Court Opinion

ID: 995517
Source: CourtListenerOpinion
Date Created: 2013-07-04 00:38:25.787416+00
Date Added: 2024-06-11T12:39:15.137488
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

JOSEPH F. CUNNINGHAM PENSION
PLAN; JOSEPH F. CUNNINGHAM,
Trustee on behalf of the Joseph F.
Cunningham Pension Plan,
Plaintiffs-Appellants,

v.
                                                               No. 97-2230
LINDA MATHIEU; TEFRA,
INCORPORATED,
Defendants-Appellees,

and

DAVID D. HUDGINS,
Defendant.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Catherine C. Blake, District Judge.
(CA-94-2789-CCB)

Argued: May 6, 1998

Decided: July 6, 1998

Before WILKINSON, Chief Judge, LUTTIG, Circuit Judge, and
BEEZER, Senior Circuit Judge of the
United States Court of Appeals for the Ninth Circuit,
sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

ARGUED: Joseph Francis Cunningham, CUNNINGHAM & ASSO-
CIATES, Alexandria, Virginia, for Appellants. Cynthia J. Morris,
PIPER & MARBURY, L.L.P., Washington, D.C., for Appellees. ON
BRIEF: Kimberly A. Rushton, CUNNINGHAM & ASSOCIATES,
Alexandria, Virginia, for Appellants.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

The Joseph F. Cunningham Pension Plan ("the Plan") and Joseph
F. Cunningham ("Cunningham") brought an action against Linda
Mathieu and TEFRA, Inc. (collectively, "Mathieu"), seeking damages
for breach of fiduciary duty under the Employment Retirement
Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461.
Cunningham and the Plan (collectively, "the plaintiffs") now appeal
the district court's grant of summary judgment in favor of Mathieu.
We have jurisdiction, 28 U.S.C. § 1291, and we affirm.

I

From 1985 to 1990 Cunningham and David Hudgins ("Hudgins")
were partners in the law firm of Cunningham & Hudgins. The part-
ners and employees of that firm were participants in the Plan. Cun-
ningham was trustee of the Plan. In 1989 the Plan hired Mathieu as
plan administrator. In 1990 the firm dissolved acrimoniously.
Hudgins established a successor law firm, and Mathieu began work-
ing as an ERISA plan administrator for that firm while continuing to
serve as administrator for the Plan.

The Plan reserved to Cunningham, as the employer, the power to
amend the Plan. In 1991 Mathieu asked Cunningham, as the employer

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and trustee of the Plan, to sign documents amending the Plan.
Mathieu told Cunningham that the amendments were necessary to
bring the Plan into compliance with the 1986 Tax Reform Act. How-
ever, the documents also amended the Plan in other respects. Previ-
ously, the Plan had provided for payment of benefits when
participants reached a designated retirement age. As amended, the
Plan permitted participants to receive the vested portion of their
accrued benefits, reduced to present value, after a one-year break in
service. Mathieu did not inform Cunningham that the documents that
she had provided him would result in this amendment.

Cunningham initially signed the documents without reading the
amendments to the Plan and thus did not realize that the amended
Plan provided for early payout of benefits. In January 1992 Cunning-
ham asked Mathieu to delay sending the revisions to the Internal Rev-
enue Service so that he could review the documents. The amendments
nevertheless went into force.

In 1992 Hudgins requested payment of the present value of his
vested benefits pursuant to the amended Plan. This request brought
the amendments to Cunningham's attention. In response to Hudgins'
request, Mathieu performed actuarial calculations to determine the
present value of the vested portion of Hudgins' accrued benefit. She
determined that Hudgins was entitled to $58,703. Believing that fig-
ure to be too high, Cunningham hired Steven Ostrander ("Ostrander")
to recalculate the benefits. Ostrander determined that Hudgins was
entitled to $25,000. Hudgins refused Cunningham's offer of that
amount and brought suit in district court ("the Hudgins litigation")
seeking payment of the higher figure. The district court awarded
Hudgins an amount less than that calculated by Mathieu but more
than that calculated by Ostrander. No attorneys' fees were awarded in
the Hudgins litigation.

The plaintiffs brought this action to recover the costs of the
Hudgins litigation. The district court dismissed the claims against
Hudgins and then granted summary judgment in favor of Mathieu on
the remaining claims. This timely appeal followed.

II

We review de novo a grant of summary judgment. Shaw v. Stroud,
13 F.3d 791, 798 (4th Cir. 1994). Summary judgment is appropriate

                    3
if there is no genuine issue of material fact and if the moving party
is entitled to judgment as a matter of law. Id. (citing Fed. R. Civ. P.
56(c)).

III

On appeal, the plaintiffs argue that the district court erred in hold-
ing (1) that Mathieu did not breach any fiduciary duty to the Plan in
recommending amendments to it without informing Cunningham of
the effect of those amendments and (2) that Mathieu did not cause any
harm to the Plan in miscalculating Hudgins' benefits because Hudgins
would have brought suit anyway. We affirm on alternate grounds. See
Thigpen v. Roberts, 468 U.S. 27, 30 (1984).

ERISA provides that "[a]ny person who is a fiduciary with respect
to a plan who breaches any of the responsibilities, obligations, or
duties imposed upon fiduciaries by this subchapter shall be personally
liable to make good to such plan any losses to the plan resulting from
each such breach . . . ." 29 U.S.C. § 1109(a). Mathieu was a person
designated by the employer as the plan administrator and thus was a
fiduciary under ERISA. See id. § 1102(a)(2). She may be held liable
under § 1109(a) for any losses resulting from a breach of her fiduciary
duty.

The plaintiffs argue that Mathieu breached her fiduciary duty under
§ 1104(a)* by making or recommending amendments to the Plan
without apprising Cunningham of the effect of those amendments.
Even if Mathieu breached her fiduciary duty in this regard, the plain-
tiffs cannot recover in this instance. To recover under § 1109(a), the
plaintiffs must demonstrate a "loss" to the Plan. But the plaintiffs do
not seek to recover the losses, if any, caused by Mathieu's role in
adopting the amendments. See Appellants' Opening Brief at 18-19
("[The plaintiffs] did not sue to recover the losses caused by the
Mathieu amendments, mandating lump sum payouts after a one year
break in service to Hudgins, in that the Plan remained liquid and
_________________________________________________________________
*Section 1104(a)(1) provides, in pertinent part, that "a fiduciary shall
discharge his [or her] duties with respect to a plan solely in the interest
of the participants and beneficiaries and . . . in accordance with the docu-
ments and instruments governing the plan . . . ."

                     4
funding adjustments were made to hopefully avoid prospective under-
funding."). Because the plaintiffs do not claim that the Plan suffered
a loss resulting from the early payout itself, they cannot recover for
Mathieu's breach of fiduciary duty, if any, in recommending or mak-
ing amendments to the Plan.

The plaintiffs seek instead to recover the costs of the Hudgins liti-
gation. The plaintiffs contend that these litigation costs derived from
Mathieu's miscalculation of Hudgins' benefits. According to the
plaintiffs, had Hudgins accepted Cunningham's offer of $25,000, the
litigation would not have occurred, and the Plan would not have
incurred any losses. Hudgins refused Cunningham's offer, plaintiffs
contend, as a result of Mathieu's earlier miscalculation.

Mathieu is not liable as a fiduciary in regard to her calculation of
Hudgins' benefits. Under ERISA, "a party is a fiduciary only as to the
activities which bring that person within the definition" of fiduciary
in 29 U.S.C. § 1002(21)(A). Coleman v. Nationwide Life Ins. Co., 969
F.2d 54, 61 (4th Cir. 1992). Calculation of benefits is not a fiduciary
duty within the meaning of § 1002(21)(A). 29 C.F.R. § 2509.75-8(D-
2). Because calculation of benefits is not a fiduciary duty, Mathieu
was not acting as a fiduciary in calculating Hudgins' benefits. She
therefore could not have breached a fiduciary duty to the Plan in cal-
culating Hudgins' benefits. Without a breach of fiduciary duty, there
can be no liability under § 1109(a). Mathieu is not liable for the costs
of the Hudgins litigation.

IV

The judgment of the district court is

AFFIRMED.

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