Opinion ID: 603902
Heading Depth: 2
Heading Rank: 1

Heading: kyle's claims against pacific

Text: 5 We review de novo the district court's dismissal of Kyle's fiduciary and nonfiduciary misconduct claims against Pacific. See Oscar v. University Students Co-Operative Ass'n, 965 F.2d 783, 785 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 113 S.Ct. 655, 121 L.Ed.2d 581 (1992). Our review is based on the contents of the complaint, the allegations of which we accept as true and construe in the light most favorable to the plaintiff. See Love v. United States, 915 F.2d 1242, 1245 (9th Cir.1989). 6 A. The District Court did not Err in Concluding that Pacific was not Liable as a Fiduciary to Kyle Under ERISA. 7 Kyle asserts that the district court's definition of an ERISA fiduciary was far too narrow and should have included Pacific. However, ERISA permits suits for breach of fiduciary duty only against ERISA defined fiduciaries. Gibson v. Prudential Ins. Co. of America, 915 F.2d 414, 417 (9th Cir.1990); Gelardi v. Pertec Computer Corp., 761 F.2d 1323, 1324-25 (9th Cir.1985) (per curiam). ERISA defines a fiduciary as anyone who exercises discretionary authority or control respecting the management or administration of an employee benefit plan. 1 8 Kyle asserted before the district court, and continues to assert on appeal, two bases for its argument that Pacific was an ERISA fiduciary. First, Kyle claims that the Administrative Services Agreement (Agreement) between Kyle and Pacific gives Pacific sufficient discretion over the Plan to make Pacific a fiduciary. Second, Kyle claims that regardless of the Agreement, Pacific actually exercised discretion and control over Plan assets. We reject both arguments. 9 The Agreement does not make Pacific a fiduciary over the Plan. The paragraphs of the Agreement upon which Kyle relies do not indicate that Pacific assumed any discretionary functions. On the contrary, these paragraphs detail functions that are merely ministerial. See 29 C.F.R. § 2509.75-8(D-2) (listing several purely ministerial functions, the performance of which do not make an entity an ERISA fiduciary). Moreover, the Agreement expressly requires Pacific to refer all discretionary questions regarding the payment of claims to Kyle for final decision. The Agreement also clearly states that Kyle retains the full responsibility for all claims under the Plan. 10 Further, Pacific's actions in administrating the Plan do not make Pacific a fiduciary. Kyle claims that Pacific exercised discretion not conferred by the Agreement when it improperly and untimely paid claims. However, Pacific's alleged negligence in following the Plan does not change the fact that Pacific was still obligated to follow the Plan and that Kyle retained ultimate responsibility under p 6 of the Agreement for all claims made under the Plan. Moreover, third party administrators like Pacific are not fiduciaries under ERISA when they merely perform ministerial duties or process claims. See Gelardi, 761 F.2d at 1325 (citing 29 C.F.R. § 2509.75-8(d-2)); Gibson, 915 F.2d at 417. Accordingly, we affirm the district court's dismissal of Kyle's breach of fiduciary duty claims against Pacific. 11 B. The District Court did not Err in Concluding that Pacific was not Liable as a Nonfiduciary to Kyle Under ERISA. 12 Under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), equitable relief for nonfiduciary liability is available only where a party in interest has participated in prohibited transactions. Call v. Sumitomo Bank, 881 F.2d 626, 635 (9th Cir.1989); Nieto v. Ecker, 845 F.2d 868, 873-74 & n. 7 (9th Cir.1988). Even if we were to assume that Pacific was a party in interest, there is no evidence that Pacific was engaged in a prohibited transaction under ERISA § 406(a)(1). 2 Therefore, the district court correctly concluded that ERISA § 502(a)(3) does not allow equitable relief for Kyle's nonfiduciary claims against Pacific. See Call, 881 F.2d at 635; Nieto, 845 F.2d at 874. 13 Moreover, even if we were to recognize equitable relief for nonfiduciary misconduct, Kyle's claim for unjust enrichment by Pacific would fail because Pacific was not unjustly enriched. See Mertens v. Hewitt Assoc., 948 F.2d 607, 612 (9th Cir.1991), cert. granted, --- U.S. ----, 113 S.Ct. 49, 121 L.Ed.2d 19 (1992). Nothing in Kyle's Second Amended Complaint alleged that Pacific received anything other than the compensation it contracted for under the Agreement. In fact, on appeal Kyle only claims that Pacific mismanaged the payment of claims, not that Pacific retained Plan proceeds for itself. Accordingly, we affirm the district court's dismissal of Kyle's nonfiduciary duty claims against Pacific. 14