Court Opinion

ID: 8981334
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:23:57.27159+00
Date Added: 2024-06-11T17:10:40.576409
License: Public Domain

WIGGINS, Circuit Judge,
concurring:
I agree that this case must be remanded to the district court to determine the factual issue of when the plaintiff-trustees should have known of the failure of the defendant-employer to. pay the proper amount to the trust funds. The resolution of this issue is necessary to a determination of when the plaintiffs’ cause of action against the defendant accrued. I write separately because I would not decide the question of whether the defendant had a fiduciary duty to pay the proper amount to the trust funds. This question is not involved in the statute of limitations issue before the court.
We are in agreement that the four year limitation period for actions of this type by the trustees is proper and that such four year period accrues “when the plaintiff *1374knows or has reason to know of the injury that is the basis of the action." Maj.Op. at 6648. The present action was filed on February 1, 1988. Thus, all payment shortages of which the trustees by February 1, 1984 did not know, and in the exercise of reasonable care, could not have known, may be recovered in this action. This clearly includes all shortages which occurred after February 1, 1984. But it may also include some or all of the shortages which occurred from January 1, 1982 to February 1, 1984. For example, perhaps the trustees should not have been alerted to the existence of any of these shortages until September of 1984, when the employer discovered its payment error and began to pay the proper amount to the trust funds. Or, perhaps the trustees first should have learned that there were such shortages only in August of 1986, when the trustees audited the employer’s books. If either of these possibilities is found to exist, the present action is timely filed as to all sums at issue, including all those sums due and unpaid from January 1, 1982 to February 1, 1984, without regard to the question of whether the parties are fiduciaries.
By finding that the trust agreement makes the employer a fiduciary, the court defines their legal relationship, but it does not change the result in this case. For example, if the employer owed a fiduciary duty to the trustees to pay the proper amount to the trust funds, perhaps the employer had a duty to disclose that it had failed to pay the proper amount to the trust funds from January 1, 1982 to September 1, 1984 on or about the date that it discovered its error. Such a disclosure, if made, would have given the trustees notice that there were sums due and unpaid from January 1, 1982 to September 1, 1984 and would have commenced the running of the statutory period to recover these sums. However, that hypothesis is not this case. The employer did not give notice to the trustees.
If the employer had a fiduciary duty to pay the proper amount to the trust funds, the employer’s failure to give notice of its underpayments might give rise to an additional cause of action for breach of fiduciary duties. But the trustees did not assert a cause of action for breach of fiduciary duty before this court.
The only other possible consequence of the existence of a fiduciary relationship between the trustees and the employer that I see involves the frequency of the trustees’ audit of the employer’s books. The employer might on remand argue that the trustees should have audited the trust funds more frequently than every four years and, if the trustees had done so, they would have discovered some of the shortages prior to February 1, 1984. However, if the employer owed a fiduciary duty to the trustees, the trustees could be excused from auditing the trust funds more frequently than every four years.
We must remember, though, that this action was timely filed for all shortages of which the trustees knew or should have known by February 1, 1984. The first shortage occurred in January 1982. Therefore, the trustees would not, as the result of an audit, have discovered the shortages earlier than February 1984 unless they had audited the trust funds within approximately two years of the first shortage. I do not believe that the remote possibility that the employer could show on remand that in the absence of a fiduciary duty on the part of the employer, the trustees should have audited the trust funds more frequently than every two years justifies our deciding as a matter of law whether such a fiduciary duty exists.
This case must be remanded to the trial court to determine when the trustees’ cause of action accrued. In my view, whether the employer owes a fiduciary duty to the trustees does not affect that determination and, therefore, should not be decided.