UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Urological Surgery Professional

Association; et al. 

v. Civil No. 08-cv-241-LM

William Mann Company, Inc.; et al.

O R D E R

Plaintiffs in this case are a medical practice, two benefit 

plans sponsored by the practice (which are governed by the 

Employee Retirement Income Security Act of 1974 (“ERISA”), 29 

U.S.C. §§ 1101-1461), and Dr. Edward Chibaro, an employee and 

director of the practice who was both a trustee and a 

participant/beneficiary of the benefit plans (“the Plans”). 

Defendants are an investment firm that advised the Plans and the 

president of the firm. (Plaintiffs also sued Fecteau Benefits 

Group, Inc., the Plans‟ third-party administrator, and its 

president, Thomas Fecteau, but the claims against those 

defendants, Counts I, II, and III, have been settled.) 

Plaintiffs seek to recover damages equal to the amount of 

certain payments made by the Plans to several departing 

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participants.

1 Plaintiffs make two claims under ERISA, one for 

breach of fiduciary duty (Count IV), the other for contribution 

and indemnity (Count V). They also assert claims under New 

Hampshire tort law (Count VI). Before the court is defendants‟ 

motion for summary judgment. Plaintiffs object. For the 

reasons given, the court grants summary judgment to defendants 

on the ERISA claims and declines to exercise supplemental 

jurisdiction over the remaining state-law claims.

Summary Judgment Standard

Summary judgment should be granted when the record reveals 

“no genuine issue as to any material fact and . . . the moving 

party is entitled to a judgment as a matter of law.” Fed. R. 

Civ. P. 56(c). “The object of summary judgment is to „pierce the 

boilerplate of the pleadings and assay the parties‟ proof in 

order to determine whether trial is actually required.‟” Dávila 

v. Corporación de P.R. para la Diffusión Pública, 498 F.3d 9, 12 

(1st Cir. 2007) (quoting Acosta v. Ames Dep‟t Stores, Inc., 386 

F.3d 5, 7 (1st Cir. 2004)). When ruling on a party‟s motion for 

summary judgment, a trial court “constru[es] the record in the 

light most favorable to the nonmovant and resolv[es] all 

reasonable inferences in [that] party‟s favor.” Meuser v. Fed. 

 

1

 The largest of those payments resulted from the judgment 

in an ERISA benefits claim against the Plans. See Janeiro v. 

Urological Surgery Prof‟l Ass‟n, 457 F.3d 130 (1st Cir. 2006).

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Express Corp., 564 F.3d 507, 515 (1st Cir. 2009) (citing 

Rochester Ford Sales, Inc. v. Ford Motor Co., 287 F.3d 32, 38 

(1st Cir. 2002)).

Background

The Urological Surgery Professional Association (“USPA”) 

sponsored the USPA Money Purchase Pension Plan and the USPA 

Profit Sharing Plan and Trust. According to the Summary Plan 

Descriptions for both Plans, the USPA was the “Plan 

Administrator” and Chibaro was both the “Plan Trustee” and the 

“Plan Committee.” Defs.‟s Mot. Summ. J., Ex. E (document no. 

42-1), at 5, 19.

During the years 2000, 2001, and 2002, “William Mann 

Company, Inc. („William Mann‟), acting through Mr. William 

Prizer, served as discretionary investment advisor with 

authority to invest and reinvest plan assets.” Pls.‟ Obj. to 

Summ. J., Ex. 1 (Chibaro Aff., document no. 44-2) ¶ 15. In 

addition to providing investment advice to the Plans, Prizer 

also served as a personal investment advisor to Chibaro‟s former 

medical partner, Dr. John Janeiro, and to Chibaro‟s ex-wife, 

Mary Chibaro. Chibaro Aff. ¶¶ 22, 23. On that basis, Prizer 

was familiar with both the break-up of the USPA, described 

below, and the Chibaros‟ divorce. Id. The divorce resulted in 

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Mary Chibaro‟s receiving fifty-five percent of Dr. Chibaro‟s 

interests in the Plans. Id. ¶ 28.

For over a decade, Janeiro was an employee and co-owner of 

the USPA. Janeiro v. Urological Surgery Prof‟l Ass‟n, 457 F.3d 

130, 133 (1st Cir. 2006). As such, he was a participant in the 

Plans. Id. “In July of 2000, Janeiro gave notice that he 

intended to leave the USPA.” Id. at 134. He terminated his 

employment in October of that year. Id. Under the terms of the 

Plans, he was due a distribution of benefits, payable “in a lump 

sum at the valuation date following the occurrence precipitating 

the disbursement.” Id. The event precipitating Janeiro‟s 

disbursement was his departure from the USPA in October of 2000, 

and the valuation date following that occurrence was December 

31, 2000. See id.

On December 31, 2000, Janeiro‟s share of the Plans‟ assets 

was valued at $651,680. Id. at 135. Notwithstanding Janeiro‟s 

clear statements to Chibaro that he wanted to withdraw his 

assets from the Plans as soon as possible, id. at 134-35, 

Janeiro did not receive a disbursement until the late fall of 

2002. Id. at 135. Between December 31, 2000, and the time when 

Janeiro received his disbursement, the value of the assets 

funding the Plans declined (due to a steadily declining stock 

market), and Janeiro‟s share of those assets declined in value 

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by $195,036 (to $456,644). Id. Rather than receiving an amount 

equal to the value of his share of the Plans‟ assets as of

December 31, 2000 ($651,680), Janeiro received an amount equal 

to the value of his share of the Plans‟ assets as of June 30, 

2002 ($456,644). Id. Janeiro received that diminished payout 

because Plan assets sufficient to pay the amount due as of 

December 31, 2000, were not liquidated and segregated from other 

plan assets but, instead, remained in riskier investments, id.

at 136, and because the December 31 valuation of the Plans was 

not completed in a timely manner, id.

In a previous action in this court, No. 03-cv-325-B, 

Janeiro sued the USPA, the Plans, and Chibaro to recover the 

difference between the value of his share of the Plans as of 

December 31, 2000, and the amount of benefits the Plans

disbursed to him. He won a judgment against the Plans, affirmed 

on appeal, that he was owed the full amount he sought, i.e., 

$195,036. See Janeiro, 457 F.3d at 145. 

At some point, “[t]he United States Department of Labor 

[“DOL”] opened an investigation of the valuations and the 

distributions of the Plans.” Chibaro Aff. ¶ 47. “Following the 

conclusion of the Janeiro litigation, the DOL sought to ensure 

that the other plan participants similarly situated to Dr. 

Janeiro were also made whole. The DOL agreed that if the other 

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participants were made whole, the DOL would conclude the 

investigation.” Id. ¶ 48. In accordance with that agreement, 

“the Profit Sharing Plan paid a total $42,594 to former 

employees who, like Dr. Janeiro, suffered a loss in the value of 

their vested interest in the Plans between December 31, 2000 and 

the June 30, 2002 valuations.” Id. ¶ 49. Both the judgment the 

Plans paid to Janeiro and the payments the Profit Sharing Plan

made to other former employees were funded exclusively from 

Chibaro‟s interest in the Plans. Id. ¶¶ 46, 49.

While Judge Barbadoro ruled in favor of Janeiro on his 

claim against the Plans for benefits under 29 U.S.C. § 

1132(a)(1)(B), see Janeiro, 457 F.3d at 136, he granted judgment 

as a matter of law to Chibaro (and the USPA) on Janeiro‟s “claim 

for damages based on a breach of fiduciary duty theory [under 29 

C.F.R. § 1132(a)(3)], because such a claim does not lie where, 

as here, the suit is only on behalf of a claimant who has an 

available claim for benefits,” id. (citations omitted). In 

defending against Janeiro‟s claims, the Janeiro defendants did 

not implead William Mann or Prizer pursuant to Rule 14 of the 

Federal Rules of Civil Procedure but, rather, sued Fecteau 

Benefits Group and William Mann in a separate action before 

Judge DiClerico, 04-cv-422-JD, and then attempted to consolidate 

that case with the case before Judge Barbadoro. Judge DiClerico

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dismissed the action against Fecteau Benefits and William Mann 

on ripeness grounds. See Urological Surgery Prof‟l Ass‟n v. 

Fecteau Benefits Grp., Inc., 359 F. Supp. 2d 24, 26 (D.N.H. 

2005). As a result, Judge DiClerico terminated, as moot, the 

plaintiffs‟ motion to consolidate their case before him with the 

case before Judge Barbadoro. Id. at 26. Subsequently, Judge 

Barbadoro denied the Janeiro defendants‟ motion to consolidate 

Janeiro with the case before Judge DiClerico. See Endorsed 

Order, No. 03-cv-325-B (D.N.H. Mar. 7, 2005).

One of the issues litigated in Janeiro, at trial and on 

appeal, was the correct standard of review. 457 F.3d at 139-42. 

In his ruling from the bench, Judge Barbadoro explained that he 

reviewed Chibaro‟s actions as plan administrator de novo because 

Chibaro was “operating under a conflict of interest that was so 

severe . . . that it entitle[d] his judgments . . . to no 

discretion.” Defs.‟ Mem. of Law, Ex. 1 (document no. 32-1), at 

86. Judge Barbadoro then went on to identify three reasons why 

he determined that Chibaro was operating under a conflict of 

interest: (1) “it was [Chibaro‟s] breaches of fiduciary duty 

[i.e., failing to direct the liquidation and segregation of 

assets and failing to have the Plans valued promptly after 

December 31, 2000] that produced the losses that the plan

suffered here,” id. at 87, which created in Chibaro a reasonable 

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fear that he would be subject to suit for breaching his 

fiduciary duties, id. at 87-88; (2) “in June of 2001 and 

thereafter Dr. Chibaro was in a highly adversarial relationship 

with the departing employees,” id. at 88;

2 and (3) due to his 

ownership of ninety-two percent of the assets that would remain 

in the Plans after disbursements to the departing participants, 

Chibaro “would be the principal beneficiary” of a decision not 

to make disbursements based on the December 31, 2000, valuation, 

id. In other words, Judge Barbadoro reviewed Chibaro‟s actions 

under the de novo standard because he found them to be motivated 

by Chibaro‟s fear of litigation, his interest in disadvantaging 

the departing participants, and his interest in benefitting 

himself in his position as the largest remaining participant in 

the Plans.

On appeal, the Janeiro defendants attacked all three 

grounds for Judge Barbadoro‟s finding that Chibaro was operating 

under a conflict of interest, and the court of appeals 

determined that all three were supported by the evidence of 

record. 457 F.3d at 139-40. Regarding the first factor, fear 

of litigation, the Janeiro defendants argued that “none of 

Chibaro‟s professional advisors told him he was obliged to 

 

2 Given Judge Barbadoro‟s other findings, and the fact that 

Janeiro departed the USPA in October of 2000, it seems likely 

that Judge Barbadoro intended to say “in June of 2000 and 

thereafter” rather than “in June of 2001 and thereafter.”

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liquidate and segregate assets sufficient to pay the imminently 

departing plan participants.” Id. at 140. In rejecting that 

argument, the court of appeals noted that “the district court 

found that Chibaro failed to inform the investment advisor in 

the first place that a significant exodus was imminent . . . and 

expressly refused to find that he relied in good faith on the 

advice of professionals.”3 Id. 

In this action, plaintiffs seek to recover the $237,630 

paid to Janeiro and the other departing plan participants, plus 

post-judgment interest and costs on the $195,036 judgment the 

Plans paid Janeiro and interest on the $42,594 that was paid to 

the other departing participants.

 

3 Earlier in its opinion, the court of appeals described 

Judge Barbadodro‟s factual finding somewhat more expansively:

Chibaro was in breach of his fiduciary duty in two 

ways: First, Chibaro was aware as of December 30, 2000 

that a substantial amount of the assets, having been 

claimed by the departing participants, would (or 

should) shortly be leaving the plan, but he failed to 

apprise the plan‟s investment advisor of this fact so 

that the advisor could liquidate and segregate 

sufficient plan assets. This failure meant that “the 

assets remained invested in a mixture of stocks and 

bonds[,] which exposed the assets to be distributed to 

an unacceptable degree of market risk.” 

Janeiro, 457 F.3d at 136.

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Discussion

A. Count IV

Count IV is plaintiffs‟ claim for breach of fiduciary duty. 

Specifically, they allege that

William Mann and Mr. Prizer negligently breached 

[their] duties to the Plaintiffs by failing to place a 

substantial percentage of the Plans‟ assets, including 

the assets of the soon-to-be departing participants, 

in risk-free or low risk investments once they knew or 

should have known that approximately half of USPA‟s 

employees terminated their employment in 2000 and 

wished to receive distributions as of the next 

valuation date on December 31, 2000.

Compl. ¶ 108. Plaintiffs further allege that

William Mann and Mr. Prizer negligently breached 

[their] duties to the Plaintiffs by failing to 

maintain communications with Fecteau Benefits 

concerning the status of the departing assets and the 

valuations and revaluations [of the Plans] so that 

William Mann and Mr. Prizer could consider this 

information in making its investment decisions in the 

best interests of the participants of the Plans.

Compl. ¶ 111. 

29 U.S.C. § 1132(a)(2) provides that the Secretary of 

Labor, a participant, beneficiary, or fiduciary of an ERISA plan 

may bring a civil action for appropriate relief under 29 U.S.C. 

§ 1109, which provides, in pertinent part, that

[a]ny person who is a fiduciary with respect to a 

plan who breaches any of the responsibilities, 

obligations, or duties imposed upon fiduciaries by 

this subchapter shall be personally liable to make 

good to such plan any losses to the plan resulting 

from each such breach, and to restore to such plan any 

profits of such fiduciary which have been made through 

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use of assets of the plan by the fiduciary, and shall 

be subject to such other equitable or remedial relief 

as the court may deem appropriate, including removal 

of such fiduciary. 

29 U.S.C. § 1109(a). The United States Supreme Court has 

recently held that § 1132(a)(2) “authorize[s] recovery for 

fiduciary breaches that impair the value of plan assets in a 

participant‟s individual account.” LaRue v. DeWolff, Boberg & 

Assocs., Inc., 552 U.S. 248, 256 (2008). While the complaint 

characterizes Count IV as being brought by all the named 

plaintiffs, the court construes the claim stated therein as

being brought by Chibaro alone, as neither the USPA nor the 

Plans have standing to pursue an ERISA-based claim for breach of 

fiduciary duty.

4

Defendants argue that the doctrine of collateral estoppel 

bars Chibaro‟s fiduciary-duty claim against them. Specifically, 

they rely on Judge Barbadoro‟s finding that Chibaro “exclusively 

exercised the responsibilities of plan administration and 

 

4 29 U.S.C. § 1132(d)(1) does provide that “[a]n employee 

benefit plan may sue or be sued under this subchapter as an 

entity,” but “various courts, including the Second Circuit, have 

overwhelmingly concluded that a plan, as distinct from its 

participants, beneficiaries and fiduciaries lacks standing under 

ERISA to sue claiming breach of fiduciary duty, and that 

accordingly, a federal court lacks subject matter jurisdiction 

over any such claim brought by a plan.” Agway, Inc. Emps.‟ 

401(k) Thrift Inv. Plan v. Magnuson, No. 5:03-CV-1060 (HGM/DEP), 

2006 WL 2934391, at *12 (N.D.N.Y. Oct. 12, 2006) (citing 

Pressroom Unions-Printers League Income Sec. Fund v. Continental 

Assurance Co., 700 F.2d 889, 891-93 (2d Cir. 1983)) (other

citations omitted). 

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exclusively exercised the responsibilities as trustee of both 

plans.” Defs.‟ Mem. of Law, Ex. 1, at 64. They also rely on 

Judge Barbadoro‟s finding that 

[t]he losses that were suffered in this case by 

the plans as a result of the demands placed on the 

plans by the departing employees and declines in the 

market that occurred before those assets were actually 

paid out are due entirely and exclusively to the 

breaches of fiduciary duty by Dr. Chibaro to liquidate 

and segregate plan assets.

Id. at 80. Judge Barbadoro made one additional relevant 

finding: 

I make no finding with respect to Dr. Chibaro‟s 

communications with his investment advisor except that 

I do find credible the investment advisor‟s statement 

that he was not apprised prior to December 31, 2000 as 

to the percent of the assets that would end up having 

to be withdrawn from the plan to satisfy the needs of 

departing employees. That was information that was 

available to Dr. Chibaro in his capacity as plan 

administrator, but the financial advisor did not have 

independent access to that information and Dr. Chibaro 

did not communicate it to the investment advisor.

Id. at 79. Plaintiffs contend that collateral estoppel is 

inapplicable.

“Collateral estoppel, now often called issue preclusion, 

prevents a party from relitigating issues that have been 

previously adjudicated.” Rodriguez-García v. Miranda-Marín, 610 

F.3d 756, 770 (1st Cir. 2010) (citing Enica v. Principi, 544

F.3d 328, 336 (1st Cir. 2008)).

Collateral estoppel may be applied where “(1) the 

issue sought to be precluded in the later action is 

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the same as that involved in the earlier action; (2) 

the issue was actually litigated; (3) the issue was 

determined by a valid and binding final judgment; and 

(4) the determination of the issue was essential to 

the judgment.”

Rodríguez-García, 610 F.3d at 770 (quoting Ramallo Bros. 

Printing, Inc. v. El Dia, Inc., 490 F.3d 86 (1st Cir. 2007)).

Plaintiffs contend that collateral estoppel is inapplicable 

because: (1) there is no mutuality between the parties in this 

case and those in Janeiro; (2) there is no identity of issues; 

(3) the findings on which defendants rely were not necessary to 

the decision in Janeiro; (4) they deserve a fair opportunity to 

litigate against the defendants in this case; (5) collateral 

estoppel will not promote judicial economy; and (6) collateral 

estoppel will confuse the jury. The court considers each 

argument in turn.

1. Mutuality of the Parties

The court of appeals for this circuit has recently 

addressed the issue of mutuality:

In the past, courts “adhered to the doctrine of 

„mutuality of estoppel,‟ which ordained that „unless 

both parties (or their privies) in a second action are 

bound by a judgment in a previous case, neither party 

(nor his privy) in the second action may use the prior 

judgment as determinative of an issue in a second 

action.‟ ” Acevedo-Garcia [v. Monroig], 351 F.3d 

[547,] 573 [(1st Cir. 2003)] (quoting Blonder-Tongue 

Labs. v. Univ. of Ill. Found., 402 U.S. 313, 320-21 

(1971)). However, mutuality is no longer strictly 

required for the application of collateral estoppel in 

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federal courts. Fiumara v. Fireman‟s Fund Ins. Cos.,

746 F.2d 87, 92 (1st Cir. 1984). Instead, the central 

question is “whether a party has had a full and fair 

opportunity for judicial resolution of the same 

issue.” Id.

Rodríguez-García, 610 F.3d at 770-71 (parallel citations 

omitted). The court further explained that “[n]onmutual 

collateral estoppel may be invoked . . . by a defendant who 

„seeks to prevent a plaintiff from asserting a claim the 

plaintiff has previously litigated and lost against another 

defendant.‟” Id. at 771 (quoting Parklane Hosiery Co. v. Shore, 

439 U.S. 322, 329-32 (1979)).

Based on Rodríguez-García, plaintiffs are plainly incorrect 

in their assertion that the lack of mutuality, without more, is 

a sufficient reason to reject defendants‟ invocation of 

collateral estoppel. More importantly, both Judge Barbadoro‟s 

decision in Janeiro and the appellate opinion in that case make 

it clear that Chibaro, as a defendant in Janeiro, had a full and 

fair opportunity to litigate the factual questions decided 

against him in that case and that defendants seek to estop him 

from relitigating here. That is, Chibaro had the chance to 

litigate, and did actually litigate, the facts related to his 

responsibility for the losses suffered by Janeiro and the other 

departing plan participants, including any culpability that 

might be assigned to defendants in this case.

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2. Identity of Issues

“With respect to . . . identity of issues, „[i]t is common 

ground that the reach of collateral estoppel “must be confined 

to situations where the matter raised in the second suit is 

identical in all respects to that decided in the first 

proceeding.”‟” Enica, 544 F.3d at 337 (quoting Faigin v. Kelly, 

184 F.3d 67, 78 (1st Cir. 1999); Comm‟r v. Sunnen, 333 U.S. 591, 

599-600 (1948)). In plaintiffs‟ view, there is no identity of 

issues because, in Janeiro, the Plans lost an ERISA benefits 

claim while here, Chibaro is claiming that William Mann and 

Prizer violated their fiduciary duties under ERISA. That 

argument is not persuasive. See Keystone Shipping Co. v. N.E. 

Power Co., 109 F.3d 46, 51 (1st Cir. 1997) (“The principle of 

collateral estoppel, or issue preclusion . . . bars relitigation 

of any factual or legal issue that was actually decided in 

previous litigation between the parties, whether on the same or 

a different claim.”) (citations and internal quotation marks 

omitted, second emphasis added). The relevant question is not 

the identity of the causes of action in the two cases; it is the 

identity of the legal or factual issues raised in those cases 

that matters. 

In Enica, the plaintiff brought an accommodation claim 

under the Rehabilitation Act and argued that the trial court 

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should have given preclusive effect, under the doctrine of 

offensive collateral estoppel, to certain findings made by the 

Department of Labor during its adjudication of a workers‟ 

compensation claim. 544 F.3d at 335, 337. The court of appeals 

held that there was no identity of issues where

the issue addressed and resolved by the Department of 

Labor was whether Enica‟s injuries (bursitis) were 

caused by excessive walking in the course of her 

employment at the VA [while] the issue before the 

district court was whether the VA failed to provide 

Enica with reasonable accommodations in connection 

with her disability. 

Id. at 337. In Faigin, A.J. Faigin brought a defamation claim 

against James Kelly, and argued that the trial court should have 

given preclusive effect, under the doctrine of offensive 

collateral estoppel, to a sanctions order entered against Kelly 

in a previous case Kelly had brought against Faigin. 184 F.3d 

at 77. The court of appeals held that there was no identity of 

issues where

[t]he issue addressed and resolved by the Sanctions 

Order was whether Kelly had abused the judicial 

process in failing to produce evidence to substantiate 

claims that he had made regarding Faigin‟s supposed 

involvement in shady investment activities [while] the 

issue below was the truthfulness vel non of the 

remarks contained in Kelly‟s autobiography. 

Id. at 78. Here, by contrast, the factual findings that Judge 

Barbadoro made in Janeiro and that defendants seek to apply in 

this case are identical. Judge Barbadoro found that the losses 

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suffered by the Plans were due entirely and exclusively to Dr. 

Chibaro‟s failure to have the Plans valued in a timely fashion 

and his failure to liquidate and segregate plan assets while 

here, Chibaro claims that the losses suffered by the Plans were 

due to defendants‟ failure to liquidate and segregate plan 

assets.5 It is difficult to imagine a clearer example of 

identity of issues. 

3. Necessity to the Judgment

Collateral estoppel bars the relitigation of issues that 

were essential to a previous judgment. As plaintiffs correctly 

point out, “pure dicta . . . cannot have any collateral estoppel 

effect because it is not essential to the judgment.” Bath Iron 

Works Corp. v. Coulombe, 888 F.2d 179, 180 (1st Cir. 1989)

(citing McDaniel v. Sanchez, 452 U.S. 130, 141 (1981); Balcom v. 

Lynn Ladder & Scaffolding Co., 806 F.2d 1127 (1st Cir. 1986)). 

“The reasons for this condition are that a collateral issue, 

although it may be the subject of a finding, is less likely to 

receive close judicial attention and the parties may well have 

only limited incentive to litigate the issue fully since it is 

not determinative.” Commercial Assocs. v. Tilcon Gammino, Inc., 

998 F.2d 1092, 1097 (1st Cir. 1993) (citing Wright, Miller & 

 

5 In Count I, Chibaro charged Fecteau Benefits and Thomas 

Fecteau with failing to produce valuations of the Plans in a 

timely fashion. See Compl. ¶¶ 74-76, 80.

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Cooper, Federal Practice and Procedure § 4421 at 193 (1981 

ed.)). “[E]xtending the force of [an] unnecessary finding into 

a different case is deemed too risky and possibly unfair.” 

Commercial Assocs., 998 F.2d at 1097. Here, plaintiffs identify 

three determinations for which, in their view, defendants seek 

preclusive effect, and then they argue that none of those 

findings was necessary to the decision in Janeiro.

As a preliminary matter, the three issues plaintiffs 

identify are not quite the issues on which defendants rely. 

Specifically, plaintiffs argue that defendants are not entitled 

to collateral estoppel on these issues: (1) “Dr. Chibaro 

breached fiduciary duties,” Pls.‟ Mem. of Law (document no. 44-

1) 27; (2) “Dr. Chibaro exclusively breached fiduciary duties,” 

id. at 29; and (3) “Dr. Chibaro‟s exclusive breach of fiduciary 

duties caused the harm,” id. The actual factual determinations 

on which defendants seek to rely, however, are that “Dr. Chibaro 

„exclusively exercised the responsibilities of plan 

administration and exclusively exercised the responsibilities as 

trustee of both plans,‟ ” Defs.‟ Mem. of Law (document no. 32)

9; and that

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[t]he losses that were suffered in this case by the 

plans as a result of the demands placed on the plans 

by the departing employees and declines in the market 

that occurred before those assets were actually paid 

out are due entirely and exclusively to the breaches 

of fiduciary duty by Dr. Chibaro to liquidate and 

segregate plan assets. . . .

Id. The question before the court is whether the findings that

defendants seek to apply in this case were necessary to Judge 

Barbadoro‟s decision in Janeiro. They were.

Plainly, Judge Barbadoro did not render a judgment that 

Chibaro was liable to Janeiro for breaching his fiduciary duties 

under ERISA; he granted Chibaro (and the USPA) judgment as a 

matter of law on Janeiro‟s claim for breach of fiduciary duties. 

Janeiro, 457 F.3d at 136. But, the parties in Janeiro did 

vigorously litigate the standard of review in that case, id. at 

139-42, and Judge Barbadoro‟s findings and conclusions regarding 

Chibaro‟s conduct were essential to his decision, affirmed on 

appeal, to apply the de novo standard because Chibaro was acting 

under a severe conflict of interest.

6

 

6 While plaintiffs do not raise the issue, there is 

authority for the proposition that issues resolved in the 

context of deciding procedural matters are essential to the 

judgment for purposes of collateral estoppel. See, e.g.,

Monarch Life Ins. Co. v. Ropes & Gray, 65 F.3d 973, 983 (1st 

Cir. 1995) (holding that bankruptcy court‟s ruling on 

jurisdiction was essential to the effectiveness and validity of 

its decision).

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Plaintiffs argue to the contrary, noting that Judge 

Barbadoro identified three separate factors supporting his 

determination that Chibaro suffered from a conflict of interest. 

Indeed, “ „[i]f a judgment of a court of first instance is based 

on determinations of two issues, either of which standing 

independently would be sufficient to support the result, the 

judgment is not conclusive with respect to either issue standing 

alone,‟ and neither receives preclusive effect.” Rutanen v. 

Baylis (In re Baylis), 217 F.3d 66, 71 (1st Cir. 2000) (quoting 

1 Restatement (Second) of Judgments § 27 cmt. i). “If, however, 

„the appellate court‟ affirms both grounds of the holding, each 

ground receives preclusive effect.” In re Baylis, 217 F.3d at 

71 (quoting 1 Restatement (Second) of Judgments § 27 cmt. o). 

Here, the appellate court affirmed Judge Barbadoro‟s 

factfinding on all three grounds he cited for determining that 

Chibaro was under a conflict of interest. See Janeiro, 457 F.3d 

at 139-41. Specifically, the court upheld Judge Barbadoro‟s 

findings that “Chibaro failed to inform the investment advisor 

in the first place that a significant exodus was imminent,” id. 

at 140, and that “Chibaro was at fault for failure to timely 

liquidate and segregate sufficient assets,” id. at 141. 

Accordingly, there is no merit to plaintiffs‟ argument that 

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Judge Barbadoro‟s findings, upon which defendants seek to rely,

were not essential to his judgment.7

4. Opportunity to Litigate Against These Defendants

Plaintiffs next argue that Chibaro deserves a full and fair 

opportunity to litigate against William Mann and Prizer, having 

been denied the opportunity to seek recovery from them during 

the pendency of Janeiro. They seem to be particularly 

interested in relitigating Judge Barbadoro‟s finding that 

defendants did not know about the exodus of Plan participants 

before December 31, 2000, and introducing evidence that Prizer 

learned about those departures through his work as a private 

investment advisor for Janeiro and Mary Chibaro, which 

plaintiffs learned about only through discovery in this case.8

 

7 The court of appeals affirmed Judge Barbadoro‟s finding 

that Chibaro had failed to notify William Mann and Prizer of the 

impending “significant exodus” from the USPA. It did so in 

direct response to the argument, advanced by the Janeiro

defendants, that “none of Chibaro‟s professional advisors told 

him he was obliged to liquidate and segregate assets sufficient 

to pay the imminently departing plan participants.” 457 F.3d at 

140. It is difficult to understand how plaintiffs can assert 

that the court‟s findings and rulings on an argument they raised 

was not essential to the judgment.

8 There is no need to decide this issue, but the court is 

dubious of the proposition that defendants were obligated, or 

even legally permitted, to use information they learned while 

working for Janeiro and/or Mrs. Chibaro to make decisions on 

matters arising in their work for an entirely different client, 

i.e., the Plans.

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While plaintiffs argue that they have not had a fair

opportunity to litigate against William Mann and Prizer, that is 

not exactly the case. To be sure, their previous action against 

William Mann was dismissed on ripeness grounds. But that 

dismissal resulted from their own decision to sue William Mann 

and Fecteau Benefits in a separate action, rather than 

impleading them as third-party defendants in the Janeiro case, a 

procedural move that might well have met with success.

9 

Plaintiffs had an opportunity to litigate against William Mann 

and Prizer in Janeiro and, for whatever reason, chose not to 

 

9 In dismissing the case before him, Judge DiClerico provided a 

roadmap for plaintiffs (then defendants) to implead any other 

parties who might share liability for the breach of fiduciary 

duty with which they had been charged by Janeiro:

USPA mistakenly relies on Federal Rule of Civil 

Procedure 14 to support its argument that its 

contribution and indemnification claims are properly 

raised here. Rule 14(a) provides that “a defending 

party, as a third-party plaintiff, may cause a summons 

and complaint to be served upon a person not a party 

to the action who is or may be liable to the thirdparty plaintiff for all or part of the plaintiff‟s 

claim against the third-party plaintiff.” Rule 14(a)

merely provides a procedure to bring a third-party 

claim in an existing action; the rule does not provide 

a substantive cause of action for indemnification or 

contribution. See 6 Charles A. Wright, Arthur R. 

Miller & Mary Kay Kane, Federal Practice and Procedure

§ 1448 (1990); see also Z.B. ex rel. Kilmer v. 

Ammonoosuc Comty. Health Servs., Inc., 225 F.R.D. 60, 

61 (D. Me. 2004); Brown v. Shredex, Inc., 69 F. Supp. 

2d 764, 767 (D.S.C. 1999). Therefore, Rule 14(a) is 

inapposite to this case.

Urological Surgery, 359 F. Supp. 2d at 26.

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23

take it. Their decision should not preclude defendants from

enjoying the benefit of collateral estoppel in this case.

5. Judicial Economy

Plaintiffs argue that they sought to promote judicial 

economy by moving to consolidate their action against William 

Mann and Fecteau Benefits (04-cv-422-JD) with Janeiro‟s action 

against them (03-cv-125-B), and that by allowing defendants the 

benefit of collateral estoppel in this case, the court would 

reward conduct the Supreme Court condemned in Parklane. In 

Parklane, the Supreme Court observed that the offensive use of 

collateral estoppel gives potential plaintiffs an incentive to 

adopt a “wait and see” attitude while other plaintiffs litigate 

against a common defendant. 439 U.S. at 330. 

This case, however, involves the use of collateral estoppel 

defensively, not offensively, albeit against a party who was 

previously a defendant (but also a potential third-party 

plaintiff). As the Supreme Court explained, “defensive 

collateral estoppel gives a plaintiff a strong incentive to join 

all potential defendants in the first action if possible.” Id.

at 329-30. While plaintiffs may have attempted to advance 

judicial economy by moving to consolidate their previous action 

against William Mann and Fecteau benefits with Janeiro‟s case 

against them, plaintiffs failed to take the seemingly more 

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efficacious step of impleading William Mann and Fecteau Benefits 

as third-party defendants in Janeiro. Given that plaintiffs 

lost an earlier opportunity to litigate against William Mann and 

Prizer by failing to implead them in Janeiro, it seems inapt for 

plaintiffs, who once sat on their rights – if inadvertently – to 

now accuse defendants of taking a “wait and see” attitude. In 

short, plaintiffs‟ judicial-economy argument is not persuasive.

6. Jury Confusion 

Plaintiffs‟ argument concerning jury confusion is similarly 

unavailing. They contend that a jury would be confused by the 

application of collateral estoppel in this case, given that it 

would apply to some plaintiffs and not others, and would not 

apply to Chibaro in his capacity as a plan participant and 

beneficiary. The case on which plaintiffs rely, Hurt v. 

Pullman, Inc., 764 F.2d 1443 (11th Cir. 1985), involved an 

application of collateral estoppel in which mutuality of parties 

was required. Given that mutuality of parties is not a 

requirement in this case, Hurt is of limited utility, and the 

court has no doubt that it could properly instruct a jury in 

this case on the proper application of collateral estoppel.

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7. Analysis and Summary

Based on the foregoing, the court concludes that all four 

conditions for applying collateral estoppel set out in 

Rodríguez-García, have been satisfied and that plaintiffs‟ 

additional objections to the application of collateral estoppel 

are not persuasive. Accordingly, Judge Barbadoro‟s factual 

findings in Janeiro have preclusive effect in this case. Now, 

it is necessary to apply those findings to the cause of action 

set out in Count IV, to determine the precise effects of those 

findings on plaintiffs‟ claims in this case. While plaintiffs 

argue that collateral estoppel should not be applied at all, 

they make no argument that Count IV could survive the 

application of collateral estoppel, apparently conceding the 

point.

Defendants contend that Judge Barbadoro‟s finding that 

Chibaro exclusively exercised the responsibilities of plan 

administration and trusteeship, and his finding that the losses 

suffered by the Plans as a result of the late payout to Janeiro 

were “due entirely and exclusively to the breaches of fiduciary 

duty by Dr. Chibaro to liquidate and segregate plan assets . . . 

and to take appropriate steps to ensure that the valuation was 

completed in a timely fashion” are fatal to any claim that 

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William Mann or Prizer violated their fiduciary duties under 

ERISA. The court agrees.

Judge Barbadoro determined that the losses in Janeiro were 

due to Chibaro‟s failure to obtain timely plan valuations and 

his failure to liquidate and segregate assets sufficient to pay 

out Janeiro‟s share in time to avoid the losses that occurred 

after December 31, 2000. Janeiro, 457 F.3d at 142. He also 

determined that Chibaro did not inform William Mann or Prizer of 

the impending departures of plan participants prior to that 

date, and that “the financial advisor did not have independent 

access to that information.” Defs.‟ Mem. of Law, Ex. 1, at 79. 

Given Judge Barbadoro‟s determination that the losses in Janeiro

were due exclusively to Chibaro‟s failure to liquidate and 

segregate assets in time to avoid the losses that began accruing 

on December 31, 2000, and in light of the court of appeals‟ 

affirmance of Judge Barbadoro‟s rejection of Chibaro‟s attempt 

to shift blame to his financial advisors, i.e., William Mann and 

Prizer, see Janeiro, 457 F.3d at 140, defendants are entitled to 

judgment as a matter of law on Chibaro‟s ERISA claim for breach 

of fiduciary duty. The factual bases for those claims were 

conclusively decided against Chibaro in Janeiro. Accordingly, 

defendants‟ motion for summary judgment is granted as to Count 

IV.

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B. Count V

Count V is plaintiffs‟ claim, under ERISA, for contribution 

and indemnity for the various payments made to Janeiro and the 

other departing participants. 29 U.S.C. § 1132(a)(3) provides 

that a participant, beneficiary, or fiduciary of an ERISA plan 

may bring a civil action to enjoin acts that violate the statute 

or the terms of the plan, or “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.” As with Count IV, it is necessary to determine which of 

the plaintiffs are bringing the claim. Under the statutory 

language, the only proper plaintiff is Chibaro, as a fiduciary.

Defendants seek summary judgment on Chibaro‟s ERISA-based 

claim for contribution and indemnity on grounds that ERISA does 

not permit such claims. They argue that there is a split of 

authority on this issue, and ask the court to follow those 

circuits that have held that ERISA does not authorize such 

claims. Plaintiffs, for their part, point to decisions from the

Second and Seventh Circuits which recognize the availability of 

claims for contribution and indemnity under ERISA. See Chemung 

Canal Trust Co. v. Sovran Bank/Maryland, 939 F.2d 12 (2d Cir. 

1991); Free v. Briody, 732 F.2d 1331 (7th Cir. 1984); Alton 

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Mem‟l Hosp. v. Metro. Life Ins. Co., 656 F.2d 245 (7th Cir.

1981).

“Neither the Supreme Court nor the First Circuit Court of 

Appeals has directly addressed the existence of a federal 

common-law right to contribution and indemnification under 

ERISA.” Charters v. John Hancock Life Ins. Co., 583 F. Supp. 2d 

189, 193 (D. Mass. 2008). In this case, however, it is not 

necessary to predict how the court of appeals would resolve that 

question. In each of the appellate opinions on which plaintiffs 

rely, and in each of the district court cases they cite, the 

claim for contribution or indemnity was brought by a fiduciary 

who had been found liable for, or stood accused of, breaching a 

fiduciary duty. In Chemung Canal, the Second Circuit pointed 

out that “[c]ontribution deals with allocating obligations among 

co-defendants and/or third parties.” 939 F.2d at 15. The court 

then held that ERISA “provides for a right of contribution among 

defaulting fiduciaries.” Id. at 16. In so holding, the court 

explained that “[t]here is no reason why a single fiduciary who 

is only partially responsible for a loss should bear its full 

brunt.” Id. In Alton Memorial, the Seventh Circuit held that 

“where an ERISA plan suffers losses and where the plan 

participants and beneficiaries have established a cause of 

action . . . against one fiduciary, that fiduciary may seek 

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indemnification or contribution from co-fiduciaries in 

accordance with 29 U.S.C. § 1105(a).” 656 F.2d at 250. But, 

after stating that rule, the Alton Memorial court held the rule 

to be inapplicable in the case before it because “no breach of 

fiduciary duties with respect to plan participants and 

beneficiaries can be established.” Id. That statement 

describes this case, as well.

In support of his decision to apply de novo review, Judge 

Barbadoro found, as a factual matter, that Chibaro breached his 

fiduciary duties. But, Chibaro (and the USPA) won judgment as a 

matter of law on Janeiro‟s ERISA-based breach-of-fiduciary-duty 

claim. And, as described by Chibaro himself, the agreement with 

the DOL that resulted in payments to former employees other than 

Janeiro did nothing more than follow the judgment in Janeiro, 

see Chibaro Aff. ¶ 48, which resulted in no legal liability for 

Chibaro as a fiduciary. Thus, Chibaro has incurred no legal 

liability as a fiduciary and has suffered no loss. He has born 

no brunt, and is under no obligation that could be allocated to 

defendants through contribution or indemnity.10 Accordingly, 

even if the First Circuit were to follow the Second and Seventh 

 

10 Chibaro says that the Plans‟ payments to Janeiro and the 

other former USPA employees came out of his own interests in the 

Plans, Chibaro Aff. ¶¶ 46, 49, but even so, the fact remains 

that neither Judge Barbadoro nor the DOL ever made a legal 

determination that Chibaro breached his duties as a fiduciary of 

an ERISA plan.

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Circuits and recognize a right to contribution and indemnity 

among duty-breaching ERISA fiduciaries, defendants in this case 

would be entitled to judgment as a matter of law because the 

party seeking contribution from them has not himself been found 

liable for breaching his fiduciary duties under ERISA. On that 

basis, defendants‟ motion for summary judgment is granted as to 

Count V.

C. Count VI

In Count VI, plaintiffs assert a state-law negligence claim 

against William Mann and Prizer, and also contend that they are 

entitled to contribution from defendants under New Hampshire 

Revised Statute Annotated (“RSA”) § 507:7-f, and to indemnity

under New Hampshire common law. Like Counts IV and V, Count VI 

fails to specify which of the five plaintiffs is making the 

claim(s) stated therein. In that Chibaro is the only plaintiff 

that is an ERISA fiduciary, the court construes Count VI as 

being Chibaro‟s claim. Count VI also contains somewhat 

conflicting legal theories in that plaintiffs make a claim for 

negligence (based on defendants‟ asserted liability to

plaintiffs) and also make claims for contribution and indemnity 

(based on plaintiffs‟ and defendants‟ asserted joint liability 

to a third party, presumably Janeiro).

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Defendants seek summary judgment on Count VI, arguing that 

because ERISA does not allow claims for contribution and 

indemnity, plaintiffs‟ state-law claims seeking the same relief 

are pre-empted by ERISA. Plaintiffs contend that ERISA 

preemption is an affirmative defense that defendants have failed 

to preserve.

Having granted summary judgment to defendants on both of

plaintiffs‟ federal claims, the court declines to exercise 

supplemental jurisdiction over the remaining state-law claims. 

See 28 U.S.C. § 1367(c)(3); Camelio v. Am. Fed‟n, 137 F.3d 666,

672 (1st Cir. 1998). Even if the court were to exercise 

supplemental jurisdiction over Count VI, however, defendants 

would be entitled to judgment as a matter of law on the 

negligence claim on the basis of ERISA preemption, and they 

would be entitled to judgment as a matter of law on the claim 

for contribution and indemnity for the same reasons that 

supported summary judgment in their favor on Count V.

The ERISA preemption provision provides that “[e]xcept as 

provided in subsection (b) of this section, the provisions of 

this subchapter . . . shall supersede any and all State laws 

insofar as they may now or hereafter relate to any employee 

benefit plan. . . .” 29 U.S.C. § 1144(a). The term “State law” 

encompasses the results of litigation on state-law causes of 

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action. See Hampers v. W.R. Grace & Co., 202 F.3d 44, 49

(citing 29 U.S.C. § 1144(c)(1)). “Express „ERISA preemption 

analysis . . . involves two central questions: (1) whether the 

plan at issue is an “employee benefit plan” and (2) whether the 

cause of action “relates to” this employee benefit plan.‟ ” 

Hampers, 202 F.3d at 49. 

In Hampers, the plaintiff sued his employer for, among 

other things, “lump sum contract damages,” 202 F.3d at 45, for 

failing to “enroll the plaintiff in an ERISA-regulated employee 

pension benefit plan,” id., in breach of the plaintiff‟s 

employment contract with the defendant,” id. at 46. The court 

of appeals held that the plaintiff‟s contract claim related to 

the employee benefit plan to which he was denied access. Id. at 

53-54.

Given the way plaintiffs have framed Count VI, the court 

has no difficulty concluding that the negligence claim stated 

therein relates to the employee-benefit plans in this case. 

Count VI charges William Mann and Prizer with “negligence in the 

discharge of [their] duties.” Compl. ¶ 131. The three 

paragraphs of the complaint devoted to Count VI do not indicate 

the duties William Mann and Prizer are supposed to have 

breached, see Compl. ¶¶ 129-31, and the only duties mentioned 

anywhere else in the complaint are defendants‟ duties as plan 

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fiduciaries, i.e., the duty to liquidate and segregate plan 

assets and the duty to communicate with the Plans‟ third-party 

administrator to ascertain the status of plan participants. 

Thus, like the plaintiff in Hampers, Chibaro has made a statelaw claim that alleges the same conduct as his ERISA claim. See

202 F.3d at 54. The court also notes that plaintiffs‟ argument 

in favor of supplemental jurisdiction, which points up the 

shared factual and legal bases for plaintiffs‟ federal and state 

claims, also supports a determination that the state-law claims 

are so closely related to the ERISA plan that they are 

preempted. In sum, the negligence claim in Count VI is at least 

as closely related to the ERISA plan at issue than the state-law 

breach-of-contract claim the court of appeals held to be 

preempted in Hampers. Accordingly, the negligence portion of 

Count VI is preempted by ERISA.

As noted, plaintiffs contend that ERISA preemption is an 

affirmative defense that defendants did not raise in their 

answer and, therefore, waived. In Wolf v. Reliance Standard 

Life Insurance Co., 71 F.3d 444 (1st Cir. 1995), the court of 

appeals held that “ERISA preemption in a benefits-due action is 

an affirmative defense and, as such, . . . is subject to waiver 

if not timely pleaded,” id. at 449. The court also explained, 

however, that its “holding [was] limited to ERISA preemption of 

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34

benefits-due actions,” noting that “ERISA permits several other 

types of civil actions (e.g., for injunctive relief, for breach 

of fiduciary duty, etc.) subject to exclusive jurisdiction in 

the federal courts . . . .” Id. at 449 n.8. The upshot is that 

because plaintiffs‟ negligence claim in Count VI is a claim for

the breach of a fiduciary duty rather than a claim for benefits 

due, Wolf is no impediment to defendants‟ reliance on ERISA 

preemption.

In Wolf, the court‟s decision turned on the distinction 

between federal statutory preemption that is jurisdictional, 

because it dictates the choice of forum, and preemption that is 

merely an affirmative defense, subject to waiver, because it 

pertains only to the choice of law. Id. at 448. With respect 

to a state-law claim for benefits due under an ERISA plan, 

preemption is a waivable affirmative defense for the following 

reason:

ERISA preemption in a benefits-due action does not 

affect the choice of forum, because ERISA‟s 

jurisdictional provision provides that “State courts 

of competent jurisdiction and district courts of the 

United States shall have concurrent jurisdiction of 

actions,” 29 U.S.C. § 1132(e)(1) (emphasis added), 

“brought by a participant or beneficiary to recover 

benefits due.” 29 U.S.C. § 1132(a)(1)(B). The plain 

language of § 1132 tells us that if a plaintiff 

brought a “benefits-due” action in state court and the 

defendant pleaded ERISA preemption, this would not 

deprive the court of jurisdiction over the subject 

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35

matter; rather, ERISA preemption in that situation 

would dictate the applicable law. 

Id. On the other hand, with respect to a claim asserting the

breach of a fiduciary duty, the jurisdiction of the federal 

courts is exclusive. See 29 U.S.C. § 1132(e)(1). This means 

that if a plaintiff brought a breach-of-fiduciary-duty claim in 

state court and the defendant pleaded ERISA preemption, the 

court would be deprived of jurisdiction over the subject matter. 

Thus, preemption in such a situation is jurisdictional rather 

than something that only effects the choice of law. And, 

following the reasoning of Wolf, where preemption is 

jurisdictional rather than a waivable affirmative defense, 

failure to raise preemption in an answer or other responsive 

pleading does not bar a defendant from asserting it later.

Chibaro‟s state-law claims for contribution and indemnity 

stand on a different footing. Given the circuit split regarding

the availability of contribution and indemnity under ERISA, such 

claims may or may not be preempted.11 But, presuming that those 

claims are not preempted, defendants would be entitled to 

judgment as a matter of law for the simple reason that no 

 

11 In Travelers Casualty & Surety Co. of America v. IADA 

Services, Inc., 497 F.3d 862 (8th Cir. 2007), the court of 

appeals held that “ERISA does not create a right of 

contribution,” id. at 867, and that state common-law claims for 

contribution brought to apportion liability for ERISA violations 

are preempted by ERISA, id. at 867-68.

Case 1:08-cv-00241-LM Document 62 Filed 01/24/11 Page 35 of 37
36

plaintiff has been adjudged a tortfeasor or otherwise determined 

to be individually liable to Janeiro. See RSA 507:7-f 

(establishing a right of contribution among joint tortfeasors); 

Consol. Util. Equip. Servs., Inc. v. Emhart Mfg. Corp., 123 N.H. 

258, 261 (1983) (describing common-law rule under which “one 

joint tortfeasor can obtain indemnification, a complete shifting 

of liability, against another where the indemnitee‟s liability 

is derivative or imputed by law . . . or where an express or 

implied duty to indemnify exists”). Accordingly, even if a 

state-law claim for contribution and/or indemnity is not 

preempted by ERISA, such a claim would be unavailable to Chibaro 

because the necessary predicate, his liability for a breach of 

duty, has not been established.

In sum, the court declines to exercise supplemental 

jurisdiction over Count VI. If the court were to entertain the 

claims stated therein, defendants would nonetheless be entitled 

to summary judgment on the negligence claim on the basis of 

ERISA preemption. Defendants would also be entitled to summary 

judgment on the claim for contribution and/or indemnity for lack 

of a plaintiff who has been assigned liability for an obligation 

toward which contribution could be made.

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Conclusion

For the reasons given, defendants‟ motion for summary 

judgment, document no. 31, is granted. The clerk of the court 

shall enter judgment in accordance with this order and close the 

case.

SO ORDERED.

_________________________________

Landya B. McCafferty

United States Magistrate Judge

Date: January 24, 2011

cc: Thomas M. Closson, Esq.

William B. Pribis, Esq.

Jonathan M. Shirley, Esq.

Alexander J. Walker, Esq.

Joshua M. Wyatt, Esq.

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