UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

SOUTH BEND DIVISION

Lorraine Cappello and Jeffrey O’Barski, on 

behalf of themselves and all others similarly 

situated,

Plaintiffs,

vs.

Franciscan Alliance, Inc., Franciscan Alliance 

Pension and Benefits Committee, and John Does 

1-20,

Defendants.

Civil Action No.: 3:16-CV-290

CLASS ACTION COMPLAINT

Plaintiffs Lorraine Cappello and Jeffrey O’Barski, by and through their attorneys, on 

behalf of themselves and all others similarly situated, based on personal knowledge with respect 

to their own circumstances, and based upon information and belief pursuant to the investigation 

of their counsel as to all other allegations, allege the following.

INTRODUCTION

1. This is a class action against Defendants Franciscan Alliance, Inc. and Affiliates 

(“Franciscan Alliance” or the “Company”),1the Franciscan Alliance Pension and Benefits

Committee (the “Committee”),2and John Does 1-20 (the “Committee members”) concerning the 

Franciscan Alliance Pension Security Plan (the “Plan”).3 

 

1 As discussed below, the Company was formerly known as the Sisters of St. Francis Health Services, 

Inc., but the Company changed its name to Franciscan Alliance, Inc. in November 2010.

2 And/or any other committee with responsibility for managing/administering the Plan (defined below).

3 The Plan was formerly known as Sisters of St. Francis Health Services, Inc. Pension Security Plan.

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2. As of December 31, 2013, the Plan was underfunded by $115.956 million. See 

Franciscan Alliance, Inc. and Affiliates Consolidated Financial Statements December 31, 2014 

and 2013 (“2014 Consolidated Financial Statements”), at 29.

3. By year end 2014, the Plan’s underfunded status tripled such that as of December 

31, 2014, the Plan was under funded by $378.269 million. See id. 

4. Defendants excuse the severe underfunding on the grounds that the Plan is a 

“church plan” and therefore is exempt from the Employee Retirement Income Security Act of 

1974, 29 U.S.C. § 1001, et seq. (“ERISA”). 

5. To the contrary, as described herein, the Plan does not meet ERISA’s 

requirements for the “church plan” exemption because it was not “established,” and is not 

“maintained” by a church. Rather, the Plan was established and is maintained by Franciscan 

Alliance, which is a business – not a church or a convention or association of churches.

6. Consequently, the Plan is governed by all of the funding, fiduciary, and notice 

requirements of ERISA. This action seeks to require Defendants to comply with all of those 

requirements, and to pay damages and penalties as a result of their past failures to do so.

JURISDICTION AND VENUE

7. This court has subject matter jurisdiction over this action pursuant to 28 U.S.C. 

§ 1331 because it is a civil action arising under the laws of the United States, and pursuant to 29 

U.S.C. § 1332(e)(1), which provides for federal jurisdiction of actions brought under Title I of 

the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (“ERISA”).

8. This court has personal jurisdiction over Defendants because they are 

headquartered and transact business in, or reside in, and have significant contacts with, this 

District, and because ERISA provides for nationwide service of process.

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9. Venue is proper in this District pursuant to ERISA § 502(e)(2), 29 U.S.C. 

§ 1132(e)(2), because some or all of the violations of ERISA occurred in this District and 

Defendants reside and may be found in this District. Venue is also proper in this District 

pursuant to 28 U.S.C. § 1391 because Defendants conduct business in this District and a 

substantial part of the events or omissions giving rise to the claims asserted herein occurred 

within this District.

PARTIES

Plaintiffs

10. Plaintiff Lorraine Cappello is a citizen and resident of Lynwood, Illinois. Plaintiff 

Cappello was employed by the Company from November 1989 until September 2008 at the 

Franciscan St. James Health – Olympia Fields hospital during which time she worked as a 

switchboard operator for approximately seven years and thereafter in the Central 

Scheduling/Admitting department until September 2008. Plaintiff Cappello is a current 

participant in the Plan

11. Plaintiff Jeffrey O’Barski is a citizen and resident of Cedar Lake, Indiana. 

Plaintiff O’Barski was employed by the Company from July 1992 until January 2009 at the 

Franciscan St. Anthony Health – Crown Point hospital during which time he worked initially as a 

Dish Room Attendant, and thereafter in several positions before becoming a cook in 2005 until 

January 2009. Plaintiff O’Barski is a current participant in the Plan.

Defendants

12. Defendant Franciscan Alliance is a 501(c)(3) non-profit corporation organized 

under the laws of Indiana. See 2014 Consolidated Financial Statements, at 6. Defendant 

Franciscan Alliance is headquartered in Mishawaka, Indiana, 46544.

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13. The Committee is an unincorporated association, which, upon information and 

belief, is the Plan Administrator and/or named fiduciary.

14. John Does 1-20 are the individual members of the Committee and members of 

any other committee(s) which administer the Plan. The identity of the members of the 

Committee, and any of the other committee(s) which was or were responsible for carrying out 

the provisions of the Plan, is currently not known. Upon information and belief, John Does 1-20 

are senior executive officers of the Company who knew or should have known the facts alleged 

herein. The Committees and John Does 1-20 are hereafter collectively referred to as the 

“Committee Defendants.”

CLASS ACTION ALLEGATIONS

15. Plaintiffs bring this action as a class action pursuant to Rule 23 of the Federal 

Rules of Civil Procedure on behalf of themselves and the class (the “Class”) defined as follows:

All participants in and beneficiaries of the Franciscan Alliance 

Pension Security Plan (the “Plan”). Excluded from the Class are 

Defendants and any individuals who are subsequently to be 

determined to be fiduciaries of the Plan.

16. The members of the Class are so numerous that joinder of all members is 

impractical. Upon information and belief, the Class includes thousands of persons.

17. Plaintiffs’ claims are typical of the claims of the members of the Class because 

Plaintiffs’ claims, and the claims of all Class members, arise out of the same conduct, policies, 

and practices of Defendants as alleged herein, and all members of the Class are similarly affected 

by Defendants’ wrongful conduct.

18. There are questions of law and fact common to the Class and these questions 

predominate over questions affecting only individual Class members. Common legal and factual 

questions include, but are not limited to:

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A. Whether the Plan is covered by ERISA;

B. Whether the Plan Administrator failed to comply with ERISA’s reporting 

and disclosure provisions;

C. Whether the Defendants failed to fund the Plan and establish a policy to

fund the Plan in compliance with ERISA; and

D. Whether Defendants breached their fiduciary duties in failing to comply 

with the provisions of ERISA set forth above.

19. Plaintiffs will fairly and adequately represent the Class and have retained counsel 

experienced and competent in the prosecution of ERISA class action litigation. Plaintiffs have

no interests antagonistic to those of other members of the Class. Plaintiffs are committed to the 

vigorous prosecution of this action, and anticipate no difficulty in the management of this 

litigation as a class action.

20. This action may be properly certified under either subsection of Rule 23(b)(1). 

Class action status in this action is warranted under Rule 23(b)(1)(A) because prosecution of 

separate actions by the members of the Class would create a risk of establishing incompatible 

standards of conduct for Defendants. Class action status is also warranted under Rule 

23(b)(1)(B) because prosecution of separate actions by the members of the Class would create a 

risk of adjudications with respect to individual members of the Class that, as a practical matter, 

would be dispositive of the interests of other members not parties to this action, or that would 

substantially impair or impede their ability to protect their interests.

21. In the alternative, certification under Rule 23(b)(2) is warranted because 

Defendants have acted or refused to act on grounds generally applicable to the Class, thereby 

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making appropriate final injunctive, declaratory, or other appropriate equitable relief with respect 

to the Class as a whole.

22. In the alternative, certification under Rule 23(b)(3) is also appropriate. A class 

action is superior to other available methods for the fair and efficient adjudication of the 

controversy within the meaning of Rule 23(b) and in consideration of the matters set forth in 

Rule 23(b)(3)(A)-(D). Because of the amount of the individual Class members’ claims relative 

to the complexity of the litigation and the financial resources of the Defendants, few, if any, 

members of the Class would seek legal redress individually for the wrongs complained of herein. 

The maintenance of separate actions would place a substantial and unnecessary burden on the 

courts, and could result in inconsistent adjudications, while a single class action can determine, 

with judicial economy, the rights of all Class members. Absent a class action, Class members 

will continue to suffer damages, and Defendants’ misconduct will proceed without remedy.

SUBSTANTIVE ALLEGATIONS

A. Defendant Franciscan Alliance’s Business

23. Franciscan Alliance is a not-for-profit healthcare conglomerate serving the needs 

of communities in Indiana, Illinois, and Michigan. See: 

http://www.franciscanalliance.org/about/pages/default.aspx. See also 2014 Consolidated 

Financial Statements, at 6.

24. The Company includes 13 hospitals, various accountable care organizations, 

physician hospital managed care networks, a nonprofit foundation, a consolidated information 

technology services division, a construction company and a captive insurance company. See: 

http://www.franciscanalliance.org/about/pages/default.aspx. See also 2014 Consolidated 

Financial Statements, at 6.

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25. The Company’s hospitals include:

 Franciscan St. Anthony Health – Crown Point, Crown Point, Indiana

 Franciscan St. Anthony Health – Michigan City, Michigan City, Indiana

 Franciscan St. Elizabeth Health – Lafayette Central, Lafayette, Indiana

 Franciscan St. Elizabeth Health – Lafayette East, Lafayette, Indiana

 Franciscan St. Elizabeth Health – Crawfordsville, Crawfordsville, Indiana

 Franciscan St. Francis Health – Carmel, Carmel, Indiana

 Franciscan St. Francis Health – Indianapolis, Indianapolis, Indiana

 Franciscan St. Francis Health – Mooresville, Mooresville, Indiana

 Franciscan St. James Health – Chicago Heights, Chicago Heights, Illinois

 Franciscan St. James Health – Olympia Fields, Olympia Fields, Illinois

 Franciscan St. Margaret Health – Dyer, Dyer, Indiana

 Franciscan St. Margaret Health – Hammond, Hammond, Indiana

 Franciscan Healthcare – Munster, Munster, Indiana

See http://www.franciscanalliance.org/hospitals/pages/default.aspx.

26. The Company has more than 18,000 employees in three states to serve its 

patients. See http://www.franciscanalliance.org/hospitals/crownpoint/about/pages/mission-andministry.aspx.

27. The Company is not, and does not claim to be a church. In fact, in the 2014 

Consolidated Financial Statements, the Company notes that it is, “dedicated to providing 

comprehensive health care services, including emergency, medical, surgical, behavioral, 

rehabilitative, and other health services in inpatient and outpatient settings; home health care 

services; and primary and specialty physician services to communities within four geographic 

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regions in Indiana and Illinois.” See 2014 Consolidated Financial Statements, at 6 (emphasis 

added). 

28. Prior to 2010, Franciscan Alliance was known as St. Francis Health Services but, 

the Company adopted a new name when they, “recognized the evolving changes in the health 

care landscape and the need to reinforce the shared capabilities across our hospitals and other 

health care facilities.” See http://www.franciscanalliance.org/about/pages/history.aspx. 

29. That Franciscan Alliance is primarily focused on healthcare is perhaps best 

summarized by the Company’s own statement regarding its name change to Franciscan Alliance, 

“We adopted a new name – Franciscan Alliance – to strengthen our presence as a large, 

comprehensive health care system.” Id. (emphasis added).

30. As a result of its business – to provide health care and related services – the 

Company recorded $2.425 billion in net patient service revenue for the year ended December 31, 

2014, an increase from the $2.321 billion recorded the previous year. See 2014 Consolidated 

Financial Statements, at 3.

31. The vast majority of that revenue was received from Medicare, Medicaid, and 

“commercial insurance carriers, health maintenance organizations, and preferred provider 

organizations,” sources which only pay for the provision of health care services. See id. at 18. 

32. Moreover, the 2014 Consolidated Financial Statements include warnings that the 

Company’s net patient service revenue was subject to the “[l]aws and regulations governing the 

Medicare and Medicaid programs” and, “[a]s a result, there is at least a reasonable possibility 

that recorded estimates may change in the near term.” Id. at 19.

33. In order to fund its healthcare business, the Company has issued over $1 billion in 

bonds through the Indiana Financial Authority, including $552.545 million in Tax Exempt 

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Hospital and Health System Revenue and Refunding Bonds. See id. at 25. These are sources of 

revenue unavailable to churches.

34. Despite its status as an ERISA plan, the Company has invoked Church Plan status 

to evade ERISA’s protections to which its employees are entitled. The Company’s failure to 

treat the Plan as an ERISA plan puts the Plan’s participants at risk of receiving pension payouts 

drastically lower than those proposed, and deprives Plan participants of material information as 

alleged below.

35. Moreover, by avoiding ERISA’s requirements, the Company obtains a 

competitive advantage over the other healthcare entities that comply with ERISA.

B. The Plan

(1) Franciscan Alliance Pension Security Plan Overview

36. The Plan was established and is maintained by the Company to provide retirement 

income to employees. Thus, the Plan was not established and is not maintained by a church or 

convention or association of churches. 

37. As noted in the 2014 Consolidated Financial Statements, “[p]rior to 2014, 

[Franciscan Alliance] had various retirement programs due to acquisitions over the years,” but 

that effective January 1, 2014, all employees “will be covered by one comprehensive retirement 

program.” See 2014 Consolidated Financial Statements, at 28. 

38. The Company’s 2014 Consolidated Financial Statements note that “[Franciscan 

Alliance, Inc. and Affiliates] has a qualified noncontributory defined benefit pension plan [the 

Plan] covering all eligible employees of certain of the Corporation’s entities.” 2014 

Consolidated Financial Statements, at 28. “The plan provides defined benefits based on years of 

service and final average salary.” Id.

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39. Similarly, the Company’s website states:

Employees are eligible to participate in the Franciscan Alliance Pension Plan 

(defined benefit plan) after one year of service with a minimum of 1,000 hours

and attainment of age 21. Employees are fully vested after five years. This plan is 

paid totally by Franciscan Alliance, with no employee contributions required.

See http://www.franciscanalliance.org/careers/why-work-for-us/pages/benefits.aspx.

40. The Plan is an “employee pension benefit plan” within the meaning of ERISA § 

3(2)(A), 29 U.S.C. § 1002(a)(A).

41. The Plan is a defined benefit plan within the meaning of ERISA § 3(35), 29 

U.S.C. § 1002(35). 

42. Upon information and belief, at all relevant times, the Committee Defendants 

have been the administrators of the Plan within the meaning of ERISA § 3(16)(A), 29 U.S.C. 

§ 1002(16)(A). They have also been fiduciaries of the Plan within the meaning of ERISA 

§ 3(21)(A), 29 U.S.C. § 1002(21)(A) because they have exercised authority or control respecting 

management or disposition of Plan assets, or have had discretionary authority or discretionary 

responsibility in the administration of the Plan. 

43. The Company is a fiduciary of the Plan within the meaning of ERISA § 3(21)(A), 

29 U.S.C. § 1002(21)(A) because it has exercised authority or control respecting management or 

disposition of Plan assets, or has had discretionary authority or discretionary responsibility in the 

administration of the Plan. 

44. In particular, the Company, acting through its Board of Trustees, officers, and 

employees, is responsible for all of the acts alleged herein. 

45. Additionally, the Company has also been a party-in-interest under ERISA § 3(14), 

29 U.S.C. § 1002(14), both because it is a fiduciary and because it is an employer whose 

employees are covered by the Plan.

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(2) The Franciscan Alliance Pension Security Plan is not a “Church 

Plan” under ERISA

46. In its 2014 Consolidated Financial Statements the Company declares “[b]ecause 

the noncontributory defined benefit pension plan has church plan status as defined in the 

Employee Retirement Income Security Act of 1974 (‘ERISA’), funding in accordance with 

ERISA is not required.” 2014 Consolidated Financial Statements, at 28. 

47. Despite this claim, the Plan is not an ERISA “Church Plan.”

48. As alleged above, several factors demonstrate that Franciscan Alliance is not a 

church or conventions or association of churches. See ¶¶ 23-35. 

49. Under Section 3(33)(A) of ERISA, 29 U.S.C. § 1002(33)(A), a plan must be both 

established and maintained by a church or by a convention or association of churches to qualify 

for the church plan exception. 

50. The Plan was established by the Company or its predecessors, not by a church or 

convention or association of churches. 

51. The Plan is maintained by the Company, not by a church or convention or 

association of churches. 

52. Additionally, Section 3(33)(C)(i) of ERISA, 29 U.S.C. § 1002(33)(C)(i), provides 

that a plan maintained by a church or a convention or association of churches includes a plan 

maintained by an organization, whether a civil law corporation or otherwise, the 

principal purpose or function of which is the administration or funding of a plan 

or program for the provision of retirement benefits or welfare benefits, or both, 

for the employees of a church or a convention or association of churches, if such 

organization is controlled by or associated with a church or a convention or 

association of churches.

53. The principal purpose of Franciscan Alliance is to provide healthcare services, not 

to operate a pension system.

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54. Since the Plan is maintained by a healthcare company, the Plan is not maintained 

by “an organization ... the principal purpose of which is the administration or funding of a plan 

or program for the provision of retirement benefits....” 11 U.S.C. § 1002 (33)(C)(i).

55. Moreover, the Plan is not maintained for employees of any church or convention 

or association of churches; it is maintained for employees of the Company – a hospital system.

C. Defendants’ Breaches of Fiduciary Duties

(1) Defendants Breached their Fiduciary Duty to Ensure the Plan is Fully 

Funded

56. Under ERISA, the Plan must have an annual actuarial report addressing the Plan’s 

funding needs.

57. Defendants are further required to fund the Plan each year according to a funding 

plan that meets the funding standards of ERISA and is based on reasonable actuarial 

assumptions. See ERISA §§ 302, 303, 29 U.S.C. §§ 1083, 1083.

58. Defendants are responsible for setting the funding requirements and the funding 

policy for the Plan.

59. Defendants failed to set a funding policy that will adequately fund the anticipated 

obligations of the Plan or fund the Plan.

60. As of December 31, 2014, the Plan was $378.269 million underfunded, a 

substantially worse position than it had been just a year earlier, when it ended calendar year 2013

underfunded by $115.956 million. See 2014 Consolidated Financial Statements, at 29. 

(2) Defendants Breached their Fiduciary Duty to Avoid Conflicts of 

Interest

61. By continuing to set an inadequate funding policy which has resulted in the Plan 

becoming underfunded by over three hundred and seventy five million dollars, Defendants have 

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acted at all times in the interest of the Company, and have not acted solely in the interests of the 

Plan participants as is required of a fiduciary under ERISA.

62. Franciscan Alliance benefits from Defendants’ decision not to fund the Plan

adequately and Defendants have a conflict of interest that prevents them from carrying out their 

fiduciary duties in a manner consistent with ERISA.

63. Despite this conflict of interest, Franciscan Alliance has failed to appoint 

fiduciaries who could carry out their duties to protect the Plan’s participants in a manner 

consistent with ERISA or to take other appropriate steps to address the conflict.

64. As a result of this conflict of interest, and in light of Defendants’ repeated and 

ongoing breaches of fiduciary duties, the Court should appoint an independent fiduciary who can 

protect the interests of Plan participants and carry out his or her duties consistent with ERISA.

FIRST CLAIM FOR RELIEF

Declaratory and Equitable Relief

(Declaratory Judgement Act and ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3))

65. Plaintiffs re-allege and incorporate herein by reference all prior allegations in this 

Complaint.

66. ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), authorizes a participant or 

beneficiary to bring a civil action to: “(A) enjoin any act or practice which violates any 

provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief 

(i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the 

plan.”

67. Pursuant to this provision, 28 U.S.C. § 2201 and 2202, and Federal Rule of Civil 

Procedure 57, Plaintiffs seek declaratory relief that the Plan is not a “church plan” within the 

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meaning of ERISA § 3(33), 29 U.S.C. § 1002(33), and is thus subject to the provisions of Title I 

and Title IV of ERISA.

68. Plaintiffs further seek orders directing all Defendants to bring the Plan into 

compliance with ERISA, including the reporting and funding requirements of ERISA, 29 U.S.C. 

§§ 1021, 1023, 1082, 1102, and 1104, and by remedying the additional violations set forth 

below.

69. Additionally, Plaintiffs seek an order that Franciscan Alliance make all 

contributions to the Plan as necessary to remedy the Plan’s funding shortfall.

SECOND CLAIM FOR RELIEF

Violation of Reporting and Disclosure Provisions

(ERISA §§ 101-104, 502(a)(1)(A), (a)(3), 29 U.S.C. §§ 1021-1024, 1132(a)(1)(A), (a)(3))

70. Plaintiffs re-allege and incorporate herein by reference all prior allegations in this 

Complaint.

71. § 502(a)(1)(A), 29 U.S.C. 1132(a)(1)(A), permits a plan participant to bring a suit 

for penalties when a defendant violates the recordkeeping obligations set forth in ERISA.

72. ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), permits a plan participant to bring a 

suit to obtain appropriate equitable relief to enforce the provisions of Title I of ERISA or to 

enforce the terms of a plan.

A. Annual Reports

73. Under ERISA § 103, 29 U.S.C. § 1023, employee benefit plans are required to 

file an annual report with the Secretary of Labor. This report, submitted via Form 5500, must 

include certain specified information about the plan’s finances, participants, and administration.

74. Defendants failed to file an annual report concerning the Plan with the Secretary 

of Labor in compliance with ERISA § 103, 29 U.S.C. § 1023, or a Form 5500 and associated 

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schedules and attachments which the Secretary has approved as an alternative method of 

compliance with ERISA § 103, 29 U.S.C. § 1023.

75. Defendants have violated ERISA § 104(a), 29 U.S.C. § 1024(a), by failing to file 

annual reports with respect to the Plan with the Secretary of Labor in compliance with ERISA 

§ 103, 29 U.S.C. § 1023, or file a Form 5500 and associated schedules and attachments.

B. Notification of Failure to Meet Minimum Funding Standards

76. Under ERISA § 101(d)(1), 29 U.S.C. § 1021(d)(1), employers maintaining 

employee benefit plans are required to issue a notice to beneficiaries and participants whenever 

the plan fails to make a required installment or other payment required to meet the minimum 

funding standards under ERISA.

77. Franciscan Alliance has failed to furnish the Plaintiffs or any member of the Class 

with a Notice with respect to the Plan pursuant to ERISA § 101(d)(1), 29 U.S.C. § 1021(d)(1), 

informing them that Franciscan Alliance failed to make payments required to comply with 

ERISA § 302, 29 U.S.C. § 1082.

C. Funding Notices

78. Under ERISA § 101(f), 29 U.S.C. § 1021(f), administrators of defined benefit 

plans are required to provide annual plan funding notices to all participants and beneficiaries of 

such defined benefit plans.

79. At no time has the Committee furnished Plaintiffs or any member of the Class 

with a Funding Notice with respect to the Plan pursuant to ERISA § 101(f), 29 U.S.C. § 1021(f).

80. As the Administrator of the Plan, the Committee has violated ERISA § 101(f), 29 

U.S.C. § 1021(f), by failing to provide each participant and beneficiary of the Plan with the 

Funding Notice required by ERISA § 101(f), 29 U.S.C. § 1021(f), and as such may be required 

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by the Court to pay Plaintiffs and each Class member up to $110 per day (as permitted by 29 

C.F.R. § 2575.502(c)(3)) for each day that the Committee has failed to provide Plaintiffs and 

each Class member with the Funding Notice required by ERISA § 101(f), 29 U.S.C. § 1021(f).

THIRD CLAIM FOR RELIEF

Failure to Provide Minimum Funding

(ERISA §§ 302 and 502(a)(3), 29 U.S.C. §§ 1082, 1132(a)(3))

81. Plaintiffs re-allege and incorporate herein by reference all prior allegations in this 

Complaint.

82. ERISA § 302, 29 U.S.C. § 1082, establishes minimum funding standards for 

defined benefit plans that require employers to make minimum contributions to their plans so 

that each plan will have assets available to fund plan benefits if the employer maintaining the 

plan is unable to pay benefits out of its general assets.

83. ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), permits a plan participant to bring a 

suit to obtain appropriate equitable relief to enforce the provisions of Title I of ERISA or to 

enforce the terms of a plan.

84. As the employer maintaining the plan, Franciscan Alliance was responsible for 

making the contributions that should have been made pursuant to ERISA § 302, 29 U.S.C. § 

1082, at a level commensurate with ERISA’s requirements.

85. Franciscan Alliance has failed to make contributions in satisfaction of the 

minimum funding standards of ERISA § 302, 29 U.S.C. § 1082.

86. By failing to make the required contributions to the Plan, Franciscan Alliance has 

violated ERISA § 302, 29 U.S.C. § 1082.

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87. As a result of the failure of Franciscan Alliance to fund the Plan in accordance 

with ERISA’s minimum funding standards, Plaintiffs face substantial risk of the pension being 

lost or severely reduced.

FOURTH CLAIM FOR RELIEF

Failure to Establish the Plan Pursuant to a Written Instrument Under ERISA

(ERISA §§ 402, 502(a)(3), 29 U.S.C. §§ 1102, 1132(a)(2))

88. Plaintiffs re-allege and incorporate herein by reference all prior allegations in this 

Complaint.

89. ERISA § 402, 29 U.S.C. § 1102, provides that every plan will be established 

pursuant to a written instrument which will, among other things, “provide a procedure for 

establishing and carrying out a funding policy and method consistent with the objectives of the 

plan and the requirements of [Title I of ERISA].”

90. ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), permits a plan participant to bring a 

suit to obtain appropriate equitable relief to enforce the provisions of Title I of ERISA or to 

enforce the terms of a plan.

91. The Plan has not been established pursuant to a written instrument meeting the 

requirements of ERISA § 402, 29 U.S.C. § 1102.

92. As Franciscan Alliance has been responsible for maintaining the Plan and has 

amendment power over the Plan, it violated § 402, 29 U.S.C. § 1102, by failing to promulgate 

written instruments in compliance with these sections to govern the Plan operation and 

administration.

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FIFTH CLAIM FOR RELIEF

Breach of Fiduciary Duty

(ERISA §§ 404, 409, 502(a)(2), 29 U.S.C. §§ 1104, 1109, 1132(a)(2))

93. Plaintiffs re-allege and incorporate herein by reference all prior allegations in this 

Complaint.

94. ERISA § 404(a)(1), 29 U.S.C. § 1104(a)(1), provides that a fiduciary shall 

discharge his/her duties with respect to a plan solely in the interest of the participants and 

beneficiaries, and defraying reasonable expenses of administering the plan, and with the care, 

skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting 

in a like capacity and familiar with such matters would use in the conduct of an enterprise of a 

like character and with like aims.

95. ERISA § 409, 29 U.S.C. § 1109, provides, inter alia, that any person who is a 

fiduciary with respect to a plan and who breaches any of the responsibilities, obligations, or 

duties imposed on fiduciaries by ERISA shall be personally liable to make good to the plan any 

losses to the plan resulting from each such breach, and to restore to the plan any profits the 

fiduciary made through the use of the plan’s assets. ERISA § 409 further privies that such 

fiduciaries are subject to such other equitable or remedial relief as a court may deem appropriate. 

96. ERISA § 502(a)(2), 29 U.S.C. § 1132(a)(2), permits a plan participant, 

beneficiary, or fiduciary to bring a suit for relief under ERISA § 409.

97. As a fiduciary of the Plan, Defendants had the duty to comply with and enforce 

the provisions of ERISA alleged above.

98. Defendants have not complied with and/or enforced any of the provisions of 

ERISA set forth above with respect to the Plan.

USDC IN/ND case 3:16-cv-00290-RLM-MGG document 1 filed 05/12/16 page 18 of 22
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99. By failing to enforce the provisions of ERISA set forth above, Defendants have 

breached their fiduciary duties.

100. The failure of Defendants to create and enforce adequate funding policies for the 

Plan, and properly fund the Plan, has resulted in a loss to the Plan equal to the foregone funding 

and earnings thereon, and this failure has profited Franciscan Alliance by providing it the use for 

its general business purposes of money that it should have paid to the Plan.

101. Plaintiffs are entitled to recover those losses on behalf of the Plan.

JURY DEMAND

102. Plaintiffs demand a jury.

PRAYER FOR RELIEF

103. WHEREFORE, Plaintiffs pray that judgment be entered against Defendants on all 

claims and requests that the Court awards the following relief:

A. Certifying this action as a class pursuant to FED. R. CIV. P. 23;

B. Declaring that the Plan is an employee benefit plan within the meaning of ERISA 

§ 3(2), 29 U.S.C. § 1002(2), is a defined benefit pension plan within the meaning of ERISA 

§ 3(35), 29 U.S.C. § 1002(35), and is not a Church Plan within the definition of ERISA § 3(33), 

29 U.S.C. § 1002(33);

C. Ordering Defendants to bring the Plan into compliance with ERISA, including, 

but not limited to, requiring Defendants to fund the Plan in accordance with ERISA’s funding 

requirements, disclose required information to the Plan’s participants and beneficiaries, and 

otherwise comply with all other reporting, vesting, and funding requirements of Title I of 

ERISA;

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D. Requiring Defendants to make the Plan whole for all contributions that should 

have been made pursuant to ERISA funding standards, and for interest and investment income 

on such contributions, and requiring Defendants to disgorge any profits accumulated as a result 

of their fiduciary breaches;

E. Granting a preliminary and permanent injunction removing Defendants as Plan 

fiduciaries, and appointing one or more independent fiduciaries to hold the Plan assets in trust, to 

manage and administer the Plan and its assets, and to enforce the terms of ERISA;

F. Requiring the Franciscan Alliance Pension Security Plan to pay a civil money 

penalty of up to $110 per day to Plaintiffs and each Class member for each day it failed to inform 

Plaintiffs and each Class member of its failure to fund the Plan in accordance with ERISA’s 

requirements;

G. Requiring Franciscan Alliance to pay a civil money penalty of up to $110 per day 

to Plaintiffs and each Class member for each day it failed to inform Plaintiffs and each Class 

member with a Funding Notice;

H. Ordering declaratory and injunctive relief as necessary and appropriate, including 

enjoining the Defendants from further violating the duties, responsibilities, and obligations 

imposed on them by ERISA, with respect to the Plan;

I. Awarding, declaring, or otherwise providing Plaintiffs and the Class all relief 

under ERISA § 502(a), 29 U.S.C. § 1132(a), or any other applicable law, that the Court deems 

proper, and such appropriate equitable relief as the Court may order, including an accounting, 

surcharge, disgorgement of profits, equitable lien, constructive trust, or other remedy; and

J. Awarding to Plaintiffs’ counsel attorneys’ fees and expenses as provided by the 

common fund doctrine, ERISA § 502(g), 29 U.S.C. § 1132(g), and/or other applicable doctrine.

USDC IN/ND case 3:16-cv-00290-RLM-MGG document 1 filed 05/12/16 page 20 of 22
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Dated: May 12, 2016

JURY DEMAND

Plaintiffs, by counsel, hereby demand a trial by jury on all issues for which it is available. 

/s/ Kevin E. Warren

Kevin E. Warren

Respectfully submitted,

SOPKO, NUSSBAUM, INABNIT & KACZMAREK

By: /s/ Kevin E. Warren 

Kevin E. Warren, #26638-64

5

th Floor - Plaza Building

210 South Michigan Street

South Bend, Indiana 46601

Telephone: (574) 234-3000

Facsimile: (574) 234-4220

Kevinw@sni-law.com

Counsel for Plaintiffs

KESSLER TOPAZ 

MELTZER & CHECK, LLP

Edward W. Ciolko

(pro hac vice motion to be filed)

Mark K. Gyandoh

(pro hac vice motion to be filed)

Julie Siebert-Johnson

(pro hac vice motion to be filed)

280 King of Prussia Road

Radnor, PA 19087

Tel: (610) 667-7706

Fax: (610) 667-7056

Email: eciolko@ktmc.com

Email: mgyandoh@ktmc.com

Email: jsjohnson@ktmc.com

USDC IN/ND case 3:16-cv-00290-RLM-MGG document 1 filed 05/12/16 page 21 of 22
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IZARD NOBEL LLP

Robert A. Izard

(pro hac vice motion to be filed)

Mark P. Kindall

(pro hac vice motion to be filed)

29 South Main Street

Suite 305

West Hartford, CT 06107

Tel: (860) 493-6292

Fax: (860) 493-6290

Email: rizard@izardnobel.com

Email: mkindall@izardnobel.com

Counsel for Plaintiffs

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