Opinion ID: 2803977
Heading Depth: 2
Heading Rank: 3

Heading: Hawaii State Court Proceedings

Text: On December 9, 2008, Rodrigues filed a “Complaint for Indemnity” in the circuit court, alleging that his liability to the MAF “arose solely from acts and/or omissions” committed by Rodrigues “in his capacity as agent of Defendant UPW and/or were authorized and/or ratified by the trustees of the [MAF] and/or 8 ____ FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER ____ Defendant UPW.” Rodrigues sought indemnification from UPW in the amount of $850,000 plus attorneys’ fees and costs incurred in defending the ERISA breach of fiduciary duties action. UPW filed an answer asserting multiple defenses, including ERISA preemption. Rodrigues moved the circuit court for partial summary judgment in his favor as to the duty/liability of UPW to indemnify Rodrigues for the loss he suffered in the federal district court proceedings. Rodrigues argued that the underlying actions for which he was held liable under ERISA were within the scope of his performance of duties assigned to him by UPW. Rodrigues thus asserted that UPW was vicariously liable to the MAF for Rodrigues’ actions, and also directly liable for its negligence in assigning him as the MAF’s administrator. Accordingly, Rodrigues contended that UPW had a duty to indemnify him for the federal district court judgment. In opposition, UPW argued that Rodrigues had no right of indemnity under ERISA and that ERISA preempted any alleged state law indemnity claim. The circuit court agreed with UPW; it concluded that Rodrigues’ indemnity claim was preempted by ERISA and entered summary judgment in favor of UPW.6
6 The Honorable Karl K. Sakamoto presided. 9 ____ FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER ____ On appeal to the ICA, Rodrigues argued that his action was not preempted under the doctrine of implied conflict preemption because his indemnity claim did not “‘duplicate[], supplement[], or supplant[]’ remedies provided in ERISA’s civil enforcement scheme.” He also asserted that his action was not expressly preempted by ERISA’s preemption clause. Rodrigues contended that his indemnification claim arose solely from his employment relationship with UPW, which was not an ERISA party in the underlying federal court action. Rodrigues thus argued that his indemnity claim was not preempted by ERISA’s express preemption clause because, (1) his claims [were] entirely independent of any ERISA duties or obligations; (2) adjudication of these claims [would] not involve the plan’s administration and the benefits provided; and (3) adjudication of these claims [would] not encroach on any ERISA relationship or have any impact on any ERISA plan or party. (Citation omitted). UPW argued that (1) under ERISA there is no right of indemnity for a breaching fiduciary; (2) Rodrigues’ state law indemnity claim was preempted by ERISA; (3) Rodrigues’ indemnity claim was premature because he had not suffered a loss; and (4) Rodrigues was an active wrongdoer, and accordingly, Rodrigues should “bear the loss.” The ICA held that ERISA did not preempt Rodrigues’ indemnity claim; it reasoned that because Rodrigues’ “liability 10 ____ FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER ____ to the plan for breach of his fiduciary duties had already been established,” the resolution of his indemnity claims against UPW “[did] not raise questions involving the [MAF’s] administration and the benefits provided.” Rodrigues, 2014 WL 983024, at . The ICA also explained that Rodrigues’ indemnity claim did not supplement ERISA’s civil enforcement scheme because his claim was an independent cause of action: “UPW’s alleged obligation to indemnify derives not from the plan’s ‘particular rights and obligations,’ but rather, from the alleged duties UPW owed to Rodrigues by virtue of UPW designating Rodrigues as its agent to serve as a plan fiduciary.” Id. at . Recognizing, however, that the circuit court did not address whether Rodrigues’ negligence was a bar to his indemnity claim because it found the preemption issue dispositive, the ICA entered summary judgment on the alternative ground that his own negligence barred Rodrigues’ claim for indemnification.7 Id. at -12.