challenge the trial

court’s calculation of her entitlements in the

first QDRO. Adair’s trial strategy in actively

opposing plaintiff’smotion and appealsinstate

court litigation does not constitute a violation

of § 1140. As the district court noted, the

state court litigation process and settlement

negotiations are not topics properly reviewed

under ERISA. See Matassarin v. Lynch, 174
8

F.3d 549, 569 (5th Cir. 1999).

VII.

A.

Plaintiff complains that her non-ERISA

claims were severed from the other

proceedings, including her claims asserted

under the Racketeer Influenced and

Corruption Organization Act and her claims

based on t heo ries of negligent

misrepresentation, legal malpractice, and abuse

of process. The court found that “these

claims, while each relying on the same general

facts, are separate and distinct from the

remaining claims asserted under” ERISA.

Indeed, they are. 

The non-ERISA claims are quite different

in purpose and content from the ERISA

claims. In a case already complicated by diverse and difficult issues of ERISA law, it was

no abuse of discretion for the district court to

deal with plaintiff’s non-ERISA claims

separately.

B.

As the district court noted, this case

“involves a myriad of issues with each being

briefed in exhaustive detail by the parties.” To

bring focus to the case, the court appointed

two special masters with expertise in ERISA

law, pursuant to FED. R. CIV. P. 53.

Plaintiff contends the appointment of special masters was unnecessary, because the

“facts and law on her ERISA claims were

clear,” and the appointment would lead to

“unwarranted delay and expense.” But even a

short reading of the issues in the case reveals

that it revolves around difficult and unfamiliar

areas of law.

Plaintiff also avers that the special masters

were in some waysuborned and insinuatesthat

the extensive redrafting of the masters’ report

was undertaken at the improper urging of the

district court, which, she states, intended to

undermine the neutrality of the report. More

likely, the need to redraft was caused by the

difficulty of the ERISA issues in the case. It

was no abuse of discretion to appoint and rely

on special masters here.

C.

The district court made its inquiry

concerning retention of counsel after the

masters’ report raised the possibility that

plaintiffmight prevail on some issues. Plaintiff

indicated a willingness to secure counsel at an

appropriate time, and the court directed her to

do so. She asserted no opposition to the order

at the time and did indeed retain counsel. She

eventually terminated counsel and resumed

representing herself pro se after complaining

that she was short of funds to support a

separate attorney.

Plaintiff aversthat when she failed to object

to the order to retain legal counsel, she had

been led to believe by the district court that

she might succeed on some issues and that the

court intended to order mediation. That these

hopes were disappointed apparently formsthe

basis of her objection to the order to retain

counsel. The order, a reasonable response to

reportsfromthe specialmasters, was no abuse

of discretion.

D.

ERISA provides that in “any action . . . by

a participant, beneficiary, or fiduciary, the

court in its discretion may allow a reasonable

attorney’s fee and costs of action to either

party.” 29 U.S.C. § 1132(g)(1). Plaintiff argues that the refusal to allow her to recover

her attorneys’ fees was an abuse of discretion.
9

She notes that she did prevail on her initial

claim for clarification and enforcement of her

right to a qualified domestic relations order

and a distribution. Indeed, this issue was the

core of the disagreement between her and the

defendants, though it was far less an issue in

federal district court than at the state level and

throughout the mediation process.

Defendants note that plaintiff’s few

successes in the course of the litigation

occurred while she was working pro se, so

they urge that, as in Matassarin v. Lynch, 174

F.3d 549, 570 (5th Cir.1999), no attorneys

feesshould be due a pro se litigant. There was

no abuse of discretion in denying fees.

Plaintiff urges, however, that the district

court improperly failed to consider the five

“Bowen factors” to be applied in awarding fees

in ERISA disputes. See Iron Workers Local

No. 272 v. Bowen, 624 F.2d 1255, 1265-66

(5th Cir. 1980). Plaintiff claims that

consideration of the Bowen factors is

mandatory in the Fifth Circuit. In Riley v.

AMR Corp. Subsidiaries Supersaver 401(k)

Capital Accumulation Plan, 209 F.3d 780,

781-82 (5th Cir. 2000), we wrote that a court

“should consider and explicate the five Bowen

factors, and should do so without giving

predominance or preclusive effect to any one

of them . . . .” Nothing in Bowen requires,

however, that a court must, in every case,

elaborately and explicitly run its fact pattern

through the five factors in its written opinion,

especiallywhere a litigant has achieved aslittle

success as has this plaintiff. Furthermore,

plaintiff contributed substantially to the

prolongation of the litigation process by

aggressively pursuing appeals.

E.

The district court denied plaintiff’s recusal

motion. It looked unfavorably on her

arguments that the court was biased, noting

that she had “quoted isolated words and

phrases from various orders entered in this

action to date, arguing the forceful language

used by the Court shows bias or prejudice

against the subject matter of her claims,

extreme favorable predisposition to the

Fulbright Defendants, and undeserved and

excessive bias against the Plaintiff.” Plaintiff

again quotes isolated words of the court,

where it characterized several of her factual

and legal arguments as “unnecessarily abusive

and insulting,” “unsupported personal venom,”

“disrespectful and unprofessional,” and

“outrageous, fri volous, and completely

unsupported.” Plaintiff seems especially

exercised that the court characterized her

divorce proceedings as “bitter and acrimonious” and urged her and JamesHatteberg

to “put to rest the parties’ divorce” and avoid

turning the proceedings into a “post-mortem”

of the divorce.

There is, however, no good evidence that

the court was biased against plaintiff or the

subject matter of her claims. Although the

court apparently showed irritationwith a number of plaintiff’s arguments and accusations,

the court’s characterizations of her conduct

had some foundation. The court lacked the

“deep-seated favoritism and unequivocal antagonism that would render fair judgment impossible” and make recusal appropriate. Liteky v. United States, 510 U.S. 540, 555 (1994);

see also Matassarin, 174 F.3d at 571.

F.

After lengthy discovery, the district court

concluded that there had been “more than adequate time for discovery.” It overruled

plaintiff’s requests for unlimited discovery.

She, however, still wanted documents relating
10

to the Fulbright attorneys’ legal advice to

James Hatteberg with respect to the divorce

proceedings. Plaintiff also sought assorted

other documents she insists were relevant to

appropriate statutory penalties under § 1132

and to her allegations ofself-dealing, breaches

offiduciaryduty, and interferences withHatteberg’s rights under ERISA. In short, she

argued that further discovery was necessary

with regard to the bulk of her case.

The district court wasin a good position to

decide whether further discovery was needed.

The record is voluminous and detailed and is

additionallyenriched bythe analysis ofthe special masters. The court was within its discretion to bring an end to discovery.

AFFIRMED.