Civ. No. S 90-2729.
January 3, 1991.
Anthony P. Palaigos, Thomas Augustus Bowden, Blum, Yumkas, Mailman, Gutman Denick, Baltimore, Md., for plaintiff.
Janet M. Truhe, Lee B. Zaben, Semmes, Bowen Semmes, Baltimore, Md., for defendants.
This ERISA case is before the Court on defendants' motion for summary judgment, on the ground of limitations, as well as their related motion for sanctions under FED.R.CIV.P. 11. The motions have been timely opposed, and no oral hearing appears necessary.
The plaintiff essentially concedes that his action against the defendants for fiduciary misfeasance on account of bad tax advice they gave relating to his benefit plan is barred prima facie by the ERISA statute of limitations, 29 U.S.C. § 1113. But, plaintiff argues, his cause of action survives the statutory bar because of the tolling effect of a suit on the same claims that plaintiff timely filed (both under the state statutes of limitations and ERISA's statute of limitations) in the Maryland state court, the dismissal of which precipitated the filing of the instant federal suit beyond the period of limitations. Plaintiff cites as authority for this proposition the ERISA case of Farrell v. Automobile Club of Michigan, 870 F.2d 1129 (6th Cir. 1989).
Farrell appears to be the sole reported case dealing with tolling of limitations under ERISA on account of an earlier state court suit. In Farrell, the Sixth Circuit held that the earlier state suit tolled the ERISA statute in respect of a federal claim on the same facts, which was, like the one here, otherwise filed outside of the period of limitations under ERISA.
This Court is not necessarily persuaded by Farrell, as that case seems to extend the principle of tolling beyond the narrow scope of the seminal authority relied on therein, viz., Burnett v. New York Central Railroad Co., 380 U.S. 424, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1964). In any event, even assuming that the Fourth Circuit would adopt the Farrell rule in a case on all fours with Farrell, this is not that case. In fact, in this case, it is clear as a matter of law that the plaintiff's claims cannot be said to be cognizable within the concurrent jurisdiction provision of ERISA, 29 U.S.C. § 1132(a)(1)(B), but, rather, must be read as being cognizable only under the exclusive federal jurisdictional grant in 29 U.S.C. § 1132(e)(1). Thus, because the state court. was plainly without jurisdiction here ab initio, the tolling principle arising from concurrence of jurisdiction, upon which the rules in Burnett and Farrell are based, can have no application here. See discussion in Farrell, 870 F.2d at 1132-34.
For the reasons stated, an order will be entered separately, granting summary judgment in favor of the defendants. That order will also deny their Rule 11 motion, because the existence of Farrell, predating the filing of the present suit, gives an arguable basis for an attorney to attempt a tolling argument, justifying the filing of this federal suit, whether or not that argument ultimately succeeds. Thus, the standards of Rule 11 were not violated.