Court Opinion

ID: 2965228
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:37:34.022881+00
Date Added: 2024-06-11T11:43:06.301129
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT

                              _________________________

          No. 97-1666

                              JAMES J. BEDDALL, ET AL.,

                               Plaintiffs, Appellants,

                                          v.

                         STATE STREET BANK AND TRUST COMPANY,

                                 Defendant, Appellee.

                              _________________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                       [Hon. Mark L. Wolf, U.S. District Judge]
                                           ___________________

                              _________________________

                                        Before

                                Selya, Circuit Judge,
                                       _____________

                            Coffin, Senior Circuit Judge,
                                    ____________________

                         and Shadur,* Senior District Judge.
                                      _____________________

                              _________________________

               James S. Ray,  with whom William G. Bell,  Barry Klickstein,
               ____________             _______________   ________________
          and  Abrams,  Roberts, Klickstein  &  Levy  were  on  brief,  for
               _____________________________________
          appellants.
               Henry C.  Dinger, with whom  Henry C. Dinger, P.C.,  Dori C.
               ________________             _____________________   _______
          Gouin,  and  Goodwin, Procter  &  Hoar  LLP  were on  brief,  for
          _____        ______________________________
          appellee.

                              _________________________

                                  February 27, 1998
                              _________________________

          __________
          *Of the Northern District of Illinois, sitting by designation.

                    SELYA, Circuit  Judge.   A cadre  of former  pilots for
                    SELYA, Circuit  Judge.
                           ______________

          Eastern  Airlines, Inc.  (Eastern) brought  an  action under  the

          Employee Retirement Income Security Act (ERISA), 29 U.S.C.   1001

          et seq. (1994),  against the trustee of the  failed air carrier's
          __ ____

          retirement  plan.   The district  court dismissed the  suit after

          reviewing the trust agreement and concluding that the trustee was

          not subject to ERISA liability  as a fiduciary or co-fiduciary in

          respect to the harms alleged.  The plaintiffs appeal.  We affirm.

          I.  BACKGROUND
          I.  BACKGROUND

                    We  draw the facts  from the plaintiffs'  complaint and

          the trust agreement.  In 1958, Eastern and the union representing

          its pilots  established  a defined  contribution retirement  plan

          (the Plan) designed  to provide retirees with a  range of pension

          options.     Almost   a   quarter-century   later,   the   Plan's

          administrative committee (the TAC) retained State Street Bank and

          Trust  Company (the  Bank) to  hold the  Plan's assets  in trust,

          manage them as directed, and  periodically report their value (so

          that  the   TAC,  inter  alia,  could  effectuate   the  Plan  by
                            _____  ____

          calculating  annuity  and  lump-sum  retirement  benefits).   The

          parties spelled out the Bank's duties and obligations qua trustee
                                                                ___

          in a trust agreement (the Agreement).

                    As time  went  by, the  Plan invested  heavily in  real

          estate.   In reporting the  value of these investments,  the Bank

          relied on  information obtained  from Hawthorne  Associates, Inc.

          (Hawthorne), the Plan's principal investment manager, in the form

          of periodic appraisals prepared by Blake, a consultant engaged by

                                          2

          Hawthorne.   Despite  a  subsequent decline  in  the real  estate

          market, Blake assigned consistently high valuations to the Plan's

          properties and the  Bank parroted those valuations in its reports

          to the TAC.

                    In the summer of 1991, the Bank expressed concern anent

          the   figures  supplied  by  Hawthorne.    Eventually,  it  hired

          Spaulding  & Slye (S&S), an independent appraisal firm, to review

          Blake's  handiwork.   Upon  encountering  difficulty  in  gaining

          access to the necessary information, the Bank wrote to  Hawthorne

          stating that:

                    Our appraiser is prepared to begin his review
                    on Monday, October 7.  If he is not permitted
                    to  begin his review by Friday, October 11 on
                    the basis of full access to the documents, we
                    believe  that we have no recourse but to seek
                    the advice of  the Department of Labor  as to
                    our concerns about Hawthorne's instructing us
                    to  continue  to report  the  real  estate at
                    values  supplied by  Hawthorne as  investment
                    manager.

          In short  order, Hawthorne  relented and  an unencumbered  review

          proceeded.

                    S&S thereafter  issued a report that criticized Blake's

          valuations and recommended that new appraisals  be secured from a

          new appraiser.   The Bank submitted the S&S  report to the TAC on

          November 8, 1991.   One week later,  the Bank wrote to  the TAC's

          attorney expressing concern that, according to S&S, "many of  the

          appraisals  are  incomplete  and/or  suffer  from  methodological

          flaws."  The Bank declared that it was  "unwilling to continue to

          carry  these valuations  on its  books  without qualification  in

          light of the[se] concerns."   Within a matter of weeks, Hawthorne

                                          3

          informed the  Bank that  it had lowered  the appraised  values of

          certain properties.   The Bank  accepted the new  figures without

          further investigation.

                    The TAC eventually retained an independent appraiser to

          assess the Plan's real estate holdings.  This exercise culminated

          in  a substantial  reduction of  the  reported values.   At  that

          point,  it became evident that Blake's exaggerated valuations had

          skewed the Plan's  finances:  because inflated  appraisal figures

          had  been  carried on  the  Plan's  books  for nearly  a  decade,

          retiring pilots who opted for lump-sum retirement benefits during

          that  period  received  a windfall,  whereas  the  remaining Plan

          participants were left holding an unduly depleted bag.

          II.  THE ENSUING LITIGATION
          II.  THE ENSUING LITIGATION

                    Eastern filed for bankruptcy  in 1989.  In due  course,

          several quondam pilots  brought an  action in  a Florida  federal

          court against the  Plan, its sponsors, the TAC,  and sundry other

          parties  (not including  the Bank).    The plaintiffs'  complaint

          invoked ERISA and  alleged myriad breaches  of fiduciary duty  in

          connection with the investment of the Plan's assets.  See Beddall
                                                                ___ _______

          v.  Eastern Air Lines, C.A. No.  91-1865-CIV (S.D. Fla.) (Beddall
              _________________                                     _______

          I).   The Florida  court transferred  the case to  Massachusetts.
          _

          See 28 U.S.C.   1404(a).
          ___

                    The Beddall I  plaintiffs moved to amend  the complaint
                        _________

          to add  the Bank  as a  defendant.   As a  precaution, they  also

          initiated a separate  suit against the Bank in  the Massachusetts

          federal court  (Beddall II).   The complaint  in the  latter suit
                          __________

                                          4

          charged  that the Bank  violated ERISA's fiduciary  provisions by

          its failure  to  ensure  that  the Plan's  holdings  were  valued

          appropriately.

                    Judge   Wolf  eventually   approved   a  class   action

          settlement in Beddall I, see Beddall v. Eastern Airlines Variable
                        _________  ___ _______    _________________________

          Benefit Retirement Plan for  Pilots, No. 93-12074 (D.  Mass. Nov.
          ___________________________________

          7,  1996) (order approving final settlement),1 and the plaintiffs

          withdrew  the pending motion  to amend.   The Bank  then moved to

          dismiss Beddall II  for failure to  state a claim.   See Fed.  R.
                  __________                                   ___

          Civ. P.  12(b)(6).  The district  court granted the motion.   See
                                                                        ___

          Beddall II, 1996 WL 74218 (D.  Mass. Feb. 14, 1996).  Judge  Wolf
          __________

          concluded that, because  the Agreement absolved  the Bank of  any

          fiduciary  responsibility for  the  alleged overvaluation  of the

          Plan's real  properties once  the TAC  engaged  Hawthorne as  the

          investment  manager in  respect to  those  assets, the  complaint

          failed to state an actionable ERISA claim for breach of fiduciary

          duty.  See id. at *1-*2.  Then,  citing ERISA   405(d), 29 U.S.C.
                 ___ ___

            1105(d), the judge  determined that, even if  the Bank knew  or

          should  have  known  of Hawthorne's  indiscretions,  co-fiduciary

          liability did not attach in the absence of an allegation that the

          Bank had participated actively in, or concealed, the breach.  See
                                                                        ___

          id. at *2.  This appeal ensued.
          ___

          III.      STANDARD OF REVIEW
          III.      STANDARD OF REVIEW

                              
          ____________________

               1Under  the settlement, the  named defendants paid  the Plan
          more than $10,000,000.   As a condition of  the settlement, Judge
          Wolf  precluded the  Bank  from impleading  any  of the  settling
          defendants in the instant action.

                                          5

                    We   afford  de  novo  review  to  a  district  court's

          resolution  of  a motion  to  dismiss.    See Garita  Hotel  Ltd.
                                                    ___ ___________________

          Partnership v. Ponce Fed. Bank, 958 F.2d 15, 17 (1st  Cir. 1992).
          ___________    _______________

          Like  the  court  below  we  must  accept  as  true  the  factual

          allegations of the complaint, construe all  reasonable inferences

          therefrom in favor of  the plaintiffs, and determine  whether the

          complaint, so read, limns facts sufficient to justify recovery on

          any  cognizable theory  of the  case.   See  Dartmouth Review  v.
                                                  ___  ________________

          Dartmouth College, 889 F.2d 13, 16 (1st Cir. 1989).
          _________________

                    This is familiar lore.   Here, however, there is an odd

          twist:   the court below  scrutinized not only the  complaint but

          also the  Agreement    and it is  undisputed that  the plaintiffs

          neither  appended  the  latter  document  to  the  complaint  nor

          incorporated  it  therein  by an  explicit  reference.    In this

          posture  of  the case,  the  lower court's  consideration  of the

          Agreement gives us pause.

                    We think  that this  situation calls  for a  practical,

          commonsense  approach    one  that  does  not elevate  form  over

          substance.  The complaint discusses the Agreement at considerable

          length.  And, although it states conclusorily that  "State Street

          is a  fiduciary of the Plan,"  it then proceeds to  summarize the

          parts  of the Agreement  that, in  the plaintiffs'  view, justify

          this characterization.   The Bank responded to  these allegations

          by filing a  Rule 12(b)(6) motion and  appending to it a  copy of

          the   Agreement.     The   plaintiffs   neither   challenged  the

          authenticity of  the Agreement  nor moved to  strike it  from the

                                          6

          record.

                    Under these  circumstances, the Agreement  was properly

          before   the  court.    When,   as  now,  a  complaint's  factual

          allegations  are expressly linked  to   and  admittedly dependent

          upon   a document (the  authenticity of which is not challenged),

          that document effectively merges into the pleadings and the trial

          court can review it  in deciding a motion  to dismiss under  Rule

          12(b)(6).   See Fudge  v. Penthouse Int'l,  Ltd., 840  F.2d 1012,
                      ___ _____     ______________________

          1015  (1st Cir. 1988); see  also Branch v.  Tunnell, 14 F.3d 449,
                                 ___  ____ ______     _______

          454 (9th Cir. 1994) ("[D]ocuments whose contents are alleged in a

          complaint  and whose authenticity  no party questions,  but which

          are not physically attached to the pleading, may be considered in

          ruling on a Rule 12(b)(6) motion to dismiss."); 2 James Wm. Moore

          et  al., Moore's  Federal  Practice     12.34[2]  (3d  ed.  1997)
                   __________________________

          (explaining  that  courts  may  consider "[u]ndisputed  documents

          alleged or referenced  in the complaint" in deciding  a motion to

          dismiss); see generally Fed. R.  Civ. P. 10(c) (stating that "[a]
                    ___ _________

          copy of any written  instrument which is an exhibit to a pleading

          is a part thereof").   Accordingly, we conclude that the district

          court  had the authority to consider the Agreement if it chose to

          do so.

                    This  conclusion  makes  eminent  sense.    A  district

          court's  central task  in evaluating  a motion  to dismiss  is to

          determine whether the complaint alleges facts sufficient to state

          a cause  of action.  In conducting  that tamisage, the court need

          not accept  a  complaint's "bald  assertions"  or  "unsupportable

                                          7

          conclusions."  Chongris v. Board of Appeals, 811 F.2d 36, 37 (1st
                         ________    ________________

          Cir. 1987).   While a plaintiff only is obliged  to make provable

          allegations,  the court's  inquiry into  the  viability of  those

          allegations  should not be hamstrung simply because the plaintiff

          fails to append to the complaint the  very document upon which by
                                                                         __

          her own admission the allegations rest.  Any other approach would
          ___ ___ _________

          seriously  hinder recourse  to Rule  12  motions, as  a plaintiff

          could thwart the  consideration of a critical  document merely by

          omitting  it from the complaint.   We doubt  that the drafters of

          the Civil Rules, who envisioned Rule 12(b)(6) motions as a swift,

          uncomplicated  way to weed out plainly unmeritorious cases, would

          have countenanced such a result.

                    To their  credit, the plaintiffs  tacitly concede  that

          the  lower court  had  the prerogative  to  review the  Agreement

          notwithstanding its omission from the complaint.  They asseverate

          instead  that the  court should  not  have done  so without  also

          enabling them to submit other evidence (and, thereby, convert the

          motion  before the  court into  one  for summary  judgment).   We

          reject  that  asseveration  and hold  that  consideration  of the

          Agreement  did not in itself compel the court to treat the motion

          before it as  one for  summary judgment.2   See Fed.  R. Civ.  P.
                                                      ___
                              
          ____________________

               2There is a  certain irony to  the plaintiffs' criticism  of
          the district court's course  of action.  Although the  conversion
          of  the plaintiffs'  motion  would have  enabled  them to  submit
          evidence regarding the Bank's fiduciary responsibilities, the act
          of  conversion  also  would have  imported  the  summary judgment
          standard into  the case  and raised the  bar for  the plaintiffs.
          See Fed. R. Civ. P. 12(b).  By eschewing conversion, the district
          ___
          court ensured that  the plaintiffs' complaint would  be subjected
          to  the  less  demanding  scrutiny  associated  with  motions  to

                                          8

          12(b).  We offer three reasons in support of this ruling.  First,

          the  Agreement's centrality  to the  plaintiffs' contentions,  as

          limned  in  their complaint,  makes  it  in  effect part  of  the

          pleadings,   and,   thus,   differentiates  its   evaluation   in

          conjunction  with a  motion  to dismiss  from  the assessment  of

          traditional extrinsic  evidence.   See Venture  Assocs. Corp.  v.
                                             ___ ______________________

          Zenith  Data  Sys. Corp.,  987  F.2d  429,  431 (7th  Cir.  1993)
          ________________________

          ("Documents that a defendant attaches  to a motion to dismiss are

          considered a part of the pleadings if they are referred to in the

          plaintiff's complaint and  are central to her  claim.").  Second,

          and relatedly, the  complaint predicates  the plaintiffs'  claims

          regarding the existence of the Bank's ostensible fiduciary duties

          solely on  the Agreement,  not on external  events.   Lastly, the

          conversion of a Rule 12(b)(6) motion  into a Rule 56 motion is  a

          matter  quintessentially  within  the  purview  of  the  district

          court's sound discretion.  See Garita Hotel, 958 F.2d at 18.
                                     ___ ____________

          IV.  ANALYSIS
          IV.  ANALYSIS

                    We begin  our treatment of the merits  by examining the

          pertinent portions of ERISA's statutory  scheme.  We then turn to

          the plaintiffs' triad of claims:  (1) that the complaint states a

          cause of action  for fiduciary liability by reason  of the Bank's

          discretionary authority over the Plan's real estate holdings; (2)

          that the complaint states a claim for fiduciary liability arising

          out of the  Bank's conduct, including its role in  respect to the

          Plan's Short  Term Investment Fund  (the STIF); and (3)  that the
                              
          ____________________

          dismiss.

                                          9

          complaint  states a  claim  against  the  Bank  for  co-fiduciary

          liability.

                              A.  The Statutory Scheme.
                              A.  The Statutory Scheme.
                                  ____________________

                    ERISA's fiduciary duty provisions not only describe who

          is  a "fiduciary"  or "co-fiduciary,"  but  also what  activities

          constitute a  breach of fiduciary  duty.  In the  first instance,

          the statute reserves fiduciary liability for "named fiduciaries,"

          defined either as those individuals  listed as fiduciaries in the

          plan  documents  or   those  who  are  otherwise   identified  as

          fiduciaries pursuant to a plan-specified  procedure.  29 U.S.C.  

          1102(a)(2).  But the statute also extends fiduciary  liability to

          functional fiduciaries    persons who act as  fiduciaries (though

          not explicitly denominated as such) by performing at least one of

          several enumerated  functions with  respect to a  plan.   In this

          wise, the statute instructs that

                    a person  is a  fiduciary with  respect to  a
                    plan  to  the  extent  (i)  he  exercises any
                    discretionary   authority  or   discretionary
                    control respecting management of such plan or
                    exercises any authority or control respecting
                    management or disposition of its assets, (ii)
                    he renders  investment  advice for  a fee  or
                    other compensation, direct  or indirect, with
                    respect to  any moneys or  other property  of
                    such   plan,   or   has  any   authority   or
                    responsibility  to do so, or (iii) he has any
                    discretionary   authority  or   discretionary
                    responsibility in the  administration of such
                    plan.

          29 U.S.C.   1002(21)(A).

                    The key determinant of whether a person qualifies  as a

          functional   fiduciary   is   whether   that   person   exercises

          discretionary  authority in  respect  to,  or meaningful  control

                                          10

          over, an ERISA  plan, its administration, or its  assets (such as

          by rendering investment advice).  See O'Toole v.  Arlington Trust
                                            ___ _______     _______________

          Co.,  681  F.2d 94,  96 (1st  Cir.  1982); see  also 29  C.F.R.  
          ___                                        ___  ____

          2509.75-8, at  571 (1986).   We make  two points that  inform the

          application of this  rule.  First, the mere  exercise of physical

          control  or the  performance  of mechanical  administrative tasks

          generally  is insufficient  to  confer  fiduciary  status.    See
                                                                        ___

          Cottrill v. Sparrow,  Johnson & Ursillo, Inc., 74  F.3d 20, 21-22
          ________    _________________________________

          (1st Cir. 1996); Concha  v. London, 62 F.3d 1493,  1502 (9th Cir.
                           ______     ______

          1995),  cert.  dismissed,  116  S.  Ct.  1710  (1996).    Second,
                  _____  _________

          fiduciary status  is  not  an  all or  nothing  proposition;  the

          statutory language indicates  that a person  is a plan  fiduciary

          only "to the extent" that he possesses or exercises the requisite

          discretion and control.  29  U.S.C.   1002(21)(A).  Because one's

          fiduciary  responsibility under  ERISA  is  directly  and  solely

          attributable  to  his  possession or  exercise  of  discretionary

          authority, fiduciary  liability  arises  in  specific  increments

          correlated  to the vesting or performance of particular fiduciary

          functions in  service of the  plan, not in broad,  general terms.

          See Maniace v. Commerce  Bank, 40 F.3d 264, 267  (8th Cir. 1994);
          ___ _______    ______________

          Brandt v. Grounds, 687 F.2d 895, 897 (7th Cir. 1982); NARDA, Inc.
          ______    _______                                     ___________

          v. Rhode Island Hosp. Trust Nat'l Bank, 744 F. Supp. 685, 690 (D.
             ___________________________________

          Md. 1990).

                    An ERISA  fiduciary, properly  identified, must  employ

          within  the  defined  domain  "the  care,  skill,  prudence,  and

          diligence  under the circumstances then prevailing that a prudent

                                          11

          man  acting in  a like  capacity and  familiar with  such matters

          would use."  29 U.S.C.   1104(a)(1)(B).  The fiduciary should act

          "solely in the  interest of the participants  and beneficiaries,"

          and his overarching purpose should  be to "provid[e] benefits  to

          the  participants  and  their  beneficiaries"  and  to  "defray[]

          reasonable   expenses  of  administering   the  plan."     Id.   
                                                                     ___

          1104(a)(1).      A   fiduciary  who   fails   to   fulfill  these

          responsibilities is "personally liable to make good to [the] plan

          any losses to the plan resulting from  . . . such breach."  Id.  
                                                                      ___

          1109(a).

                    Co-fiduciary liability  is  a  shorthand  rubric  under

          which  one ERISA  fiduciary may  be  liable for  the failings  of

          another fiduciary.  Co-fiduciary liability inheres if a fiduciary

          knowingly participates in or conceals another fiduciary's breach,

          enables such  other to  commit a breach,  or learns about  such a

          breach and fails  to make reasonable efforts  to remedy it.   See
                                                                        ___

          id.   1105(a).  In  some circumstances, co-fiduciary liability is
          ___

          subject to a  special set of rules.   This is true,  for example,

          where the putative co-fiduciary is a trustee and the breach is at

          the  hands of  a plan-appointed  investment manager.   See  id.  
                                                                 ___  ___

          1105(d)(1) (stating generally that a trustee shall only be liable

          for a money manager's violation  if the former participates in or

          acts to conceal the breach).

                                B.  The Bank's Status.
                                B.  The Bank's Status.
                                    _________________

                    The  starting point for reasoned analysis of the Bank's

          fiduciary status is the Agreement.  In support of their assertion

                                          12

          that  the  Bank  bears fiduciary  responsibility  for Hawthorne's

          misvaluation  of  the  real estate  investments,  the  plaintiffs

          direct our attention to three sections of the Agreement, which we

          set out in pertinent part:

                    Section  3.   Investment of  the  Fund.   The
                    __________
                    Trustee [the Bank]  shall cause all principal
                    and income at any time forming  a part of the
                    fund to be  invested as a single fund,  . . .
                    in  such  property as  the  Trustee may  deem
                    proper and appropriate . . . .

                    Section 4.  Duties and Powers of the Trustee.
                    _________
                    The Trustee [the Bank] shall have the duties,
                    powers and  responsibilities with  respect to
                    the  Fund,   in  addition   to  and   not  in
                    modification or  limitation of  the authority
                    provided by law and this Agreement:

                         (a) to manage,  control and operate
                         the Fund and to prepare and  submit
                         to  the  Committee  [the  TAC]  and
                         Eastern, and otherwise  as required
                         by  applicable  law,  all financial
                         information,   including   periodic
                         valuation of the  Fund, as required
                         by   law,   the   Plan   and   this
                         Agreement;
                         . . .
                         (c)  to  invest  and  reinvest  the
                         Fund, as  provided in Section  3 of
                         this Agreement;
                         . . . .

                    Section 5.  Records, Accounting and Valuation
                    _________
                    of  the Assets  of Fund.    The Trustee  [the
                    Bank]  shall keep  accurate  accounts of  all
                    investments, receipts  and disbursements  and
                    other  transactions  hereunder  regarding the
                    Fund. . . .
                         Following the  close of  each month  the
                    Trustee shall provide the Committee [the TAC]
                    and  Eastern and  such  others as  they shall
                    direct  from  time  to time  with  a  monthly
                    report  of the assets held in  the Fund as of
                    the close of said month . . . .
                         . . . .
                         Except  as  otherwise provided  in  this
                    Section,  the  assets  of the  Trust  at  any

                                          13

                    monthly  or annual  valuation  date shall  be
                    valued at market value as  of such date . . .
                    .   Real property  . . .  shall be  valued at
                    market value  on the valuation  dates on  the
                    basis of information obtained from qualified,
                    available sources  such as  dealers, bankers,
                    brokers,  or appraisers  dealing or  familiar
                    with the type of  investment involved, or  on
                    the basis of reference to the market value of
                    similar investments; and the Trustee may rely
                    on an appraisal  of real property made  by an
                    independent appraiser deemed competent by the
                    Trustee,  within  two   years  prior  to  the
                    valuation  date  as of  which  such  value is
                    being determined.

          We also deem relevant to the Bank's status as regards real estate

          investments  another section of the Agreement that the plaintiffs

          tend to downplay.  We reprint that provision in pertinent part:

                    Section   6.     Appointment  of   Investment
                    ___________
                    Manager.  The  Committee [the TAC] .  . . may
                    direct the  Trustee [the Bank]  in writing to
                    segregate  all  or  a portion  of  the  Fund,
                    including  without   limitation,  all   or  a
                    portion  of   such  investments  as   may  be
                    initially  transferred  to   the  Trustee  in
                    accordance with  this Agreement, into  one or
                    more  separate   accounts  to  be   known  as
                    "Investment  Manager Accounts."  .  . .   The
                    Committee shall  promptly thereafter  appoint
                    for  each   Investment  Manager   Account  an
                    Investment  Manager  .  .  . and  shall  give
                    written  notice of  such  appointment to  the
                    Trustee. . . .
                         . . . .
                         It shall  be the  responsibility of  the
                    Committee  to  vest each  Investment  Manager
                    with the authority necessary to discharge its
                    duties hereunder and to properly direct  each
                    Investment Manager to perform such accounting
                    and valuation functions and such other duties
                    as shall  be necessary to enable  the Trustee
                    to fully perform hereunder.
                         The Trustee shall  follow the directions
                    of each  Investment Manager  with respect  to
                    the Investment  Manager Account  forming part
                    of   the   Fund;  provided   that   all  such
                    directions  be  in  writing,  signed  by   an
                    officer,  or  partner,   of  such  Investment

                                          14

                    Manager. .  . .   The  Trustee shall  have no
                    obligation to act pursuant  to any directions
                    from any Investment Manager unless and  until
                    it  receives   such  directions  in   a  form
                    satisfactory to it.
                         The Trustee shall have no responsibility
                    for supervising any  Investment Manager.  The
                    Trustee  shall  be  under  no  obligation  to
                    invest  or otherwise to  manage any  asset of
                    the Fund  which is subject to  the management
                    of any Investment Manager.  The Trustee shall
                    be under no  obligation to review or  to make
                    inquiries  as to  any action or  direction of
                    any  Investment  Manager  taken  as  provided
                    herein  or   as  to   any  failure  to   give
                    directions, nor to review or value the assets
                    held in any  Investment Manager Account,  nor
                    to  make any  suggestions  to the  Investment
                    Manager or Committee  or Eastern with respect
                    to  the  investment and  reinvestment  of, or
                    disposal  of investments  in, any  Investment
                    Manager  Account . .  . .   The Trustee shall
                    not be liable  for any act or omission of any
                    Investment  Manager,  except as  provided  in
                    Section 405(a) of ERISA [29 U.S.C.  1105(a)].
                         In the case  of any purchase or  sale of
                    real property by any Investment Manager,  the
                    Trustee shall have the right to request, as a
                    condition to its  executing any documents  or
                    paying  over  any  assets  of  the   Fund  in
                    connection  with  such transaction,  that  it
                    receive a certified appraisal of the value of
                    such property . . . .

                    The plaintiffs read these provisions, in the aggregate,

          as conferring  upon the  Bank sufficient authority  to make  it a

          fiduciary in regard to the Plan's real estate investments.  We do

          not agree.  The quoted text authorizes the Bank mainly to perform

          administrative  and  ministerial  functions in  respect  to those

          investments which,  like real estate, are held within a so-called

          Investment   Manager   Account.      Without   more,   mechanical

          administrative responsibilities (such as retaining the assets and

          keeping a  record of  their value) are  insufficient to  ground a

                                          15

          claim  of  fiduciary  status.    See  O'Toole,  681  F.2d  at  96
                                           ___  _______

          (concluding that a bank's duties "as the depository for the funds

          do not  include the discretionary, advisory  activities described

          by the  [ERISA]  statute"); Pension  Fund    Mid Jersey  Trucking
                                      _____________________________________

          Indus.   Local  701 v. Omni Funding Group, 731 F. Supp. 161, 174-
          ___________________    __________________

          75 (D.N.J. 1990) (similar).

                    To  give the devil his due, we acknowledge that section

          4, standing  alone, might be  construed as authorizing  the Bank,

          under  some circumstances,  to  manage  the  Plan's  real  estate

          investments in  a manner  that would render  it a  fiduciary with

          regard to the valuation of those assets.  Nevertheless, section 4

          cannot be read  in a vacuum.   The TAC nominated Hawthorne  as an

          investment manager in respect to the Plan's real estate holdings,

          and  the plain  language of  section  6 of  the Agreement  leaves

          little doubt but  that the TAC thereby  relieved the Bank  of all

          fiduciary responsibility regarding those  investments.  In terms,

          section  6  shifts   to  an  appointed  investment   manager  all

          discretion  over affected assets and makes the investment manager

            not the trustee   responsible for "perform[ing] such accounting

          and  valuation  functions  and  such  other  duties  as shall  be

          necessary  to enable  the Trustee  to fully  perform."   To cinch

          matters,   section  6   expressly   absolves   the   trustee   of

          "responsibility for supervising any Investment Manager"; confirms

          that the trustee  is not obliged "to review or  make inquiries as

          to any  action or  direction of any  Investment Manager,"  or "to

          review  or  value  the  assets held  in  any  Investment  Manager

                                          16

          account."   Further, it  proclaims, with  a single  exception not

          relevant  to this  discussion,  that the  trustee  "shall not  be

          liable for any act or omission of any Investment Manager."  These

          stipulations   strip   any  veneer   of  plausibility   from  the

          plaintiffs' bald assertion that  the Bank is a fiduciary  subject

          to liability  for Hawthorne's  overvaluation of  the Plan's  real

          property.

                    In  a last-ditch  attempt to  blunt the  force of  this

          conclusion,  the  plaintiffs  point to  language  that  gives the

          trustee the right  to reject the investment  manager's directions

          in certain circumstances   say, if those directions are not "in a

          form satisfactory to  it"   and they  argue that, as a  result of

          this "discretion" (to use plaintiffs' word), the Bank retains its

          status  as  a   fiduciary  notwithstanding  the   other  language

          contained in section 6.  This argument will not fly.

                    It  is  beyond cavil  that  when  the  TAC appoints  an

          investment manager  for designated  assets, the  Agreement shifts

          all significant  discretion and control over those  assets to the

          investment manager  and relegates the  trustee to the role  of an

          administrative  functionary.    With  section  6  velivolant, the

          Bank's  remaining  powers  are ministerial.    They  involve such

          details as  checking whether  Hawthorne's instructions  are in  a

          writing  signed  by  an authorized  person  and  issuing periodic

          reports to  the TAC anent the  Fund's status.  Although  the Bank

          arguably may  refuse to  follow instructions that  are not  in an

          acceptable  format, this negative discretion lies well within the

                                          17

          administrative sphere, and  its existence does not  transform the

          Bank into  a  fiduciary  vis- -vis  the affected  assets.3    See
                                                                        ___

          Arizona State Carpenters Pension Trust Fund v. Citibank, 125 F.3d
          ___________________________________________    ________

          715, 722 (9th Cir. 1997).

                    We need not paint the lily.  The complaint acknowledges

          that  the  TAC  appointed Hawthorne  to  manage  its real  estate

          investments.  In that circumstance, the trust document, read as a

          whole, divests  the Bank of  any and all management  authority or

          discretionary control  over those  assets.   Whatever the  Bank's

          powers  may  have  been  in  the  absence  of  a  duly  appointed

          investment  manager, no fiduciary responsibility in regard to the

          valuation  of  the  Plan's  real  estate  holdings  survived  the

          appointment.

                               C.  The Bank's Actions.
                               C.  The Bank's Actions.
                                   __________________

                    Charting   a  slightly   different  flight   path,  the

          plaintiffs urge us to set the  Agreement to one side and to  deem

          the Bank  a fiduciary  of the Plan's  real estate  investments by

          virtue of its actions.  They posit that, because the Bank was not

          entirely passive   it questioned Hawthorne's valuations,  engaged

          an independent  appraiser  to  review  Hawthorne's  numbers,  and

          ultimately  threatened  to  report Hawthorne's  practices  to the

                              
          ____________________

               3Similarly, the Bank's retention under section  6 of a right
          to secure a certified appraisal of the real estate does not alter
          the  decisional  calculus because  the  Bank  has  no such  duty.
                                                                      ____
          Indeed, section  6  explicitly  provides that  the  Bank  has  no
          obligation "to review or value  the assets held in any Investment
          Manager Account."

                                          18

          authorities   it acted as a fiduciary and thus we should treat it

          as one.  We think not.

                    As a  matter of  policy and  principle, ERISA does  not

          impose  Good Samaritan liability.  A financial institution cannot

          be  deemed  to  have volunteered  itself  as  a  fiduciary simply

          because it undertakes reporting responsibilities that exceed  its

          official  mandate.    Imputing  fiduciary  status  to  those  who

          gratuitously assist a  plan's administrators is undesirable  in a

          variety of ways, and ERISA's somewhat narrow fiduciary provisions

          are  designed to  avoid such  incremental costs.   See  generally
                                                             ___  _________

          Mertens v. Hewitt  Assocs., 508 U.S. 248, 262-63  (1993).  Viewed
          _______    _______________

          against this backdrop, a rule  that would dampen any incentive on

          the  part of depository institutions voluntarily to make relevant

          information available to fund administrators and other interested

          parties is counter-intuitive.  Moreover, such a wrong-headed rule

          "would  also  risk   creating  a  climate  in   which  depository

          institutions would routinely  increase their fees to  account for

          the  risk that fiduciary  liability might attach  to nonfiduciary

          work."  Arizona State Carpenters, 125 F.3d at 722.
                  ________________________

                    To  the extent  that  the plaintiffs'  fiduciary  claim

          derives from  the Bank's  activities with  regard to Plan  assets

          apart from real estate, it fares no better.  The plaintiffs argue

          that because the  Bank is a fiduciary with regard to the STIF, it

          had a statutory responsibility to make a timely disclosure to the

          Plan participants of  its concerns about Hawthorne's  real estate

          valuations.  We agree with the plaintiffs' premise   clearly, the

                                          19

          Bank had  some discretion  with regard to  investing cash  in the

          STIF   but their conclusion does not necessarily follow.

                    Refined to  bare essence,  the question  is whether  an

          ERISA fiduciary for one purpose has an obligation to disclose his

          suspicions  even when  there is  no nexus between  his particular

          fiduciary responsibilities and  the perceived jeopardy.   This is

          an  issue of  first impression,  certainly  in this  circuit, and

          perhaps  more broadly.   Good arguments exist on  both sides.  On

          the  one hand,  the  obligations  of  an ERISA  fiduciary,  while

          governed  by federal  law,  are  informed by  the  common law  of

          trusts.  That law generally treats the communication  of material

          facts   to  the  beneficiary  as   "the  core  of  a  fiduciary's

          responsibility."  Eddy  v. Colonial Life Ins. Co.,  919 F.2d 747,
                            ____     ______________________

          750  (D.C. Cir. 1990).4  On the  other hand, it is settled that a

          non-fiduciary's failure to communicate knowledge of a fiduciary's

          breach does not "constitute culpable participation in a breach of

          trust under ERISA."   Painters of Philadelphia  Dist. Council No.
                                ___________________________________________

          21 Welfare Fund v.  Price Waterhouse, 879 F.2d 1146, 1153 n.9 (3d
          _______________     ________________

          Cir. 1989).
                              
          ____________________

               4We note,  however, that  the Eddy  court described  ERISA's
                                             ____
          fiduciary duty  to disclose  as the  duty "not  only to  inform a
          beneficiary of  new and  relevant information  as it  arises, but
          also  to  advise  him of  circumstances  that  threaten interests
          relevant to the  relationship."  Eddy, 919 F.2d  at 750 (emphasis
          ______________________________   ____
          supplied).  Indeed, every case  that the plaintiffs have cited in
          support  of  an affirmative duty to  disclose arises in a context
          in which  the plaintiff  charges the  defendant with  withholding
          information   related  (i.e.,   relevant)   to  the   fiduciary's
          association with the  plan.  See,  e.g., Ream v.  Frey, 107  F.3d
                                       ___   ____  ____     ____
          147, 149-50 (3d Cir. 1997); Glaziers and Glassworkers Union Local
                                      _____________________________________
          No. 252 Annuity Fund v. Newbridge Sec., Inc., 93 F.3d 1171, 1175-
          ____________________    ____________________
          77 (3d Cir. 1996).

                                          20

                    Although this question is  both close and  interesting,

          we need not answer it today.   Apart from the co-fiduciary claim,

          considered  infra, the plaintiffs'  complaint does not  premise a
                      _____

          claim   on  the  Bank's   supposed  obligation  to   inform  Plan

          participants  of  the  suspected  misvaluations.    Instead,  the

          complaint predicates the plaintiffs' alternate claim of fiduciary

          liability  on  the  Bank's  "willingness  to  accept  Hawthorne's

          instructions  as to  the values  to  be carried  on [the  Bank's]

          books."   According to  the  complaint, this  gaffe "resulted  in

          those properties  being carried  on the  [Bank's] books  for many

          years at values  greatly in excess of their  market values, which

          in turn  led to retiring  pilots receiving millions more  in lump

          sum benefits  than  the benefits  to which  they were  entitled."

          Nowhere in the complaint (or in the plaintiffs' opposition to the

          motion to  dismiss, for that  matter) do the plaintiffs  make the

          entirely  distinct claim  that  the  Bank  breached  a  fiduciary

          obligation  under  ERISA   because  it  failed  to   notify  Plan

          participants of Hawthorne's erroneous appraisals.

                    That ends  the matter.   Afterthought  theories    even

          cleverly constructed afterthought theories   cannot be introduced

          for  the first  time in  an  appellate venue  through the  simple

          expedient  of dressing them  up to look  like preexisting claims.

          "If any  principle is settled in this circuit, it is that, absent

          the most  extraordinary circumstances, legal theories  not raised

          squarely in the lower court cannot be broached for the first time

          on appeal."  Teamsters Local No. 59 v. Superline Transp. Co., 953
                       ______________________    _____________________

                                          21

          F.2d 17, 21 (1st Cir. 1992); accord McCoy v. M.I.T., 950 F.2d 13,
                                       ______ _____    ______

          22  (1st   Cir.  1991).     Since  there  are   no  extraordinary

          circumstances  here      when  the  plaintiffs  sued,   they  had

          experienced  counsel, a  good grasp  of the  facts (honed  by the

          rigors of Beddall I), and ample time to decide which arguments to
                    _________

          press   that principle applies full bore. 

                             D.  Co-Fiduciary Liability.
                             D.  Co-Fiduciary Liability.
                                 ______________________

                    The plaintiffs' final approach  centers around a  claim

          that  the Bank  is liable  as a co-fiduciary.   This  claim comes

          perilously  close to suffering from the same procedural infirmity

          that  we have  just identified.   The  complaint is  not artfully

          pleaded and no  explicit co-fiduciary liability claim  appears on

          its face.   Nevertheless,  the plaintiffs  argued a  co-fiduciary

          liability claim  theory below  and the  district court  addressed

          it.5  So do we.

                    We need  not linger long.  The short  of it is that the

          plaintiffs' allegations, even  if well-pleaded and assumed  to be

          true,  do not  establish  a  violation  of  ERISA's  co-fiduciary

          provisions.   ERISA renders  a fiduciary vulnerable  to liability

          for breaches committed by other fiduciaries in three situations:

                    (1)  if  he  participates  knowingly  in,  or
                    knowingly undertakes  to conceal,  an act  or
                    omission  of  such other  fiduciary,  knowing
                    such act or omission is a breach;
                              
          ____________________

               5The lower  court apparently cobbled the  co-fiduciary claim
          together from a liberal reading  of the complaint.  The complaint
          does allege  that the Bank is a  fiduciary (an allegation that is
          irrefutable with regard to the  STIF), that it had some knowledge
          of   Hawthorne's  improprieties,  and  that  it  failed  to  make
          reasonable efforts to remedy the situation.

                                          22

                    (2) if, by  his failure to comply with  . . .
                    the    administration    of    his   specific
                    responsibilities which  give  rise  to    his
                    status as  a fiduciary, he  has enabled  such
                    other fiduciary to commit a breach; or
                    (3) if he  has knowledge of a  breach by such
                    other fiduciary,  unless he  makes reasonable
                    efforts under the circumstances to remedy the
                    breach.

          29 U.S.C.    1105(a).  Given  their allegations, the  plaintiffs'

          claim must stand  or fall on the  third of these scenarios.6   We

          think that it falls.

                    29 U.S.C.   1105(d) provides that a fiduciary (such  as

          the Bank)  cannot be  held responsible as  a co-fiduciary  on the

          basis of acts described in section 1105(a)(2) or (3):

                    If  an  investment manager  or  managers have
                    been appointed  . .  . then,  notwithstanding
                                                  _______________
                    subsections  (a)(2) and (3) . . ., no trustee
                    ___________________________
                    shall be liable from the acts or omissions of
                    such investment  manager or  managers, or  be
                    under  an obligation  to invest  or otherwise
                    manage any asset of the plan which is subject
                    to the management of such investment manager.

          29  U.S.C.    1105(d)  (emphasis  supplied).   Given  its literal

          meaning, section 1105(d) defenestrates the plaintiffs' claim that

          the Bank is subject to co-fiduciary liability in this instance.

                    The plaintiffs attempt  to steer away from  the obvious

          conclusion  and  to ensure  a  soft  landing  by two  stratagems.

          First,  they  point to  the exact  language of  section 6  of the

          Agreement  ("The Trustee  shall  not  be liable  for  any act  of

                              
          ____________________

               6Of course,  the  Bank  argues  that it  did,  indeed,  take
          reasonable steps to investigate Hawthorne's improprieties and put
          an  end to them.   The potential issues  relating to whether such
          steps actually were taken and/or their sufficiency are not before
          us, and we do not endeavor to decide those issues.

                                          23

          omission of the Investment Manager, except as provided in Section
                                              _____________________________

          405(a) of  ERISA [29  U.S.C.    1105(a)].") (emphasis  supplied).
          ________________

          This verbiage, they assert, evinces an intent to hold a fiduciary

          liable for all the conduct described in  section 1105(a), without

          reference to the exculpatory  provisions of section 1105(d).   We

          reject that assertion out of  hand.  The Agreement's reference to

          29  U.S.C.    1105(a)  can  only be  read  as incorporating  that

          section to  the extent that  it would impart liability  under the

          statute.   Cf. Chicago Bd. Options Exchange,  Inc. v. Connecticut
                     ___ ___________________________________    ___________

          Gen. Life  Ins. Co., 713 F.2d  254, 259 (7th Cir.  1983) (stating
          ___________________

          that "although the parties may  decide how much authority to vest

          in any  person, they  may not decide  how much  [ERISA] liability

          attaches to the exercise of that authority").

                    The plaintiffs'  second  attempt  to  avoid  the  clear

          implication of section  1105(d) is  disingenuous at  best.   They

          speculate  that  Hawthorne  may not  be  an  "investment manager"

          within the meaning  of the statute.   This suggestion contradicts

          the premise on  which the case has  been argued up to  this point

          and is  thus precluded.   In the  district court,  the plaintiffs

          repeatedly characterized Hawthorne as the Plan's "principal money

          manager," and never contended otherwise during the hearing on the

          motion to dismiss.  The  plaintiffs must have recognized that the

          district  court   understood  their  representations  to   be  an

          admission that Hawthorne was an investment  manager (at least for

          the purpose of the pending  Rule 12(b)(6) motion).  Moreover, the

          plaintiffs  made  no  effort  to  correct  the  district  court's

                                          24

          understanding  by moving for reconsideration after Judge Wolf had

          issued his  decision.   See, e.g., Vanhaaren  v. State  Farm Mut.
                                  ___  ____  _________     ________________

          Auto. Ins. Co.,  989 F.2d 1, 4-5  (1st Cir. 1993).   We generally
          ______________

          will  not permit litigants  to assert contradictory  positions at

          different  stages   of  a  lawsuit  in  order  to  advance  their

          interests.  See  Patriot Cinemas, Inc.  v. General Cinema  Corp.,
                      ___  _____________________     _____________________

          834  F.2d 208, 211-12 (1st Cir. 1987);  see also United States v.
                                                  ___ ____ _____________

          Levasseur, 846 F.2d 786, 792-93 (1st Cir. 1988) (stating the rule
          _________

          but  finding exceptional  circumstances sufficient  to warrant  a

          departure).  In all events, even if the investment manager gambit

          is not  judicially estopped, it  is surely waived inasmuch  as it

          makes its debut in this court.

          V.  CONCLUSION
          V.  CONCLUSION

                    We  need go  no further.   Because the  trust agreement

          (coupled with the TAC's  appointment of Hawthorne)  unambiguously

          establishes  that the  Bank retained  no discretionary  authority

          over  the  Plan's  real  estate investments,  we  hold  that  the

          complaint fails to state an actionable claim against the Bank for

          Hawthorne's overvaluation  of those assets.   By the  same token,

          the complaint fails to state an actionable claim for co-fiduciary

          liability  inasmuch as ERISA,  specifically 29 U.S.C.    1105(d),

          limits such liability  to knowing participation or  concealment  

          facts  not alleged  in  this  case.   Hence,  the district  court

          appropriately granted the Bank's motion to dismiss.

          Affirmed.
          Affirmed.
          ________

                                          25