Court Opinion

ID: 3150692
Source: CourtListenerOpinion
Date Created: 2015-10-29 17:00:31.238651+00
Date Added: 2024-06-11T07:38:34.320947
License: Public Domain

NOT PRECEDENTIAL

         UNITED STATES COURT OF APPEALS
              FOR THE THIRD CIRCUIT

                      _____________

                       No. 14-3747
                      _____________

             DARRELL EUGENE WILLIAMS,

                                  Appellant

                             v.

               THE WEBB LAW FIRM, P.C.

       On Appeal from the United States District Court
          for the Western District of Pennsylvania
            (District Court No.: 2-12-cv-01702)
        District Judge: Honorable Joy Flowers Conti

         Submitted under Third Circuit LAR 34.1(a)
                  on September 11, 2015

Before: VANASKIE, SLOVITER, and RENDELL, Circuit Judges

              (Opinion filed: October 29, 2015)
                                      O P I N I O N*

RENDELL, Circuit Judge:

       Plaintiff-Appellant Darrell E. Williams, Esq., appeals the District Court’s grant of

summary judgment in favor of Defendant-Appellee Webb Law Firm, P.C. (“WLF”).

Williams sued WLF for violation of the Employee Retirement Income Securities Act of

1974 (“ERISA”)—specifically, for breach of fiduciary duty by misclassifying him as an

independent contractor, instead of as an employee. The District Court granted summary

judgment because Williams’ claim is barred by the applicable statutes of limitations in 29

U.S.C. § 1113. We will affirm.

                                     I. Background

       In January 2001, Williams began working for WLF under an independent

contractor agreement (the “First ICA”) as a patent attorney. On July 1, 2001, Williams’

employment status changed so that he was an associate attorney, receiving full

employment benefits. However, on January 1, 2006, Williams returned to being

classified as an independent contractor and began working under the terms of a Second

ICA. According to Williams, his work duties and activities were the same as when he

was an associate.

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.

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       On January 10, 2007, Williams signed a Third ICA, which reiterated that he was

an independent contractor. On May 16, 2007, the parties signed an addendum to the

Third ICA, pursuant to which WLF agreed to pay a scaled percentage of Williams’ total

monthly medical costs, depending on how many hours Williams billed.

       On November 15, 2009, Williams’ relationship with WLF was terminated.

Williams applied for unemployment benefits within two weeks of his termination, and he

began to receive unemployment benefits in May 2010.

       On November 8, 2012, Williams filed the present complaint. The District Court

granted summary judgment to WLF based on the statutes of limitations in 29 U.S.C.

§ 1113. Those statutes of limitations provide that a lawsuit for ERISA breach of

fiduciary duty is barred if filed either more than six years after “the date of the last action

which constituted a part of the breach” or more than three years after the date that the

plaintiff had “actual knowledge” of the breach. 29 U.S.C. § 1113. Williams’ lawsuit

failed under both: (1) the date of the last action which formed a part of WLF’s alleged

breach of fiduciary duty occurred on January 1, 2006 (and, therefore, the six-year statute

of limitations in 29 U.S.C. § 1113(1) bars Williams’ claim), and (2) Williams knew about

the material elements of WLF’s alleged breach and knew that these actions constituted a

breach of a fiduciary duty, at the latest, in May 2007 (and therefore the three-year statute

of limitations in § 1113(2) bars his claim). Williams appealed.

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                                         II. Analysis1

       To succeed on appeal, Williams must show that the District Court erred twice: first

in determining that the six-year statute of limitations in 29 U.S.C. § 1113(1) bars

Williams’ claim, and second in determining that the three-year “actual knowledge”

statute of limitations in 29 U.S.C. § 1113(2) bars his claim. He cannot show error in

either determination.

       A.      Six-Year Statute of Limitations

       ERISA provides that “[n]o action may be commenced under this title with respect

to a fiduciary’s breach of any responsibility, duty, or obligation . . . (1) six years after . . .

the date of the last action which constituted a part of the breach or violation.” 29 U.S.C.

§ 1113(1). We must ask when the “date of the last action” was in this case.

       The District Court determined that the date of the last action was the date that

WLF allegedly misclassified Williams as an independent contractor—i.e., January 1,

2006, when Williams began working under the Second ICA. Williams urges that the

proper date is when Williams began working under the Third ICA or, alternatively, when

he began working under the subsequent addendum to the Third ICA. If the date of the

last action is either of the dates Williams urges, then the six-year statute of limitations

does not bar his claim.

       The District Court was correct. Neither the Third ICA nor its addendum purported

to alter Williams’ employment status: they merely repeated the alleged misrepresentation

1
 “We exercise plenary review of the District Court’s order for summary judgment.”
Daniels v. Sch. Dist. of Phila., 776 F.3d 181, 192 (3d Cir. 2015).

                                          4
of Williams’ employment status as an independent contractor. We have held that

subsequent misrepresentations that are “mere continuations of the initial

misrepresentations that led to the changes of employment” do not extend the date of last

action. Ranke v. Sanofi-Synthelabo Inc., 436 F.3d 197, 203 (3d Cir. 2006). It follows

that, in a case where an employee’s employment status is misrepresented as independent

contractor, mere continuations of the initial misrepresentation do not extend the date of

last action. Thus, because the Third ICA (and addendum) merely continued to state that

Williams was an independent contractor, the date of last action was the effective date of

the Second ICA. Accordingly, the six-year statute of limitations bars Williams’ claim.

       B.     Three-Year Statute of Limitations

       Alternatively, Williams’ claim fails pursuant to the three-year statute of limitations

in 29 U.S.C. § 1113(2). ERISA provides that “[n]o action may be commenced under this

title with respect to a fiduciary’s breach of any responsibility, duty, or obligation . . . (2)

three years after the earliest date on which the plaintiff had actual knowledge of the

breach or violation.” 29 U.S.C. § 1113(2). We must ask when Williams had actual

knowledge of his claim. Williams urges that he did not have actual knowledge until he

knew that the law treated him as an employee, whereas the District Court found that he

had “actual knowledge” once he knew all the material facts about his employment status.

       In Gluck v. Unisys Corp., we held that “‘actual knowledge of a breach or

violation’ requires that a plaintiff have actual knowledge of all material facts necessary to

understand that some claim exists, which facts could include necessary opinions of

experts, knowledge of a transaction’s harmful consequences, or even actual harm.” 960

                                         5
F.2d 1168, 1177 (3d Cir. 1992) (citations omitted) (quoting 29 U.S.C. § 1113(2)). In

other words, “‘[a]ctual knowledge of a breach or violation’ requires knowledge of all

relevant facts at least sufficient to give the plaintiff knowledge that a fiduciary duty has

been breached or ERISA provision violated.” Id. at 1178.

       Subsequently, in National Security Systems, Inc. v. Iola, we clarified that “[w]hat

matters here is whether [plaintiffs] had actual knowledge of all material facts necessary to

appreciate that a claim against [defendant] existed.” 700 F.3d 65, 100 (3d Cir. 2012).

We rejected as “meritless” the Iola plaintiffs’ contention that they lacked actual

knowledge that the defendant was a fiduciary, given that they “ceded to [defendant]

discretionary authority to manage and administer plan assets.” Id. at 99. In other words,

it does not matter whether the plaintiffs knew that the law would deem the defendant to

be a fiduciary, so long as the plaintiffs knew all the relevant facts that would give the

defendant fiduciary status. See id.

       Like the Iola plaintiffs, Williams contends that he did not know the law would

treat him as an employee, but he does not deny that he knew all the facts relevant to

deeming him an employee. As the District Court stated, it is “‘patently obvious’” that,

“by May 2007, Williams knew all the material elements of [WLF’s] breach of its

fiduciary duty.” (App. 24 (quoting Kurz v. Phila. Elec. Co., 96 F.3d 1544, 1551 (3d Cir.

1996)).) Williams did not need to know he was entitled to unemployment benefits under

the law in order to have actual knowledge of the alleged breach. Accordingly, the three-

year statute of limitations bars his claim.

                                       III. Conclusion

                                         6
For either of the foregoing reasons, we will affirm.

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