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Foster v. Principal Life Ins. Co.

United States Court of Appeals, Seventh Circuit

November 24, 2015

FRANCIS T. FOSTER, Plaintiff-Appellant,
v.
PRINCIPAL LIFE INSURANCE COMPANY, Defendant-Appellee

Argued September 18, 2015

Page 968

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:13-cv-03066 -- Rebecca R. Pallmeyer, Judge.

Francis T. Foster, Plaintiff - Appellant, Pro se, Brookfield, IL.

For Principal Life Insurance Company, Defendant - Appellee: Theodore M. Becker, Attorney, Daniel J. Collins, Attorney, Jeffrey Perconte, Attorney, Drinker Biddle & Reath, LLP, Chicago, IL.

Before BAUER, KANNE, and ROVNER, Circuit Judges.

OPINION

Page 969

Rovner, Circuit Judge

Principal Life Insurance Company moved to dismiss Francis T. Foster's complaint for failure to state a claim. The district court dismissed the complaint but did so because the court concluded that Foster's claim against Principal was " derivative" of a related lawsuit that had already been settled. Although Foster's complaint was not a model of clarity, we conclude that it stated a claim that was not precluded by any other litigation. We therefore vacate the judgment and remand for further proceedings.

I.

In reviewing this dismissal, we accept all well-pleaded factual allegations in the complaint and draw all reasonable inferences from those facts in favor of Foster. Richards v. Kiernan, 461 F.3d 880, 882 (7th Cir. 2006). We begin with the cast of characters in the hopes of dispelling the confusion that clouded matters in the district court. The Regional Transportation Authority (" RTA" ) runs six bus lines in northern Illinois under its Pace Suburban Bus Division (" Pace" ). Each Pace bus line has its own pension and 401(k) retirement plan (the " Pace Plans" ). The RTA also has its own retirement plan, the " RTA Plan." We will refer to the Pace Plans and the RTA Plan collectively as the Plans. Each of the Plans is run by a committee composed of an equal number of union and management representatives. The Pace Plans, which are considered private trusts created for the benefit of the covered employees, appointed Principal as the trustee. Principal held title to the assets of the Pace Plans for the benefit of participants and their beneficiaries. As trustee, Principal had a fiduciary duty to follow the terms of the Pace Plan documents.

In 2003, each of the committees for the Pace Plans passed a resolution retaining Foster to act as the lawyer representing the interests of the Plans.[1] The committees

Page 970

instructed Principal to pay Foster a fixed monthly fee from the jointly administered trust funds for the Pace Plans. This arrangement worked without incident for a number of years until January 2011. At that time, Foster notified Pace's Board of Directors (" Pace Board" ) that one of the Pace Plans was underfunded in violation of the Illinois Pension Code. Foster told the Pace Board that Pace was required to make additional contributions of $181,360 for 2009, and $235,190 for 2010. This was unwelcome news at Pace, and Pace management employees subsequently retaliated by attempting to terminate Foster's employment as lawyer for the Plan committees. ...


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