Lorenzen v. Employees Retirement Plan of Sperry and Hutchinson Co., Inc.

• Decision Date: 10 April 1990
• Docket Number: Nos. 89-1549,89-1585,s. 89-1549
• Citation: 896 F.2d 228
• Parties: , 15 Fed.R.Serv.3d 1137, 12 Employee Benefits Ca 1001 Delvina E. LORENZEN, Plaintiff-Appellee, Cross-Appellant, v. EMPLOYEES RETIREMENT PLAN OF THE SPERRY AND HUTCHINSON COMPANY, INC., a/k/a Employees Retirement Plan of the S & H Group, Inc.; and S & H Group, Inc., Defendants-Appellants, Cross-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 228

896 F.2d 228

58 USLW 2556, 15 Fed.R.Serv.3d 1137,

12 Employee Benefits Ca 1001

Delvina E. LORENZEN, Plaintiff-Appellee, Cross-Appellant, v. EMPLOYEES RETIREMENT PLAN OF THE SPERRY AND HUTCHINSON

COMPANY, INC., a/k/a Employees Retirement Plan of

the S & H Group, Inc.; and S & H Group,

Inc., Defendants-Appellants,

Cross-Appellees.

Nos. 89-1549, 89-1585.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 27, 1989.

Decided Feb. 15, 1990.

Rehearing and Rehearing En Banc Denied April 10, 1990.

Kathryn Sawyer Gutenkunst (argued), James W. Hammes, Cramer, Multhauf & Hammes, Waukesha, Wis., for plaintiff-appellee, cross-appellant.

Paul E. Prentiss (argued), Michael, Best & Friedrich, Milwaukee, Wis., for defendants-appellants, cross-appellees.

Before CUDAHY and POSNER, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.

POSNER, Circuit Judge.

This is a suit under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Secs. 1001 et seq., by the widow of an employee of S & H, claiming that S & H's Retirement Plan, an ERISA plan, violated its fiduciary duties to her husband and herself, causing a loss of retirement benefits. The district judge granted summary judgment for Mrs. Lorenzen, awarding her some $192,000, 699 F.Supp. 1367 (E.D.Wis. 1988), and the plan appeals. Mrs. Lorenzen cross-appeals, seeking prejudgment interest.

The complaint named the employer, which is the administrator of the retirement plan, as a defendant along with the plan itself. This was a natural move: several cases, illustrated by Leigh v. Engle, 727 F.2d 113, 133-35 (7th Cir.1984); Thornton v. Evans, 692 F.2d 1064, 1077 (7th Cir.1982), and Gelardi v. Pertec Computer Corp., 761 F.2d 1323 (9th Cir.1985) (per curiam), hold that a fiduciary who violates his fiduciary duties is liable to a plan participant or beneficiary; and we may assume that, as the plan administrator, the employer in this case was a fiduciary. The cases are, however, a little puzzling. Either they base liability on sections of ERISA that make the fiduciary liable to co-fiduciaries and to the plan, respectively, rather than to participants or beneficiaries, 29 U.S.C. Secs. 1105, 1109; Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 144, 105 S.Ct. 3085, 3091, 87 L.Ed.2d 96 (1985), or they do not indicate what section imposes liability on fiduciaries to participants or beneficiaries. Nor is it obvious what section, if any, does. One possibility, however, is section 1132(a)(3)(B), which among other things authorizes a civil action by a participant or beneficiary to obtain "appropriate equitable relief" against a violation of the terms of an ERISA plan; as the concurring Justices in Massachusetts Mutual Life Ins. Co. pointed out, equitable relief, in a case involving a breach of fiduciary obligations, can include a monetary payment, such as Mrs. Lorenzen sought in this case. 473 U.S. at 154 n. 10, 105 S.Ct. at 3090 n. 10. And Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987), by holding that ERISA preempts suits under state tort law against employer-fiduciaries by ERISA plan participants for improper processing of claims, strongly implies that such suits can be brought under ERISA; for otherwise there would be a big gap in liability for misconduct by ERISA fiduciaries. So there may well be employer liability in a case like this under ERISA, but this we need not decide. Mrs. Lorenzen neither discusses the basis of that liability nor argues that the employer is liable to her even if the plan is not.

A threshold question that we cannot duck is appellate jurisdiction. The judgment for Mrs. Lorenzen was entered on November 29, 1988. The plan lost no time in filing its notice of appeal; it filed it on December 6, well within the thirty days allowed by Fed.R.App.P. 4(a)(1). On December 9, the tenth day after entry of the judgment, Mrs. Lorenzen filed a motion in the district court captioned a Rule 59 motion. As amplified in an accompanying affidavit, the motion sought an award of costs and of attorney's fees, an order that the award would accrue postjudgment interest, and an award of prejudgment interest. By order of January 24, 1989, the district judge awarded costs and attorney's fees, ignored the request (superfluous in light of 28 U.S.C. Sec. 1961) for postjudgment interest, and denied the request for prejudgment interest. The plan concedes the propriety of awarding costs and attorney's fees should we uphold the district judge's decision. 29 U.S.C. Sec. 1132(g)(1).

Mrs. Lorenzen's counsel waited until the thirty days that the plan had in which to file a notice of appeal from the order of January 24 had passed, then moved this court to dismiss the appeal. On March 3, the thirty-seventh day after January 24, the plan asked the district judge for an extension of time in which to file a notice of appeal. The judge granted an extension to March 8 and the notice was filed that day.

Rule 4(a)(4) of the Federal Rules of Appellate Procedure provides, so far as relates to this case, that if a timely motion under Rule 59(e)--that is, a motion to alter or amend the judgment--is filed, any notice of appeal filed previously "shall have no effect." In light of this provision, appellants are well advised not to emulate the plan's counsel and file their notice of appeal before the expiration of the nonextendable ten-day deadline for filing Rule 59(e) motions as well as for filing motions under Rules 50(b), 52(b), and 59(b)--motions that have the same effect, on a notice of appeal filed previously, that a motion under Rule 59(e) has. Counsel should wait until the ten days have passed before filing the notice of appeal, so that the notice will be indefeasible.

But that is water under the bridge; given Rule 4(a)(4), if the motion that Mrs. Lorenzen's counsel filed on December 9, 1988, was a proper Rule 59(e) motion, it wiped out the notice of appeal that the plan had filed three days earlier. Was it a proper Rule 59(e) motion? Insofar as it sought costs and attorney's fees, it was not; it was instead a collateral proceeding that did not affect the time for appealing from the judgment of November 29. White v. New Hampshire Dept. of Employment Security, 455 U.S. 445, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982); Buchanan v. Stanships, Inc., 485 U.S. 265, 108 S.Ct. 1130, 99 L.Ed.2d 289 (1988) (per curiam). But insofar as it sought an award of prejudgment interest it was a proper Rule 59(e) motion. Osterneck v. Ernst & Whinney, --- U.S. ----, 109 S.Ct. 987, 103 L.Ed.2d 146 (1989). In this circuit, all motions addressed to the judgment that are filed within ten days of the entry of judgment, except purely procedural motions, such as for extensions of time, and motions that kick off collateral proceedings such as a proceeding to obtain an award of costs or attorney's fees, are deemed to be Rule 59(e) motions. Charles v. Daley, 799 F.2d 343, 347 (7th Cir.1986). And Osterneck holds expressly that, whether or not Rule 59(e) sweeps quite that broadly, it does encompass motions for prejudgment interest. They are equivalent to motions to alter the amount of damages awarded in the judgment, and so fit comfortably within the language and purpose of the rule.

Rule 4(a)(5), however, provides that "the district court, upon a showing of excusable neglect or good cause, may extend the time for filing a notice of appeal upon motion filed not later than 30 days after the expiration of the time prescribed by" Rule 4(a)(1). In other words, the district court may permit the filing of an untimely notice of appeal, provided permission is requested no more than thirty days after the deadline--a condition fulfilled here. We must consider therefore whether the plan showed "excusable neglect"--not "good cause," for we agree with Mrs. Lorenzen that the reference to "good cause" is limited to requests for extensions filed within the time for filing the appeal. Parke-Chapley Construction Co. v. Cherrington, 865 F.2d 907, 909-10 (7th Cir.1989); Redfield v. Continental Casualty Corp., 818 F.2d 596, 601 (7th Cir.1987); 650 Park Ave. Corp. v. McRae, 836 F.2d 764, 766 (2d Cir.1988); Consolidated Freightways Corp. v. Larson, 827 F.2d 916, 918 n. 3 (3d Cir.1987); Oregon v. Champion Int'l Group, 680 F.2d 1300 (9th Cir.1982) (per curiam); contra, Scarpa v. Murphy, 782 F.2d 300 (1st Cir.1986). The draftsmen of the 1979 amendment which added this language to Rule 4(a)(5) thought it odd to describe as "neglect" a request for an extension of time made before the deadline for filing the notice of appeal had passed, for as yet no neglect had occurred. Note of Advisory Committee to 1979 Amendment, Subdivision (a)(5). This is semantic punctilio, perhaps ill-advised; it gave rise to a dictum in Redfield, 818 F.2d at 601, promoted to a holding in Parke-Chapley Construction Co. v. Cherrington, supra, 865 F.2d at 909-11, that "excusable neglect" is a more demanding standard than "good cause," though how much more is uncertain. Id. at 909 n. 5. Oregon v. Champion Int'l Group, supra, agrees that it is more demanding. Scarpa disagrees.

As an original matter we might think it so much hairsplitting to try to distinguish excusable neglect from good cause, or even that, if the hairs must be split, excusable neglect connotes a laxer standard than good cause. "Excusable" is not as meritorious as "good" (compare the distinction in criminal law between justifiable and excusable homicide), or "neglect" as "cause." But it is too soon to reexamine Cherrington, especially when its position is that of a majority of the circuits to have ruled on the question. And in defense of that position we point out that when the time for taking an appeal has passed without a peep from the losing party, the winner's interest in finality and repose is greater than if within that time a document is filed indicating that the loser wants to appeal.

An observation fully consistent with Redfield and...