Plan and Trust; Money Purchase Plan and Trust v. Berkshire Life Insurance Company

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 ALAN MEYER, Trustee for Paul D.
Meyer, M.D., P.A.; JORGE R.
ORDONEZ, Trustee for Jorge R.
Ordonez, M.D., P.A.; EMPLOYEE
PROFIT SHARING PLAN AND TRUST,
SUCCESSOR TO JORGE R. ORDONEZ,
M.D. MONEY PURCHASE PENSION No. 03-1600 PLAN AND TRUST; MONEY PURCHASE
PLAN AND TRUST,
Plaintiffs-Appellees,
v.
BERKSHIRE LIFE INSURANCE COMPANY,
Defendant-Appellant. 
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Catherine C. Blake, District Judge.
(CA-99-1432-CCB)
Argued: May 4, 2004
Decided: June 14, 2004
Before LUTTIG and MICHAEL, Circuit Judges, and
Bobby R. BALDOCK, Senior Circuit Judge of the
United States Court of Appeals for the Tenth Circuit,
sitting by designation.
Affirmed by published opinion. Judge Luttig wrote the opinion, in
which Judge Michael and Senior Judge Baldock joined.

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COUNSEL
ARGUED: Nicholas Theodore Christakos, SUTHERLAND,
ASBILL & BRENNAN, L.L.P., Washington, D.C., for Appellant.
Mark Menton Dumler, PARKER, DUMLER & KEILY, L.L.P., Balti-
more, Maryland, for Appellees. ON BRIEF: Stephen M. Rosenblatt,
SUTHERLAND, ASBILL & BRENNAN, L.L.P., Washington, D.C.,
for Appellant.
OPINION
LUTTIG, Circuit Judge:
Appellees, Alan Meyer and Jorge Ordonez, in their capacity as
trustees for certain pension plans and trusts ("the pension plans"),
sued appellant, Berkshire Life Insurance Co. ("Berkshire"), in state
court, bringing common-law claims for professional negligence, neg-
ligent misrepresentation or omission, deceit, and breach of fiduciary
duty. The claims primarily turn on the actions of Michael Meszaros,
a Berkshire insurance agent. Broadly speaking, appellees allege that
Berkshire, through Meszaros, "placed excessive pension plan funds
into life insurance policies, imprudently invested funds in low-
yielding annuities, and repeatedly churned the plans’ assets." J.A.
174. After Berkshire removed the case, asserting that the district court
had jurisdiction under the Employee Retirement Income Security Act
("ERISA"), appellees amended their complaint to include, in the alter-
native, a fifth count for damages for breach of fiduciary duty under
ERISA. Berkshire moved for summary judgment and, after Berkshire
waived its prior argument that it was not an ERISA fiduciary, the dis-
trict court dismissed appellees’ state-law claims as preempted. See
Meyer v. Berkshire Life Ins. Co., 128 F. Supp. 2d 831 (D. Md. 2001)
("Meyer I").
The district court held a bench trial on the ERISA claim and found,
in a lengthy opinion, that Meszaros acted substantially as alleged in
appellees’ complaint and that Berkshire, through the actions of Mes-
zaros, its agent, breached its fiduciary duties under 29 U.S.C. § 1104.
The court awarded appellees damages of almost $1.3 million, plus
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pre- and post-judgment interest. See Meyer v. Berkshire Life Ins. Co.,
250 F. Supp. 2d 544 (D. Md. 2003) ("Meyer II").1 The court’s deci-
sion rested heavily, though not exclusively, on its conclusion that
Berkshire’s "concession" as to fiduciary status prevented Berkshire
from challenging that status as to Meszaros’ alleged conduct.
I.
On appeal, Berkshire raises several claims of error. The only claim
that we address in detail, however, is Berkshire’s assertion that the
district court erred in finding that Berkshire conceded that it was an
ERISA fiduciary with respect to Meszaros’ alleged actions. As
explained below, we hold that the district court did not abuse its dis-
cretion in so construing Berkshire’s waiver.
A.
In its motion for summary judgment, Berkshire argued that appel-
lees’ four state-law claims were preempted under 29 U.S.C. § 1144(a)
and that it was not an ERISA fiduciary. In response, appellees
claimed that these positions were inconsistent because "if Berkshire
is not an ERISA fiduciary, then, as a matter of law, ERISA does not
preempt the state law claims against Berkshire." Id. at 558. Because
the evidence as to Berkshire’s fiduciary status was in dispute, appel-
lees asserted that their state and ERISA claims would all have to be
tried.
In its reply memorandum, Berkshire responded as follows:
MODIFICATION OF ORIGINAL MEMORANDUM
Given [appellees’] concession that their common law claims
are pre-empted if "Berkshire served as an ERISA fiduciary,"
[Berkshire] will waive its argument that it was not an
ERISA fiduciary. Thus, this case should proceed as an
1Because the facts underlying the litigation are more than adequately
recounted in the above-mentioned reported opinions, we do not detail
them here.
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ERISA case, subject to ERISA statutes and case law inter-
preting it.
Id. (underlining added). In addition to making this "concession,"
Berkshire "argued for twenty pages" in that brief "that the statute of
limitations [for ‘actual knowledge’ cases] bars the action," but "did
not respond whatsoever to [appellees’] contentions that Berkshire was
an ERISA fiduciary because Meszaros exercised discretionary author-
ity over the plans’ assets and rendered investment advice for a fee."
Id. Accordingly, the district court reasoned that Berkshire’s conces-
sion "rendered evaluation of [the fiduciary status] issue unnecessary,"
and granted summary judgment for Berkshire on the state-law claims.
At trial and thereafter, the district court rejected Berkshire’s
attempts, through new counsel, to "recast" the scope of its waiver. Id.
at 559. Indeed, after noting that "the facts as alleged in the amended
complaint are substantially similar to the court’s findings of fact," the
court explained that
Berkshire’s unqualified concession that it was an ERISA
fiduciary was in response to the plaintiffs’ claims that Berk-
shire, through its agent, violated numerous common laws by
mismanaging their pension plans. The court accepted the
defendant’s concession, and Berkshire’s subsequent
attempts to disavow the concession it made or to constrict
its scope are unavailing. The court finds, therefore, that
Berkshire was an ERISA fiduciary with regard to the con-
duct alleged in the amended complaint, namely Mes-
zaros’[ ] investment decisions on behalf of the plans from
1983 to sometime in 1997.
Id. at 558, 560 (emphasis added).
B.
We think it apparent that, in so ruling, the district court implicitly
construed Berkshire’s waiver as a "judicial admission," i.e., a repre-
sentation that "unless allowed by the court to be withdrawn, is conclu-
sive in the case." Keller v. United States, 58 F.3d 1194, 1199 n.8 (7th
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Cir. 1995) (citing relevant treatises and distinguishing "judicial
admissions" from "evidentiary admissions"). We review "the district
court’s determination as to whether a particular statement consti-
tute[d] a judicial admission . . . [for] abuse of discretion." MacDonald
v. General Motors Corp., 110 F.3d 337, 340 (6th Cir. 1997).
No matter what label is affixed to Berkshire’s statement, Berkshire
claims that the district court’s conclusion as to that statement’s bind-
ing effect was erroneous as a matter of law. More specifically, Berk-
shire contends that the district court’s conclusion is necessarily
incorrect because parties cannot admit or stipulate to the legal conclu-
sion of fiduciary status under ERISA. Instead, that conclusion has to
be based on the evidence presented at trial, evidence that Berkshire
claims was legally insufficient to support the district court’s judgment
here.
Berkshire first argues that it merely waived its legal right to assert
that it was not an ERISA fiduciary based on the evidence, but did not
admit that it was one. And even if it had admitted fiduciary status,
Berkshire claims, because that status is a legal conclusion, the district
court could not properly accept such a concession.
We disagree. Judicial admissions are not, as Berkshire claims, lim-
ited to affirmative statements that a fact exists. They also include
intentional and unambiguous waivers that release the opposing party
from its burden to prove the facts necessary to establish the waived
conclusion of law. See, e.g., Martinez v. Bally’s Louisiana, Inc., 244
F.3d 474, 477 (5th Cir. 2001) ("Although a judicial admission is not
itself evidence, it has the effect of withdrawing a fact from conten-
tion. A statement made by counsel during the course of trial may be
considered a judicial admission if it was made intentionally as a
waiver, releasing the opponent from proof of fact.") (emphasis
added). Accordingly, the district court could permissibly interpret
Berkshire’s waiver of its argument that it was not an ERISA fiduciary
to have the effect of excusing appellees from proving the facts neces-
sary to establish Berkshire’s fiduciary status.2 See Major v. CSX
2In arguing to the contrary, Berkshire misses the distinction between
mere opinions of law, and intentional waivers of legal defenses. While
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Transp., Inc., 170 F. Supp. 2d 563, 567 (D. Md. 2001) (explaining
that a statement that "crew error . . . was a substantial legal cause of
[a] collision" is more than "a mere fact"; "[i]t is a legal conclusion in
the nature of a stipulation excusing the need to produce evidence.").
Berkshire also asserts that when a complaint seeks relief within the
scope of 29 U.S.C. § 1109 (governing liability for breach of fiduciary
duty under ERISA), a district court’s ongoing subject-matter jurisdic-
tion under 29 U.S.C. § 1132(e) is inextricably intertwined with the
defendant’s fiduciary status. Because a party cannot confer jurisdic-
tion on the court, Berkshire could not concede that it was an ERISA
fiduciary, so the argument goes.
This argument fails as well. While it is axiomatic that "[c]onsent
of parties cannot give the courts of the United States jurisdiction," it
is also true that "the parties may admit the existence of facts which
show jurisdiction, and the courts may act judicially upon such an
admission." Ferguson v. Neighborhood Hous. Servs. of Cleveland,
Inc., 780 F.2d 549, 551 (6th Cir. 1986) (allowing, over a similar
objection, a judicial admission of "employer" status under the Fair
Labor Standards Act).
C.
Berkshire further claims that even if it did concede that it was an
ERISA fiduciary in some regard, it did not concede to being a fidu-
courts are "reluctant" to treat "opinions and legal conclusions . . . as bind-
ing judicial admissions," "deliberate, clear[,] and unambiguous" state-
ments by counsel may be considered judicial admissions that bind the
conceding party to the representations made. See MacDonald, 110 F.3d
at 340-41. In contrast, the precedents on which Berkshire relies in argu-
ing that parties to federal litigation cannot stipulate to legal conclusions,
appear to stand for, at least in this context, no more than the unsurprising
proposition that the court is not bound by a party’s conception of the
legal effect of certain facts. See, e.g., New Amsterdam Cas. Co. v. Wal-
ler, 323 F.2d 20, 24 (4th Cir. 1963) ("When counsel speaks of legal prin-
ciples, as he conceives them and which he thinks applicable, he makes
no judicial admission and sets up no estoppel which would prevent the
court from applying to the facts disclosed by the proof, the proper legal
principles as the Court understands them.") (emphasis added), cited in
Br. of Appellant at 38-39.
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ciary as to Meszaros’ alleged conduct, and is not responsible under
ERISA for his actions. We are satisfied, however, that the district
court did not abuse its discretion in determining the scope of Berk-
shire’s "concession."
When a party unqualifiedly waives a legal defense, it is within the
court’s discretion to construe that waiver as judicial admission in a
manner that effectuates the strategic purpose for which the court rea-
sonably believes the waiver was made. The court below clearly
expressed its interpretation of why Berkshire made the waiver,
explaining that "the court treated the concession as Berkshire itself
intended it to be treated: as a means to broadly preempt the four com-
mon law claims that alleged that Berkshire, via its agent, Meszaros,
mismanaged [appellees’] pension plans." Meyer II, 250 F. Supp. 2d
at 559 (citations omitted) (emphasis added). Given that purpose, the
district court not only concluded that Berkshire conceded its fiduciary
status, but also that "[s]ince [its] concession was made in response to
claims that Berkshire, through its agent, mismanaged [appellees’]
pension plans, the concession is properly understood to waive any
argument that Meszaros was not acting within the scope of his
employment when he breached his fiduciary duties." Id. at 564 n.29.3
In other words, it appears that the district court believed, or at least
could have permissibly believed, that the state-law claims would be
preempted because of Berkshire’s fiduciary status if Meszaros’ activi-
ties with respect to the pension plans were performed within the scope
of "Meszaros’ agency and employment" with Berkshire, an ERISA
fiduciary — irrespective of whether such a representation was actu-
ally necessary to dismiss those claims as preempted at summary judg-
ment. And on that basis, the court could have permissibly construed
Berkshire’s waiver as a judicial admission that, if the appellees
proved that "Meszaros’ investment decisions on behalf of the plans"
were made "as alleged in the amended complaint," excused the appel-
3In this regard, the district court likely was alluding to the statements
in each of appellees’ state-law counts that "Berkshire is liable as a princi-
pal for the negligent acts [or deceit] of its agent and employee, Meszaros,
performed within the scope of Meszaros’ agency and employment." J.A.
11-13, 15.
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lants from establishing that "Berkshire, through its agent [and acting
as an ERISA fiduciary]," itself engaged in that conduct.4 Id. at 560.
While it is commonly understood that the representations of parties
to federal litigation may be binding in appropriate circumstances,
courts have been diligent in preventing parties from gaining an
improper advantage by withdrawing or distorting an earlier conces-
sion of fiduciary status under ERISA that was made, for example, to
preempt a plaintiff’s state-law claims. See id. at 559-60 (collecting
cases); see also Moench v. Robertson, 62 F.3d 553, 560 (3d Cir.
1995) (rejecting defendants’ efforts to re-characterize their unquali-
fied concession of fiduciary status at summary judgment and explain-
ing that "the [defendants are] changing course when [they] now
4Contrary to Berkshire’s assertions, this conclusion is only confirmed
by the following exchange at trial:
THE COURT: You seem to be agreeing that if a commission
is being paid to a Berkshire agent that is advice for a fee and that
is a fiduciary function?
MR. CHRISTAKOS: For purposes of this case, I believe that’s
the logical consequence of the position that was taken earlier
and that is if Berkshire is a fiduciary and again I want to make
clear what I said, what we said in our pretrial order filing. For
posterity, I want to say on the record [that] Berkshire is not con-
ceding anything that would in any way in our view be applicable
to any other case. But for purposes of this case, we have agreed
to waive the defense that we are not a fiduciary and that is the
only possible theory that fits these facts and so that is the theory
that we’re presenting.
J.A. 213-14 (emphases added). Based on this colloquy, the district court
concluded that Berkshire made a "second concession" that "it was a fidu-
ciary pursuant to [29 U.S.C. § 1002(21)(A)(ii)] by virtue of the commis-
sions Meszaros received in connection with transactions made on behalf
of the [appellees’] plans." Meyer II, 250 F. Supp. 2d at 560. But the
exchange also has broader import, in that it demonstrates — if by noth-
ing else than the juxtaposition of what Berkshire "is not conceding" with
what it "ha[s] agreed to waive" — that even Berkshire’s trial counsel
understood that Berkshire’s representation at summary judgment was not
merely a legal opinion but, rather, was an unambiguous waiver of its
right to dispute that it was an ERISA fiduciary under "these facts."
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argue[ ] . . . that [they were] simply not an ERISA fiduciary in the rel-
evant capacity. We will not permit this.") (emphasis added). Such dili-
gence was equally appropriate here. For the reasons stated above, we
affirm the district court’s judgment in this respect.
II.
As noted above, Berkshire also raises several other claims, includ-
ing that the district court erred in determining that, disregarding any
concession, Berkshire was a fiduciary pursuant to 29 U.S.C.
§ 1002(21)(A)(ii) with respect to Meszaros’ conduct; in determining
that Berkshire breached its fiduciary duties under 29 U.S.C. § 1104;
and in concluding that appellees did not have actual knowledge of
Berkshire’s breaches, so that the shorter three-year statute of limita-
tions for "actual knowledge" cases in 29 U.S.C. § 1113(2) did not
apply. As to these claims, we affirm substantially on the district
court’s reasoning.
AFFIRMED
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