Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

ISOLA v. HUTCHINSON

December 10, 1991

ROBERT A. ISOLA, Plaintiff,
v.
GARY HUTCHINSON, et al., Defendants.



The opinion of the court was delivered by: JAMES WARE

 Plaintiff, a participant in an ERISA regulated profit sharing plan, has filed suit against Great American Insurance Company, American National Fire Insurance Company and Agricultural Insurance Company ("Insurance Companies") to enforce a bond issued by these defendants. The defendant Insurance Companies seek to have this lawsuit dismissed on the ground that plaintiff lacks standing to pursue it. On October 9, 1991, the Special Master assigned to this case recommended that the motion be denied. Subsequently, defendant Insurance Companies requested this Court to review the decision of the Special Master and rule in their favor. Having reviewed the governing statutes, and for reasons discussed more fully below, the motion to dismiss is denied.

 BACKGROUND

 Plaintiff filed suit seeking recovery of benefits allegedly due him as a participant of a profit sharing plan ("the Plan") created by his employer, Belko Electric Corporation. Plaintiff predicates his rights on various provisions of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq.

 ERISA requires that every fiduciary of an employee benefits plan be bonded to protect the plan against losses due to fraudulent and dishonest administration of the plan. 29 U.S.C. § 1112. Fiduciaries of the Plan were bonded by defendant Insurance Companies.

 Plaintiff's First Amended Complaint alleges that as a result of conduct and transactions prohibited by ERISA, assets of the Plan were divested so as to effectively deprive plaintiff of his benefits. Specifically, plaintiff alleges that when the Plan terminated, every participant in the Plan except plaintiff received full distribution. He alleges that this was a result of fraudulent conduct. Pursuant to his Third Cause of Action, plaintiff seeks to have the issues of fraudulent and dishonest conduct adjudicated and, if successful, to have insurance policy proceeds paid to the Plan. See First Amended Complaint, p.

 ISSUE

 Defendant Insurance Companies claim that plaintiff does not have standing to make a claim on bonds issued to benefit the Plan. They allege that the Plan, as the insured, is the only real party in interest who has standing to prosecute a claim on the policy. See Defendant's Points and Authorities, pp. 3-4. Plaintiff, on the other hand, contends that the ERISA statute authorizes him to prosecute such a claim. See Plaintiff's Opposition to Motion, pp. 15-22.

 The issue that is raised from this motion is whether a plan participant can sue a non-fiduciary insurance company under 29 U.S.C. § 1132(a)(3)(B) to enforce and seek redress for violations of 29 U.S.C. § 1112. *fn1" As there are no cases which confront this issue, this appears to be a matter of first impression.

 ANALYSIS

 A. Standing to Sue Under ERISA

 1. Congressional Intent

 It is clear that Congress enacted ERISA to protect participants of employee benefit plans. One concern of Congress was that participants in employee benefit plans were being deprived of their benefits:

 The Congress finds that . . . owing to the inadequacy of current minimum standards, the soundness and stability of plans with respect to adequate funds to pay promised benefits may be endangered; [and] that owing to the termination of plans before requisite funds have been accumulated, employees and their ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.