Opinion ID: 3040025
Heading Depth: 3
Heading Rank: 4

Heading: Judgment Against Allshore, Inc.

Text: Next, Allshore, Inc. asserts that the District Court should not have entered judgment against it as an entity. Recently, we stated that when a plaintiff seeks recovery of benefits pursuant to Section 1132(a)(1)(B), “the defendant is the plan itself (or plan administrators in their official capacities only).” Graden v. Conexant Systems, 496 F.3d 291, 301 (3d Cir. 2007)(emphasis added). Thus, if entitlement to benefits is established, the court can direct the plan administrator to pay them from the assets of the plan, much as a trustee may be compelled to satisfy a trust obligation from trust assets. See, e.g., Hall v. Nat’l Gypsum Co., 105 F.3d 225, 229-30 (5th Cir. 1997). However, Hahnemann did not sue Allshore, Inc. seeking benefits from the Allshore Plan’s assets. Rather, it sued both the Allshore Plan and Allshore, Inc., and requested that it “recover of and from Allshore [Inc.] and the [Allshore] Plan, jointly and severally.” Therefore, the judgment Hahnemann secured against Allshore, Inc. was not in its official capacity. The mere fact that Hahnemann established that it was entitled to benefits from the Allshore Plan did not make Allshore, Inc. liable in an individual capacity. Indeed, ERISA states that, “[a]ny money judgment under this subchapter against an employee benefit plan shall be enforceable only against the plan as an entity and shall not be enforceable against any other person unless liability against such person is established in his individual capacity under this subchapter.” 29 U.S.C. § 1132(d)(2). Nevertheless, this does discount. Thus, any discount under this agreement could not have applied based on these circumstances. 12 not necessarily mean that Allshore, Inc. cannot be held individually liable. Allshore, Inc. can be held liable if the facts established an individual basis against it. See id. Two possible bases appeared to arise in this case for Allshore, Inc.’s liability: (1) that Allshore, Inc. agreed to be financially liable for the medical expenses the patient incurred at Hahnemann; and (2) that Allshore, Inc., as plan administrator, owed a fiduciary duty which it breached by refusing to pay the claim without any justification. It appeared that the District Court accepted both of these theories of liability. For the following reasons, we will affirm the judgment against Allshore, Inc., based upon this second rationale. When a denial of “benefits due” arises from a plan administrator’s breach of its fiduciary obligations to the claimant, Sections 1132(a)(1)(B) and (d) permit the beneficiary to seek redress for the breach directly from the plan administrator as a fiduciary. Indeed, as the Supreme Court has noted: a fiduciary has obligations other than, and in addition to, managing plan assets . . . . For example . . . a plan administrator engages in a fiduciary act when making a discretionary determination about whether a claimant is entitled to benefits under the terms of plan documents . . . . ERISA specifically provides a remedy for breaches of fiduciary duty with respect to the interpretation of plan documents and the payment of claims, one that is outside the framework of the second subsection . . . and one that runs directly to the injured beneficiary. § 502(a)(1)(B). Varity Corp. v. Howe, 516 U.S. 489, 511-12 (1996)(internal citations omitted and emphasis added). Thus, a breach of these fiduciary obligations will satisfy the limitations set forth in 13 Section 1132(d) because there is an individual basis for recovery. As previously noted, Allshore, Inc. was the plan administrator and exercised all discretionary authority and control over the administration of the Allshore Plan as well as the management and disposition of plan assets. Thus, Allshore, Inc. was clearly a fiduciary to the plan. See 29 U.S.C. § 1002(21)(A)(stating that a person is a fiduciary with respect to the plan if he exercises any discretionary authority or discretionary control respecting management of the plan or has authority or discretionary responsibility in the administration of the plan). ERISA requires that a fiduciary “discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries.” 29 U.S.C. § 1104(a)(1). Furthermore, a fiduciary must discharge his duties “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use.” 29 U.S.C. § 1104(a)(1)(B). Upon reviewing the record with respect to the circumstances surrounding the payment (or lack thereof) of benefits to Hahnemann, there is ample evidence to support the finding that Allshore, Inc. breached a fiduciary duty that it owed to Hahnemann as assignee of the patient in this case. See 29 U.S.C. § 1104 (discussing obligations fiduciary owes to plan participants and beneficiaries); cf. Varity Corp., 516 U.S. at 506 (illustrating conduct by a plan administrator that amounts to a breach of fiduciary duty). Therefore, the District Court did not err in entering judgment against Allshore, Inc.8