Opinion ID: 4656289
Heading Depth: 3
Heading Rank: 2

Heading: 2016 RBR Plan

Text: Central Valley asserts that TBG, AMPS, and CDS were fiduciaries because they exercised control over plan assets when they (1) decided and communicated about benefits claims; and (2) increased their compensation by charging unauthorized fees. Neither argument is persuasive. 2 Central Valley also seeks to hold defendant GMS Benefits liable on the theory that it knowingly participated in TBG or AMPS’s fiduciary duty breach. Because TBG and AMPS are not fiduciaries, this argument necessarily fails. -8- The record is plain that CDS exercised discretion in deciding some claims and was a fiduciary. CDS, however, was the only defendant with the ability to exercise this type of discretion. While TBG and AMPS communicated with both CDS and Central Valley about claims, that communication is insufficient to trigger a fiduciary duty unless it is coupled with discretionary control over the payment of claims. Here, the record does not support a finding that TBG and AMPS exercised discretion over the payment of claims, foreclosing the possibility of a fiduciary relationship. Id. This leaves only the question of whether or not CDS breached its admitted fiduciary duties. In order for Central Valley to prevail, it must show that CDS violated a duty while acting in its role as a fiduciary. See, McCaffree Fin. Corp., 811 F.3d at 1002 (“[C]ourts assessing claims under ERISA must ask whether a person was acting as a fiduciary . . . when taking the action subject to complaint.”) (cleaned up). Here, the breaches of fiduciary duties alleged by Central Valley are completely unrelated to CDS’s role as a fiduciary. The fiduciary duties owed by CDS to Central Valley were limited to making benefit determinations on hospital and facility claims. Central Valley has not pointed to any breach of this duty; rather, the bulk of Central Valley’s allegations are against non-fiduciary TBG. Because none of Central Valley’s allegations pertain to CDS’s fiduciary duty of making benefit determinations on hospital and facility claims, Central Valley’s fiduciary duty claim against CDS fails. Central Valley also asserts that TBG, AMPS, and CDS were fiduciaries because they exercised discretion over their compensation by charging unauthorized fees. Central Valley relies on the plan documents, which provided for payment to CDS in the amount of 10% of gross billed charges. Because CDS was paid 12.5% of gross billed charges, Central Valley asserts the “extra” 2.5% was the result of the defendants exercising their discretion to increase the fees. The record shows otherwise. The record supports the district court’s finding that the 10% fee listed in the RBR plan was a “scrivener’s error,” allowing the court to fix the error. See, e.g., -9- Young v. Verizon’s Bell Atl. Cash Balance Plan, 615 F.3d 808, 817–23 (7th Cir. 2010) (amending ERISA plan to fix scrivener’s error). The error contained in the RBR plan is apparent when the communications between the parties and the performance of the contract are examined. GMS Benefits provided a document listing the different plan options for 2016 to Central Valley that included the RBR fee as 12.5%. A later email between representatives at Central Valley and GMS Benefits confirmed that the RBR fee was 12.5%. The course of performance between the parties also supported a 12.5% fee, as Central Valley repeatedly made payments of 12.5% to CDS during the plan year. This course of conduct and communication makes plain that the parties agreed to a 12.5% fee. No defendant had discretion to set a higher fee, and no defendant set a higher fee. Because no defendant acted with discretion with respect to compensation, no defendant became a fiduciary.