17‐1826‐cv (L)
Testa v. Becker
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term 2017
(Argued: May 22, 2018 Decided: December 12, 2018)
Nos. 17‐1826‐cv, 17‐1985‐cv
––––––––––––––––––––––––––––––––––––
ROBERT TESTA, an individual,
Plaintiff‐Appellee‐Cross‐Appellant,
‐v.‐
LAWRENCE BECKER, as plan administrator of the Xerox Corporation Retirement
Income Guarantee Plan, XEROX CORPORATION RETIREMENT INCOME GUARANTEE
PLAN, an Employee Pension Benefit Plan,
Defendants‐Appellants‐Cross‐Appellees.
––––––––––––––––––––––––––––––––––––
Before: PARKER, LIVINGSTON, CHIN, Circuit Judges.
In 1998, Defendant‐Appellant‐Cross‐Appellee Xerox Corporation
Retirement Income Guarantee Plan (“Xerox Plan”) issued a Summary Plan
Description explaining that it would calculate plan participants’ benefits using the
so‐called “phantom account offset” method. In 2006, we held in Frommert v.
Conkright, 433 F.3d 254 (2d Cir. 2006), that Defendant‐Appellant‐Cross‐Appellee
Lawrence Becker (“Becker”) could not use the phantom account offset when
calculating benefits for a group of over one hundred plan participants who were
hired before 1998. Three years later, Plaintiff‐Appellee‐Cross‐Appellant Robert
1
Testa (“Testa”), who was hired before 1998, learned that Becker had applied the
phantom account offset to him. Testa sued Becker under ERISA for denial of
benefits and breach of fiduciary duty, alleging that Testa had defied our decision
in Frommert. The United States District Court for the Western District of New
York (Larimer, J.) dismissed Testa’s denial‐of‐benefits claim as untimely but
granted Testa summary judgment on his fiduciary‐duty claim. Becker appealed
the latter; Testa cross‐appealed the former. We conclude that Testa’s denial‐of‐
benefits claim is untimely, and that Becker, not Testa, was entitled to summary
judgment on the fiduciary‐duty claim. Accordingly, the judgment of the district
court is AFFIRMED in part, REVERSED in part, and the case is REMANDED with
directions to enter judgment for Becker and the Xerox Plan.
FOR ROBERT TESTA: SHAUN P. MARTIN, University of San
Diego School of Law (Amber Ziegler,
John A. Strain, Law Offices of John A.
Strain, Manhattan Beach, CA, on the brief),
San Diego, CA.
FOR LAWRENCE BECKER, NOAH LIPSCHULTZ (Margaret A. Clemens,
XEROX CORPORATION Pamela S.C. Reynolds, on the brief), Littler
RETIREMENT INCOME Mendelson, P.C., Fairport, NY.
GUARANTEE PLAN:
DEBRA ANN LIVINGSTON, Circuit Judge:
This case presents two questions concerning the Employee Retirement
Income Security Act (“ERISA”):
whether a litigant may bring a denial‐of‐benefits claim under ERISA
when the limitations period is six years and his claim accrued twelve
years before he sued; and
whether Frommert v. Conkright (“Frommert I”), 433 F.3d 254 (2d Cir. 2006),
ordered Defendant‐Appellant‐Cross‐Appellee Lawrence Becker
2
(“Becker”) not to apply the so‐called “phantom account offset” to plan
participants who did not bring timely denial‐of‐benefits claims.
The answer to both questions is no. We therefore AFFIRM in part and VACATE
in part the judgment below and REMAND the case to the district court for further
proceedings consistent with this opinion.
BACKGROUND
I. Factual Background1
Becker administers the Xerox Corporation Retirement Income Guarantee
Plan (“Xerox Plan”). This case concerns the method by which Becker calculates
benefits for employees who left Xerox, then later returned to Xerox, and then later
retired (the “rehired employees”). When they initially left Xerox, these rehired
employees typically received a lump sum payment equal to the total value of their
then‐accrued pension benefit. Consequently, when these rehired employees
ultimately retired, their final pension benefits were reduced by the lump sum that
they had previously received upon their initial departure. During the period at
issue in this case, however, Becker offset more than just this lump sum.2 He also
1 The facts presented below are, unless otherwise noted, undisputed facts derived
from the parties’ submissions at summary judgment.
2 Throughout this opinion, we refer to the Defendants‐Appellants‐Cross‐
Appellees collectively as “Becker.”
3
deducted from the rehired employees’ benefits an additional sum approximating
the interest that the previous disbursement would have earned had it remained in
the pension plan. This hypothetical interest deduction has come to be known as
the “phantom account offset.”
In 1999, a group of more than one hundred plan participants sued the Xerox
Plan, alleging that the terms of the Xerox Plan did not allow it to apply the
phantom account offset. They argued that the phantom account offset violated
ERISA’s anti‐cutback rule, which provides that “[t]he accrued benefit of a
participant under a plan may not be decreased by an amendment of the plan.”
ERISA § 204(g)(1), 29 U.S.C. § 1054(g)(1). The plaintiffs sued for denial of benefits
under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), and they sought an
injunction prohibiting the Xerox Plan from using the phantom account offset
under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3) (creating a cause of action “to
enjoin any act or practice which violates any provision of this subchapter or the
terms of the plan, or . . . obtain other appropriate equitable relief”). In Frommert
I, we held for the plaintiffs. See 433 F.3d at 256–57.
We concluded that the Xerox Plan “attempted to implement the phantom
account offset without properly amending the terms of the Plan or providing
4
adequate notice to rehired employees.” Id. at 262. The phantom account offset
was eventually “added by amendment of the Plan’s text” when the Xerox Plan
issued its 1998 Summary Plan Description (“SPD”), which explained the
mechanics of the phantom account offset in full. Id. at 263. We said that for this
reason, “the phantom account may not be applied to employees rehired prior to
the issuance of the 1998 SPD.” Id. We then permitted the plaintiffs to recover
on their denial‐of‐benefits claim under ERISA § 502(a)(1)(B). Id. at 270. But we
declined to issue “a judgment declaring that the phantom account is prohibited by
ERISA and enjoining its application in calculating the benefits of any Plan
participants.” Id. at 269; see also id. (commenting that “such sweeping relief [was]
not warranted”). Beyond ruling out broad equitable and declaratory relief,
Frommert I did not decide on the plaintiffs’ appropriate remedy. The Frommert
parties have been litigating this issue ever since. See, e.g., Frommert v. Conkright
(“Frommert II”), 535 F.3d 111 (2d Cir. 2008), rev’d and remanded, 559 U.S. 506 (2010);
Frommert v. Conkright (“Frommert III”), 738 F.3d 522 (2d Cir. 2013).3
3 After we decided Frommert I, the Ninth Circuit also held that ERISA did not
permit the application of the phantom account offset, though for different reasons. See
Miller v. Xerox Corp. Ret. Income Guarantee Plan, 464 F.3d 871, 876 (9th Cir. 2006).
5
After we decided Frommert I, Becker continued to apply the phantom
account offset to some rehired employees who were not parties to the Frommert
litigation. This spawned a new batch of rehired employee litigation—including
this case. Plaintiff‐Appellee‐Cross‐Appellant Robert Testa (“Testa”) began
working at Xerox in 1972. He left Xerox in 1983, taking a lump‐sum distribution
of roughly $30,000 from the Xerox Plan. He was rehired in 1985 and retired in
2008. When Testa retired, Becker applied the phantom account offset in his
calculation of Testa’s pension benefits. In January 2009, Testa received a
“pension calculation statement” that informed Testa of the amount of benefits he
would receive pursuant to the phantom account offset calculation.
II. Procedural History
After contesting Becker’s calculation of his benefits in two 2009 letters, Testa
sued Becker and the Xerox Plan in January in the United States District Court for
the Central District of California. As relevant here, he alleged two principal
claims for relief: denial of benefits under ERISA § 502(a)(1)(B) and breach of
fiduciary duty under § 502(a)(3), see Devlin v. Empire Blue Cross & Blue Shield, 274
F.3d 76, 89 (2d Cir. 2001) (holding that plan participants may bring fiduciary‐duty
claims under ERISA § 502(a)(3)). His denial‐of‐benefits claim was virtually
6
identical to that of the Frommert plaintiffs: the phantom account offset
impermissibly reduced his pension benefits. Testa then argued that it was a
breach of fiduciary duty for Becker to continue to apply the phantom account
offset in light of this Court’s decision in Frommert I.4
The case was transferred to the United States District Court for the Western
District of New York (Larimer, J.) in April 2010. Becker then moved to dismiss
both claims. On October 30, 2013, the district court granted Becker’s motion in
part, dismissing Testa’s denial‐of‐benefits claim on timeliness grounds. Testa v.
Becker, 979 F. Supp. 2d 379, 383–84 (W.D.N.Y. 2013). The court first concluded
that Testa’s denial‐of‐benefits claim became untimely in 2004 because Frommert I
held that the Xerox Plan had incorporated the phantom account offset in 1998, and
the statute of limitations for a denial‐of‐benefits claim in New York is six years.
Id. at 383. But the court did not dismiss Testa’s fiduciary‐duty claim. Testa had
argued that Becker had a fiduciary duty to comply with the Second Circuit’s
4 Because he filed his complaint in California, Testa initially alleged that Becker
was enforcing the phantom account offset in violation of the Ninth Circuit’s decision in
Miller. After the case was transferred to New York, Testa began to argue that Becker
defied both Miller and Frommert I. On appeal, he has dropped all reference to Miller in
his fiduciary‐duty arguments and instead relies principally on Frommert I. We therefore
focus our fiduciary‐duty discussion on Frommert I, rather than Miller. See, e.g., Norton v.
Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998) (“Issues not sufficiently argued in the briefs
are considered waived and normally will not be addressed on appeal.”).
7
decision in Frommert I, which, he maintained, held that “the phantom account may
not be applied to employees”—like Testa—“rehired prior to the issuance of the
1998 SPD.” 433 F.3d at 263. The district court concluded that this claim was not
untimely because the statute of limitations began running only when Becker’s
decision to ignore Frommert I “became known to” Testa, “presumably” January
2009 or earlier. Testa, 979 F. Supp. 2d at 384.
At the end of discovery, both parties moved for summary judgment. On
May 9, 2017, the district court held for Testa. See Testa v. Becker, No. 10‐CV‐6229L,
2017 WL 1857384 (W.D.N.Y. May 9, 2017). Becker had maintained that it was not
a breach of fiduciary duty for him to continue to apply the phantom account offset
to Testa because Testa could no longer bring a timely denial‐of‐benefits claim, as
the court recognized in its October 30, 2013 decision. The district court rejected
this argument, concluding that Frommert I directed Becker not to apply the
phantom account offset to any employees rehired before 1998. Citing Frommert
I’s apparent mandate, the court concluded that Testa was entitled to summary
judgment on his fiduciary‐duty claim.
The district court entered final judgment on May 10, 2017. Becker
appealed the district court’s May 9, 2017 decision granting summary judgment to
8
Testa, and Testa cross‐appealed the district court’s October 30, 2013 dismissal of
his denial‐of‐benefits claim.5
DISCUSSION
I
We begin our analysis with Testa’s challenge to the district court’s dismissal
of his denial‐of‐benefits claim on timeliness grounds. We review de novo a district
court’s grant of a motion to dismiss under Fed. R. Civ. P. 12(b)(6), accepting all
factual allegations in the complaint as true and drawing all reasonable inferences
in the plaintiff’s favor. See, e.g., O’Donnell v. AXA Equitable Life Ins. Co., 887 F.3d
124, 128 (2d Cir. 2018). To survive a motion to dismiss, a complaint must contain
sufficient factual allegations to state a claim for relief that is plausible on its face.
See, e.g., id.
Testa first challenges the district court’s dismissal of his denial‐of‐benefits
claim on timeliness grounds. ERISA does not specify a limitations period for
denial‐of‐benefits claims, so we apply “the most nearly analogous state limitations
5 Becker also appealed the district court’s October 30, 2013 denial of his motion to
dismiss Testa’s fiduciary‐duty claim, but he does not contest the court’s timeliness
analysis for this claim in his opening brief. He has therefore forfeited this challenge.
See, e.g., McCarthy v. SEC, 406 F.3d 179, 186 (2d Cir. 2005).
9
statute.” Burke v. PriceWaterHouseCoopers LLP Long Term Disability Plan, 572 F.3d
76, 78 (2d Cir. 2009) (per curiam) (quoting Miles v. N.Y. State Teamsters Conference
Pension & Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 598 (2d Cir. 1983)).
“New York’s six‐year limitations period for contract actions, N.Y. C.P.L.R. 213,
applies” here, “as it is most analogous” to ERISA denial‐of‐benefits claims. Id.
An ERISA denial‐of‐benefits claim ordinarily accrues “when a plan denies a
beneficiary’s formal application for benefits,” but it may also accrue “upon a clear
repudiation by the plan that is known, or should be known, to the plaintiff —
regardless of whether the plaintiff has filed a formal application for benefits.”
Carey v. Int’l Bhd. of Elec. Workers Local 363 Pension Plan, 201 F.3d 44, 47, 49 (2d Cir.
1999). Testa does not contest any of this. This first issue therefore turns on
when Becker clearly repudiated Testa’s benefits.
The district court held that Becker clearly repudiated Testa’s claimed
pension benefits in 1998 when he updated the SPD to state clearly that the
phantom account offset would be used for all employees. See Testa, 979 F. Supp.
2d at 383–84. We agree. SPDs play a “central role . . . in communicating the
terms of a plan to its members.” Frommert I, 433 F.3d at 265. For this reason,
courts in this Circuit have routinely held that SPDs may constitute clear
10
repudiations of benefits. 6 And most importantly, we held in Frommert I that
Xerox’s 1998 SPD clearly explained that the phantom account offset would be
applied to all rehired employees participating in the Xerox Plan. See 433 F.3d at
260 (“As the plaintiffs concede, the details of the phantom account offset functions
were set out in full in the 1998 Summary Plan Description . . . .”). That is why the
Frommert I plaintiffs knew to challenge the phantom account offset after the 1998
SPD’s publication. Accordingly, Testa’s denial‐of‐benefits claim became
untimely in 2004.
Testa does not contest that an SPD can amount to a clear repudiation of
benefits. Instead, he argues that the 1998 SPD did not meet this bar,
notwithstanding our holding in Frommert I. Testa makes four principal
arguments in support of his position. All four are unavailing.
First, Testa maintains that “Defendants repeatedly said that they would not
apply the phantom account to anyone, including Testa, if they ultimately lost
Frommert (which they did).” Testa Br. 18; see also id. at 29 (accusing Becker of
6 See Hirt v. Equitable Ret. Plan for Emps., Managers & Agents, 285 F. App’x 802, 804
(2d Cir. 2008) (summary order); Anderson v. Xerox Corp., 29 F. Supp. 3d 323, 331 (W.D.N.Y.
2014), aff’d on other grounds, 614 F. App’x 38 (2d Cir. 2015) (summary order); Bilello v.
JPMorgan Chase Ret. Plan, 607 F. Supp. 2d 586, 595–96 (S.D.N.Y. 2009).
11
making “ongoing misrepresentations” about whether the phantom account offset
would be applied to Testa). In his view, these misleading statements by Becker
both illustrate that the 1998 SPD was not unambiguous and judicially estop Becker
and the Xerox Plan from asserting a timeliness defense. We apply judicial
estoppel when “a party both takes a position that is inconsistent with one taken in
a prior proceeding, and has had that earlier position adopted by the tribunal to
which it was advanced.” Uzdavines v. Weeks Marine, Inc., 418 F.3d 138, 148 (2d
Cir. 2005) (quoting Stichting v. Schreiber, 407 F.3d 34, 45 (2d Cir. 2005)).
But the only “misrepresentation” that Testa identifies is a single sentence
from a 2014 memorandum in Kunsman v. Conkright, in which, Testa argues, Becker
admitted that “[t]he decision reached in Frommert . . . will, as a matter of law, be
applicable to” everyone rehired before 1998. Defs. Mem. in Opp’n at 16, Kunsman
v. Conkright, No. 08‐CV‐6080 (W.D.N.Y. July 7, 2017). Testa has quoted Becker
out of context. That memorandum repeatedly makes the same argument that
Becker does in this case: that Frommert I permits him to apply the phantom account
offset to rehired employees whose claims are untimely. See, e.g., id. at 13
(opposing certification because “there are statute of limitations defenses that will
apply to individual plaintiffs”). Moreover, Becker made this statement sixteen
12
years after the Xerox Plan issued the 1998 SPD, ten years after Testa’s claim went
stale, and four years after Testa sued. Becker’s Kunsman brief thus has no bearing
on whether the 1998 SPD was ambiguous. Nor could this brief have been “to the
prejudice of” Testa, Uzdavines, 418 F.3d at 147, as his claims became untimely ten
years before Becker filed it. We therefore stand by our decision in Frommert I that
the 1998 SPD unambiguously repudiated Testa’s benefits and reject Testa’s judicial
estoppel argument.
Second, Testa contends that when the 1998 SPD was issued, Becker failed to
disclose that he would refuse to comply with our decision in the Frommert
litigation. This is beside the point: even if Becker had failed to comply with
Frommert I, this would not make the 1998 SPD any less of a clear repudiation of
benefits. We also note that Testa’s premise here is faulty because, as we explain
below, Becker has not failed to comply with Frommert I.
Third, Testa argues that it was illegal for Becker to apply the phantom
account offset to Testa after the plaintiffs won in Frommert I because ERISA plans
must be “applied consistently with respect to similarly situated claimants.” 29
C.F.R. § 2560.503‐1(b)(5). Yet the plaintiffs in Frommert are not “similarly
situated” to Testa: they sued before their limitations periods expired. Testa did
13
not. As a result, this rule does not bar Becker from applying the phantom account
offset to Testa or others like him.
Finally, Testa maintains that his denial‐of‐benefits claim has been equitably
tolled ever since 1999, when the Frommert plaintiffs sued. All ERISA denial‐of‐
benefits claims, in his view, are “akin to . . . putative class action[s]” because
“Defendants were under a duty to apply any remedy granted in the pending
Frommert action to all Plan participants.” Testa Br. 36. Therefore, he argues, his
claims should be equitably tolled because the Supreme Court’s original “rationale”
for equitable tolling in Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974), “is
equally applicable to participant ERISA actions,” Testa Br. 37.
This is a radical argument: no court to our knowledge has ever held that
equitable tolling applies in every single ERISA denial‐of‐benefits action. We will
not be the first. Cf. Heimeshoff v. Hartford Life & Accident Ins. Co., 571 U.S. 99, 115
(2013) (declining to toll an ERISA claim because the plan did not allow for it). But
even if equitable tolling did apply, Testa would almost certainly not qualify for it.
Litigants may benefit from equitable tolling only if they were “diligent in pursuit
of their claims.” China Agritech, Inc. v. Resh, 138 S. Ct. 1800, 1808 (2018). Testa
was not “diligent” in any sense of the word: he sat on his rights from 1998 to 2010.
14
In sum, the 1998 SPD was a clear repudiation of benefits that started the six‐
year limitations period. Testa’s denial‐of‐benefits claim thus became untimely in
2004. We disagree with all of Testa’s arguments to the contrary, and we therefore
AFFIRM the district court’s October 30, 2013 dismissal of Testa’s denial‐of‐benefits
claim.
II
Becker challenges the district court’s May 9, 2017 decision granting
summary judgment to Testa and denying Becker’s cross‐motion for summary
judgment. “We review de novo the award of summary judgment, construing the
evidence in the light most favorable to the nonmoving party and drawing all
reasonable inferences and resolving all ambiguities in its favor.” Jaffer v. Hirji,
887 F.3d 111, 114 (2d Cir. 2018) (internal citations, quotation marks, and brackets
omitted). “Summary judgment is appropriate only where ‘there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter
of law.’” Id. (quoting Fed. R. Civ. P. 56(a)).
Testa’s fiduciary‐duty claim is straightforward: “Defendants breached their
fiduciary duties by not complying with this Court’s decision in Frommert I.”
Testa Br. 30; see also, e.g., id. at 31 (“Testa asserted a valid cause of action for breach
15
of fiduciary duty based upon Defendants’ refusal to follow” Frommert I). Becker
argues that he, not Testa, was entitled to summary judgment on this claim. In his
view, Frommert I did not order Becker to stop applying the phantom account offset
to plan participants who were not parties to the Frommert litigation. We agree
with Becker.
Frommert I did not order Becker to stop applying the phantom account offset
to every single rehired employee who was hired before 1998. Testa’s argument
to the contrary turns on one clause in Frommert I: “the phantom account may not
be applied to employees rehired prior to the issuance of the 1998 SPD.” 433 F.3d
at 263. Becker contended below that this sentence was dictum. The district
court rejected this argument, observing that this sentence “seems like a clear
directive.” Testa, 2017 WL 1857384, at *5. We agree with the district court that
this sentence is mandatory in tone, but that is not the end of our inquiry. To
ascertain Frommert I’s true holding, we must read the sentence in context. See
Bryan A. Garner et al., The Law of Judicial Precedent 58 (2016); see also, e.g., Cohens v.
Virginia, 19 U.S. (6 Wheat.) 264, 399 (1821) (“[G]eneral expressions, in every
opinion, are to be taken in connection with the case in which those expressions are
used.”).
16
Read in context, Frommert I did not direct Becker to stop applying the
phantom account offset to every single employee rehired before the 1998 SPD was
issued. Frommert I stated that “the phantom account may not be applied to
employees rehired prior to the issuance of the 1998 SPD” when holding that the
plaintiffs should win on their individual denial‐of‐benefits claims. 433 F.3d at 263.
But Frommert I declined to issue “a judgment declaring that the phantom account
is prohibited by ERISA and enjoining its application in calculating the benefits of
any Plan participants,” even though the plaintiffs had requested that remedy. Id.
at 269–70; see also id. at 269 (commenting that “such sweeping relief [was] not
warranted”). Indeed, Frommert I did not order any remedy at all. It remanded
the case to the district court to craft one, and the plaintiffs then asked for individual
relief. See Frommert v. Becker, 153 F. Supp. 3d 599, 616 (W.D.N.Y. 2016)
(“[D]efendants are hereby directed to recalculate and pay plaintiffs’ retirement
benefits . . . .” (emphasis added)). Indeed, the Frommert plaintiffs seemingly
never sought any additional equitable relief or to “make [their case] a class action.”
See Frommert v. Conkright, 472 F. Supp. 2d 452, 465 & n.8 (W.D.N.Y. 2007).
Frommert I thus expressly declined to issue an order that would benefit Testa.
17
At the very least, Frommert I did not foreclose Becker from raising legitimate
affirmative defenses against rehired employees. We held as much in Frommert II.
There, we concluded that the phantom account offset could be applied to Xerox
Plan participants who had waived their rights to bring ERISA claims,
notwithstanding Frommert I. See Frommert II, 535 F.3d at 122; see also Anderson v.
Xerox Corp., 614 F. App’x 38, 39 (2d Cir. 2015) (summary order) (enforcing ERISA
waivers against plaintiffs challenging phantom account offsets). Timeliness is as
good a defense as waiver. Consequently, if Becker could apply the phantom
account offset to plan participants who waived their ERISA rights in Frommert II,
he can also apply it to participants who cannot bring timely claims.
Both Testa and the district court respond, without further explanation, that
there is a distinction between applying the phantom account offset to plan
participants who waived their rights and applying it to those who slept on them.
We disagree. Timeliness serves “several important policies, including rapid
resolution of disputes, repose . . . , and avoidance of litigation involving lost
evidence or distorted testimony of witnesses.” Carey, 201 F.3d at 47. None of
those considerations were present in Frommert I. And all of them suggest the
importance of a legitimate affirmative defense that—like the waivers at issue in
18
Frommert II—Becker was entitled to raise here. Finally, to the extent that Testa
seeks to circumvent that defense by litigating under a fiduciary‐duty theory, we
conclude that his fiduciary‐duty claim is no more than his untimely denial‐of‐
benefits claim under another name. Permitting him to recover simply because he
recharacterized his original argument “would render the [denial‐of‐benefits]
limitation period a limit in name only.” Id. at 49.
One might argue that an ERISA plan fiduciary reading the Frommert I
sentence at issue should have decided to stop applying the phantom account offset
to Testa and employees like him, even if Frommert I did not technically order it.
But that ignores the complex considerations that these fiduciaries face. ERISA’s
fiduciary provision does “not necessarily favor payment over nonpayment”; to the
contrary, fiduciaries have an obligation “to preserve assets to satisfy future, as well
as present, claims.” Varity Corp. v. Howe, 516 U.S. 489, 514 (1996). Furthermore,
penalizing Becker for not trawling through Frommert I for sentences that future
litigants might quote out of context would make it difficult for plan administrators
to judge the scope of potential liability. See also Conkright, 559 U.S. at 517
(stressing that ERISA was meant to “assur[e] a predictable set of liabilities”
(emphasis added) (quoting Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 379
19
(2002))). That in turn would imperil their ability to properly invest and grow
resources for the benefits of all plan participants.
As such, Becker did not breach his fiduciary duty by applying the phantom
account offset to Testa, and Becker, not Testa, was entitled to summary judgment.
We therefore REVERSE the district court’s May 9, 2017 grant of summary
judgment to Testa.
CONCLUSION
For all these reasons, the judgment below is AFFIRMED in part,
REVERSED in part, and the case is REMANDED with directions to enter
judgment for Becker and the Xerox Plan.
20