Chao v. Williams et al

Filing 44

ORDER granting Motion for Default Judgment 39 . Signed by Judge Whyte on 3/5/10. (rmwlc3, COURT STAFF) (Filed on 3/5/2010)

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 LAWRENCE BREWSTER, Regional Solicitor DANIELLE L. JABERG, Counsel for ERISA California Bar No. 256653 jaberg.danielle@dol.gov Office of the Solicitor, U.S. Department of Labor 90 Seventh St., Suite 3-700 San Francisco, CA 94103-1516 Phone (415) 625-7740 Fax (415) 625-7772 EVAN H. NORDBY, Trial Attorney Washington Bar No. 35937 nordby.evan@dol.gov Office of the Solicitor, U.S. Department of Labor 1111 Third Avenue, Suite 945 Seattle, WA 98101 Phone (206) 553-0940 Fax (206) 553-2768 Attorneys for Hilda L. Solis, Secretary United States Department of Labor, Plaintiff UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA HILDA L. SOLIS,1 Secretary of the United States Department of Labor, ) ) ) Plaintiff, ) v. ) ) MICHAEL D. WILLIAMS, an individual; ) POWER & DATA TECHNOLOGY, INC., a ) California corporation; and POWER & DATA ) TECHNOLOGY, INC., 401(K) PROFIT ) SHARING PLAN, an employee pension ) benefit plan, ) ) Defendants. ) ) Case No.: C08-05643 RMW PROPOSED ORDER GRANTING MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANTS MICHAEL D. WILLIAMS AND POWER & DATA TECHNOLOGY, INC. E-filed 3/5/10 1 Hilda L. Solis was confirmed as Secretary of Labor on February 24, 2009, and is substituted as Plaintiff in this action. See Fed. R. Civ. P. 25(d) No. C08-05643 RMW Proposed Order Granting Motion for Default Judgment Against Defendants Michael D. Williams and Power & Data Technology, Inc. -1- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2 Plaintiff Hilda L. Solis, Secretary of Labor, United States Department of Labor (the "Secretary"), brought this action against Defendants Michael D. Williams, an individual; Power & Data Technology, Inc., a California corporation and the Power & Data Technology, Inc., 401(K) Profit Sharing Plan, an employee pension benefit plan,2 for violations of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1001-1191c. The Defendants failed to timely answer the Complaint and, on August 17, 2009, the Clerk of this Court issued an Entry of Default in this matter. Upon review of the moving papers, the record, and for good cause shown, it is hereby ORDERED, ADJUDGED, and DECREED that: 1. The Secretary's Motion for Default Judgment Against Defendants Michael D. Williams, an individual, and Power & Data Technology, Inc., a California corporation, is granted in full; and that judgment is entered in favor of the Secretary against Defendants Michael D. Williams, an individual, and Power & Data Technology, Inc., a California corporation, finding that said Defendants, acting in their fiduciary capacities: a. failed to act solely in the interest of the participants and beneficiaries of the Plan and for the exclusive purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of Plan administration, in violation of ERISA 404(a)(1)(A), 29 U.S.C. 1104(a)(1)(A); b. failed to discharge their duties with respect to a plan with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, as required by ERISA 404(a)(1)(B), 29 U.S.C. 1104(a)(1)(B). The Plan was named as a Defendant pursuant to Rule 19(a) of the Federal Rules of Civil Procedure solely to assure that complete relief can be granted. No. C08-05643 RMW Proposed Order Granting Motion for Default Judgment Against Defendants Michael D. Williams and Power & Data Technology, Inc. -2- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 c. failed to act in accordance with the documents and instruments governing the plan as required by ERISA 404(a)(1)(D), 29 U.S.C. 1104(a)(1)(D); d. caused the Plan to engage in transactions which they knew or should have known constituted a direct or indirect transfer to, or use by or for the benefit of, a party in interest, of assets of the Plan, in violation of ERISA 406(a)(1)(D), 29 U.S.C. 1106(a)(1)(D); and e. dealt with assets of the Plan in their own interests, in violation of ERISA 406(b)(1), 29 U.S.C. 1106(b)(1). 2. Said judgment is in the amount of $39,325.62 in missing Plan assets, plus $6,865.46 in pre-judgment interest as of January 15, 2010, to compensate the Plan for lost opportunity costs; for a total of $46,191.08; 3. Additional pre-judgment interest is awarded through the date of entry of judgment, at the rate provided by IRC 6621(a); 4. U.S.C. 1961; 5. An independent fiduciary shall be appointed by the Court upon motion of the Post-judgment interest is awarded through the date of collection pursuant to 28 Secretary to administer the Plan, with duties including but not limited to: to conduct an accounting of the Plan; to distribute the Plan's assets to eligible participants and beneficiaries upon request; and ultimately terminate the Plan, when appropriate, and conclude any Plan-related matters connected with the proper termination of the Plan. a. The independent fiduciary shall have all the rights, duties and discretion of a trustee/fiduciary under ERISA. b. The independent fiduciary shall have full access to all data, information and calculations in the Plan's and the Plan Administrator's possession or control. c. The Defendants are ordered to fully cooperate with the independent fiduciary's reasonable requests in connection with the proper administration and termination of the Plan. No. C08-05643 RMW Proposed Order Granting Motion for Default Judgment Against Defendants Michael D. Williams and Power & Data Technology, Inc. -3- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 6. Defendants are required to pay for all costs associated with the appointment and retention of the independent fiduciary. 7. Upon the effective date of the appointment of the independent fiduciary, Defendants Michael D. Williams, an individual, and Power & Data Technology, Inc., a California corporation, are removed as fiduciaries to the Plan. 8. Defendant Michael D. Williams is permanently enjoined from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan; 9. The Secretary is awarded costs of service of $946.00 pursuant to Federal Rule of Civil Procedure 4(d)(2)(A). Although defendant Williams appeared at the hearing and was given the opportunity to speak, he did not challenge the amount of damages sought. Dated: 3/5/10 __________________________________ UNITED STATES DISTRICT JUDGE Presented by: UNITED STATES DEPARTMENT OF LABOR Deborah Greenfield Acting Deputy Solicitor Lawrence Brewster Regional Solicitor Danielle L. Jaberg Counsel for ERISA By: /s/ Evan H. Nordby_________________ Evan H. Nordby Trial Attorney Dated: January 15, 2010__________ No. C08-05643 RMW Proposed Order Granting Motion for Default Judgment Against Defendants Michael D. Williams and Power & Data Technology, Inc. -4-

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