Crowhurst v. California Institute of Technology

Full title: William H. CROWHURST; Estes L. Yinger; Edward H. Greenberg, on behalf of…

Court: United States Court of Appeals, Ninth Circuit

Date published: Apr 4, 2001

11 F. App'x 827 (9th Cir. 2001)

Opinion

11 Fed.Appx. 827 (9th Cir. 2001) William H. CROWHURST; Estes L. Yinger; Edward H. Greenberg, on behalf of the California Institute of Technology Mutual Benefit Tax-Deferred Annuity Plan, Plaintiffs-Appellants/Cross-Appellees, v. CALIFORNIA INSTITUTE OF TECHNOLOGY, Defendant-Appellee/Cross-Appellant. Nos. 99-56386, 99-56680. D.C. Nos. CV-96-05433-RAP(SHx), CV-96-05433-RAP-02. United States Court of Appeals, Ninth Circuit. April 4, 2001

Argued and Submitted March 7, 2001.

NOT FOR PUBLICATION. (See Federal Rule of Appellate Procedure Rule 36-3)

Action was brought against Employee Retirement Income Security Act (ERISA) plan trustee alleging breach of fiduciary duty. The United States District Court for the Central District of California, Richard A. Paez, J., entered judgment. Both parties appealed. The Court of Appeals held that trustee was not liable for breach of fiduciary duty.

Affirmed.

Appeal from the United States District Court for the Central District of California, Richard A. Paez, District Judge, Presiding.

Before KOZINSKI and TALLMAN, Circuit Judges, and FOGEL, ^* District Judge.

* Honorable Jeremy D. Fogel, United States District Judge for the Northern District of California, sitting by designation.

MEMORANDUM ^**

** This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as may be provided by 9th Cir. R. 36-3.

There is no evidence that Caltech's delay in requesting an aggregate transfer harmed Plan participants. "ERISA holds a trustee liable for a breach of fiduciary duty only to the extent that losses to the plan result from the breach." Friend v. Sanwa Bank Cal., 35 F.3d 466, 469 (9th Cir.1994); 29 U.S.C. § 1109 (2000). Caltech requested an aggregate

Page 828.

transfer on June 19, 1991, and Plan assets invested in MBL were frozen on July 16, 1991. Caltech's delay, by a few days, did not cause or increase the likelihood of the July 16, 1991, freeze.

Caltech did not act imprudently by submitting individual transfer requests and requesting an aggregate transfer after July 1, 1991. Caltech knew that MBL was experiencing difficulties and that New Jersey authorities might freeze withdrawals from MBL at any time. Between June 19, 1991, and July 1, 1991, MBL failed to make the aggregate transfer despite Caltech's repeated requests. MBL never confirmed that the aggregate transfer would take place on July 10, 1991. In lights of these difficulties and uncertainty, it was not unreasonable for pension consultants Foster Higgins to recommend, nor for Caltech to elect, to continue to submit individual transfer requests after July 1, 1991. See Donovan v. Mazzola, 716 F.2d 1226, 1234 (9th Cir.1983) (A fiduciary is required to exercise "his own judgment in the light of the information and advice which he receives.") (quotations and emphasis omitted).

Caltech did not breach its duty of loyalty by submitting individual transfer requests after July 1, 1991, because Caltech could have faced liability even if it had not submitted individual transfer requests. Caltech's self-interest was not at stake. See Cunha v. Ward Foods, Inc., 804 F.2d 1418, 1432 (9th Cir.1986).

The district court did not abuse its discretion in declining to award costs to Caltech. See Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir.1980); Arizona State Carpenters Pension Trust Fund v. Citibank, 125 F.3d 715, 724-25 (9th Cir.1997).

Each party shall bear its own costs on appeal.

AFFIRMED. ^***

*** We do not address the statute of limitation issue because it is unnecessary to do so in light of this disposition.