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David Barboza v. California Association of Professional

April 6, 2011

DAVID BARBOZA,
PLAINTIFF,
v.
CALIFORNIA ASSOCIATION OF PROFESSIONAL FIREFIGHTERS, A CALIFORNIA CORPORATION; CALIFORNIA ASSOCIATION OF PROFESSIONAL FIREFIGHTERS LONGTERM DISABILITY PLAN; CALIFORNIA ADMINISTRATION INSURANCE SERVICES, INC., A CALIFORNIA CORPORATION; AND KENNETH BLANTON, DENNIS CAMPANALE, GENE DANGEL, JAMES FLOYD, CHARLES GLUCK, BRIAN PINOMAKI, AND WILLIAM SOQUI, INDIVIDUALLY AND AS PLAN DIRECTORS, DEFENDANTS.



The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge

MEMORANDUM AND ORDER

This matter is before the court on (1) defendants California Association of Professional Firefighters ("CAPF"), California Administration Insurance Services, Inc. ("CAISI"), Kenneth Blanton, Dennis Campanale, Gene Dangel, Brian Pinomaki, Charles Gluck, William Soqui, and James Floyd's (collectively, "defendants") motion to alter or amend the judgment, pursuant to Federal Rules of Civil Procedure 59(e) and 60; (2) plaintiff David Barboza's ("plaintiff") motion for attorneys' fees; (3) defendants' motion for attorneys' fees; (4) defendants' bill of costs; and (5) plaintiff's bill of costs. Based upon the submissions of the parties and for the reasons set forth below, (1) defendants' motion to alter or amend the judgment is DENIED; (2) plaintiff's motion for attorney fees is DENIED; (3) defendants' motion for attorney fees is DENIED; (4) defendants' bill of costs is DENIED; and (5) plaintiff's bill of costs is DENIED.

BACKGROUND*fn1

Defendant CAPF is a non-profit mutual benefit corporation that sponsors the California Association of Professional Firefighters Long-Term Disability Plan (the "Plan"). (Order at 2-3.) Defendant CAISI administers the Plan and is responsible for making determinations regarding participants' disability and benefits. (Id.) Individual Defendants Kenneth Blanton, Dennis Campanale, Gene Dangel, and Brian Pinomaki are Directors and Executive Board members of CAPF and are "fiduciaries" within the meaning of 29 U.S.C. §§ 1002(14) and (21). (Id.) The Plan is an ERISA welfare benefit plan that receives its funding exclusively from Plan participants, as opposed to employers, and pays all benefits solely from Plan assets. (Id. at 3.) Plaintiff was a participant in the Plan. (Id. at 5.)

Plaintiff brought suit against defendants, the Plan, the Plan Administrator (CAISI), and the individual board members of CAPF and CAISI, alleging numerous breaches of fiduciary duties under Part 4 of Title I of ERISA. (Id.) Plaintiff alleged that defendants breached their fiduciary duties by: (1) failing to distribute a Summary Annual Report ("SAR") to Plan participants; (2) unlawfully refusing to file Form 990 with the IRS; (3) unlawfully failing to hold Plan assets in trust; (4) engaging in unlawful self-dealing and prohibited transactions by coming to an agreement that allows CAISI to use fees and expenses; (5) engaging in prohibited transactions by renewing the administrative services agreement between CAPF and CAISI, including authorizing an administrative services fee increase, agreeing to an unreasonably lengthy term, and including an indemnity clause; and (6) failing to obtain actuarial review as required by Plan bylaws.*fn2 (Id. at 5--6.)

In July 2010, plaintiff and defendants filed cross-motions for summary judgment.*fn3 (See Pl.'s Mot. for Summ. J., filed Jul. 20, 2010 [Docket #41]; Defs.' Mot. For Summ. J., filed Jul. 30,2010 [Docket #47].) The court granted plaintiff summary judgment on his claim for failure to distribute a SAR and failure to obtain actuarial review. (Order at 31.) In reaching the merits of the claim, the court relied, inter alia, on various opinions published by the Department of Labor ("DOL opinions") in concluding that the CAPF Plan was not unfunded, and thus, not exempt from issuing a SAR pursuant to 29 C.F.R. 2520.104b-10(g)(1). (Id. at 11--13.) As a result, the court ordered defendants "to distribute SARs from 2002 to date to all participants in accordance with 29 C.F.R. 2520.104b-10 and to obtain actuarial studies for each year that the Plan has not undergone actuarial review." (Id. at 32.) The court granted defendants summary judgment on the remainder of plaintiff's claims. (See id.)

After the court issued its order, both parties filed motions for attorney fees and filed bills of costs. (See Pl.s' Mot. for Atty's Fees, filed Feb. 22, 2011 [Docket #103]; Defs.' Mot. For Atty's Fees, filed Feb. 22, 2011 [Docket #102]; Pl.'s Bill of Costs, filed Feb. 8, 2011 [Docket #98]; Defs.' Bill of Costs, filed Feb. 8, 2011 [Docket #99].)

ANALYSIS

A. Motion to Alter or Amend/Relief from Judgment

Defendants contend that the court should grant its motion to amend or alter the judgment on three separate grounds. First, defendants argue that the court's use of the DOL opinions to conclude that the Plan is not unfunded and thus, not exempted from the SAR requirement, unjustifiably "surprised" defendants. Second, defendants assert that the DOL opinions apply only to employer plans, not employee organizations plans such as CAPF, and thus, it was error for the court to rely upon them as persuasive authority. Finally, defendants contend that requiring them to issue reports for previous years undermines the purpose of ERISA.

Federal Rule of Civil Procedure 59(e) permits a party to file a motion to amend or alter a trial court's order. Under the standard imposed by the Ninth Circuit, "the rule offers an 'extraordinary remedy, to be used sparingly in the interest of finality and conservation of judicial resources.'" Kona Enter., Inc. v. Estate of Bishop, 229 F.3d 877 (9th Cir. 2000) (quoting 6 James Wm. Moore et al., Moore's Federal Practice § 54.78[1] (3d ed. 2000)). Indeed, a district court should refrain from granting a motion for reconsideration absent highly unusual circumstances falling into one of three specific categories: (1) the moving party presents newly discovered evidence; (2) the district court committed clear error; or (3) there is an intervening change in the controlling law. 389 Orange Street Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999) (emphasis added). Alternatively, Federal Rule of Civil Procedure 60(b) permits a party to file for relief from judgment on the basis of "mistake, inadvertence, surprise, or excusable neglect."

"A district court may reconsider its grant of summary judgment under either Federal Rule of Civil Procedure 59(e) . . . or Rule 60(b)." School Dist. No. 1J Multnomah County, Oregon v. ACands, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993), cert. denied, 512 U.S. 1236, 114 S.Ct. 2742, 129 L. Ed. 2d 861 (1994). Under both Rule 59(e) and Rule 60(b), the district court has considerable discretion in granting or denying a motion for reconsideration. Id.

1. Reliance on DOL Opinion Letters

Defendants contend that relief from the judgment is warranted pursuant to Federal Rule of Civil Procedure 60(b) because the order "granting summary judgment . . . relies upon authorities that had not been discussed by Plaintiff or Defendants." (Defs.' Mot. to Alter or Amend Judgment ["MTAA"], filed Feb. 22, 2011 ...


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