Barboza v. Cal. Ass’n of Prof’l Firefighters, No. 11-15472 (9th Cir. 2015)
Annotate this CaseThis case arose out of a disability benefits dispute between Plaintiff, a retired firefighter for the City of Tracy, California, and the California Association of Professional Firefighters (CAPF), the manager of an employee welfare benefit plan. While a related action was ongoing, Plaintiff initiated a second lawsuit against CAPF, California Administration Insurance Services, Inc. (CAISI), and individual members of the board of directors for both CAPF and CAISI, alleging that Defendants had breached their fiduciary duties under ERISA in the management and administration of the plan. A panel of the Ninth Circuit affirmed in part and reversed in part the district court’s judgment, holding that the district court (1) correctly granted summary judgment for Defendants on a claim that they breached their duty to hold plan assets in trust; (2) erred in granting summary judgment for Defendants on a claim that they breached their fiduciary duties by engaging in unlawful self-dealing; and (3) erred in granting partial summary judgment for Plaintiff where Defendants did not breach their fiduciary duties by failing to distribute a summary annual report. Remanded.
Court Description: ERISA. The panel affirmed in part and reversed in part the district court’s judgment in an ERISA action alleging breach of fiduciary duties in the management and administration of an employee welfare benefit plan. The panel affirmed the district court’s summary judgment in favor of the defendants on a claim that they breached their duty to hold plan assets in trust. Applying the common law of trusts, the panel held that under 29 U.S.C. § 1103, a person (legal or natural) must hold legal title to the assets of an employee benefit plan with the intent to deal with these assets solely for the benefit of the members of that plan. Such a person is the “trustee,” and the resulting relationship between the trustee and the participants in the plan with respect to a plan’s assets is a “trust” for purposes of § 1103. The panel 6 BARBOZA V. CAL. ASS’N OF PROF. FIREFIGHTERS held that compliance with § 1103 does not require parties to use express words of trust in plan documents. The panel reversed the district court’s summary judgment in favor of the defendants on a claim that they breached their fiduciary duties by engaging in unlawful self-dealing. The panel held that the plan administrator’s practice of paying its own fees and expenses from the plan’s assets was a prohibited transaction and therefore a breach of its fiduciary duty. Reversing the district court’s partial summary judgment in favor of the plaintiff, the panel held that the defendants did not breach their fiduciary duties by failing to distribute a summary annual report because the plan met the definition of a “totally unfunded welfare plan.”
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