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Barker v. American MOBIL Power Corp.

filed: September 8, 1995.


Appeal from the United States District Court for the Northern District of California. D.C. No. CV-90-01599-DLJ. D. Lowell Jensen, District Judge, Presiding.

Before: Jerome Farris, Robert Boochever, and Melvin Brunetti, Circuit Judges. Dissent by Judge Farris.

Per Curiam:

The plaintiffs brought this action against three former fiduciaries of an employee retirement plan. The plaintiffs alleged that the fiduciaries breached their duties under Section 404 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1104. Finding that ERISA's statute of limitations had run on the plaintiffs' claims with respect to two of the former fiduciaries, the district court granted summary judgment in favor of those two. After a bench trial on the plaintiffs' remaining claim against the third fiduciary, the district court held that no breach had been committed and entered judgment in the fiduciary's favor. The plaintiffs appeal from both judgments. We affirm in part and reverse in part.


In 1970, Spartan Associates, an air conditioner service and repair company, created the Spartan Service Associates Profit Sharing and Retirement Plan and Trust (the "Plan") for the benefit of its employees. The Plan established an Administrative Committee composed of Spartan officers or employees. The Trustees of the Plan were given discretionary authority to manage and invest Plan funds but were obligated to follow the directions of the Administrative Committee.

The Plan Agreement required the Administrative Committee to "establish and maintain an account in the name of each participant" and to "credit all allocations to each such participant pursuant to the provisions of [the Plan]." The Plan specified that employer contributions to the Plan were to be made from "current or accumulated net profit." The Plan also afforded employee participants the opportunity to make voluntary contributions to their accounts.

Defendants William Bro and Douglass Smith were appointed Trustees of the Plan in 1973. In 1979, both Bro and Smith wrote letters to Spartan stating that they were resigning from their positions at Spartan, although neither letter specifically mentioned their posts as Trustees. Defendant John Ayres was a member of the Administrative Committee and served as president of Spartan from 1981 to 1989, when the company went out of business.

Plaintiffs Robert Barker and Calvin Brown both had been employed by Spartan as service technicians for approximately twenty years. By virtue of their long-time employment with Spartan, each had fully vested in the Plan. While all other employees with vested rights under the Plan were fully paid, Barker and Brown never received their benefits despite repeated requests that they be paid from the Plan. The Plan's funds had apparently been depleted and there was no longer any money in the trust to pay Barker and Brown.

The plaintiffs filed this action alleging that the defendants breached their fiduciary duties under ERISA § 404 by mismanaging Plan funds.*fn1 The plaintiffs' complaint also asserted claims under ERISA § 502(c) for failure to furnish benefit information to a participant who requests such information.*fn2

The district court granted summary judgment to defendants Bro and Smith on the plaintiffs' breach of fiduciary duty claims. The court held that the claims were time barred by ERISA's statute of limitations. With respect to the plaintiffs' claim against Ayres, however, the court conducted a bench trial to determine whether Ayres had breached his fiduciary duty by assuring the plaintiffs at various times that their benefits were secure and available upon retirement, when in fact they were not. After the trial, the district court held that the plaintiffs had not demonstrated that Ayres breached his fiduciary duties. The court therefore entered judgment in his favor. The plaintiffs now appeal both the summary judgment in favor of defendants Bro and Smith, and the judgment for defendant Ayres.


A grant of summary judgment is reviewed de novo. Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). A district court's findings of fact are reviewed for clear error; Conclusions of law are reviewed de novo. Rozay's Transfer v. Local Freight Drivers, 850 F.2d 1321, 1326 (9th Cir. 1988), cert. denied, 490 U.S. 1030, 104 L. Ed. 2d 203, 109 S. Ct. 1768 (1989). We may affirm on any ground supported by the record. United States v. Washington, 969 F.2d 752, 755 (9th Cir. 1992), cert. denied, 123 L. Ed. 2d 651, 113 S. Ct. 1945 (1993).


I. ERISA Statute of Limitations

ERISA imposes a statute of limitations on claims alleging a breach of fiduciary duty. Section 413 provides:

No action may be commenced under this subchapter with respect to a fiduciary's breach of any responsibility, duty, or obligation under this part, or with respect to a violation of this part, after the earlier of -

(1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission, the latest date on which the ...

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