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It goes without saying that a claim for breach of fiduciary duty lies only against an individual or entity that qualifies as an ERISA "fiduciary." And to be a fiduciary, the individual or entity involved must exercise a degree of discretion over the management of the plan or its assets, or over the administration of the plan itself. 29 U.S.C.S. § 1002(21)(A). ERISA makes the existence of discretion a sine qua non of fiduciary duty. A person who performs purely ministerial functions for an employee benefit plan within a framework of policies, interpretations, rules, practices and procedures made by other persons is not a fiduciary. 29 C.F.R. § 2509.75-8, D-2.
Richard A. Schmidt ("Richard") initiated the present ERISA action against the Sheet Metal Workers' National Pension Fund and its Board of Trustees to recover the portion of his father's death benefit that the Fund disbursed to Richard's sister. Although Richard's father failed to designate a beneficiary for his death benefit, Richard contended that his father intended that he be the sole beneficiary and that the proper designation was never made only because a benefit analyst employed by the Fund sent the wrong form after speaking with Richard and his father over the telephone. Therefore, Richard argued that he was entitled to the contested benefits either under an estoppel or breach of fiduciary duty theory. He further contended that defendants violated ERISA by failing to adequately notify him of his appeal rights. After discovery, the district court granted summary judgment to defendants on each of Richard's claims. Richard challenged the decision. The defendants cross-appealed from the denial of their request for an award of attorney’s fees.
Was Richard entitled to the contested benefits under an estoppel or breach of fiduciary theory, thereby making the grant of summary judgment in favor of defendants an error?
The court affirmed the district court’s grant of summary judgment to the defendants. The court held that oral representations that conflicted with the terms of the plan could not be recognized; only written modifications could be given effect. The court held that only a "fiduciary" could commit a breach of fiduciary duty, which the plan representative was not because he had no discretionary power and performed only ministerial duties. The defendants as fiduciaries were not negligent, did not make any misrepresentations, and were neither negligent in hiring nor supervising the plan representative. On the cross-appeal the court affirmed the denial of attorney fees to trustees because the beneficiary's litigation was justified even if he did not prevail.