Riley v. Murdock ( 1996 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JOHNSIE RILEY, on behalf of herself
and all others similarly situated;
JOHN F. RILEY, on behalf of himself
and all others similarly situated;
VIRGINIA HARRINGTON, on behalf of
herself and all others similarly
situated; DEWEY HARRINGTON, on
behalf of himself and all others
similarly situated,
Plaintiffs-Appellants,
v.
DAVID H. MURDOCK; DHM HOLDING
CORPORATION; MURDOCK INVESTMENT
CORPORATION; PACIFIC HOLDING No. 95-2414
CORPORATION; CANNON HOLDING
CORPORATION; CABARRUS BANK &
TRUST COMPANY, Trustee,
Defendants-Appellees,
and
FIELDCREST CANNON MILLS,
INCORPORATED; CHARLES A. CANNON,
Charitable Trust Number One;
CHARLES A. CANNON, Charitable
Trust Number Two; CHARLES A.
CANNON, Charitable Trust Number
Three; CANNON FOUNDATION,
INCORPORATED; TRUST UNDER THE
WILL OF CHARLES A. CANNON;
WILLIAM C. CANNON, Estate of the
foregoing, individually and as a
trustee; GEORGE A. BATTE, JR.,
individually and as a trustee;
J. HARRIS CANNON, individually and
as a trustee; OTTO G. STOLZ,
individually and as a trustee;
HAROLD P. HORNADAY; DONALD S.
HOLT, Estate of the foregoing;
ANDREW W. ADAMS; ALBERT M.
ALLRAN; JOSEPH C. RIDENHOUR;
HUBERT J. TAME; JAMES R. JOLLY;
FIRST UNION NATIONAL BANK,
Trustee,
Defendants.
SECRETARY OF LABOR,
Amicus Curiae.
Appeal from the United States District Court
for the Eastern Distict of North Carolina, at Raleigh.
W. Earl Britt, District Court Judge.
(CA-92-442-5-BR)
Argued: April 1, 1996
Decided: April 30, 1996
Before WIDENER, WILLIAMS, and MICHAEL, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
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COUNSEL
ARGUED: Thomas W. Henderson, Pittsburgh, Pennsylvania, for
Appellants. Timothy David Hauser, Senior Trial Attorney, Office of
the Solicitor, Plan Benefits Security Division, UNITED STATES
DEPARTMENT OF LABOR, Washington, D.C., for Amicus Curiae.
Rodrick John Enns, Ralph Madison Stockton, Jr., PETREE, STOCK-
TON, L.L.P., Winston-Salem, North Carolina, for Appellees. ON
BRIEF: Thomas F. Taft, TAFT, TAFT & HAIGLER, Greenville,
North Carolina; Tybe A. Brett, Pittsburgh, Pennsylvania; Norman P.
Stein, Tuscaloosa, Alabama; David B. Rodes, GOLDBERG, PER-
SKY, JENNINGS & WHITE, P.C., Pittsburgh, Pennsylvania, for
Appellants. Thomas S. Williamson, Jr., Solicitor of Labor, Marc I.
Machiz, Associate Solicitor, Karen L. Handorf, Counsel for Special
Litigation, Office of the Solicitor, Plan Benefits Security Division,
UNITED STATES DEPARTMENT OF LABOR, Washington, D.C.,
for Amicus Curiae. Jeffrey C. Howard, William E. Wright, PETREE,
STOCKTON, L.L.P., Winston-Salem, North Carolina, for Appellees.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Appellant Johnsie Riley, a class representative for former employ-
ees of Cannon Mills Corporation (Cannon), participated in Cannon's
Retirement Plan (the Plan). Riley asserts that Appellees, David Mur-
dock and affiliated entities (collectively, Murdock), violated various
provisions of the Employee Retirement Income Security Act, 29
U.S.C.A. §§ 1001-1461 (West 1985 & Supp. 1995) (ERISA), arising
out of the amendment and termination of the Plan. The gravamen of
Riley's suit is that Murdock breached his fiduciary duties in purchas-
ing a group annuity contract from Executive Life Insurance Company,
which administered the Plan but ultimately went into conservatorship,
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and that Murdock failed to monitor the financial integrity of Execu-
tive Life subsequent to purchasing the annuity. In a thorough, pub-
lished opinion, the district court addressed all of Riley's claims and
granted summary judgment in favor of Murdock regarding all claims
pertinent to this appeal. See Riley v. Murdock , 890 F. Supp. 444(E.D.N.C. 1995).
Before us, Riley advances the same arguments that proved unsuc-
cessful in the district court. Despite the fact that Riley and her class
have received every dollar of benefits to which they were entitled
under the Plan, Riley appeals, specifically positing that Murdock
breached his fiduciary duties in three ways: (1) he violated the exclu-
sive purpose requirement of 29 U.S.C.A. § 1104(a)(1)(A) by purchas-
ing the cheapest available annuity; (2) he violated the prudence
requirement of 29 U.S.C.A. § 1104(a)(1)(B) because he knew or
should have known that Executive Life did not or would not enjoy
financial integrity and by failing to monitor Executive Life's financial
health; and (3) he violated the diversification requirement of 29
U.S.C.A. § 1104(a)(1)(C) by investing in a single termination policy.
Additionally, the Department of Labor (DOL) intervened in this
appeal, urging us to adopt a standard that an ERISA fiduciary must
select the safest available annuity to assure payment of the benefits
that a plan promises to its participants. In urging adoption of this stan-
dard, the DOL relies on its Interpretative Bulletin 95-1, see 60 Fed.
Reg. 12,328, 12,330 (1995) (to be codified at 29 C.F.R. § 2509.95-1),
which was published approximately three months prior to the district
court's judgment and well after the events at issue.
We have carefully examined the record, the briefs, the parties' oral
arguments, and the applicable law, and we affirm the grant of sum-
mary judgment in Murdock's favor based on the well-reasoned opin-
ion of the district court. Regarding adoption of"the safest available"
standard urged by the DOL, no federal court has adopted such a stan-
dard, and the circumstances of this case do not merit application of
such a demanding standard.
AFFIRMED
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