United States District Court, D. Colorado
LORRAINE M. RAMOS, et al., Plaintiffs,
BANNER HEALTH, et al., Defendants.
ORDER DENYING MOTION TO DISMISS
WILLIAM J. MARTÍNEZ UNITED STATES DISTRICT JUDGE
action brought pursuant to 29 U.S.C. § 1132 under the
Employee Retirement Income Security Act of 1974
(“ERISA”), Plaintiffs Lorraine M. Ramos and
others bring a putative class action against numerous
Defendants including, as relevant here, Banner Health and
numerous of its officers or employees (collectively,
“Banner Health”), and against Jeffrey Slocum
& Associates, Inc. (“Slocum”). Now before the
Court is Slocum's Motion to Dismiss Counts I and II of
the Amended Complaint. (ECF No. 182.) For the reasons
explained below, Slocum's Motion is denied.
Federal Rule of Civil Procedure 12(b)(6), a party may move to
dismiss a claim in a complaint for “failure to state a
claim upon which relief can be granted.” The 12(b)(6)
standard requires the Court to “assume the truth of the
plaintiff's well-pleaded factual allegations and view
them in the light most favorable to the plaintiff.”
Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174,
1177 (10th Cir. 2007). In ruling on such a motion, the
dispositive inquiry is “whether the complaint contains
‘enough facts to state a claim to relief that is
plausible on its face.'” Id. (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). Granting a motion to dismiss “is a harsh
remedy which must be cautiously studied, not only to
effectuate the spirit of the liberal rules of pleading but
also to protect the interests of justice.” Dias v.
City & Cnty. of Denver, 567 F.3d 1169, 1178 (10th
Cir. 2009) (internal quotation marks omitted). “Thus,
‘a well-pleaded complaint may proceed even if it
strikes a savvy judge that actual proof of those facts is
improbable, and that a recovery is very remote and
unlikely.'” Id. (quoting Twombly,
550 U.S. at 556).
Court assumes the following facts taken from Plaintiffs'
Amended Complaint (ECF No. 118) to be true for purposes of
resolving Slocum's Motion to Dismiss.
are current and former Banner Health employees who reside in
Colorado. (ECF No. 118 ¶¶ 20-26.) During relevant
time periods, Plaintiffs were participants in Banner
Health's employee 401(k) plan (the “Plan”).
(Id. ¶¶ 1, 20-26.) The Plan qualifies as
an “employee pension benefit plan” under 29
U.S.C. § 1002(2)(A) and an “individual account
plan” or “defined contribution plan” under
29 U.S.C. § 1002(34). (Id. ¶ 8.) Pursuant
to 29 U.S.C. § 1102(a)(1), the Plan is established by a
written plan document, which has been amended and restated
over the years. (Id. ¶ 7.)
Plan provides for the Banner Health Retirement Plans Advisory
Committee (the “Committee”) to advise Banner
Health with respect to Plan investments and administration.
(Id. ¶ 29.) Committee members are appointed, and
may be removed, by Banner Health's CEO. (Id.)
The Plan document and its “Statement of Fiduciary
Duties and Procedures and Investment Objectives and
Policies” (the “IPS”) provide that the
Committee is responsible for all investment and
administrative functions, including selecting and removing
Plan investment options and selecting an independent
investment consultant to evaluate and make recommendations
regarding the Plan investment options. (Id. ¶
Health is the named fiduciary of the Plan under 29 U.S.C.
§ 1102(a), and the Committee acts as the Plan
administrator, but may appoint another committee or
individual to perform Plan administrative functions.
(Id. ¶¶ 27, 32.) Plan assets are held in
trust by a trustee appointed by Banner Health. (Id.
at 12.) As of December 2007, Banner entered into a Trust
Agreement with Fidelity Management Trust Company.
(Id. ¶ 12.) Pursuant to this 2007 Trust
Agreement, Fidelity has provided recordkeeping and
administrative services to the Plan. (Id. ¶
is a third-party investment consultant hired by Banner
Health. Because the allegations regarding Slocum's role
are central to the present Motion, the Court reproduces this
portion of Amended Complaint in full:
Defendant Jeffrey Slocum & Associates, Inc. serves as an
independent third-party investment consultant hired by Banner
Health to function as a fiduciary with respect to the
investment and administration of the assets of the Plan and
other Banner Health corporate assets and sponsored retirement
plans. In this role, Slocum conducted an ongoing review of
the applicable investment policy statement that governed the
investment of assets held in Banner Health's 401(k)
plans, defined benefit plans, supplemental executive plans,
as well as Banner Health's other corporate assets. Under
the applicable IPS, Slocum was charged with the ongoing
review of the investment options in the Banner
Health-sponsored retirement plans, including the Plan. Slocum
was also responsible for performing investment manager
evaluations and searches when an investment manager was added
to the Banner Health plans. During the transition to the
selected investment manager, Slocum also assisted in
[sic] the Committee in negotiating fees, among other
duties. Slocum performed ongoing investment consulting
services, such as providing written investment performance
evaluations on a quarterly basis to the Committee, and
performed asset liability and allocation evaluations. In
performing investment services on behalf of the Plan, Slocum
received a fee paid directly from Plan assets.
Under the agreement between Slocum and Banner Health dated
June 28, 2010, and as confirmed by the Plan's IPS, Slocum
acknowledges that it is a “fiduciary within the meaning
of section 3(21)(A)(ii) of ERISA [29 U.S.C. §
1002(21)(A)(ii)] with respect to the Defined Benefit and
401(k) Plans.” During all relevant time periods
applicable to Plaintiffs' claims, Slocum has functioned
as a fiduciary to the Plan. Based on the services performed
on behalf of the plan, Slocum is a fiduciary to the Plan
because it rendered investment advice for a fee with respect
to Plan assets, or had responsibility to do so. 29 U.S.C.
(ECF No. 118 ¶¶ 37-38 (brackets in original).)
relevant here, Plaintiffs bring two counts against Slocum for
breach of the duties of loyalty and prudence, and for
violation of Plan documents. (See generally id.
¶¶ 120-139.) In Count I, Plaintiffs allege
that Banner Health and Slocum breached their duties by
allowing excessive administrative fees to be charged to Plan
participants. (Id. ¶¶ 120-130.) In Count
II, Plaintiffs allege the Defendants breached their duties
and violated Plan documents by making imprudent investment
options available for Plan participants to invest ...