2001); Lays v. Mead Corp., 132 F.3d 1246, 1249 (8th Cir. 1998). To bring suit against Seid, Plaintiff
must allege that: (1) Seid was both the plan administrator and the employer and (2) that Seid and the
Plan were closely intertwined.

In the instant case, Sack’s complaint does not specifically allege that Seid is the administrator
of the Plans. According to the Amended Complaint, Seid was the trustee of both Plans (Am. Compl.
at (6), and “control[led] all of the other defendants”. (Am. Compl. at 7), and that he took Sack’s money
(Am. Compl. at 10). Based on all facts alleged in the Amended Complaint and any reasonable
inferences drawn therefrom in the light most favorable to Seid, Seid has sufficiently pled that Sack was
the administrator of the Plans and that through his involvement with Beacon and the Plans, Seid and the
Plans were closely intertwined. Therefore, at this stage of the litigation, Seid is a proper defendant in
Sack’s ERISA claim brought pursuant to 29 U.S.C. § 1132.

Motion to Dismiss Count I -- Allegation of Breach of Fiduciary Duty

Count II states a claim for a breach of fiduciary duty under 29 U.S.C. §§ 1104, 1109, and 1132;
a violation of the exclusive benefit rule under 29 U.S.C. §§ 1104(a)(1) and 1103(c)(1); a prohibited
transaction under 29 U.S.C. § 1106; and a violation of the anti-assignment and anti-alienation of benefit
provisions under 29 U.S.C. § 1056(d). Defendant argues that the fiduciary duty claims should be
dismissed because Plaintiff is not a proper party to bring such a complaint. Additionally, Defendant
argues that the balance of Count II should be dismissed because it is “hopelessly vague”. (Pl.’s Br. at
410).

In the Amended Complaint, Sack does not indicate under which subsection of 29 U.S.C. § 1132
he brings his claim. Subsection (a) of § 1132 details “persons empowered to bring a civil action” under

ERISA. Of the nine subsections in 29 U.S.C. §1132(a), the only feasible sections under which a plaintiff


Motion to Dismiss the Balance of Count II

Defendant also alleges that the balance of Count II is vague. Under Federal notice pleading
requirements, plaintiffs are not required to allege all of the facts underlying their claims in the
complaint. Instead, a plaintiff need only plead the bare minimum facts necessary to put a defendant
on notice of the claim so that the defendant can file an answer. See Swierkiewicz, 122 S.Ct. at 996;
Higgs, 286 F.3d at 439. Count II of Sack’s Complaint is titled: “COUNT II: BREACH OF
FIDUCIARY DUTY AND VIOLATION OF THE EXCLUSIVE BENEFIT RULE AND ANTI-
ASSIGNMENT, AND ANTI-ALIENATION AND PROHIBITED TRANSACTION PROVISIONS OF
ERISA.” Given federal notice pleading requirements, Sack is clearly placing Defendants on notice of
these claims. Swierkiewicz, 122 S.Ct. at 996. However, Count II also alleges that Defendants’ actions
“constitute[d] fraud, conversion, breach of contract and unjust enrichment under the federal common
law.” (Am. Compl. at 130). This Court does not interpret, nor does Plaintiff argue, that Paragraph 30
is a separate claim for relief under the federal common law. Instead, paragraph 30 is to be read as
alleging facts in support of the claims for the remainder of Count II (claims for a violation of the
exclusive benefit rule under 29 U.S.C. §§ 1104(a)(1) and 1103(c)(1), a prohibited transaction under 29
U.S.C. § 1106, and a violation of the anti-assignment and anti-alienation of benefit provisions under 29
U.S.C. § 1056(d).

For the reasons stated above, Seid’s Motion to Dismigs.is denied.

Dated: Cayue 5, 2002- ‘Dh net

sound. DARRAH
United States District Judge



anti-assignment and anti-alienation of benefit provisions under 29 U.S.C. § 1056(d). Count III' alleges
that the failure to notify Plaintiff fifteen days in advance of the date of the termination of Money
Purchase Plan violates Section 204(h) of ERISA, 29 U.S.C. § 1054(h). Currently before the Court is
Defendant Seid’s Motion to Dismiss Counts I and II.

Motion to Dismiss Count I

Seid argues that Count I must be dismissed because only the Plans themseives (as opposed to
a plan trustee or an administrator) are proper defendants to a denial of benefits claim brought under
section 502(a)(1)(B) of BRISA, 29 U.S.C. § 1132(a)(1)(B).

Ordinarily, in a suit to recover benefits of a Plan brought pursuant to ERISA, the plaintiff may
only bring suit against the Plan. See Riordan v. Commonwealth Edison Co., 128 F.3d 549, 551 (7th Cir.
1997); Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir. 1996).

Seid argues that Count I should be dismissed because Sack has pled that the Plans were
“terminated” for several years; therefore, because the only permissible party defendant is the Plans,
Count | should be dismissed. Seid’s argument fails because the Plans have been named as a party and
because Sack did not plead that the Plans had been terminated. Sack has pled that he recently learned
that the Plans were “terminated” and that the supposed termination was ineffective because proper notice
and termination proceedings were not followed. Accordingly, Seid’s argument fails.

Even if the Plans were terminated, suits for benefits may also be brought against the plan
administrator. See Mein v. Carus Corp., 241 F.3d 581, 583 (7th Cir. 2001) (employer was proper
defendant in ERISA action because employer was also the plan administrator, and the employer and the

plan were otherwise closely intertwined); Neuma, Inc. v. AMP, Inc., 259 F.3d 864, 872 n.4 (7th Cir.

‘Count III is mislabeled as Count IV in the Amended Complaint and is referenced in this
Memorandum Opinion and Order as Count IIE.


can bring a claim for breach of fiduciary duty are §§ (a)(2) and (a)(3). In the instant case, however,
neither of these sections are appropriate avenues for relief.

A. Breach of Fiduciary Duty Under 29 U.S.C. §1132(a)(2)

Individually, Sack may not bring a fiduciary claim under subsection (a)(2). Subsection (a)(2)
of section 1132 allows a plan participant to bring an action for “appropriate relief under section 1109
of this title”. 29 U.S.C. § 1132(a)(2). Thus, plaintiffs ability to sue under subsection (a)(2) must come
directly out of section 1109 of ERISA. In Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134
(1985) (Russell), the Supreme Court stated that “the entire text of [section 1109] persuades us that
Congress did not intend that section to authorize any relief except for the plan itself.” Russell, 473 U.S.
at 144 (emphasis added). Therefore, any “recovery for a violation of [section 1109] inures to the plan
as a whole” and not to an individual participant or beneficiary. Russell, 473 U.S. at 140. Pursuant to
Russell, an individual plan participant may not bring a cause of action under section 1109 to recover on
his own behalf. Anweiler v. AEPSC, 3 F.3d 986, 992 (7th Cir. 1993) (discussing Russell and its progeny).
See also Wyluda v. Fleet Financial Group, 112 F.Supp.2d 827, 831 (E.D. Wisc. 2000).

In similar instances, other courts have concluded that an effort to bring a claim for breach of
fiduciary duty should be read as if the claim was being brought as a derivative action on behalf of the
plan. See Musmeci v. Schwegmann Giant Super Markets, No. Civ.A. 97-2757, 2002 WL 88938, at *1
(E.D.La. Jan 22, 2002). The instant case permits such an inference.

In his prayer for relief, Sack seeks to “restore the Plan for Plaintiff and the other participants and
beneficiaries”. Based on this prayer for relief, a reasonable inference can be made that Sack is not only
bringing suit on behalf of himself but also the Plan and other participants and beneficiaries. Therefore,

Sack’s claim under 29 U.S.C. § 1132(a)(2) is not dismissed.


‘Minute Order Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge John W. Darrah Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 01 C 6747 DATE 8/8/2002
CASE PAUL W. SACK vs. SHELDON SEID
TITLE

[ln the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

of the motion being presented.)

(8)

MOTION:

DOCKET ENTRY:

(1) Oo Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due

(3) o Answer brief to motion due___. Reply to answer briefdue___.

(4) im) Ruling/Hearingon set for at

(5) a Status hearing[held/continued to] [set for/re-set for]on__setfor___at

(6) a Pretrial conference[held/continued to] [set for/re-set for]on__setfor___—sat__.

(7) a Trial{set for/re-set for]on at

(8) oO {Bench/Jury trial] [Hearing] held/continued toa

(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) (General Rule21 CFRCP41(a)\(1) OO FRCP41(a)(2).

qo) iff [Other docket entry] Defendant Sheldon Seid’s motion to compel discovery is granted. Plaintiff

to produce documents by 8/22/02 as stated on the record. Status hearing is set for 9/12/02 at 9:00 a.m.

Enter Memorandum Opinion And Order. Seid’s motion to dismiss is denied.

0 [For further detail see order (on reverse side offattached to) the original minute order.]

No notices required, advised in open court.

No notices required. umber of notices |

Notices mailed by judge’s staff, TAC 1 9 ene

Notified counsel by telephone. date dgcketed

Docketing to mail notices,

Mail AO 450 form,

docketing dfputy initials

Copy to judge/magistrate judge.

my date\pailed notice
courtroom < boa

LG deputy's
initials

Date/time received in
central Clerk's Office trailing depp initials

V



B. Breach of Fiduciary Duty under 29 U.S.C. §1132(a)(3)

Subsection (a)(3) of Section 1132, unlike subsection (a)(2), authorizes individualized equitable
relief for breach of fiduciary obligations. Varity Corp. v. Howe, 515 U.S. 489, 515 (1996) (Varity). This
subsection provides that an action may be brought “by a participant, beneficiary or fiduciary: (A) to
enjoin any act or practice which violates any provision of this subchapter 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 subchapter or the terms of the plan.” 29 U.S.C. § 1132(a)(3). Under this subsection, “appropriate
equitable relief’ does not include compensatory damages but only “the typical remedies available in
equity”. Buckley Dement, Inc. V. Travelers Plan Administrators of Illinois, 39 F.3d 784, 788 (7th Cir.
1994).

In Varity, the Supreme Court addressed the issue of whether an individual plaintiff can obtain
equitable relief under subsection (a)(3). The Court stated that equitable relief is permitted but “that
where Congress elsewhere provided adequate relief for a beneficiary’s injury, there will likely be no
need for further equitable relief, in which case such relief normally would not be ‘appropriate.”” Varity,
516 U.S. at 515. Where remedies are elsewhere available, individual plaintiffs are not permitted to bring
claims for equitable relief under subsection (a)(3). See Wyluda v. Fleet Financial Group, 112 F.Supp.2d
827, 832 (E.D. Wisc. 2000).

Here, Sack seeks compensatory damages and other relief necessary to require the Defendants
to make full restitution. While Sack seeks compensatory damages, if Sack’s above theories in which
he seeks such damages fail, Sack would need equitable relief to make him whole, i.e., an injunctive relief
to restore the funds to the Plans so that he can claim his share. Therefore, Sack has properly pled a cause

of action under 29 U.S.C. 1132(a)(3).


UNITED STATES DISTRICT COURT ~

NORTHERN DISTRICT OF ILLINOIS =

EASTERN DIVISION my

4uy
ty
PAUL W. SACK, Uy,

Plaintiff,

v.
No. 01 C 6747
SHELDON SEID, BEACON CHICAGO
BUTTON CO., CRESCENT BUTTON CO.,
OF CHICAGO, BEACON CHICAGO
BUTTON CO. PROFIT SHARING TRUST,
AND BEACON CHICAGO BUTTON CO.
MONEY PURCHASE PENSION TRUST,

Judge John W. Darrah

we Se SSS SS SS SS DS

Defendants.
MEMORANDUM OPINION AND ORDER

Plaintiff, Paul Sack (“Sack”), brought suit against Defendants, Sheldon Seid (“Seid”), Beacon
Chicago Button Company (“Beacon”), Beacon Chicago Company Profit Sharing Trust (“Profit Sharing
Trust”), and Beacon Chicago Button Company Money Purchase Pension Trust (“Money Purchase
Plan”), alleging violations of the Employee Retirement Income Security Act of 1974 (“ERISA”).
Presently before the Court is Seid’s Motion to Dismiss Counts I and II of Plaintiff's Amended
Complaint.

In reviewing a motion to dismiss, the court reviews all facts alleged in the complaint and any
reasonable inferences drawn therefrom in the light most favorable to the plaintiff. See Marshall-Mosby
v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000). Dismissal is only warranted if the
plaintiff can prove no set of facts in support of its claims that would entitle it to relief. See Conley v.
Gibson, 355 U.S. 41, 45-46 (1957). Plaintiffs are not required to allege all of the facts underlying their
claims in the complaint. Instead, a plaintiff need only plead the bare minimum facts necessary to put

a defendant on notice of the claim so that the defendant can file an answer. See Swierkiewicz v.

AY


Sorema, 122 S.Ct. 992, 996 (2002) (Swierkiewicz); Higgs v. Carver, 286 F.3d 437, 439 (7th Cir.
2002) (Higgs).

Areading ofthe Complaint supports the following summary of the alleged conduct of the parties.

Sack worked for Beacon until 1983. While employed by Beacon, Sack was a participant in two
ERISA-governed retirement plans sponsored by Beacon: the Profit Sharing Trust and the Money
Purchase Plan (collectively, “the Plans”). Defendant Seid was the trustee of both plans, was a fiduciary
under ERISA, and “control{led] all of the other defendants”. (Am. Compl. at 7).

In 1983, at the age of 43, Sack discontinued his employment at Beacon and applied for his vested
pension balance. At that time, Seid instructed Sack that he could not collect his pension benefits until
reaching 65 years of age and that Sack should return at that time to receive such benefits. As Sack
approached retirement age, he contacted Seid in an effort to obtain his pension benefits so he could
collect such benefits upon reaching age 65. Despite his efforts, Sack was unable to confirm that his
monies were available. Instead, he learned that Beacon was “gone” as were the Plans.

Between the time that Sack stopped working for Beacon and the time when he contacted Seid,
the Profit Sharing Trust and the Money Purchase Plan were terminated. (According to the Amended
Complaint, the Plans were terminated during the mid- to late- 1980's.) Seid had sold Beacon, terminated
the Plans, and taken the Plaintiff’s retirement money.

Ali three defendants are named as parties to the three counts in the Amended Complaint. Count
Tis a claim for denial of benefits under ERISA, 29 U.S.C. § 1132, Count I] alleges a breach of fiduciary
duty under 29 U.S.C. §§ 1104, 1109, and 1132; a violation of the exclusive benefit rule under 29 U.S.C.

§§ 1104(a)(1) and 1103(c)(1); a prohibited transaction under 29 U.S.C. § 1106; and a violation of the