Source: http://id.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20160818_0002523.C09.htm/qx
Timestamp: 2017-06-28 15:45:55
Document Index: 793537185

Matched Legal Cases: ['§ 1132', '§\n1132', '§ 1132', '§\n1132', '§ 1132', '§\n1132', '§\n1132', '§ 1132', '§ 1132', '§\n1132', '§\n1132']

| Moyle v. Liberty Mutual Retirement Benefit Plan
Geoffrey Moyle, an individual, on behalf of themselves; Pauline Arwood, an individual, on behalf of themselves; Thomas Rollason, an individual, on behalf of themselves; Jeannie Sanders, an individual, on behalf of themselves, Plaintiffs-Appellants/ Cross-Appellees,v.Liberty Mutual Retirement Benefit Plan; Liberty Mutual Retirement Plan Retirement Board; Liberty Mutual Insurance Company, a Massachusetts company; Liberty Mutual Insurance Group Inc., a Massachusetts company, Defendants-Appellees/ Cross-Appellants.
and Submitted October 19, 2015 Pasadena, California
District of California Gonzalo P. Curiel, District Judge,
Presiding D.C. No. 3:10-cv-02179-GPC-MDD
Matthew Butler (argued) and Michael Olinik, The Butler Firm,
San Diego, California; Jack Winters Jr., Winters &
Associates, San Diego, California; Craig Nicholas and Alex
Tomasevic, Nicholas & Tomasevic, LLP, San Diego,
California, for Plaintiffs-Appellants/Cross-Appellees.
Abel (argued), Jackson Lewis P.C., Greenville, South
Carolina, for Defendants-Appellees/Cross-Appellants.
Before: Harry Pregerson and Consuelo M. Callahan, Circuit
Judges and Stanley Allen Bastian, [*] District Judge.
court's summary judgment in favor of the defendants in a
class action under the Employee Retirement Income Security
alleged that their new employer, which purchased their former
employer, told them that they would receive past service
credit, under the new employer's retirement plan, for the
time they worked with the former employer.
panel affirmed the district court's summary judgment on a
claim for benefits under 29 U.S.C. § 1132(a)(1)(B). The
panel held that the district court applied the correct abuse
of discretion standard of review, and the plaintiffs were not
entitled to past service credit under the plain terms of the
panel reversed the district court's summary judgment on
plaintiffs' claim for equitable relief under §
1132(a)(3). Agreeing with the Eighth Circuit, the panel held
that the plaintiffs were not barred from bringing
simultaneous claims under § 1132(a)(1)(B) and §
1132(a)(3). Courts have interpreted Varity Corp. v.
Howe, 516 U.S. 489 (1996), to mean that equitable relief
under § 1132(a)(3) is not available if §
1132(a)(1)(B) provides an adequate remedy. But under
CIGNA Corp. v. Amara, 131 S.Ct. 1866 (2011), §
1132(a)(3) authorizes equitable relief in the form of plan
reformation, even if plaintiffs also claim relief under
§ 1132(a)(1)(B). The panel concluded that in light of
Amara, prior Ninth Circuit case law to the contrary
was no longer binding. The panel remanded for determinations
of fact and equitable relief in the form of reformation and
claim that the new employer breached its fiduciary duty to
disclose information about past service retirement credit in
its Summary Plan Description. The panel held that the
plaintiffs did not prove harm or detrimental reliance.
defendants' cross-appeal, the panel held that class
certification was proper.
Opinion filed on May 20, 2016, is amended as follows: in the
last sentence on page 5 of the Slip Opinion, the words
"that the suit is not time-barred and" shall be
deleted so that the sentence reads, "We also find that
class certification was proper."
Pregerson, Callahan, and Bastian have voted to deny
Defendants-Appellees' petition for panel rehearing. Judge
Callahan has voted to deny Defendants-Appellees' petition
for rehearing en banc, and Judges Pregerson and Bastian so
full court has been advised of the petition, and no judge of
the court has requested a vote on the petition for rehearing
en banc. Fed. R. App. P. 35. Defendants-Appellees'
Petition for Rehearing or Rehearing En Banc is therefore
DENIED, and no further petitions for rehearing will be
are former employees of Old Golden Eagle Insurance Company
("Golden Eagle"). Golden Eagle did not offer a
retirement plan to its employees. When Liberty Mutual
Insurance Company ("Liberty Mutual") purchased
Golden Eagle through a conservatorship sale, Appellants
became employees of Liberty Mutual. Appellants state that
while the sale was underway, Liberty Mutual told Appellants
that they would receive past service credit for the time they
worked with Golden Eagle under Liberty Mutual's
retirement plan. But, after Liberty Mutual purchased Golden
Eagle, Liberty Mutual denied Appellants' claims for past
service credit. Liberty Mutual argues that it never made any
representation to Appellants that they would receive past
service credit for their time with Golden Eagle. Liberty
Mutual also argues that under the terms of the retirement
plan, Appellants are entitled only to past service credit for
purposes of eligibility, vesting, early retirement, and
spousal benefits, and not for retirement benefits accrual.
filed this class action against Liberty Mutual for violating
("ERISA"). At the district court, Appellants
asserted four claims for relief: (1) Appellants are entitled
to past service credit under the terms of the retirement
plan, under 29 U.S.C. § 1132(a)(1)(B); (2) Appellants
are entitled to equitable relief under 29 U.S.C. §
1132(a)(3); (3) Liberty Mutual violated its duty to provide
Appellants with documents relevant to their claim; and (4)
Liberty Mutual violated its duty to disclose information
about past service retirement credit in its Summary Plan
Descriptions. Appellants seek the equitable remedies of
reformation and surcharge for both claims (2) and (4).
district court granted summary judgment in favor of Liberty
Mutual on all four claims. Appellants appealed on claims (1),
(2), and (4). Liberty Mutual cross-appealed, alleging that
Appellants' suit is time-barred and that class
certification was improper.
reverse the district court's ruling as to claim (2).
Appellants can seek equitable relief under 29 U.S.C. §
1132(a)(3). We affirm the district court's ruling as to
claims (1) and (4): Appellants are not entitled to past
service credit under the plain terms of the retirement plan,
and Appellants did not rely to their detriment on Liberty
Mutual's failure to disclose information about past
service credit in its Summary Plan Descriptions. We also find
that class certification was proper.
Liberty Mutual's Bid for Golden Eagle
January 31, 1997, the California Department of Insurance
placed Golden Eagle into conservatorship with the San Diego
Superior Court. Seeing an opportunity to expand its insurance
business, Liberty Mutual took an immediate interest in
acquiring Golden Eagle, who had a large worker's
many Golden Eagle employees-worried that their jobs were in
jeopardy-began to look for different employment
opportunities. From January 1997 to the summer of that year,
nearly fifty percent of Golden Eagle employees left the
company, and their departure had already cost Golden Eagle
April 1997, Liberty Mutual was in a bidding war with American
International Group, Inc. ("AIG") for the
acquisition of Golden Eagle. To win the bidding war, Liberty
Mutual needed to not only match AIG's bid, it also needed
to add enhancements to secure the Conservation Court's
approval. On April 6, 1997, Liberty Mutual submitted its
enhanced bid, which included improved employee benefits such
as a retirement plan, a benefit not offered by Golden Eagle.
Including improved employee benefits for Golden Eagle's
former employees served to benefit Liberty Mutual in two
ways: by retaining Golden Eagle's employees, and by
increasing the likelihood that the court would approve
Liberty Mutual's bid.
the bid was going on, several Golden Eagle employees
approached George Kaerth, Senior Vice President of
Underwriting at Golden Eagle, and asked him if they would get
past service credit for their time with Golden Eagle under
Liberty Mutual's retirement benefits program. Kaerth, in
turn, had about twenty conversations with David Long from
Liberty Mutual, and about ten to twelve conversations with
Tim Sweeney, also from Liberty Mutual, about the Liberty
Mutual benefits package for Appellants. Kaerth repeatedly
told Long and Sweeney that the Golden Eagle employees were
confused about past service credit. Kaerth asked Long and
Sweeney pointedly whether or not service with Golden Eagle
would count under the Liberty Mutual benefits program, and,
every time, Long and Sweeney separately responded that this
issue was still under negotiation.
29, 1997, the Conservation Court held an evidentiary hearing
to evaluate Liberty Mutual's and AIG's competing
bids. Among the exhibits that Liberty Mutual submitted to the
court, one exhibit expressly stated that the value that
Liberty Mutual added was to "increase employee benefits
(credit for prior year's of service and participation in
the benefits plan)." Liberty Mutual also told the
Conservation Court that Golden Eagle employees would have the
rights that Liberty Mutual employees had with "X years
of service." This representation was later repeatedly
made to Golden Eagle employees.[1]
Mutual's representations at the May 29 hearing were
shared with Golden Eagle employees. At the time of the
hearing, Golden Eagle employees preferred Liberty
Mutual's proposal because it was perceived that Liberty
Mutual would treat its employees better than AIG. On May 30,
1997, the Conservation Court approved Liberty Mutual's
Golden Eagle Transitions to Liberty Mutual
the approval of Liberty Mutual's bid, Liberty Mutual
drafted a Rehabilitation Agreement, which was meant to settle
any outstanding claims with policyholders, creditors, and
shareholders of Golden Eagle. Notably, Article 5 of the
Rehabilitation Agreement states that Golden Eagle
employees' past service credit would count for the
purposes of eligibility, vesting, and early retirement
subsidies under Liberty Mutual's retirement benefit plan,
but past service credit would not be credited for the purpose
of benefits accrual. The Rehabilitation Agreement is the only
document that explicitly states that past service credit with
Golden Eagle would not count for benefits accrual, and this
language does not appear anywhere else during the time of
transition or in any of the communications with Golden Eagle
Sayles, Liberty Mutual's Senior Vice President of Human
Resources and Administration, oversaw the development of
Article 5 as well as all Summary Plan Descriptions
("SPD")[2]. Sayles testified that it was
"important to be explicit at each agreement, including
this one, what people got and what people didn't
Conservator in charge of the transition of Golden Eagle to
Liberty Mutual was not required to send notification of the
Rehabilitation Agreement to Golden Eagle employees. Liberty
Mutual never provided a copy of the Rehabilitation Agreement
to Golden Eagle employees.
August 1997, Liberty Mutual hosted a series of benefits
enrollment meetings so that Golden Eagle employees could
discuss and obtain information about the transition to
Liberty Mutual. Liberty Mutual developed a uniform
"Facilitator Guide" that presenters used as a
script at these meetings to convey information about the
terms and conditions of employee benefits, including
retirement benefits. There was no mention in the Facilitator
Guide that past service credit with Golden Eagle would not be
credited for benefit accrual, or that benefit accrual would
begin on the plan entry date of October 1, 1997.
the enrollment meetings, Liberty Mutual failed to indicate
that there were any limitations to the treatment of past
service credit. Paula Tonsky, who organized new hire
orientations, testified that her understanding from attending
some of these meetings was that "previous years with
Golden Eagle would count towards . . . service with Liberty
Mutual."
Eagle employees Geoffrey Moyle, Pauline Arwood, Thomas
Rollason, and Jeannie Sanders also testified that this was
their understanding after attending the meetings, as well as
the understanding of other Golden Eagle employees. When asked
if his understanding was that he would get past service
credit for his time with Golden Eagle for all purposes under
the Liberty Mutual retirement plan, Moyle stated, "I
know that was my understanding, because everybody was quite
happy after the meeting, that [sic] what they were going to
receive." Similarly, Sanders testified, "[B]ecause
of the meeting . . . we all were told that our years of
service with Golden Eagle would be ...