Parsons v. Bd. of Trs. of the Nev. Resort Ass'n - I.A.T.S.E. Local 702 Retirement Plan
| Decision Date | 20 September 2013 |
| Docket Number | Case No. 2:12-cv-00299-LDG (VCF) |
| Parties | ROB PARSONS, Plaintiff, v. BOARD OF TRUSTEES OF THE NEVADA RESORT ASSOCIATION - I.A.T.S.E. LOCAL 702 RETIREMENT PLAN, et al., Defendants. |
| Court | U.S. District Court — District of Nevada |
Rob Parsons was a participant in a retirement benefits plan administered by the Board of Trustees of the Nevada Resort Association - I.A.T.S.E Local 702 Retirement Plan (the "Trustees"). Zenith Administrators, Inc. ("Zenith") provided administrative services for the Plan. On June 15, 2010, the Trustees sent notice ("Notice") informing participants that the Plan had been modified, including a reduction in early retirement benefits, but that the modification would not affect those that qualified under a grandfather provision. Uncertain of whether he qualified for the grandfather provision, Parsons contacted Zenith. A Zenithemployee represented to Parsons that he qualified and, based on that representation, Parsons applied for an early retirement pension and retired.
After Parsons officially retired, the Zenith employee informed Parsons that he did not qualify for the grandfather provision and his benefit amount would be calculated under the new rule. Parsons appealed to the Trustees and was denied. Parsons returned to work, but was forced to accept a lower-paying position and a significant wage and benefit loss. Parsons filed a Complaint against the Trustees and Zenith, which complaint was dismissed with leave to amend. (#27). Parsons amended his complaint, alleging a claim against all defendants for a breach of fiduciary duty under 29 U.S.C. §1104(a)(1), a claim against the Trustees for breach of co-fiduciary duty under 29 U.S.C. § 1105, and an alternative claim against Zenith for negligence. (#30).
The Trustees now move to dismiss (#33) for breach of fiduciary duty and breach of co-fiduciary duty. Zenith also moves to dismiss (#34) for breach of fiduciary duty and further for negligence. Parsons opposes both motions. (# 35, 36). Having read and considered the papers and complaint, the Court will GRANT the motions.
A motion to dismiss under Federal Rules of Civil Procedure Rule 12(b)(6) requires courts to engage in a two-part analysis. Ashcroft v. Iqbal, — U.S. —, 129 S. Ct. 1937 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). First, the courts accept only non-conclusory allegations as true. Iqbal, 129 S.Ct. at 1949. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555). Federal Rule of Civil Procedure Rule 8 "demands more than an unadorned, the defendant-unlawfully-harmed-me-accusation." Id. Federal Rule of Civil Procedure Rule 8 "does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 1950. The Court must draw all reasonableinferences in favor of the plaintiff. Mohamed v. Jeppesen Dataplan, Inc., 579 F.3d 943, 949 (9th Cir. 2009).
After accepting as true all non-conclusory allegations and drawing all reasonable inferences in favor of the plaintiff, the Court must then determine whether the complaint "states a plausible claim for relief." Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 555). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1949 (citing Twombly, 550 U.S. at 556). This plausibility standard "is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. A complaint that ' " Id. (citing Twombly, 550 U.S. at 557).
Parsons has been a participant in the NEVADA ASSOCIATION'S THEATRICAL STAGE EMPLOYEES I.A.T.S.E. LOCAL 702 RETIREMENT PLAN ("Plan") since he began employment as a "stagehand" with LV Theatrical Group, Inc. in 1974. The Trustees are the named fiduciaries of the Plan and are responsible for administering the Plan. Zenith provides "certain administrative services for the operation of the Trust, " as per the Administrative Services Contract ("Contract") between the Trustees and Zenith. On or about June 15, 2010, The Trustees sent notice ("Notice") to the participants informing them that the Plan had been modified, including a reduction in benefits. However, the modification included a grandfather provision:
This change will not apply to any Participant who satisfies all three of the following requirements before August 1, 2010: is (A) eligible for early retirement, (B) retires (a bona fide separation from Covered Employment), and (C) applies for an early retirement pension.
Uncertain of whether he qualified for the grandfather provision, Parsons contacted Zenith's Pension Department for guidance and informed Henry Dobbs ("Dobbs") that he would not be 55 until October 26, 2010. In response, Dobbs stated that he would have to wait until after the Trustees' July 1, 2010 meeting to determine whether Parsons qualified under the grandfather provision. On July 2, 2010, Parsons met with Dobbs again to discuss whether he qualified for the grandfather provision. Parsons again informed Dobbs that he was currently 54 and would not be 55 until October 26, 2010. Dobbs represented to Parsons that he qualified regardless because Parson could apply for early retirement before August 1, 2010, obtain an allowed three-month deferral of his early retirement-pension-benefit-starting date, and be 55 in time to receive his first benefit check on November 1, 2010. Based on Dobb's representation, Parsons subm itted his application for an early retirement pension, and retired July 31, 2010.
A while after Parsons retired, Dobbs phoned and informed him that because he was not yet 55 when he had submitted his pension application, he did not qualify for the grandfather provision and his benefit amount would be calculated under the new rule. His benefits under the new rule would result in him receiving $1,900 per month, which is less than half of the $3,959.96 per month amount he had been led to believe he would receive.
Parsons appealed to the Trustees and was denied. Parsons, thereafter, informed Zenith that he did not intend to continue with the retirement application process. When Parsons returned to work, he was forced to take a lower level position causing him to suffer significant wage loss.
The Trustees move to dismiss Parsons' Complaint for being untimely under the provisions of the Plan document. 29 U.S.C. § 1133 requires that ERISA plans provide a procedure for Plan beneficiaries to appeal denial of benefits. In this case, the Plandocument states "the applicant will have ninety (90) days after completing the appeals process and being denied to file suit." First Amended Complaint, Ex. 1 Part 2 at RP 50 (15.10). The Trustees assert that where an ERISA plan contains a provision limiting time allowed to file a lawsuit following an appeal denying benefits, it is enforceable and binding on the participants. Northlake Regional Medical Center v. Waffle House Sys. Employee Benefit Plan, 160 F.3d 1301, 1303 (11th Cir. 1998). Courts have found periods as short as 45 and 90 days to be reasonable. Davidson v. Wal-Mart Assocs. Health & Welfare Plan, 305 F.Supp.2d 1059 (S.D.Iowa 2004). Other District Courts in the Ninth Circuit have held that limitation periods specified by plans are valid and enforceable unless they are unreasonable. Spinedex Physical Therapy, U.S.A., Inc. v. United Healthcare of Arizona, Inc., CV-08-00457-PHX-ROS, 2012 WL 8169880 (D. Ariz. Oct. 19, 2012) (citing Sousa v. Unilab Corp. Class II (Non-Exempt) Members Group Benefit Plan, 252 F.Supp.2d 1046, 1055 (E.D.Cal.2002)). However, the Ninth Circuit has yet to adopt the rule that limitation provisions in Plan documents are binding on the participants. Section 1113(b) of Title 29 of the U.S. Code allows Plan beneficiaries three years from the earliest date of knowledge of the breach of fiduciary duty to file a complaint.
Parsons counters that his suit is not barred by the 90-day provision in the Plan because he is not appealing a decision of the Board, but is instead suing them for breach of a fiduciary duty. Parsons points out his assertion, in a footnote in his complaint, that he is not contesting the Trustees' decision to deny him benefits under the grandfather provision.
Whether Parsons' complaint is timely presents a close question. Though Parsons asserts he is not appealing the decision of the Trustees, the underlying factual basis of his complaint concerns that very decision. But for the Trustees' decision to deny Parsons an early retirement benefit under the grandfather provision, this suit could not have been brought.
Nevertheless, the Court will not decide this question because, assuming the suit is timely, the defendants are entitled to having this suit dismissed on the merits.
Congress enacted ERISA to protect participants and beneficiaries of employee benefit plans without discouraging employers from offering such plans. Bins v. Exxon Co., 220 F.3d 1042, 1047 (9th Cir. 2000) (quoting (Varity Corp. v. Howe, 516 U.S. 489, 497 (1996)). ERISA establishes "standards of conduct, responsibility, and obligations for fiduciaries," and provides plan participants and beneficiaries with "appropriate remedies . . . and ready access to the Federal courts." ERISA § 2(b), 29 U.S.C. § 1001(b)(quoted in Varity, 516 U.S. at 513). Pursuant to 29 U.S.C. § 1104(a)(1)(B), a statutory duty is created requiring that a "fiduciary shall discharge his duties . . . with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and...
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