Dennis v. Sawbrook Steel Castings Co.

• Decision Date: 05 February 1991
• Docket Number: No. C-1-89-487.,C-1-89-487.
• Citation: 792 F. Supp. 552
• Parties: Joseph DENNIS, Jr., et al., Plaintiffs, v. The SAWBROOK STEEL CASTINGS COMPANY, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

792 F. Supp. 552

Joseph DENNIS, Jr., et al., Plaintiffs, v. The SAWBROOK STEEL CASTINGS COMPANY, et al., Defendants.

No. C-1-89-487.

United States District Court, S.D. Ohio, W.D.

February 5, 1991.

COPYRIGHT MATERIAL OMITTED

David M. Cook, Kircher & Phalen, Cincinnati, Ohio and William T. Payne, Schwartz, Steinsapir, Dohrmann & Sommers, Los Angeles, Cal., for plaintiffs.

Harold Sol Freeman, Dinsmore & Shohl, Cincinnati, Ohio, for defendants.

ORDER DENYING IN PART AND GRANTING IN PART DEFENDANTS' MOTION TO DISMISS

SPIEGEL, District Judge.

This matter is before this Court on defendants' motion to dismiss (doc. 3). Plaintiffs have responded in opposition to this motion (doc. 5), and defendants have replied (doc. 7).

The plaintiffs brought this action alleging that defendant Sawbrook Steel Castings Company (Sawbrook) amended the Sawbrook Pension Plan for Hourly Workers (Plan) to allow reversion of excess funds to revert to Sawbrook upon termination of the plan. Plaintiffs further allege that the plan was terminated on or about September 29, 1985, and certain assets reverted to Sawbrook. The plaintiffs claim: (1) that these actions violate the terms of the plan by reverting assets in violation of ERISA, 29 U.S.C. § 1132 (Count I); (2) that these actions constitute a breach of their fiduciary duties under ERISA, 29 U.S.C. §§ 1104-1109 by defendant Trustees of the Sawbrook Pension Plan for Hourly Workers (Count II); (3) that defendants are equitably estopped from retaining any reverted assets under the federal common law of ERISA (Count III); and (4) that the reversion constituted a breach of a collective bargaining agreement under Section 301 of the Labor-Management Relations Act (LMRA) (Count IV). Also, the plaintiffs have requested a trial by jury.

The defendants now move this Court to dismiss the following claims for the following reasons: (1) Plaintiffs' counts I through IV as untimely filed; (2) Plaintiffs' counts I through IV for failure to exhaust existing administrative remedies; (3) Plaintiffs' count III for failure to state a claim upon which relief may be granted; (4) Plaintiff Mays' count IV for lack of standing to assert rights under the collective bargaining agreement; and (5) Plaintiffs' demand for a jury trial as unsupported by the allegations. The Plaintiffs respond as follows: (1) Counts I through IV were timely filed; (2) Plaintiffs exhausted any administrative remedies available for counts I through III and plaintiffs were not required to exhaust administrative remedies for count IV because such efforts would have proved futile; (3) Equitable estoppel is a viable federal common law cause of action under ERISA; (4) Plaintiff May has standing to sue as a third-party beneficiary of the 1984 collective bargaining agreement; and (5) Plaintiffs' claims are legal in nature and entitle plaintiff to a trial by jury.

Because the defendants have attached affidavits and exhibits to their motion to dismiss this action, their motion must be treated as a motion for summary judgment pursuant to Fed.R.Civ.P. 12(b) and (c), and disposed of in the manner prescribed by Fed.R.Civ.P. 56. In considering a motion for summary judgment, the narrow question we must decide is whether there are "no genuine issues as to any material fact and whether the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The Court cannot try issues of fact on a Rule 56 motion, but is empowered to determine only whether there are issues to be tried. In re Atlas Concrete Pipe, Inc., 668 F.2d 905, 908 (6th Cir.1982). The moving party "has the burden of showing conclusively that there exists no genuine issue as to a material fact and the evidence together with all inferences to be drawn therefrom must be read in the light most favorable to the party opposing the motion." Smith v. Hudson, 600 F.2d 60, 63 (6th Cir.) (emphasis in original), cert. denied, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979). And, "while the movant's papers are to be closely scrutinized, those of the opponent are to be viewed indulgently." Id. at 63. "The District Court is obligated to consider not only the materials specifically offered in support of the motion, but also all `pleadings, depositions, answers to interrogatories, and admissions' properly on file and thus properly before the court." Id. (quoting Fed. R.Civ.P. 56(c)). Summary judgment "must be used only with extreme caution for it operates to deny a litigant his day in court." Id. We are further guided by the Supreme Court's recent elaboration of this standard in Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) as follows:

The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial....

477 U.S. at 322, 106 S.Ct. at 2552.

TIMELINESS

Neither ERISA nor section 301 of the Labor-Management Relations Act contains a statute of limitations. The Court must, therefore, look to the most analogous statute of limitations for the appropriate time limit in this case. Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975). Courts have looked to both federal and state law for the source of this analogous statute of limitations. See United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981) and Del Costello v. Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983).

The defendants first argue that count IV is time-barred by section 10(b) of the National Labor Relations Act, citing Del Costello v. Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). In Del Costello, the United States Supreme Court applied the six-month statute of limitations period provided in section 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b) to hybrid section 301/fair representation claims against the employer and the union. However, the Court limited its decision to that particular situation stating:

We stress that our holding today should not be taken as a departure from prior practice in borrowing limitations periods for federal causes of action, in labor law or elsewhere. We do not mean to suggest that federal courts should eschew use of state limitations periods anytime state law fails to provide a perfect analogy. On the contrary, as the courts have often discovered, there is not always an obvious state-law choice for application to a given federal cause of action; yet resort to state law remains the norm for borrowing of limitations periods.

Id. at 170, 103 S.Ct. at 172 (citation omitted). Further, the Court distinguished rather than overruled International Union, UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966), in which the Court applied the state contract period of limitations to a union's action for breach of a collective bargaining agreement. In Apponi v. Sunshine Biscuits, Inc., 809 F.2d 1210 (6th Cir.1987), the United States Court of Appeals for the Sixth Circuit distinguished Del Costello, holding instead that, borrowing from Ohio law, either a six-year statute of limitations for actions alleging breach of an oral contract (Ohio Rev.Code § 2305.07) or a fifteen-year statute of limitations for actions alleging breach of a written contract (Ohio Rev.Code § 2305.06) were applicable to a section 301 claim for recovery of early retirement benefits.

In the case at bar, count IV of the plaintiffs' complaint alleges that the reversion of plan assets constituted a breach of a collective bargaining agreement under section 301 of the LMRA. As section 301 does not contain a statute of limitations, this Court must apply the most analogous statute of limitations, bearing in mind the Supreme Court's mandate that federal courts should generally turn first to state limitations periods. This Court, then, finds that Ohio's breach of contract limitations periods are most analogous to this claim for breach of a collective bargaining agreement. Admittedly, the latest date alleged in the complaint on which a cause of action accrued was September 29, 1985. The complaint was filed on July 10, 1989. Therefore, this Court need not determine whether to apply Ohio's six-year limitation on actions for breach of an oral contract or the fifteen-year limitation on actions for breach of a written contract as under either statute, count IV of plaintiffs' complaint was timely filed.

The defendants also argue that counts I, II and III of plaintiffs' complaint are barred by 29 U.S.C. § 1113. Section 1113 states:

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 fiduciary could have cured the breach or violation, or

(2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation;

except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation.

29 U.S.C.A. § 1113 (1990 Supp.).

Count I of plaintiffs' complaint alleges that defendants violated the terms of the pension plan by reverting assets in violation of ERISA, 29 U.S.C. § 1132. The time limits established by 29 U.S.C. § 1113 are only applicable to claims for breach of fiduciary duty. Cowden v. Montgomery Co. Soc. for Cancer Control, 591 F.Supp. 740 (S.D.Ohio 1984). By its own terms, § 1113 is only directly applicable to actions alleging violations of the section entitled fiduciary responsibility,...