Blatt v. Marshall and Lassman
| Decision Date | 27 February 1987 |
| Docket Number | D,No. 176,176 |
| Citation | 812 F.2d 810 |
| Parties | , 8 Employee Benefits Ca 1495 Abbey E. BLATT, Plaintiff-Appellant, v. MARSHALL AND LASSMAN (formerly known as Marshall, Lassman and Company), a partnership, Louis V. Marshall and Joseph I. Lassman, Defendants-Appellees. ocket 86-7421. |
| Court | U.S. Court of Appeals — Second Circuit |
Kenneth L. Robinson, Mitchel Field, N.Y. (Levine & Robinson, P.C., Carl S. Levine and Timothy Mulcahy, Mitchel Field, N.Y., of counsel), for plaintiff-appellant.
Robert M. Milner, New York City (Javits, Robinson, Brog, Leinwand & Reich, P.C., of counsel), for defendants-appellees.
Before TIMBERS, PRATT and ALTIMARI, Circuit Judges.
Abbey E. Blatt appeals from an order of the United States District Court for the Eastern District of New York granting summary judgment for defendants on the ground that they could not be considered fiduciaries under Section 3(21)(A) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Sec. 1002(21)(A). We reverse and remand for the entry of summary judgment in favor of appellant.
Abbey Blatt joined the accounting firm of Marshall, Dym and Lassman in 1968. He became a partner in 1977 and remained with the firm, which is now known as Marshall and Lassman, until October 3, 1983, when he left the firm.
During the entire period of Blatt's association, Marshall and Lassman (and its predecessors in interest) participated in a retirement plan sponsored by the American Institute of Certified Public Accountants ("AICPA"). The plan is administered by an AICPA Retirement Committee and is insured by the Mutual Life Insurance Company of New York ("MONY"). The plan allows employees of different accounting firms to pool their funds toward retirement.
An accounting firm that wishes to make the AICPA plan available to its employees must apply to the Retirement Committee. If the firm's application is accepted, employees who wish to take advantage of the plan may become participants. An employee's participation in the plan terminates upon the termination of that employee's services with the particular employer.
In its application to the Retirement Committee an employer must make several elections regarding the plan's applicability to its particular firm. These elections include: (1) the formula by which employer contributions are to be computed, and the frequency of those contributions; (2) the number of years of service required for an employee to be eligible to participate; (3) whether employees have the option to make voluntary contributions; (4) the formula for determining number of hours of service performed by employees; and (5) whether to adopt a minimum contribution provision.
The employer's contributions must be paid in cash to MONY at least once a year. The employer also must pay entry fees and a share of the administrative expenses, as determined by the Retirement Committee. All contributions are exclusively for the benefit of employee-participants; no plan assets ever revert to the employer. The employer may defer paying its contributions for up to one year and may, subject to conditions established by the Retirement Committee, direct MONY to transfer all the accounts of its employee-participants into another retirement plan. Finally, the employer must agree to furnish all information necessary for the convenient administration of the plan.
Appellant Blatt had been a participant in the AICPA plan sponsored by Marshall and Lassman. On December 9, 1983, Blatt wrote to MONY, informing them that he had left the employ of Marshall and Lassman and requesting a lump-sum distribution of the amount in his AICPA retirement account. MONY informed Blatt that no funds would be released to him until Marshall and Lassman delivered to MONY a "Notice of Change" form reflecting Blatt's status as a former member of the firm. MONY subsequently sent a Notice of Change form to Marshall and Lassman, but despite repeated requests by both Blatt and his attorney, Marshall and Lassman never executed the form. After Blatt commenced the instant federal action in April 1985, Marshall and Lassman finally executed the Notice of Change on May 17 Blatt's complaint alleged that the defendants were fiduciaries under ERISA, 29 U.S.C. Sec. 1001 et seq., and that they had breached their fiduciary duty to Blatt by intentionally failing to execute the Notice of Change, thereby preventing Blatt's access to his fully vested retirement funds. See 29 U.S.C. Sec. 1104. According to Blatt, the defendants' refusal to execute the Notice of Change was motivated by a desire to gain advantage over him in an unrelated suit then pending in state court which defendants had filed shortly after Blatt left the firm.
1985, more than one and one-half years after Blatt had left the firm.
In a memorandum and order dated May 1, 1986, 633 F.Supp. 712, the district court found that Marshall and Lassman could not be considered fiduciaries with respect to the AICPA retirement plan under 29 U.S.C. Sec. 1002(21)(A). The opinion first notes that Marshall and Lassman did not render investment advice to the plan for a fee, or have the authority to do so, see 29 U.S.C. Sec. 1002(21)(A)(ii). Second, appellees had no discretionary role in administering the plan, see id. Sec. 1002(21)(A)(iii). After reviewing the various elections which Marshall and Lassman made in their application to the Retirement Committee, the court concluded that appellees' responsibility for making a limited number of choices respecting contributions to the plan was merely a ministerial one. The court found no other provision of the plan which conferred any discretionary authority over plan administration. Finally, appellees were found not to possess any discretionary authority with respect to management of the plan or disposition of its assets, see id. Sec. 1002(21)(A)(i). Accordingly, the court directed that summary judgment be entered for defendants.
The term "fiduciary" is defined in Section 3(21)(A) of ERISA:
[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. Sec. 1002(21)(A).
Congress intended the term to be broadly construed. "[T]he definition includes persons who have authority and responsibility with respect to the matter in question, regardless of their formal title." H.R.Rep. No. 1280, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Ad.News 4639, 5038, 5103. According to an interpretive bulletin issued by the Department of Labor, someone who performs purely "ministerial" functions for a benefit plan is not a fiduciary. See 29 C.F.R. Sec. 2509.75-8. Such ministerial functions include the...
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