The opinion of the court was delivered by: Michael M. Mihm, United States District Judge
Now before the Court is Defendant Valuemetrics Advisors, Inc.'s
("Valuemetrics") Motion for Summary Judgment. For the reasons set forth
below, the Motion for Summary Judgment [#382] is GRANTED.
The basic factual background has been sufficiently set forth in the
prior orders of this Court, and familiarity therewith is presumed. The
present motion is brought by Valuemetrics, the financial consulting firm
that performed appraisals of F&G stock for the ESOP from 1988 through
1994 and 1996 through 2001, and also provided consulting services to F&G
and its Board of Directors in connection with the 1995 ESOP transaction.
The matter is now fully briefed and ready for resolution. This Order
Summary judgment should be granted where "the pleadings, depositions,
answers to interrogatories and admissions on file, together with the
affidavits, if any, show there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter of
law." Fed.R.Civ.P. 56(c). The moving party has the responsibility of
informing the Court of portions of the record or affidavits that
demonstrate the absence of a triable issue. Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). The moving party may meet its burden of showing
an absence of disputed material
facts by demonstrating "that there is an
absence of evidence to support the non-moving party's case." Id. at 325.
Any doubt as to the existence of a genuine issue for trial is resolved
against the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
255 (1986); Cain v. Lane, 857 F.2d 1139, 1142 (7th Cir. 1988).
If the moving party meets its burden, the non-moving party then has the
burden of presenting specific facts to show that there is a genuine issue
of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586-87 (1986). Federal Rule of Civil Procedure 56(e)
requires the non-moving party to go beyond the pleadings and produce
evidence of a genuine issue for trial. Celotex, 477 U.S. at 324.
Nevertheless, this Court must "view the record and all inferences drawn
from it in the light most favorable to the [non-moving party]." Holland
v. Jefferson Nat. Life Ins. Co., 883 F.2d 1307, 1312 (7th Cir. 1989).
Summary judgment will be denied where a reasonable fact-finder could
return a verdict for the non-moving party. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986); Hedberg v. Indiana Bell Tel. Co.,
47 F.3d 928, 931 (7th Cir. 1995).
Valuemetrics has moved for summary judgment based on the argument that
it was not a fiduciary to the ESOP plan. A fiduciary is one who owes
duties to the plan participants and beneficiaries; a fiduciary must
exercise care, skill, prudence, and diligence in fulfilling those
duties. 29 U.S.C. § 1104(a).
Under ERISA, an individual or entity can become a fiduciary in three
ways: (1) being named as a fiduciary in the written plan instrument,
29 U.S.C. § 1102(a); (2) being named and identified as a fiduciary
pursuant to a procedure specified in the written plan instrument,
29 U.S.C. § 1102(a)(2); or (3) meeting the definition of a fiduciary
contained in 29 U.S.C. § 1002(21):
[A] person is a fiduciary with respect to a plan to
the extent (i) he exercises any discretionary
authority or discretionary control respecting
management of such plan or exercises any authority or
control respecting management or disposition of its
assets, (ii) he renders investment advice for a fee or
other compensation, direct or indirect, with respect
to any moneys or other property of such plan, or has
any authority or responsibility to do so, or (iii) he
has any discretionary authority or discretionary
responsibility in the administration of such plan.
For purposes of addressing this motion, it is undisputed that
Valuemetrics was never named as a fiduciary or as an investment manager
in the ESOP plan documents. It was never involved in administering the
ESOP and had no discretionary authority or control over the ESOP's
administration. However, Plaintiffs argue that Valuemetrics was a
fiduciary to the ESOP plan under § 1002(21)(A) because it exercised
control over plan assets and rendered investment advice with respect to
the property of the plan.
In this circuit, "a fiduciary is a person who exercises any power of
control, management or disposition with respect to monies or other
property of an employee benefit fund, or has the authority or
responsibility to do so." Farm King Supply v. Edward D. Jones & Co.,
884 F.2d 288, 292 (7th Cir. 1989), citing Forys v. United Foor &
Commercial Worker's International Union, 829 F.2d 603, 607 (7th Cir.
1987). Under this definition, a showing of authority or control requires
decision-making power" rather than the type of influence that a
professional advisor may have with respect to decisions to be made by the
trustees or fiduciaries that it advises. Id.; Pappas v. Buck
Consultants, Inc., 923 F.2d 531, 535 (7th Cir. 1991). Professionals who
do no more than provide advice to plan trustees are not fiduciaries.
Pappas, 923 F.2d at 535; Laborers' Pension Fund v. Arnold, 2001 WL
197634, at *3-5 (N.D.Ill. Feb. 27, 2001).
Here, Valuemetrics had made annual valuation appraisal reports for the
ESOP. On March 16, 1995, Valuemetrics wrote a letter to F&G and the ESOP
Administrative Committee proposing an offer to assist the two entities in
formulating a stock purchase transaction with the ESOP. However, the ESOP
never accepted Valuemetrics' offer. In mid-1995, Valuemetrics was
retained, not by the ESOP but by the F&G Board of Directors, to update
its valuation analysis, determine an optimal structure for the proposed
1995 ESOP transaction to maximize the value received by selling
shareholders, prepare a transaction memorandum for the sale, negotiate
with the ESOP trustee, and present the Board of Directors of F&G with an
opinion on the fairness of the transaction. The documents produced in
connection with the ...