Gabriel v. Alaska Elec. Pension Fund

Decision Date16 December 2014
Docket NumberNo. 12–35458.,12–35458.
PartiesGregory R. GABRIEL, Plaintiff–Appellant, v. ALASKA ELECTRICAL PENSION FUND; Trustees of the Alaska Electrical Pension Fund; Pension Administrative Committee of the Alaska Electrical Pension Fund; Appeals Committee of the Alaska Electrical Pension Fund; Gregory Stokes; Gary Brooks; Steve Boyd; John Giuchici; Cheresa MacLeod; Scott Bringmann; David Carle; Jim Fullford; Mary Tesch; Knute Anderson; Mike Bavard; Larry Bell; Vince Beltrami, Defendants–Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

773 F.3d 945

Gregory R. GABRIEL, Plaintiff–Appellant,
v.
ALASKA ELECTRICAL PENSION FUND; Trustees of the Alaska Electrical Pension Fund; Pension Administrative Committee of the Alaska Electrical Pension Fund; Appeals Committee of the Alaska Electrical Pension Fund; Gregory Stokes; Gary Brooks; Steve Boyd; John Giuchici; Cheresa MacLeod; Scott Bringmann; David Carle; Jim Fullford; Mary Tesch; Knute Anderson; Mike Bavard; Larry Bell; Vince Beltrami, Defendants–Appellees.

No. 12–35458.

United States Court of Appeals, Ninth Circuit.

Opinion filed June 6, 2014
Argued and Submitted Aug. 14, 2013
Opinion withdrawn and new Opinion filed Dec. 16, 2014


Affirmed in part and vacated and remanded in part.

Opinion, 755 F.3d 647, superseded.

Kozinski, Circuit Judge, filed concurring opinion.

[773 F.3d 949]

Jennifer Mary Coughlin, K & L Gates, LLP, Anchorage, AL, for Plaintiff–Appellant.

Allen Bruce McKenzie (argued), and Frank J. Morales, McKenzie Rothwell Barlow & Coughran, P.S., Seattle, WA, for Defendants–Appellees.


Appeal from the United States District Court for the District of Alaska, Timothy M. Burgess, District Judge, Presiding. D.C. No. 3:06–cv–00192–TMB.
Before: ALEX KOZINSKI, MARSHA S. BERZON, and SANDRA S. IKUTA, Circuit Judges. Opinion by Judge IKUTA; Concurrence by Judge KOZINSKI. IKUTA, Circuit Judge:
ORDER

The opinion filed on June 6, 2014, and appearing at 755 F.3d 647, is withdrawn. The superseding opinion will be filed concurrently with this order. The parties may file additional petitions for rehearing or rehearing en banc.

OPINION

Gregory R. Gabriel appeals the district court's dismissal of his claims against the Alaska Electrical Pension Fund (the Fund) and other defendants under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq. We affirm the district court's determination that Gabriel failed to raise a genuine issue of material fact as to his entitlement to “appropriate equitable relief” under 29 U.S.C. § 1132(a)(3) in the form of equitable estoppel or reformation. We also reject Gabriel's argument that the Fund failed to comply with ERISA procedural requirements or waived its determination that Gabriel never vested, and therefore affirm the district court's deference to the Fund's denial of benefits. But, because the district court made its ruling prior to the Supreme Court's decision in CIGNA Corp. v. Amara, the district court did not consider the availability of the “monetary remedy against a trustee, sometimes called a ‘surcharge,’ ” which the Court held may be “appropriate equitable relief” for purposes of § 1132(a)(3). ––– U.S. ––––, 131 S.Ct. 1866, 1880, 179 L.Ed.2d 843 (2011). Accordingly, we vacate the district court's ruling that Gabriel is not entitled to any form of “appropriate equitable relief” and remand for the district court to reconsider the availability of surcharge in this case,

[773 F.3d 950]

and, if available, whether Gabriel has adequately alleged a remediable wrong.

I

For over three years, the Fund paid Gabriel monthly pension benefits he had not earned. This case arises from the events that occurred after the Fund discovered this error.

From August 1968 through April 1975, Gabriel participated in the Alaska Electrical Pension Plan (the Plan). The Plan is an “employee pension benefit plan” as defined in ERISA, 29 U.S.C. § 1002(2)(A). It covers electrical workers and contractors who work for employers that participate in one of several electrical industry collective bargaining agreements. The Plan is administered by the Fund, which is run by a board of trustees. The Plan gives the trustees “the exclusive right to construe the provisions of the Plan and to determine any and all questions arising thereunder or in connection with the administration thereof.”

Under section 5.01 of the Plan, a participant who has completed ten or more “[y]ears of service,” as defined in the Plan, is vested under the Plan and is eligible to apply for pension benefits on retirement after reaching a specified age. Section 8.01 provides that a participant who fails to earn a total of 500 hours of service in a two-year period, and is not on a qualifying leave of absence pursuant to section 8.02, is terminated from the Plan. A terminated participant may be reinstated under section 8.04. Under section 8.03, a vested participant who is terminated is not devested; once vested, a participant remains vested.

Gabriel worked until April 1975 as an employee of several different electric companies that participated in the Plan. In 1975, he became the sole proprietor of Twin Cities Electric. From September 1975 through November 1978, Twin Cities made contributions for both Gabriel and its employees. Based on these contributions, the Fund initially credited Gabriel with eleven years of service, enough to qualify Gabriel as a vested participant under section 5.01.

But in 1979, the Fund determined that Gabriel was an owner of Twin Cities, rather than an employee, and therefore not eligible to participate in the Plan. In a letter dated November 20, 1979, the Fund's general counsel informed Gabriel about this error and told him that the Fund owed him a refund of $13,626 for the erroneous contributions made on his behalf from 1975 to 1978. Further, the letter informed Gabriel that he was terminated from the Plan as of January 1, 1978, pursuant to section 8.01, because its records showed that by that time he had two consecutive years with less than 500 hours of service. An attachment to the letter, entitled “Benefit Statement Without Hours Reported By Twin Cities,” stated that Gabriel had “8 yrs. Credited Service” from 1968 to 1975 when the improper hours for his time as an employer at Twin Cities were excluded, and that the Fund would update Gabriel's hours report to remove the improperly credited hours.

As a separate matter, the letter stated that, because Twin Cities had been delinquent in making contributions for its other employees, the Fund would set off the delinquent amounts owed to the Fund (a total of $6,989.24) from the refund amount owed Gabriel, for a total refund to Gabriel of $6,636.76.

On December 3, 1979, the Fund drafted a follow-up letter stating that Twin Cities actually owed more in delinquent obligations than the Fund originally had calculated. To satisfy Twin Cities' delinquent obligations for its employees, the Fund

[773 F.3d 951]

intended to withhold $12,982.69, instead of $6,989.24. Therefore, the Fund would give Gabriel a refund of only $643.31. The letter enclosed a release agreement, which documented the terms of the setoff and refund. It also informed Gabriel about the steps he would have to take to become vested in the Plan. The record includes only an unsigned copy of this letter, which was found in the Fund's files. Gabriel asserts he never received this letter.

In January 1980, Gabriel signed the release agreement, in which he acknowledged that he was receiving a refund of $643.31 arising from “the improper employer contributions paid from the year 1975 through 1978” made on his behalf when he was the owner of Twin Cities, and that the remainder of the improper contributions (amounting to $12,982.69) would be used to pay delinquent obligations.

Gabriel did not meet any of the requirements under the Plan for reinstatement and so never vested in the Plan. Nevertheless, in late 1996, Gabriel asked the Fund for information about the amount of pension benefits he would receive if he retired. In a letter dated January 6, 1997, a pension representative for the Fund stated that it had calculated Gabriel's pension benefits based on his years of service from 1968 to 1978, and determined that, if he retired, Gabriel would receive pension benefits of $1,236 each month.

Gabriel subsequently retired and applied for benefits, which he began receiving in March 1997. In an affidavit submitted as part of this litigation, Gabriel stated that he would not have retired in 1997 if the pension representative had informed him he was ineligible to receive pension benefits.

The sequence of events leading the Fund to rediscover its error and terminate Gabriel's benefits began in May 2000. At that time, Gabriel began working part-time as an OSHA safety inspector for Udelhoven Oilfield Services to supplement his retirement income. In 2001, the Fund warned Gabriel that his work constituted prohibited post-retirement employment in the industry, which could lead to a suspension of benefits. Although Gabriel argued that his employment at Udelhoven was not in the same industry, the Fund nonetheless suspended his benefits on that basis in November 2001.

Gabriel challenged this suspension of benefits through the administrative process established in the Plan. First, Gabriel appealed the suspension to the Appeals Committee. The Committee denied his appeal, and Gabriel appealed again to the next administrative level, which required arbitration of the dispute. The arbitrator reversed the Appeals Committee's decision and remanded the issue for further fact finding.

At the remand hearing before the Appeals Committee, Gabriel learned that the Fund had not provided him with certain relevant Plan amendments. The Appeals Committee suspended the hearing to give Gabriel an opportunity to review the amendments. Before the Appeals Committee ruled on the dispute, Gabriel stopped working for Udelhoven, and the Fund reinstated his pension benefits as of July 1, 2004.

Gabriel nevertheless continued to pursue his claim against the Fund, and demanded payment of the benefits that the Fund had withheld due to his Udelhoven work, as well as attorney's fees and costs incurred in the administrative appeals process. The parties engaged in settlement negotiations, and the Fund agreed to reimburse Gabriel's attorney's fees and costs. After further negotiations, the Fund also offered to pay Gabriel the withheld benefits, with interest.

[773 F.3d 952]

Before Gabriel could respond to this offer, however, the Fund...

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