FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS July 11, 2016
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
TRENT LEBAHN; WENDY
LEBAHN,
Plaintiffs - Appellants,
v. No. 15-3201
NATIONAL FARMERS UNION
UNIFORM PENSION PLAN;
PENSION COMMITTEE OF THE
NATIONAL FARMERS UNION
UNIFORM PENSION PLAN;
NATIONAL FARMERS UNION
PENSION CONSULTANTS,
Defendants - Appellees.
_________________________________
Appeal from the United States District Court
for the District of Kansas
(D.C. No. 6:15-CV-01065-MLB-KGG)
_________________________________
Randall K. Rathbun, Depew Gillen Rathbun & McInteer, LC, Wichita,
Kansas, for Plaintiffs-Appellants.
Jessica L. Skladzien, Lewis Brisbois Bisgaard & Smith, Wichita, Kansas
(Alan L. Rupe, Lewis Brisbois Bisgaard & Smith, Wichita, Kansas, on the
brief), for Defendants-Appellees.
_________________________________
Before HOLMES, MURPHY, and BACHARACH, Circuit Judges.
_________________________________
BACHARACH, Circuit Judge.
_________________________________
This appeal involves claims under the Employee Retirement Income
Security Act of 1974, commonly known as ERISA. Invoking ERISA, Mr.
Trent Lebahn and his wife claim that a pension-plan consultant breached a
fiduciary duty by misstating the amount of the monthly pension payments
that Mr. Lebahn would receive if he were to retire. But under ERISA, the
plan consultant could be considered a fiduciary only if she exercised
discretionary authority over the plan’s administration. On appeal, we ask:
Does a consultant exercise discretionary authority in administering the
plan simply by making a calculation of benefits at the request of a plan
participant? We conclude that a consultant does not exercise discretionary
authority under these circumstances.
I. The plan consultant’s computation error resulted in Mr. Lebahn’s
premature retirement, prompting Mr. Lebahn to sue.
Hoping to retire, Mr. Lebahn contacted Ms. Eloise Owens, a
consultant hired by his company’s pension plan, to ask what his monthly
pension payment would be. Ms. Owens told Mr. Lebahn that if he retired
soon, he would be entitled to $8,444.18 per month. At Mr. Lebahn’s
request, Ms. Owens checked her calculations and assured Mr. Lebahn that
the figure she had quoted was correct. Mr. Lebahn then retired and soon
began receiving monthly checks of $8,444.18.
But Ms. Owens’ calculations proved to be too good to be true.
Shortly after Mr. Lebahn retired, a representative of the pension plan
2
contacted Mr. Lebahn and told him that he was being overpaid by almost
$5,000 per month. A pension-plan attorney then told Mr. Lebahn that he
would need to return over $43,000 in overpayments that he had already
received. Unable to retire on his true pension benefit of $3,653.78 per
month, Mr. Lebahn tried to go back to work, but he was unable to find a
suitable job.
Mr. Lebahn and his wife then sued under ERISA. 1 The Lebahns
alleged that in incorrectly representing Mr. Lebahn’s benefits and failing
to pay Mr. Lebahn in accordance with those representations, the pension
plan, the pension committee, and “National Farmers Union Pension
Consultants” incurred ERISA liability under theories of breach of fiduciary
duty and equitable estoppel. On the defendants’ motion, the district court
dismissed the complaint for failure to state a valid claim. The Lebahns
appeal this dismissal, and we affirm.
II. We affirm the dismissal of the Lebahns’ claims for breach of
fiduciary duty and equitable estoppel.
On appeal, the Lebahns challenge the dismissal of their claims for
breach of fiduciary duty and equitable estoppel. We reject each challenge.
We first address the Lebahns’ claim for breach of fiduciary duty. For
this claim, the Lebahns must show that the defendants were ERISA
1
Mr. Lebahn had earlier sued Ms. Owens for negligent
misrepresentation. That suit was dismissed based on preemption, and we
affirmed the dismissal. Lebahn v. Owens, 813 F.3d 1300, 1302 (10th Cir.
2016).
3
fiduciaries. Although Ms. Owens is not named as a defendant, the Lebahns
argue that she was a fiduciary of the plan, rendering the named defendants
liable for Ms. Owens’ breach of her fiduciary duty. 2 The district court
rejected this position on the ground that Ms. Owens had not acted as an
ERISA fiduciary when calculating pension benefits. We agree: Because
Ms. Owens lacked discretionary authority in administering the pension
plan, she lacked fiduciary status. And in the absence of fiduciary status of
the wrongdoer, the claim for breach of fiduciary duty was properly
dismissed.
The Lebahns’ claim of equitable estoppel was also properly
dismissed. In dismissing this claim, the district court reasoned that the
Lebahns had failed to plead facts satisfying two of the five elements of
equitable estoppel: awareness of the true facts and justifiable reliance. On
appeal, the Lebahns do not challenge the district court’s conclusion that
they failed to adequately plead justifiable reliance. Because the Lebahns
fail to challenge one of the grounds relied on by the district court, we
affirm the dismissal of the equitable estoppel claim.
2
The three defendants are the National Farmers Union Uniform
Pension Plan, the Pension Committee of the National Farmers Uniform
Pension Plan, and the National Farmers Union Pension Consultants. But in
suing these entities, the Lebahns rely solely on Ms. Owens’ miscalculation
of pension benefits. Because we conclude that Ms. Owens was not a plan
fiduciary, we need not decide whether her fiduciary status could support
liability of the three named defendants.
4
III. Our review of the dismissal is de novo.
We review de novo a dismissal under Federal Rule of Civil Procedure
12(b)(6), applying the same legal standard used by the district court.
Mocek v. City of Albuquerque, 813 F.3d 912, 921 (10th Cir. 2015). Under
that standard, we inquire whether the complaint contains factual
allegations that “state a claim to relief that is plausible on its face.” Khalik
v. United Air Lines, 671 F.3d 1188, 1190 (10th Cir. 2012) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially
plausible “when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). It is not
enough for the plaintiff to plead “labels and conclusions” or to provide “a
formulaic recitation of the elements of a cause of action.” Khalik, 671 F.3d
at 1190-91 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007)). 3
3
Notwithstanding the Lebahns’ protestations to the contrary, there is
no special rule limiting dismissal of ERISA claims under Rule 12(b)(6).
See, e.g., Moffett v. Halliburton Energy Servs., Inc., 291 F.3d 1227, 1231,
1233 (10th Cir. 2002) (applying generally applicable pleading standards in
reviewing the dismissal of an ERISA claim for breach of fiduciary duty).
5
IV. The Lebahns failed to plead facts showing that Ms. Owens was a
plan fiduciary.
The Lebahns argue that Ms. Owens was a plan fiduciary under
ERISA. We disagree.
A. ERISA’s definition of a functional fiduciary requires
discretionary authority or discretionary responsibility over
plan administration.
To plead a breach of fiduciary duty, the Lebahns must adequately
allege fiduciary status of the wrongdoer. ERISA § 409, 29 U.S.C.
§ 1109(a) (rendering personally liable “[a]ny person who is a fiduciary
with respect to a plan who breaches any of the responsibilities, obligations,
or duties imposed upon fiduciaries by this subchapter”). In their complaint,
the Lebahns alleged that Ms. Owens was responsible for calculating and
reporting pension benefits. That responsibility, the Lebahns argue, is
sufficient to characterize Ms. Owens as a plan fiduciary under ERISA. We
disagree. In our view, calculating and reporting pension benefits, without
more, does not establish fiduciary status under ERISA.
There are two types of ERISA fiduciaries: named fiduciaries and
functional fiduciaries. 29 U.S.C. § 1102(a) (named fiduciaries); 29 U.S.C.
§ 1002(21)(A) (functional fiduciaries). The Lebahns invoke only the
functional-fiduciary provision.
Although the functional-fiduciary provision prescribes three means
of becoming a functional fiduciary, the Lebahns focus on only one of
6
these 4: “[A] person is a fiduciary with respect to a plan to the extent . . . he
has any discretionary authority or discretionary responsibility in the
administration of such plan.” 29 U.S.C. § 1002(21)(A). 5 Under this
provision, fiduciary status requires authority or responsibility that is
discretionary, which entails “the freedom to decide what should be done in
a particular situation.” “Discretion,” New Oxford American Dictionary (3d
ed. 2010). In our view, conducting a routine computation, as required by
one’s job, does not inherently require discretion. See Schmidt v. Sheet
Metal Workers’ Natl. Pension Fund, 128 F.3d 541, 546-47 (7th Cir. 1997)
(holding that an employee who sent the wrong form to a pension
beneficiary, causing the beneficiary to forfeit his pension benefits, was not
a fiduciary because the employee’s tasks were “ministerial”).
The Department of Labor has expressed the same view in two
interpretive bulletins discussing the functional-fiduciary provision,
§ 1002(21)(A).
In 29 C.F.R. § 2509.75–8, the Department of Labor noted that a
person who performs administrative functions, such as calculating benefits,
4
The other two means involve (1) providing investment advice and
(2) having discretionary authority or control over management of the plan
or its assets. 29 U.S.C. § 1002(21)(A)(i)-(ii). The Lebahns do not rely on
these two means of becoming a functional fiduciary.
5
The defendants argue that the Lebahns forfeited any argument based
on this statutory provision. Because we conclude that Ms. Owens’ actions
did not fall within this functional-fiduciary definition, we need not address
the defendants’ forfeiture argument.
7
does not automatically have discretionary authority and does not become a
fiduciary without something more:
Only persons who perform one or more of the functions
described in [§ 1002(21)(A)] with respect to an employee
benefit plan are fiduciaries. Therefore, a person who performs
purely ministerial functions such as the types described above
[which include “calculation of benefits” and “[p]rocessing of
claims”] for an employee benefit plan within a framework of
policies, interpretations, rules, practices and procedures made
by other persons is not a fiduciary because such person does
not have discretionary authority or discretionary control
respecting management of the plan, does not exercise any
authority or control respecting management or disposition of
the assets of the plan, and does not render investment advice
with respect to any money or other property of the plan and has
no authority or responsibility to do so.
29 C.F.R. § 2509.75–8 at D-2.
Similarly, in 29 C.F.R. § 2509.75–5, the Department of Labor
interpreted the functional-fiduciary provision to exclude from fiduciary
status persons who
provide legal, accounting, actuarial, or consulting services but
lack discretionary authority and do not offer investment advice
to the plan.
29 C.F.R. § 2509.75–5 at D-1.
In these two interpretive bulletins, the Department of Labor
expressed the view that typical consulting services—which would include
the calculation of pension benefits—are not per se discretionary.
The Lebahns dispute this reading of the statute, arguing that one can
become a fiduciary by conveying information about plan benefits to a plan
8
beneficiary. But the statutory provision at issue restricts fiduciary status to
acts involving authority or responsibility to engage in a discretionary act
of plan administration. See 29 U.S.C. § 1002(21)(A). The interpretative
bulletins apply this provision in a common-sense way, concluding that the
calculation and reporting of benefits based on preset formulas do not
involve acts of discretion. 6
To support their position, the Lebahns rely on Varity Corp. v. Howe,
516 U.S. 489 (1996), and Moore v. Lafayette Life Insurance Co., 458 F.3d
416 (6th Cir. 2006). But these opinions have no bearing here, for neither
opinion involves an assertion of fiduciary status based on discretionary
authority or responsibility over plan administration.
Varity concerned an ERISA suit for breach of fiduciary duty that had
been initiated by employees participating in their employer’s welfare
benefit plan. Varity, 516 U.S. at 492. The Supreme Court held that the
employer was acting as an ERISA fiduciary under § 1002(21)(A)(iii) when
the employer misled the employees about their likely future benefits under
the plan. Id. at 503.
But in Varity, the Court was not concerned with the meaning of the
term “discretionary.” Instead, the Court was addressing whether the
6
The parties do not argue that the statute is ambiguous, but we would
regard the Department of Labor’s interpretive bulletins as persuasive even
if the statute were ambiguous. See Skidmore v. Swift & Co., 323 U.S. 134,
140 (1944).
9
defendant’s actions involved “plan administration.” Id. at 502-05. The
Court apparently assumed that the employer had discretionary authority, a
safe assumption in light of the facts. The employer had called a special
meeting of the employee-beneficiaries and conveyed to them false
information about a new subsidiary’s prospects to entice employees to
transfer to the new subsidiary. Id. at 493-94. The meeting was intended to
effectuate an administrative change initiated by the employer. And unlike
Ms. Owens, the employer in Varity was not calculating future plan benefits
according to a formula. Instead, the employer was predicting future
business and pension performance, an undertaking that involves
considerable decision-making. Id. As a result, Varity does not affect our
inquiry into whether Ms. Owens’ duties involved discretionary authority.
The Lebahns also rely on the Sixth Circuit’s opinion in Moore v.
Lafayette Life Insurance Co., which held that “providing plan participants
with materially misleading information” constitutes a breach of fiduciary
duty. 458 F.3d 417, 432 (6th Cir. 2006); see also Drennan v. Gen. Motors
Corp., 977 F.2d 246, 251 (6th Cir. 1992) (stating, in the context of
discussing a fiduciary’s duties, that furnishing misleading information to
plan participants “will support a claim for a breach of fiduciary duty”
(quoting Berlin v. Mich. Bell Tel. Co., 858 F.2d 1154, 1163 (6th Cir.
1988))). But we are not called upon to decide whether a breach of duty
10
took place. Instead, we must determine whether Ms. Owens could be
regarded as a fiduciary. Moore does not bear on this determination.
The Sixth Circuit did address fiduciary status in Sprague v. General
Motors Corp., 133 F.3d 388 (6th Cir. 1998) (en banc). There, the Sixth
Circuit remarked that under Varity, an employer “may have acted in a
fiduciary capacity when it explained its retirement program to the early
retirees.” 133 F.3d at 405. But the discussion of the employer’s fiduciary
status constituted dicta because the court ultimately dismissed the case on
the separate ground that the employer had not breached a fiduciary duty,
even assuming that such a duty existed. Id. at 405-06. We therefore cannot
say that the Sixth Circuit has adopted a different view of Varity than we do
here.
Some courts have interpreted Sixth Circuit case law to expand
ERISA’s functional-fiduciary provision to encompass persons who lack
discretionary authority. See Van Loo v. Cajun Operating Co., 64 F. Supp.
3d 1007, 1017-18 (E.D. Mich. 2014); Weaver v. Prudential Ins. Co. of Am.,
No. 3:10-CV-438, 2011 WL 4833574, at *7 (M.D. Tenn. Oct. 12, 2011).
But we do not regard these opinions as persuasive because their approach
would stretch the definition of “fiduciary” beyond any meaningful
boundaries.
Rather than follow the lead of those courts, we rely on the plain
meaning of the terms “fiduciary” and “discretionary authority [or] . . .
11
responsibility.” See 29 U.S.C. § 1002(21)(A). In doing so, we share the
view of the Department of Labor that calculating benefits at a participant’s
request does not involve discretionary authority or responsibility over plan
administration.
B. The Lebahns failed to plead that Ms. Owens had
discretionary authority or discretionary responsibility.
Taken as true, the Lebahns’ allegations establish only that Ms.
Owens was responsible for calculating pension benefits. But merely
calculating benefits, without more, does not establish fiduciary status
under ERISA. Thus, the facts alleged by the Lebahns are insufficient for
liability.
The complaint contains a number of allegations regarding Ms.
Owens’ authorities and responsibilities:
“The Pension Consultants were supposed to determine benefits,
qualification and other certifications of benefits.” Appellants’
App’x at 4.
“Mr. Lebahn contacted Eloise Owens, who at the time was the
pension consultant for the National Farmers Union Uniform
Pension Plan . . . . The Plan has the authority to manage the
plan and, in accordance with that authority, hired Ms. Owens
and her company to determine benefits, qualifications and other
certifications of benefits. As a pension consultant, Ms. Owens
was acting as a functional fiduciary. Ms. Owens indicated that
she would make the appropriate calculation and let Lebahn
know what his monthly benefits would be. Mr. Lebahn had to
contact the pension consultant because the plan was too
complicated to determine the benefits without the aid of a
consultant.” Id.
12
“According to the [sic] Ms. Owens, upon early retirement,
Lebahn would be entitled to monthly benefits in the amount of
$8444.18. Ms. Owens sent written confirmation of this benefit
calculation.” Id. at 5.
“In response to Mr. Lebahn’s concerns, Ms. Owens verified her
numbers and indicated that the actuaries were low and were
missing something.” Id. at 6.
“In response to [his] application, Mr. Lebahn received a letter
from the Pension Consultant for the National Farmers Union
Uniform Pension Plan on June 15, 2012, advising him that his
pension payment for his retirement beginning on July 1, 2012
would be $8445.39 per month. The pension consultant . . . was
acting as a fiduciary and agent of the Plan and informed Mr.
Lebahn on the amount he would receive if retiring.” Id.
Even if these allegations are true, they would not establish that Ms.
Owens had discretionary authority or responsibility as required by
§ 1002(A)(21)(iii). The Lebahns have pleaded only that Ms. Owens
responded to Mr. Lebahn’s request by calculating his pension-plan
benefits, informing him of the results, and verifying the calculations in
response to Mr. Lebahn’s stated concerns. These allegations assert only
that Ms. Owens was responsible for calculating pension benefits and
communicating these calculations to plan participants. But that
responsibility does not establish fiduciary status under ERISA. And
nowhere do the Lebahns otherwise plead or argue that Ms. Owens had any
additional authority or responsibility delegated by the plan. Therefore, we
affirm the dismissal of the Lebahns’ claim for breach of fiduciary duty.
13
V. The Lebahns failed to adequately plead equitable estoppel.
The Lebahns’ second claim is for equitable estoppel. The district
court dismissed this claim, and we affirm this ruling because the Lebahns
do not challenge both of the independent grounds on which the district
court based its dismissal.
A plan beneficiary may seek “appropriate equitable relief” to redress
ERISA violations or enforce ERISA provisions. See ERISA § 502(a)(3), 29
U.S.C. § 1132(a)(3). It is well established that equitable estoppel is a form
of equitable relief available under ERISA § 502(a)(3). See Jensen v. Solvay
Chems., Inc., 721 F.3d 1180, 1185 (10th Cir. 2013).
Although we have not definitively identified the elements of an
ERISA claim of equitable estoppel, the parties assume that we should
apply the elements stated in our unpublished opinion, Palmer v.
Metropolitan Life Insurance Co., 415 F. App’x 913 (10th Cir. 2011).
Therefore, we assume without deciding that Palmer correctly sets out the
elements of an ERISA equitable estoppel claim.
Two of these elements are
awareness of the true facts by the party to be estopped and
reliance that is detrimental and justifiable. 7
7
Palmer lists five elements of an ERISA claim for equitable estoppel:
1) conduct or language amounting to a representation of
material fact; 2) awareness of the true facts by the party to be
14
The district court held that the Lebahns had not adequately alleged either
of these elements. On appeal, the Lebahns challenge the district court’s
holding with respect to one of these elements (awareness of the true facts
by the party to be estopped) but not with respect to the other element
(justifiable reliance by the party seeking estoppel). 8
When a district court dismisses a claim on two or more independent
grounds, the appellant must challenge each of those grounds. Bones v.
Honeywell Int’l, Inc., 366 F.3d 869, 877 (10th Cir. 2004). But the Lebahns
have not challenged the district court’s ruling on the element of justifiable
estopped; 3) an intention on the part of the party to be estopped
that the representation be acted on, or conduct toward the party
asserting the estoppel such that the latter has a right to believe
that the former’s conduct is so intended; 4) unawareness of the
true facts by the party asserting the estoppel; and
5) detrimental and justifiable reliance by the party asserting
estoppel on the representation.
Palmer v. Metro. Life Ins. Co., 415 F. App’x 913, 920 (10th Cir. 2011)
(quoting Armistead v. Vernitron Corp., 944 F.2d 1287, 1298 (6th Cir.
1991)). Additionally, the Supreme Court has held that “when a court
exercises its authority under § 502(a)(3) to impose a remedy equivalent to
estoppel, a showing of detrimental reliance must be made.” CIGNA Corp.
v. Amara, 563 U.S. 421, 443 (2011).
8
At oral argument, the Lebahns’ counsel argued that it was
inappropriate to resolve the justifiable reliance issue on a motion to
dismiss. Oral Argument at 6:46-7:24, Lebahn v. Nat’l Farmers Union Unif.
Pension Plan, No. 15-3201 (10th Cir. May 3, 2016). But the Lebahns did
not make this argument in their appellate briefs. As a result, this argument
is waived. See Fed. Ins. Co. v. Tri-State Ins. Co., 157 F.3d 800, 805 (10th
Cir. 1998) (“Issues raised for the first time at oral argument are considered
waived.”).
15
reliance. Thus, even if we were to adopt the Lebahns’ position on the
second element (awareness of the true facts by the party to be estopped),
the Lebahns have given us no basis to disturb the district court’s ruling on
the first element, that there was no justifiable reliance. In these
circumstances, we must affirm. See id.; see also Starkey ex rel. AB v.
Boulder Cty. Soc. Servs., 569 F.3d 1244, 1252 (10th Cir. 2009) (“When an
appellant does not challenge a district court’s alternate ground for its
ruling, we may affirm the ruling.”).
In their reply brief, the Lebahns state that the district court’s
dismissal order omitted any “discussion of [the justifiable-reliance]
element.” Appellants’ Reply Br. at 9. But as the Lebahns’ counsel
conceded at oral argument, this statement is incorrect. In its order, the
district court expressly considered whether Mr. Lebahn’s reliance was
justified:
Moreover, plaintiffs have not set forth sufficient facts which
would support a finding that their reliance on Owens’ statement
was justifiable in light of the fact that the complaint states that
Lebahn “questioned the validity of [Owens’] numbers as the
monthly benefits Owens had calculated was substantially
greater than the annual statements he had been receiving each
year.” (Doc. 1 at 3). In addition, the Plan unambiguously states
the formula to calculate pension benefits. See Palmer, 415 Fed.
App’x at 921 (no justifiable reliance when Plan documents
unambiguously set forth Plan terms).
Appellants’ App’x at 240-41.
16
Because the Lebahns have not challenged this part of the ruling, we
affirm the dismissal of the equitable estoppel claim.
VI. Conclusion
We affirm.
17