Gregory Gabriel v. Alaska Electrical Pension Fund , 755 F.3d 647 ( 2014 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GREGORY R. GABRIEL, No. 12-35458
Plaintiff-Appellant,
D.C. No.
v. 3:06-cv-00192-
TMB
ALASKA ELECTRICAL PENSION
FUND; TRUSTEES OF THE ALASKA
ELECTRICAL PENSION FUND; OPINION
PENSION ADMINISTRATIVE
COMMITTEE OF THE ALASKA
ELECTRICAL PENSION FUND;
APPEALS COMMITTEE OF THE
ALASKA ELECTRICAL PENSION
FUND; GREGORY STOKES; GARY
BROOKS; STEVE BOYD; JOHN
GIUCHICI; CHERESA MACLEOD;
SCOTT BRINGMANN; DAVID CARLE;
JIM FULLFORD; MARY TESCH;
KNUTE ANDERSON; MIKE BAVARD;
LARRY BELL; VINCE BELTRAMI,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Alaska
Timothy M. Burgess, District Judge, Presiding
Argued and Submitted
August 14, 2013—Anchorage, Alaska
2 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
Filed June 6, 2014
Before: Alex Kozinski, Chief Judge, and Marsha S. Berzon
and Sandra S. Ikuta, Circuit Judges.
Opinion by Judge Ikuta;
Partial Concurrence and Partial Dissent by Judge Berzon
SUMMARY*
Employee Retirement Income Security Act
The panel affirmed the district court’s summary judgment
in favor of Alaska Electrical Pension Fund and other
defendants on claims (1) that the Fund abused its discretion
in denying the plaintiff benefits under the Alaska Electrical
Pension Plan and (2) that he was entitled to equitable relief
under ERISA.
For over three years, the Fund paid the plaintiff monthly
pension benefits he had not earned. When it rediscovered an
earlier determination that the plaintiff had never met the
Plan’s vesting requirements, it terminated his benefits.
The panel affirmed the district court’s summary judgment
on the plaintiff’s claim that the defendants violated their
fiduciary duties under ERISA or the terms of the Plan and
that he therefore was entitled to “appropriate equitable relief”
under 29 U.S.C. § 1132(a)(3). The panel held that the
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 3
plaintiff was not entitled to an order equitably estopping the
Fund from relying on its corrected records that showed his
actual years of service because he failed to show that a letter
informing him that he would receive a pension was an
interpretation of ambiguous language in the Plan, rather than
a mere mistake in assessing his entitlement to benefits, and he
also failed to show that he was ignorant of the true facts. The
panel held that the plaintiff was not entitled to the equitable
remedy of reformation based on mistake under trust or
contract law principles because he failed to demonstrate that
a mistake of fact or law affected the terms of the Plan. He
also was not entitled to reformation based on fraud. The
panel held that the plaintiff was not entitled to the equitable
remedy of surcharge, to receive an amount equal to the
benefits he would have received if he had been a participant
with the hours erroneously reflected in the Fund’s records
when he applied for benefits, because he did not show that the
defendants were unjustly enriched by their alleged breaches
of fiduciary duty. In addition, the surcharge remedy the
plaintiff sought would not restore the trust estate, but rather
would wrongfully deplete it by paying benefits he was not
eligible to receive under the Plan.
The panel also affirmed the district court’s summary
judgment on the plaintiff’s claim that the defendants erred in
denying him benefits on the ground that he was non-vested.
The panel rejected the plaintiff’s argument that the Fund
waived this rationale for denying him benefits by not timely
raising it.
Judge Berzon concurred and dissented. She dissented
from Part II(B)(3) of the majority opinion because the
plaintiff might be entitled to an equitable remedy similar to
surcharge. She wrote that the majority disregarded Supreme
4 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
Court guidance in CIGNA Corp. v. Amara, 131 S. Ct. 1866(2011), and created a conflict with recent decisions of the
Fourth, Fifth, and Seventh Circuits regarding the scope of the
“surcharge” remedy. Judge Berzon concurred in the
remainder of the majority opinion.
COUNSEL
Jennifer Mary Coughlin, K&L Gates, LLP, Anchorage,
Alaska, for Plaintiff-Appellant.
Allen Bruce McKenzie (argued), and Frank J. Morales,
McKenzie Rothwell Barlow & Coughran, P.S., Seattle,
Washington, for Defendants-Appellees.
OPINION
IKUTA, Circuit Judge:
Gregory R. Gabriel appeals the district court’s dismissal
of his claims against the Alaska Electrical Pension Fund (the
Fund) and other defendants under the Employee Retirement
Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et
seq. Because Gabriel failed to raise a genuine issue of
material fact that the Fund abused its discretion in denying
him benefits, or that he was entitled to “appropriate equitable
relief” under 29 U.S.C. § 1132(a)(3), we affirm the district
court.
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 5
I
For over three years, the Fund paid Gabriel monthly
pension benefits he had not earned. This case arises from the
events that occurred after the Fund discovered this error.
From August 1968 through April 1975, Gabriel
participated in the Alaska Electrical Pension Plan (the Plan).
The Plan is an “employee pension benefit plan” as defined in
ERISA, 29 U.S.C. § 1002(2)(A). It covers electrical workers
and contractors who work for employers that participate in
one of several electrical industry collective bargaining
agreements. The Plan is administered by the Fund, which is
run by a board of trustees. The Plan gives the trustees “the
exclusive right to construe the provisions of the Plan and to
determine any and all questions arising thereunder or in
connection with the administration thereof.”
Under section 5.01 of the Plan, a participant who has
completed ten or more “[y]ears of service,” as defined in the
Plan, is vested under the Plan and is eligible to apply for
pension benefits on retirement after reaching a specified age.
Section 8.01 provides that a participant who fails to earn a
total of 500 hours of service in a two-year period, and is not
on a qualifying leave of absence pursuant to section 8.02, is
terminated from the Plan. A terminated participant may be
reinstated under section 8.04. Under Section 8.03, a vested
participant who is terminated is not devested; once vested, a
participant remains vested.
Gabriel worked until April 1975 as an employee of
several different electric companies that participated in the
Plan. In 1975, he became the sole proprietor of Twin Cities
Electric. From September 1975 through November 1978,
6 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
Twin Cities made contributions for both Gabriel and its
employees. Based on these contributions, the Fund initially
credited Gabriel with eleven years of service, enough to
qualify Gabriel as a vested participant under section 5.01.
But in 1979, the Fund determined that Gabriel was an
owner of Twin Cities, rather than an employee, and therefore
not eligible to participate in the Plan. In a letter dated
November 20, 1979, the Fund’s general counsel informed
Gabriel about this error and told him that the Fund owed him
a refund of $13,626 for the erroneous contributions made on
his behalf from 1975 to 1978. Further, the letter informed
Gabriel that he was terminated from the Plan as of January 1,
1978, pursuant to section 8.01, because its records showed
that by that time he had two consecutive years with less than
500 hours of service. An attachment to the letter, entitled
“Benefit Statement Without Hours Reported By Twin Cities,”
stated that Gabriel had “8 yrs. Credited Service” from 1968
to 1975 when the improper hours for his time as an employer
at Twin Cities were excluded, and that the Fund would update
Gabriel’s hours report to remove the improperly credited
hours.
As a separate matter, the letter stated that, because Twin
Cities had been delinquent in making contributions for its
other employees, the Fund would set off the delinquent
amounts owed to the Fund (a total of $6,989.24) from the
refund amount owed Gabriel, for a total refund to Gabriel of
$6,636.76.
On December 3, 1979, the Fund drafted a follow-up letter
stating that Twin Cities actually owed more in delinquent
obligations than the Fund originally had calculated. To
satisfy Twin Cities’ delinquent obligations for its employees,
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 7
the Fund intended to withhold $12,982.69, instead of
$6,989.24. Therefore, the Fund would give Gabriel a refund
of only $643.31. The letter enclosed a release agreement,
which documented the terms of the setoff and refund. It also
informed Gabriel about the steps he would have to take to
become vested in the Plan. The record includes only an
unsigned copy of this letter, which was found in the Fund’s
files. Gabriel asserts he never received this letter.
In January 1980, Gabriel signed the release agreement, in
which he acknowledged that he was receiving a refund of
$643.31 arising from “the improper employer contributions
paid from the year 1975 through 1978” made on his behalf
when he was the owner of Twin Cities, and that the remainder
of the improper contributions (amounting to $12,982.69)
would be used to pay delinquent obligations.
Gabriel did not meet any of the requirements under the
Plan for reinstatement and so never vested in the Plan.
Nevertheless, in late 1996, Gabriel asked the Fund for
information about the amount of pension benefits he would
receive if he retired. In a letter dated January 6, 1997, a
pension representative for the Fund stated that it had
calculated Gabriel’s pension benefits based on his years of
service from 1968 to 1978, and determined that, if he retired,
Gabriel would receive pension benefits of $1,236 each month.
Gabriel subsequently retired and applied for benefits,
which he began receiving in March 1997. In an affidavit
submitted as part of this litigation, Gabriel stated that he
would not have retired in 1997 if the pension representative
had informed him he was ineligible to receive pension
benefits.
8 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
The sequence of events leading the Fund to rediscover its
error and terminate Gabriel’s benefits began in May 2000. At
that time, Gabriel began working part-time as an OSHA
safety inspector for Udelhoven Oilfield Services to
supplement his retirement income. In 2001, the Fund warned
Gabriel that his work constituted prohibited post-retirement
employment in the industry, which could lead to a suspension
of benefits. Although Gabriel argued that his employment at
Udelhoven was not in the same industry, the Fund
nonetheless suspended his benefits on that basis in November
2001.
Gabriel challenged this suspension of benefits through the
administrative process established in the Plan. First, Gabriel
appealed the suspension to the Appeals Committee. The
Committee denied his appeal, and Gabriel appealed again to
the next administrative level, which required arbitration of the
dispute. The arbitrator reversed the Appeals Committee’s
decision and remanded the issue for further fact finding.
At the remand hearing before the Appeals Committee,
Gabriel learned that the Fund had not provided him with
certain relevant Plan amendments. The Appeals Committee
suspended the hearing to give Gabriel an opportunity to
review the amendments. Before the Appeals Committee
ruled on the dispute, Gabriel stopped working for Udelhoven,
and the Fund reinstated his pension benefits as of July 1,
2004.
Gabriel nevertheless continued to pursue his claim against
the Fund, and demanded payment of the benefits that the
Fund had withheld due to his Udelhoven work, as well as
attorney’s fees and costs incurred in the administrative
appeals process. The parties engaged in settlement
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 9
negotiations, and the Fund agreed to reimburse Gabriel’s
attorney’s fees and costs. After further negotiations, the Fund
also offered to pay Gabriel the withheld benefits, with
interest.
Before Gabriel could respond to this offer, however, the
Fund revoked it. The Fund rediscovered its earlier
determination that Gabriel had been ineligible to participate
in the Plan between September 1975 and November 1978,
and therefore had never met the Plan’s vesting requirements.
Because Gabriel had never become eligible for retirement
benefits, the Fund terminated Gabriel’s benefits and
threatened to seek reimbursement for the $81,033 in benefits
Gabriel had previously received.1
In response, Gabriel brought an ERISA action in district
court against the Fund, the Board of Trustees, the Pension
Administrative Committee (comprised of trustees responsible
for deciding benefit claims), the Appeals Committee, and
various other individuals responsible for administering the
Fund. In his complaint, Gabriel brought claims for recovery
of benefits and clarification of rights to future benefits under
29 U.S.C. § 1132(a)(1)(B), and breach of the fiduciary duties
set forth in 29 U.S.C. § 1104(a)(1)(A)–(B) and § 1109 under
§ 1132(a)(3).2 The complaint also alleged misrepresentation
and estoppel based on written and oral representations, as
1
The Fund initially brought a counterclaim for reimbursement of these
benefits against Gabriel in this litigation, but later voluntarily dismissed
it.
2
The complaint also alleged claims for breach of co-fiduciary duties set
forth in 29 U.S.C. § 1105(a), under 29 U.S.C. § 1132(a)(3), but because
these claims are derivative of his breach of fiduciary duty claims, we do
not discuss them separately.
10 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
well as other claims not relevant here. The defendants moved
for summary judgment on all of Gabriel’s claims.
The district court addressed the defendants’ motion for
summary judgment in a series of orders. In its first order, the
district court held that Gabriel had raised a genuine issue of
material fact as to whether he had satisfied the Plan’s vesting
requirements, and therefore denied the defendants’ summary
judgment motion on Gabriel’s claims under § 1132(a)(1)(B)
for retroactive reinstatement of his monthly pension benefits
to November 2001, and clarification of his rights to future
benefits. The district court remanded this claim to the
Appeals Committee so Gabriel could exhaust his
administrative remedies. The district court rejected Gabriel’s
claim that the defendants were equitably estopped to deny
him future pension benefits and granted summary judgment
to the defendants on this claim.
On remand before the Appeals Committee, Gabriel no
longer argued that he had satisfied the Plan’s vesting
requirements, but argued that his pension benefits should be
reinstated because he had relied to his detriment on the 1997
determination by the pension representative that he was
eligible for those benefits. The Appeals Committee rejected
this claim, finding that Gabriel was properly informed of the
ten-year vesting requirement in the Fund’s letters to him of
November 20 and December 3, 1979. It also held that, even
if Gabriel relied to his detriment on the pension
representative’s statements, he was not entitled to have those
benefits reinstated in violation of the express terms of the
Plan.
In its second order, the district court rejected Gabriel’s
claims under § 1132(a)(3)(B) that he was entitled to equitable
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 11
relief due to the Fund’s breaches of fiduciary duty because
part of the relief Gabriel sought (compensatory damages in
the form of benefits) was not equitable, and he was not
entitled to the equitable relief he sought (restitution or the
imposition of a constructive trust) given his failure to show
any fraud by the Fund.
In its third order, the district court held that it would
review the Appeals Committee’s final denial of benefits
under an abuse of discretion standard, because the Plan
provided the trustees with broad discretion to construe the
terms of the Plan. The court rejected Gabriel’s claim that the
Fund had waived its argument that he did not satisfy the
Plan’s vesting requirement, as well as Gabriel’s argument that
the Fund breached its obligation to inform him that he was
non-vested in 1979. Under its deferential standard of review,
the district court concluded that the Appeals Committee’s
determination that Gabriel had been properly informed of the
ten-year vesting requirement in the letters of November 20
and December 3, 1979, was not clearly erroneous. The court
therefore granted summary judgment in favor of the
defendants on Gabriel’s benefits claim.
After the district court resolved all his claims, Gabriel
timely appealed. We review a district court’s grant of
summary judgment de novo, and must determine, viewing the
evidence in the light most favorable to the non-moving party,
whether there are any genuine issues of material fact.
Tremain v. Bell Indus., Inc., 196 F.3d 970, 975–76 (9th Cir.
1999). We review de novo the district court’s conclusion that
an ERISA fiduciary did not abuse its discretion. Winters v.
Costco Wholesale Corp., 49 F.3d 550, 552 (9th Cir. 1995).
12 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
II
We begin by considering Gabriel’s argument that the
defendants violated their fiduciary duties under ERISA or the
terms of the Plan, for which he is entitled to “appropriate
equitable relief” under § 1132(a)(3).3
A
The civil enforcement provisions of ERISA, codified in
§ 1132(a), are “the exclusive vehicle for actions by
ERISA-plan participants and beneficiaries asserting improper
processing of a claim for benefits.” Pilot Life Ins. Co. v.
Dedeaux, 481 U.S. 41, 52 (1987). Courts may not “infer
[additional] causes of action in the ERISA context, since that
statute’s carefully crafted and detailed enforcement scheme
provides ‘strong evidence that Congress did not intend to
authorize other remedies that it simply forgot to incorporate
expressly.’” Mertens v. Hewitt Assocs., 508 U.S. 248, 254
(1993) (quoting Mass. Mut. Life Ins. Co. v. Russell, 473 U.S.
134, 146–147 (1985)). Under ERISA, the issue is not
3
Section 1132(a)(3) provides in pertinent part:
(a) Persons empowered to bring a civil action
A civil action may be brought— . . .
(3) by a participant, beneficiary, or fiduciary (A) to
enjoin any act or practice which violates any provision
of this subchapter or the terms of the plan, or (B) to
obtain other appropriate equitable relief (i) to redress
such violations or (ii) to enforce any provisions of this
subchapter or the terms of the plan . . . .
29 U.S.C. § 1132(a)(3).
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 13
whether the statute bars a particular cause of action, but rather
“whether the statute affirmatively authorizes such a suit.” Id.at 255 n.5.
Section 1132(a)(3) provides that “[a] civil action may be
brought . . . (3) by a participant, beneficiary, or fiduciary . . .
(B) to obtain other appropriate equitable relief (i) to redress
[any act or practice which violates any provision of this
subchapter or the terms of the plan] or (ii) to enforce any
provisions of this subchapter or the terms of the plan.”
29 U.S.C. § 1132(a)(3). Under this provision, a plaintiff must
prove both (1) that there is a remediable wrong, i.e., that the
plaintiff seeks relief to redress a violation of ERISA or the
terms of a plan, see Mertens, 508 U.S. at 254; and (2) that the
relief sought is “appropriate equitable relief,” 29 U.S.C.
§ 1132(a)(3)(B). A claim may fail if the plaintiff cannot
establish the second prong, that the remedy sought is
“appropriate equitable relief” under § 1132(a)(3)(B),
regardless whether “a remediable wrong has been alleged.”
Mertens, 508 U.S. at 254.
The Supreme Court has made clear that “appropriate
equitable relief” refers to a “remedy traditionally viewed as
‘equitable.’” Id. at 255. Because “ERISA abounds with the
language and terminology of trust law,” Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 110 (1989), the Court
relies heavily on trust law doctrine in interpreting ERISA,
see, e.g., Conkright v. Frommert, 559 U.S. 506, 512 (2010)
(stating that, when “ERISA’s text does not directly resolve
the matter,” the Court has “looked to ‘principles of trust law’
for guidance” (quoting Firestone, 489 U.S. at 109)).
In interpreting § 1132(a)(3), the Court has distinguished
between equitable and legal relief. According to the Court,
14 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
Congress intended to limit the relief available under
§ 1132(a)(3) to “those categories of relief that were typically
available in equity (such as injunction, mandamus, and
restitution, but not compensatory damages),” Mertens,
508 U.S. at 256, and did not authorize any legal remedies,
even though an equity court was empowered to grant such
relief, id. at 256–59. Accordingly, in Mertens the Court
rejected the plaintiffs’ efforts to seek money damages to
remedy alleged breaches of fiduciary duty. Id. at 255.
Further, the Court held that plaintiffs may not disguise an
attempt to obtain monetary relief as a traditional equitable
remedy. For example, “an injunction to compel the payment
of money past due under a contract, or specific performance
of a past due monetary obligation, was not typically available
in equity,” and thus is not available under § 1132(a)(3).
Great-W. Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204,
210–11 (2002). And although restitution can be an equitable
remedy, “not all relief falling under the rubric of restitution
is available in equity.” Id. at 212. For instance, a plaintiff
“had a right to restitution at law through an action derived
from the common-law writ of assumpsit.” Id. at 213. But “a
plaintiff could seek restitution in equity” only “where money
or property identified as belonging in good conscience to the
plaintiff could clearly be traced to particular funds or property
in the defendant’s possession.” Id.While ruling out legal remedies and limiting the
availability of injunction, mandamus, and restitution in
Mertens and Great-West Life, the Supreme Court has
identified three forms of traditional equitable relief that may
be available under § 1132(a)(3).
First, “appropriate equitable relief” may include “the
reformation of the terms of the plan, in order to remedy the
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 15
false or misleading information” provided by a plan fiduciary.
CIGNA Corp. v. Amara, 131 S. Ct. 1866, 1879 (2011). The
power to reform contracts is available only in the event of
mistake or fraud. Id.; see also Skinner v. Northrop Grumman
Ret. Plan B, 673 F.3d 1162, 1166 (9th Cir. 2012). A plaintiff
may obtain reformation based on mistake in two
circumstances: (1) “if there is evidence that a mistake of fact
or law affected the terms of [a trust] instrument and if there
is evidence of the settlor’s true intent”; or (2) “if both parties
[to a contract] were mistaken about the content or effect of
the contract” and the contract must be reformed “to capture
the terms upon which the parties had a meeting of the minds.”
Skinner, 673 F.3d at 1166. Under a fraud theory, a plaintiff
may obtain reformation when either (1) “[a trust] was
procured by wrongful conduct, such as undue influence,
duress, or fraud,” or (2) a “party’s assent [to a contract] was
induced by the other party’s misrepresentations as to the
terms or effect of the contract” and he “was justified in
relying on the other party’s misrepresentations.” Id.Second, “appropriate equitable relief” may include the
remedy of equitable estoppel, which holds the fiduciary “to
what it had promised” and “‘operates to place the person
entitled to its benefit in the same position he would have been
in had the representations been true.’” Amara, 131 S. Ct. at
1880 (quoting James W. Eaton, Handbook of Equity
Jurisprudence § 62, p.176 (1901)). Under this theory of
relief:
“(1) the party to be estopped must know the
facts; (2) he must intend that his conduct shall
be acted on or must so act that the party
asserting the estoppel has a right to believe it
is so intended; (3) the latter must be ignorant
16 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
of the true facts; and (4) he must rely on the
former’s conduct to his injury.”
Greany v. W. Farm Bureau Life Ins. Co., 973 F.2d 812, 821
(9th Cir. 1992) (quoting Ellenburg v. Brockway, Inc.,
763 F.2d 1091, 1096 (9th Cir. 1985)); see also 1 John Norton
Pomeroy, A Treatise on Equity Jurisprudence § 805,
pp.190–98 (5th ed. 1941).
A plaintiff seeking equitable estoppel in the ERISA
context must meet additional requirements.4 First, we have
consistently held that a party cannot maintain a federal
equitable estoppel claim in the ERISA context when recovery
on the claim would contradict written plan provisions.
Greany, 973 F.2d at 822 (non-trust fund defendants);
Davidian v. S. Cal. Meat Cutters Union & Food Emps.
Benefit Fund, 859 F.2d 134, 136 (9th Cir. 1988) (trust fund
defendant). This principle is derived from ERISA’s
requirement that “[e]very employee benefit plan shall be
established and maintained pursuant to a written instrument.”
29 U.S.C. § 1102(a)(1). The purpose of this requirement is to
protect “the plan’s actuarial soundness by preventing plan
4
Although our cases have sometimes discussed equitable estoppel
claims as if they were independent causes of action, see, e.g., Greany,
973 F.2d at 821, the Supreme Court has now clarified that courts may not
“infer causes of action in the ERISA context” beyond what is set forth in
the statute, and has instructed us to analyze equitable estoppel as a form
of “appropriate equitable relief” under § 1132(a)(3)(B), Mertens, 508 U.S.
at 254. But because our estoppel precedent relied on traditional equitable
principles, see United States v. Ga.-Pac. Co., 421 F.2d 92, 96 (9th Cir.
1970) (citing 3 Pomeroy, Equity Jurisprudence §§ 801–02, 804), and
Lavin v. Marsh, 644 F.2d 1378, 1382 (9th Cir. 1981)), it continues to
inform our understanding of what constitutes “appropriate equitable
relief.”
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 17
administrators from contracting to pay benefits to persons not
entitled to them under the express terms of the plan.”
Rodrigue v. W. & S. Life Ins. Co., 948 F.2d 969, 971 (5th Cir.
1991); see also Greany, 973 F.2d at 822 (citing Rodrigue,
948 F.2d at 971). Accordingly, a plaintiff may not bring an
equitable estoppel claim that “would result in a payment of
benefits that would be inconsistent with the written plan,” or
would, as a practical matter, result in an amendment or
modification of a plan, because such a result “would
contradict the writing and amendment requirements of
29 U.S.C. §§ 1102(a)(1) and (b)(3).” Greany, 973 F.2d at
822. For the same reason, “oral agreements or modifications
cannot be used to contradict or supersede the written terms of
an ERISA plan.” Richardson v. Pension Plan of Bethlehem
Steel Corp., 112 F.3d 982, 986 n.2 (9th Cir. 1997); see also
Thurber v. W. Conf. of Teamsters Pension Plan, 542 F.2d
1106, 1109 (9th Cir. 1976) (per curiam) (holding in an
analogous context that an employee’s reliance on advice from
a pension administrator did not estop the pension fund from
denying benefits because “[t]he rights of other pensioners
must be considered, and the trust fund may not be deflated
because of the misrepresentation or misconduct of the
Administrator of the fund”). The same rule applies to
informal written interpretations of an ERISA plan. See Nat’l
Cos. Health Benefit Plan v. St. Joseph’s Hosp., 929 F.2d
1558, 1572 (11th Cir. 1998) (holding that “use of the law of
equitable estoppel to enforce informal written interpretations
will not undermine the integrity of ERISA plans”), abrogated
on other grounds by Geissal v. Moore Med. Corp., 524 U.S.
74 (1998). Nevertheless, we have distinguished “between
oral statements that contradict or supersede the terms of an
ERISA plan and oral interpretations of a plan’s provisions
that are not contrary to the plan’s written provisions,” and
18 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
may give effect to interpretations of ambiguous plan
provisions. Richardson, 112 F.3d at 986 n.2.
Second, we have held that an ERISA beneficiary seeking
to recover benefits under an equitable estoppel theory must
establish “extraordinary circumstances.” Pisciotta v.
Teledyne Indus., Inc., 91 F.3d 1326, 1331 (9th Cir. 1996) (per
curiam). “The actuarial soundness of pension funds is, absent
extraordinary circumstances, too important to permit trustees
to obligate the fund to pay pensions to persons not entitled to
them under the express terms of the pension plan.” Phillips
v. Kennedy, 542 F.2d 52, 55 n.8 (8th Cir. 1976); see also
Rosen v. Hotel & Rest. Emps. & Bartenders Union of Phila.,
637 F.2d 592, 598 (3d Cir. 1981). Although we have not
defined “extraordinary circumstances” in this context, courts
have held that making “a promise that the defendant
reasonably should have expected to induce action or
forbearance on the plaintiff’s part,” Devlin v. Empire Blue
Cross & Blue Shield, 274 F.3d 76, 86 (2d Cir. 2001), as well
as “conduct suggesting that [the employer] sought to profit at
the expense of its employees,” a “showing of repeated
misrepresentations over time,” or evidence “that plaintiffs are
particularly vulnerable,” Kurz v. Phila. Elec. Co., 96 F.3d
1544, 1553 (3d Cir. 1996), can constitute extraordinary
circumstances.
Accordingly, to maintain a federal equitable estoppel
claim in the ERISA context, the party asserting estoppel must
not only meet the traditional equitable estoppel requirements,
but must also allege: (1) extraordinary circumstances;
(2) “that the provisions of the plan at issue were ambiguous
such that reasonable persons could disagree as to their
meaning or effect”; and (3) that the representations made
about the plan were an interpretation of the plan, not an
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 19
amendment or modification of the plan. Spink v. Lockheed
Corp., 125 F.3d 1257, 1262 (9th Cir. 1997) (citing Pisciotta,
91 F.3d at 1331); see also Greany, 973 F.2d at 822 n.9 (“A
plaintiff must first establish that the plan provision in
question is ambiguous and the party to be estopped
interpreted this ambiguity. If these requirements are satisfied,
the plaintiff may proceed with the equitable estoppel claim by
satisfying” traditional equitable estoppel requirements.).
Third, “appropriate equitable relief” also includes
“surcharge,” defined as “the power to provide relief in the
form of monetary ‘compensation’ for a loss resulting from a
trustee’s breach of duty, or to prevent the trustee’s unjust
enrichment.” Amara, 131 S. Ct. at 1880 (citing Restatement
(Third) of Trusts § 95 & cmt. a (Tent. Draft No. 5, Mar. 2,
2009)). Under the traditional equitable principles specified
in Amara, id. at 1879–80, the surcharge remedy was available
when a breach of trust committed by a fiduciary resulted in a
loss to the trust estate or allowed the fiduciary to profit at the
expense of the trust. See Restatement (Second) of Trusts
§ 205 (1959) (limiting a trustee’s liability for breach of trust
to “any loss or depreciation in the value of the trust estate,”
“any profit which would have accrued to the trust estate,” and
“any profit made by [the trustee]”); see also George Gleason
Bogert et al., The Law of Trusts and Trustees § 862 (2013)
(defining the three primary measures of damages for breach
of trust to include “the loss in the value of the trust estate,”
“any profit [the trustee] has made,” and “profit that would
have accrued to the trust”); 4 Austin Wakeman Scott, William
Franklin Fratcher, & Mark L. Ascher, Scott and Ascher on
Trusts § 24.9, pp.1686–87 (5th ed. 2007) (same). Under
these circumstances, a surcharge remedy can protect the
beneficiaries of a trust by making the trust estate whole. “If
a breach of trust causes a loss, including any failure to realize
20 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
income, capital gain, or appreciation that would have resulted
from proper administration, the beneficiaries are entitled to
restitution and may have the trustee surcharged for the
amount necessary to compensate fully for the consequences
of the breach.” Restatement (Third) of Trusts § 95 & cmt. b
(2012). However, “[t]he trustee is not subject to surcharge
for a breach of trust that results in no loss to the estate” or
profit to the trustee. 4 Scott and Ascher on Trusts § 24.9,
p.1693; see also id. § 24.10, pp.1707–08; Thomas Lewin, A
Practical Treatise on the Law of Trusts and Trustees ch. 26,
§ 3, p.604 (2d ed. 1858) (“In the event of a breach of trust, the
cestui que trust is entitled to file a bill against the trustee
. . . to compel from him personally a compensation for the
loss the trust estate has sustained.”).
Contrary to the dissent, Amara did not suggest that the
remedy of surcharge is available to provide any sort of
“[m]ake-whole relief for breach of fiduciary duty against a
trustee” regardless “whether or not traditional trust law would
have provided that relief under the ‘surcharge’ terminology.”
Dissent at 39. Rather, the Supreme Court followed its prior
interpretation of “appropriate equitable relief” as including
only traditional equitable remedies. See Amara, 131 S. Ct. at
1878 (observing that “appropriate equitable relief” refers to
“those categories of relief that . . . were typically available in
equity” (internal quotation marks and citation omitted)). In
this vein, the Court carefully distinguished Mertens, which
had held that “appropriate equitable relief” did not include
“‘compensatory damages’ against a nonfiduciary.” Id. at
1878 (quoting Mertens, 508 U.S. at 255). The Court pointed
out that while Mertens disallowed a monetary remedy against
a non-fiduciary under § 1132(a)(3), traditional equitable
principles allowed surcharge as a “monetary remedy against
a trustee,” and “[t]hus, insofar as an award of make-whole
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 21
relief is concerned, the fact that the defendant in [Amara],
unlike the defendant in Mertens, is analogous to a trustee
makes a critical difference.” Id. at 1880 (emphasis added).
In explaining the scope of traditional equitable remedies,
including surcharge, available against a trustee, the Court
relied on standard trust treatises. See, e.g., id. at 1881 (citing
4 Scott and Ascher on Trusts § 24.9, for the principle that “a
court of equity would not surcharge a trustee for a nonexistent
harm”). As the very section of Scott and Ascher on Trusts
cited in Amara explains, “[t]he trustee is not subject to
surcharge for a breach of trust that results in no loss to the
trust estate.” 4 Scott and Ascher on Trusts § 24.9, p.1693.5
We followed the traditional equitable principles and
treatises relied on in Amara in our subsequent decision in
Skinner, where we held that surcharge is an appropriate form
of equitable relief to redress losses of value or lost profits to
the trust estate and to require a fiduciary to disgorge profits
from unjust enrichment. 673 F.3d at 1167. Specifically,
Skinner held that if a trustee breaches a fiduciary duty: (1) the
remedy of surcharge is available against the fiduciary “for
benefits it gained through unjust enrichment or for harm
caused as the result of its breach”; and (2) the trustee “could
be liable for loss of value to the trust or for any profits that
the trust would have accrued in the absence of the breach,” in
order to return the beneficiary to “the position he or she
5
While Amara made the important determination that surcharge was a
form of “appropriate equitable relief” potentially available under
§ 1132(a)(3), the Supreme Court concluded that it “need not decide which
remedies are appropriate on the facts of this case.” 131 S. Ct. at 1880.
Indeed, the Supreme Court’s analysis of surcharge was necessarily limited
because neither the district court nor the Second Circuit had addressed the
applicability of a surcharge remedy, see id. at 1882, and the parties had
not briefed the issue, see id. at 1885 & n.3 (Scalia, J., concurring).
22 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
would have attained but for the trustee’s breach.” Id.Skinner’s identification of the two circumstances in which
surcharge may be available is consistent with the
Restatements of Trusts it cites, see id. (citing Restatement
(Third) Trusts § 100(b) (2012), and Restatement (Second) of
Trusts § 205 (1959)), as well as with the treatises cited by the
Supreme Court in Amara, including Bogert, The Law of
Trusts and Trustees § 862, and 4 Scott and Ascher on Trusts
§ 24.9, see 131 S. Ct. at 1880–81.
Relying on McCravy v. Metropolitan Life Insurance Co.,
690 F.3d 176 (4th Cir. 2012), Gabriel argues that surcharge
is available more broadly than these traditional equitable
principles suggest, and claims that he is entitled to make-
whole relief, even if it comes at the expense of the trust
estate. We disagree. McCravy, as well as subsequent similar
decisions from the Fifth and Seventh Circuits, see Kenseth v.
Dean Health Plan, Inc., 722 F.3d 869 (7th Cir. 2013);
Gearlds v. Entergy Servs., Inc., 709 F.3d 448 (5th Cir. 2013),
did not define the availability of surcharge, or even address
whether the plaintiff was entitled to relief, see, e.g., McCravy,
690 F.3d at 181–82 (“Whether McCravy’s breach of fiduciary
duty claim will ultimately succeed and whether surcharge is
an appropriate remedy under Section 1132(a)(3) in the
circumstances of this case are questions appropriately
resolved in the first instance before the district court.”).
Instead, these circuits merely corrected district courts’
erroneous interpretations of Mertens as precluding recovery
of any monetary relief and remanded for the district courts to
assess the merits of the plaintiffs’ claims, along with the
appropriateness of the surcharge remedy, in the first instance.
See Kenseth, 722 F.3d at 883; Gearlds, 709 F.3d at 452;
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 23
McCravy, 690 F.3d at 181–82.6 Accordingly, none of these
circuits has had the opportunity to review the traditional trust
law doctrines on which the Supreme Court relies and
determine the sorts of surcharge remedies that may be
available under those doctrines. See Amara, 131 S. Ct. at
1878 (defining “appropriate equitable relief” in § 502(a)(3) as
“referring to ‘those categories of relief’ that, traditionally
speaking . . . ‘were typically available in equity’”) (quoting
Sereboff v. Mid Atl. Med. Servs., Inc., 547 U.S. 356, 361
(2006)). We are bound by our own precedent, which
correctly identifies surcharge as including only unjust
enrichment and losses to the trust estate. See Skinner,
673 F.3d at 1167.
B
We now turn to Gabriel’s claim under § 1132(a)(3) that
there is a genuine issue of material fact as to whether he is
entitled to “appropriate equitable relief.”7
6
For this reason, it is misleading for the dissent to state that these cases
“confirm that under Amara, surcharge is not limited to the circumstances
in which a trustee personally benefits from a breach of duty or a plan
incurs a loss.” Dissent at 41.
7
We may address this issue before asking whether Gabriel has created
a genuine issue of material fact that the Fund violated the fiduciary duties
set forth in § 1104(a)(1)(A) and (B). See Mertens, 508 U.S. at 254–55
(evaluating whether the relief sought constituted “appropriate equitable
relief” and reserving decision on whether “a remedial wrong has been
alleged”).
24 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
1
We first consider Gabriel’s argument that he is entitled to
an order equitably estopping the Fund from relying on its
corrected records that show his actual years of service.8
Gabriel claims he meets the test for traditional equitable
estoppel because: (1) the defendants were aware that he was
not vested; (2) they nevertheless informed him in the January
7, 1997 letter that he would receive a monthly pension, and
Gabriel was entitled to rely on this letter; (3) Gabriel was
ignorant of the true facts; and (4) Gabriel relied on the
misinformation in the January 1997 letter to his detriment by
retiring at age 62 when he could have continued working.
Further, Gabriel asserts that he has met the additional
requirements set forth in Spink, because the provisions of the
Plan were ambiguous, the plan representative provided an
interpretation of the Plan, and there were extraordinary
circumstances, including that the defendants operated under
a conflict of interest and violated the procedural requirements
of ERISA.
We need not determine whether Gabriel has raised a
genuine issue of material fact as to every element of his
equitable estoppel claim because we conclude that Gabriel
has failed to show that the plan representative’s January 1997
letter was an interpretation of ambiguous language in the
Plan, rather than a mere mistake in assessing Gabriel’s
8
Gabriel’s request for relief has changed over the course of this
litigation. In his complaint, Gabriel asserted that the defendants should be
estopped from denying that he qualified as a vested participant in the Plan.
Because he now concedes that he did not vest in the Plan, he instead
asserts that the defendants should be estopped from refusing to change the
Fund’s records to show him as vested.
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 25
entitlement to benefits. On its face, the letter does not
provide an interpretation of the Plan, but merely provides the
erroneous information that Gabriel is entitled to benefits of
$1,236 per month upon retirement. Such an error in
calculating benefits is just the sort of mistake that we
repeatedly have held cannot provide a basis for equitable
estoppel. We have made clear that “[a] plaintiff cannot avail
himself of a federal ERISA estoppel claim based upon
statements of a plan employee which would enlarge his rights
against the plan beyond what he could recover under the
unambiguous language of the plan itself.” Greany, 973 F.2d
at 822; see also Renfro v. Funky Door Long Term Disability
Plan, 686 F.3d 1044, 1054 (9th Cir. 2012) (holding that “a
beneficiary cannot obtain recovery on the basis of estoppel
‘in the face of contrary, written plan provisions’”) (quoting
Davidian, 859 F.2d at 134)). “Our precedent dictates that a
trust fund can never be equitably estopped where payment
would conflict with the written agreement.” Greany,
973 F.2d at 822. Nor is this principle limited to trust fund
defendants, because we concluded in Greany that “no
compelling reason [existed] to allow an estoppel claim to
proceed solely because the individual or group to be estopped
is other than a trust.” Id.To counter the weight of this precedent, Gabriel relies on
Spink, and claims that the type of misinformation he received
from the plan representative, when considered in conjunction
with various provisions in the Plan, makes certain provisions
in the Plan ambiguous as to him. To understand this
argument, we must first take an in-depth look at Spink. In
Spink, Lockheed hired the plaintiff, who was then 61 years
old, away from a competitor. 125 F.3d at 1259. As part of its
recruitment process, Lockheed represented that the plaintiff
could participate in Lockheed’s pension plan. Id. For the
26 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
next four years, Lockheed sent the plaintiff written year-end
statements notifying him of the amount of credited service he
had accumulated as a plan participant. Id. Eventually,
Lockheed notified him he was not eligible to participate in the
plan because he was over 60 when hired. Id. at 1259–60.
Although the district court granted Lockheed’s motion to
dismiss, id. at 1259, we reversed, rejecting Lockheed’s
argument that the pension plan unambiguously excluded the
plaintiff from obtaining benefits, see id. at 1262–63.
In reaching that conclusion, we relied on two provisions
of Lockheed’s ERISA plan. The first provision stated that
“no Employee may become a Member if he commences
employment on or after December 25, 1976, and, at the time
of such commencement of employment, is sixty (60) years of
age or older.” Id. at 1262. The second provided that “once
each year the Retirement Plan Committee shall notify each
Member in writing of his total Credited Service, according to
the Corporation’s records. Such Credited Service shall be
considered correct and final unless the Member files an
objection by Filing With the Committee within thirty (30)
calendared days following such notice.” Id. Because the
plaintiff had received “correct and final” year-end statements
indicating that he had accrued credited service time, despite
having been older than 60 when hired, we concluded there
was sufficient ambiguity in the plan as applied to the plaintiff
to allow the case to survive Lockheed’s motion to dismiss.
Id. at 1262–63.
Gabriel claims he is similarly situated to the employee in
Spink, and points to two different provisions in the Plan.
First, he identifies the “unambiguous statement in the AEPF
plan that ten years of service are required.” This ten-year
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 27
vesting requirement is reflected in both section 5.01,9 which
sets the normal retirement date, and section 8.03,10 entitled
“vesting,” which explains when a terminated participant will
be considered to have vested. Second, section 14.02 states
that participants in the Plan “shall be entitled to obtain
periodic reports showing the number of hours credited to their
accounts at the administration office” and may show they are
entitled to additional hours by filing a claim and evidence
with the administration office within one year after the end of
the disputed year. Otherwise the “hours shall remain as
9
Section 5.01(a) provides in relevant part:
The Normal Retirement Date for a Participant shall be
the first day of the month coincident with or
immediately following his attainment of age 62, or one
year after his Effective Date of Coverage, whichever is
later and the date he has:
(a) completed ten (10) Years of Service, of which at
least one year must be Credited Future Service . . . .
10
Section 8.03 provides in relevant part:
A Participant who prior to January 1, 1978, fails to earn
a total of at least 500 Hours of Service in a two-
consecutive Plan Year period and a Participant, who on
or after January 1, 1978, fails to earn at least 500 Hours
of Service in a Plan Year shall be deemed a Terminated
Vested Participant provided he has completed ten (10)
or more Years of Service, of which one year was
Credited Future Service. Once he attains age 55, he
shall be eligible to apply for a Retirement Income in
accordance with the applicable provisions of Article
VII[, which sets the amount of retirement income].
28 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
credited.”11 According to Gabriel, the Fund gave him an
unequivocal written statement that he would be entitled to
$1,236 per month if he retired in 1997, implicitly indicating
that he had enough hours of service to vest. Gabriel reasons
that, because he did not challenge the Fund’s implicit
indication that his service hours were sufficient for vesting,
the “hours shall remain as credited” under section 14.02.
Gabriel concludes that the clash between the Fund’s implicit
hours calculation in the representative’s letter to him and the
Plan’s statement that ten years are required for vesting creates
an ambiguity in the Plan’s provisions.
We disagree. Section 14.02 refers only to “periodic
reports showing the number of hours credited” to a
participant’s account. Gabriel does not claim he received or
relied on such periodic reports when deciding to retire.
Therefore, even if section 14.02’s requirement that the hours
in such a report “shall remain as credited” could create an
ambiguity when read in connection with the vesting
requirements in sections 5.01 and 8.03 under some
circumstances, no such conflict exists in this case.
11
Section 14.02 states in pertinent part:
Participants shall be entitled to obtain periodic reports
showing the number of house credited to their accounts
at the administration office. Participants who contend
that they are entitled to be credited with a greater
number of hours for any calendar year must file
evidence in support of such claims with the
administration office within one year after the end of
the disputed year or the hours shall remain as credited.
The Trustees shall determine the proper number of
hours, if any, to be credited to such Participants.
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 29
Because section 14.02 is not applicable to Gabriel’s
claims, we are left with his argument that the misinformation
provided by the plan representative in 1997 conflicts with the
clear language of sections 5.01 and 8.03. This conflict does
not cast doubt on the meaning or effect of those sections,
however, but merely establishes that the defendants made
misrepresentations, a necessary element of traditional
estoppel. Reasonable persons could not disagree regarding
the effect of sections 5.01 and 8.03. The plan representative’s
mistaken response to Gabriel’s inquiry therefore “does not
rise to the level of an interpretation of the plan’s provisions
justifying application of the equitable estoppel doctrine.”
Greany, 973 F.2d at 822.
Even if Gabriel could show that the Plan was ambiguous,
he fails to satisfy another element necessary to qualify for
equitable estoppel: that he was ignorant of the true facts.
Gabriel does not dispute that he received the Fund’s
November 20, 1979 letter. This letter informed Gabriel that
he had not been eligible to participate while a proprietor of
Twin Cities between 1975 and 1978, that his hours accrued
for Twin Cities would be deducted from his account, and that
he had been terminated under section 8.01 of the Plan, which
provides that a non-vested participant who, for any two
consecutive plan years, has less than 500 hours of service will
be deemed a terminated non-vested participant, absent
reinstatement or some other exception. Gabriel argues that
this letter was insufficient to inform him he was not vested,
because it did not expressly state that he was ineligible to
receive a pension unless he met certain criteria. The letter
30 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
itself belies this claim.12 Accordingly, the district court
properly concluded that Gabriel was not entitled to relief
based on estoppel as a matter of law.
2
We next turn to Gabriel’s claim that he is entitled to the
equitable remedy of reformation. To qualify for reformation
of the Plan based on mistake under trust or contract law
principles, Gabriel would need to demonstrate that “a mistake
of fact or law affected the terms” of the Plan, the relevant
trust instrument here, and introduce evidence of the trust
settlor’s (or contractual parties’) true intent. Skinner,
673 F.3d at 1166. Gabriel cannot meet this standard as a
matter of law, because the Plan itself does not contain an
error. Gabriel concedes that he was a sole proprietor of Twin
Cities from 1975 to 1978 and ineligible to participate in the
Plan during that time, and therefore the Fund’s current,
corrected records accurately reflect the agreement between
Gabriel and the Fund. Instead, Gabriel wants to reform the
Fund’s administrative records to conform to the
misinformation given him by the plan representative. But
reformation does not extend so far. The administrative
records are not part of the Plan, see Amara, 131 S. Ct. at1877–78 (rejecting the use of non-plan summary documents
to create new or different plan terms), and the Fund’s
mistaken administrative records did not reflect the parties’
true intent in entering into the Plan. Accordingly, the remedy
of reformation due to mistake is not applicable in this context.
12
Because the November 20, 1979 letter establishes that Gabriel knew
or should have known that he was not vested, we do not need to reach his
argument that he never received the December 3, 1979 letter.
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 31
Nor has Gabriel demonstrated that he is entitled to
reformation based on fraud, because he does not allege that
the Plan “was procured by wrongful conduct, such as undue
influence, duress, or fraud” or that he “was justified in relying
on the [Fund’s] misrepresentations.” Skinner, 673 F.3d at
1166. Accordingly, Gabriel has not adduced evidence giving
rise to a genuine issue of material fact that he is entitled to
reformation.
Gabriel argues that our decision in Mathews v. Chevron
Corp., 362 F.3d 1172 (9th Cir. 2004), supports his
reformation claim. In Mathews, Chevron management
adopted a program to reduce its workforce by offering an
enhanced retirement benefit to any participant in Chevron’s
ERISA plan who was involuntarily terminated without cause,
including those employees who expressed an interest in such
“involuntary” termination. Id. at 1176–77. Despite this
program, plant general managers at first continued to exercise
significant personnel discretion. The Richmond plant general
manager repeatedly informed his employees that he did not
plan to adopt the enhanced benefit program, and certain
employees at the plant voluntarily retired. Id. at 1177. When
Chevron ultimately instituted the program at Richmond, the
retired employees sued for the enhanced benefits. Id. at
1177–78. It was undisputed that all of the employees would
have been selected for involuntary termination had they
expressed an interest. Id. at 1186. We held that Chevron
breached its fiduciary duty to these employees once it began
to seriously consider implementing the program in Richmond.
Therefore, we affirmed the district court’s order that Chevron
had to modify its records to show that the retired plaintiffs
had been involuntarily terminated and were eligible for
enhanced benefits. Id. at 1186–87. The remedy was
“appropriate equitable relief” because it operated merely to
32 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
provide the participants with the benefits they would have
been received but for the breach. Id. (internal quotation
marks omitted).
Mathews does not help Gabriel here. In Mathews, the
employees had been eligible to participate in the enhanced
benefits program, and would have participated but for the
fiduciary’s misinformation. Id. at 1186. Here, by contrast,
Gabriel was not eligible to participate in the Plan, and the
misinformation he received in 1997 from a plan
representative did not prevent him from obtaining any benefit
under the Plan to which he otherwise would have been
entitled. Whereas the order in Mathews allowed the
employees to get the benefit of the involuntary termination
program, but did not alter the terms of the Plan as written, see
id. at 1186–87, the order Gabriel seeks here necessarily
would require violating the terms of the Plan by deeming an
ineligible person to be eligible for pension benefits.
Equitable remedies are not available where the claim “would
result in a payment of benefits that would be inconsistent with
the written plan.” Greany, 973 F.2d at 822.
3
Finally, we turn to Gabriel’s claim that he is entitled to
the equitable remedy of surcharge, to receive an amount equal
to the benefits he would have received if he had been a
participant with the hours erroneously reflected in the Fund’s
records when he applied for benefits. This claim also fails.
While a trust beneficiary may remedy unjust enrichment
through surcharge by requiring “[a] trustee (or a fiduciary)
who gains a benefit by breaching his or her duty [to] return
that benefit to the beneficiary,” Skinner, 673 F.3d at 1167,
Gabriel does not argue that any of the defendants here were
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 33
unjustly enriched by their alleged breaches of fiduciary duty.
Nor could he, because the defendants merely prevented
Gabriel from receiving benefits that he was not entitled to
receive under the Plan, and such actions appropriately
discharged the fiduciaries’ duty to act “solely in the interest
of the participants and beneficiaries,” the individuals eligible
to receive such benefits from the Fund. 29 U.S.C.
§ 1104(a)(1); see also id. § 1002(7), (8) (defining
“participant” and “beneficiary” to require potential
“eligibil[ity] to receive a benefit” under a plan).
Nor is Gabriel seeking a monetary award to recoup losses
the Fund suffered from any fiduciary’s breach. Under
traditional trust principles, “[a] trustee who breaches his or
her duty could be liable for loss of value to the trust or for any
profits that the trust would have accrued in the absence of the
breach,” and “[t]he beneficiary can pursue the remedy that
will put the beneficiary in the position he or she would have
attained but for the trustee’s breach.” Skinner, 673 F.3d at
1167. In short, the beneficiary is entitled to restoration of the
trust res, not to benefit at the expense of other beneficiaries.
Indeed, under traditional trust law principles, a beneficiary
could be obliged to repay any payments received in error
from the trust. See Bogert, The Law of Trusts and Trustees
§ 191 (“A co-beneficiary owes his fellow beneficiaries a duty
to restore to the trust fund payments made to him from trust
principal or income which were improperly made, either due
to mistake or willful breach of trust.”). Because the surcharge
remedy Gabriel seeks would not restore the trust estate, but
rather would wrongfully deplete it by paying him benefits he
is not eligible to receive under the Plan, under Skinner and
trust law principles, Gabriel is not entitled to surcharge as a
remedy under § 1132(a)(3) as a matter of law.
34 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
Because Gabriel is not entitled to estoppel, reformation,
or surcharge, as a matter of law, we affirm the district court’s
grant of summary judgment in favor of the defendants on
Gabriel’s breach of fiduciary and co-fiduciary duty claims
under § 1132(a)(3).13 The basis for our decision obviates the
need for us to reach the question whether the defendants’
actions here breached their fiduciary duty by violating ERISA
or the terms of the Plan. Mertens, 508 U.S. at 254–55.
III
We now turn to Gabriel’s argument under § 1132(a)(1)
that the defendants erred in denying him benefits on the
ground that he was non-vested. Gabriel does not claim that
the Fund erred in determining that he had not vested in the
Plan. Rather, he argues that the Fund waived this rationale
for denying him benefits because the Fund did not raise his
non-vested status until 2004, three years after the Fund first
suspended benefits on the ground that Gabriel was engaged
in improper post-retirement work in the industry.
The Fund did not abuse its discretion here. Under
ERISA, an employee benefit plan must “provide adequate
notice in writing to any participant or beneficiary whose
claim for benefits under the plan has been denied” and must
“afford a reasonable opportunity to any participant whose
claim for benefits has been denied for a full and fair review
by the appropriate named fiduciary of the decision denying
the claim.” 29 U.S.C. § 1133; see also 29 C.F.R.
13
Gabriel’s breach of co-fiduciary duty claim fails for the same reasons
as his breach of fiduciary duty claim. See 29 U.S.C. § 1105(a) (creating
co-fiduciary liability in certain circumstances when there is an underlying
breach of another fiduciary’s duty).
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 35
§ 2560.503–1(g)(1), (h)(2). Given these statutory and
regulatory requirements, we have held that an administrator
may not raise a new reason for denying benefits in its final
decision, because that would effectively preclude the
participant “from responding to that rationale for denial at the
administrative level,” and insulate the rationale from
administrative review. Abatie v. Alta Health & Life Ins. Co.,
458 F.3d 955, 974 (9th Cir 2006) (en banc); see also Saffon
v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d
863, 871 (9th Cir. 2008) (holding that a plan administrator
must provide a participant with the reasons for a benefits
denial at a time when the participant “had a fair chance to
present evidence on this point,” and should not add a new
reason in the administrator’s final denial). Where the
administrator’s final denial contains a new rationale for
denying a claim, the participant may present evidence on that
point to the district court, which must consider it. Saffon,
522 F.3d at 872. Further, the district court can take into
account the administrator’s violation of ERISA’s procedural
requirements in determining how much deference to give the
administrator’s final decision. Id. at 873.
In this case, the Fund did not violate ERISA’s procedural
requirements because it notified Gabriel regarding his non-
vested status while Gabriel’s administrative case was still
pending before the Appeals Committee. The Fund did not
put a new rationale for denying benefits into a final decision
in a manner that would insulate the denial from
administrative review. Cf. Abatie, 458 F.3d at 974. The
Appeals Committee had not yet ruled on Gabriel’s claim for
benefits when it discovered his non-vested status, and nothing
precluded Gabriel from further litigating the Fund’s decision
to deny him benefits through the Fund’s administrative
review process. Indeed, Gabriel had the opportunity to
36 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
present evidence to the Appeals Committee on this very issue,
because the district court remanded his benefits claim to the
Appeals Committee. As we noted in Saffon, if a plan
administrator fails to give timely notice, the plaintiff is not
entitled to an award of benefits, but only to the opportunity to
present evidence to challenge the plan administrator’s new
determination. See 522 F.3d at 872–74. Gabriel got just such
a remedy in this case. Accordingly, we reject Gabriel’s
arguments that the Fund failed to comply with ERISA
procedural requirements, or that it waived its determination
that Gabriel never vested, and affirm the district court’s
deference to the Fund’s denial of benefits.
IV
Because Gabriel cannot demonstrate that he is entitled to
any of the equitable remedies available under § 1132(a)(3), or
that the Fund waived its argument that he never vested, we
affirm the district court’s grant of summary judgment in favor
of the defendant.
AFFIRMED.
BERZON, Circuit Judge, concurring and dissenting:
The majority opinion disregards Supreme Court guidance
in CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011), and
creates a conflict with recent decisions of the Fourth, Fifth,
and Seventh Circuits. As Gabriel may be entitled to an
equitable remedy similar to surcharge, I dissent from Part
II(B)(3) of the majority opinion, but concur in the remainder.
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 37
Gabriel seeks a “remedy that will put [him] in the position
he . . . would have attained but for the trustee[s]’[] breach.”
Skinner v. Northrop Grumman Ret. Plan B, 673 F.3d 1162,
1167 (9th Cir. 2012). Amara described “this kind of
monetary remedy against a trustee” as “‘exclusively
equitable.’” 131 S. Ct. at 1880 (citation omitted). Although
Amara identified such relief as “sometimes called a
‘surcharge,’” the focus was not on the particulars of
traditional surcharge law. Id. (citation omitted). Instead,
Amara embraced the concept that where the defendant is
“analogous to a trustee,” the “‘charge [against] the defendant,
as a trustee, [is] for breach of trust,” and “award [is] of make-
whole relief,” then “the remedies . . . fall within the scope of
the term ‘appropriate equitable relief.’” Id. (citation omitted).
The majority understands Amara otherwise — as
providing for make-whole relief against a trustee for breach
of fiduciary duty only when the breach (1) “result[s] in a loss
to the trust estate[;]” or (2) “allow[s] the fiduciary to profit at
the expense of the trust.” Maj. Op. at 19; see also id. at 33
(quoting Skinner, 673 F.3d at 1167). As Gabriel has failed to
demonstrate either an unjust enrichment by a trustee or a loss
to the plan, the majority holds he is not entitled to surcharge
as a matter of law. Id. at 32–34.
But the holding of Amara is not so limited. Amara noted
that the “surcharge remedy [had] extended to a breach of trust
committed by a fiduciary encompassing any violation of a
duty imposed upon that fiduciary.” 131 S. Ct. at 1880(emphasis added); see also J. Eaton, Handbook of Equity
Jurisprudence § 212, at 439 (1901) (“A breach of trust by a
trustee creates a personal obligation . . . which may be
enforced against the trustee or his estate in a proper
proceeding.”). Explaining its reasoning, Amara noted that
38 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
“before the merger of law and equity,” a beneficiary could
bring suit for breach of fiduciary duty “only in a court of
equity, not a court of law.” 131 S. Ct. at 1879. Equity courts
accordingly developed “specially tailored remedies” such as
surcharge “to fit the nature of the right they sought to protect
because ‘[e]quity suffers not a right to be without a remedy.’”
Kenseth v. Dean Health Plan, Inc., 722 F.3d 869, 878 (7th
Cir. 2013) (quoting Amara, 131 S. Ct. at 1879) (quotation
marks and citation omitted). The broad character of the
remedies identified in Amara is clearly described in the
portion of a treatise it quoted:
Equity is primarily responsible for the
protection of rights arising under trust, and
will provide the beneficiary with whatever
remedy is necessary to protect him and
recompense him for loss, in so far as this can
be done without injustice to the trustee or
third parties.
The court is not confined to a limited list of
remedies but rather will mold the relief to
protect the rights of the beneficiary according
to the situation involved.
G. Bogert & G. Bogert, Trusts and Trustees § 861 at 3–4 (rev.
2d ed. 1995) (second sentence quoted in Amara, 131 S. Ct. at
1881).
“Thus, insofar as an award of make-whole relief is
concerned, the fact that the defendant . . . is analogous to a
trustee makes a critical difference.” Amara, 131 S. Ct. at
1880 (distinguishing prior case law concerning non-fiduciary
defendants). Beyond that “critical difference,” id., Amara
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 39
was concerned with whether relief sought under 29 U.S.C.
§ 1132(a)(3) “resembles forms of traditional equitable relief,”
id. at 1879 (emphasis added), not whether the precise
requirements for obtaining such relief under the common law
of trusts are met. Make-whole relief for breach of fiduciary
duty against a trustee conforms to that description, whether or
not traditional trust law would have provided that relief under
the “surcharge” terminology.
Given its breadth, Amara has rightly been described as a
“‘[a] striking development,’” McCravy v. Metro. Life Ins.
Co., 690 F.3d 176, 180 (4th Cir. 2012), “that significantly
altered the understanding of equitable relief available under”
§ 1132(a)(3), Kenseth, 722 F.3d at 876, in cases alleging a
breach of fiduciary duty. Indeed, several other circuits have
overruled their own precedents in its wake. See, e.g.,
McCravy, 690 F.3d at 180 (“Before Amara, various lower
courts, including this one, had (mis)construed Supreme Court
precedent to limit severely the remedies available to plaintiffs
suing fiduciaries under [§] 1132(a)(3).”). The majority
nonetheless treats Amara as a continuation of prior case law,
Maj. Op. at 20, hardly citing it in the portion of its opinion
holding Gabriel not entitled to relief under § 1132(a)(3) as a
matter of law. See id. at 23–34.
The recent decisions from the Fourth, Fifth, and Seventh
Circuits confirm that the doctrine of surcharge is, after
Amara, not as narrow as the majority contends. In McCravy,
for example, the defendant accepted life insurance premiums
from a plan participant on behalf of the participant’s
daughter, even though the daughter was ineligible for
coverage. 690 F.3d at 178. When the participant filed a
claim for benefits following her daughter’s death, the plan
“attempted to refund multiple years’ worth of premiums”
40 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
rather than pay the claim. Id. The Fourth Circuit held that
under the surcharge doctrine, which it characterized as
“make-whole relief,” the participant’s “potential recovery”
was “not limited . . . to a premium refund.” Id. at 181. That
was so even though paying the participant’s benefits would
hold the fiduciaries liable neither for “loss of value to the
trust,” nor for “profits that the trust would have accrued in the
absence of the breach.” Skinner, 673 F.3d at 1167.
Similarly, the participant in Gearlds v. Entergy Services,
Inc., 709 F.3d 448 (5th Cir. 2013), waived medical benefits
available under his wife’s retirement based on his own plan’s
“assurances” that he would be covered for life. The plan later
determined that it had inaccurately “comput[ed] Gearlds’s
service time under the retirement plan” and withdrew his
medical coverage. Id. at 449–50. The Fifth Circuit held that
Gearlds stated a “plausible claim” for surcharge relief, id. at
452, again, notwithstanding that the medical benefits he
sought had nothing to do with unjust enrichment by a trustee
or a loss to the trust.
Finally, in Kenseth, the Seventh Circuit construed Amara
as stating a similarly broad view of surcharge — that “make-
whole money damages” are an available “equitable remedy”
whenever a plan participant demonstrates (1) a breach of a
fiduciary duty, (2) causing damages. 722 F.3d at 882.
Kenseth had undergone surgery based on the health plan’s
customer service representative’s assurance that the surgery
would be covered, but the plan subsequently denied coverage.
Id. at 871–72. Noting that Amara “clarified that equitable
relief may come in the form of money damages when the
defendant is a trustee in breach of a fiduciary duty[,]” id. at
878–79, the Seventh Circuit held “that if Kenseth is able to
demonstrate a breach of fiduciary duty . . . , and if she can
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 41
show that the breach caused her damages, she may seek an
appropriate equitable remedy including make-whole relief in
the form of money damages,” id. at 883.
McCravy, Gearlds, and Kenseth confirm that under
Amara, surcharge is not limited to the circumstances in which
a trustee personally benefits from a breach of duty or a plan
incurs a loss. Instead, the remedy is based on equity courts’
“power to provide relief in the form of monetary
‘compensation’ for a loss resulting from a trustee’s breach of
duty,” and is intended to “make” a plan participant “whole.”
Amara, 131 S. Ct. at 1880.
The majority disputes that these recent cases “define the
availability of surcharge.” Maj. Op. at 22. In the majority’s
view, these cases “merely corrected district courts’
erroneous” conclusions that no monetary relief was available
under § 1132(a)(3), and “remanded for the district courts to
assess . . . the appropriateness of the surcharge remedy, in the
first instance.” Id. at 22. These reasoned opinions from other
circuits cannot be dispatched so easily. Had they concluded,
like the majority here, that surcharge was limited to unjust
enrichment by a trustee or a loss to the plan, McCravy,
Gearlds, and Kenseth would have each held their respective
participant not entitled to surcharge as a matter of law. In
each case, a participant sought benefits to which he was not
entitled under the terms of the plan. There was neither
claimed unjust enrichment by the trustee nor a loss to the
plan. There was simply an alleged breach of fiduciary duty
and a loss of benefits to the participant himself. Although
each remanded to the district court to determine whether the
defendant “breached its fiduciary duty” and “[i]f so, . . .
whether that breach . . . harmed” the participant, the appellate
courts made clear that if these questions were answered in the
42 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
affirmative, the participant could “seek an appropriate
equitable remedy including make-whole relief in the form of
money damages.” Kenseth, 722 F.3d at 890, 883.
Indeed, the majority’s narrow view of Amara is
unsupported by the facts of that case itself, which involved
neither a loss to the trust estate nor unjust enrichment by the
fiduciary. The breach alleged in Amara was not the
underlying decision to alter CIGNA’s retirement benefit
offerings. Instead, it was the fiduciary’s “fail[ure] to give
[plan participants] proper notice of changes to their benefits,”
Amara, 131 S. Ct. at 1870, and instead sending “descriptions
of its new plan [which] were significantly incomplete and
misle[a]d[ing],” id. at 1872. Although the fiduciary saved
$10 million annually by changing the retirement benefits
available to its employees, those savings did not result from
the alleged breach. There is no indication that but-for the
improper notice, CIGNA would not have instituted the plan
changes and obtained the resulting savings. Indeed, the
district court in Amara noted that participants may not “have
received a larger benefit were the notices accurate,”
acknowledging that the harm caused by the improper notice
was different from the harm caused by the changes to the
plan. Amara v. Cigna Corp., 534 F. Supp. 2d 288, 353 (D.
Conn. 2008), aff’d, 348 F. App’x 627 (2d Cir. 2009), vacated
and remanded, 131 S. Ct. 1866 (2011). Amara was not,
therefore, a case in which “a breach of trust committed by a
fiduciary resulted in a loss to the trust estate or allowed the
fiduciary to profit at the expense of the trust” — the only two
circumstances in which the majority believes surcharge to be
available. Maj. Op. at 19.
Nor does our precedent in Skinner limit ERISA make-
whole equitable relief for a breach of fiduciary duty to “only
GABRIEL V. ALASKA ELECTRICAL PENSION FUND 43
unjust enrichment and losses to the trust estate” such that we
are “bound” to hold as the majority does. Maj. Op. at 23.
Although Skinner describes only two bases for surcharge, it
does not identify them as exclusive, or opine that no other
retroactive make-whole relief is available under § 1132(a)(3).
Indeed, Skinner notes that “[t]he beneficiary can pursue the
remedy that will put the beneficiary in the position he or she
would have attained but for the trustee’s breach,” 673 F.3d at
1167, echoing the broader view of surcharge-like relief
expressed in Amara.
The majority opinion thus seriously misunderstands the
reach of Amara and brings us needlessly into conflict with all
other circuits to have considered the scope of the equitable
remedies available after Amara. I therefore dissent from the
majority’s limitations on the make-whole equitable relief
available under § 1132(a)(3).
As the majority holds Gabriel not entitled to an
“appropriate equitable remedy” under § 1132(a)(3) as a
matter of law, it affirms the district court without considering
whether Gabriel has raised a triable issue of fact as to the
other elements of a breach of fiduciary duty claim. I would
conclude he has.
There can be little dispute that the fiduciary defendants
breached their duties to Gabriel by giving him incorrect
information about his rights under the plan. See, e.g., Bins v.
Exxon Co. U.S.A., 220 F.3d 1042, 1054 (9th Cir. 2000) (en
banc) (noting “an ERISA fiduciary’s duty . . . [to] giv[e]
complete and accurate answers to the employee’s questions”).
Gabriel has also adduced sufficient evidence to raise a triable
issue as to whether that breach caused him harm by leading
him to retire when he was still healthy enough to work. That
44 GABRIEL V. ALASKA ELECTRICAL PENSION FUND
the “the misinformation [Gabriel] received in 1997 from a
plan representative did not prevent him from obtaining any
benefit under the Plan to which he otherwise would have
been entitled,” Maj. Op. at 32 (emphasis added), because it
was “eleven years too late for him to” accrue the required
additional years of service, as noted by the Fund’s Appeals
Committee, is not a pertinent consideration. Gabriel’s
complaint is not that he could have accrued additional years
of service had he been properly informed, but that he relied
on the representation that he had already accrued adequate
service, and on the resulting pension payments. As there are
triable issues of fact regarding whether Gabriel was harmed
by the defendants’ breach, and, if so, whether make-whole
relief would remedy that harm, I would reverse the district
court’s grant of summary judgment in favor of defendants
and remand for further proceedings.1
Because the panel misconstrues Amara and misapplies it
to this case, I respectfully dissent.
1
I recognize that the record could support the conclusion that Gabriel
knew or should have known he was not vested as early as 1979. As there
are triable issues of fact regarding Gabriel’s reliance on defendants’
misrepresentations, this case is not appropriate for summary judgment.