Askew v. R.L. Reppert, Inc., Civil Action No. 11-cv-04003
| Decision Date | 30 September 2016 |
| Docket Number | Civil Action No. 11-cv-04003 |
| Parties | DERRICK ASKEW, Plaintiff v. R.L. REPPERT, INC.; RICHARD L. REPPERT; R.L. REPPERT, INC. EMPLOYEES PROFIT SHARING 401(k) PLAN; and R.L. REPPERT, INC. MONEY PURCHASE PLAN (DAVIS BACON PLAN), Defendants R.L. REPPERT, INC.; RICHARD L. REPPERT; R.L. REPPERT, INC. EMPLOYEES PROFIT SHARING 401(k) PLAN; and R.L. REPPERT, INC. MONEY PURCHASE PLAN (DAVIS BACON PLAN), Third-Party Plaintiffs v. CALIFORNIA PENSION ADMINISTRATORS & CONSULTANTS, INC., Third-Party Defendants |
| Court | U.S. District Court — Eastern District of Pennsylvania |
APPEARANCES:
KENT G. CPREK, ESQUIRE
JAMES E. GOODLEY, ESQUIRE
On behalf of Plaintiff
WALTER H. FLAMM, JR., ESQUIRE
CHRISTOPHER M. CURCI, ESQUIRE
On behalf of Defendants and
Third-Party Plaintiffs
DANIEL S. STRICK, ESQUIRE
On behalf of Third-Party Defendant
I presided over a three-day non-jury trial in this matter on February 29, 2016 and March 1 and 2, 2016. On May 6, 2016, the parties filed their post-trial proposed findings of fact and conclusions of law.
Following my decisions on the parties' motions for summary judgment, the issues raised at trial which remain for adjudication include, with respect to plaintiff's Class Action Complaint:
Count One: (1) whether defendant R.L. Reppert, Inc. ("Reppert, Inc.") is liable under 29 U.S.C. §§ 1024(b)(4) and 1132(c)(1) for any failure to produce other custodial agreements for the R.L. Reppert, Inc. Employees Profit Sharing 401(k) Plan ("401(k) Plan") (apart from the custodial agreement with Nationwide Trust Company, FSB) and (2) what penalties, if any, should be imposed for defendant Reppert, Inc.'s failure to timely produce plan documents for the periods December 6, 2008 to October 2, 2009 and May 17, 2012 to January 1, 2015.1
Count Four: whether defendant Reppert, Inc. was required by 29 U.S.C. § 1023(a)(3)(A) and failed to engage an independent qualified public accountant to conduct an audit of the 401(k) Plan for plan years 2008 through 2011.
The issues raised at trial which remain for adjudication also include, with respect to defendants and third-party plaintiffs' Amended Third Party Complaint:
Count One: whether third-party defendant California Pension Administrators & Consultants, Inc. ("CalPac") breached its contract with defendant and third-party plaintiff Reppert, Inc. to provide plan administration and recordkeeping services for the 401(k) Plan.
Count Two: whether CalPac, either knowingly or recklessly, misrepresented the nature of its plan administration and recordkeeping services to third-party plaintiff Reppert, Inc.
Regarding Count One of plaintiff's Class Action Complaint, I find that defendant Reppert, Inc. is not liable under 29 U.S.C. § 1132(c)(1) for any failure to produce any other custodial agreements for the 401(k) Plan (apart from the custodial agreement with Nationwide Trust Company, FSB).
However, I impose on defendant Reppert, Inc. a document penalty of $15,959.00 for its failure to timely produce plan documents for the period December 6, 2008 to October 2, 2009 and for its failure to timely produce its custodial agreement with the Nationwide Trust Company, FSB for the period May 17, 2012 to January 1, 2015.
Regarding Count Four of plaintiff's Class Action Complaint, I conclude that defendant Reppert, Inc. failed to engage an independent qualified public accountant to conduct an audit of the 401(k) Plan for plan years 2008 through 2011 as required by 29 U.S.C. § 1023(a)(3)(A). In particular, I find that the 401(k) Plan did not qualify for an audit exemption for those years, because it had more than 120 participants at the beginning of the 2008 plan year and was thus not permitted to file a simplified annual report.
Regarding Count One of defendants' and third-party plaintiffs' Amended Third Party Complaint, I conclude that defendants and third-party plaintiffs have failed to prove by apreponderance of the evidence that third-party defendant CalPac breached its contract with defendant and third-party plaintiff Reppert, Inc. to provide plan administration and recordkeeping services for the 401(k) Plan.
Regarding Count Two of defendants' and third-party plaintiffs' Amended Third Party Complaint, I conclude that defendants and third-party plaintiffs have failed to prove by a preponderance of the evidence that third-party defendant CalPac, either knowingly or recklessly, misrepresented the nature of its plan administration and recordkeeping services to third-party plaintiff Reppert, Inc.
This court has original jurisdiction over the subject matter of plaintiff's claims under 29 U.S.C. §§ 1024, 1132 and various other provisions of the Employee Retirement Income Security Act of 1974 ("ERISA")2 pursuant to 28 U.S.C. § 1331. This court has supplemental jurisdiction over defendants and third party plaintiffs' state law claims of breach of contract, fraud and misrepresentation pursuant to 28 U.S.C. § 1367(a).
Venue is proper pursuant to 28 U.S.C. § 1391(b) because defendants reside in, and a substantial part of theevents giving rise to this action occurred in, Emmaus, Lehigh County, Pennsylvania, which is located within this judicial district.
On June 17, 2011 plaintiff filed a six-count Class Action Complaint (Document 1).3 Count One alleged violations of ERISA document production requirements under, among other sections, 29 U.S.C. § 1024(b)(4) and sought statutory penalties pursuant to 29 U.S.C. § 1132(c)(2) against Reppert, Inc. as plan administrator.
Count Two averred the same violations as Count One and sought injunctive relief to compel defendants Reppert, Inc. and Richard L. Reppert to satisfy their statutory document production obligations under ERISA.
Count Three asserted that defendants Reppert, Inc. and Richard L. Reppert failed to establish a trust in violation of 29 U.S.C. § 1103.
Count Four alleged that defendants Reppert, Inc. and Mr. Reppert breached their fiduciary duties in violation of 29 U.S.C. § 1104, by among other things, failing to document, disclose and report on the 401(k) Plan in accordance with ERISA.
Count Five averred that defendants Reppert, Inc. and Mr. Reppert conducted prohibited transactions in violation of 29 U.S.C. § 1106.
Finally, Count Six alleged that defendants denied benefits owed to plaintiff and seeks a declaration of benefits.
On September 15, 2011 defendants filed a Third Party Complaint against CalPac (Document 18), seeking to hold it liable for contribution and indemnity to the extent that the defendants themselves were found liable to plaintiff.
On November 14, 2011 CalPac filed a motion to dismiss the Third Party Complaint (Document 34). On September 28, 2012 I granted that motion (Documents 40 and 41). Subsequently, on October 31, 2012 defendants filed a three-count Amended Third Party Complaint against CalPac (Document 42).
Count One of the Amended Third Party Complaint alleged that CalPac breached its contract with defendants to administer the Reppert plans.
Count Two averred that CalPac knowingly or recklessly misrepresented the administration and recordkeeping services it would provide.
Count Three asserted that CalPac was a co-fiduciary with defendants and sought contribution and indemnity from CalPac to the extent defendants were liable to plaintiff Askew.
On November 14, 2012 CalPac filed a second motion to dismiss (Document 44), and on September 30, 2013 I granted that motion regarding Count Three only (Document 51).
On April 10, 2015, after extensive discovery had been conducted in this case, plaintiff moved for partial summary judgment (Document 73) on Counts One and Four of his Class Action Complaint. Subsequently, on July 31, 2015 defendants filed their own motion for summary judgment (Document 90) against plaintiff on all counts of plaintiff's Class Action Complaint.
Simultaneously, third-party defendant CalPac moved for summary judgment (Document 89) against defendants and third-party plaintiffs on both counts of their Amended Third Party Complaint.
By Order dated November 13, 2015 and filed November 17, 2015 (Document 118), I denied third-party defendant's motion for summary judgment.
By Order dated February 4, 2016 and filed February 5, 2016 (Document 133), I granted plaintiff's motion for partial summary judgment in part and denied it in part. Specifically, I granted plaintiff summary judgment regarding liability (but not damages) on that part of Count One of his Class Action Complaint alleging that defendant R.L. Reppert, Inc. failed to provide plan documents for the 401(k) Plan in a timely manner and forits failure to produce its custodial agreement with Nationwide Trust Company, FSB. I denied plaintiff summary judgment in all other respects.
In that Order, I also granted defendants' motion for summary judgment in part and denied it in part.
I granted summary judgment in favor of defendants on that part of plaintiff's Class Action Complaint alleging defendant R.L. Reppert, Inc.'s failure to provide plan documents for the R.L. Reppert, Inc. Money Purchase Plan (Davis Bacon Plan) and that part of Count One alleging R.L. Reppert, Inc.'s failure to produce trust agreements, periodic benefits statements, notice of vested deferred benefits, disclosure of financial reports, Section 404(c) disclosures, notice of qualified default investment, notice of availability of investment advice and depository documents for the R.L. Reppert, Inc. Employees Profit Sharing 401(k) Plan.4
I also granted summary judgment in favor of defendants on that part of plaintiff's Class Action Complaint alleging R.L. Reppert, Inc.'s failure to conduct audits of the R.L. Reppert, Inc. Money Purchase Plan (Davis Bacon Plan) as well as on Counts Two, Three, Five and Six of plaintiff's Class Action Complaint.
I denied summary judgment for defendants on that part of Count One of plaintiff's Class Action Complaint on which I granted plaintiff's...
To continue reading
Request your trial