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" F o ley v . L ocal 98 P e n sion " (2001). 2001 D e cisio n s

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. e du/thir dc ir c uit_2001/259Filed November 8, 2001

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 00-2767 and 00-4427

EDWARD J. FOLEY, SR.

v.

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL UNION 98 PENSION FUND;

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 98; SCOTT ERNSBERGER; JOHN J. DOUGHERTY, in his capacity as a TRUSTEE and as an officer and BUSINESS MANAGER OF LOCAL 98; EDWARD NIELSON, in his capacity as a TRUSTEE and as an off icer of LOCAL 98; JOSEPH AGRESTI, in his capacity as a TRUSTEE; THOMAS J. REILLY, JR., in his capacity as a TRUSTEE; DENNIS LINK, in his capacity as a TRUSTEE; WILLIAM RHODES, in his capacity as a TRUSTEE; ROY DANTZ, in his capacity as a TRUSTEE; LARRY J. BRADLEY, in his capacity as a TRUSTEE; FRED J.

COMPTON

International Brotherhood of Electrical Workers Loc al Union 98 Pension Fund, Scott Ernsberger, John J. Dougherty, in his capacity as a Trustee, Edward Nie lson, in his capacity as a Trustee, Joseph Agresti, in hi s capacity as a Trustee, Thomas J. Reilly, Jr., in hi s capacity as a Trustee, Dennis Link, in his capacity as a Trustee, William C. Rhodes, in his capacity as a Tr ustee, Roy Dantz, in his capacity as a Former Trustee, and Larry Bradley, in his capacity as a Former Trustee (Collectively the "Defendants"), Appellants in No. 00-2767EDWARD J. FOLEY, SR.

v.

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL UNION 98 PENSION FUND;

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 98 OF AMERICA; SCOTT ERNSBERGER; JOHN J. DOUGHERTY, in his capacity as
a TRUSTEE and as an officer and BUSINESS MANAGER OF LOCAL 98; EDWARD NIELSON, in his capacity as a TRUSTEE and as an officer of LOCAL 98; JOSEPH AGRESTI, in his capacity as a TRUSTEE; THOMAS J. REILLY, JR., in his capacity as a TRUSTEE; DENNIS LINK, in his capacity as a TRUSTEE; WILLIAM RHODES, in his capacity as a TRUSTEE; ROY DANTZ, in his capacity as a TRUSTEE; LAWRENCE J. BRADLEY, in his capacity as a TRUSTEE, Appellants in No. 00-4427

and FRED COMPTON

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civ. No. 98-906) District Judge: Honorable Lowell A. Reed, Jr.

Argued October 9, 2001

Before: SCIRICA, GREENBERG, and COWEN, Circuit Judges

(Filed: November 8, 2001)

Laurance E. Baccini (argued)
Linda B. Hollinshead Wolf, Block, Schorr & Solis-Cohen 1650 Arch Street, 22nd Floor Philadelphia, PA 19103-2297

2Richard B. Sigmond

Sagot, Jennings & Sigmond Penn Mutual Towers, 16th Floor

510 Walnut Street Philadelphia, PA 19106-3683

Attorneys for Appellants

Daniel P. McElhatton (argued) Schubert, Bellwoar, Cahill & Quinn Two Penn Center, Suite 1400

1500 JFK Blvd. Philadelphia, PA 19102-1890

Edward J. Foley, Jr. Garagozzo, Foley & Collazzo
410 N. 8th Street Philadelphia, PA 19123-3903

Attorneys for Appellee

OPINION OF THE COURT

GREENBERG, Circuit Judge.

This matter comes on before this court on appeal fr om an order of the district court entering judgment in fa vor of appellee Edward J. Foley, Sr., and against the Inte rnational
Brotherhood of Electrical Workers Local Union 98 Pe nsion Fund (the "Pension Fund" or the "Fund"). 1 Foley cl aims that the Pension Fund's Board of Trustees ("Trustees") improperly declined to grant him an exception to th e pension Plan's service eligibility provisions that would have permitted him to receive a higher level of benefits than that

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1. There is some question as to which of the defend ants the district court entered judgment against. While the court apparentl y intended to enter judgment only against the Fund, and the district co urt docket reflects this disposition, the individual defendants neverth eless have appealed. Inasmuch as we conclude that Foley was not entitled to a judgment against any of the defendants, the question is of n o practical significance. However, as a matter of convenience, we will treat all the individual defendants except Fred Compton as appell ants, as they in fact appealed.

3to which he otherwise was entitled. Following a ben ch trial,

the district court concluded that the Trustees arbi trarily and capriciously declined to apply the exception to Foley in the manner they had applied it to other employees s eeking its benefit. Thus, it entered judgment in his favor on August 29, 2000. Appellants assert that the distric t court, when reviewing the Trustees' decision, erred in its application of the arbitrary and capricious standar d, as Foley was not similarly situated to other employees to whom the Trustees had applied the exception. Appell ants also appeal the district court's subsequent award o f attorneys' fees to Foley by order of December 8, 20 00. For the reasons set forth below, we will reverse the di strict court's judgment on the merits and, accordingly, we also will reverse the award of attorneys' fees.

I. BACKGROUND

Foley is the former President of the International Brotherhood of Electrical Workers Local 98 (hereina fter "the Union") and a former Trustee of the Union's Pension Fund. He worked in covered employment for Fund pension purposes, i.e., employment in the electrical indust ry, from 1959 until his employer laid him off in 1971. Then, from 1972 through 1980, Foley worked in his family's tir e business, returning to employment in the electrical industry in 1981. Following his return to the elect rical industry, Foley was elected the Union's President a nd he
served as a Trustee of the Pension Fund from 1987 t hrough July 1996. In July 1996, Foley retired and sought p ension
benefits.

Under the Plan provisions, Foley forfeited all cred ited service earned prior to his return to work in 1981 because of a break-in-service provision which provided, in the years applicable to Foley, that accrued pension credits l apsed when a Plan participant did not work 600 hours in c overed employment for a consecutive two-year period. There is, however, an exception to the break-in-service provi sion, known as the available-for-work exception, wherein the Plan provides that an employee shall not forfeit cr edited service if he was continuously available for work w ithin the jurisdiction of the Union and unable to obtain cove red

4employment.2 Based on this exception, in 1988, shor tly

after Foley began his tenure as Trustee, the Truste es agreed to excuse his break-in-service pursuant to their understanding that work had not been available to h im in covered employment from 1972 to 1980.

On October 28, 1994, however, Fred Compton, a forme r Union president and Trustee, sent Laurance Baccini, counsel to the Pension Fund, a letter stating that the 1988
decision was incorrect because the Trustees at that time based their decision on fabricated information impr operly skewed in Foley's favor. Upon receipt of Compton's letter, the Trustees appointed a subcommittee to investigat e Compton's allegations. Then, in February 1995, base d on the subcommittee's recommendations, the Trustees reversed the 1988 decision because they concluded t hat
there was insufficient evidence to substantiate Fol ey's claim
that work was unavailable and that he was available for covered employment in the 1972-1974 period.

In July 1996, Foley applied for pension benefits bu t, based upon their 1995 decision, the Trustees denied his application insofar as it sought credits for the pe riod between 1959-1971. Foley appealed but was not succe ssful as the Trustees determined that he still had not pr esented
sufficient information to establish his entitlement to credit for the disputed years of credited service.

On February 23, 1998, Foley commenced this action under the Employee Retirement Income Security Act, 29 U.S.C. S 1001, et seq. ("ERISA"), in particular 29 U.S.C. SS 1132(a)(1)(B) and (a)(3), which action, as subse quently amended, named the Fund, the Union, the Trustees, a nd various Union officers as defendants. In his compla int Foley

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2. The relevant Plan provision states:

Notwithstanding anything to the contrary in paragraph (a) and (b), an employee shall not have forfeited any of his Credited Service (past or future) or the right to any death b enefit regardless of
his number of years of credited service if:

(1) he was continuously available for work w ithin the jurisdiction

of
the Union and was unable to obtain covered e mployment.

Article I, Definitions, Section C "Break in Service " (c)(i).

5asserted that the Trustees improperly applied a mor e

demanding evidentiary standard to him than to other employees who had been granted an exception to the break-in-service provision notwithstanding a provis ion in the Plan that all "interpretations and decisions sh all be applied in a uniform manner to all Employees simila rly situated." In addition to his ERISA claims, Foley a lso asserted claims under the Labor Management Reportin g and Disclosure Act of 1974, 29 U.S.C. S 401 et seq.
, ("LMRDA"), and the Internal Revenue Code, 26 U.S.C. SS 411 and 412. Following the parties' cross-motion s for summary judgment, the district court dismissed all but Foley's ERISA claims. See Foley v. IBEW Local Union 98 Pension Fund, 91 F. Supp. 2d 797 (E.D. Pa. 2000).3 We make no further reference to the dismissed claims, as Foley has not cross-appealed from their dismissal and has not
asserted that we should affirm on the basis of thes e claims.

After a bench trial in August 2000, the district co urt found that the Trustees arbitrarily and capriciousl y acted contrary to the terms of the Plan when they denied Foley credit for time during his employment in the electr ical industry prior to his 1971 layoff. See Foley v. IBE W Local Union 98 Pension Fund, 112 F. Supp. 2d 411, 416-17 (E.D. Pa. 2000) ("Foley"). On August 29, 2000, the court entered judgment against appellants, and on December 8, 200 0, entered an order granting Foley's motion for attorn eys' fees. See Foley v. IBEW Local Union 98 Pension Fund, No. Civ. A. 98-906, 2000 WL 1801273 (E.D. Pa. Dec. 7, 2000). Appellants have timely appealed from the judgment a nd

order.4

II. STANDARD OF REVIEW

We reverse factual conclusions of the district cour t only if they are clearly erroneous, see Fed. R. Civ. P. 52(a), but exercise "plenary review over the trial court's cho ice and

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3. Foley included Compton as a defendant but the pa rties later dismissed the action against him by stipulation. He is not a party on this appeal.

4. The district court had jurisdiction over this ma tter pursuant to 29 U.S.C. S 1132(e) and 28 U.S.C. S 1331 and we have j urisdiction under 28

U.S.C. S 1291.

6interpretation of legal precepts and its applicatio n of those

precepts to the historical facts." Orvosh v. Progra m of Group Ins. for Salaried Employees of Volkswagen of Am., 2 22 F.3d 123, 129 (3d Cir. 2000) (citation and internal quot ation marks omitted). Where, as here, the plan administra tor has discretion to interpret the Plan and the authority to determine eligibility, we review a denial of benefi ts under an "arbitrary and capricious" standard. Id. Under thi s standard:

a plan administrator's decision will be over turned only if it is clearly not supported by the eviden ce in the
record or the administrator has failed to co mply with the procedures required by the plan. A court is not free to substitute its own judgment for that of t he defendants in determining eligibility for pl an benefits.

Orvosh, 222 F.3d at 129 (internal quotations and ci tations omitted).5 Further, "the district court cannot, by couching a legal conclusion as a finding of fact, prevent appe llate review of legal errors." Louis W. Epstein Family P' ship v. Kmart Corp., 13 F.3d 762, 766 (3d Cir. 1994) (citat ion and internal quotation marks omitted).

III. DISCUSSION

The Trustees denied Foley credit for the disputed y ears of service because the subcommittee's investigation demonstrated that work had been plentiful between 1 972 and 1974, but that Foley was unavailable for work d uring that period due to his employment in the family tir e business. The Trustees also found that Foley failed to produce any evidence supporting his claim.

Under the "arbitrary and capricious" standard of re view,
the district court was bound to affirm this decisio n if it was not contrary to the Plan's terms and was rationally related to a legitimate Plan purpose. See Orvosh, 222 F.3d at 129- 31. The district court determined that although the Trustees believed in good faith that they were trea ting Foley

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5. Foley unsuccessfully argued in the district cour t that the court should
review the Trustees' decision on a de novo basis bu t he does not make that contention on this appeal.

7the same as any other applicant seeking the benefit of the

break-in-service exception, they actually treated h im differently from other employees similarly situated in that they arbitrarily and capriciously subjected his app lication to a more demanding evidentiary standard and a stri cter level of scrutiny than those of other employees. Se e Foley, 112 F. Supp. 2d at 416. A district court, however, may not substitute its judgment for that of a plan's truste es in determining a claimant's eligibility for benefits, and, as we discuss below, the record demonstrates that the Tru stees here did not arbitrarily and capriciously treat Fol ey as not being similarly situated to other employees to whom the exception to the break-in-service rule had been app lied.

The record shows that during a Trustees' meeting in 1979, they determined that Foley forfeited the cred its he earned from 1959-1971 as he had a two-year break in service as of 1973. In 1984, when, after resuming employment in the electrical industry, Foley inquir ed as to the status of those credits, Compton informed him t hat they had been forfeited and that it was "too late" to save
them.

In 1988, six months after Foley was elected Preside nt of the Union, he appointed himself, Paul Gilmore, and James Mackin to three of the six positions on the Fund's Board of Trustees. Shortly thereafter, the Board of Trustees granted Foley credits for the years 1959-1971, reversing it s prior forfeiture of his credits even though he had not ap plied formally for their reinstatement. Indeed, Foley did not present documentary evidence to support the award o f
credits at the time he was awarded the credits. Ins tead, Mackin and Gilmore spoke on Foley's behalf, and the Trustees appear to have accepted their statements a s true. The record shows, however, that Mackin and Gilmore did not have first hand knowledge of the germane facts as they had not been employed full time in the electrical i ndustry during the 1972 to 1974 period.

In October 1994, however, the Trustees received Compton's letter, "seriously question[ing]" the 198 8 decision and stating that "the [1988] pension trust ees may have been either misled or misinformed" when they reinstated Foley's credits. Confronted with this fo rmal

8written challenge, the Trustees determined that the y were

obliged to review the facts and, accordingly, creat ed the subcommittee to investigate the issues Compton rais ed in
his letter.

The subcommittee rendered its report in late 1994 o r early 1995. It found that work opportunities were"p lentiful" from 1971 through 1974 and, according to the record available to it, the hours electricians worked duri ng that period evidenced "full employment, a few visiting b rothers working and a decent amount of overtime." The
subcommittee also determined that the Trustees in 1 988 primarily relied on Gilmore's statement that Foley was available for work but Gilmore admitted to the subcommittee that he knew only of Foley's availabil ity after 1975. The subcommittee interviewed Foley, who state d that he went into the family business in 1972 and period ically
checked to see if electrical work was available.

We recognize that the subcommittee noted that the l ack of evidence supporting Foley's alleged availability for work in the electrical industry and inability to find wo rk was not "unique" and that the "available for work-no work a vailable" exception had been applied liberally. In fact, the subcommittee's report included a list showing each case in which the exception had been applied since 1980. Consequently, the subcommittee recommended that the Trustees construe the exception more strictly than they had in the past and that if they did so in Foley's case , they also should "examine" the included list, making"appropri ate adjustments." Id. at 254 255.6

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6. According to the list, in addition to Foley, 20 other employees applied for the benefit of the exception, only one unsucces sfully. Eight who were successful had signed the Union's "out-of-work" boo k signaling their availability for work. In three cases, the Trustees testified as to having first hand knowledge as to each employee's availabi lity for work and in three other cases the employees had constant contac t with the Union, and one submitted a letter detailing his work histo ry.

The district court found these distinctions from Fo ley's case "not meaningful or persuasive." Foley, 112 F. Supp. 2d a t 414 n.2. It pointed out that during the period at issue, 1972-1974, a t ime that the Trustees found that work opportunities were plentiful, nine employees had been granted the "available for work-work not available" exception. Id.

9In February 1995, following their review of the

subcommittee's report, the Trustees unanimously vot ed to remove the credited service from Foley's pension re cord but advised him that at any time he could submit a requ est for reconsideration attaching relevant documentation. T he Trustees also resolved to reinvestigate all other i ndividuals
to whom the "available for work-no work available" exception had been applied. See Foley, 112 F. Supp. 2d at

413.

In July 1996, when Foley applied for benefits, he d id not submit additional information supporting a credit f or service from 1959 to 1971. Accordingly, the Trustee s awarded Foley pension benefits taking into account his break in service. Foley appealed the decision, but the Trustees concluded that they had "insufficient evid ence as to the unavailability of work and Mr. Foley's inabi lity to obtain covered employment during the Plan years 197 2,

1973 and 1974."

The district court found that the Trustees acted in good faith and believed they did not treat Foley differe ntly than other employees. Foley, 112 F. Supp. 2d at 415. How ever, the court determined that the Trustees actually hel d Foley to a stricter standard "than any other individual i n like circumstances," id., arbitrarily and capriciously v iolating their duty to interpret the Plan and apply decision s"in a uniform manner to all Employees similarly situated. " Id. at 416 (citation omitted).

The district court made much of the fact that the Trustees appointed the subcommittee to investigate the circumstances under which Foley had been granted th e exception in 1988, yet failed to form a subcommitte e to examine "any other plan participant's pension appli cation." Foley, 112 F. Supp. 2d at 415. As the district cour t

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However, of these nine, only two met the exception during 1973, and the remaining seven could not find work from 1974-1 975. Most of those
who could not find work in 1974-1975 were out-of-to wn workers who signed the out-of-work book. Of the two that met th e exception in 1973, the Trustees had first hand knowledge of both emplo yees' record.

10recognized, however, the allegations of impropriety that

Compton raised in his letter "justified a review of plaintiff's claim to determine whether there was any impropriet y." Id. at 414 n.2. Thus, given the allegations of impropri ety in the Compton letter, and in light of their fiduciary dut ies to the Fund, the Trustees reasonably and appropriately app ointed the subcommittee in Foley's case.

The district court next took issue with the actions the Trustees took upon receipt of the subcommittee's re port.
See id. The court seems to have been of the view th at because the investigation yielded "no evidence of wrongdoing or deceit," the Trustees were bound to g rant Foley's application for benefits as they had with"a number of individuals who sought refuge under the break-in -service exception . . . who, like Foley, produced a minuscu le
amount of evidence." Id. The court also seemed frus trated
with the fact that the Trustees had not conducted a n investigation with respect to the other employees w ho were granted the benefit of the exception. Id. at 415. T hese cases differed from Foley's, however, in that these emplo yees' eligibility for the exception never was challenged. Further, the subcommittee did not uncover any evidence sugge sting that any of them acquired pension credits through improper means.7

In essence, the court held that because Foley was "similarly situated" to other employees who had ben efitted from a liberal interpretation of the available-for- work exception, the Trustees' failure to award him the b reak-in service credits was "arbitrary and capricious." Fol ey, 112 F. Supp. 2d at 416. The premise of the court's decisio n was, however, erroneous as Foley was not similarly situa ted to rank and file Union members who had been granted th e benefit of the exception. Rather, he was a Trustee when he sought to have service credits added to his pension record, and he appointed the Trustees who spoke on his beha lf and apparently voted to grant him the benefit of the ex ception. Moreover, Foley's case was the only one under the

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7. Apparently, the Trustees referred the matter to the Fund professionals for follow-up. Several individuals who were granted the benefit of the exception now are deceased. See Appellants' Br. at 34.

11available-for-work exception where issues of improp riety

were raised, and his case was the only one in which the employee's entitlement to benefits under the except ion was challenged. Furthermore, upon review of the subcommittee's report, the Trustees recognized that they did not have evidence to support the application of the exception to Foley.

It is also significant that at a time that he shoul d have been "continuously available for work" in order for his break in service to be excused, Foley was engaged i n the family tire business and thus had an incentive not to work in the electrical industry. When the district court made its determination that the Trustees acted arbitrarily a nd capriciously, it should have recognized that this circumstance distinguished Foley's case from those of other supposedly "similarly situated" employees who were granted the benefit of the exception, as Foley made no show ing that they had incentives equivalent to his to eschew emp loyment in the electrical industry. In the circumstances, i t cannot reasonably be held that the Trustees arbitrarily an d capriciously treated Foley differently from other e mployees similarly situated, and thus the district court err ed in reaching its result.

We emphasize that in focusing on the fact that cred it under the available-for-work exception had been gra nted liberally in the past rather than examining whether the Trustees' decision was contrary to Plan language or whether it was rationally related to a legitimate P lan purpose, the district court did not properly credit significant evidence. This evidence included the subcommittee's finding that work was plentiful from 1972- 1974, the Trustees' own recollections and understan ding regarding the availability of work during that time
, Gilmore's admission to the subcommittee of his lack of knowledge of the germane facts, Foley's failure to present evidence, and the circumstances in which Foley was originally granted the exception. The court, howeve r, should
have relied on this evidence as it was not free to substitute its judgment for that of the Plan administrators. S ee Orvosh, 222 F.3d at 129.

12Moreover, the district court's holding binds the Tr ustees

to a result that was a consequence of poor administ rative practices, that the Trustees later corrected. In ef fect, the district court's decision improperly "straitjackets " the Trustees into granting benefits simply because of t heir past practices. See Oster v. Barco of Cal. Employees' Re t. Plan, 869 F.2d 1215, 1219 (9th Cir. 1988) (holding that p rior record of granting requests is insufficient to esta blish that committee denied request in arbitrary and capriciou s manner and stating "[t]o hold otherwise would impai r the flexibility necessary for proper financial manageme nt of such plans, a goal of Congress in holding ERISA fid uciaries to the `prudent man' standard") (citation and inter nal quotation marks omitted). See also Nazay v. Miller, 949 F.2d 1323, 1336 (3d Cir. 1991) (plan administrator' s decision not to waive requirement "was neither arbi trary nor capricious and did not constitute an abuse of discretion" where plan administrator waived require ment on 14 previous occasions). We are particularly trouble d by the fact that the district court effectively read the b reak-inservice forfeiture provision out of the Plan, as un der the
court's conclusions it is difficult to see how it e ver could be applied in the face of an employee's claim that he is entitled to the benefit of the exception.8

The district court's opinion also is problematical for another quite fundamental reason. While we know tha t the break-in-service exception was excused in 20 other cases in which employees claimed its benefit, the district c ourt had no way of knowing the number of situations in which employees lost credits by reason of a break in empl oyment during a consecutive two-year period but did not se ek the benefit of the exception. Certainly if there were s uch employees, they were treated the same as rather tha n differently from Foley.9 But the district court did not consider this possibility.

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8. Foley argues that the Trustees did not raise a"s traightjackets" argument in the district court. We are satisfied, h owever, that they sufficiently made the contention to preserve it for this appeal.

9. The subcommittee's report said that "[g]enerally , the available for work-no work available exception has been applied l iberally in almost all

13In summary, we conclude that in appointing a

subcommittee to investigate the claims against Fole y, the Trustees acted quite responsibly and consistently w ith their obligations as fiduciaries. Moreover, inasmuch as t he Trustees' decision to deny the disputed benefits wa s not contrary to the Plan's terms and was rationally rel ated to a legitimate Plan purpose, the district court erred i n determining that the Trustees acted in an arbitrary and capricious manner. Furthermore, because Foley was n ot similarly situated to the other employees who were granted the benefit of the exception, the Trustees were not bound to grant him the benefit of the exception merely becau se they had applied it in other cases. Accordingly, we will reverse the judgment of the district court.10

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cases in which it has been invoked." The report, ho wever, did not advise
the Trustees of the number of cases in which the br eak-in-service forfeiture provision had been applied without the e mployee invoking the exception. Moreover, the parties' briefs do not sug gest that there was any evidence on this point in the district court. In th is regard, we point out that Foley had the burden of proof as he brought th e action and had to demonstrate that the Trustees acted arbitrarily and capriciously. While we cannot be certain of the number of employees who did not receive the benefit of the break-in-service exception following an interruption of employment and forfeiture of credits, it may have b een substantial. The list attached to the subcommittee's report reveals that over a period of about 15 years from 1980 until the subcommittee mad e its report, only 21 employees sought the benefit of the exception. Y et, according to the district court, the Fund had more than $130,000,000 "in its coffers" when Foley applied for fees. See Foley v. IBEW Loca l Union 98 Pension Fund, 2000 WL 1801273, at *4. A reasonable inferenc e can be drawn from the size of the Fund that it must have provide d for benefits for many employees and thus it well may be that many ha ve lost pension credits by reason of breaks in service. Yet inasmuc h as we only can speculate on this fundamental point, we do not unde rstand how we can uphold the decision of the district court that the Trustees acted arbitrarily and capriciously. We add, however, that even without considering the possibility that some employees did not obtain the benefit of the break-in-service exception, our resu lt would be the same

as that we reach.

10. The appellants contend that the district court erred in entering judgment against Scott Ernsberger, whom they descri be as the Fund's "third party contract administrator," by reason of circumstances

14particular to him, and that the court also erred in calculating damages.

In view of our result, we do not reach these issues as we are reversing the judgment as to all appellants, including Ernsbe rger on common grounds and directing judgment to be entered in the ir favor, and because there will not be any damages to calculate.

11. Certain of the defendants unsuccessfully sought attorneys' fees in the district court but inasmuch as they are not at this time seeking
these fees we do not review the district court's or der denying their application.

IV. ATTORNEYS' FEES

Finally, we come to the question of the attorneys' fees which ERISA permits when a participant, beneficiary or fiduciary succeeds on any significant issue in the litigation which achieves some of the benefit sought from the suit. See 29 U.S.C. S 1132(g)(1). In light of our conclus ions, it is clear that Foley has not prevailed on a significant issue in the litigation and thus, we will therefore reverse the district court's award of attorney fees. See Hensley v. Nort hwest Permanente P.C. Ret. Plan & Trust, 258 F.3d 986, 10 02-03 (9th Cir. 2001).11

V. CONCLUSION

For the foregoing reasons, we will reverse the dist rict court's judgment of August 29, 2000, and its order of December 8, 2000, and will remand the matter to the district court to enter judgment for the defendants

.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

15