Source: http://openjurist.org/119/f3d/888/23936c-hunt-v-hawthorne-associates-inc
Timestamp: 2013-12-13 22:14:11
Document Index: 437294156

Matched Legal Cases: ['§ 1001', '§ 402', '§ 1102', '§ 402', '§ 1102', '§ 3', '§ 1002', '§ 101', '§ 1021', '§ 105', '§ 1025', '§ 402', '§ 1102', '§ 404', '§ 1104', '§ 404', '§ 1104', '§ 414', '§ 4', '§ 1', '§ 5', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 10', '§ 2', '§ 10', '§ 2', '§ 2', '§ 2', '§ 2', '§ 6', '§ 1101', '§ 6', '§ 6', '§ 6', '§ 1132']

119 F3d 888 23936c Hunt v. Hawthorne Associates Inc | OpenJurist
119 F. 3d 888 - 23936c Hunt v. Hawthorne Associates Inc	Home119 f3d 888 23936c hunt v. hawthorne associates inc
119 F3d 888 23936c Hunt v. Hawthorne Associates Inc 119 F.3d 888
21 Employee Benefits Cas. 1625,Pens. Plan Guide (CCH) P 23936C,11 Fla. L. Weekly Fed. C 294Harry L. HUNT, Plaintiff-Appellee, Cross-Appellant,v.HAWTHORNE ASSOCIATES, INC., Defendant,Eastern Air Lines Variable Benefit Retirement Plan forPilots; Trust Administrative Committee of the EasternAirlines Variable Benefit Retirement Plan for Pilots,Defendants-Appellants, Cross-Appellees.
No. 95-2078.
John H. Pelzer, Shari J. Ronkin, Ft. Lauderdale, FL, for Plaintiff-Appellee, Cross-Appellant.
Mary E. Martin, Albert C. Penson, Tallahassee, FL, for Defendants-Appellants, Cross-Appellees.
Before TJOFLAT and COX, Circuit Judges, and CLARK, Senior Circuit Judge.
Harry L. Hunt is a retired Eastern Air Lines ("Eastern") pilot seeking to recover a lump-sum retirement benefit under the Eastern Air Lines Variable Benefit Retirement Plan for Pilots (the "Plan").1 Eastern, the Plan's administrator, which is a debtor before the Bankruptcy Court for the Southern District of New York, has refused to pay the benefit because the Plan has been amended, with the approval of the bankruptcy court, to foreclose the lump-sum benefit Hunt seeks. As the Plan now stands, Hunt is entitled to receive only a modified lump-sum benefit: he may receive a partial distribution immediately and subsequent payments over time as the Plan's assets are liquidated.
Hunt rejected this modified lump-sum benefit, as well as other payment options provided under the Plan, and sued Eastern; the Air Line Pilots Association ("ALPA"), the pilots' union; Charles H. Copeland, the Chairman of the Trust Administrative Committee (the "TAC"), the Plan's named fiduciary; Paul M. O'Connor, Jr., of O'Connor, Morris & Jones, the TAC's legal counsel (the "O'Connor law firm"); and Hawthorne Associates, Inc. ("Hawthorne"), the TAC's principal investment advisor, to recover his retirement benefit in a lump sum. Hunt brought his suit under the Employee Retirement Income Security Act of 1974 ("ERISA"), Pub.L. No. 93-406, 88 Stat. 829, 29 U.S.C. §§ 1001-1461 (1994). His complaint, framed in six counts, asked for compensatory and punitive damages, injunctive relief in the form of an order requiring the defendants to pay his lump-sum benefit, statutory penalties, and attorneys' fees.
Eastern's Bankruptcy Trustee, in a motion for summary judgment, contended that Eastern could not be held liable to Hunt because it had properly discharged its responsibilities as administrator under the Plan. Later, when opposing Hunt's motion for leave to file an amended complaint, Eastern argued that Hunt's claim for a lump-sum benefit had been foreclosed by a bankruptcy court ruling against Hunt in Eastern's bankruptcy case. In an apparent attempt to avoid the effect of this ruling, Hunt voluntarily dismissed Eastern from the case with prejudice and, with leave of court, filed an amended complaint against three defendants--Hawthorne, the TAC, and the Plan--that asserted essentially the same claims presented in his initial complaint.
The case was tried to the district court; by that time, the only defendants before the court were the TAC and the Plan. Without referring to the bankruptcy court's ruling against Hunt, the court held that he was entitled to his lump-sum benefit and entered judgment for Hunt in the amount of that benefit. The judgment stated that the benefit was to be satisfied out of the Plan's fund of assets. The court rejected Hunt's remaining claims and entered judgment for the defendants.
The TAC and the Plan now appeal. Hunt cross-appeals the court's rejection of his claim requesting the court to impose a statutory penalty on the defendants. We reverse the court's judgment against the TAC and the Plan, and affirm its judgment on the statutory-penalty claim.
Hunt claims that, under ERISA and the provisions of the Plan, he is entitled to recover his retirement benefits in a lump sum. Unlike the typical scenario in which a participant in an employee benefit plan sues to recover ERISA benefits, Hunt sought his lump-sum payment while the administrator of the Plan, Eastern, was undergoing a highly publicized bankruptcy proceeding that ultimately resulted in the company's demise. In addition to scrutinizing ERISA and the provisions and operation of the Plan, we must therefore consider the interrelationship between the Plan and Eastern's bankruptcy in order to evaluate Hunt's claims for relief.
ERISA is a "comprehensive and reticulated statute" that created a framework for the administration and maintenance of private employee benefit plans. Nachman Corp. v. Pension Benefit Guaranty Corp., 446 U.S. 359, 361, 100 S.Ct. 1723, 1726, 64 L.Ed.2d 354 (1980). The cornerstone of an ERISA plan is the written instrument, which must provide for "the allocation of responsibilities for the operation and administration of the plan." ERISA § 402(b)(2), 29 U.S.C. § 1102(b)(2); see also ERISA § 402(a)(1), 29 U.S.C. § 1102(a)(1) ("Every employee benefit plan shall be established and maintained pursuant to a written instrument.").
The written instrument must designate an "administrator," ERISA § 3(16)(A)(i), 29 U.S.C. § 1002(16)(A)(i), "to run the plan in accordance with the ... governing plan documents." Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 84-86, 115 S.Ct. 1223, 1231, 131 L.Ed.2d 94 (1995); see also Varity Corp. v. Howe, --- U.S. ----, ----, 116 S.Ct. 1065, 1086, 134 L.Ed.2d 130 (1996) ("Essentially, to administer the plan is to implement its provisions and to carry out plan duties imposed by [ERISA].") (Thomas, J., dissenting). In some instances, ERISA imposes specific obligations on the plan administrator. See, e.g., ERISA § 101(b), 29 U.S.C. § 1021(b) (duty to file plan description, modifications and changes, and reports with the Department of Labor); ERISA § 105(a), 29 U.S.C. § 1025(a) (duty to provide plan participants with information regarding their benefits).
The written instrument must also "provide for one or more named fiduciaries who jointly or severally shall have authority to control and manage the operation and administration of the plan." ERISA § 402(a)(1), 29 U.S.C. § 1102(a)(1). The administrator, as well as the named fiduciary, is considered a "fiduciary" under ERISA.2 Both the administrator and the named fiduciary must discharge their duties "in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with [ERISA]," ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D), "for the exclusive purpose of providing benefits to participants and their beneficiaries," ERISA § 404(a)(1)(A), 29 U.S.C. § 1104(a)(1)(A). Because both the plan administrator and named fiduciary must discharge their duties in accordance with the written instrument, we examine the provisions of the Plan in detail.3
The Plan is a variable benefit pension plan for Eastern pilots that was created in 1958 pursuant to a collective bargaining agreement between Eastern and ALPA. The parties rewrote the Plan in the 1970s to comply with ERISA and subsequently amended it in 1986.4
The Plan is a "defined contribution plan."5 According to 26 U.S.C. § 414(i), a defined contribution plan is a "plan [that] provides for an individual account for each participant and for benefits based solely on the amount contributed to the participant's account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant's account." More simply, in the words of an ALPA newsletter sent to Eastern pilots, a participant's interest in a defined contribution plan is "determined solely by contributions made in a beneficiary's name and the subsequent investment performance of those contributions." The Plan requires that Eastern make contributions on behalf of each participant, see § 4.1 ("Eastern Contributions"),6 for investment in stocks, bonds, real estate, and other assets. These investments constitute the Plan's "Variable Fund" (the "Fund"). See § 1.36 ("Variable Fund").7 As a result, the value of a participant's interest in the Plan depends not only upon the funds contributed but also on the investment return on the Fund's assets. See Borst v. Chevron Corp., 36 F.3d 1308, 1311 n. 2 (5th Cir.1994), cert. denied, 514 U.S. 1066, 115 S.Ct. 1699, 131 L.Ed.2d 561 (1995). The value of the Fund is calculated annually as of December 31 of each calendar year. See § 5.1 ("Fund Value").
The Plan designates Eastern as the "plan administrator." Eastern has "those powers necessary to carry out the day to day operation of the Plan." See § 2.2(a) ("Administration"). Those powers include the broad responsibility to "initially determine all questions arising from the administration, interpretation, and application of the Plan pursuant to all applicable law, agreements and contracts and such determination shall be binding upon all persons, except as otherwise provided by law, and further provided that each Participant shall be granted the same treatment under similar conditions." Id. The Plan also charges Eastern with the responsibility for, inter alia, keeping records, see § 2.4 ("Records"), preparing and distributing periodic Plan summaries, see § 2.5 ("Plan Summary"), and sending to each participant an annual statement reflecting the value of his investment in the Plan, see § 2.6 ("Annual Statement"). Section 13.1 of Article XIII, which is titled "Modification, Suspension or Discontinuance," grants Eastern the authority to unilaterally modify, suspend, or discontinue any feature of the Plan, provided that any such action does not "adversely affect" any benefits "already provided" to a participant under the Plan. An exercise of this authority, however, would not constitute an amendment to the Plan.8
The Plan designates the TAC, a small committee that monitors the management of the Plan's assets,9 as its "named fiduciary." Under the Plan, the TAC has "overall supervisory responsibility of the administrative functions of the Fund," see § 2.13(b)(i) ("Fund Administration"), and the duty "to maintain surveillance over the status and administration of the Plan and the [Fund]," see § 10.2(b) ("Rights and Duties of the [TAC]"). It must "regularly and periodically suppl[y]" information to ALPA about "transactional detail, cash flow reports, investment status, documentation and Fund performance," see § 2.11 ("Information and Accountability"), and furnish to ALPA and Plan participants reports about the TAC's "functions, actions, and decisions ... as are reasonable and appropriate." See § 10.2(c). Furthermore, the TAC is charged with the responsibility of selecting and replacing investment advisors and trustees of the Fund's assets, see § 2.7(b) ("Trust Agreement and Trustee"), as well as giving directions and instructions to these trustees, see § 2.8 ("Directions to Trustee(s)"). Before selecting or replacing investment advisors or trustees, however, the TAC must notify ALPA of the TAC's planned course of action and give ALPA an opportunity to respond, see § 2.7(b), thus effectively giving ALPA a quasi-veto power over these decisions. Similarly, before giving any notice or instruction to a Fund trustee, the TAC must notify ALPA and give it fifteen days to object. See § 2.8.
Pursuant to its authority under sections 2.7 and 2.13(D), THE TAC10 hired Hawthorne as the Plan's principal investment advisor/manager for the time period relevant in this case. Hawthorne's duties are enumerated in a written "investment advisor agreement" between the TAC and Hawthorne. According to the testimony of Hawthorne's chairman, Charles G. Dyer, Hawthorne assumed many of the TAC's administrative duties involving the Fund and its assets, including the scheduling of TAC meetings and the release of quarterly statements to participants about the value of the Fund's assets. In essence, Hawthorne served "at the pleasure of the [TAC]."
Since the Plan's inception, an Eastern pilot choosing normal or early retirement could elect to receive his benefits in the form of monthly annuity payments.11 Beginning in 1983, a retiring pilot also could elect to receive his benefits in the form of a lump-sum payment.
Processing an application for a lump-sum benefit involved five steps.12 First, a pilot seeking a lump-sum payment would complete the necessary paperwork and inform the Chief Pilot, an Eastern management employee, of his intention to retire. Second, the Chief Pilot would check to make sure that the pilot met age criteria to qualify for normal or early retirement benefits under the Plan.13 Third, if the pilot met the age qualifications, the Chief Pilot would inform the Eastern Pension and Insurance Department about the pilot's decision to retire. Fourth, the Eastern Pension and Insurance Department would contact the Plan's actuary, William M. Mercer, Inc., which would determine the precise amount of benefits to which the retiring pilot was entitled. Fifth, the actuary would then give that information to the State Street Bank & Trust Company, a Plan trustee, which would make the distribution to the pilot. The lump-sum payment would be equal to the entire actuarial present value14 of the pilot's accrued benefit15 as of his effective retirement date.16 See § 6.2(e)(i) ("Lump Sum Option"). A pilot dissatisfied with the disposition of his application for benefits could pursue administrative relief with the Pension Dispute Board pursuant to Article XI ("Determination of Disputes") of the Plan.17
In the late 1980s, Eastern was experiencing severe financial difficulties against the backdrop of a highly publicized labor dispute. On March 9, 1989, Eastern filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 1101-1174, in the Bankruptcy Court for the Southern District of New York. On March 20, 1990, Eastern and ALPA signed an interim letter of agreement, effective March 2, 1990, fixing Eastern's contribution to the Plan for all pilots at 3% of compensation.18 On April 18, 1990, the bankruptcy court named Martin R. Shugrue as Bankruptcy Trustee of Eastern (the "Bankruptcy Trustee"). The Bankruptcy Trustee began liquidating certain company assets in an attempt to reorganize Eastern as a smaller carrier.19
On September 11, 1990, the Bankruptcy Trustee, proceeding under section 1113(e) of the Bankruptcy Code, applied to the bankruptcy court for an order, which the court entered, approving an amendment to the Plan.20 Pursuant to this order, Eastern reduced its contribution to the Plan to 0% for compensation earned by pilots after August 11, 1990, and provided for resumption of its contribution of 3% for such compensation on or after June 1, 1991. This amendment also suspended the Pension Dispute Board's powers effective August 11, 1991. ALPA objected to the Bankruptcy Trustee's action and appealed to the district court the bankruptcy court's order authorizing this amendment. The record does not inform us of the district court's disposition of this appeal.
After Eastern's Chapter 11 filing, the Fund became increasingly illiquid due to three factors. First, because Eastern had suspended and eventually ceased making contributions to the Plan, the Fund's sole source of cash was the return on its investments. Second, a substantial portion of the Fund's assets were invested in real estate, which was depressed in value due to a nationwide real estate recession. Third, the lump-sum option for receiving benefits had become increasingly popular with retiring pilots. In fact, the annual amount distributed in lump-sum payments had risen steadily from $52,000,000 in 1986 to more than $200,000,000 in 1990.
On January 18, 1991, Eastern shut down its operations, effectively retiring the approximately 2,500 pilots in its employ at the time. The same day, O'Connor of the O'Connor law firm, which served as counsel to the TAC, contacted Brian P. White, Director of Eastern's Pension and Insurance Department, and told White that the TAC "recommended" that Eastern place a temporary moratorium on lump-sum payments. White, in response, said that Eastern lacked the authority to impose a moratorium. On January 19, 1991, O'Connor confirmed the recommendation by letter, a copy of which he sent to ALPA, the TAC, and Hawthorne.
On January 27, 1991, according to the deposition testimony of former President Gerald R. Ford, the TAC voted unanimously to impose the temporary moratorium.21 The record does not disclose how the TAC planned to implement the moratorium.
On January 28, 1991, O'Connor, representatives of ALPA and Eastern and their respective attorneys,22 met to discuss the need to place a temporary moratorium on lump-sum payments. The record does not disclose whether at this meeting the parties discussed Article XIII of the Plan, which gives Eastern the power to "modify, suspend ... or discontinu[e] ... any feature [of the Plan]."
On February 1, 1991, the TAC issued a "Certificate of Action of the [TAC of the Plan] Taken upon Unanimous Written Consent." In this document, the TAC stated that it, "as named fiduciary of the [Plan], has decided to, and hereby does, impose a temporary moratorium upon the payment of benefits to all Eastern pilots who shall file requests for benefits after the close of business on January 18, 1991."23 This Certificate also instructed O'Connor to "notify [Eastern] of the [TAC's] request that Eastern, as [Plan] Administrator, promptly notify all Eastern pilots who shall file requests for benefits after the close of business on January 18, 1991, that, until further notice, a temporary moratorium has been placed in effect by [the TAC]." Pursuant to the TAC's request, Eastern mailed notice of the moratorium to all of its pilots on February 4, 1991.24 In this notice, Eastern advised pilots that "[q]uestions regarding the temporary moratorium should be addressed to the [TAC]" at one of the following addresses: (1) the TAC, care of the O'Connor law firm; or (2) the TAC, care of Hawthorne.
White stated that, after Eastern's shutdown and the commencement of the moratorium, the procedure for processing claims for benefits under the Plan remained the same except for two changes: (1) the retiring pilot would contact Eastern's Pension and Insurance Department directly rather than go through the Chief Pilot; and (2) Eastern's Pension and Insurance Department would inform the actuary whether a participant had applied for benefits following the shutdown. If the participant had applied after the shutdown, the bank would not issue a benefit check.
On May 22, 1991, the TAC mailed a letter and a videotape to all Plan participants and beneficiaries. The letter and videotape were designed to inform these parties about the current status of the Plan and its plans for the future in light of the "present liquidity issues confronting the [Plan]"--that is, the state of the Plan after Eastern's shutdown and bankruptcy.
On June 25, 1991, the Bankruptcy Trustee and ALPA modified the Plan by letter of agreement.25 This agreement modified the Plan in three significant ways. First, the Plan provided for a periodic-payment option that enabled participants to receive their retirement benefit in substantially equal monthly payments that were made for life (or life expectancy). See § 6.11 ("Periodic Payments"). These payments would be exempt from the 10% additional tax assessed on early distributions from qualified retirement plans.26 Second, a new article (Article XV) was added in order to enable participants to take out loans from the Plan during this time of financial uncertainty.27 The amendment provided that the TAC would serve as administrator for these two provisions; Eastern, however, retained its administrative authority for all other provisions of the Plan. See §§ 6.11(f), 15.1. Third, the Plan was amended to provide that the value of benefits distributed from the Plan was to be determined at the time of distribution. Thus, the value of a participant's lump-sum benefit would no longer be determined as of the effective retirement date. See § 6.2(e)(i).
On July 27, 1992, pending approval by the bankruptcy court, the Bankruptcy Trustee and ALPA entered into a letter of agreement once again. Referred to as Document 91C, this proposed amendment would make two fundamental changes to the Plan. First, the Fund would be divided into a liquid portion (i.e., cash, marketable stocks, and bonds) and an illiquid portion (i.e., real estate, alternative investments, and working capital). Each Plan participant would have a percentage interest in both the liquid and illiquid portions of the Fund rather than an interest in the Fund as a whole. Second, the lump-sum option was modified to provide for a partial distribution--that is, an immediate cash payment equal to the liquid portion of each eligible participant's account. A participant selecting this option also would receive extended payments over time as the real estate and other illiquid assets were sold. The modified lump-sum option had become feasible because of recent favorable changes in the tax code for partial distributions.28
On August 19, 1992, pursuant to its duties under section 10.2(c), the TAC sent a letter to all Plan participants to describe the modified lump-sum option and to explain why the moratorium had been imposed:
The lump sum option in the [Plan] has been modified by Document 91-C to address the reality that the [Plan] has a substantial amount of high quality illiquid assets that cannot be liquidated quickly without suffering a substantial discount in order to achieve a quick sale. The [Plan] does not have sufficient cash and other liquid assets to allow eligible participants to take their lump sum in cash. This is what caused the imposition of the moratorium in January 1991.
On October 1, 1992, the Bankruptcy Trustee and ALPA filed a joint motion in the Bankruptcy Court for the Southern District of New York seeking approval of the amendment provided by Document 91C. On November 13, 1992, the bankruptcy court granted their motion and approved the amendment to the Plan, effectively ending the moratorium. The operative date of the Document 91C amendment was June 30, 1992.
Harry Hunt worked as a pilot for Eastern for twenty-four years. He elected to retire effective March 1, 1991, and demands that he be paid a lump-sum benefit for the value of his interest in the Plan as of that date.29 On February 22, 1991, Eastern's Pension and Insurance Department received his application for benefits, which was signed by Hunt on February 5, 1991. On April 22, 1991, the manager of Eastern's Pension Administration Department, Ms. S.W. Boles,30 approved Hunt's application and authorized payment of his benefits.31 Given Eastern's instruction to the actuary that it apply the moratorium to those applications submitted after January 18, 1991, the State Street Bank and Trust never made any payment to Hunt. Although Hunt is eligible to receive a modified lump-sum benefit and future payments in accordance with the Document 91C amendment, he has refused to elect that option. In addition, Hunt did not select the periodic-payment option nor did he take out a loan from the Plan.
Dissatisfied with the progress of his application, Hunt dispatched four letters, the first by himself and the other three through two different attorneys. He alleges that these letters were sent pursuant to the instructions in Eastern's February 4, 1991, letter to all Eastern pilots. On March 15, 1991, Hunt wrote to Charles G. Dyer, the chairman of Hawthorne, to inquire about the status of his pension.32 On March 20, 1991, through the first of three attorneys whom Hunt employed in this controversy,33 he wrote to O'Connor in order to request the most current statement of his account and the most recent financial statement for the Plan "showing [its] assets and liabilities." On July 15, 1991, through a second attorney, he wrote another letter to Dyer of Hawthorne. In that letter, he requested a statement of "the TAC's position on his application," copies of all amendments to the Plan affecting his benefits, an explanation if the TAC were to deny his application, and the name, address, and the forms necessary to file a claim with the Pension Dispute Board if the TAC decided not to pay his lump sum. Hunt also sent a copy of this letter to the then-chairman of the TAC. Finally, on August 19, 1991, the same attorney wrote on Hunt's behalf to O'Connor to request copies of the "amendments to the Plan," an explanation of whether the TAC "had the right to amend the [Plan]," and a statement disclosing the number of applications for lump-sum benefits filed since January 18, 1991.34 Hunt complains that none of his letters were answered.B.
On February 21, 1992, Hunt filed a complaint in the United States District Court for the Northern District of Florida against the following parties: Eastern, ALPA, Hawthorne, Charles H. Copeland as chairman of the TAC, and O'Connor as partner and agent for the O'Connor law firm. The complaint was a typical "shotgun" pleading.35 With the exception of Count I, Hunt made only general references to "ERISA," failing to indicate which provision of the statute served as his basis for relief.
The complaint contained six counts or causes of action. Each incorporated the allegations, mostly factual, set out in the first twenty-four paragraphs of the complaint. In those paragraphs, Hunt made essentially the following allegations:
he was a participant in the Plan;
on February 5, 1991, he mailed to the Plan administrator's (Eastern's) Pension and Insurance Department a "Notice of Retirement Status, electing a lump sum payout of his benefits under the [Plan], effective on his early retirement date of March 1, 1991";
he inquired of Hawthorne on March 15, 1991, May 3, 1991, and May 7, 1991 as to when he would receive his lump-sum payment for his accrued benefit;
Hawthorne replied that he would be paid between June 15, 1991, and June 30, 1991;
the Plan administrator had not paid his benefit because a moratorium had been placed on the payment of lump-sum benefits;
the "moratorium resulted from resolutions rendered by ALPA"; and
he retained counsel in order to obtain his lump-sum benefit.36
Count I of the complaint, titled "Failure to Provide Information," alleged that the defendants' failure "to respond within 30 days to repeated written requests made by Hunt since March 20, 1991, as required by 29 U.S.C. § 1132(c)(1)(B)," rendered the defendants "liable to Hunt in an amount up to $100 per day from the date of this failure to respond pursuant to [section] 1132(c)(1)(B)." Accordingly, Hunt requested "judgment against Defendants for the applicable penalty and damages, ... such further relief as the court deems appropriate and ... prejudgment interest, costs and reasonable attorneys' fees."
Count II, titled "Action to Enforce Rights under [Plan]," alleged that Hunt had properly submitted his request for a lump-sum benefit; that he was entitled to the benefit; and that the "Defendants have failed to pay or direct payment of said benefits and have failed to provide any disposition of Hunt's claim." Accordingly, Hunt asked the court to "enter an order requiring Defendants to pay Hunt his benefits and award to him prejudgment interest, costs and reasonable attorneys' fees."Count III, titled "Breach of Fiduciary Duty," alleged in pertinent part:
the defendants were fiduciaries under ERISA;
"ALPA has a duty not to interfere with Hunt's interest";
"[t]he value of Hunt's [Plan] account continues to decrease since his effective retirement date";
the defendants "willfully and wantonly breached their fiduciary duty to Hunt by failing to pay [his lump-sum benefit], by failing to respond to Hunt's requests for information, by interfering with Hunt's rights to [his benefit], and by failing to discharge their duties solely in the interest of the participants for the exclusive purpose of providing benefits in accordance with the [Plan] documents";
the decision to impose the moratorium on lump-sum benefits was "arbitrary and capricious, [was] contrary to the terms of the [Plan] and [was] contrary to law"; and
"[a]s a result of Defendants' breach of the fiduciary duties, Hunt has been damaged by failing to receive his lump sum payout and the resulting payment of increased interest expense for loans obtained pending payment."
Accordingly, Hunt demanded "compensatory and punitive damages against Defendants jointly and severally and request[ed] entry of an order awarding to him prejudgment interest, costs and reasonable attorneys' fees."
Count IV, titled "Recovery of Benefits," alleged that "Hunt has been damaged by Defendants' failure to pay Hunt the benefits to which he is entitled under the [Plan]." Accordingly, Hunt demanded "judgment against Defendants jointly and severally for payment of his benefits under the [Plan], plus prejudgment interest, costs and attorneys' fees."
Count V, titled "Estoppel," alleged in pertinent part:
"Defendants represented to Hunt that he was fully vested, that the [Plan] was fully funded, and that his benefits would be paid before June 30, 1991";
"Hunt relied on the terms of the [Plan] and on the representation of Defendants in determining his retirement date and in establishing his business plan and financial affairs upon retirement"; and
"Defendants should be estopped to deny payment and to refuse to process payment to Hunt."
Accordingly, Hunt demanded "judgment against Defendants jointly and severally for payment of his benefits under the [Plan], plus prejudgment interest, costs and attorneys' fees."
Count VI, titled "Declaratory Judgment," alleged that the defendants "failure to pay to Hunt the benefits to which he is entitled as set forth in the [Plan] have raised dispute regarding Hunt's entitlement (right) to immediate payment of the [Plan] benefits under the terms of the [Plan] and ERISA" and that "Chapter 86 Fla. Stat.[ ] provides that such rights may be determined by the court." Accordingly, Hunt requested that "this court enter an order declaring his right to payment of his lump sum [Plan] benefits under the terms of the [Plan] and pursuant to ERISA and awarding to Hunt costs of this proceeding, including reasonable attorneys' fees."
The defendants, proceeding individually, responded to Hunt's complaint. Hawthorne and the Bankruptcy Trustee, who appeared for Eastern, filed answers that denied liability and included the affirmative defense that the complaint failed to state a claim for relief. The remaining defendants, with the exception of Copeland, moved to dismiss the complaint under Fed.R.Civ.P. 12(b)(6) for failure to state a claim for relief;37 Copeland moved for dismissal on the ground that Hunt had not served him with process as required by Fed.R.Civ.P. 4(j).38 Because Hunt had "demonstrated neither good reason for Copeland's continued presence in this lawsuit nor good cause for the lack of timely service upon Copeland," the court dismissed Copeland from the case.39
Before the court could address the question whether the complaint stated a claim for relief against any of the defendants, the Bankruptcy Trustee moved the district court on August 6, 1992, for summary judgment on the grounds, among others, that Eastern was not a fiduciary under the Plan because its duties were purely ministerial; that Eastern lacked discretion to impose the moratorium; and that the moratorium was imposed at the TAC's direction. Although the Plan contained no provision requiring Eastern to accept the TAC's decisions as binding, Eastern contended that it "had no choice but to abide by" the TAC's decision to impose a moratorium on the payment of lump-sum benefits. Finally, Eastern contended that "its sole obligation in the retirement benefits process is limited to determining eligibility, here whether an applicant meets the age criteria." "Once this is done," Eastern argued, "[it] has no role in deciding whether to pay an eligible participant benefits, what benefits an eligible participant is entitled to, or how those benefits will be distributed" (emphasis in original).
On October 1, 1992