Pens. Plan Guide P 23887u, 9 F.3d 1553 (9th Cir. 1991)

MEMORANDUM^** 

In the action below, the Trustees of the Amalgamated Insurance Fund ("Fund") sought to recover retirement benefits erroneously paid to Jerry A. Guffan. Guffan, proceeding pro se, counterclaimed¹  for payments of medical and life insurance benefits, damages for breach of fiduciary duty and emotional distress, and punitive damages. The district court granted summary judgment for the Fund on both the Fund's claim and Guffan's counterclaim, and granted the Fund's request for $15,024.00 in attorney's fees. Guffan timely appeals. We have jurisdiction pursuant to 28 U.S.C. § 1291. We review de novo, Williams v. Caterpillar, Inc., 944 F.2d 658, 661 (9th Cir. 1991), and affirm.

* Summary judgment is appropriate if the evidence, construed in the light most favorable to the nonmoving party, shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Tzung v. State Farm Fire & Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir. 1989).

The following facts are undisputed. The Fund was organized to provide retirement and health benefits to members of the Amalgamated Clothing and Textile Workers Union ("Union"). Guffan's mother, Eva Guffan, was a Union member and had been receiving retirement benefits from the Fund following her retirement on January 1, 1957. Eva died on March 6, 1981 but the Fund continued to send her retirement checks. Guffan endorsed the checks in his and his mother's names and cashed them. Between the time Eva actually died and the time the Fund learned of her death in 1988, the Fund paid and Guffan kept $6,785.00 in retirement benefits.²  The Fund thereafter filed this action under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1371.

The Retirement Plan pursuant to which the Fund operates provides, in pertinent part, that "no benefit shall be payable under the Plan upon the death of the Participant and all benefits under the Plan shall cease upon the occurrence of such event." Complaint, Exh. A. Thus, when Eva died in 1981 so did her entitlement to retirement benefits under the Plan. Because Eva's right to retirement benefits ended with her death, the only way Guffan could have been entitled to the benefits at issue is if he became so entitled before Eva's death. The Plan provides, however, that benefits payable under the Plan are not alienable or assignable. Id.; see 29 U.S.C. § 1056(d) (1) (" [e]ach pension plan shall provide that benefits provided under the plan may not be assigned or alienated"). Because the Plan prohibited Eva from assigning her benefits, Guffan could not have become entitled to those benefits prior to her death.

Guffan claims that (1) he notified the Fund of his mother's death in 1981; (2) the Fund could have contacted him to determine whether his mother had died; and (3) the Fund never asked him to return any money. Attached to his answer and counterclaim is an exhibit, dated March 18, 1991, that purportedly notifies the Fund of Eva's death. In essence, Guffan contends the Fund is at fault for continuing to pay Eva's retirement benefits.

Guffan's claim is flatly contradicted by evidence that shows Guffan deliberately maintained the pretense that Eva was alive.³  Moreover, even if Guffan's claims were true, he did not thereby become entitled to Eva's retirement benefits. Consequently, although an issue may exist as to whether and/or when Guffan notified the Fund of Eva's death, that fact is not material to this litigation. Therefore, the district court properly granted summary judgment for the Fund on the issue of Guffan's liability to the Fund for the amount of benefits wrongfully kept by Guffan.⁴ 

II

In his counterclaim, Guffan alleged claims for payment of life insurance and medical benefits, damages for emotional distress, and punitive damages. These claims arose out of the Fund's actions in regard to Plan benefits and are therefore preempted by ERISA to the extent Guffan brings them under state law. See 29 U.S.C. § 1144(a); Nevill v. Shell Oil Co., 835 F.2d 209, 212 (9th Cir. 1987) ("state law is preempted if the conduct sought to be regulated by the state law is part of the administration of an employee benefit plan" (quotations omitted)).

In addition, although ERISA specifically provides for liability for breach of fiduciary duty, 29 U.S.C. § 1109(a), damages for emotional distress and punitive damages are not available under that provision, Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 139-44 (1985). Such damages also are not available in an action under section 502(a) (3) of ERISA, 29 U.S.C. § 1132(a) (3). Sokol v. Bernstein, 803 F.2d 532, 538 (9th Cir. 1986).

It is undisputed that Eva's health insurance coverage expired one year after her retirement in 1957. Therefore, the Fund was not obligated to pay medical expenses Eva incurred in 1981. Moreover, because Eva's health insurance had expired, there is no basis for Guffan's claim that the Fund should have informed him of his rights to those benefits.

Finally, assuming arguendo that the Fund is the proper party to sue for the benefits from Eva's life insurance policy, the Plan provides that interpretation and administration of the Plan is committed to the discretion of the Fund. We find no abuse of discretion in the Fund's decision to offset Guffan's claimed life insurance benefits against his debt to the Fund. See Williams, 944 F.2d at 661.

III

Guffan did not designate the district court's award of $15,204.00 in attorney's fees and costs to the Fund in his notice of appeal, but nevertheless contends in his opening brief that the court's decision to grant the Fund's request was erroneous.⁵  We review the district court's decision to award attorney's fees in an ERISA action for abuse of discretion. Sokol, 803 F.2d at 538.

"ERISA commits the award of fees to the district court's discretion." Id.; see 29 U.S.C. § 1132(g) (1) (providing that the court may allow "a reasonable attorney's fee and costs of action to either party"). The court should consider at least five factors in deciding whether to award fees:

(1) the degree of the opposing parties' culpability or bad faith; (2) the ability of the opposing party to satisfy an award of fees; (3) whether an award of fees against the opposing party would deter others from acting under similar circumstances; (4) whether the parties requesting fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA; and (5) the relative merits of the parties' positions.

Sokol, 803 F.2d at 538. No one of these factors is necessarily decisive. Smith v. CMTA-IAM Pension Trust, 746 F.2d 587, 590 (9th Cir. 1984).

In light of the record, we are satisfied that the first, third, fourth, and fifth factors all weigh in favor of the district court's award. We are aware that the district court did not explicitly refer to or discuss all five of the pertinent factors. The court clearly was driven, however, by Guffan's bad faith in this matter. Under the circumstances of this case, we agree with the district court that Guffan's bad faith justified granting the Fund's request for fees. See Smith, 746 F.2d at 590 (stating that "bad faith is a factor that would always justify an award [of fees]").

The only factor that possibly weighs against the district court's award of fees is Guffan's ability, or lack thereof, to satisfy the award. This factor certainly is relevant, see id., but we cannot say that it outweighs the other factors. We also reject Guffan's remaining contentions, that the Fund deliberately delayed and multiplied the proceedings and that the district court judge exhibited bias by granting the Fund's fee request, as having no basis in the record.

The district court did not err by granting the Fund's request for attorney's fees and costs.

AFFIRMED.⁶