Bower v. Bunker Hill Co.

114 F.R.D. 587, 1986 U.S. Dist. LEXIS 29697
CourtDistrict Court, E.D. Washington
DecidedFebruary 4, 1986
DocketNos. C-82-412 RJM, C-85-87 RJM
StatusPublished
Cited by16 cases

This text of 114 F.R.D. 587 (Bower v. Bunker Hill Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bower v. Bunker Hill Co., 114 F.R.D. 587, 1986 U.S. Dist. LEXIS 29697 (E.D. Wash. 1986).

Opinion

ORDER

ROBERT J. McNICHOLS, Chief Judge.

Present and future pensioners of the Bunker Hill Company have brought this action to obtain reinstatement of their medical insurance and to obtain damages for its alleged wrongful termination. The complaint seeks relief under Sections 502(a)(1)(B), (a)(2) and (a)(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), (a)(2), and (a)(3) and Section 301 of the Labor-Management Relations Act of 1947 (“LMRA”), 29 U.S.C. § 185. Before the court is the plaintiffs’ Motion for Leave to Amend Pursuant to Rule 15 and plaintiffs’ Motion For Certification of this litigation as a class action pursuant to Rule 23 Fed.R. Civ.P. Also before the court is the defendant’s Motion to Strike plaintiffs’ jury demand.

MOTION FOR LEAVE TO AMEND

The facts of this lawsuit are more thoroughly set out in other portions of this memoranda. At this point suffice it to say that this case involves the termination of [590]*590medical benefits which were provided to present and future pensioners of the Bunker Hill Company. These benefits were terminated by Bunker Hill in the Spring of 1982 when an economic downturn forced the company’s closure. The essence of plaintiffs’ claims is that the medical benefits being provided by Bunker Hill were vested and thus could not be unilaterally terminated by Bunker Hill.

Plaintiffs seek to amend their complaint to add two additional parties, Bunker Limited and Jack Kendrick. Bunker Ltd. is a partnership which purchased substantially all of the assets of Bunker Hill in 1982. Mr. Kendrick was the chief executive officer of Bunker Hill at the time of its closure and is presently one of the limited partners in Bunker Ltd. By this amendment, plaintiff seeks to impose liability against both Bunker Ltd. and Kendrick based upon their alleged status as fiduciaries of the Bunker Hill retirement plan. An additional claim is madé against Bunker Ltd. based upon the asset purchase agreement which it entered into with Bunker Hill.

This circuit has consistently adhered to the policy of construing motions to amend pursuant to Fed.R.Civ.P. 15 with “extreme liberality.” United States v. Webb, 655 F.2d 977 (9th Cir.1981). In Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) the Supreme Court identified four factors as relevant to the determination of whether a motion for leave to amend should be denied: undue delay, bad faith or dilatory motive, futility of amendment, and prejudice to the opposing party. Id. at 182, 83 S.Ct. at 230. These factors are not treated with equal weight. As was explained by the Ninth Circuit in Hurn v. Retirement Fund Trust, 648 F.2d 1252 (9th Cir.1981):

Delay alone does not provide sufficient grounds for denying leave to amend: ‘where there is lack of prejudice to the opposing party and the amended complaint is obviously not frivolous, or made as a dilatory maneuver in bad faith, it is an abuse of discretion to deny such a motion.’ (citation omitted).

Id. at 1254.

This action was commenced in July of 1982. Plaintiffs’ Motion to Amend was not filed until May of 1985. However, a substantial portion of the expired time is attributable to the fact that plaintiffs’ complaint was initially dismissed on defendant’s summary judgment motion. This was followed by an appeal to the Ninth Circuit which ultimately resulted in an Order of Remand to this court. The fact of delay here without more is entitled to little weight.

Defendants also argue that they will be prejudiced by an amendment at this late stage of the proceedings. While I recognize that additional discovery would no doubt be required by allowing amendment, there appears to be substantial identity between the already existing parties to this lawsuit and those parties whom the plaintiffs seek to add. There is certainly an identity of claims being asserted against all parties and thus any prejudice can likely be minimized by coordinating efforts of counsel.

Defendants argue further that leave to amend should not be allowed where the claims asserted against the proposed additional parties are patently unsupportable. This circuit has held that futile amendments should not be permitted. Klamath-Lake Pharm. v. Klamath Med. Serv. Bureau, 701 F.2d 1276 (9th Cir.1983), cert. denied, 464 U.S. 822, 104 S.Ct. 88, 78 L.Ed.2d 96 (1983). However, defendants have not made such a showing here. Plaintiffs’ claims against Kendrick and in part against Bunker Ltd. are based upon alleged breaches of their fiduciary duties. Defendants argue that neither Kendrick or Bunker Ltd. were named fiduciaries under the plan and thus plaintiffs’ claims must ultimately fail. In defining the term “fiduciary” as that term is used in ERISA, Congress adopted a functional approach. A person is a fiduciary with respect to a plan to the extent he exercises any discretionary authority or control respecting manage[591]*591ment or administration of the plan or authority or control over the management or disposition of plan assets. 29 U.S.C. § 1002 (21).

Plaintiff has alleged that Kendrick participated in the decision to terminate retiree health insurance benefits. Although this ultimately may be an insufficient showing to require a trial of this claim, I believe it is a sufficient showing here. Although I must agree with defendants that plaintiffs’ claims against Bunker Ltd. as a fiduciary are somewhat dubious it is not the function of this court given the present posture of this case to decide the issue. In any event, such a determination is not required because plaintiffs’ claims against Bunker Ltd. based upon its purchase of assets from Bunker Hill is clearly not frivolous.

Under the foregoing facts and circumstances, I believe it would be an abuse of discretion not to allow plaintiffs to amend their complaint. However, determining that amendment would be appropriate does not end the inquiry as to Mr. Kendrick. Defendants argue that the three-year statute of limitations governing claims against fiduciaries (29 U.S.C. § 1113) operates as a bar to plaintiffs’ claims against Mr. Kendrick which in turn makes the assertion of such claims by amendment futile. Section 1113 provides in relevant part:

(a) No action may be commenced under this subchapter with respect to a fiduciary’s breach of any responsibility ... after the earlier of ...
(2) Three years after the earliest date (A) on which the plaintiff had actual knowledge of the breach or violation, or (B) on which a report from which he could reasonably be expected to have obtained knowledge of such breach or violation was filed with the Secretary under this title ...

29 U.S.C.

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Bluebook (online)
114 F.R.D. 587, 1986 U.S. Dist. LEXIS 29697, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bower-v-bunker-hill-co-waed-1986.