Darrell Williams v. Webb Law Firm

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 14-3747
_____________
DARRELL EUGENE WILLIAMS,
Appellant
v.
THE WEBB LAW FIRM, P.C.
On Appeal from the United States District Court
for the Western District of Pennsylvania
(District Court No.: 2-12-cv-01702)
District Judge: Honorable Joy Flowers Conti
Submitted under Third Circuit LAR 34.1(a)
on September 11, 2015
Before: VANASKIE, SLOVITER, and RENDELL, Circuit Judges
(Opinion filed: October 29, 2015)
O P I N I O N*
RENDELL, Circuit Judge:
Plaintiff-Appellant Darrell E. Williams, Esq., appeals the District Court’s grant of
summary judgment in favor of Defendant-Appellee Webb Law Firm, P.C. (“WLF”).
Williams sued WLF for violation of the Employee Retirement Income Securities Act of
1974 (“ERISA”)—specifically, for breach of fiduciary duty by misclassifying him as an
independent contractor, instead of as an employee. The District Court granted summary
judgment because Williams’ claim is barred by the applicable statutes of limitations in 29
U.S.C. § 1113. We will affirm.
I. Background
In January 2001, Williams began working for WLF under an independent
contractor agreement (the “First ICA”) as a patent attorney. On July 1, 2001, Williams’
employment status changed so that he was an associate attorney, receiving full
employment benefits. However, on January 1, 2006, Williams returned to being
classified as an independent contractor and began working under the terms of a Second
ICA. According to Williams, his work duties and activities were the same as when he
was an associate.
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
2
On January 10, 2007, Williams signed a Third ICA, which reiterated that he was
an independent contractor. On May 16, 2007, the parties signed an addendum to the
Third ICA, pursuant to which WLF agreed to pay a scaled percentage of Williams’ total
monthly medical costs, depending on how many hours Williams billed.
On November 15, 2009, Williams’ relationship with WLF was terminated.
Williams applied for unemployment benefits within two weeks of his termination, and he
began to receive unemployment benefits in May 2010.
On November 8, 2012, Williams filed the present complaint. The District Court
granted summary judgment to WLF based on the statutes of limitations in 29 U.S.C.
§ 1113. Those statutes of limitations provide that a lawsuit for ERISA breach of
fiduciary duty is barred if filed either more than six years after “the date of the last action
which constituted a part of the breach” or more than three years after the date that the
plaintiff had “actual knowledge” of the breach. 29 U.S.C. § 1113. Williams’ lawsuit
failed under both: (1) the date of the last action which formed a part of WLF’s alleged
breach of fiduciary duty occurred on January 1, 2006 (and, therefore, the six-year statute
of limitations in 29 U.S.C. § 1113(1) bars Williams’ claim), and (2) Williams knew about
the material elements of WLF’s alleged breach and knew that these actions constituted a
breach of a fiduciary duty, at the latest, in May 2007 (and therefore the three-year statute
of limitations in § 1113(2) bars his claim). Williams appealed.
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II. Analysis1
To succeed on appeal, Williams must show that the District Court erred twice: first
in determining that the six-year statute of limitations in 29 U.S.C. § 1113(1) bars
Williams’ claim, and second in determining that the three-year “actual knowledge”
statute of limitations in 29 U.S.C. § 1113(2) bars his claim. He cannot show error in
either determination.
A. Six-Year Statute of Limitations
ERISA provides that “[n]o action may be commenced under this title with respect
to a fiduciary’s breach of any responsibility, duty, or obligation . . . (1) six years after . . .
the date of the last action which constituted a part of the breach or violation.” 29 U.S.C.
§ 1113(1). We must ask when the “date of the last action” was in this case.
The District Court determined that the date of the last action was the date that
WLF allegedly misclassified Williams as an independent contractor—i.e., January 1,
2006, when Williams began working under the Second ICA. Williams urges that the
proper date is when Williams began working under the Third ICA or, alternatively, when
he began working under the subsequent addendum to the Third ICA. If the date of the
last action is either of the dates Williams urges, then the six-year statute of limitations
does not bar his claim.
The District Court was correct. Neither the Third ICA nor its addendum purported
to alter Williams’ employment status: they merely repeated the alleged misrepresentation
1
“We exercise plenary review of the District Court’s order for summary judgment.”
Daniels v. Sch. Dist. of Phila., 776 F.3d 181, 192 (3d Cir. 2015).
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of Williams’ employment status as an independent contractor. We have held that
subsequent misrepresentations that are “mere continuations of the initial
misrepresentations that led to the changes of employment” do not extend the date of last
action. Ranke v. Sanofi-Synthelabo Inc., 436 F.3d 197, 203 (3d Cir. 2006). It follows
that, in a case where an employee’s employment status is misrepresented as independent
contractor, mere continuations of the initial misrepresentation do not extend the date of
last action. Thus, because the Third ICA (and addendum) merely continued to state that
Williams was an independent contractor, the date of last action was the effective date of
the Second ICA. Accordingly, the six-year statute of limitations bars Williams’ claim.
B. Three-Year Statute of Limitations
Alternatively, Williams’ claim fails pursuant to the three-year statute of limitations
in 29 U.S.C. § 1113(2). ERISA provides that “[n]o action may be commenced under this
title with respect to a fiduciary’s breach of any responsibility, duty, or obligation . . . (2)
three years after the earliest date on which the plaintiff had actual knowledge of the
breach or violation.” 29 U.S.C. § 1113(2). We must ask when Williams had actual
knowledge of his claim. Williams urges that he did not have actual knowledge until he
knew that the law treated him as an employee, whereas the District Court found that he
had “actual knowledge” once he knew all the material facts about his employment status.
In Gluck v. Unisys Corp., we held that “‘actual knowledge of a breach or
violation’ requires that a plaintiff have actual knowledge of all material facts necessary to
understand that some claim exists, which facts could include necessary opinions of
experts, knowledge of a transaction’s harmful consequences, or even actual harm.” 960
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F.2d 1168, 1177 (3d Cir. 1992) (citations omitted) (quoting 29 U.S.C. § 1113(2)). In
other words, “‘[a]ctual knowledge of a breach or violation’ requires knowledge of all
relevant facts at least sufficient to give the plaintiff knowledge that a fiduciary duty has
been breached or ERISA provision violated.” Id. at 1178.
Subsequently, in National Security Systems, Inc. v. Iola, we clarified that “[w]hat
matters here is whether [plaintiffs] had actual knowledge of all material facts necessary to
appreciate that a claim against [defendant] existed.” 700 F.3d 65, 100 (3d Cir. 2012).
We rejected as “meritless” the Iola plaintiffs’ contention that they lacked actual
knowledge that the defendant was a fiduciary, given that they “ceded to [defendant]
discretionary authority to manage and administer plan assets.” Id. at 99. In other words,
it does not matter whether the plaintiffs knew that the law would deem the defendant to
be a fiduciary, so long as the plaintiffs knew all the relevant facts that would give the
defendant fiduciary status. See id.
Like the Iola plaintiffs, Williams contends that he did not know the law would
treat him as an employee, but he does not deny that he knew all the facts relevant to
deeming him an employee. As the District Court stated, it is “‘patently obvious’” that,
“by May 2007, Williams knew all the material elements of [WLF’s] breach of its
fiduciary duty.” (App. 24 (quoting Kurz v. Phila. Elec. Co., 96 F.3d 1544, 1551 (3d Cir.
1996)).) Williams did not need to know he was entitled to unemployment benefits under
the law in order to have actual knowledge of the alleged breach. Accordingly, the three-
year statute of limitations bars his claim.
III. Conclusion
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For either of the foregoing reasons, we will affirm.
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