Perez v. Wallis
Citation | 77 F.Supp.3d 730 |
Decision Date | 30 December 2014 |
Docket Number | No. 11 C 3019,11 C 3019 |
Parties | Thomas E. Perez, Secretary of Labor, United States Department of Labor, Plaintiff, v. Scott Wallis, et al., Defendants. |
Court | U.S. District Court — Northern District of Illinois |
Bruce C. Canetti, U.S. Department of Labor, Office of the Solicitor, Chicago, IL, for Plaintiff.
Scott Wallis, Elgin, IL, pro se.
The Secretary of the U.S. Department of Labor (“the Secretary”) brought this action against Scott Wallis (“Wallis”), Ronald Eriksen (“Eriksen”), USA Baby, Inc., USA Baby, Inc. 401(k) Plan, and USA Baby, Inc. Health Plan for violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. (R. 1, Compl.¶ 1.) Presently before the Court are the Secretary's separate motions seeking summary judgment against Wallis and Eriksen (collectively “Defendants”). (R. 137, Sec'y's Mot. Summ. J. against Wallis; R. 132, Sec'y's Mot. Summ. J. against Eriksen.) For the reasons set forth below, the motions are granted.
Before summarizing the material facts, the Court must address Local Rule 56.1, which imposes “certain requirements for supporting and opposing motions for summary judgment.” Bordelon v. Chi. Sch. Reform Bd. of Trs., 233 F.3d 524, 527 (7th Cir.2000). Local Rule 56.1 assists the Court “by organizing the evidence, identifying undisputed facts, and demonstrating precisely how each side propose[s] to prove a disputed fact with admissible evidence.” Id. (quoting Markham v. White, 172 F.3d 486, 490 (7th Cir.1999) ). The U.S. Court of Appeals for the Seventh Circuit has emphasized that Local Rule 56.1 is “not a mere formality.” Delapaz v. Richardson, 634 F.3d 895, 899 (7th Cir.2011) (quoting Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 924 (7th Cir.1994) ). Rather, it “is designed ... to aid the district court, ‘which does not have the advantage of the parties' familiarity with the record and often cannot afford to spend the time combing the record to locate the relevant information,’ in determining whether a trial is necessary.” Id. (quoting Waldridge, 24 F.3d at 923–24 ).
To that end, Local Rule 56.1 requires a party moving for summary judgment to submit, among other things, a statement of undisputed material facts consisting of “short numbered paragraphs, including within each paragraph specific references to the affidavits, parts of the record, and other supporting materials relied upon to support the facts set forth in that paragraph.” N.D. Ill. L.R. 56.1(a)(3). The opposing party must then submit, among other things, a concise response to the movant's statement of facts containing “a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon.” N.D. Ill. L.R. 56.1(b)(3)(B). Unless controverted in this manner, “all material facts set forth in the movant's statement are deemed admitted.” Bordelon, 233 F.3d at 527. “Thus, a general denial is insufficient to rebut a movant's factual allegations; the nonmovant must cite specific evidentiary materials justifying the denial.” Malec v. Sanford, 191 F.R.D. 581, 584 (N.D.Ill.2000) ; see also Butts v. Aurora Health Care, Inc., 387 F.3d 921, 924 (7th Cir.2004) ().
In addition, a Local Rule 56.1(b)(3) response “is not the place for purely argumentative denials,” Malec, 191 F.R.D. at 584, nor is it the place for submitting additional facts, Ciomber v. Coop. Plus, Inc., 527 F.3d 635, 643–44 (7th Cir.2008). Instead, to properly present additional facts to the Court, the non-moving party must submit a separate statement, “consisting of short numbered paragraphs, of any additional facts that require the denial of summary judgment, including references to the affidavits, parts of the record, and other supporting materials relied upon.” N.D. Ill. L.R. 56.1(b)(3)(C). The Seventh Circuit has “consistently upheld a district court's discretion to require strict compliance” with Local Rule 56.1. Bordelon, 233 F.3d at 527.
Here, Defendants failed to comply with Local Rule 56.1. While they filed a joint response to the Secretary's motions, they did not provide any supporting evidence or point to specific documents in the record; instead, they offer general denials, irrelevant arguments, and inflammatory statements about alleged misconduct by the Secretary. (See R. 147, Defs.' Resp. at 1–89.) As required by Local Rule 56.2, the Secretary served Defendants with the notice required for pro se litigants, which explains how to prepare a proper response, how to defeat a summary judgment motion, and the consequences of not complying with the Local and Federal Rules. (See R. 135, Notice; R. 140, Notice.) The fact that Defendants are proceeding pro se does not excuse their failure to comply with the Rules. See McNeil v. U.S., 508 U.S. 106, 113, 113 S.Ct. 1980, 124 L.Ed.2d 21 (1993) (); Cady v. Sheahan, 467 F.3d 1057, 1061 (7th Cir.2006) ( ); Lumpkins–Benford v. Allstate Ins. Co., 987 F.Supp.2d 807, 812 (N.D.Ill.2013) ( ). Accordingly, the Secretary's facts are deemed admitted.
U.S.A. Baby, Inc. (“USA Baby”), a company specializing in the retail of infant and toddler furniture, was incorporated in Illinois on October 16, 2001. (R. 138, Sec'y's Facts ¶¶ 3–4; R. 138–24, Illinois Secretary of State Search; R. 133, Sec'y's Facts ¶¶ 3–4; R. 133–19, 2010 USA Baby Website Printout.) On September 5, 2008, USA Baby filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Northern District of Illinois. (R. 138, Sec'y's Facts ¶ 6; R. 133, Sec'y's Facts ¶ 6.) On February 11, 2009, the case was converted to a Chapter 7 bankruptcy. (R. 138, Sec'y's Facts ¶ 6; R. 133, Sec'y's Facts ¶ 6.) On October 3, 2012, the bankruptcy case was closed, and USA Baby ceased to exist as a corporate entity. (R. 138, Sec'y's Facts ¶ 6; R. 133, Sec'y's Facts ¶ 6.)
From 2005 to 2009, Wallis served various roles within USA Baby, including: Chief Financial Officer from January 2005 to November 2008; Chief Operating Officer from August 2005 to November 2008; and President from November 2008 to April 2009. (R. 138, Sec'y's Facts ¶ 8.) Wallis was also a five percent shareholder of USA Baby stock. In addition to his positions with USA Baby, Wallis also provided consulting services to USA Baby though various corporate entities, including Scott Wallis & Associates and Lighthouse Publications, Inc. (R. 138, Sec'y's Facts ¶¶ 52–53; R. 138–26, Wallis Dep. at 15–16.)
From 2001 to 2008, Eriksen served various roles at USA Baby, including: Chairman of the Board from 2001 to 2008; Chief Executive Officer from May 2004 to December 2008; and President from October 2007 to November 2008. Eriksen was also a 78.23% majority shareholder of USA Baby stock, and earned a weekly salary of $3,202.22.
On May 18, 2004, USA Baby established a 401(k) plan (“the 401(k) Plan”) in order to provide retirement and other incidental benefits to its employees. (R. 138, Sec'y's Facts ¶ 18; R. 138–2, USA Baby 401(k) Plan at 35; R. 133, Sec'y's Facts ¶ 15.) Employees could make salary deferral contributions to the 401(k) Plan. (R. 138, Sec'y's Facts ¶ 19; R. 138–2, USA Baby 401(k) Plan at 35; R. 138–3, Summ. Plan Description of USA Baby 401(k) Plan at 3; R. 133, Sec'y's Facts ¶ 16.) Qualified Plan Consultants (“QPC”) was the third-party administrator of the 401(k) Plan. (R. 138, Sec'y's Facts ¶ 14; R. 138–5, John Hancock Letter at 2; R. 133, Sec'y's Facts ¶ 13; R. 133–6, QPC Letter and Authorization.) John Hancock Life Insurance Company (“John Hancock”) was the asset custodian of the 401(k) Plan. (R. 138, Sec'y's Facts ¶ 15; R. 138–5, John Hancock Letter at 2; R. 133, Sec'y's Facts ¶ 14.)
From February 1, 2004, to May 1, 2008, USA Baby held a group health insurance policy (“Blue Cross Health Plan”) with Blue Cross Blue Shield of Illinois. (R. 138, Sec'y's Facts ¶¶ 16, 20; R. 138–11, Appl. to Blue Cross Benefit Program at 2.) USA Baby established the Blue Cross Health Plan “in order to provide medical benefits to employees of USA Baby.” (R. 138, Sec'y's Facts ¶¶ 16, 20.) Under the Blue Cross Health Plan, premiums were due on the first calendar day of each month. (R. 138, Sec'y's Facts ¶ 23; R. 138–11, Appl. to Blue Cross Blue Shield of Ill. Benefit Program at 3.) Effective May 1, 2008, Blue Cross terminated the policy because USA Baby failed to pay the required premiums. (R. 138, Sec'y's Facts ¶ 24; R. 138–12, Letter from Blue Cross and Invoices at 2, 7.) On October 1, 2008, USA...
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