Unpublished Disposition, 940 F.2d 667 (9th Cir. 1989)

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US Court of Appeals for the Ninth Circuit - 940 F.2d 667 (9th Cir. 1989)

Joseph L. BLACKWELL, Trustees of the Teamsters Security Fundfor Southern Nevada, Plaintiffs-Appellees,v.TRANSAMERICA OCCIDENTAL LIFE, et al., Defendant,andLeonard Saye, Central Administrators, Inc., a Nevadacorporation, Defendants-Appellants.

No. 89-16687.

United States Court of Appeals, Ninth Circuit.

Submitted Feb. 12, 1991.

Decided July 23, 1991.

Before CHAMBERS, WALLACE and WIGGINS, Circuit Judges.


Leonard Saye and Central Administrators, Inc. appeal the district court's award of damages, costs and attorney's fees in an action brought by the Trustees of the Teamsters Security Fund for Southern Nevada and Joseph Blackwell which alleged that Central breached its fiduciary duty pursuant to ERISA, 29 U.S.C. § 1002(21), in administering portions of the Fund because Central failed to: (1) maintain eligibility records in a readily transferable form, and (2) take adequate steps in verifying the eligibility of a self-paying beneficiary before authorizing coverage and accepting payments from him.

These two cases were consolidated by the district court and tried July 20-23 and 29, 1987. The original judgment, April 18, 1988, did not sufficiently identify the parties against whom judgment was entered. Upon remand the lower court clarified this in a new order issued September 7, 1989. We now consider the merits and affirm the lower court.

Saye and Central contend that whether they were fiduciaries under ERISA is a legal question reviewed de novo. The Trustees maintain that Saye and Central's status as fiduciary is a finding of fact which is to be upheld unless clearly erroneous. We review the district court's findings of fact under the clearly erroneous standard. Rozay's Transfer v. Local Freight Drivers, 850 F.2d 1321, 1326 (9th Cir. 1988), cert. denied, 490 U.S. 1030 (1989). The interpretation of a federal statute, such as ERISA, is a question of law, and we review it de novo. Saratoga Sav. & Loan Ass'n v. Federal Home Loan Bank Bd., 879 F.2d 689, 691 (9th Cir. 1989).

The Employee Retirement Income Security Program, 29 U.S.C. § 1002(21), states:

... a person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, ..., or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan.

The lower court found that Saye and Central were fiduciaries to the Fund based on the evidence of Saye and Central's discretionary authority and control over the Fund as well as their status as plan administrator. Saye and Central breached their fiduciary duty by failing to maintain usable eligibility information. They further breached when they refused to turn over what records they had to the new plan administrators. Thus, in the Trustees case the lower court found Central and Saye jointly and severally liable for the judgment.

In the Blackwell case, the lower court awarded the Fund damages for the amount of the Blackwells' medical claim together with attorney's fees expended by the Fund for Saye's breach of fiduciary duty in grossly mishandling the Blackwell claim by failing to adequately verify the Blackwell's eligibility for the plan. In this case, Central alone is liable.

We affirm.


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Circuit Rule 36-3