author: LYNNE, Senior District Judge.

text:
    Curtis JUSTICE, et al., Plaintiffs, v. BANKERS TRUST COMPANY, INC., a foreign corporation, et al., Defendants.
    Civ. A. No. CV83-L-5188-NE.
    United States District Court, N.D. Alabama, Northeastern Division.
    April 19, 1985.

      Brinkley & Ford, J. Allen Brinkley, Robert H. Ford, Daniel F. Aldridge, Price & Henson, Walter J. Price, Jr., Huntsville, Ala., for plaintiffs.
    Bradley, Arant, Rose & White, Samuel H. Franklin, Richard H. Walston, Birmingham, Ala., for defendants.

       The Court acknowledges the exceptional contribution of Michael R. Pennington, Law Clerk, to the preparation of this opinion.

   MEMORANDUM OF OPINION

LYNNE, Senior District Judge.

This ease involves so-called “welfare” benefits under a supplemental unemployment benefit (“SUB”) plan covered by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. The SUB Plan at issue was created by a collective bargaining agreement between employer Revere Copper & Brass, Inc. (“Revere”), and the United Steelworkers of America, AFL-CIO (“the Union”), which is the union representing employees at Revere’s Scottsboro facilities. In order to effectuate the terms of the SUB Plan, Revere entered into a trust agreement to provide for the custody and investment of plan assets. Defendant Bankers Trust Company was appointed trustee pursuant to this agreement.

Under the original terms of the plan, the trust fund was pre-funded. However, the plan was later amended to provide for funding by Revere on an “as-needed” basis; in other words, Revere was to pay into the fund only so much as was required to pay the calculated benefits due for a particular week.

In October, 1982, Revere filed for reorganization under Chapter 11 of the Bankruptcy Code and simultaneously ceased making payments to the trust fund for distribution of benefits. On the same day that Revere filed its Chapter 11 petition, Revere notified the Union that it intended to declare bankruptcy and cease making certain benefit contributions, including SUB Plan contributions. The Union promptly filed a grievance which has since been held in abeyance in deference to the bankruptcy proceedings.

In addition, the Union is presently pursuing a claim in the bankruptcy proceedings for all outstanding SUB Plan benefits due under the terms of the amended Plan. Apparently, the principal issue in regard to the Union’s claim in bankruptcy is whether the plan participants and beneficiaries are administrative creditors (and hence entitled to 100 cents on the dollar) or trade creditors (and hence entitled to only 65 cents on the dollar). Deposition of Carl Statum at 79-89, 92-95.

Plaintiffs in the instant case are certain employees of Revere claiming entitlement to supplemental unemployment benefits which apparently were “guaranteed” under the collective bargaining agreement. Plaintiffs are obviously precluded from proceeding directly against Revere in this Court due to the pendency of the bankruptcy proceedings, see 11 U.S.C. § 362, and apparently are not content to await the outcome of the claims made against Revere on their behalf in bankruptcy court. Instead, plaintiffs seek to recover their “gau-ranteed” benefits (and related damages) from Bankers Trust, on the theory that Bankers Trust breached certain fiduciary duties owing to the plaintiffs under ERI-SA. Primarily on this basis, the plaintiffs filed suit in the Circuit Court of Jackson County, Alabama. The complaint alleged not only that Bankers Trust violated its fiduciary duties under various sections of ERISA, but also that Bankers Trust was liable for alleged breaches of fiduciary duties by Revere. In addition, plaintiffs raised state law claims of fraud and misrepresentation, conversion, and a claim for money had and received. Bankers Trust removed the lawsuit to this Court on the basis of federal question jurisdiction under ERISA. A subsequent motion to remand filed by the plaintiffs was denied. Several months later, on September 24, 1984, Bankers Trust filed a motion for summary judgment. After numerous continuances and extensions of time to allow plaintiffs to adduce all available evidence in opposition to the motion, with a full opportunity having been afforded the parties to complete discovery, the motion is now ripe for adjudication. There being no genuine issue as to any material fact, the Court concludes that the defendant is entitled to judgment as a matter of law.

The state law claims will be dealt with at the outset. With regard to the claims for conversion and for money had and received, the thrust of those claims is the mismanagement or wrongful administration of the corpus of an ERISA trust fund. Similarly, the claims of fraud and misrepresentation are premised upon the suppression of material facts which Bankers Trust, as a plan fiduciary, was obligated to disclose. Viewed in this light, it becomes plain that no recovery may be had upon these state law claims unless the right to such recovery arises under ERISA. Section 514 of ERISA, 29 U.S.C. § 1144(a), preempts all state laws that “relate to” any employee benefit plan:

Except as provided in subsection (b) of this section, the provisions of this sub-chapter and subchapter III of this chapter shall supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan described in § 1003(a) of this title and not exempt under § 1003(b) of this title.

29 U.S.C. § 1144(a) (emphasis supplied). The only state laws expressly exempted from ERISA’s broad preemptive sweep are those laws regulating insurance, banking and securities, and criminal laws of general application. 29 U.S.C. § 1144(b).

In light of this express Congressional declaration of preemptive intent, the Court need not determine whether and to what extent state law fraud and misrepresentation principles might conflict with or alter the requirements of ERISA. See Brown v. Hotel & Restaurant Employees & Bartenders International Union Local 54, — U.S. -, -, 104 S.Ct. 3179, 3185-86, 82 L.Ed.2d 373, 382-83 (1984); Fidelity Federal Savings & Loan Assoc. v. De La Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982). The import of the statutory language cannot be mistaken. As the Supreme Court stated in Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523, 101 S.Ct. 1895, 1906, 68 L.Ed.2d 402 (1981), ERISA was “meant to establish pension plan administration as exclusively a federal concern.”

Recently, in Shaw v. Delta Air Lines Inc., 463 U.S. 85, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983), the Supreme Court confirmed ERISA’s broad preemptive sweep and further confirmed that the term “relate to” as used in the Act was to be given a liberal and broad interpretation. As noted by the Court, it was the intent of Congress to eliminate all possibility of conflict with state law principles and to make the field of employee benefit plans exclusively federal in nature. 463 U.S. at 99, 103 S.Ct. at 2901, 77 L.Ed.2d at 502. Indeed, Congress considered and rejected a proposal to limit the preemptive scope of the statute to the specific areas and issues concerning employee benefit plans directly regulated by ERISA’s express provisions, reasoning that “[s]uch a formulation raised the possibility of endless litigation over the validity of state action that might impinge on the federal regulatory scheme.” Shaw v. Delta Air Lines, Inc., 463 U.S. at 99, n. 20, 103 S.Ct. at 2901, n. 20, 77 L.Ed.2d at 502, n. 20 (1983). See also 120 Cong.Rec. 29942; Hewlett-Packard Co. v. Barnes, 425 F.Supp. 1294, 1298-1300 (N.D.Cal.1977), affirmed 571 F.2d 502 (9th Cir.1978), cert. denied 439 U.S. 831, 99 S.Ct. 108, 58 L.Ed.2d 125 (1978); In re C.D. Moyer Co. Trust Fund, 441 F.Supp. 1128, 1130-31, n. 4 (E.D.Pa.1977), affirmed 582 F.2d 1273 (3d Cir.1978). Thus, the settled construction of 29 U.S.C. § 1144(a) is that it preempts not only state laws dealing with the subject matters directly covered by ERISA, but also any state laws which “relate” either directly or indirectly to an employee benefit plan. Shaw v. Delta Air Lines, 463 U.S. at 95-100, 103 S.Ct. at 2899-2901, 77 L.Ed.2d at 501-502. Accord, Wadsworth v. Whaland, 562 F.2d 70 (1st Cir.1977), cert. denied 435 U.S. 980, 98 S.Ct. 1630, 56 L.Ed.2d 72 (1978); District 65, UAW v. Harper & Row Publishers, Inc., 576 F.Supp. 1468 (S.D.N.Y.1983). See generally American Progressive Life and Health Ins. Co. of New York v. Corcoran, 715 F.2d 784 (2d Cir.1983); Bucyrus-Erie Co. v. Dept. of Industry, Labor and Human Relations, 599 F.2d 205 (7th Cir.1979), cert. denied 444 U.S. 1031, 100 S.Ct. 701, 62 L.Ed.2d 667 (1980).

In the instant case, it is clear that the state law claims of fraud and misrepresentation are preempted. As noted above, these claims are based upon the alleged suppression of material facts which Bankers Trust, as a plan fiduciary, was under an obligation to disclose. Because any fiduciary duties owed by Bankers Trust arise under ERISA, or the trust agreement governed by ERISA, the liability of Bankers Trust for any suppression of material facts relating to the plan or its assets must be adjudged solely by reference to ERISA. Insofar as state law fraud and misrepresentation principles are relevant here, they relate directly or indirectly to the duties or liabilities of Bankers Trust in connection with the ERISA plan at issue and are thus preempted. See District 65, UAW v. Harper & Row Publishers, Inc., 576 F.Supp. 1468, 1487 (S.D.N.Y.1983) (common law claims of fraud, conversion, unjust enrichment, and tortious interference with contract preempted by ERISA); Ogden v. Michigan Bell Telephone Co., 571 F.Supp. 520, 524 (E.D.Mich.1983) (common law fraud claim dismissed as preempted by ER-ISA); Whitaker v. Texaco, Inc., 566 F.Supp. 745 (N.D.Ga.1983) (state law misrepresentation and breach of fiduciary duty claims preempted by ERISA); Ziskind v. Retail Clerks International Association, 3 E.B.C. 1012, 1014-1015 (E.D.Cal.1982) (state cause of action for negligent misrepresentation preempted by ERISA). Cf. Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208 (8th Cir.1981), cert. denied 454 U.S. 968, 102 S.Ct. 512, 70 L.Ed.2d 384 (1981) (common law tortious interference with contract claim preempted by ERISA). Similarly, the counts for conversion and for money had and received relate to the corpus of an ERISA trust fund and are undoubtedly preempted. See UAW v. Dyneer Corp., 4 E.B.C. 1486, 1488 (N.D.Ohio 1983), affirmed 747 F.2d 335 (6th Cir.1984); District 65, UAW v. Harper & Row Publishers, Inc., 576 F.Supp. at 1487. Cf. Shaw v. Association of Machinists & Aerospace Workers Pension Plan, 563 F.Supp. 653 (C.D.Cal.1983) (common law breach of contract claim preempted by ERISA). Thus, the liability of Bankers Trust on the facts of this case must be judged according to ERISA, and ERISA only.

Turning then to the ERISA claims, the following violations appear to be asserted by the plaintiffs:

(1) Bankers Trust violated 29 U.S.C. §§ 1104 and 1106 in that it improperly refunded certain 1980 contributions to Revere, thereby engaging in a transaction involving the assets of the plan for the benefit of a party in interest and breaching its fiduciary duties to apply plan assets solely to the benefit of plan participants and beneficiaries;
(2) Bankers Trust violated its fiduciary duties under 29 U.S.C. § 1104(a)(1) by failing to pay out sums due under the contract; by failing to discharge its duties for the exclusive purpose of providing benefits to participants and their beneficiaries; and by failing to discharge its duties with reasonable care, skill, prudence and diligence under the circumstances.
(3) Bankers Trust is liable for an alleged breach of fiduciary duties committed by Revere under 29 U.S.C. § 1105(a).

With regard to the alleged breach of Bankers Trust’s duty to apply trust assets solely to the benefit of the plan participants and beneficiaries, the plaintiffs base their claim of a violation of § 1104 and § 1106 on the fact that in 1980, Bankers Trust returned certain contributions to Revere. Bankers Trust has adduced evidence that the contributions were returned because the contributions were made by mistake of fact. See, e.g., Deposition of Susan Proctor at p. 13, Exhibit 5. In these circumstances, ERISA allows a trustee to return contributions upon timely demand. 29 U.S.C. § 1103(c)(2). See also Teamsters Local 639-Emp. Health Trust v. Cassidy Trucking, 646 F.2d 865 (4th Cir.1981); Ethridge v. Masonry Contractors, Inc., 536 F.Supp. 365 (N.D.Ga.1982). On the other hand, plaintiffs have adduced no evidence tending to establish that the contributions were improperly refunded, and no evidence that Bankers Trust otherwise diverted plan assets or engaged in transactions for the benefit of Revere or any other party in interest. Thus, there exists no genuine issue of material fact with regard to these claims, and defendant is entitled to judgment as a matter of law.

With regard to the Section 1104(a)(1) claims of breach of fiduciary duty by Bankers Trust, the first step is to identify the fiduciary duties owed by Bankers Trust. The obligations of a trustee of trust assets, such as Bankers Trust, are limited to those responsibilities imposed by ERISA and those imposed by the trust agreement or thé plan itself. Fine v. Semet, 699 F.2d 1091, 1093 (11th Cir.1983). In the instant case, the SUB Plan itself, which was part of a contract between Revere and the Union to which Bankers Trust was not signatory, imposed no direct obligations upon Bankers Trust as such. The plan did not list Bankers Trust as a “named fiduciary” as defined in 29 U.S.C. § 1102. However, the trust agreement between Revere and Bankers Trust did designate Bankers Trust as the trustee of plan assets and imposed upon Bankers Trust the duty to “(a) hold, invest and reinvest the Trust Fund, and (b) to pay monies on the instructions of the Company.” Trust Agreement, § 2. As to these obligations, plaintiffs have proffered no evidence contradicting the deposition testimony of Susan Proctor, which clearly establishes that Bankers Trust has fulfilled the obligations imposed by the terms of the trust agreement.

Thus, if any fiduciary duties have been breached by Revere, those duties must originate in ERISA itself. As a general matter, the duties imposed on a fiduciary by ERISA are limited to those related to the particular functions which that fiduciary is authorized to perform under the plan and applicable trust agreements or other controlling documents. Brandt v. Grounds, 687 F.2d 895, 3 E.B.C. 1780, 1782 (7th Cir.1982). Because the sole duties of Bankers Trust under the trust agreement relate to the custody and investment of Plan assets, its fiduciary responsibilities relate only to those functions. Section 1104(a)(1) is not to the contrary. It specifies that

Subject to sections 1103(c) and (d), 1342, and 1344 of this title, a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and
(A) for the exclusive purpose of:
(i) providing benefits to participants and their beneficiaries; and
(ii) defraying reasonable expenses of administering the plan;
(B) with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims;
(C) by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and
(D) in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this subchapter or subchapter III of this chapter.

29 U.S.C. § 1104(a)(1) (emphasis supplied). Thus, although Section 1104(a)(1) delineates the standards to which a fiduciary shall be held in discharging his duties under the plan and applicable agreements, as a general rule it does not enlarge the basic scope of those duties as defined in the controlling documents.

In light of these principles, plaintiffs’ reliance on Rosen v. Hotel & Restaurant Employees & Bartenders Union, 637 F.2d 592 (3rd Cir.1981), cert. denied 454 U.S. 898, 102 S.Ct. 398, 70 L.Ed.2d 213 (1981), is misplaced. In Rosen, the Third Circuit held that “the fiduciary obligations of a pension fund trustee require that he notify the pensioner of his employer’s failure to contribute to the fund as required by the pension agreement” within a reasonable time after the trustee acquires knowledge of the employer’s default, and to bring suit or picket the employer to coerce payment of the contributions, 637 F.2d at 599-600. Plaintiffs argue that in this case Bankers Trust, as trustee, had the obligation under ERISA and the trust agreement to take action against Revere when Revere failed to contribute to the fund as required by the plan, and to notify the plan participants of this failure. See plaintiffs’ March 11,1985, Brief in Opposition to Defendant’s Motion for Summary Judgment at 11-12.

This Court is not entirely convinced that the principle of Rosen applies fully to the facts of the case sub judice. Rosen involved a jointly administered multi-employer pension trust maintained pursuant to § 302(c)(5) of the Labor Management Relations Act, 29 U.S.C. § 186(c)(5). Rosen, 637 F.2d at 594 n. 1. In that situation, the trustee apparently participated in the administration of the plan itself and had duties far in excess of merely holding and investing fund assets. See Rosen v. Hotel & Restaurant Employees & Bartenders Union, 494 F.Supp. 521, 523-24 (trustees responsible for determining employee eligibility, etc.). See also 29 U.S.C. § 1002(16)A(ii) and B(iii). The duties of a plan administrator involve fiduciary responsibilities not shared by a mere trustee of assets. Thus, despite its casual use of the term “trustee”, the Rosen court arguably held only that a trustee with administrative duties related to a pension plan has an obligation to monitor the adequacy of an employer’s contributions to the plan and to take steps to protect the interests of particular beneficiaries when contributions appear inadequate. Indeed, the Rosen court said as much when it noted that the trustee’s “duty originates in the pension agreement” at issue in the particular case. 637 F.2d at 599.

In the case sub judice, the obligations of Bankers Trust are much narrower under the applicable agreements than were the apparent obligations of the trustee in Rosen. Those obligations of Bankers Trust were set forth in the trust agreement which provides in relevant part:

Section 2. It shall be the duty of the Trustee (a) to hold, to invest, and to reinvest the Trust Fund and (b) to pay moneys on the instructions of the Company, including payments to any checking account or accounts which may be established by any bank or banks for the purpose of drawing checks in payment of benefits under the Plan. Such instructions need not specify the application to be made of money so ordered, and the Trustee shall not be responsible in any way respecting such application or for the administration of the Plan. The Trustee shall be under no duty to enforce payment of any contribution and shall not be responsible for the adequacy of the Trust Fund to meet and discharge the liabilities of the plan.

Trust Agreement, § 2. This agreement clearly shows that Bankers Trust was responsible only for the custody and investment of the plan assets, and had no duty to supervise or participate in the administration of the plan, to determine eligible participants, to evaluate the adequacy of trust assets, or to calculate benefits due particular participants at any given time. Such a division of fiduciary functions is not inconsistent with ERISA. Indeed, ERISA implicitly (if not explicitly) recognizes the distinction. 29 U.S.C. § 1102(a) provides for a named fiduciary responsible for the “operation and administration of the plan.” 29 U.S.C. § 1103(a) provides for the separate and distinct function of managing and controlling plan assets. While the different functions may be served by the same body, they may also be served by different persons or entities whose responsibilities are appropriately limited. So long as no specific provision of ERISA mandates otherwise, this division of authority worked out by the parties determines the duties of the various fiduciaries. See Blackmar v. Lichtenstein, 603 F.2d 1306 (9th Cir.1983). Compare 29 U.S.C. § 1104(a)(1)(D). In light of the obvious differences in the functions and authority of the “trustees” in Rosen as compared with the trustee in the case sub judice, the duties enunciated by the Rosen court are not necessarily applicable here.

This does not necessarily mean that a custodial trustee such as Bankers Trust will never have a duty to notify the plan participants of the cessation of contributions by an employer. If an employer fails to make contributions to an ERISA plan trust fund as required by applicable documents or instruments governing the plan, this may (in certain circumstances) constitute a breach of fiduciary duty by the employer. See 29 U.S.C. §§ 1002(21), 1102(a)(1), and 1104(a)(1). If so, the custodial trustee will be liable under 29 U.S.C. § 1105 for the breach of fiduciary responsibility by his co-fiduciary if, among other things, “he has knowledge of a breach by such other fiduciary, unless he makes reasonable efforts under the circumstances to remedy the breach.” 29 U.S.C. § 1105(a)(3). Cf. Aronson v. Servus Rubber Division of Chromalloy, 566 F.Supp. 1545, 1556 (D.Mass.1983), judgment vacated 730 F.2d 12 (1st Cir.1984), cert. denied — U.S. -, 105 S.Ct. 431, 83 L.Ed.2d 357 (1984). In certain circumstances, the reasonable remedial efforts required of a custodial trustee in this situation might arguably consist of or include notification of plan participants. Plaintiffs rely on this theory as well as upon Rosen in seeking to hold Bankers Trust liable for Revere’s failure to contribute to the trust fund.

In the instant case, the Court need not decide the validity of Rosen nor its applicability to the present facts. Whether analyzed in terms of the duty enunciated in Rosen or in terms of Section 1105(a)(3), the plaintiffs have not demonstrated a factual basis for holding Bankers Trust liable for failing to notify them or take other remedial action in the circumstances of this case. The record reflects without contradiction that Bankers Trust did not become aware of Revere’s intention to declare bankruptcy and cease making contributions under the plan until at or about the time the bankruptcy petition was filed, and that plaintiffs, through their Union, received notice from Revere at or about the same time. See Deposition of Susan Proctor at 10, 51-56; Deposition of Carl Statum at 79-89. It is uncontroverted that up until that time, Revere paid all benefits due plaintiffs under the terms of the SUB Plan. Therefore, even assuming that the cessation of contributions by Revere constituted a breach of Revere’s fiduciary duties, a proposition which is far from clear in light of Revere’s bankruptcy and the other circumstances of this case, no causal connection has been demonstrated between any failure by Bankers Trust to notify the plaintiffs and any damage they have sustained as a result of Revere’s alleged breach. Nor has it been demonstrated that Bankers Trust could have taken any effective action to remedy the breach or to protect the plaintiffs, given the fact that Bankers Trust did not learn of the cessation of contributions in- time to take action before Revere filed bankruptcy.

The plaintiffs have not disputed the fact that benefit payments were properly suspended once the petition was filed, pursuant to the provisions of the Bankruptcy Code. Clearly, notice to the plaintiffs thereafter would have been futile except insofar as it enabled plaintiffs to prosecute a claim in the bankruptcy court. Since the plaintiffs received sufficient notice through their union to ensure that their claims were in fact presented to the bankruptcy court, there is no showing on the record that any breach of a duty to notify on the part of Bankers Trust could possibly have harmed the plaintiffs. In the absence of a showing that the breach of duty by Bankers Trust— if indeed there was a breach of duty at all — proximately harmed the plaintiffs in some way, the plaintiffs are not entitled to recover. Brandt v. Grounds, 687 F.2d 895, 898 (7th Cir.1982) (causal connection required between fiduciary’s breach of duty and plaintiff’s loss). Accord, 29 U.S.C. § 1109.

In short, plaintiffs have adduced no evidence of any breaches of fiduciary duty committed by Bankers Trust; no evidence that Bankers Trust acted improperly in refunding contributions made by Revere; and no evidence that Bankers Trust knew of any breach of fiduciary duty by Revere prior to the cessation of contributions and Revere’s simultaneous declaration of bankruptcy. In view of the record, it appears that plaintiffs, who are prevented from recovering the benefits due them from Revere because of the bankruptcy proceedings, are in effect simply seeking to recover from Bankers Trust as a surety for the contractual indebtedness of Revere. Neither ERISA nor the trust agreement provides a basis for such liability.

Having considered the motion for summary judgment in light of the record in this case and the submissions of the parties, the Court concludes that there exists no genuine issue of material fact and that defendant is entitled to judgment as a matter of law. An order will be entered dismissing this case in its entirety.

      . The decision the Court reaches will not materially affect the resolution of the claims made against Revere on behalf of plaintiffs in the bankruptcy proceedings.

      . The state law claims have been largely ignored by both parties in their briefs on the pending summary judgment motion. However, these claims are fairly addressed by the motion itself, see Defendant’s Motion for Summary Judgment, ¶¶ 3 and 4, and they are ripe for adjudication.

      . In any event, the uncontroverted deposition testimony of Susan Proctor reflects that Bankers Trust has neither converted trust monies nor improperly withheld payment of benefits. Thus, even assuming that claims for conversion and for money had and received were not preempted, defendant would still be entitled to summary judgment. There simply exists no genuine issue of material fact in regard to these claims, as no evidence sufficient to substantiate these claims is apparent from the record.

      . The plaintiffs have never contended that Bankers Trust was a "named fiduciary” under the terms of the plan, although they have demonstrated that Bankers Trust, in its capacity as trustee, did meet the statutory definition of an ordinary "fiduciary". Compare 29 U.S.C. § 1102 with 29 U.S.C. §§ 1002(21), 1103.

      . See abo 29 C.F.R. § 2509.75-8 (FR-16), which provides, inter alia:

      Question: Is a fiduciary who is not a named fiduciary with respect to an employee benefit plan personally liable for all phases of the management and administration of the plan? Answer: A fiduciary with respect to a plan who is not a named fiduciary is a fiduciary only to the extent that he or she performs one or more of the functions described in section 3(21)(A) of the Act. The personal liability of a fiduciary who is not a named fiduciary is generally limited to the fiduciary functions which he or she performs with respect to a plan.

      . That the Rosen holding was premised upon the administrative functions of the trustee in question is also supported by the Rosen court’s reliance on Aitken v. I.P. & GCU-Employer Retirement Fund, 604 F.2d 1261 (9th Cir.1979), and Phillips v. Kennedy, 542 F.2d 52, 55 n. 8 (8th Cir.1976), both of which were cases involving union trustees with substantial administrative duties under the terms of particular labor union pension plans.

      . Indeed, in light of the limited functions of Bankers Trust under the trust agreement, it is doubtful that Bankers Trust had available to it on a regular basis sufficient information to enable it to police Revere's compliance with the terms of the plan or notify individual participants of the cessation of contributions. Certainly the present record does not demonstrate that such information was available to Bankers Trust. In Rosen, by contrast, an implicit factor in the court’s analysis was that the administrative "trustee" had available to it in the regular course of its administrative duties sufficient information to enable the "trustee” to effectively monitor the adequacy of an employer’s contributions to the plan to meet the plan's obligations to each particular employee, and to notify individual participants if contributions in their behalf were inadequate. See Rosen, 637 F.2d at 599, n. 10. This lends further support to the Court's conclusion that the principle of Rosen may not apply to the facts of this case. In any event, it should be noted that at least one appellate court has refused to adopt the rule enunciated in Rosen, even with regard to "trustees” having substantial responsibility for administration of a plan. See Laborers Health & Welfare Trust Fund v. Kaufman & Broad, 707 F.2d 412 (9th Cir.1983).

      . The Rosen court apparently relied upon principles gleaned from 29 U.S.C. § 1104 and the common law of trusts — rather than 29 U.S.C. § 1105(a)(3) — in defining the duty of the particular "trustees” to notify plan participants of the employer’s failure to contribute to the plan. See Rosen, 637 F.2d at 599-600, n. 11. The practical difference between the two doctrines is that under § 1105(a)(3), the trustee's duty to take remedial action arises only when the trustee discovers that a co-fiduciary has taken action which amounts to a breach of fiduciary duty, whereas under Rosen, certain types of trustees would apparently have a duty to notify participants of any action by an employer jeopardizing a participant’s eligibility for benefits, regardless of whether the action of the employer amounted to a breach of fiduciary duty.

      . Clearly Bankers Trust cannot be held liable for failing to take action to remedy any breach of fiduciary duty by Revere prior to acquiring knowledge of such a breach. Cf. Davidson v. Cook, 567 F.Supp. 225, 237 (E.D.Va.1983), affirmed 734 F.2d 10 (4th Cir.1984), cert. denied - U.S. -, 105 S.Ct. 275, 83 L.Ed.2d 211 (1984). Compare Rosen, 637 F.2d at 600 (“trustee" required to notify beneficiaries of actions of employer jeopardizing their eligibility "within a reasonable time after [trustee] acquires knowledge” of such facts).


source: Caselaw Access Project

author: WILLIAM C. LEE, District Judge.

license: Public Domain

text:
    Arnold W. HILGEFORD and Martha A. Hilgeford, Plaintiffs, v. The PEOPLES BANK, PORTLAND, INDIANA, Defendant.
    Civ. No. F 85-154.
    United States District Court, N.D. Indiana, Fort Wayne Division.
    April 19, 1985.

      Arnold W. Hilgeford and Martha A. Hilgeford, pro se.
    Robert E. Grant, Shoaff, Parker & Kee-gan, Fort Wayne, Ind., for defendant.
   ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on its sua sponte analysis of the complaint filed in this cause. For the following reasons, this cause will be dismissed on the court’s own motion.

Plaintiffs are proceeding pro se. Pro se pleadings are to be liberally construed. Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972). The district court’s role is to ensure that the claims of pro se litigants are given “fair and meaningful consideration.” Matzker v. Herr, 748 F.2d 1142, 1146 (7th Cir.1984); Caruth v. Pinkney, 683 F.2d 1044, 1050 (7th Cir.1982). This court also recognizes that federal courts have historically exercised great tolerance to ensure that an impartial forum remains available to plaintiffs invoking the jurisdiction of the court without the guidance of trained counsel. Pro se motions and complaints such as the plaintiffs’ are held to less stringent pleading requirements; rigor in the examination of such motions, complaints and pleadings is inappropriate.

This is the second action filed by plaintiffs against this defendant within the last two weeks. The first action, Hilgeford v. The Peoples Bank, No. F 85-142, was dismissed by this court for lack of jurisdiction in an order dated April 11, 1985. This court ruled in that order that the basis of jurisdiction preffered in the complaint failed to allege any federal question, and that diversity jurisdiction failed because both the plaintiffs and the defendant are citizens of Indiana. With knowledge of the court’s April 11, 1985 ruling, plaintiffs filed this cause, which is nearly identical to the first cause, except that the plaintiffs have made reference to federal constitutional and statutory provisions in an apparent attempt to bolster jurisdiction.

The essence of both No. F 85-142 and this cause is that plaintiffs seek to quiet title to certain real property located in Portland, Indiana. The plaintiffs claim superior title to the property by virtue of a “Land Patent” which they drafted and signed themselves and recorded with the Recorder of Deeds in Jay County, Indiana. The defendant bank had apparently made a loan to the plaintiffs, and secured the loan via a mortgage on the property. The bank filed a foreclosure action, and on April 10, 1985, had the plaintiffs evicted from the property. Plaintiffs seek to have the title to the property and the interests of the parties determined in this court, and the defendant bank enjoined from asserting any rights in the land.

The alleged bases for jurisdiction are article IV, section 3, clause 2 of the United States Constitution, and an Act of Congress of- April 24, 1820, 3 Stat. 566. Article IV, § 3, cl. 2 gives Congress the power to “dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States ...,” and the Act of Congress of April 24, 1820 was the statute enacted by which the government apparatus for disposing of public lands via issuance of -land patents was created. However, neither of these provisions are implicated here. These provisions, and the current statutory machinery for land patents set out at 43 U.S.C. § 1, et seq., are for land patents to public lands of the United States. These provisions allow the United States to grant title to public land to private individuals, thereby creating private title in the patent holder, and extinguishing title in the United States. The “patent” involved here is not a grant by the United States; it is a grant by the plaintiffs. The “patent” here is not a grant to some other holder so as to pass title on to another party; it is a self-serving document whereby the plaintiffs grant the patent to themselves. This “patent” does not involve or concern “public land;” it relates to plaintiffs’ private property. The court cannot conceive how these federal provisions are implicated here, and thus federal question jurisdiction is absent.

Of course, the purported “land patent” in this case fails for reasons independent of jurisdiction. As was noted before, the “land patent” attached to plaintiffs’ various filings is a grant of a land patent from the plaintiffs to the plaintiffs. It is, quite simply, an attempt to improve title by saying it is better. The court cannot conceive of a potentially more disruptive force in the world of property law than the ability of a person to get “superior” title to land by simply filling out a document granting himself a “land patent” and then filing it with the recorder of deeds. Such self-serving, gratuitous activity does not, cannot and will not be sufficient by itself to create good title.

The blatant insufficiency of the “patent” is evident when it is compared to the copy of a land patent attached to the plaintiffs’ “Motion Barring Action of Ejectment.” That copy, which is apparently of the original land patent for part of the property which is the subject matter of this cause, bears the signature of the President of the United States by his appointed Secretary of the Interior. It is clearly a grant from the United States to a private citizen (one Reuben Montgomery). Plaintiffs’ “land patent” is obviously insufficient when compared to this valid patent.

Finally, the court acknowledges the plaintiffs’ fifty-one page “Memorandum of Law,” which sets out a lengthy history of land ownership principles in England and the United States. This Memorandum is irrelevant to the issues raised by this suit. The plaintiffs apparently granted the defendant bank a right in the property by mortgaging the property, and gave the bank the contractual right to foreclose on the property in case of default. The filing of the purported “land patent,” and then the filing of these two lawsuits to quiet title, after the creation of the bank’s mortgage interests, smacks of bad faith attempts to interfere with the defendant’s contractual and property rights.

Because this cause constitutes the third quiet title suit filed in this court within the past month on the basis of a most identical self-serving land patents (two of which were filed by these same plaintiffs), the court fears that other such suits will be filed unless a signal is sent that this court will not tolerate such obviously frivolous suits based upon documents which on their very face are legal nullities.

Rule 11 of the Federal Rules of Civil Procedure governs the signing of pleadings and motions, and requires that each pleading or motion be signed by an attorney or the party (if the party is proceeding pro se). The rule then provides:

The signature of an attorney or party constitutes a certificate by him that he had read the pleading, motion, or other paper; that to the best of his knowledge, information and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harrass or to cause unnecessary delay or needless increase in the cost of litigation.

If a pleading violates this rule, the court “shall impose” an “appropriate sanction,” which may include the amount of reasonable expenses and attorney’s fees incurred by the other party because of the filing of the pleading or motion.

The notes of the Advisory Committee on the Federal Rules make it clear that Rule ll’s provisions are designed to “discourage dilatory or abusive tactics and [to] help streamline the litigation process by lessening frivolous claims or defenses.” The rule applies to anyone who signs a pleading, motion, or other paper, and the same standards apply to pro se litigants, although the concerns of Haines v. Kerner can be taken into account.

The core of Rule 11 is that the signature on the pleading certifies that “to the best of his knowledge, information and belief formed after reasonable inquiry it [the pleading, motion, or paper] is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law ...” (emphasis added). What is important to note is that this language requires more than just a belief that the law is or should be a certain way; as the Advisory Committee states, “what constitutes a reasonable inquiry may depend on ... whether the pleading, motion, or other paper was based on a plausible view of the law,” and is thus a “more stringent” standard than good faith.

This cause falls squarely within the parameters of the type of frivolous claims that Rule 11 allows courts to issue sanctions for. It is based upon a purported land patent which indicates on its face that it is a self-serving document, drafted by the plaintiffs to grant themselves title to land, and which does not invoke any federal law or constitutional provision precisely because it is a blatant. attempt by private landowners to improve title by personal fiat. Such lawsuits constitute a gross waste of precious judicial resources, for this court is forced to deal with patently frivolous lawsuits instead of addressing those suits on its docket which have merit and deserve close judicial scrutiny.

Rule 11 gives this court power to issue fines as sanctions for filing frivolous lawsuits, and this court has used that power before without hesitation. See Snyder v. IRS, 596 F.Supp. 240 (N.D.Ind.1984); Young v. IRS, 596 F.Supp. 141 (N.D.Ind.1984). This case’s frivolity demands the imposition of a fine as a Rule 11 sanction. The court finds that a $250.00 fine is an appropriate sanction here. Further this order stands as public notice to all future litigants who may seek to file lawsuits based on the same type of self-serving, invalid “land patent:” this court will issue Rule 11 sanctions for such lawsuits. This court stands ready to adjudicate any federal question arising out of a valid federal land patent which has been signed by the Secretary of the Interior (43 U.S.C. § 15) and involves a grant of title to public lands. However, this court will not countenance suits based upon self-serving documents and pet theories about land ownership such as this one.

For the reasons stated above, this action is hereby DISMISSED for lack of jurisdiction pursuant to Federal Rules Civil Procedure 12(h)(3). Plaintiffs are hereby ORDERED to pay $250.00 to the Clerk of this court as a sanction for filing this lawsuit.


author: VUKASIN, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. HEALY TIBBITTS CONSTRUCTION COMPANY, Defendant.
    No. C-83-3072.
    United States District Court, N.D. California.
    April 19, 1985.
    Norman J. Ronneberg, Jr., Attorney, Torts Branch, Civil Division, U.S. Dept, of Justice, San Francisco, Cal., for plaintiff.
    John E. Droeger, Henry D. Dicum, of Hall, Henry, Oliver & McReavy, San Francisco, Cal., for defendant.
   AMENDED ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

VUKASIN, District Judge.

Introduction

The question before the Court on defendant’s motion for summary judgment is whether actions brought by the United States pursuant to the Federal Water Pollution Control Act [“FWPCA”], 33 U.S.C. § 1321, are subject to the statute of limitations contained in 28 U.S.C. § 2415 and, if so, which subdivision of that statute should properly apply. Defendant urges that the remedy provided by the FWPCA is grounded on a tort theory of liability, rendering actions brought thereunder subject to the three-year time-bar of 28 U.S.C. § 2415(b). The United States contends that FWPCA suits are subject to no limitations period whatsoever; in the alternative, the government maintains that if a statute of limitations must be imposed the restitutionary nature of the remedy furnished by the FWPCA brings such lawsuits within the ambit of the six-year time-bar for quasi-contractual actions provided by 28 U.S.C. § 2415(a). For the reasons herein stated, the Court adopts the latter view.

FACTS

The factual background of this case is uncomplicated. On September 6, 1978, a barge owned by defendant ran aground during rough weather near Dana Point, California. The vessel’s fuel tanks ruptured, releasing between two hundred fifty and five hundred gallons of diesel fuel into the marine environment. Pursuant to 33 U.S.C. § 1321(f)(1) the Coast Guard requested that Healy Tibbitts remove the spill. Defendant refused, necessitating that the Coast Guard retain a private contractor to clean up the oil. 33 U.S.C. § 1321(c)(1). The actual cost to the government of the cleanup operation was $18,-236.61, a sum which, despite repeated efforts, the United States has been unsuccessful in recovering from defendant.

On June 14, 1983 — more than four and one-half years after the initial oil spill — the United States instituted this action seeking to recover the costs expended by it in the cleanup. Defendant now moves for summary judgment, or for dismissal of the complaint, on the theory that the action is time-barred by the operation of the three-year statute of limitations found in 28 U.S.C. § 2415(b).

Analysis

The Federal Water Pollution Control act is comprehensive remedial legislation designed to assist the United States in the prevention and removal of oil pollution. Once an oil discharge is discovered, the statute empowers the government to remove or arrange for the removal of the spill, to recover the costs incurred in cleanup operations, and to assess civil penalties against polluters. 33 U.S.C. § 1321(b)(6), (c)(1), (f)(1), (2); see United States v. Poughkeepsie Housing Authority, et al., C.A. No. 80-1998, slip op. at 4 (S.D.N.Y. Oct. 16, 1981). However, where the dis-charger properly acts to remove the pollution under § 1321(c)(1) the government’s role is chiefly supervisory. Poughkeepsie Housing Authority, supra, slip op. at 9 n. 10; see also 40 C.F.R. § 1510.21(a) (promulgated under the mandate of the FWPCA). The FWPCA does not itself contain a specific statute of limitations. United States v. Barge Shamrock, 635 F.2d 1108, 1110 (4th Cir.1980); 33 U.S.C. § 1321.

The issue of the applicability of § 2415 to FWPCA actions has been litigated elsewhere, with inconsistent results. Compare United States v. T/B STCO 225, et al., C.A. No. B-82-946 (E.D.Tex. Jan. 17, 1984) (six year statute of § 2415(a) applies), United States v. C & R Trucking Co., 537 F.Supp. 1080 (N.D.W.Va.1982) (same), Poughkeepsie Housing Authority, supra (same), with United States v. T/B 7026, et al., C.A. No. 82-0192 (W.D.La. Sept. 23, 1983) (applying three year time-bar of § 2415(b)). United States v. P/B STCO 213, et al., C.A. No. G-82-464 (S.D.Tex. Aug. 25, 1983) (same). A decision on this issue properly rests on a consideration of the nature of the remedy afforded the government by 33 U.S.C. § 1321.

In P/B STCO 213, supra, the Court stated that actions brought pursuant to the FWPCA are not

founded upon a contract whether express or implied in fact or law_ The cleanup actions of the government are. done for the benefit of the public, not for the polluter. Therefore, this Court does not construe this action as one for restitution. It does not appear to be an action in quasi-contract for unjust enrichment.

Id., slip op. at 2-3. The premise underlying this analysis is that actions done for public benefit cannot equally result in enrichment to the recalcitrant polluter. With that reasoning this Court cannot agree. Cf. T/B STCO 225, supra, slip op. at 3.

A claim for restitution in quasi-contract is based on the well-established principle that one may not be unjustly enriched by the acts of others. It differs from a damages action in that the damages recovery in tort is intended to restore the plaintiff — “paying” him, at least theoretically, for his injury or loss. The restitution action, however, is not aimed at plaintiffs restoration, but at forcing the defendant to disgorge benefits which it would be unjust for him to keep. See Dobbs, Remedies, at 224 (West 1973). An implied-in-law or quasi-contract is a species of restitution which arises where one party has been unjustly enriched at the expense of another. See, e.g., City of Chattanooga v. Louisville & Nashville R.R. Co., 298 F.Supp. 1 (E.D.Tenn.1969), Chase Manhatten Bank v. Banque Intra, S.A., 274 F.Supp. 496 (S.D.N.Y.1967). A quasi-contractual relation is implied regardless of the parties’ intent: it arises wherever the defendant, in equity and good conscience, should not be permitted to keep gains he has realized. See Dobbs, supra, at 235; see generally 66 Am.Jur.2d, §§ 2, 3.

As the Court pointed out in T/B STCO 225, supra, slip op. at 3-4, Section 115 of the Restatement of Restitution is instructive in the determination of the issue presented to the Court. That Section states in full:

§ 115. Performance of Another’s Duty to the Public.
A person who has performed the duty of another by supplying things or services, although acting without the other’s knowledge or consent, is entitled to restitution from the other if
(a) he acted unofficiously and with intent to charge therefore, and
(b) the things or services supplied were immediately necessary to satisfy the requirements of public decency, health, or safety.

Id. The statutory scheme here clearly envisions that federal intervention in oil spill cleanups is done unofficiously and with intent to charge. Furthermore, the Federal Water Pollution Control Act in its entirety reflects a Congressional finding that the immediate cleanup of oil spills is necessitated by considerations of public health and safety. Thus, the only arguable basis upon which the analogy of § 1321(f)(1) to quasi-contract may be found deficient is the question of whether the owner of the discharging vessel has a duty to undertake removal.

Other Courts have ruled affirmatively on this issue. In Barge Shamrock, supra, an action brought under the FWPCA, the Court did not find it necessary to rule on the statute of limitations question. However, the duty issue was addressed; in this connection, the Court specifically stated that “[t]he primary duty for cleaning up the oil spill was, of course, upon the [owner and operator].” Id., 635 F.2d at 1110; accord, Poughkeepsie Housing Authority, supra, slip op. at 9 n. 10. Actions brought pursuant to § 1321(f)(1) thus appear to fall squarely within the scope of § 115 of the Restatement, and the Court is of the opinion that this construction is proper for statute of limitations purposes. The portrait of a polluter indifferently standing idle while its oil spill is neutralized at public expense — and thereafter spiritedly disavowing any responsibility for recompensing the United States — offers as compelling an example of unjust enrichment as has lately been brought before the Court.

Finally, while the public undeniably benefits from the remedial provisions of the Federal Water Pollution Control Act— in health, aesthetics, and in quality of life— government suits brought thereunder do not have as their sole object such impalpable considerations of the common welfare. These actions further effect a needed restoration of the status quo ante. Where a polluter itself acts promptly to remove an oil spill, the government’s role is supervisory; disbursement of public funds is accordingly minimal. 33 U.S.C. § 1321(c)(1); 40 C.F.R. § 1510.21(a). Where, however, the polluter refuses to perform a cleanup the United States must, at public expense, employ a private contractor to do the necessary work. In endeavoring, by legal action, to recover such expenditures, the government is doing no more than seeking restitution of tax dollars expended in performance of a task the primary responsibility for which is properly the polluter’s. Cost recovery suits under the statute thus help to insure that the public fisc is not depleted by the unjust enrichment of those responsible for oil pollution. For this reason too, actions brought by the United States under the FWPCA must clearly be characterized as quasi-contractual in nature. See Poughkeepsie Housing Authority, supra, slip op. at 9.

Conclusion

The Court is of the opinion that actions brought pursuant to 33 U.S.C. § 1321 to recover funds disbursed by the United States to clean up oil spills are subject to the six year statute limitations contained in 28 U.S.C. § 2415(a). In the case at bar, therefore, the Court finds that the government’s cause of action against defendant Healy Tibbitts is not barred by the statute, and defendant’s motion for summary judgment on the statute of limitations question must accordingly be denied. Because of this ruling, it is unnecessary to consider the government’s alternate contention, i.e., that suits under the Federal Water Pollution Control Act are exempt from § 2415 altogether.

SO ORDERED.

      . The Coast Guard also assessed a $3000.00 civil penalty against Healy Tibbitts, pursuant to the authority of 33 U.S.C. § 1321(b)(3). In United States v. Healy Tibbitts, 713 F.2d 1469 (9th Cir.1983), the Court of Appeals for this Circuit acknowledged the validity of the civil penalty, upholding the findings of a Hearing Officer that defendant’s barge had released a harmful quantity of oil into the navigable waters of the United States.

      . While the Court is apprised of authority to the contrary — see T/B 7026, supra; P/B STCO 213, supra —this does not recommend itself as the better-reasoned view.

      . In making this determination, however, the Court wishes to express its view that imposition of a six year statute of limitations may serve to place potential defendants at a considerable disadvantage vis-a-vis the United States. Three years should be an ample period for the institution of § 1321 actions, and the Court both questions the government’s tardiness in filing the instant suit, and exhorts the authorities concerned to be less dilatory in the maintenance of future actions. Based on the foregoing, though, the Court nonetheless concludes that FWPCA actions are subject to the six-year time-bar of 28 U.S.C. § 2415(a), an interpretation which comports with the Ninth Circuit’s admonition that the Federal Water Pollution Control Act "should be read charitably in light of the purpose to be served [citations] ... and is entitled to a liberal construction to accomplish [its] purposes....” United States v. City of Redwood City, 640 F.2d 963, 968 (9th Cir.1981).


author: LUMBARD, Circuit Judge:

text:
    WESTERN PUBLISHING COMPANY, INC., Plaintiff, v. FEDERATED GRAPHICS COMPANIES, INC. and Levenstein Gaines, Inc., Defendants.
    No. 82 CIV. 4177 (JEL).
    United States District Court, S.D. New York.
    April 19, 1985.

      Fine Tofel Saxl Berelson & Barandes by Joel Reiss, Laura H. Rubin, New York City, for plaintiff.
    M.S. & I.S. Isaacs by Michael Schlanger, New York City, for defendants.
   LUMBARD, Circuit Judge:

Western Publishing Company, Inc. sues Federated Graphics Companies, Inc. and Levenstein Gaines, Inc. for $73,444.12, plus interest — damages for the printing and production, pursuant to agreement, of approximately 780,000 catalogue covers that were subsequently rejected by Federated. Federated counterclaims for $8,515.93, plus interest — damages resulting from Western’s failure to produce covers that “matched” a Cromalin (a color proof used in printing) supplied by Federated. As Western is incorporated in Delaware, with its principal place of business in Racine, Wisconsin, and the defendants are residents of New York, jurisdiction is conferred by 28 U.S.C. § 1332 (1982).

The court finds that the “match” between the Federated-supplied Cromalin and the Western covers was well within the bounds of commercial acceptability and that the contract between the parties required nothing more. If a critical match between the Cromalin and the press proof was required, Federated Graphics was obligated either to have a representative present at the press run to approve the press sheets or otherwise to provide for press sheet approval prior to completion of the press run. Having failed to attend the production so that it could make its own subjective judgment as to the acceptability of a color match, Federated was in breach of contract when it rejected Western’s commercially satisfactory product. The court directs that judgment be entered in favor of Western and against Federated Graphics and that Federated’s counterclaim be dismissed.

Finding no basis upon which to hold Le-venstein Gaines liable for Federated’s breach of contract, Western’s claim against defendant Levenstein Gaines is dismissed.

The court finds the following:

In June 1981, Meredith Burda Corporation requested Federated to arrange for the production of approximately 750,000 covers for the Pennsylvania House furniture catalogue. Federated Graphics is a printing broker that arranges for the production of printed material for its clients by placing orders with outside companies and then supervising the overall production process. The Pennsylvania House covers were needed for March 1982, in time for issuance of that year’s catalogue.

In late 1981, Richard Scharer, an officer, director, and shareholder of Federated, asked Eric Senkowsky, a salesperson for Western, to submit a proposal for the printing of the catalogue covers. Senkowsky had visited Federated’s offices in New York in the fall of 1981 to solicit business, and had met with Herb Scharer, Richard Scharer’s father and an employee of Federated. At the end of December, and after Richard Scharer’s communication, Herb Scharer provided Senkowsky with specifications for the four-color printing job.

About January 8, 1982, Western submitted two proposals to Federated on the production and cost of the catalogue covers. The proposals were addressed to Richard Scharer, as Herb Scharer was vacationing in Africa. According to Senkow-sky, he received a telephone call from Kenneth Lima, Herb Scharer’s son-in-law, a few days later. Lima advised Senkowsky that Western had been selected to do the printing. On January 11, 1982, Senkowsky met with Lima, in the Federated offices, to discuss a reduction in the price of imprinting the names of individual stores on the back covers of the catalogues. In Senkow-sky’s presence, Lima signed one of the two proposals, after it was amended to reflect changes in the imprinting cost.

Senkowsky then passed the specifications along to Western’s production plant in Poughkeepsie, New York. Between January 16, the date of Herb Scharer’s return from Africa, and February 9, Senkowsky and Herb Scharer frequently communicated about the Pennsylvania House project. In a letter to Herb Scharer, dated January 20, 1982, Senkowsky confirmed specification and pricing changes:

This is to confirm the final pricing on your Pennsylvania House cover job placed with Western Publishing’s Pough-keepsie plant.
Relating to our January 8th contract: The base price will change to $60,083.00 and the press plates will cost $200.00 each for one color imprints on cover # 4. You will provide us the imprints to size on film. Western will run the four color on one press and run the one color im-. prints in a separate pass. All other specs remain the same. Final film requirements will be arranged between the plant and you or your staff.
Thanks again for the order.

Sometime between January 20 and February 9, Herb Scharer advised Senkowsky that the color film and Cromalin that Western was to use in its printing would be supplied by Spectragraphics, Inc., and delivered to the Poughkeepsie plant around February 12. Scharer also indicated that 4,950 covers would be needed on March 4, 1982, with the balance due on March 12. In a letter dated February 9, Herb Scharer provided Senkowsky with a purchase order that recapitulated the terms of the agreement between Western and Federated, with minor revisions. In the final paragraph of this letter, Scharer stated:

If possible, we will arrange for one of our people to be available for a press OK, otherwise you are to match the cro-malins except that the blue used on the cromalins is not PMS 540.

The press date for the Pennsylvania House job was originally February 17, 1982. Western later changed this date to February 18, and then February 19, due to minor delays. When Senkowsky informed Scharer that the final press date had been set for February 19, a Friday, Scharer told Senkowsky that he could not be present on that date, but that . Senkowsky could “okay” the press sheets for him.

On February 19, Western began its presswork on the Pennsylvania House covers. At around 3:00 that afternoon, when Senkowsky examined the first sheets off the press, he was dissatisfied with the color match of the inside front cover, particularly with the red of a chair on the press sheet, which was less brilliant than the red in the Cromalin. After conferring with production personnel, Senkowsky telephoned Herb Scharer, then in New York, at about 5:00 p.m. He told Scharer that Western was having difficulty matching the color in the red chair. Scharer told him simply to match the Cromalin and Senkowsky promised that Western would do the best that it could. Later, about 8:00 p.m., Senkowsky signed a press okay authorizing the press run on the inside front cover. By his own testimony:

About eight o’clock that night [the press foreman] came up with a match which I felt was a commercially acceptable match to the Cromalin ...
I signed a press sheet, which was my approval for the job.

On February 20, Senkowsky, back in New York, mailed samples of the inside front cover, by priority mail, to Lynchburg, Virginia, where Herb Scharer was scheduled to arrive on February 22, the following Monday, to work on the inside of the catalogue. On February 22, Senkowsky sent proofs from Western’s New York office, via a messenger service, to Federated’s offices in New York. According to Senkowsky, he received a telephone call from Ken Lima on February 22 or 23. Confirming receipt of the samples, Lima spoke with Senkowsky concerning the copy on the inside cover. Senkowsky then returned to the Poughkeepsie plant, where he approved a press sheet for the front cover.

While in Poughkeepsie, Senkowsky re-' ceived a telephone call from Herb Scharer, in Lynchburg. Scharer told Senkowsky that Federated’s client would need 10,000 advance covers, rather than the 4,950 originally agreed upon. Senkowsky agreed to send more copies, but asked for an extension beyond the initial due date of March 4. Nothing was said about the previously forwarded samples. On February 23, Sen-kowsky sent yet another set of samples, this time of the front and inside front covers, to Lynchburg. These press sheets were followed by a final set of proofs, sent by Senkowsky on or about February 25 via an overnight pouch service from New York. The samples were sent to Lynch-burg, for Herb Scharer’s attention. Airplane tickets showed that Scharer was in Lynchburg from February 22 through February 26, in New York from February 26 to March 2, and then back in Lynchburg until March 5. Samples were thus available for his examination for essentially the entire period from February 22 until March 5.

On March 5, two weeks after Senkow-sky’s okay of the first press run, Scharer telephoned Senkowsky and told him that the catalogue covers were unacceptable. By this time, Western had essentially completed the printing and imprinting of 780,-000 covers. Scharer agreed to accept the 10,000 advance copies for his client’s immediate use and then to meet at the Pough-keepsie plant to discuss the printing.

On March 8, Scharer and Senkowsky drove from New York to Poughkeepsie, where they met with Douglas Gould, Western’s regional sales manager, John Stewart, manager of the Poughkeepsie plant, John Klumb, superintendent of the lithograph department, and other Western employees. Scharer examined a representative sampling of the production run in a light room. He complained about the red in a cherry desk on the front cover and asserted that the inside front cover was muddied. Western offered to reprint some of the covers. Scharer, however, asserted that the entire job was unacceptable and asked Western to redo the run, at Western’s expense, less the cost of any increase in the price of the paper. Gould told Scharer that Gould would have to consult with Western’s management and the meeting adjourned.

By letter dated March 9, Gould informed Scharer that Western would not reprint the entire job. The 10,000 advance copies had already been shipped to Lynchburg and accepted by Federated. In fact, some of the covers were used by the customer. Federated, however, refused to accept delivery of the remaining 770,000, though it conceded that it was liable for the 10,000 copies that had been shipped in advance. On March 10, Federated contracted with R.R. Donnelly & Sons Company, Inc. to print the covers.

According to Federated, it was not obligated to accept any of the catalogue covers produced by Western, because the covers did not “match” Spectra-graphic’s Cromalin. The defendant relies on the language in its purchase order of February 2, 1982:

If possible, we will arrange for one our people to be available for a press OK, otherwise you are to match the cromalins

Federated contends that this provision, an amendment of the January 11 contract, superseded the disclaimer in the Western proposal signed by Lima:

Color Proofing: Because of the difference in equipment and conditions between the color proofing and the press room operations, a reasonable variation in color between color proofs and completed job shall constitute an acceptable delivery.

For the reasons stated below, however, the court finds that the provision in Federated’s purchase order, even if construed as an additional term to the original agreement, did not modify the contract so as to make Federated’s payment conditional upon anything other than a commercially acceptable match between the colors in the Cromalin and the colors in the completed covers.

In the “Cromalin Communicator,” a trade publication, Dupont, the manufacturer of Cromalins, has stated that a printer will rarely achieve an exact match between a Cromalin and the standard press sheet in all colors and tone values. In part, this is because of differences in the ink absorbency of papers used in the production process, the expense of stopping and starting presses to vary inks in order to brighten or darken particular tones, and even the amount of moisture in the air on the day of printing. More basically, the “art” of matching color — and particularly the matching of a film proof to a press sheet— is inexact. Within the bounds of commercial acceptability, the “match” of a Croma-lin to a press sheet lies in the eyes of the beholder.

According to Dr. Albert Materazzi, plaintiff’s expert, the instruction to match the Cromalin thus does not usually require an eye perfect — and often unattainable— match, but demands, instead, that a printer match colors within the constraints of time, money, and materials. A commercially acceptable match is not exact; it is simply a reasonable variation from a color proof.

Dr. Materazzi testified that when it is imperative that a match between a Croma-lin and a completed product be as exact as possible, approval of the press sheet is generally given by the customer, though sometimes by a delegated surrogate, often the salesperson of the printing company. A critical color match also requires greater attention than is usual to the materials used in the production process.

Federated did not arrange for a representative to be present at the press okay. Far from alerting Senkowsky that a critical match was imperative, Scharer, in their February 19 conversation, agreed that Sen-kowsky should do the best that he could in matching the color in the red chair. Scharer’s failure to communicate with Western concerning the press proofs prior to March 5, despite the availability of proofs and Senkowsky’s February 19 statement that Western was having some initial difficulty matching color, attests to the fact that Scharer was not concerned with achieving a critical match. Indeed, Dr. Ma-terazzi testified that Federated’s supervision of the Western job could not have been directed at producing such a match. An exact match was impossible, according to Materazzi, because of the very film and paper provided or specified for use by Federated.

Crediting Dr. Materazzi’s testimony, and that of Eric Senkowsky, the court concludes that Federated’s February 2 instruction to “match the cromalins” required only that Western provide a commercially acceptable product, and not an exact or eye perfect match with Spectragraphics’s proof. Further, if Federated had wanted a more exact match — with the subjective judgment that such a match requires — a Federated representative should have been present at the press okay, as Richard Scharer was later, during production of the Donnelley covers. Alternatively, Federated should have clearly conditioned its contractual obligations upon press sheet approval, and arranged for such approval to be given. Cf. Wagner v. Derecktor, 306 N.Y. 386, 391, 118 N.E.2d 570, 572 (1954) (asserting “well-settled rule” that a party cannot insist on a condition when that party has caused its nonperformance). Instead, it disregarded the numerous proof sheets sent by Western while the presses were running. Cf. Columbia Broadcasting System, Inc. v. Stokley-Van Camp, Inc., 522 F.2d 369, 378 (2d Cir.1975) (discussing equitable duty to speak).

The court also finds that the product supplied by Western was commercially acceptable. Dr. Materazzi stated that, of four sample Western covers that he examined on June 14, 1983, one of the covers was a closer match to the Cromalin than that of a Donnelley cover commissioned after the Western presswork and accepted by Federated. The three others, in his opinion, were as good as the Donnelley product. Materazzi contended that, though the Western covers that he examined were not perfect matches to the Cromalin, the match achieved was reasonable by industry standards.

The court has examined the Cromalin for the inside cover and compared it with the press sheet which Federated had printed after the dispute and with three samples produced by Western. Based on this inspection of the exhibits, and crediting the testimony of Dr. Materazzi, the court finds that the match between the Western samples and Spectragraphics’s Cromalin, while not perfect, is well within the bounds of a reasonable variation.

The court notes that Federated relies heavily on a Western interoffice communication dated March 12, 1982, a few days after the meeting between Scharer and Western personnel at Poughkeepsie, in arguing that the Western covers were not acceptable. In this memorandum, John Klumb, superintendent of the lithograph department and present at the February 19 and 22 press runs, advised John Ives, Western’s quality control manager, about events leading up to the press okays:

I ... check[ed] back with Eric [Senkow-sky] numerous times during the okays offering advice and any help he needed. During the first okay, cover 2, we changed ink rotation to help add brightness to the red chair. We also found during that same side that we would not “match” the cromalin. At that time I had Eric notify customer and informed him (Eric) that this was as close as we were going to get without pulling the job and altering the film. Eric was also instructed only to okay the sheet if he felt he could sell it.
We stayed with the same ink rotation on the second side and Eric’s comments during the okay were that he felt the front cover was coming along better than cover two and looked good. We discussed the importance of matching the desk top to the cromalin with the pressmen for the run.

The court finds, however, that this memorandum is not inconsistent with the conclusion that Senkowsky exercised reasonable judgment in authorizing the press runs. Because exact matches are very difficult to achieve, even when great care has been taken to produce a critical match, the customer or, if so delegated, the printer must inevitably make a subjective judgment about the acceptability of a given variation. Klumb’s advice that Senkowsky should okay the sheet only if he felt he could sell it simply alerted the salesman to the fact that an eye perfect match had not been achieved, and that Senkowsky should not authorize a press run if such a match were, indeed, required. Senkowsky, however, had not been instructed that a critical match was imperative and thus had no reason to believe that a commercially acceptable variation would be unsatisfactory. In any event, Klumb was not present when Senkowsky later okayed the first press sheet, three hours of additional work after the 5:00 p.m. conversation in which Sen-kowsky advised Scharer that he was having some difficulty matching the red chair.

Having delegated the responsibility for making the decision as to what constituted an acceptable match to Senkowsky, Federated is bound by his judgment, provided it was exercised in a reasonable, commercially acceptable manner. Cf. U.C.C. § 2-210(1) (1977). The court concludes that Senkowsky’s judgment was so exercised.

Because Federated was in breach of contract when it rejected Western’s commercially acceptable product, it is liable to Western for $73,444.12, the agreed value of the catalogue covers plus freight charges incurred, and for interest from March 15, 1982. Western is not liable to Federated on its counterclaim for any difference in value between the Western covers and the Donnelley covers which Federated commissioned subsequent to its breach.

The court directs that judgment be entered for plaintiff Western Publishing Company, Inc. against defendant Federated Graphics Companies, Inc. for $73,444.12, with interest from March 15, 1982. The complaint against defendant Levenstein Gaines, Inc. and the counterclaim against plaintiff Western Publishing are dismissed.

This opinion constitutes the court’s findings of fact and conclusions of law pursuant to Fed.R.Civ.Proc. 52.

SO ORDERED.

       Sitting by designation.

      . In the contract between Western and Federated, four percent "overs," or additional copies, were added to this base figure.

      . The plaintiff alleges that Meredith Burda, in commissioning Federated, was acting on behalf of Levenstein Gaines, an advertising firm for Pennsylvania House, and that Federated agreed to broker the printing of the covers for Leven-stein. Even assuming that Meredith was acting as an agent for Levenstein Gaines, however, plaintiffs have produced no evidence to show that Federated, too, entered into its contract with Western as an agent for Levenstein, and thus that Levenstein is liable under the contract as principal.

      . Scharer and Senkowsky disagreed on the substance of this conversation. Senkowsky testified that Scharer "agreed" to Senkowsky’s assurance that Western would do the best that it could in matching the Cromalin. Scharer, on the other hand, insisted that he told Senkowsky that all of the colors had to match those in the Cromalin and that Senkowsky never stated that Western would simply do its best. The court credits Senkowsky’s account.

      . According to Federated, Western’s offer to cull out objectionable covers or to reprint some covers for Federated's customer was in bad faith— physically impossible, given the large number of covers that would have to be sorted through, and directed at the deception of Federated’s customer through the selection of a small number of acceptable covers for the customer’s examination. The court, however, credits the testimony of Douglas Gould, regional sales manager at Western, who stated that when the offer was made, Western anticipated that only 10 to 15 percent of the covers would be found unacceptable. Gould also stated that Western’s quality control department can scan large amounts of printed material to weed out the worst of a job. The court concludes that Western's offer was a good faith attempt to resolve the contract dispute.

      . At trial, Federated attempted to argue that Lima had no authority to contract on behalf of Federated Graphics and that, consequently, the proposal of January 8 did not constitute a contract between Federated and Western, when signed by Herb Scharer’s son-in-law. The defendant thus contends that the contract between Western and Federated is actually reflected in Federated’s purchase order of February 2.
      Lima is not an employee of Federated Graphics, but is an officer, director, and shareholder of Transmarket Graphics, a company in the same business as Federated and located in the same offices, with a common reception area. Herb Scharer introduced Lima and Senkowsky during Senkowsky’s first visit to Federated’s offices, without advising him that Lima was not affiliated with Federated. Lima conferred with Senkowsky about the catalogue covers during the production process, and Scharer, upon his return from Africa, never objected to Senkow-sky’s January 20 letter, which referred to "our January 8th contract” and thanked Scharer for his order. Kenneth Lima was not called as a witness.
      Though the court’s decision does not turn on this finding, the evidence overwhelmingly supports the conclusion that Lima had both apparent and actual authority to act on behalf of Federated. Consequently, the proposal of January 8, when signed by Lima, constituted a contract between Federated and Western. See Strip Clean Floor Refinishing v. New York District Council No. 9 Brotherhood of Printers, 333 F.Supp. 385, 395-96 (E.D.N.Y.1971).

      . The "Cromalin Communicator” was identified and portions of it were read into evidence during the cross-examination of Nolan Meredith, Federated’s expert.

      . Federated also argues that Senkowsky was not qualified to okay the press sheets and that it was relying on Western’s color production personnel to achieve an acceptable match. As Dr. Mater-azzi testified, however, it is not unusual to designate a salesperson to okay a press sheet and, in this instance, Scharer expressly did so. Sen-kowsky was an experienced salesperson who had approved color on previous jobs. The court finds that he was competent to perform the press sheet okay, and, in any event, the court finds that the printing was commercially acceptable.

      . Materazzi’s testimony conflicted with that of Nolan Meredith, Federated’s expert and president of Spectragraphics. The court, however, credits Materrazi’s conclusions as to the quality of the Western product. Materazzi examined 32 covers randomly drawn from 200 covers that were selected by Federated, pursuant to a discovery request. Of these, Materazzi found 29 to be acceptable matches to a Cromalin made from the negatives furnished by Federated. Materaz-zi later examined a Cromalin proof for the inside cover, the negatives from which the proof was made, three randomly selected Western covers, the okay press proof and the printed cover catalogue before reaching his conclusion that the covers produced by Western were an acceptable match to Federated’s Cromalin. Ma-terazzi is presently Scientific and Technical Consultant for the National Association of Printers and Lithographers and was formerly manager of the Quality Control and Technical Department of the United States Government Printing Office.

      . Klumb was not called as a witness.