CHARLES B. GOODWIN, United States District Judge.
Now before the Court is the Motion for a New Trial filed by Plaintiff AGI Consulting L.L.C., by Assaf Al-Assaf as Trustee/Owner/Plan Administrator of an Alleged Non-Integrated Defined Benefit Plan, pursuant to Federal Rules of Civil Procedure 59(a)(1)(B) and 59(a)(2). See Pl.'s Mot. (Doc. No. 18). Defendant American National Insurance Company has responded in opposition (Doc. No. 19), and Plaintiff has replied (Doc. No. 20).
On July 30, 2018, the Court granted Defendant's Motion to Dismiss after Plaintiff confessed that its cause of action for fraud against Defendant was time-barred. See Order of July 30, 2018 (Doc. No. 16) (West, J.). The Court further denied Plaintiff's request, set forth in its response to Defendant's Motion to Dismiss, to amend its complaint, after finding that amendment would be futile because Plaintiff's proposed claims for rescission, reformation, and breach of contract would likewise
Plaintiff has now moved the Court to vacate its Order and Judgment (Doc. Nos. 16, 17) entered on July 30, 2018, and permit Plaintiff to file an amended complaint alleging claims for breach of fiduciary duty against Defendant under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq., as amended ("ERISA"). See Pl.'s Reply ¶ 23 (Plaintiff's "sole purpose [in filing the Motion for a New Trial is] to amend its Complaint to [set forth] an ERISA cause of action for breach of a fiduciary duty").
In support of its motion, Plaintiff has relied on Federal Rules of Civil Procedure 59(a)(1)(B) and (a)(2). These rules provide, respectively, that the Court "may ... grant a new trial ... after a nonjury trial, for any reason for which a rehearing has heretofore been granted in a suit in equity in federal court" and "may, on motion for a new trial, open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new ones, and direct the entry of a new judgment." Fed. R. Civ. P. 59(a)(1)(B), (a)(2).
There has been no trial, nonjury or otherwise, in this matter, however. Neither Rule 59(a)(1)(B) nor Rule 59(a)(2), therefore, applies as a method for challenging the Court's Order and Judgment. See Soto v. Bd. of Cty. Comm'rs of Caddo Cty., No. CIV-16-416-F, 2017 WL 6551295, at *1 (W.D. Okla. Oct. 4, 2017).
The instant motion is more properly characterized as a motion to alter or amend the Court's Order and Judgment under Federal Rule of Civil Procedure 59(e), which permits relief in certain "limited circumstances." Hayes Family Tr. v. State Farm Fire & Cas. Co., 845 F.3d 997, 1004 (10th Cir. 2017). See Soto, 2017 WL 6551295, at *1 (Fed. R. Civ. P. 59(e) is "appropriate vehicle to review the court's order and judgment" after court has granted a motion to dismiss under Fed. R. Civ. P. 12(b)(6)). Those circumstances include
Hayes Family Tr., 845 F.3d at 1004 (alterations in original) (quoting Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000)). See Monge v. RG Petro-Mach. (Grp.) Co., 701 F.3d 598, 611 (10th Cir. 2012) (quoting Webber v. Mefford, 43 F.3d 1340, 1345 (10th Cir. 1994) ("`purpose of [Fed. R. Civ. P. 59(e)] motion is to correct manifest errors of law'")). While a Rule 59(e) motion "is not appropriate to revisit issues already addressed or [to] advance arguments that could have been raised in prior briefing," relief under this rule may be available if a "court has misapprehended the facts, a party's position, or the controlling law." Servants of the Paraclete, 204 F.3d at 1012 (citation omitted).
Plaintiff has stated, "[b]y way of explanation and not as an excuse," that "when Plaintiff [first] sought to amend its [c]omplaint, Plaintiff was not clear about the
Plaintiff has contended that if the Court had done so, it would have applied 29 U.S.C. § 1113, the statute applicable "to actions brought to redress a fiduciary's breach of its obligations to enforce the provisions of ERISA," Trs. of Wyo. Laborers Health & Welfare Plan v. Morgen & Oswood Constr. Co., 850 F.2d 613, 618 n.8 (10th Cir. 1988) (citation omitted), as opposed to Okla. Stat. tit. 12, § 95, and Plaintiff's proposed claims would have been deemed timely. See Pl.'s Mot. ¶¶ 6, 8-9, 13.
Plaintiff has conceded, however, that it did not "raise[ ] the application of ERISA" in response to Defendant's argument that amendment would be futile, (b) acknowledge in its submissions that it was seeking relief under ERISA, or (c) cite § 1113. Id. ¶ 8. Plaintiff has argued that despite "this lack of clarity" in its pleadings and papers, the Court should now vacate its Order and Judgment and permit Plaintiff to file an amended complaint, this time "clearly stat[ing] an ERISA [claim and] statute of limitations...." Id. ¶¶ 9, 32.
Because the Court's and the parties' reliance on a state statute of limitations (and failure to address whether ERISA had pre-empted Defendant's proposed state law claims
Section 1113 provides that "[n]o action may be commenced ... with respect to a fiduciary's breach of any responsibility, duty, or obligation,"
29 U.S.C. § 1113.
By its express terms, then, § 1113 creates two periods for filing suit for breach of the duties imposed on ERISA fiduciaries by 29 U.S.C. § 1104(a): three years and six years. If plaintiff knew of defendant's nonfraudulent breach, § 1113(2)'s three-year limitations period applies, measured from "the earliest date on which the plaintiff had actual knowledge of the breach or violation." Id. § 1113(2).
The Tenth Circuit has characterized § 1113(1)'s six-year period as a "statute of repose." Fulghum v. Embarq Corp., 785 F.3d 395, 413 (10th Cir. 2015) (citations omitted). "[S]tatutes of repose operate to `extinguish a plaintiff's cause of action whether or not the plaintiff should have discovered within that period that there was a violation or an injury.'" Id. (quoting Nat'l Credit Union Admin. Bd. v. Nomura Home Equity Loan, Inc., 764 F.3d 1199, 1224 (10th Cir. 2014)). Under § 1113(1), a plaintiff has six years to file its lawsuit, with this six-year period beginning to run either on the date defendant last acted, if defendant's breach involves an affirmative act, see 29 U.S.C. § 1113(1)(A), or on "the latest date on which [defendant] ... could have cured the ... violation," id. § 1113(1)(B), if defendant's breach is the result of an omission.
In addition to the six-year statute of repose, "§ 1113 contains language providing that `in the case of fraud or concealment,' a civil enforcement action `may be commenced not later than six years after the date of discovery of [the] breach or violation.'" Fulghum, 785 F.3d at 413 (quoting 29 U.S.C. § 1113). The Tenth Circuit views "the `fraud or concealment' provision" not as "a separate statute of limitations," but rather as "a legislatively created exception to the six-year statute of repose." Id. at 414 (citation omitted). The circuit reads "[t]he fraud or concealment exception ... in the disjunctive[,]" id. at 415, and "`[c]anons of construction indicate that terms connected in the disjunctive... be given separate meanings.'" Id. (quotation and further citations omitted). "[T]he exception to the general six-year statute," therefore
Id. (quotation and footnote omitted).
Defendant has argued that whether the Court applies § 1113's three-year limitations period, the six-year statute of repose, or § 1113's six-year "fraud or concealment" provision, Plaintiff's proposed breach of fiduciary claims are time-barred and amendment as Plaintiff has now suggested would be futile. The Court agrees.
In the proposed amended pleading which Plaintiff had attached to its response to Defendant's Motion to Dismiss, see Pl.'s Resp. Ex. 2 (Doc. No. 12-3), and which Plaintiff has now contended should have been evaluated under § 1113 (and not Okla. Stat. tit. 12, § 95), Plaintiff has alleged:
Plaintiff has alleged in its proposed pleading that on August 10, 2016, three years after "the DBP was [f]rozen," id. ¶ 24, Plaintiff "discovered the existence of the two different ... [P]lans," id. ¶ 25, learned that "[t]he DBP that Defendant operated was materially different than the DBP Plaintiff had purchased," id. ¶ 26, and further learned that "[t]he signature page from ... Plaintiff's [handwritten] Adoption Agreement [had been] ... attached to ... Defendant's [typewritten] Adoption Agreement." Id. ¶ 27. But see Pl.'s Resp. (Doc. No. 12) ¶ 9 ("Plaintiff believed the first date of discovery of the switched signature pages was March 24, 2016").
Papers filed in this matter revealed, however, that Plaintiff had in its possession as early as March 14, 2012, a copy of the typewritten Adoption Agreement that contained the materially different terms. See id. at 3, n.1.
The Court finds, upon review of Plaintiff's proposed pleading and other documents properly considered, that Plaintiff had notice by March 14, 2012, that: (1) Defendant had "not provide[d] the same Adoption Agreement ... Plaintiff [had] purchased," id. Ex. 3 (Doc. No. 12-3) ¶ 31; (2) the DBP that Defendant was managing required only six months of employment to be eligible as a Plan participant, as opposed to one year of employment as stated in the handwritten Adoption Agreement, compare Compl. Ex. 3 (Doc. No. 1-4) at 4, with id. Ex. 1 (Doc. No. 1-2) at 4;
Plaintiff has alleged in its proposed pleading that Defendant fraudulently "manag[ed] a DBP that was materially different than the Adoption Agreement... Plaintiff had executed on June 22, 2011." Pl.'s Resp. Ex. 3 (Doc. No. 12-3) ¶ 20; e.g., id. ¶ 38 (the freezing of the DBP and the increase in funding requirements "are a direct result of ... Defendant's fraud in using its DBP terms rather than the Adoption Agreement ... Plaintiff signed on June 22, 2011"). Further, Plaintiff has alleged that Defendant concealed the fact that two plans existed by attaching "[t]he signature page from ... Plaintiff's Adoption Agreement ... to ... Defendant's Adoption Agreement." Pl.'s Resp. Ex. 3 (Doc. No. 12-3) ¶ 27.
Under § 1113's "fraud or concealment" provision, an "action `may be commenced not later than six years after the date of discovery of [the] breach or violation.'" Fulghum, 785 F.3d at 413 (quoting 29 U.S.C. § 1113). It is undisputed that Plaintiff had in its possession as early as March 14, 2012, a copy of the typewritten Adoption Agreement. That copy not only revealed the materially different terms, see Pl.'s Resp. (Doc. No. 12) at 3, n.1, but also had attached to it the Plaintiff's signature page. As Plaintiff has acknowledged, the document "would have put Plaintiff on notice of the two different plans." Id. ¶ 9.
Plaintiff therefore had six years after the date of discovery of Defendant's alleged fraudulent conduct and its alleged concealment, or until March 14, 2018, to assert causes of action under § 1109 for breach of fiduciary duty. Because Plaintiff did not seek relief until March 21, 2018 (assuming Plaintiff's claims relate back under Fed. R. Civ. P. 15(c)), amendment of Plaintiff's complaint at this stage of the litigation to more clearly articulate its ERISA claims would be futile.
Plaintiff also has alleged in its proposed pleading that Defendant also breached its fiduciary duty by failing to resolve the census issue on September 12, 2013, after Plaintiff complained that date about the increase in funding. Plaintiff has contended that Defendant "made its first request for a 2011 census [on December 29, 2011]," Pl.'s Resp. Ex. 2 (Doc. 12-3) ¶ 18, and that Plaintiff responded to that request on February 8, 2012, see id. Plaintiff has argued that "[w]ith each census, [Plaintiff] questioned and challenged incorrect inclusions by Defendant." Pl.'s Mot. ¶ 21. Plaintiff has alleged in its proposed pleading that "from the first year's census and every census thereafter, disagreements on the census ... arose." Pl.'s Resp. Ex. 2 (Doc. 12-3) ¶ 20. Plaintiff has alleged that Defendant notified Plaintiff on August 27, 2013, "of a substantial increase in funding," id. ¶ 23, and the DBP was thereafter frozen on September 12, 2013, see id. ¶ 24.
Section 1113(2) provides that "[n]o action may be commenced ... with respect to a fiduciary's breach of any responsibility, duty, or obligation ... after ... three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation." 29 U.S.C. § 1113(2).
Following the more prevalent view
In its Motion for a New Trial, Plaintiff has prayed that this Court vacate its Order and Judgment entered on July 30, 2018, reconsider the timeliness of Plaintiff's proposed claims under § 1113, and allow Plaintiff to file another amended complaint "to clearly state an ERISA statute of limitations among other things." Pl.'s Mot. (Doc. No. 18) ¶ 32.
As stated, the Court's and the parties' reliance on a state-law statute of limitations may be deemed a manifest error of law or a misapprehension of the controlling law that required revisitation. Having now reexamined Plaintiff's proposed claims under § 1113 and having determined that amendment would be futile because those claims would be time-barred, the Court again FINDS that dismissal of this lawsuit is warranted. Accordingly, the Court DENIES
IT IS SO ORDERED this 28th day of March, 2019.
These documents reflect that, as of September 12, 2013, Plaintiff would have had actual knowledge of the terms of the DBP that Defendant was managing, absent any allegations of fraud or concealment, including the following provisions: (1) Article I, titled "Participation in the Plan," see id. at 4 (capitalization modified to initial capitals only), which advises employees that they will be eligible to participate after "completion of six (6) months of service," id.; and (2) Article II, titled "Determination of Benefits," see id. at 5 (capitalization modified to initial capitals only), which advises employees that "[a]ccrued [b]enefit[s] will be determined based upon a retirement benefit formula ... equal to 200% of Your Average Compensation," id.