Court Opinion

ID: 2756662
Source: CourtListenerOpinion
Date Created: 2014-12-02 21:00:55.78979+00
Date Added: 2024-06-11T10:31:36.536070
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                DEC 02 2014

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

DAVID BARBOZA,                                   No. 12-17439

              Plaintiff - Appellant,             D.C. No. 2:08-cv-00519-KJM-
                                                 GGH
  v.

CALIFORNIA ASSOCIATION OF                        MEMORANDUM*
PROFESSIONAL FIREFIGHTERS, a
California corporation; et al.,

              Defendants - Appellees.

DAVID BARBOZA,                                   No. 13-16652

              Plaintiff - Appellant,             D.C. No. 2:08-cv-00519-KJM-
                                                 GGH
  v.

CALIFORNIA ASSOCIATION OF
PROFESSIONAL FIREFIGHTERS, a
California corporation; et al.,

              Defendants - Appellees.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
DAVID BARBOZA,                             No. 13-16680

          Plaintiff - Appellee,            D.C. No. 2:08-cv-00519-KJM-
                                           GGH
 v.

CALIFORNIA ASSOCIATION OF
PROFESSIONAL FIREFIGHTERS, a
California corporation; et al.,

          Defendants - Appellants.

DAVID BARBOZA,                             No. 13-16888

          Plaintiff - Appellee,            D.C. No. 2:08-cv-00519-KJM-
                                           GGH
 v.

CALIFORNIA ASSOCIATION OF
PROFESSIONAL FIREFIGHTERS, a
California corporation; et al.,

          Defendants - Appellants.

              Appeal from the United States District Court
                 for the Eastern District of California
              Kimberly J. Mueller, District Judge, Presiding

                Argued and Submitted November 21, 2014
                        San Francisco, California

                                     2
Before: NOONAN and IKUTA, Circuit Judges, and ALBRITTON, Senior District
Judge.**

      David Barboza and the Plan administrators cross appeal the district court’s

order granting in part and denying in part summary judgment to each party, as well

as the district court’s order denying each party’s motion for attorneys’ fees and

costs. We have jurisdiction under 28 U.S.C. § 1291.

      The district court did not err when it determined that the Plan administrators’

decisions should be reviewed for an abuse of discretion. The Plan instrument

granted discretionary authority to the Plan administrators, and their failure to

timely render a decision within ninety days of Barboza’s administrative appeal was

not a “wholesale and flagrant” procedural requirement violation that alters the

abuse of discretion standard of review. See Abatie v. Alta Health & Life Ins. Co.,

458 F.3d 955, 963, 971 (9th Cir. 2006) (en banc). Nor is the Plan administrators’

failure to notify Barboza until the eve of his appeal that the issue of section 4850

pay would be considered at his hearing such a “wholesale and flagrant” procedural

violation, particularly since the Plan administrators had repeatedly instructed

Barboza to consider the availability of such pay. See Saffon v. Wells Fargo & Co.

Long Term Disability Plan, 522 F.3d 863, 871–72 (9th Cir. 2008).

       **
             The Honorable William H. Albritton III, Senior District Judge for the
U.S. District Court for the Middle District of Alabama, sitting by designation.

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      The district court erred in holding that the Plan was entitled to set off a full

year of section 4850 benefits against Barboza’s benefit award. Under the terms of

the Plan instrument, the Plan was entitled to offset the first two months of

administrative leave pay, which Barboza conceded was a “negotiated substitute”

for section 4850 pay. But there remains a genuine issue of material fact as to

whether the Plan required Barboza to retire in a manner that would entitle him to a

full year of section 4850 benefits. We remand this issue to the district court for

further proceedings.

      The district court did not err in holding the Plan administrators did not abuse

their discretion in offsetting Barboza’s benefit award by his workers’

compensation settlement. The Plan instrument states that the Plan administrators

need not perfect a lien to be entitled to such an offset, and the Plan may recover

from any future benefits, “regardless of their characterization and including,

without limitation, future medical claims.”

      The district court did not abuse its discretion in declining to award Barboza

statutory penalties under 29 U.S.C. § 1132(c)(1)(B) as a result of the Plan

administrators’ failure to furnish documents he requested. Although a showing of

prejudice is not required for a district court to grant damages under 29 U.S.C.

§ 1132(c)(1)(B), see 29 C.F.R. 2560.503.1(m)(8)(i)–(iii), the decision to grant such

                                           4
damages is “in the court’s discretion,” 29 U.S.C. § 1132(c)(1)(B). Here, the

district court declined to award damages after it first determined that Barboza was

not prejudiced or denied the ability “to meaningfully participate in the appeals

process” as a result of the Plan administrator’s delay in providing the requested

documents. The district court therefore provided cogent reasons for declining to

exercise its discretion and its decision was not illogical, implausible, or without

support in the record. See United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir.

2009).

         The district court failed to address Barboza’s motion for prejudgment

interest on his award of ERISA benefits. We therefore remand this issue to the

district court to consider whether Barboza’s request for prejudgment interest on his

benefits award is warranted.

      On the Plan administrators’ cross appeal, the district court did not err in

holding that the Plan may offset only Barboza’s net earnings from his self-

employment, rather than his gross earnings. The ordinary definition of the term

“earnings” is “net earnings” rather than “gross earnings.” See, e.g., Webster’s

Third International Dictionary 714 (3d ed. 2002).

      We vacate the district court’s injunction requiring the Plan administrators to

amend the Plan instrument’s non-ERISA-compliant appeals procedures. Such

                                          5
relief was rendered moot by this court’s decision in Barboza’s first appeal,

Barboza v. Cal. Ass’n of Prof’l Firefighters, 651 F.3d 1073 (9th Cir. 2011).

      Finally, the district court did not abuse its discretion in denying the parties’

cross motions for attorneys’ fees and costs under ERISA’s discretionary fee-

shifting provision, 29 U.S.C. § 1132(g)(1). The district court’s decision to not

award these discretionary fees was not illogical, implausible, or without support in

the record because, after considering the five factors enumerated in Hummell v.

S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980), it reasonably concluded that

neither party acted in bad faith, the case presented complex issues for adjudication,

and the Plan administrators’ attempts to offset Barboza’s benefits were “inherently

reasonable.” We therefore affirm the district court’s denial of the cross motions for

discretionary attorneys’ fees and costs. Each party will bear its own costs on

appeal.

      AFFIRMED in part, REVERSED in part, VACATED in part, AND

REMANDED for further proceedings consistent with this memorandum

disposition.

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