Opinion ID: 626153
Heading Depth: 4
Heading Rank: 1

Heading: Doyle's Fiduciary Status

Text: Identification of plan assets is essential to determining Doyle's fiduciary status. Under ERISA, even if a person is not named as a fiduciary in plan documents, he may still be a fiduciary with respect to a plan to the extent . . . he . . . exercises any authority or control respecting management or disposition of its assets. . . . 29 U.S.C. § 1002(21)(A)(i); see also Board of Trustees of Teamsters Local 863 Pension Fund v. Foodtown, Inc., 296 F.3d 164, 174 (3d Cir.2002). The Secretary argues that Doyle was a fiduciary because all or part of the payments that PCMG collected from PCI/NP's clients were plan assets and Doyle, as head of PCMG, exercised discretionary control over those assets. Doyle contends that the payments PCMG collected from employers who enrolled their employees in the Fund were not plan assets and that the only plan assets were funds remitted to the Fund's claim administrators pursuant to the collective bargaining agreements between PITWU and PCI/NP. The District Court, however, made no findings as to which, if any, of the monies under Doyle's control were plan assets, or whether Doyle was a fiduciary. Instead, the District Court appears to have concluded that Doyle could not have breached any fiduciary duties he might have owed to the Fund based on (1) his testimony that he forwarded all required Check 1 monies, and (2) his testimony that the Check 2 monies he collected as marketing fees were customary and the absence of evidence that the fees were excessive, unreasonable, or contrary to plan documents. Doyle, 2010 WL 2671984, at -8. Both of these conclusions are problematic. First, the District Court's findings cast doubt on Doyle's testimony that he forwarded all required Check 1 monies. The court found that Doyle had collected $4.5 million in Check 1 monies, of which $3.1 million was forwarded to PCI/NP and $645,000 was sent directly to the Fund's claim administrator pursuant to instructions from the Fund's trustees after PCI/NP stopped making contributions in November 2002. Doyle, 2010 WL 2671984, at . But this leaves $755,000 of the $4.5 million collected by Doyle unaccounted for. Doyle's claim that he properly forwarded all required Check 1 monies cannot be credited without addressing this $755,000 discrepancy between the amounts Doyle collected and the amounts he transmitted to PCI/NP or the Fund's claims administrator. In any case, the District Court would still need to determine whether Check 1 monies were plan assets and whether Doyle exercised sufficient control over those monies to be considered a fiduciary. See In re Mushroom Transp. Co., Inc., 382 F.3d 325, 346-47 (3d Cir.2004). Second, Doyle's unrefuted testimony that the Check 2 funds he collected for marketing fees were customary or reasonable does not mean that he did not violate any fiduciary duties under ERISA. If Check 2 monies were plan assets and Doyle was a fiduciary, he was required to use these monies for the exclusive purposes of providing benefits to participants in the plan and their beneficiaries [and] defraying reasonable expenses of administering the plan. 29 U.S.C. § 1104(a)(1)(A). The Check 2 monies retained by PCMG were used to pay expenses it incurred in marketing the Fund. It is far from obvious how plan participants benefitted from PCMG's marketing of the Fund to other businesses with whom they had no connection or why the Fund would reasonably incur such expenses. Moreover, as we have explained above, the PEO services of PCI/NP that PCMG was promoting were actually part of a scheme to abuse ERISA preemption and avoid state insurance regulations through a sham collective bargaining relationship with PITWU. At a minimum, expenditures for marketing this illegal scheme were not reasonable expenses for the benefit of plan participants. [29] Accordingly, on remand, the District Court should make detailed factual findings concerning the nature of the funds received and controlled by Doyle to determine which, if any of these funds, were plan assets. The court should specifically address whether Check 1 and Check 2 monies were plan assets, considering in particular those monies sent at the direction of the trustees directly to claims administrators. If the District Court determines on remand that some or all of these monies are plan assets, it should then consider whether Doyle had sufficient control over these assets to support a finding of fiduciary status. See In re Mushroom Transp. Co., Inc., 382 F.3d at 346-47. If the District Court finds that Doyle is a fiduciary with respect to certain plan assets, it should then consider whether Doyle breached his fiduciary duties to the Fund. See 29 C.F.R. § 2509.75-8, FR-16; Bd. of Trs. of Teamsters Local 863 Pension Fund v. Foodtown, Inc., 296 F.3d 164, 174 (3d Cir. 2002).