Opinion
90 Civ. 7094 (RJW)
May 16, 2002
Alexander Peltz, Esq., PELTZ WALKER, New York, New York, Attorney for Plaintiffs
Bettina B. Plevan, Esq., Rory Judd Albert, Esq., Christopher J. Collins, Esq., PROSKAUER ROSE LLP, Attorneys for Defendants
OPINION
This case is before the Court on the motion of defendants American Federation of Television and Radio Artists Health Fund ("the Fund") and its individually named trustees ("the Trustees") for summary judgment pursuant to Rule 56(c), Fed.R.Civ.P., to dismiss plaintiffs' claims that defendants wrongfully denied them life insurance benefits in violation of § 1132 of the Employee Retirement Income and Security Act of 1974 ("ERISA") and that the Trustees breached their fiduciary duties by failing to monitor the eligibility of beneficiaries for death benefits in violation of § 1109 of ERISA. For the reasons that follow, defendants' motion is granted.
BACKGROUND
Plaintiffs are the beneficiaries of deceased recording artists of the 1950s and 1960s. The list of artists includes members of such well-known groups as The Marcels, The Del Vikings, The Shangri-Las, The Marvelettes, The Coasters, The Tams, The Chiffons, The Drifters, and The Shirelles, among others. The deceased artists were all members of the American Federation of Television and Radio Artists ("AFTRA"), which administers the Fund for the benefit of its members. Plaintiffs seek to recover life insurance proceeds based on life insurance coverage provided by the Fund to AFTRA members who allegedly qualified for such coverage at the time of their deaths.
To be eligible for life insurance coverage, an AFTRA member must have sufficient "covered earnings" during a specified period prior to his or her death. In the case of vocal recording artists such as the decedents here, "covered earnings" are payments from a record company that is a signatory to the AFTRA National Code of Fair Practice for Phonograph Recordings, commonly referred to as the "Phono Code." The Phono Code requires that signatories contribute a percentage of an artist's performance fees and royalty income to the AFTRA Health Retirement Funds, which are then credited to the artist and help determine the artist's eligibility for benefits.
This suit was originally filed in November of 1990 by three alleged beneficiaries of deceased Fund participants. The original complaint alleged that these individuals were entitled to life insurance proceeds because they were the beneficiaries of Fund participants who qualified for life insurance coverage at the times of their respective deaths. The case was placed on the suspense docket in December of 1990 pending settlement discussions and was not restored to the active docket until September 1995, at which time defendants argued that plaintiffs had not exhausted their administrative remedies as required by ERISA and therefore could not proceed with their claims in federal court. Accordingly, the Court directed that the litigation be stayed pending the exhaustion of the administrative claims process by the three named plaintiffs and ten other alleged beneficiaries.
One of the original plaintiffs withdrew from the action, and another was replaced by plaintiff Deborah Preston.
The administrative claims process took a number of years, and ultimately all thirteen claims were rejected by the Fund on the ground that none of the deceased recording artists had sufficient covered earnings during the relevant time period prior to his or her death to qualify for life insurance coverage. The thirteen claimants in the suit at that time filed a single appeal, which did not supply any new documentation of covered earnings that would qualify any of their decedents for life insurance coverage but instead argued that the Fund's initial decision should be reversed because (1) the Fund failed to notify artists who were losing life insurance coverage of their right to convert the group policy to a private one by assuming payment of the premiums; (2) re-mastering of an existing recording constitutes a "new record" under the Phono Code which qualifies as "covered work," and therefore royalties from such re-masterings should be counted towards an artist's eligibility for benefits; and (3) the Fund should have considered earnings credited to the artists to recoup royalty advances or paid to the songwriters of works recorded by the artists when determining the decedents' eligibility for benefits. After consideration of these issues, in June of 2000 the Fund's Appeals Committee upheld the Fund's earlier decision to deny benefits.
The Fund did determine that four of the beneficiaries were entitled to a "retirement account" benefit based upon the career earnings of their decedents, and those individuals were so notified.
The case was then restored to the Court's active docket, and in October of 2000 plaintiffs amended their complaint to add ten additional plaintiffs, none of whom have pursued the administrative claims process. Defendants filed the instant motion for summary judgment in June of 2001, contending that they are entitled to judgment as a matter of law with respect to the thirteen plaintiffs who have exhausted the administrative review process because those plaintiffs cannot show that the Fund's decision to deny their claims was arbitrary and capricious. Defendants contend they are entitled to summary judgment with respect to the ten remaining plaintiffs' claims because those plaintiffs have failed to exhaust their administrative remedies as required by ERISA. Alternatively, defendants argue that plaintiffs' claims are barred by the applicable statute of limitations and the doctrine of laches.
DISCUSSION
I. Timeliness of Plaintiffs' Claims
A. Statute of Limitations
1. Recovery of Benefits Claims
Although ERISA does not provide a statute of limitations for actions to recover benefits under § 1132, the Second Circuit has adopted the six-year period set forth in New York C.P.L.R. § 213 as the most analogous limitations period. See Miles v. N.Y. State Teamsters Conf. Pension Plan, 698 F.2d 593, 598 (2d Cir. 1983) (citations omitted). The limitations period begins to run when there has been "'a repudiation by the fiduciary which is clear and made known to the beneficiaries.'" Id. (citation omitted) (emphasis added). Defendants contend that the claims of plaintiffs whose decedents died more than six years before the action was commenced are time-barred. The Court does not agree.
Although the Second Circuit has held that an ERISA cause of action can accrue and the limitations period begin to run prior to a claimant's filing a formal application for benefits, Carey v. Int'l Bhd. of Elec. Workers, 201 F.3d 44 (2d Cir. 1999); see also Ambris v. Bank of N.Y., 1998 WL 702289 (S.D.N.Y. Oct. 7, 1998), the Court of Appeals has never dispensed with the requirement that a beneficiary be "on clear notice that she is not entitled to benefits" for the cause of action to accrue.Ambris at *6; see also Larsen v. NMU Pension Trust, 902 F.2d 1069, 1073-74 (2d Cir. 1990); Davenport v. Harry N. Abrams, Inc., 249 F.3d 130 (2d Cir. 2001) (rejecting as premature defendants' argumenr to extendCarey to deem plaintiff's cause of action to have accrued when she learned from an unofficial source that she was not entitled to participate in a benefits or pension plan). Here, despite the fact that plaintiffs may have unreasonably delayer filing their claims, they, unlike the plaintiffs in Carey and Ambris, received no communication, formal or otherwise, from the Fund prior to the institution of this lawsuit that would constitute a "clear repudiation" of benefits under the rule ofMiles. Accordingly, their claims for recovery of benefits under § 1132 of ERISA are not barred by the applicable statute of limitations.
2. Breach of Fiduciary Duty Claims
ERISA provides its own statute of limitations for breach of fiduciary duty claims under § 1109. Section § 1113 of ERISA provides that no action for breach of fiduciary duty under § 1109 may be brought "after the earlier of (1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission, the latest date on which the fiduciary could have cured the breach or violation, or (2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation." According to plaintiffs' allegations, the last action which could have constituted a part of the alleged breach of fiduciary duty would have been the Trustees' failure to adequately monitor the earnings of a decedent during his or her lifetime. As a result, the "last action" constituting an alleged breach could not possibly have occurred later than the date of any plan participant's death. As such, the breach of fiduciary duty claim of each plaintiff whose decedent died more than six years prior to the filing of this suit is barred by the statute of limitations set forth in § 1113.
Plaintiffs also allege defendants breached their fiduciary duties by failing to properly process plaintiffs' applications for benefits. This is simply another way of stating that defendants wrongfully denied their applications for benefits and Therefore is merely a restatement of plaintiffs' § 1132 claim. To the extent that this aspect of the breach of fiduciary duty claim is not duplicative, however, it is dismissed under the reasoning set forth in section IIIB.
This includes the breach of fiduciary duty claims of Lori Bricker, as beneficiary of Gene Bricker, who died on December 10, 1983; Melody Craddock, as beneficiary of Vincent Eugene Craddock, who died on October 12, 1971; Rita Ganser, as beneficiary of Mary Ann Ganser, who died on March 14, 1970; Darrin Gordon, as beneficiary of Georgianna Tillman-Gordon, who died on January 7, 1980; Dorothy Heath, as beneficiary of Floyd Ashton, who died on April 10, 1979; Elmira Lymon, as beneficiary of Frankie Lymon, who died on February 27, 1968; Vernon McFadden, as beneficiary of Addie Harris, who died on June 10, 1982; Lena McPhatter and Roger Gore, as beneficiaries of Clyde McPhatter, who died on June 13, 1972; Emma Ruth Patron, as beneficiary of Linda Ann Pought, who died on September 2, 1980; Carl, Clarence Jr., Raymond, and Walter Quick, as beneficiaries of Clarence Quick, who died on May 5, 1983; Shirley Price, as beneficiary of James Sheppard, who died on January 14, 1970; and Francis and Alexander Rapp, as beneficiaries of Daniel Rapp, who died on April 4, 1983.
B. Laches
Defendants further argue that plaintiffs' claims are barred by the equitable doctrine of laches. A party asserting the defense of laches must establish that: (1) the plaintiff knew of the defendantts misconduct; (2) the plaintiff inexcusably delayed in taking action; and (3) the defendant was prejudiced by the delay. See, e.g., Tri-Star Pictures, Inc. v. Leisure Time Prod., B.V., 17 F.3d 38, 44 (2d Cir. 1994). Since claims for ERISA benefits are equitable in nature, Sullivan v. LTV Aerospace Def. Co., 82 F.3d 1251, 1258-59 (2d Cir. 1996), plaintiffs' claims are subject to equitable defenses such as laches.
It is well-settled that the laches period begins to run when the plaintiff discovers the facts which create his or her right or cause of action. See, e.g., White v. Daniel, 909 F.2d 99, 102 (4th Cir. 1990);Dixon v. A.T. T. Co., 159 F.2d 863, 864 (2d Cir. 1947); HR Indus., Inc. v. Kirshner, 899 F. Supp. 995, 1006 (E.D.N.Y. 1995). The Supreme Court has stated that "the plaintiff is chargeable with such knowledge as he might have obtained upon inquiry, provided the facts already known by him were such as to put upon a man of ordinary intelligence the duty of inquiry." Johnston v. Standard Mining Co., 148 U.S. 360, 370 (1893). Prejudice results when a delay "makes it difficult to garner evidence," or where a "change in position" makes it inequitable to allow plaintiff's claim to proceed. Robins Island Preservation Fund, Inc. v. Southold Dev. Corp., 959 F.2d 409, 424 (2d Cir. 1992).
"The existence of laches is a question addressed to the discretion of the trial court," which must consider the "equities of the parties."Gardner v. Panama R.R. Co., 342 U.S. 29, 30-31 (1951). Here, the Court finds that the claims which were asserted more than ten years after the artist's death are barred by the doctrine of laches as a matter of law. These plaintiffs were aware that their decedents were recording artists who were members of AFTRA, that the artists had died, and that they were the beneficiaries of the artists' estates. Under the test articulated by the Supreme Court in Johnston, these facts were enough to place a duty upon persons of ordinary intelligence to inquire of logical sources whether their deceased family members had life insurance coverage. Therefore, these plaintiffs are charged with the knowledge that their decedents may have been entitled to life insurance benefits from their union, AFTRA, and are deemed to have known shortly after the death of their respective decedents of any possible misconduct by the Fund which might have led to their decedents being wrongfully denied life insurance coverage.
In addition, defendants have been prejudiced by plaintiffs' delay. Plaintiffs complain about the lack of documentation the Fund has produced regarding their decedents' claims; however, plaintiffs' own failure to submit the proof they believed entitled them to life insurance benefits within a reasonable time period has contributed to this problem and made it almost impossible for the Fund to gather evidence necessary to defend against plaintiffs' claims. The Fund has attempted to reconstruct earnings data from long-extinct record companies and has been prejudiced by its inability to gather information establishing that the artists were not entitled to life insurance benefits and that the artists were notified when they lost eligibility for benefits. Therefore, because plaintiffs are deemed to have been aware of defendants' alleged misconduct shortly after their decedents' deaths and because defendants have been prejudiced by plaintiffs' unreasonable delay, claims which were filed more than ten years after an artist's death are barred by the doctrine of laches.
This includes the claims of Melody Craddock, as beneficiary of Vincent Eugene Craddock, who died on October 12, 1971; Rita Ganser, as beneficiary of Mary Ann Ganser, who died on March 14, 1970; Darrin Gordon, as beneficiary of Georgianna Tillman-Gordon, who died on January 7, 1980; Dorothy Heath, as beneficiary of Floyd Ashton, who died on April 10, 1979; Elmira Lymon, as beneficiary of Frankie Lymon, who died on February 27, 1968; Lena McPhatter and Roger Gore, as beneficiaries of Clyde McPhatter, who died on June 13, 1972; Emma Ruth Patron, as beneficiary of Linda Ann Pought, who died on September 2, 1980; Shirley Price, as beneficiary of James Sheppard, who died on January 14, 1970.
II. Exhaustion of Administrative Remedies
Defendants next contend that the claims of those plaintiffs who have not exhausted their administrative remedies should be dismissed without prejudice. Under the well-established exhaustion doctrine, plaintiffs must pursue all administrative avenues before bringing an ERISA suit in federal court, unless they can make a "clear and positive showing" that pursuit of administrative remedies would be futile. Kennedy v. Empire Blue Cross Blue Shield, 989 F.2d 588, 594 (2d Cir. 1993). In deciding whether to apply the futility exception, courts should consider one purposes of the exhaustion doctrine, which are to:
(1) uphold Congress' desire that ERISA trustees be responsible for their actions, not the federal courts; (2) provide a sufficiently clear record of administrative action if litigation should ensue; and (3) assure that any judicial review of fiduciary action (or inaction) is made under the arbitrary and capricious standard, not de novo.Id. (quoting Denton v. First Nat'l Bank of Waco, 765 F.2d 1295, 1300 (5th Cir. 1985)).
Here, plaintiffs who have not followed the claim and appeals process set forth in the Fund's plan documents argue that such efforts would be futile because the Fund and its Appeals Committee "will merely do what they have always done — deny death benefit claims by 50s and 60s artists' beneficiaries because of the artists' failure to maintain eligibility for benefits during the life of the artists." However, pointing to past denials of other artists' claims does not amount to a "clear and positive" showing of futility. The common thread between the plaintiffs in this action is extremely thin; they are similarly situated only in the fact that they are the beneficiaries of deceased recording artists who, it is believed, were members of AFTRA. The facts and circumstances surrounding each claimant's eligibility for benefits are unique, however: each claimant's decedent had a different body of recordings, a different amount of covered earnings, and a different date of death. As a result, the futility of any one claim cannot be assumed based upon the Fund's denial of any other claim. Accord Moore v. AFTRA, 216 F.3d 1236, 1241 (11th Cir. 2000) upholding district court's decision to deny class certification to ASTRA recordinq artists because each one had a different contractual arrangement with the record companies for whom they recorded; thus, common questions of law or fact did not predominate).
Further, to allow the ten plaintiffs who have not exhausted their administrative remedies to proceed with their claims would thwart the purposes of the exhaustion doctrine and burden this Court with making an independent, de novo determination of the claimants' eligibility for benefits without the benefit of an administrative record or even the certainty that these plaintiffs are actually the legal beneficiaries of the artists under whom they claim. Accordingly, the claims of plaintiffs who have not exhausted their administrative remedies are dismissed without prejudice.
The deceased artists under whom these ten plaintiffs claim never submitted beneficiary designation forms to the Fund before their deaths, and the plaintiffs have not yet filed affidavits of survivorship to prove that they are the legal beneficiaries of their decedents' estates.
This includes the claims of Anita J. Cooke as beneficiary of Don Jackson, Shirley Gunter as beneficiary of Cornell Gunter, Freddie Jones as beneficiary of Will "Dub" Jones, Danielle Lee as beneficiary of Barbara Lee-Jones, Zerobia Leviston as beneficiary of Joshua Leviston, Suzanne McCasland as beneficiary of Stephen Wahrer, Clestine McCrea as beneficiary of Rudy Lewis, Vernon McFadden as beneficiary of Addie Harris, and Charles Pope as beneficiary of Joseph Pope. While plaintiff Rita Ganser has failed to exhaust her administrative remedies with respect to claims arising from the estate of Mary Ann Ganser, those claims are dismissed with prejudice on the grounds of laches and expiration of the statute of limitations for fiduciary duty claims as discussed more fully above. Similarly, the breach of fiduciary duty claim of plaintiff Vernon McFadden is barred by the statute of limitations, although his claim for benefits is dismissed without prejudice for failure to exhaust administrative remedies.
III. Review of Remaining Claims on the Merits
At this stage, the remaining claims are the denial of benefits claims of Lori Bricker; Herman and Rita Ganser; Henry Key; Deborah Preston; Carl, Clarence Jr., Raymond, and Walter Quick; and Francis and Alexander Rapp; and the breach of fiduciary duty claims of Herman and Rita Ganser, Henry Key, and Deborah Preston.
A. Denial of Benefits Claims
Although defendants have filed their motion pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, traditional summary judgment standards do not apply when a court reviews a plan administrator's denial of benefits under ERISA. Where an ERISA plan grants the fiduciary or administrator discretionary authority to determine eligibility, the court will not disturb the administrators s conclusion unless it is "arbitrary and capricious." Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441 (2d Cir. 1995)).
A plan administrator's decision is arbitrary and capricious if it "impose[s] a standard not required by the plan's provisions, or interpret[s] the plan in a manner inconsistent with its plain words, or by [its] interpretation render[s] some provisions of the clan superfluous." Miles v. N.Y. State Teamsters Conf. Pension Plan, 698 F.2d 593, 599 (2d Cir. 1983 (citations omitted).
Here, the Fund's written plan clearly grants to the trustees the discretionary authority to determine eligibility for benefits. The plan provides:
The Trustees shall have the power to make any determination of fact necessary or proper to the administration of this Plan and the power to construe and interpret the provisions of this Plan, including but not limited to any provisions relating to the eligibility of any person to receive benefits. Any determination made by the Trustees shall be final and binding upon all parties, including, but not limited to . . . beneficiaries, and any other person entitled or claiming to be entitled to any coverage or benefit or other right with respect to the Plan.
Accordingly, the Court will apply the "arbitrary and capricious" standard of review.
In the instant case, plaintiffs cannot satisfy their burden of demonstrating that the denial of their claims was arbitrary and capricious. As previously explained, to be eligible for life insurance coverage under the Fund's plan, an artist is required to have sufficient covered earnings, or payments from a record company that is a signatory to the AETRA Phono Code, during a specified period prior to his or her death. Here, after an exhaustive search, the Fund concluded that none of the artists had sufficient covered earnings to be eligible for life insurance benefits. The Fund's investigation included a careful review of documentation submitted by each claimant as well as independent research and correspondence with the companies for whom the artists recorded (to the extent those companies still exist). A detailed letter was prepared for each claimant setting forth the complete recording career and earnings history of each artist, the steps the Fund took in conducting its investigation into that artist's eligibility for benefits, the information it was able to obtain, and the reason for the denial of benefits. The Court has reviewed each of the letters and finds that the Fund reasonably concluded after a diligent search that none of the artists had sufficient covered earnings to be eligible for benefits.
In their appeal to the Fund's Appeals Committee, plaintiffs raised three new issues, but again did not point to any particular covered earnings they believed had not been properly credited to their decedents. As stated previously, the single appeal alleged (1) that the Fund failed to notify artists who were losing life insurance coverage of their right to convert the policy to a private policy, (2) that re-mastering of an existing recording constitutes a "new record" under the Phono Code and that royalties from such re-masterings should qualify as covered earnings, and (3) that the Fund should credit the deceased artists here with earnings applied to recoup unpaid advances on royalties and with earnings that were paid to songwriters of works recorded by the decedents. The Appeals Committee considered each of these grounds in turn.
As for plaintiffs' allegation that the Fund failed to notify artists that they were losing life insurance benefits, the Appeals Committee determined that (a) the Fund's practice has always been to notify participants of the loss of coverage and their right to convert the policy to an individual policy by assuming payment of the premiums, and there is no evidence that any of plaintiffs' decedents were not so notified, (b) seven of the deceased artists (Ashton, Craddock, Gordon, Johnson, Pought, Quick and Sheppard) never had sufficient covered earnings to become eligible for life insurance benefits at any time prior to their deaths and therefore never had a conversion option about which the Fund was obligated to notify them, and (c) the remaining six deceased artists all lost eligibility for life insurance coverage many years before their deaths, with the most recent loss of eligibility occurring in 1973. Because it is the Fund's practice to notify claimants of their loss of eligibility and because none of the plaintiffs have come forward with anything more than unsubstantiated allegations that their decedents were not so notified, the Court has determined that the Appeals Committee reasonably rejected this basis for appeal.
Similarly, the Appeals Committee reasonably rejected plaintiffs' contention that re-mastering of an existing recording constitutes a "new record" under the Phono Code and therefore qualifies as "covered work." The Phono Code applies to "the engagement of . . . singers . . . for the purpose of making phonograph recordings in the United States" and provides that contributions are due from a Phono Code signatory "in respect of services (including rehearsals) rendered by [an artist] or contracted by him under this code" and that contribution payments are due "not later than three weeks following date of performance." (emphasis added). Based on the foregoing language, the Appeals Committee determined that "covered work" under the Phono Code refers to the creation of a vocal recording for a record company that was a signatory to the Phono Code at the time the recording was first made, not the subsequent re-mastering of an existing recording which does not involve the services of the artist at all. The Court finds that this is a reasonable interpretation of the Phono Code.
Plaintiffs' third contention on appeal was that the Fund should have considered earnings credited to the artists to recoup advances on future royalties and earnings credited to the songwriters of works recorded by the decedents. The Appeals Committee rejected the first contention on the ground that at all times relevant to this suit, the Phono Code required that contributions to the Fund be calculated as a percentage of "gross compensation actually paid to an artist" (emphasis added). As such, it did not cover earnings applied to reduce an unrecouped balance from a prior advance because such earnings were not actually paid. In fact, between October 1, 1959 and December 31, 1994, no AFTRA artist was credited with earnings applied to recoup a royalty advance. Although the meaning of "gross compensation" was later expanded, based on the pre-1995 definition of gross compensation, which is relevant here, the Appeals Committee reasonably decided not to credit the decedents with royalties earned but not actually paid.
Effective January 1, 1995, five years after the institution of this Lawsuit, "gross compensation" was re-defined to include all royalties earned, whether recouped or unrecouped, pursuant to an artist's agreement with a signatory company for the performance of vocal recordings. SeeMoore v. AETRA, 216 F.3d 1236, 1239-40 (11th Cir. 2000), for a more detailed discussion of the history of the new definition.
With respect to six of the deceased artists (Ashton, Bricker, Lymon, Pought, Rapp, and Sheppard), there was no evidence of earnings credited by a Phono Code signatory during the relevant period prior to their deaths, thus, the issue of crediting unrecouped royalties was not relevant to the determination of their beneficiaries' claims.
As for plaintiffs' second contention concerning earnings, the Court agrees with the Fund that it is not reasonable for payments made to the composers of the works recorded by the deceased artists to be credited to those artists because (a) the songwriters were under different contractual agreements with the record companies and would have been paid for all recordings of their works, not just recordings made by the artists at issue here, and (b) crediting the decedents here with earnings extrapolated from songwriters' royalty data would potentially allow benefits to be paid without documentary proof of eligibility, thereby opening the door to possible fraud.
Because the Fund's denials of plaintiffs' claims for life insurance benefits were reasonable and supported by substantial evidence, the Court finds that the decisions were not arbitrary or capricious. Accordingly, the Fund's decisions will be upheld, and plaintiffs' remaining claims for wrongful denial of benefits under 29 U.S.C. § 1132 are dismissed.
This includes the denial of benefits claims of Lori Bricker as beneficiary of Gene Bricker; Herman and Rita Ganser as beneficiaries of Marge Ganser-Dorst; Henry Key as beneficiary of Horace Key; Deborah Preston as beneficiary of Corinthian Johnson; Carl, Clarence Jr., Raymond, and Walter Quick as beneficiaries of Clarence Quick; and Francis and Alexander Rapp as beneficiaries of Daniel Rapp. The reasoning set forth here also applies with equal force to and constitutes an alternate ground for dismissal of those denial of benefits claims which are barred by the doctrine of laches as set forth in section IB above.
B. Breach of Fiduciary Duty Claims
In contrast to the "arbitrary and capricious" standard applied to denial of benefits claims under ERISA, the appropriate standard of review for plaintiffs' remaining breach of fiduciary duty claims is the traditional summary judgment standard. Therefore, summary judgment is proper when it is clear from the pleadings, depositions, answers to interrogatories, admissions, and affidavits "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue of fact is genuine when "a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). While the moving party has the burden of demonstrating that no genuine issue of material fact exists, Rule v. Brine, Inc., 85 F.3d 1002, 1011 (2d Cir. 1996), the moving party's burden is satisfied "if he can point to an absence of evidence to support an essential element of the nonmoving party's claim." Goenaga v. March of Dimes, 51 F.3d 14, 18 (2d Cir. 1995).
Once the movant meets its burden, the nonmoving party must present affidavits, depositions, or other evidence permitted by Rule 56 establishing that a genuine issue of material fact exists. Rule, 85 F.3d at 1011. The nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), but must "'come forward with enough evidence to support a jury verdict in its favor.'" Trans Sport, Inc. v. Starter Sportswear, 964 F.2d 186, 188 (2d Cir. 1992) (citation omitted). All facts are considered in the light most favorable to the nonmoving party, and all inferences drawn in its favor.Id.
Here, the Court notes at the outset that claims under 29 U.S.C. § 1109, the statutory breach of fiduciary duty provision plaintiffs invoke here, must be brought on behalf of the plan, and any fiduciary who is found to have breached his or her duty is personally liable to the plan, not to individual beneficiaries. 29 U.S.C. § 1109.See also Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140-42 (1985); Algie v. RCA Global Communications, Inc., 891 F. Supp. 870, 873 (S.D.N.Y. 1994). Furthermore, a fiduciary may not be held liable for any breach of fiduciary duty that occurred before his or her tenure in that office. 29 U.S.C. § 1109 (b).
Plaintiffs here do not purport to bring their fiduciary duty claims on behalf of the plan as required by the statute; rather, they appear to be using their breach of fiduciary duty claims as another means to attempt to recover life insurance benefits. Even if they had brought their § 1109 claim on behalf of the plan, however, their claim would not succeed, because plaintiffs have not set forth sufficient evidence to survive summary judgment. In both their complaint and their opposition to the instant summary judgment motion, plaintiffs have simply made unsupported assertions that plan fiduciaries breached their fiduciary duties by failing to monitor the artists' eligibility for benefits and the processing of applications for benefits.
For their part, defendants have come forward with evidence that none of the decedents of plaintiffs whose breach of fiduciary duty claims remain had sufficient covered earnings to qualify for life insurance benefits during the relevant period preceding their deaths. Defendants have therefore shifted the burden to plaintiffs to "'come forward with enough evidence to support a jury verdict in [their] favor.'" Trans Sport, Inc. v. Starter Sportswear, 964 F.2d 186, 188 (2d Cir. 1992) (citation omitted). Plaintiffs have not met this burden. For instance, they have not pointed to a single instance in which earnings by one of their decedents were not credited as required by the Phono Code. Neither have they alleged that any of the trustees named in the complaint were trustees of the Fund when any of the decedents were performing. Because plaintiffs cannot establish the existence of any genuine issue of material fact for trial, plaintiffs' remaining breach of fiduciary duty claims are dismissed.
This includes the breach of fiduciary claims of Herman and Rita Ganser as beneficiaries of Marge Ganser-Dorst, Henry Key as beneficiary of Horace Key, and Deborah Preston as beneficiary of Corinthian Johnson. The reasoning set forth here applies with equal force to and constitutes an alternate ground for dismissal of those breach of fiduciary duty claims which are barred by the statute of limitations and doctrine of laches as set forth in sections IA2 and IB above.
CONCLUSION
For the reasons stated above, defendants' motion for summary judgment is granted, and plaintiffs' claims are dismissed.It is so ordered.