Fiduciary Breach Suit Dismissed as too late

In holding plaintiff Andrew Reeves to ERISA’s 36-month statute of limitations for fiduciary breach claims, US District Judge Laurie Smith Camp of the US District Court for the District of Nebraska rejected Reeves’ argument that he shouldn’t be held to the time limit because he hadn’t read his K plan mail, BNA reported. Camp dismissed the case.

Reeves asserted that he didn’t find out how the plan was handling his money when the plan sponsor mailed him his benefit statements because he had treated the documents as “junk mail” and had not read them. Camp said that the public policies underlying statutes of limitations would not be furthered by allowing Reeves to benefit from his own “willful blindness.”

“Even though ERISA was enacted to protect the rights of plan participants, any interpretation of the term ‘actual knowledge’ that would allow a participant to refuse to accept and acknowledge information clearly set before him is untenable,” the court said.

The plan at issue was established by Airlite Plastic Co. in 1989. In January 2000, the plan was amended to allow participants to direct the investment of their own accounts, with a money market fund as the default investment option if a participant made no investment election.

Reeves participated in the plan yet did not make an investment election, according to the court. Although his plan account should have been invested in a money-market fund, the account was mistakenly invested in a common stock fund. In quarterly statements sent to Reeves throughout 2000, the statements showed that Reeves’s account was invested in a common stock fund.

In 2003, after his account suffered substantial losses, Reeves filed an administrative claim alleging Airlite breached its ERISA fiduciary duties. When his administrative appeal was denied, Reeves filed the lawsuit in February 2004.

The case is Reeves v. Airlite Plastics Co., D. Neb., No. 8:04CV56, 9/26/05.