Atkins v. M & S Acquisition Corp.
| Decision Date | 28 December 2010 |
| Docket Number | No. 4:09-CV-1923 CAS,4:09-CV-1923 CAS |
| Court | U.S. District Court — Eastern District of Missouri |
| Parties | MERLE E. ATKINS, Plaintiff, v. M & S ACQUISITION CORPORATION et al., Defendants. |
This matter is before the Court on defendant Marshall & Stevens, Inc.'s motion for summary judgment on plaintiff's claim against it under Section 502(c) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(c), for statutory penalties for failure to provide plan information following request. Plaintiff opposes the motion and defendant has filed a reply. The Court will deny defendant's motion for the following reasons.
Plaintiff Merle Atkins was an employee of the Marshall & Stevens family of companies, including defendants M&S Acquisition Corporation ("M&S") and Marshall & Stevens, Inc. ("Marshall & Stevens"), for forty years, eventually becoming an Executive Vice President. In December 2007, plaintiff was presented the option of either resigning or being terminated from employment. Plaintiff chose to retire in lieu of termination, effective January 31, 2008. Plaintiff is a shareholder of M&S stock and owns a total of 2, 320 shares, some of which were acquired directly and some through the Marshall & Stevens Incorporated 401(k) Profit Sharing Plan, also known as the M&S Investment Savings Plan (the "Plan"). Plaintiff alleges that after his retirement, he sought to have M&S repurchase the directly-acquired shares under an Amended & Restated Buy Sell Agreement (the "Buy-Sell Agreement"), but M&S refused to do so. On approximately July 29, 2009, plaintiff requested documents relating to the Plan from Marshall & Stevens, specifically (1) all Plan documents, including any amendments thereto; (2) summaries of the Plan's annual financial report for 2007 and 2008; (3) all account balances for plaintiff, as well as other participants, since the Plan's inception; and (4) all correspondence with the Department of Labor, IRS or any federal or state agency in connection with the qualification of the Plan. Plaintiff received some of these documents in early December 2009. Marshall & Stevens contends that plaintiff is not entitled to some of the requested documents.
Plaintiff filed this action in November 2009, asserting claims against M&S for specific performance of the Buy-Sell Agreement (Count I), for attorneys' fees (Count II), for an accounting (Count III), for fraudulent inducement (Count IV), and against Marshall & Stevens for violation of ERISA Section 502(c), 29 U.S.C. § 1132(c) (Count V).1 The instant motion concerns Count V only.
The standards applicable to summary judgment motions are well settled. Pursuant to Federal Rule of Civil Procedure 56(c), a court may grant a motion for summary judgment if all of the information before the court shows "there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The initial burden is placed on the moving party. City of Mt. Pleasant, Iowa v. Associated Elec. Co-op., Inc., 838 F.2d 268, 273 (8th Cir. 1988) (). Once this burden is discharged, if the record shows that no genuine dispute exists, the burden thenshifts to the non-moving party who must set forth affirmative evidence and specific facts showing there is a genuine dispute on a material factual issue. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
Once the burden shifts, the non-moving party may not rest on the allegations in its pleadings, but by affidavit and other evidence must set forth specific facts showing that a genuine issue of material fact exists. Fed. R. Civ. P. 56(e); Herring v. Canada Life Assur. Co., 207 F.3d 1026, 1029 (8th Cir. 2000); Allen v. Entergy Corp., 181 F.3d 902, 904 (8th Cir.), cert, denied, 528 U.S. 1063 (1999). The non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). A dispute about a material fact is "genuine" only "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Herring, 207 F.3d at 1029 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A party resisting summary judgment has the burden to designate the specific facts that create a triable question of fact. See Crossley v. Georgia-Pacific Corp., 355 F.3d 1112, 1114 (8th Cir. 2004).
Under 29 U.S.C. § 1024(b)(4), an ERISA plan administrator is required to furnish certain specified reports to plan participants upon written request. Under § 1132(c)(1)(B), a plan administrator who fails or refuses to supply requested, covered information within thirty days of the request "may in the court's discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal...." 29 U.S.C. § 1132(c)(1). To recover on a claim for a § 1132(c) penalty, based on a failure to comply with § 1024(b)(4), the plaintiff must prove that (1) he requested the Plan information in writing, and (2) the Plan administrator failed to provide it within thirty days of the request. Kerr v. Charles F. Vatterott & Co., 184 F.3d 938, 948 (8th Cir. 1999). "[T]he purpose of the penalty is to provide plan administrators with an incentive to timely respond to requests for documents." Id.
Marshall & Stevens moves for summary judgment on plaintiffs § 1132(c) claim on the grounds that (1) plaintiff cannot establish he suffered any harm as a result of defendant's inadvertent failure to provide the requested Plan information within thirty days; (2) during his employment, plaintiff was a member of senior management and served as a Plan trustee from January 2003 through his retirement date, and as a result had full access to and knowledge of Plan information; (3) as of the date of his deposition, plaintiff did not even know if the information had been provided and had never reviewed it; and (4) some of the information plaintiff requested is not covered under § 1024(b)(4). Defendant contends that awarding statutory penalties to the plaintiff in this case would result in a windfall which the Court should not allow, and cites several cases in which courts declined to award statutory penalties under various circumstances.
Plaintiff responds that summary judgment is not appropriate because fact issues exist concerning Marshall & Stevens' state of mind in failing to timely provide the documents, that damages can be presumed from the defendant's obvious violation of the statute, and that plaintiffs status as a former Plan trustee does not preclude his right to receive documents under ERISA. Plaintiff states that neither prejudice nor injury are requisites to plan participants' recovery under the penalty provisions of ERISA's disclosure requirements, but rather are merely factors which may be considered by the Court in determining whether to exercise its discretion to award the penalty.
Plaintiff states that Marshall & Stevens' bad faith in failing to provide Plan documents is another relevant factor in deciding...
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