Charles Guenther v. Lockheed Martin Corporation

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHARLES GUENTHER, Nos. 17-16984
Plaintiff-Appellant, 18-15823
v. D.C. No.
5:11-cv-00380-
LOCKHEED MARTIN CORPORATION; EJD
LOCKHEED MARTIN CORPORATION
RETIREMENT PLAN FOR CERTAIN
SALARIED EMPLOYEES, OPINION
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Edward J. Davila, District Judge, Presiding
Argued and Submitted June 11, 2019
Submission Vacated June 13, 2019
Resubmitted August 18, 2020
San Francisco, California
Filed August 25, 2020
Before: Ronald M. Gould, Sandra S. Ikuta, and
Ryan D. Nelson, Circuit Judges.
Opinion by Judge R. Nelson
2 GUENTHER V. LOCKHEED MARTIN
SUMMARY *
Employee Retirement Income Security Act
Affirming the district court’s summary judgment in
favor of defendants, the panel held that a claim of breach of
fiduciary duty in violation of the Employee Retirement
Income Security Act was time-barred under 29 U.S.C.
§ 1113(2), which provides that such a claim must be brought
within three years of the date on which the plaintiff obtained
“actual knowledge” of the breach.
First, the panel held that the defendant did not waive its
statute of limitations affirmative defense, raised in answer to
a second amended complaint filed during proceedings on
remand from this court, either by litigating the case to
judgment without ever raising the defense or by compelling
plaintiff to exhaust administrative remedies without
asserting the defense.
Addressing the merits of the defense, the panel applied
Intel Corp. Inv. Policy Committee v. Sulyma, 140 S. Ct. 768(2020), which held that “actual knowledge” requires more
than merely a possible inference from ambiguous
circumstances, but rather knowledge that is actual. Plaintiff
alleged that in a letter regarding bridging of service under a
retirement plan, defendant breached its duty to make
accurate representations to a beneficiary. The panel
concluded that the sending of this letter provided the basis
for plaintiff’s claim, and he had actual knowledge of
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
GUENTHER V. LOCKHEED MARTIN 3
defendant’s alleged misrepresentation upon receipt of the
letter. The panel held that actual knowledge does not mean
that a plaintiff has knowledge that the underlying action
violated ERISA, not does it merely mean that the plaintiff
has knowledge that the underlying action occurred. Instead,
the defendant must show that the plaintiff was actually aware
of the facts constituting the breach, as well as the nature of
the breach. The panel concluded that plaintiff’s suit was
barred by the statute of limitations because he did not file
suit within three years of obtaining actual knowledge of the
alleged breach. The panel held that an exception for
fraudulent concealment, triggering application of ERISA’s
six-year statute of limitations, did not apply. The panel also
held that the district court did not abuse its discretion in
denying plaintiff’s post-judgment motion for
reconsideration.
COUNSEL
Andrew F. Pierce (argued), Pierce & Shearer LLP, Redwood
City, California, for Plaintiff-Appellant.
Clarissa A. Kang (argued), R. Bradford Huss, and Dylan D.
Rudolph, Trucker Huss APC, San Francisco, California, for
Defendants-Appellees.
Stephanie B. Bitto (argued), Trial Attorney; Thomas Tso,
Counsel for Appellate and Special Litigation; G. William
Scott, Associate Solicitor for Plan Benefits Security; Kate S.
O’Scannlain, Solicitor of Labor; Office of the Solicitor,
United States Department of Labor, Washington, D.C.; for
Amicus Curiae United States Secretary of Labor.
4 GUENTHER V. LOCKHEED MARTIN
OPINION
R. NELSON, Circuit Judge:
This appeal arises from a fiduciary’s alleged breach of
its duty to make accurate representations to a beneficiary
under the Employee Retirement Income Security Act of
1974 (“ERISA”). Specifically, we determine whether the
beneficiary had actual knowledge of the alleged breach and
failed to bring suit within the statute of limitations prescribed
under ERISA. Because the record establishes that the
beneficiary had actual knowledge of the alleged breach and
failed to bring suit within the required three-year period, we
hold his claim is time-barred.
I
Appellant Charles Guenther began working for
Lockheed Martin Corporation (“LMC”) in 1983. From 1983
to 1991, he was an active participant in the company’s
retirement plan (the “Plan”), a defined benefit pension plan.
He left LMC in 1991, but returned to work for the company
again in 1997 and was able to “bridge” his previously
accrued service credit under the Plan with his new service
credit—meaning that upon starting his new term of
employment with LMC, he was credited for his prior eight
years of accumulated service under the Plan and could
resume where he left off—in accordance with the Plan
provisions in effect at the time. 1
1
During Guenther’s first and second periods of employment with
LMC, he participated in the Lockheed Retirement Plan for Certain
Salaried Employees (the “Salaried Plan”). The Salaried Plan was later
merged with the company’s other defined benefit plans to form the Plan.
GUENTHER V. LOCKHEED MARTIN 5
In 2001, Guenther left LMC for the second time, having
accrued approximately 11.5 years of credited service under
the Plan. While Guenther was employed elsewhere, the Plan
was amended in 2005 (the “Plan Amendment”). The Plan
Amendment provided that “no person who is re-employed
by [LMC] on or after January 1, 2006 shall become an active
Participant or earn Credited Service under the Plan with
respect to any period commencing with such
reemployment.” Under the Plan Amendment, therefore,
returning LMC employees hired after January 1, 2006, could
participate in a different retirement plan—the Capital
Accumulation Plan (“CAP”)—but could not participate in or
resume accruing additional credited service under the Plan.
In 2006, Guenther began negotiations with an LMC
human resources representative to return to work for the
company. Prior to interviewing with LMC, Guenther heard
a “rumor” that the company “was going to be changing
around their [retirement] plan.” This was an important issue
for Guenther. So during the negotiations that followed, he
made clear that one of his “key conditions” of returning was
that his “prior service be bridged so that he could receive the
full benefit of the company’s defined benefit retirement
plan.” The LMC representative indicated it was possible to
bridge his prior service with his proposed new service, as
Guenther had done when he previously returned to LMC in
1997, and provided him a form entitled “Application for
Bridging of Prior Service,” which Guenther submitted to
LMC on July 17, 2006. The bridging form stated in part: “If
your request is approved, the date you submit this
application is the effective date that your current period of
service will bridge with your prior service.” On July 25,
2006, LMC Pension Plan Operations replied to his bridging
request form in a letter (the “July Letter”), stating in relevant
part:
6 GUENTHER V. LOCKHEED MARTIN
Since you were vested in a pension benefit
provided by the Lockheed Martin
Corporation Retirement Plan for Certain
Salaried Employees, your prior periods of
Lockheed/Lockheed Martin service will be
bridged with your proposed current
Lockheed Martin service.
According to Guenther, this was the only communication
from LMC that he believed told him he would be accruing
ongoing credited service in the Plan. No other retirement
plan (including CAP) was brought to his attention at that
time. The next month, Guenther terminated his then-existing
employment, and then rejoined LMC in September.
After rejoining LMC, Guenther received a November 7,
2006 letter (the “November Letter”) from LMC Pension Plan
Operations which stated, in part, the following:
Since you were vested in a pension benefit
provided by the Lockheed Martin
Corporation Retirement Plan for Certain
Salaried Employees, your prior periods of
Lockheed/Lockheed Martin service will be
bridged with your current Lockheed Martin
service. Consequently, your accrued benefit
under the Capital Accumulation Plan has
immediately become vested because the
combined total of your Lockheed Martin
controlled group service exceeds five years.
It should be noted that because you are not
currently participating in a Lockheed Martin
defined benefit pension plan, you are not
GUENTHER V. LOCKHEED MARTIN 7
entitled to a pension benefit from Lockheed
Martin for your current period of service.
Guenther was “surprise[d]” by this letter because he believed
it contradicted LMC’s assurance in the July Letter that he
could bridge his prior service under the Plan. Guenther had
checked his account numerous times online after he started
at LMC in September to see whether he had begun
accumulating time for his pension. No accumulated time
was ever indicated. He stopped checking his account online
once he received the November Letter.
Soon after receiving the November Letter, he contacted
LMC’s Employment Service Center (“ESC”) to ask about
the status of his pension, but was told the bridging issue was
handled by CitiStreet, LMC’s employer benefits service
provider. CitiStreet then instructed him to contact ESC,
which he did again, but “got the run around.” In late
November, after several more calls, Guenther asked to speak
with someone at LMC’s Human Relations office, but the
person he was referred to was not there and did not return his
calls. In December, Guenther visited a different Human
Relations office and showed the program HR Representative
the July and November Letters and asked for an explanation.
The HR Representative thanked him for bringing the matter
to her attention but never followed up. The record does not
indicate that Guenther had any further communication with
LMC regarding his pension plan for more than three years.
In 2009, Guenther spoke with another LMC employee
who was hired several months before him. That employee
indicated that he, like Guenther, had received a similar letter
promising bridging but was later informed that his credited
service under the Plan would not bridge. After speaking
with his manager, Guenther contacted the ESC again in
8 GUENTHER V. LOCKHEED MARTIN
March 2010 but received no information regarding the
specifics of his plan. However, the ESC did discuss
information from a Plan Amendment provision with him,
stating that employees “[n]ewly or rehired on or after
January 1, 2006 will not participate in [the] defined pension
benefit plan.” He later asked the legal department for a point
of contact but was again told to contact HR.
Guenther never received additional credited service for
his third period of employment with LMC, leaving his years
of credited service at 11.5. Guenther was never given a plan
summary or any other indication that he could appeal the
issue to anyone other than those he had already contacted.
On November 8, 2010, Guenther filed his complaint
(“FAC”) against LMC alleging breach of contract and
ERISA claims to recover benefits, and the case was removed
to federal court. The district court dismissed his breach of
contract claim and granted summary judgment on the ERISA
claim in favor of LMC. On appeal, we affirmed the district
court’s determination, but remanded the case because
Guenther alleged sufficient facts to raise a previously
unasserted ERISA claim against LMC for breach of
fiduciary duty under Section 1132(a)(3). Guenther v.
Lockheed Martin Corp., 646 F. App’x 567, 570 (9th Cir.
2016) (unpublished) (remanding to consider “whether
[LMC] breached a fiduciary duty and, if so, whether
Guenther is entitled to surcharge as a remedy”).
On remand, Guenther filed a Second Amended
Complaint (“SAC”) pursuing the Section 1132(a)(3) claim
for equitable relief in the form of surcharge—that is,
monetary recovery for losses resulting from a fiduciary
breach. See CIGNA Corp. v. Amara, 563 U.S. 421, 440–42
(2011) (recognizing equitable estoppel, reformation, and
surcharge as the three types of equitable relief available
GUENTHER V. LOCKHEED MARTIN 9
under Section 1132(a)(3)). Guenther alleged LMC breached
its fiduciary duty “to make accurate and correct
representations concerning [Guenther’s] ability to obtain
additional service credit under the Plan after rehire.”
Specifically, he alleged LMC misrepresented the Plan by
inducing him (and allegedly others) to return to work for
LMC by “granting” his pre-hire bridging application while
failing to disclose to him that the Plan Amendment barred
him from bridging his additional credited service. LMC
raised an affirmative defense that his claim was barred by
the statute of limitations governing breach of fiduciary duty.
The district court granted LMC’s motion for summary
judgment, finding Guenther’s claim barred by the statute of
limitations. The court found that Guenther obtained “actual
knowledge” of the breach when he received the November
Letter from LMC, more than three years before he filed his
claim. See 29 U.S.C. § 1113(2). The court concluded that
Guenther “unequivocally stated he understood the
November 7th letter to mean he was not entitled to a pension
benefit on re-employment with Lockheed, and he knew from
his online account he was not accruing credit.” The court
rejected Guenther’s argument that disclosure of the Plan
Amendment’s existence was necessary for his breach claim
to accrue, instead relying on Guenther’s testimony that when
he received the November Letter he clearly understood the
effect of the Plan Amendment (i.e., his prior credited service
would not bridge under the Plan), and this understanding
clearly conflicted with LMC’s representations during
employment negotiations and in the July Letter.
Guenther then moved for reconsideration, citing
previously unconsidered testimony from two fact witnesses
affiliated with LMC. Guenther argued that these statements
demonstrated the fraud and concealment necessary to invoke
10 GUENTHER V. LOCKHEED MARTIN
ERISA’s six-year statute of limitations, rendering his claim
timely. The court denied Guenther’s request for
reconsideration because the evidence could have been
discovered earlier with reasonable diligence, no
circumstances beyond his control prevented him from
obtaining it, and the testimony would not have changed the
disposition of the case. This timely appeal followed.
After oral argument, we vacated submission and stayed
this case pending a decision by the Supreme Court in Intel
Corporation Investment Policy Committee v. Sulyma, 140 S.
Ct. 768 (2020). In Sulyma, the Supreme Court affirmed the
Ninth Circuit’s determination that “actual knowledge” under
Section 1113(2) requires more than “‘merely a possible
inference from ambiguous circumstances’” like disclosure
alone, but rather knowledge that is actual. Sulyma, 140 S.
Ct. at 775 (quoting Sulyma v. Intel Corp. Inv. Policy Comm.,
909 F.3d 1069, 1076 (9th Cir. 2018)).
II
Congress enacted ERISA “to protect . . . the interests of
participants in employee benefit plans . . . by establishing
standards of conduct, responsibility, and obligation for
fiduciaries of employee benefit plans, and by providing for
appropriate remedies, sanctions, and ready access to the
Federal courts.” 29 U.S.C. § 1001(b). ERISA requires a
fiduciary to discharge its responsibilities “solely in the
interest of the participants and beneficiaries” and “for the
exclusive purpose of . . . providing benefits to participants
and their beneficiaries.” § 1104(a)(1). Fiduciaries breach
this duty “if they mislead plan participants or misrepresent
the terms or administration of a plan.” Barker v. Am. Mobil
Power Corp., 64 F.3d 1397, 1403 (9th Cir. 1995).
Additionally, “[t]he duty of loyalty is one of the common
law trust principles that apply to ERISA fiduciaries, and it
GUENTHER V. LOCKHEED MARTIN 11
encompasses a duty to disclose.” Washington v. Bert
Bell/Pete Rozelle NFL Ret. Plan, 504 F.3d 818, 823 (9th Cir.
2007) (internal citation and footnote omitted). ERISA
imposes “an obligation to convey complete and accurate
information material to the beneficiary’s circumstance, even
when a beneficiary has not specifically asked for the
information.” Id. at 824–25 (quoting Barker, 64 F.3d at
1403). Thus, in addition to a duty not to mislead, fiduciaries
have “an affirmative duty to inform beneficiaries of
circumstances that threaten the funding of benefits.” Acosta
v. Pac. Enters., 950 F.2d 611, 619 (9th Cir. 1991) (as
amended).
ERISA authorizes participants and beneficiaries to seek
equitable relief for violations of this duty. § 1132(a)(3). It
imposes a six-year statute of limitations commencing after
either (1) the date of the last action constituting a part of the
breach or violation, or (2) in the case of an omission, the
latest date on which the fiduciary could have cured the
breach or violation. § 1113(1). Alternatively, if the plaintiff
obtains “actual knowledge of the breach or violation,” the
statute of limitations requires suit to be filed within three
years of “the earliest date on which the plaintiff had [that]
knowledge,” § 1113(2), 2 except in the case of “fraud or
concealment,” where suit may be filed within six years of the
date of discovery of the breach or violation, § 1113.
2
If the plaintiff obtains actual knowledge of the breach or violation,
his three-year limitation period described in Section 1113(2) applies only
if it expires earlier than the default six-year limitation period outlined in
Section 1113(1). § 1113.
12 GUENTHER V. LOCKHEED MARTIN
III
We review the district court’s order granting summary
judgment de novo. Sulyma, 909 F.3d at 1072, aff’d, Sulyma,
140 S. Ct. 768. “[V]iewing the evidence in the light most
favorable to the nonmoving party,” we determine “whether
there are any genuine issues of material fact and whether the
district court correctly applied the substantive law.” Id.LMC bears the burden of proving that Guenther filed suit
outside the limitation period. See Payan v. Aramark Mgmt.
Servs. Ltd. P’ship, 495 F.3d 1119, 1122 (9th Cir. 2007).
At the heart of this dispute is whether Guenther had
“actual knowledge” of an alleged fiduciary breach within the
meaning of ERISA Section 1113(2). To determine a claim’s
accrual date under Section 1113, we use a two-step analysis.
First, we “isolate and define the underlying violation upon
which the plaintiff’s claim is founded.” Sulyma, 909 F.3d
at 1072–73 (internal quotation marks omitted). Second, we
determine “when the plaintiff had ‘actual knowledge’ of the
alleged breach or violation,” and whether suit was filed
within three years of the date that knowledge was obtained.
Id. at 1073 (quoting § 1113(2)).
Even if LMC shows Guenther had actual knowledge, he
may still demonstrate LMC committed “fraud or
concealment” under Section 1113, triggering a six-year
limitation period that would render his claim timely. See
§ 1113.
A
As an initial matter, Guenther argues LMC waived its
statute of limitations affirmative defense by (1) litigating the
case to judgment without ever raising the defense and
GUENTHER V. LOCKHEED MARTIN 13
(2) compelling him to exhaust administrative remedies
without asserting the defense. We disagree.
First, the statute of limitations defense was unavailable
to LMC in response to Guenther’s FAC because no breach
of fiduciary duty was alleged in the FAC. LMC’s statute of
limitations defense under Section 1113 only became
available on remand after Guenther raised his breach of
fiduciary duty claim in his SAC. At that point, LMC
properly raised its affirmative defense in its answer to the
SAC. LMC thus did not waive its right to raise this defense
by not doing so in its initial answer.
Second, Guenther’s argument that LMC waived the
statute-of-limitations defense by advocating that Guenther
exhaust administrative procedures also fails. Exhaustion is
required prior to bringing Section 1132(a)(1)(B) suits to
recover benefits for plan violations, see Diaz v. United Agric.
Emp. Welfare Benefit Plan & Trust, 50 F.3d 1478, 1483 (9th
Cir. 1995), but not for claims alleging a breach of fiduciary
duty, see Spinedex Physical Therapy USA Inc. v. United
Healthcare of Ariz., Inc., 770 F.3d 1282, 1294 (9th Cir.
2014). LMC’s insistence on exhaustion in response to
Guenther’s FAC—which did not raise a breach of fiduciary
duty claim—thus did not mean the defense was waived for
the SAC.
Accordingly, the district court did not abuse its
discretion in determining LMC did not waive its statute of
limitations affirmative defense.
B
Guenther’s sole cause of action in his SAC is for “Breach
of Fiduciary Duty” under Section 1132(a)(3). Specifically,
Guenther alleges that LMC breached its duty by failing, in
14 GUENTHER V. LOCKHEED MARTIN
the July Letter granting his pre-hire bridging application, “to
make accurate and correct representations concerning his
ability to obtain additional service credit under the Plan after
rehire.” Guenther asserts LMC not only made an inaccurate
affirmative representation in response to his inquiry whether
his “prior periods of Lockheed/Lockheed Martin service
[would] be bridged with [his] proposed current Lockheed
Martin service,” but also failed to disclose the existence of
the 2005 Plan Amendment, which barred him from obtaining
additional credited service under the Plan.
The facts as Guenther pled them in the SAC are
sufficient to support the claim that when LMC sent the July
Letter, it breached its fiduciary duty to not “mislead plan
participants or misrepresent the terms or administration of a
plan,” Barker, 64 F.3d at 1403. LMC allegedly falsely
represented to Guenther that he could bridge his prior and
future credited service under the Plan, even though the Plan
Amendment explicitly prevented him from “becom[ing] an
active Participant or earn[ing] Credited Service under the
Plan” upon rejoining LMC. This alleged misrepresentation
took place when LMC sent the July Letter. 3
Guenther separately contends, however, that LMC’s
failure to disclose the Plan Amendment to Guenther “until
2010 at the earliest” constitutes a “breach” distinct from its
asserted misrepresentation in the July Letter, and that this
3
At the summary judgment stage, we view all facts “in the light
most favorable” to Guenther. See Sulyma, 909 F.3d at 1072. We note
that the July Letter did not expressly state that Guenther could continue
to accrue additional credited service under the Plan, and LMC contends
that Guenther received a form of bridging because his prior period of
service was included when determining certain benefits under the newly
instituted CAP, although not for accrual of credited service under the
Plan.
GUENTHER V. LOCKHEED MARTIN 15
breach continued after the time LMC sent the July Letter.
He argues this continuing breach should extend his Section
1113 limitation period. We agree with Guenther that LMC
had a fiduciary “duty to disclose” the Plan Amendment’s
existence to him when he began the process of renewing
employment at LMC (or at a minimum, its effect of barring
his bridging request). See NFL Ret. Plan, 504 F.3d at 823.
However, this alleged breach is not a continuing breach for
purposes of Section 1113, separate from the alleged
misrepresentation in the July Letter. Once a beneficiary
knows of one breach in a series of breaches “of the same
character . . . . awareness of [the] later breaches would
impart nothing materially new.” Phillips v. Alaska Hotel &
Rest. Emps. Pension Fund, 944 F.2d 509, 520 (9th Cir.
1991). “The earliest date on which a plaintiff became aware
of any [such] breach would thus start the limitation period of
§ 1113(a)(2) running.” Id. (emphasis added). Failure to
disclose the Plan Amendment was “of the same character,”
id., as the alleged misrepresentation in the July Letter. This
is because knowledge of the Plan Amendment was only
useful to Guenther insofar as it would have informed him
that his prior credited service could not be bridged. The
district court thus correctly determined that once Guenther
received the November Letter, Guenther’s subsequent
knowledge of the Plan Amendment’s existence “impart[ed]
nothing new” to him. 4
4
Even assuming Guenther’s SAC alleges a separate breach of a
different character (i.e., continuing failure to disclose the Plan
Amendment’s existence), his legal theory fails. Under this theory, his
cause of action for LMC’s ongoing failure to disclose could have accrued
even after he obtained actual knowledge of the breach if he had learned
about the Plan Amendment from sources other than LMC, because
LMC’s ongoing fiduciary duty to disclose the Plan Amendment’s
existence to him would have continued until LMC fulfilled its duty to
16 GUENTHER V. LOCKHEED MARTIN
Because Guenther asserts no separate underlying
violation beyond breach of fiduciary duty, LMC’s act of
sending the July Letter to Guenther is the violation providing
the basis for his equitable surcharge claim. See Sulyma,
909 F.3d at 1072–73. LMC has thus met its burden of
showing that the alleged underlying violation occurred on
July 25, 2006. We therefore look at that violation for
purposes of determining Guenther’s “actual knowledge.”
C
The Section 1113 limitation period begins to run as soon
as “the plaintiff has sufficient knowledge to be alerted to the
particular claim.” Sulyma, 909 F.3d at 1076. “This inquiry
into the plaintiff’s actual knowledge is entirely factual,
requiring examination of the record.” Id. at 1073 (citation
and alterations omitted).
ERISA does not define “actual knowledge.” But the
Supreme Court recently confirmed that the plain language of
Section 1113(2) requires that an individual “in fact be
aware” of a piece of information (particularly given the
statute’s use of the qualifier “actual”). Sulyma, 140 S. Ct.
at 776. This knowledge is distinguished from lower
knowledge thresholds like presumed, implied, or
constructive knowledge, where the law will sometimes
disclose it to him. We decline to adopt such an impractical and untenable
“continuing violation” approach to the statute, which would effectively
“read[] the ‘actual knowledge’ standard out” of Section 1113(a)(2). See
Phillips, 944 F.2d at 520. LMC may have had a duty to remedy its failure
to disclose after Guenther received the July Letter with its alleged
misrepresentation. But that does not change the fact that a breach of the
duty to disclose at least happened on July 25, 2006, and that Guenther
was aware of the effect of this breach on November 7, 2006, as discussed
further below.
GUENTHER V. LOCKHEED MARTIN 17
impute knowledge of facts to a person when a reasonably
diligent person would have (or should have) learned them.
Id. Instead, actual knowledge under Section 1113(2)
requires that a plaintiff’s knowledge “be more than
‘potential, possible, virtual, conceivable, theoretical,
hypothetical, or nominal.’” Id. (quoting Black’s Law
Dictionary 53 (4th ed. 1951)). And while constructive
knowledge is insufficient to meet the actual knowledge
threshold, “actual knowledge can be proved through
‘inference from circumstantial evidence.’” Id. at 779
(quoting Farmer v. Brennan, 511 U.S. 825, 842 (1994)).
Regarding what facts a defendant must show that a
plaintiff was aware of, “actual knowledge of the breach”
(1) “does not mean that a plaintiff has knowledge that the
underlying action violated ERISA” and (2) “does not merely
mean that a plaintiff has knowledge that the underlying
action occurred.” Sulyma, 909 F.3d at 1075. Instead, a
defendant’s burden is to show “the plaintiff [was] actually
aware of the facts constituting the breach, not merely that
those facts were available to the plaintiff,” as well as
something “extra,” meaning that that the plaintiff “was
actually aware of the nature of the alleged breach.” Id.
at 1075–76 (emphasis added). 5 “The key is that, whatever
the underlying ERISA claim, the limitation period begins to
run once the plaintiff has sufficient knowledge to be alerted
to the particular claim.” Id. at 1076.
5
“For instance, in a section 1104 case, the plaintiff must be aware
that the defendant has acted and that those acts were imprudent. But in,
for example, a section 1106 case the plaintiff need only be aware that the
defendant has engaged in a prohibited transaction, because knowledge
of the transaction is all that is necessary to know that a prohibited
transaction has occurred.” Sulyma, 909 F.3d at 1075 (internal citation
omitted).
18 GUENTHER V. LOCKHEED MARTIN
A defendant’s disclosure of all relevant information to a
plaintiff strongly suggests that the plaintiff gained
knowledge of the disclosed information. Sulyma, 140 S. Ct.
at 777. To meet the actual knowledge threshold though,
Section 1113(2) “requires more than evidence of disclosure
alone.” Id. For example, circumstantial evidence that “a
plaintiff viewed the relevant disclosures” coupled with
“evidence suggesting that the plaintiff took action in
response to the information contained in them” could be
sufficient to prove actual knowledge even if a plaintiff
denies knowledge of the disclosure. Id. at 779. 6
Here, direct evidence demonstrates Guenther had actual
knowledge of LMC’s alleged breach of its fiduciary duty
more than three years before this action was filed.
Guenther’s deposition confirms he was fully aware upon
receiving the November Letter that LMC had
misrepresented in its July Letter that it would bridge his
previously accrued credited service. For instance, Guenther
testified: “I didn’t find out that I’m not in the pension fund
until I got a letter in November that Lockheed said, Oh, by
the way, we didn’t mean pension plan when we told you
pension plan in the earlier [July] letter that was your basis
for why you came back.” He thus understood the November
Letter’s representation to be “[c]ompletely opposite of the
first letter,” and even asserted it was “obvious” that LMC
contradicted itself in the two letters. When asked whether
he understood at the time he read the November Letter that
he was no longer able to participate in the Plan, he answered
affirmatively that “[u]nfortunately, I understood what they
6
“If a plaintiff’s denial of knowledge is blatantly contradicted by
the record, a court should not adopt that version of the facts for purposes
of ruling on a motion for summary judgment.” Sulyma, 140 S. Ct. at 779
(internal quotation marks omitted).
GUENTHER V. LOCKHEED MARTIN 19
were saying, yeah,” namely, “[a]t that point, I wasn’t in any
plan.” 7 His testimony thus confirms that on November 7,
2006, he was aware of the nature of LMC’s alleged breach,
even if he didn’t know that LMC’s actions violated ERISA
specifically. See Sulyma, 909 F.3d at 1075. This qualifies
as actual knowledge for purposes of Section 1113.
Circumstantial evidence of Guenther’s actions taken
before and after receiving the November Letter bolsters the
conclusion that he had actual knowledge of LMC’s alleged
misrepresentation upon receipt of the November Letter.
Guenther could have only viewed the November Letter to be
a misrepresentation if he first interpreted the July Letter to
mean he could bridge his prior credited service under the
Plan as he asserts (rather than just under the CAP).
Circumstantial evidence supports his assertion: while
negotiating with the LMC recruiter earlier that year, the fact
that Guenther explicitly stated that bridging his credited
service under the Plan was a “key condition[]” of his return,
coupled with the fact that receiving the July Letter was
apparently sufficient for him to end his existing employment
in reliance on its representation, suggests that he understood
the July Letter to mean he could bridge his prior credited
service under the Plan upon his return to LMC.
More importantly, after starting at LMC, Guenther
regularly checked his account online to see if he was
accumulating additional credited service under the Plan (he
7
When asked whether receiving the November Letter answered his
question whether he was accumulating new time on the Plan, Guenther
answered: “Yes. Not the way it was supposed to, but . . . . That was an
answer.” Driving this point home even further, Guenther also testified:
“It’s very clear in the first letter, pension plan is called out. Second letter,
it says, You’re not in the pension plan.”
20 GUENTHER V. LOCKHEED MARTIN
was not), 8 but stopped checking after receiving the
November Letter. This behavior suggests he no longer
maintained his expectation that his prior credited service
would bridge under the Plan after receiving the November
Letter. Finally, Guenther contacted various company HR
representatives immediately after receiving the November
Letter, indicating his concern LMC had made a
misrepresentation to him, causing him to urgently seek
clarification regarding the status of his pension.
Guenther argues that under Waller v. Blue Cross of
California, 32 F.3d 1337 (9th Cir. 1994), he could not have
had actual knowledge until he understood the Plan
Amendment had ended accrual of credited service for
employees rehired after January 1, 2006. However, Waller
is distinguishable because in that case the beneficiary only
knew that the fiduciaries had purchased annuities for the
employee benefits plan (not inherently a breach of fiduciary
duty), but did not know they had used an infirm bidding
process to select the annuity providers. Id. at 1341, 1345–
46. Accordingly, the beneficiary’s partial knowledge was
insufficient to rise to the level of actual knowledge of a
breach. Id. at 1341–42. Here, by contrast, Guenther testified
he was fully aware at the time he received the November
Letter that LMC’s representation in the July Letter was not
accurate.
8
Guenther testified that “when I’d go on the web and look” during
the period of time prior to receiving the November Letter, “[t]here was
no years of service being added to my prior years of service for the
pension plan,” and this concerned him. He also stated that in October
2006, after he decided he had waited “long enough [because] they should
be putting money into the pension plan and nothing’s happening,” he got
“on the phone calling State Street and Lockheed saying, [‘]What the heck
is going on here?[’]”
GUENTHER V. LOCKHEED MARTIN 21
We also reject Guenther’s argument that the three-year
limitation period should start running on a later date based
on LMC’s separate alleged breach of its fiduciary duty to
disclose the Plan Amendment to him. The district court
correctly determined that the effect of the Plan Amendment
(i.e., preventing bridging of his prior credited service) is
what mattered to Guenther, rather than the Plan
Amendment’s existence, and the November Letter “related
the effect of the 2005 plan amendment, and [Guenther]
stated he understood it.” 9 His awareness from the November
Letter was thus also sufficient to trigger the three-year
limitation period for the alleged breach of LMC’s duty to
disclose, even without specific knowledge of the Plan
Amendment’s existence per se. We need not determine
whether LMC breached its duty to disclose exclusively with
the July Letter, or continuously thereafter as Guenther
contends, because either way the date he obtained actual
knowledge of the effect of that breach remains the same:
November 7, 2006. See Phillips, 944 F.2d at 520 (“The
earliest date on which a plaintiff became aware of any breach
[of the same character in a series of breaches] would thus
start the limitation period of § 1113(a)(2) running.”).
Accordingly, even if he didn’t learn about the Plan
Amendment’s existence until his 2010 phone call with the
ESC, that knowledge “impart[ed] nothing materially new”
to him beyond the November Letter, and is not the “earliest
9
In any event, by the time he received the November Letter,
Guenther knew that “information material to [his] circumstance,”
Barker, 64 F.3d at 1403, had been concealed from him, either in the July
Letter or the November Letter, regarding whether LMC would allow him
to bridge his prior accrued credited service. At a minimum, therefore,
he was aware of the “nature of [LMC’s] alleged breach” of its duty to
disclose. See Sulyma, 909 F.3d at 1075.
22 GUENTHER V. LOCKHEED MARTIN
date on which [he] became aware of any breach[.]” See id.
(emphasis added).
Because Guenther failed to bring suit within three years
of November 7, 2006 (the earliest date he had actual
knowledge of LMC’s alleged breach of its fiduciary duty),
his suit is barred by ERISA’s statute of limitations. See
§ 1113(2).
D
Alternatively, Guenther claims that even if he had actual
knowledge of the breach, because LMC engaged in fraud via
the July Letter and concealment via LMC’s failure to
disclose the Plan Amendment “both prior to and after the
July 25, 2006 Letter,” ERISA’s six-year limitation period
applies instead of the three-year period. See § 1113.
Our circuit has held that this exception only applies when
a defendant has “taken steps to hide [its] breach of fiduciary
duty.” Barker, 64 F.3d at 1402 (emphasis added). Under
this approach, incorporated from the common law doctrine
of fraudulent concealment, a plaintiff must establish
“affirmative conduct upon the part of the defendant which
would, under the circumstances of the case, lead a
reasonable person to believe that he did not have a claim for
relief.” Id. (internal quotation marks and emphasis omitted).
Plaintiff bears the burden of pleading and proving that such
affirmative acts occurred. See Hexcel Corp. v. Ineos
Polymers, Inc., 681 F.3d 1055, 1060 (9th Cir. 2012).
To be sure, Guenther has set forth facts suggesting that
LMC misrepresented his ability to bridge his terms of
service, and failed to disclose material information regarding
the same while Guenther was negotiating renewed
employment with LMC. But his claim does not rise to the
GUENTHER V. LOCKHEED MARTIN 23
level of “fraud or concealment” under our precedent.
Guenther has failed to produce any evidence that LMC made
“knowingly false misrepresentations with the intent to
defraud” Guenther when it sent him the July Letter, see
Barker, 64 F.3d at 1401, much less evidence of affirmative
acts taken by LMC to hide that misrepresentation as required
in our circuit, see id. at 1402. Mere failure to disclose the
Plan Amendment’s existence does not demonstrate that
LMC hid its breach from Guenther. Evidence that Guenther
was “bounced . . . from one department to another, never
answering his questions” over the course of several years is
indicative of bureaucratic inefficiency, but does not on its
own rise to the level of affirmative concealment. 10 Absent
the necessary record evidence, Guenther’s argument for
application of the fraud or concealment exception fails.
Accordingly, the district court correctly determined
ERISA’s six-year limitation period for fraud or concealment
does not apply to Guenther’s claim.
IV
The district court’s order denying Guenther’s post-
judgment motion for reconsideration of summary judgment
10
Guenther argues in the alternative that even if LMC’s continuing
failure to disclose the Plan Amendment does not qualify as a separate
affirmative act of concealment, the July Letter was a “self-concealing
act” with the concealment committed in the course of the underlying
wrong itself, thus satisfying the fraud or concealment exception on its
own. We agree with the district court that the facts constituting the claim
for breach of fiduciary duty alone cannot also serve as the basis for fraud
or concealment—otherwise, the exception would swallow the rule.
Instead, a defendant must take affirmative steps “beyond the breach itself
[with] the effect of concealing the breach from its victims.” In re Unisys
Corp. Retiree Med. Benefit ERISA Litig., 242 F.3d 497, 503 (3d Cir.
2001).
24 GUENTHER V. LOCKHEED MARTIN
is reviewed for abuse of discretion. Latshaw v. Trainer
Wortham & Co., 452 F.3d 1097, 1100 (9th Cir. 2006).
“Judgment is not properly reopened absent highly unusual
circumstances, unless the district court is presented with
newly discovered evidence, committed clear error, or if there
is an intervening change in the controlling law.” Weeks v.
Bayer, 246 F.3d 1231, 1236 (9th Cir. 2001) (internal
quotation marks omitted).
Guenther fails to show how the new deposition
testimony he obtained from two witnesses affiliated with
LMC rises to the level of “highly unusual circumstances,”
nor does he cite any circumstances beyond his control which
prevented him from obtaining and producing the deposition
testimony of LMC officials for the district court’s review
before it issued its summary judgment order. Instead of
raising the kind of newly discovered evidence that would
merit reconsideration, Guenther is using Federal Rules of
Civil Procedure 59(e) and 60(b) to “relitigate old matters, or
to raise arguments or present evidence that could have been
raised prior to the entry of judgment.” Exxon Shipping Co.
v. Baker, 554 U.S. 471, 485 n.5 (2008) (citation omitted).
The district court therefore did not abuse its discretion
by denying Guenther’s motion for reconsideration.
* * *
Because Guenther had actual knowledge of LMC’s
alleged breach of its fiduciary duty, yet failed to bring suit
within the applicable three-year limitation period under
ERISA, his action is time-barred.
AFFIRMED.