Roush v. New England Mutual Life Insurance

Plaintiffs initiated this Employee Retirement Income
Security Act (“ERISA”)1 action against defendants with the filing
of a complaint pursuant to ERISA § 502(e)(1), 29 U.S.C. §
1132(e)(1) and 28 U.S.C. § 1331.

In their complaint, plaintiffs allege both state law and
ERISA claims with respect to defendants’ purported mismanagement
of assets under an employee pension benefit plan. Defendants
filed a motion to dismiss plaintiffs’ state law claims based on
ERISA preemption. In response, plaintiffs filed an amended
complaint, including only two counts, one asserting a breach of
fiduciary duty under ERISA (Count I) and the other alleging a
violation of ERISA’s prohibited transaction rules (Count II).

The court subsequently denied as moot defendants’ motion to
dismiss.

Plaintiffs have now moved for partial summary judgment as to
liability on Counts I and II, and defendants have moved for
summary judgment.

For the reasons that follow, plaintiffs’ motion will be
denied and defendants’ motion will be granted.

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II. STATEMENT OF FACTS

The following claims are those applicable to the instant
motion, and the facts relating thereto are essentially
undisputed.2

Plaintiffs are an ERISA-regulated profit sharing plan,
Richard B. Roush, Inc. Profit Sharing Plan (“the Plan”); the two
Plan trustees, Richard B. Roush and his son, Richard K. Roush;
and the Plan sponsor, Roush Insurance Group, Inc. (successor by
merger with Richard B. Roush, Inc.). Roush Insurance Group, Inc.
and Richard B Roush, Inc. will be referred to collectively as
“RBR Inc.” Defendants are The New England Mutual Life Insurance
Company and its successor New England Financial, referred to
collectively as “New England.”

In 1973, RBR Inc. established the Plan which was registered
under section 401(a) of the Internal Revenue Code for the purpose
of providing retirement benefits for the employees of RBR Inc.

In 1994, plaintiffs were approached by an insurance agent
named Robert H. Todd (“Todd”) about possibly transferring its
profit-sharing plan invested with Massachusetts Financial
Services (“MFS”) to New England.3 In reliance on representations by Todd and another New England representative named Joseph M.
Malis (“Malis”), plaintiffs decided to transfer the Plan to New
England. Thereafter, on December 6, 1994, Richard K. Roush
(“Roush”), on behalf of RBR Inc., executed the New England Age
Based Contribution Plus Profit Sharing Plan Adoption Agreement
(“Adoption Agreement”). The Adoption Agreement was designed by
New England, and constituted an amendment and restatement of RBR
Inc.’s existing profit-sharing plan, whereby RBR Inc. adopted, in
place of its former profit-sharing plan, the New England’s Age
Based Contribution Plus Profit Sharing Plan. The Adoption
Agreement incorporated by reference The New England Age Based
Contribution Profit Sharing Plan Basic Plan Document (“Basic Plan
Document”).

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Click the case caption above for the full text
of the Court's opinion.

For the foregoing reasons, plaintiffs’ motion for partial
summary judgment will be denied and New England’s motion for
summary judgment will be granted.

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