would not have been forced to pay these sums. Therefore, these
monies could constitute an actual loss to the plan. Also,
Plaintiff Gibbs, as trustee of the plan, has standing to sue on
the plan's behalf in order to recover for the plan's injury,
despite a lack of injury to Gibbs himself. Mass. Mutual's Motion
for Judgment on the Pleadings is denied on this ground.
DISMISSAL OF COUNTS II AND III
Because it is the Court's ruling that Count I of Plaintiffs'
Amended Complaint be allowed to stand with respect to
Plaintiffs Gibbs and the plan, Defendant's arguments with
respect to the dismissal of pendent Counts II and III for lack
of federal subject matter jurisdiction are moot. Mass. Mutual's
Motion is denied as to those counts.
DEFENDANT LONGANECKER'S MOTION FOR SUMMARY JUDGMENT
Defendant Charles Longanecker, II has filed a Motion for
Partial Summary Judgment with respect to both the Coleman
Clinic and Gibbs Complaints. Longanecker's Motions for Partial
Summary Judgment are identical with respect to both Complaints,
as are the responses thereto. Consequently, the Court will
address both Motions simultaneously.
The basis of Defendant Longanecker's Motion for Partial
Summary Judgment is that he was not an agent or employee of
Mass. Mutual at any relevant time with respect to Plaintiffs'
theory based on termination of the plan. Longanecker's
employment with Mass. Mutual ended June 1, 1984, two and
one-half months prior to Plaintiffs' alleged decision to
terminate the plan on August 15, 1984. In fact, Longanecker had
even begun employment with a different employer on July 15,
1984, one month prior to Plaintiffs' termination decision.
Thus, Longanecker claims that he cannot be liable for any
damages related to the subsequent termination of the plan.
Plaintiffs' claim against Longanecker is based upon their
belief that, as the general agent of the Mass. Mutual Kansas
City, Missouri office, Longanecker may well have had a
fiduciary duty to properly supervise pension consultant Judith
Dudiak, Plaintiffs' primary contact with Mass. Mutual, who was
asked by Plaintiffs to handle the plan termination. Even if
Longanecker did not have such a duty, it is Plaintiffs'
position that, at a minimum, he may have had a duty to assure
that his successor was aware of matters concerning the plan and
its proper handling. Plaintiffs contend that, whether or not
Longanecker continued to work for Mass. Mutual after August
1984, he may have had personal knowledge of the efforts to
terminate the plan, and should not be permitted to walk away
from such fiduciary duties by virtue of the fact that he
changed jobs. Under these circumstances, particularly since
Plaintiffs have not had an opportunity to depose Longanecker,
they argue that it is premature to dismiss the plan termination
claims against him at this time. They suggest that, upon
further discovery, they may be able to determine that
Longanecker properly acquitted himself as to the plan
termination, at which point stipulation to dismiss from these
claims might be appropriate. In the meantime, however,
Plaintiffs urge that the plan termination claims against
Longanecker be permitted to stand.
The Court agrees with Longanecker, and grants his Motions for
Partial Summary Judgment. Plaintiffs themselves acknowledge
that ERISA, 29 U.S.C. § 1109(b) provides, "no fiduciary shall
be liable with respect to a breach of fiduciary duty under this
subchapter if such breach was committed before he became
fiduciary or after he ceased to be a fiduciary." Plaintiffs'
allegations that Longanecker may have had fiduciary duties
which extended beyond his employment at Mass. Mutual are
contrary to the above provision. The mere fact that Longanecker
might have had personal knowledge of efforts to terminate the
plan does not mean that he had any fiduciary duties with
respect to proper plan termination.
Plaintiffs' claim that Longanecker may have had a fiduciary
duty to properly supervise Dudiak is dubious at best. Once
Longanecker was no longer employed by Mass. Mutual, he
presumably would have no authority to supervise her conduct. As
to Plaintiffs' claim that Longanecker might have had a duty to
assure that his successor was aware of matters concerning the
plan and its proper handling, Plaintiffs would require that
Longanecker had the prescience to know that, two and one-half
months after he left Mass. Mutual, Coleman would seek to have
the plan terminated. In other words, even if Longanecker did
inform his successor of matters concerning the plan and its
proper handling, such instruction would not extend to events,
such as Mass. Mutual's delay in terminating the plan, that
Longanecker could not foresee. ERISA does not require such
foresight; neither will this Court. Longanecker's Motions for
Partial Summary Judgment are granted.
THIRD PARTY DEFENDANT'S MOTION FOR SUMMARY JUDGMENT ON THIRD
Mass. Mutual's Third Party Complaint alleges that Third Party
Defendants, Edward F. Sutkowski and Sutkowski & Washkuhn
Assoc., were employed or retained by Plaintiffs in connection
with the termination of the plan. Mass. Mutual asserts that it
is entitled to indemnification or contribution from Third Party
Defendants in the event judgment is entered against Mass. Mutual
on Plaintiffs' claims.
More specifically, in Mass. Mutual's Amended Third Party
Complaint, it alleges that Third Party Defendants took action
or gave advice with respect to the plan's termination, that
they were informed that the plan was allegedly not being
terminated in a timely manner, that they knew that an initial
notice to terminate the plan would preserve the right to
terminate the plan effective the date of the initial notice,
that they knew or could determine the date on which the plan
would be required to accrue benefits for the 1985 plan year,
and that they failed to properly counsel and represent the plan
so that the benefits for the 1985 plan year would not accrue.
Mass. Mutual asserts that all of these actions were taken in
breach of Third Party Defendants' common law and contractual
duties to Plaintiffs, as well as in violation of their
fiduciary obligations to Plaintiffs pursuant to § 404(a)(1) of
ERISA, 29 U.S.C. § 1104(a)(1).
In their Motion for Summary Judgment on the Third Party
Complaint, Third Party Defendants argue that the affidavits of
Donna J. Keime, Harlan E. Crouch, and Edward F. Sutkowski,
unequivocally establish that Coleman Clinic, Ltd. and the plan
did not authorize Sutkowski & Washkuhn Assoc. or any of its
attorneys to undertake the plan termination at the relevant
points in time. Instead, these matters were entrusted by
Plaintiffs solely to Mass. Mutual and its agent, Judy Dudiak.
This Court has an independent duty to inquire into the basis
of its jurisdiction, and, having done so with respect to the
Third Party Complaint, concludes that it must sua sponte
dismiss that pleading. Regardless of what involvement Third
Party Defendants had in the plan termination, the Third Party
Complaint cannot stand. Any case or controversy which might
exist as the result of Third Party Defendants' actions and/or
failure to act with respect to the plan termination exists
between Plaintiffs and Third Party Defendants — not between
Mass. Mutual and Third Party Defendants. Thus, this Court has no
jurisdiction to even consider the Third Party Complaint.
This result is underscored by Rule 14 of the Federal Rules of
Civil Procedure. Under Rule 14, a defendant can only implead a
person "who is or may be liable to the third-party plaintiff
for all or part of the plaintiff's claim against the
third-party plaintiff." for all or any part of the defendant's
claims against him. Fed.R.Civ.P. 14(a) (emphasis added). Thus,
the Defendant does not have a right to implead persons directly
liable to Plaintiff. 6 C. Wright & A. Miller, Federal Practice
and Procedure: Civil, § 1441 (1971). Mass. Mutual has impleaded
Third Party Defendants, Edward F. Sutkowski and Sutkowski &
Washkuhn Assoc., on the basis of an alleged liability to
Plaintiffs. As noted above, Mass. Mutual cannot do so.
Therefore, regardless of the merits of Third Party Defendants'
Motion for Summary Judgment, this Court
must sua sponte dismiss the Third Party Complaint.
In summary, the Court GRANTS Defendant Longanecker's Motions
for Partial Summary Judgment; GRANTS Defendant Mass. Mutual's
Motion for Judgment on the Pleadings with respect to Coleman's
lack of standing, but DENIES Mass. Mutual's Motion insofar as it
relates to the standing of Coleman Clinic, Ltd. Employee
Pension Plan. Mass. Mutual's Motion is DENIED to the extent that
Mass. Mutual claims that the plan and Plaintiff Gibbs have not
alleged an "injury in fact," and is further DENIED as it
relates to Counts II and III. The Court DISMISSES, sua sponte,
the Third Party Complaint for lack of subject matter
It is so ordered.