Moyle v. Liberty Mut. Ret. Benefit Plan

• Decision Date: 11 April 2017
• Docket Number: CASE NO. 10cv2179–GPC(MDD)
• Court: U.S. District Court — Southern District of California
• Parties: Geoffrey MOYLE, an individual; Pauline Arwood, an individual; Thomas Rollason, an individual; and Jeannie Sanders, an individual, on behalf of themselves, Plaintiff, v. LIBERTY MUTUAL RETIREMENT BENEFIT PLAN; Liberty Mutual Retirement Plan Retirement Board; Liberty Mutual Insurance Group, Inc., a Massachusetts company; Liberty Mutual Insurance Company, a Massachusetts company, Defendants.

263 F.Supp.3d 999

Geoffrey MOYLE, an individual; Pauline Arwood, an individual; Thomas Rollason, an individual; and Jeannie Sanders, an individual, on behalf of themselves, Plaintiff,

v.LIBERTY MUTUAL RETIREMENT BENEFIT PLAN; Liberty Mutual Retirement Plan Retirement Board; Liberty Mutual Insurance Group, Inc., a Massachusetts company; Liberty Mutual Insurance Company, a Massachusetts company, Defendants.

CASE NO. 10cv2179–GPC(MDD)

United States District Court, S.D. California.

Signed April 11, 2017

Alex M. Tomasevic, Tracy J. Jones, Craig McKenzie Nicholas, Nicholas and Tomasevic LLP, Georg Capielo, Jack B. Winters, Jr., Sarah D. Ball, Law Offices of Winters and Associates, Matthew B. Butler, The Butler Firm, Mei–Ying M. Imanaka, Solomon Ward Seidenwurm & Smith, LLP, Andrew Cole Myers, Sweeney, Greene & Roberts LLP, San Diego, CA, for Plaintiff.

Aimee E. Axelrod, Amber Gardina–Quintanilla, Jackson Lewis, P.C., Jennifer L. Santa Maria, Ogletree Deakins Nash Smoak & Stewart, P.C., San Diego, CA, Ashley Bryan Abel, Julia M. Ebert, Robert M. Wood, Jackson Lewis LLP, Greenville, SC, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' SUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT

HON. GONZALO P. CURIEL, United States District Judge

On October 28, 2016, Defendants filed a supplemental brief in support of their motion for summary judgment following remand. (Dkt. No. 296.) On November 10, 2016, Plaintiffs filed a supplemental brief in opposition to Defendants' motion for summary judgment following remand. (Dkt. No. 298.) On November 18, 2016, Defendants filed a reply brief. (Dkt. No. 299.) A hearing was held on December 16, 2016. (Dkt. No. 301.) At the hearing, the Court noted additional briefing was needed on certain issues, and on December 19, 2016, the Court issued an order directing the parties to address three issues that were not fully briefed in their supplemental briefs.¹ (Dkt. No. 302.) On January 6, 2017, Defendants filed a supplemental brief in response to the Court’s order. (Dkt. No. 304.) Plaintiffs filed a response and Defendants filed a reply. (Dkt. Nos. 305, 307.) After a review of all the briefs, supporting documentation, hearing oral argument, and the applicable law, the Court GRANTS in part and DENIES in part Defendants' supplemental motion for summary judgment following remand.

Procedural Background

Prior to the filing of the instant case, on March 14, 2005, Plaintiff Geoffrey Moyle ("Moyle") filed a complaint in this Court against Golden Eagle Insurance Corporation ("Golden Eagle") and Liberty Mutual Insurance Company ("Liberty Mutual").² (Case No. 05cv507–DMS(WMC), Dkt. No. 1). On August 23, 2005, Moyle filed a first amended complaint adding Defendant Liberty Mutual Retirement Benefit Plan ("Plan"). (Id., Dkt. No. 12.) The first amended complaint sought causes of action for determination of his future rights to benefits under the plan pursuant to 29 U.S.C. § 1132(a)(1)(B), and breach of fiduciary duty pursuant to 29 U.S.C. § 1132(a)(3). (Id. ) On November 14, 2005, District Judge Dana Sabraw granted Defendants' motion to dismiss for failure to exhaust administrative remedies. (Id., Dkt. No. 32.) The court also dismissed with prejudice the § 1132(a)(3) claim pursuant to Varity Corp. v. Howe, 516 U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996), stating that " § 1132(a)(3) is a ‘catchall provision’ that authorizes lawsuits for equitable relief for breach of fiduciary duty and other injuries for "violation that [1132] does not elsewhere adequately remedy." (Id. at 9.) Plaintiff appealed and on August 23, 2007, the Ninth Circuit affirmed the district court’s dismissal requiring Plaintiff to exhaust and the dismissal of § 1132(a)(3) claim based on the rule in Varity concluding that Moyle "has no claim under 29 U.S.C. § 1132(a)(3) because he has adequate relief under 29 U.S.C. § 1132(a)(1). Moyle v. Golden Eagle Ins. Corp., 239 Fed.Appx. 362 (9th Cir. 2007).

On January 26, 2008, Moyle filed a claim with Liberty Mutual. (Administrative Record ("AR") 783–86.) On July 18, 2008, Plaintiff Thomas Rollason ("Rollason") filed a claim. (AR 639–43.) On August 21, 2008, Plaintiff Pauline Arwood ("Arwood") filed a claim. (AR 1016–20.) Lastly, on December 4, 2008, Plaintiff Jeannie Sanders ("Sanders") filed her claim. (AR 1511–16.)

On April 23, 2008, Moyle’s claim and subsequently Rollason, Arwood and Sanders' claims for benefits were initially denied by John R. St. Martin, Manager of Pension and Savings, Benefits at Liberty Mutual. (AR 712–718 ("Moyle"); 590–96 ("Rollason"); 991–97 ("Arwood"); 1497–1503 ("Sanders").)

On June 20, 2008, Plaintiffs sought review of the initial decision and all four claims were consolidated for purposes of the administrative appeal. (AR 426.) On October 23, 2009, Plaintiffs' appeals were denied by Helen Sayles, Senior Vice President of Human Resources & Administration, on behalf of the Retirement Board. (AR 4365–4414.)

After having exhausted administrative remedies, on October 19, 2010, Plaintiffs Moyle, Arwood, Rollason, and Sanders filed the instant class action complaint against Defendants Liberty Mutual Retirement Benefit Plan ("Plan"); Liberty Mutual Retirement Benefit Plan Retirement Board ("Board"); Liberty Mutual Insurance Group, Inc. ("LMGI"); and Liberty Mutual Insurance Company ("Liberty Mutual"). (Dkt. No. 1.) On October 21, 2010, Plaintiffs filed a first amended complaint alleging causes of action for determination of his future rights to benefits under the plan pursuant to 29 U.S.C. § 1132(a)(1)(B), promissory estoppel, and denial of claim rights afforded under 29 C.F.R. § 2560.503–1(h)(2)(i). (Dkt. No. 3.) On April 25, 2011, District Judge Dana Sabraw denied Defendants' motion to dismiss the second and third claims; granted in part motion to dismiss improperly named Defendants; denied Defendants' motion to dismiss the first claim as to Plaintiff Moyle and granted Defendants' motion to strike demand for trial by jury. (Dkt. No. 18.) On September 14, 2011, the Court granted Plaintiffs' motion for leave to file a second amended complaint. (Dkt. No. 41.) On September 20, 2011, Plaintiffs filed a second amended complaint which added a claim for equitable relief under 29 U.S.C. § 1132(a)(3). (Dkt. No. 47.)

After briefing by the parties on Plaintiffs' motion for class certification, on April 10, 2012, District Judge Sabraw certified the class as to the first, second, and fourth causes of action. (Dkt. No. 113 at 19.) On April 24, 2012, Defendants filed a petition for permission to appeal the Court’s order granting class certification to the Ninth Circuit. (Dkt. No. 120.) In the meantime, the Court denied Defendants' motion for reconsideration and granted their motion for stay pending appeal. (Dkt. No. 126.) On July 11, 2012, the Ninth Circuit denied Defendants' petition for permission to appeal. (Dkt. No. 128.)

On October 12, 2012, the case was transferred to the undersigned judge. (Dkt. No. 174.) On October 17, 2012, Plaintiffs filed a third amended complaint against Defendants Liberty Mutual Retirement Benefit Plan ("Plan"); Liberty Mutual Retirement Benefit Plan Retirement Board ("Board"), the Plan administrator; Liberty Mutual Insurance Group, Inc. ("LMGI"), the Plan sponsor; and Liberty Mutual Insurance Company ("Liberty Mutual"), the entity that purchased Old Golden Eagle, and established Golden Eagle, a subsidiary of LMGI. (Dkt. No. 178.) The operative third amended complaint alleges four causes of action: payment of benefits under the Plan pursuant to 29 U.S.C. § 1132(a)(1)(B) ; equitable relief under 29 U.S.C. § 1132(a)(3) ; violation of 29 C.F.R. § 2560.503–1(h)(2)(i) ; and violation of 29 C.F.R. § 2520.102–3(l ) and 29 C.F.R. § 2520.102–2(a).

On January 3, 2013, Defendants filed a motion for summary judgment on all four causes of action while Plaintiffs filed a motion for partial summary judgment on the second and fourth causes of action and on certain of Defendants' affirmative defenses. (Dkt. Nos. 212, 213.) On July 1, 2013, the Court granted Defendants' motion for summary judgment on all four causes of action in the third amended complaint, and denied Plaintiffs' motion for summary judgment. (Dkt. No. 252.) Plaintiffs appealed the Court’s ruling on the first, second and fourth causes of action while Defendants cross-appealed that the suit was time-barred and that class certification was not proper. Moyle v. Liberty Mutual Retirement Benefit Plan, 823 F.3d 948, 952 (9th Cir. 2016). On May 20, 2016, the Ninth Circuit affirmed the district court’s ruling on summary judgment on the first and fourth causes of action and reversed the district court’s ruling on the second cause of action for equitable relief under 29 U.S.C. § 1132(a)(3). Id. The Ninth Circuit also found that class certification was proper. Id. The court concluded there was a factual dispute whether "Liberty Mutual breached its fiduciary duty by failing to inform Golden Eagle employees that past service credit for the purpose of benefit accrual did not include the period prior to October 1, 1997, when they were first employed by Golden Eagle." Id. at 962. The Ninth Circuit remanded "for determinations of fact and equitable relief in the form of reformation and surcharge." Id. at 965. The Ninth Circuit also declined to consider "Liberty Mutual’s argument that the statute of repose in 29 U.S.C. § 1113 acts to bar some of Appellants' claims under 29 U.S.C. § 1132(a)(3). The district court may consider such arguments on remand." Id. at 959 n. 5.

Factual Background

The Court recites the facts from its prior order on summary judgment and from the Ninth Circuit’s opinion. Plaintiffs Moyle, Arwood, Rollason, and Sanders are four former employees of Golden Eagle Insurance Company ("Old Golden Eagle" or "OGE"). On January 31, 1997, the Superior Court of San Diego County placed OGE into conservatorship proceedings under the supervision of the California Insurance Commissioner. Liberty Mutual took an interest in...