Opinion ID: 855052
Heading Depth: 4
Heading Rank: 1

Heading: Underfunding Claim

Text: The Administrators argue that the Underfunding Claim is time-barred under the three-year limitations period because counsel for LIHS and the Class, Alexander Miuccio, acquired actual knowledge of the relevant facts sometime between 1993 and 1996 during discovery in the Prior Action, and such knowledge should be attributed to his clients based on their agency relationship. The district court held that any actual knowledge Miuccio possessed should not be imputed to LIHS and the Class because this is a class action, relying on Stieberger v. Sullivan, 738 F. Supp. 716 (S.D.N.Y. 1990), Schwab v. Philip Morris USA, Inc., No 04 Civ. 1945, 2005 WL 2467766 (E.D.N.Y. Oct. 6, 2005), and Crimi v. PAS Industries, Inc., - 21 - No. 93 Civ. 6394, 1995 WL 272580 (S.D.N.Y. May 9, 1995), where knowledge was not imputed in class action contexts because the large number of plaintiffs often rendered the attorney-client relationship more tenuous. We conclude that the three-year limitations period does not bar the Underfunding Claim. Even assuming Miuccio's knowledge can be attributed to LIHS and the Class, he did not possess all of the material facts giving rise to the Underfunding Claim. Miuccio conceded before the district court that during the Prior Action, he acquired knowledge of the facts giving rise to the Diversion Claim and the EOC Suffolk Delinquency Claim. As to the Underfunding Claim, however, he repeatedly represented that it was not until sometime between 2000 and 2004 -- when he received the Plan's financial statements during supplemental proceedings following entry of judgment in the Prior Action -- that he learned that the Plan was underfunded and the Administrators could have breached their fiduciary duties in this regard. The district court accepted this representation, and we have no basis to - 22 - second-guess that decision. 6 This action was commenced on December 13, 2000, within three years of the time Miuccio learned all of the material facts giving rise to the Underfunding Claim. 7 Alternatively, the Administrators argue that the Underfunding Claim is barred by the six-year limitations period because it accrued on September 1, 1992, when LIHS learned that the LIHS Reserves would not be refunded. The district court, however, found that the Administrators' failure to adequately fund the Plan occur red between 1995 and March 2001, a finding that is not clearly erroneous. The district court reasonably distinguished between the earlier failure to refund money contributed by LIHS and the 6 The district court referred to diversion in discussing both the Diversion Claim and the Underfunding Claim. Based on our reading of the district court's decisions and the record as a whole, we understand Miuccio's representations to relate only to the Underfunding Claim. 7 The Administrators offer an alternate basis for the application of the three-year bar. They argue that Macaluso and Phyllis Simmons (former Chief Executive Officer of LIHS) knew sometime between 1993 and 1995 that the Plan would not refund the LIHS Reserves, and that is when the limitations period began to run. This argument fails. The fact purportedly known by Macaluso and Simmons relate to the Diversion Claim, not to the Underfunding Claim. Moreover, any knowledge possessed by Macaluso in the Prior Action cannot be attributed to the Class in this case, of which he is not a member. - 23 - subsequent, distinct decision not to increase contributions to the fund to maintain adequate reserves to cover the contingent liability represented by LIHS's Prior Action to recover that money. The six-year limitations period runs from the date of the last action which constituted a part of the breach. 29 U.S.C. § 1113(1)(A) (emphasis added). Because the last action constituting the Administrators' failure to adequately fund the Plan occurred in March 2001, and this action was commenced on December 13, 2000, the Underfunding Claim is timely.