The opinion of the court was delivered by: WEXLER
Plaintiff Abbey Blatt, a certified public accountant, commenced this action against defendants Louis Marshall and Joseph Lassman, and their accounting firm, marshall & Lassman, for breach of a fiduciary duty and failure to comply with the terms of an employee benefit plan, as required by the Employee Retirement Income Security Act of 1974, Pub. L. 93-406, (codified as amended in scattered sections of 29 U.S.C.) ("ERISA"). The parties have cross-moved for summary judgment. Rule 56(c), Fed. R. Civ. P.
The following facts are undisputed. Abbey Blatt was initially hired in 1968 as an employee by the accounting firm of marshall, Dym and Lassman. He was made a partner
in 1977 and continued his association with the firm, now known as Marshall & Lassman, until October 3, 1983, when he left the firm. During the time he was associated with Marshall & Lassman, Blatt participated in a pension plan sponsored by the American Institute of Certified Public Accountants (the "AICPA Plan" or the "Plan"). This pension plan, which is fully vested, is administered by a Retirement Committee and insured by the Mutual Insurance Company of new York ("MONY"). Marshall & Lassman, as well as its predecessor partnerships, have also participated in the AICPA Plan.
In recognition the dispersed nature of employment in the accounting profession, the AICPA Plan provides an opportunity for employees of separate accounting firms to pool their funds toward retirement. Participation in the AICPA Plan is open to the employees of accounting firms that meet the Plan's requirements and eligible firms that wish to offer the AICPA Plan to their employees must apply to the Plan's Retirement Committee. In the application, the employer must elect to a number of matters concerning the scope of the Plan's applicability to the firm and its employees.
The application must also contain "[a]n agreement of the applicant to furnish all information necessary for the Plan's convenient administration...." AICPA Plan, § 3.2 (1) (h) (Plaintiff's Exhibit 4 at 25). If the firm is accepted, then the employees who wish to take advantage of the Plan can become participants. Section 8 of the Plan states that an employee terminates participation in the Plan upon termination of the employee's relationship with the employer accounting firm. Distribution of benefits to the employee can commence only upon MONY's receipt of a notice of termination.
With respect to the employer's role in the Plan, the employer is required to submit cash contributions to MONY at least once a year and is required to pay entry fees and a share of administrative expenses, as needed. Employers are held responsible for compliance with the Plan's requirements concerning contributions. Employee contributions and assets under the Plan never revert to the employer. The Plan allows an employer to suspend payments for up to one year, and an employer may, subject to the conditions of the Plan, transfer to another pension plan.
Not long after Blatt left his former partners, he decided that he wanted to recover the money he had paid into the AICPA Plan and, in due course, learned that no monies could be released until the firm had executed and sent to MONY a Notice of Change Certificate reflecting Blatt's status as a former member of the firm. Shortly thereafter, on January 13, 1984, Blatt wrote Marshall & Lassman, asking them to execute the aforementioned document. Despite repeated requests and the commencement of both an action in New York State court,
and this lawsuit, the document was not executed until May 17, 1985.
In the Complain, Blatt alleges that defendants breached their statutory duties as fiduciaries by refusing to execute the Notice of Change Certificate upon his request. Defendants move for summary judgment on the grounds that defendants are not fiduciaries within the meaning of ERISA, 29 U.S.C. § 1002(21) (A), and are, therefore, exempt from liability. 29 U.S.C. § 1104. plaintiff opposes the motion, arguing that defendants are ERISA fiduciaries, and cross moves for summary judgment on the issue of liability.
The threshold issue in this case is whether defendants are fiduciaries under ERISA. If they are not, then there is no liability and the Complaint must be dismissed. If they are, then the second inquiry is whether the failure to execute a Notice of Change Certificate constituted a breach under the statute.
In 1974, Congress enacted ERISA to protect individual pension rights and promote the expansion of private retirement plans. H.R. Rep. No. 533, 93d Cong., 2d Sess. 1-2 reprinted in 1974 U.S. Code Cong. & Ad. News 4639-40. Freund v. Marshall & Ilsley Bank, 485 F. Supp. 629, 634 (W.D. Wis. 1979). One of the legislations's critical elements was the uniform regulation of fiduciary conduct and, as enacted, ERISA set out specific standards of conduct for fiduciaries, Pub. L. 93-406, § 404, (codified as amended at 29 U.S.C. § 1104), prohibited certain transactions between fiduciaries and others, § 406, 29 U.S.C. § 1106, and imposed liability for a breach of fiduciary duty, § 409, 29 U.S.C. § 1109.
A person is a fiduciary with respect to a plan ...