Frank L. Rudy v. David Bolstad et al

Filing 134

CONSENT JUDGMENT by Judge Jacqueline H. Nguyen. IT IS HEREBY ORDERED, ADJUDGED, and DECREED that: Judgment is hereby entered against Defendants Rudy, Bolstad, Fischer and Company in the amount of $802,901.07 ("Amount Due") ( MD JS-6. Case Terminated ) (bp)

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1 2 3 4 5 6 7 8 9 10 MARY K. ALEJANDRO Acting Regional Solicitor DANIELLE L. JABERG (CSBN 256653) Counsel for ERISA Andrew J. Schultz (CSBN 237231) Trial Attorney Office of the Solicitor United States Department of Labor 90 7th Street, Suite 3-700 San Francisco, California 94103 Direct: (415) 625-7745 Facsimile: (415) 625-7772 Email: schultz.andrew@dol.gov JS-6 both cases Attorneys for Plaintiff United States Department of Labor 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ) FRANK L. RUDY, as an individual, and in his ) individual capacity as a shareholder of Western ) ) Mixers, Inc., ) Plaintiff, ) v. ) DAVID BOLSTAD, an individual; ROBERT ) ) J. FISHER, an individual, ) ) Defendants._ ) ______________________________________ ) ) HILDA L. SOLIS, ) Secretary of Labor, ) United States Department of Labor, ) ) Plaintiff, ) v. FRANK L. RUDY, DAVID H. BOLSTAD, ROBERT J. FISCHER, WESTERN MIXERS, INC., WESTERN MIXERS INC. MONEY PURCHASE PENSION PLAN, Case No. 2:10-cv-04655-JHN-PJWx Consolidated with: 2:11-cv-07220-JHN -PJWx CONSENT JUDGMENT AND ORDER BETWEEN THE PLAINTIFF SECRETARY OF LABOR AND DEFENDANTS FRANK L. RUDY, DAVID H. BOLSTAD, ROBERT J. FISCHER, WESTERN MIXERS, INC., and the WESTERN MIXERS, INC. MONEY PURCHASE PENSION PLAN Defendants CONSENT JUDGMENT & ORDER Page 1 of 9 Plaintiff HILDA L. SOLIS, Secretary of Labor, United States Department of 1 2 Labor (“Secretary”), pursuant to her authority under Sections 502(a)(2) and (5) of the 3 Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. 4 §§ 1132(a)(2) and (5), has filed a Complaint against Defendants FRANK L. RUDY, 5 DAVID H. BOLSTAD, ROBERT J. FISCHER, WESTERN MIXERS, INC. (“the Com- 6 pany”), and the WESTERN MIXERS INC. MONEY PURCHASE PENSION PLAN 7 (“the Plan”). 8 A. The Secretary, the Company, Rudy, Bolstad, Fischer, and the Plan (collectively, 9 the “Parties”) admit that the Court has jurisdiction over this action pursuant to 10 Section 502(e)(1) of ERISA, 29 U.S.C. § 1132(e)(1), and that venue lies in the 11 United States District Court for the Central District of California pursuant to Sec- 12 tion 502(e)(2) of ERISA, 29 U.S.C. § 1132(e)(2). B. The Parties agree to the entry of this Consent Judgment and Order. The Parties 13 14 further agree that this Consent Judgment and Order shall fully settle all claims of 15 the Secretary asserted in the Complaint. 16 17 IT IS HEREBY ORDERED, ADJUDGED, and DECREED that: 18 1. Judgment is hereby entered against Defendants Rudy, Bolstad, Fischer and Com- 19 pany in the amount of $802,901.07 (“Amount Due”). 20 2. 21 Bolstad and Fischer shall restore the Amount Due to the Plan as described in Paragraphs 22 4-7, below. 23 3. 24 the Independent Fiduciary appointed under this Consent Judgment and Order shall dis- 25 tribute all of the Plan’s assets, $1,795,391.63, to the participants in the amounts desig- 26 nated on Exhibit A attached to this Consent Judgment and Order. Within 10 days of entry of this Consent Judgment and Order, Defendants Rudy, Following restoration of the Amount Due as described in Paragraphs 4-7, below, 27 28 CONSENT JUDGMENT & ORDER Page 2 of 9 1 4. The governing Plan documents are hereby amended to allow for the offset of a par- 2 ticipant’s Plan benefits against an amount that the participant is required to pay as a re- 3 sult of this Consent Judgment and Order. 4 5. 5 206(d)(4), 29 U.S.C. § 1056(d)(4), Defendant Rudy shall restore such amount by forfeit- 6 ing $20,000.00 of his Plan account balance. In so forfeiting, Defendant Rudy waives 7 any further allocations into his Plan account and agrees that this sum offset from his Plan 8 Account shall be reallocated to the participants listed on Exhibit A to this Consent 9 Judgment and Order in order to satisfy Paragraphs 1 and 2 of this Consent Judgment and Defendant Rudy shall restore to the Plan $20,000.00. Pursuant to ERISA Section 10 Order. 11 6. 12 tion 206(d)(4) of ERISA, 29 U.S.C. § 1056(d)(4), Defendant Bolstad shall restore such 13 amount by forfeiting his entire Plan account balance in the amount of $508,161.75 and, 14 within 10 days of the entry of this Consent Judgment and Order, by separately paying to 15 the Plan the sum of $122,516.40. In so forfeiting, Defendant Bolstad waives any further 16 allocations into his Plan account and agrees that this sum offset from his Plan account 17 shall be reallocated to the participants listed on Exhibit A to this Consent Judgment and 18 Order in order to satisfy Paragraphs 1 and 2 of this Consent Judgment and Order. 19 Should Defendant Bolstad fail to timely separately pay the Plan $122,516.40, the out- 20 standing amount shall become immediately due and payable. Interest shall accrue on the 21 outstanding amount at the rate set forth in 26 U.S.C. § 6621 until such time as the entire 22 outstanding amount plus any applicable interest is restored. 23 7. 24 tion 206(d)(4), 29 U.S.C. § 1056(d)(4), Defendant Fischer shall restore such amount by 25 forfeiting his entire Plan account balance in the amount of $152,222.92. In so forfeiting, 26 Defendant Fischer waives any further allocations into his Plan account and agrees that 27 this sum offset from his Plan account shall be reallocated to the participants listed on Defendant Bolstad shall restore to the Plan $630,678.15. Pursuant to ERISA Sec- Defendant Fischer shall restore to the Plan $152,222.92. Pursuant to ERISA Sec- 28 CONSENT JUDGMENT & ORDER Page 3 of 9 1 Exhibit A to this Consent Judgment and Order in order to satisfy Paragraphs 1 and 2 of 2 this Consent Judgment and Order. 3 8. 4 of Defendants’ Plan account balances ordered in Paragraphs 5 through 7 of this Consent 5 Judgment and Order, as evidenced by the spousal consent forms submitted by the parties 6 contemporaneously with the filing of this Consent Judgment and Order (“Waiver of 7 Benefits and Spousal Consent Form”). 8 9. 9 from violating the provisions of Title I of ERISA, 29 U.S.C. §§ 1001-1191c. The spouses of Defendants Rudy, Bolstad and Fischer have consented to the offset Defendants Rudy, Bolstad and Fischer are permanently enjoined and restrained 10 10. 11 serving as fiduciaries to any employee benefit plan governed by ERISA. 12 11. 13 fornia, 90401, Phone Number 310-451-3225, shall be, and hereby is, appointed Inde- 14 pendent Fiduciary of the Plan who: 15 Defendants Rudy, Bolstad and Fischer are hereby permanently enjoined from Nicholas L. Saakvitne, of 532 Colorado Avenue, 2nd Floor, Santa Monica, Cali- a. Will be responsible for collecting, marshalling, paying out, and administer- 16 ing Plan assets, in accordance with the distribution schedule shown in Ex- 17 hibit A, which lists the exact balances due to each participant, and taking 18 further action with respect to the Plan as appropriate, and, if necessary, ter- 19 minating the Plan when all of its assets are distributed to all eligible partici- 20 pants and beneficiaries; 21 b. Pursuant to the procedures outlined in the Employee Benefits Security Ad- 22 ministration’s Field Assistance Bulletin 2004-02, must exercise reasonable 23 care and diligence to identify and locate each Plan participant and benefici- 24 ary who is eligible to receive a distribution under the terms of the Plan to 25 the extent the Plan has distributable assets; 26 c. Has all the rights, duties, discretion and responsibilities of a trustee, fiduci- 27 ary and Plan Administrator under ERISA, including filing a final Form 28 5500; CONSENT JUDGMENT & ORDER Page 4 of 9 d. Has the authority to delegate or assign fiduciary duties as appropriate and 1 2 allowed under the law and may retain assistance as needed including attor- 3 neys, accountants, actuaries and other service providers; e. Shall have full access to all data, information and calculations in the Plan’s 4 5 possession and under its control, including information and records main- 6 tained by the Plan’s custodial trustee or service provider; f. Shall have the authority to give instructions respecting the disposition of as- 7 sets of the Plan; 8 g. Shall comply with all applicable rules and laws; 9 h. Shall be entitled to reasonable compensation, fees and expenses, paid by 10 11 Defendant Western Mixers, Inc. Defendant Western Mixers, Inc. shall pay 12 such reasonable compensation, fees and expenses within 30 days of receiv- 13 ing an invoice from the Independent Fiduciary. Assets of the Plan shall not 14 be used to satisfy this obligation. 15 12. Within 10 days of the entry of this Consent Judgment and Order, the Independent 16 Fiduciary shall take all steps necessary to complete the offsets ordered in Paragraphs 5 17 through 7 of this Consent Judgment and Order. 18 13. 19 to the Secretary within twenty (20) calendar days of said payment. 20 14. 21 Fischer shall be assessed a penalty under Section 502(l) of ERISA, 29 U.S.C. § 1132(l), 22 in the amount of 20 percent of the applicable recovery amount, or $4,000.00 for Defen- 23 dant Rudy, $126,136.83 for Defendant Bolstad and $30,444.58 for Defendant Fischer 24 (“Penalty Amounts”). Defendants Rudy, Bolstad and Fischer waive the notice of as- 25 sessment and service requirement of 29 C.F.R. § 2570.83. Upon assessment, Defendants 26 Rudy, Bolstad and Fischer shall submit immediate payment of the Penalty Amount to 27 the address listed in this Paragraph unless any such Defendant files a petition for waiver 28 or reduction of the penalty as provided for in 29 C.F.R. §§ 2570.83–2570.87 and the The Independent Fiduciary shall provide evidence of payment of the Amount Due Upon Defendants’ restoration of the Amount Due, Defendants Rudy, Bolstad and CONSENT JUDGMENT & ORDER Page 5 of 9 1 Secretary agrees to waive or reduce the penalty. Defendants Rudy, Bolstad and Fischer 2 may not challenge the applicable recovery amount, the validity of the violations alleged, 3 or their liability for the violations. Defendants Rudy, Bolstad and Fischer shall pay the 4 Penalty Amount to the United States Department of Labor, by sending a certified or 5 cashiers check payable to the United States Department of Labor (please write EBSA 6 Case No. 72-031855(48) on the check) at the following address: 7 U.S. Department of Labor 8 ERISA -- Civil Penalty 9 P.O. Box 71360 Philadelphia, PA 19176-1360 10 11 15. Wherever submission to the Secretary is required under the terms of this Consent 12 Judgment and Order, such submission shall be made to: 13 Regional Director 14 Employee Benefits Security Administration 15 United States Department of Labor 16 1055 E. Colorado Blvd., Ste 200 17 Pasadena, CA 91106-2357 18 16. Following the appointment of the Independent Fiduciary identified in Paragraph 19 11 of this Consent Judgment and Order, Defendant Company is hereby removed as Plan 20 Administrator and as fiduciary to the Plan. 21 17. 22 11 of this Consent Judgment and Order, Defendants Rudy and Bolstad are hereby re- 23 moved as Plan Trustee and as fiduciary to the Plan. 24 18. 25 Independent Fiduciary herein appointed by the Court in providing documents or infor- 26 mation that Defendants may have relevant to the Plan’s administration and management. 27 19. 28 third party administrator, custodian, and any other Plan service provider to cooperate Following the appointment of the Independent Fiduciary identified in Paragraph Defendants Company, Rudy, Bolstad and Fischer shall cooperate fully with the Defendants Company, Rudy, Bolstad and Fischer shall instruct the Plan’s current CONSENT JUDGMENT & ORDER Page 6 of 9 1 with the Independent Fiduciary, and shall serve a copy of this Consent Judgment and 2 Order on said persons. 3 20. 4 torney’s fees incurred to date in connection with any stage of this proceeding, including 5 but not limited to attorney’s fees which may be available under the Equal Access to Jus- 6 tice Act, as amended. 7 21. 8 may have against the Secretary, the United States Department of Labor, or any of its of- 9 ficers, agents, attorneys, employees, or representatives, arising out of or in connection 10 with the allegations contained in the Complaint on file in this action, or any other pro- 11 ceedings or investigation incident thereto or based on the Equal Access to Justice Act, as 12 amended. 13 22. 14 agency other than the United States Department of Labor, Employee Benefits Security 15 Administration. 16 23. 17 with the terms of this Consent Judgment and Order. 18 24. 19 that they are informed and understand the effect and purpose of this Consent Judgment 20 and Order. The Secretary and Defendants shall each bear their own costs, expenses, and at- Defendants expressly waive any and all claims of any nature which they have or Nothing in this Consent Judgment and Order is binding on any governmental This Court retains jurisdiction of this action for purposes of enforcing compliance By signing their names to this Consent Judgment and Order, the parties represent 21 22 The Court directs the entry of this Consent Judgment and Order as a final order. 23 24 IT IS SO ORDERED, ADJUDGED, and DECREED. 25 26 Dated: May 01, 2012 27 ______________________________ Jacqueline H. Nguyen United States District Judge 28 CONSENT JUDGMENT & ORDER Page 7 of 9 1 2 Entry of this Consent Judgment and Order is hereby consented to: M. PATRICIA SMITH Solicitor of Labor 3 4 MARY K. ALEJANDRO Acting Regional Solicitor 5 DANIELLE L. JABERG Counsel for ERISA 6 7 Dated: May 1, 2012 8 Trial Attorney Attorneys for Plaintiff 9 10 11 /s/ Andrew J. Schultz ANDREW J. SCHULTZ Defendants consent to the entry of this Consent Judgment and Order: 12 13 Dated: March 23, 2012 /s/ David H. Bolstad DAVID H. BOLSTAD, Individually and on behalf of Defendant the Western Mixers, Inc. Money Purchase Pension Plan Dated: March 29, 2012 /s/ David H. Bolstad DAVID H. BOLSTAD, on behalf of Defendant WESTERN MIXERS, INC. Dated: April 23, 2012 /s/ Frank L. Rudy FRANK L. RUDY Defendant Dated: March 26, 2012 /s/ Robert J. Fischer ROBERT J. FISCHER Defendant 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CONSENT JUDGMENT & ORDER Page 8 of 9 EXHIBIT A TO CONSENT JUDGMENT 1 2 3 Final Balances Participant Name 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Bolstad, David H Bolstad, David H Jr Bolstad, Kristin Bolstad, Michelle Bolstad, Stephen R. Calvano, Peter Conlon, Mark Espinosa, Margarito M Fischer, Robert J Foster, Jeffrey Goldman, Burt Grinstead, Leslie Juarez, Hugo Koga, Dick Osborne, Greg Quintanilla, Melvin W Rudy, Frank L Rudy, Mark F Vasquez, Marcelino Villescas, Absalom Akahoshi, Greg Bolstad, William C Garcia, Radames Hernandez, Luciano Hernandez, Walter Minguela Vasquez, J. C. Munoz, Antonio Nader Margaret Patruno, Luke Sr Peraza, Jose Quiroz, Constantino A Ramos, Carlos Salinas, Herminio Torres, Manilo Vasquez, Jose G Vega, Macario Vela, Reyshell Total $ 0.00 55,219.82 44,935.04 5,602.29 31,743.34 87,174.22 43,508.09 32,791.39 0.00 75,532.10 69,434.83 129,036.70 23,474.44 352,347.80 35,041.13 6,675.21 292,673.06 114,705.25 39,265.59 14,403.65 4,693.93 264,174.02 191.39 4,902.72 120.02 4,579.60 2,447.61 10,469.77 13,736.45 7,437.70 2,379.61 2,197.30 3,299.54 526.73 6,829.02 1,711.43 12,130.84 $ 1,795,391.63 28 CONSENT JUDGMENT & ORDER Page 9 of 9

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