Solis v. Buckingham et al

Filing 30

MEMORANDUM OPINION. Signed by Judge Paul W. Grimm on 1/24/2014. (kns, Deputy Clerk)

____
__

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SOl/tltem Divisio/l

Al£IJ ---.JHlERED
-",'INED -.JfCBVED

JAN 282014

IL-

Ar_r
a.EAKUA. OI8TIIlCTCOURT
DISTllICT Of' llAR'IlANll
0EPl1IY

THOMAS E. PEREZ
SECRETARY OF LABOR
U.S. DEPARTMENT OF LABOR
Plaintiff,
CIVIL NO.: PWG-12-3576

v.
ESTATE OF .JOHN D. BUCKINGHAM,
SR., et Ill.
Defendant.
...nOn ...

MEMORANDUM

OPINION

This Memorandum and Order addresses the Motion for Default Judgment, ECI' No. 21,
and Memorandum in Support ("Default Mem."), ECF No. 21-1, tiled by Plaintiff Thomas E.
Perez, United States Secretary of Labor.

Defendants Thomas Buckingham and Sun Control

Systems, Inc. ('"Sun Control") have not responded, and the time to do so has passed. See Loc. R.
105.2.a.1
Ilaving reviewed the filings, I tind that a hearing is not nccessary.

See Loc. R. 105.6.

For the reasons stated herein, Plaintiffs' Motion for Default Judgment is GRANTED.

Defendant Estate of John D. Buckingham, Sr., has not defaulted and Iiled an answer on
August 12, 2013, ECF No. 18. The claims against the Estate of John D. Buckingham Sr. have
been resolved by the consent judgment that I entered at the request of the parties, ECI' No. 29.
Default judgment is not sought with respect to Defendants Sun Control Systems, Inc. Protit
Sharing Plan and Trust, Sun Control Systems, Inc. Profit Sharing Plan II, or Sun Control
Systems, Inc. 40 I(k) Plan and Trust. even though those Defendants have defaulted. Clerk's
Entry of Default, ECF NO.1 O.

I.

FACTUAL AND PROCEDURAL IIISTORY
Original Plaintiff Secretary of Labor Hilda L. Solis2 filed a Complaint

Employee Retirement Income Sccurity Act of 1974, 29 U.S.C.

S

under the

1001 el seq. ("ERISA"), in a

civil enforcement action for breaches of fiduciary duty, sceking relief pursuant to Sections 409
and 502 of ERISA, 29 U.S.c.

SS

1109 and 1132.

The Complaint alleges that Sun Control Systems, Inc. Profit Sharing Plan and Trust
("Plan j"'), is a single-employer.

profit sharing, defined benefit plan that is administered

in

~'\l ,
3

15.

Rockville, Maryland, and that was established on or about January 1, 1985. Compl.

Ecr No. I. Sun Control Systems, Inc. Profit Sharing Plan II ("Plan Ir') is a defined-benefit plan
with a 401 (k) component that is administered in Rockville, Maryland and that was established on
or about January 1, 1992. Ill. 'Il'li4, 16. Sun Control Systems, Inc. 40I(k) Plan and Trust ("Plan
III" and, collectively with Plan I and Plan II, the "Plans") is a 40 I(k) benefit plan providing
retirement bcnefits to employees that is administered

in Rockville, Maryland and that was

established on or about January I, 2004. All three of the Plans are employee benefit plans within
the meaning of Section 3(3) of ERISA, 29 U.S.c.
ERISA pursuant to Section 4(a), 29 U.S.c.

S

S

1002(3), and therefore all are subject to

1003(a). Ill. 'i,j3-5.

Sun Control was the Plan Administrator for the Plans.

Ill. 'Ii 11. At all relevant times

prior to January 21, 2010, John Buckingham was the President and majority shareholder of Sun
Control and trustee of the plans, performing the duties and functions of the Plan Administrator.
Id.

'i 12.

Up until his death on October 17, 2012, John Buckingham was a majority owner of Sun

See 29 U.S.C. S I002(14)(E).

Control and therefore was a party in interest.

Id. Beginning

January 21, 2010, Thomas Buckingham, the son of John. has been President and a minority

2

Plaintiff since has been substituted by the new Secretary of Labor, Thomas E. Perez,
pursuant to red. R. Civ. P. 25(d).
2

shareholder of Sun Control and trustee of the Plans, performing the duties and functions of the
Plan Administrator.
son, 29 U.S.c.

S

Id.'i

13. He also is a party in interest by virtue of being John Buckingham's

1002(I4)(F), and a fifteen perecnt owner, 29 U.S.c.

S

I002(I4)(H).

Id.

On or about December 6,2007, John Buckingham and Sun Control authorized plan assets
to be transfcrred from Plan 11to a Sun Control bank account. Id. '119. On or about February 6,
2008, John Buckingham and Sun Control executed a counter debit, causing plan assets to be
removed from a Plan I bank account and deposited into a Sun Control bank account.

Id. ~ 20.

On or about July 14,2009, John Buckingham and Sun Control caused an agent-assisted transfer
of plan assets out of a Plan I bank account and into a Sun Control bank account. Id. ~ 21. On or
about December 24, 2009, John Buckingham and Sun Control permitted the Virginia Commerce
Bank to take plan assets from a Plan II bank account to satisfy a tax levy placed on Sun Control
by the Internal Revenue Service despite having been notified by the bank on December 7, 2009
that such plan assets had been placed on hold and would be released to satisfy Sun Control's tax
debt if no further action was taken by December 24, 2009. Id. ~ 22.
On or about October 29, 2010, Thomas Buckingham and Sun Control permitted Bank of
America to take plan assets out of a Plan I bank account and a Plan 11bank account to satisfy an
August 24, 20 I0 Writ of Garnishment of Property issued for a Sun Control debt despite their
having been notified by the bank on September 3, 2010 that such plan assets had been placed on
hold and would be released to satisfy the Sun Control debt if no further action was taken. The
bank also notified Thomas Buckingham and Sun Control of an appeals process that could have
been used to reverse the transaction.

Id.

23.

John Buckingham, Thomas Buckingham, and Sun Control deducted money from the
participants' pay as employee elective salary deferrals to Plan Ill. On or about April 14, 2006,

3

some of these salary deferral
January

contributions

1, 2006 and November

failed to segregate
Defendant
April 7, 2013.
statutory

Thomas

Plaintiff
judgment

Buckingham,

filed the pending
Thomas

fiduciary,

Motion

and requiring

Buckingham,

and Sun Control

lei. ~ 25.

by a private

process

server on

Sun Control was served personally
AlI

late

of Service,

ECF NO.7.

via its
Neither

moved

for Entry of Default

as to Thomas

and the Clerk entered an Order of Default

alleged to be jointly

and

Thomas

Sun

Control

Buckingham

on August 20, 2013, seeking
as

fiduciaries,

and Sun Control

was not proper because

Estate of John D. Buckingham,

"Wright

for Default Judgment

appointing

an

to restore all losses

claims remaincd

Sr., who had appeared

Alan Wright

pending

against

and had filed an Answer.

et aI., Civil Practice & Procedure,

Ans.,

S

& Miller") ("As a general rule then. when one of several defendants
liable defaults, judgment

the matter has been adjudicated
on November

a

See Proposed Default J., ECF No. 21-3.

ECF No. 18; see also lOA Charles

llowever,

Plaintiff

Buckingham

At that time, default judgment

(hereinafter

Defendant

on April 7, 2013.

On May 9, 2013,

caused by their misconduct.

Defendant

personally

were remitted

ECF No. 10.

removing

independent

was served

Sun Control, and the Plans,) ECF No.9,

on May 10,2013,

Thomas

between

nor Sun Control has liled an Answer, a Motion to Dismiss, or a Motion for

Judgmcnt.

Buckingham,

Buckingham

AfC of Service. ECF NO.7.

Buckingham

Summary

John Buckingham,

In addition,

contributions

the Plan assets from the general assets of Sun Control.

agent, Thomas

Thomas

to the Plan.

15, 20 I 0, many salary deferral

lei. ~ 24. Defendants

without interest.

were not remitted

should not be entered against that defendant

with regard to all defendants,

or all defendants

The record reflects that the Plans also were served personally
Thomas Buckingham, on April 7, 2013. AIT.s of Service, ECF NO.7.
4

who is
until

have defaulted.").

13, 20 I 3, PlaintilT and the Estate filed a Motion to Approve

)

2690

and Enter

via their authorized

agent,

Consent Judgment, ECF No. 28, seeking to resolve such claims as were brought against the
Estate, and consenting to the relief sought in the Motion for Default Judgment. That motion now
has been granted, and a Consent Judgment entered with respect to the Estate.

ECF No. 29.

Accordingly, I now can consider Plaintiffs Motion for Default Judgment.
II.

DISCUSSION

A. Default .Judgment
Rule 55(b) of the Fedeml Rules of Civil Procedure governs default judgments.

Rule

55(b)(1) provides that the clerk may enter a default judgment if the plaintiffs claim is "for a sum
certain or a sum that can be made certain by computation:'

1\ plaintiffs

assertion of a sum in a

complaint does not make the sum "certain" unless the plaintiff claims liquidated damages;
otherwise, the complaint must be supported by affidavit or documentary evidence. See Medunic
v. Lederer, 64 F.R.D. 403, 405 n.7 (E.D. Pa. 1974) (concluding that clerk could not enter default
judgment where damages were not liquidated), reI' 'd on other grounds, 533 F.2d 891 (3d Cir.
1976).
If the sum is not certain or ascertainable through computation, Rule 55(b)(2) provides:
[TJhe party must apply to the court for a default judgment. ... The court may
conduct hearings or make referrals-preserving
any federal statutory right to a
jury trial-when, to enter or effectuate judgment, it needs to:
(A) conduct an accounting;
(B) deternline the amount of damages;
(C) establish the truth of any allegation by evidence; or
(D) investigate any other matter.
I\s

the Court noted in Disney Enters.

1'.

Delane, 446 F. Supp. 2d 402, 405 (D. Md. 2006),

The United States Court of Appeals for the Fourth Circuit has a "strong policy
that cases be decided on the merits:' United States 1'. Sh(ffler Equip. Co., II F.3d
450, 453 (4th Cir. 1993). However, default judgment is available when the
"adversary process has been halted because of an essentially unresponsive party."
S.E.C. 1'. Lawbaugh, 359 F. Supp. 2d 418, 421 (D. Md. 2005).

5

In determining whether to award a default judgment, the Court will take as true the wellpleaded factual allegations in the complaint, other than those pertaining to damages.

Ryan v.

Homecomings Fin. Nelwork, 253 F.3d 778, 780 (4th Cir. 200 I) ('"'The defendant, by his default,
admits the plaintifrs
judgment,

well-pleadcd

allegations

of fact, is concluded on those facts by the

and is barred from contesting on appeal the facts thus cstablished.'''

(quoting

Nishimalsu Conslr. Co. v. Houslon Nal 'I Bank, 515 F.2d 1200, 1206 (5th Cir. 1975))); see Fed.
R. Civ. P. 8(b)(6); Agora Fin., LLC v. Sanlier, 725 F. Supp. 2d 491, 494 (D. Md. 2010) (quoting
Ryan, 253 F.3d at 780-81);

lOA Wright & Miller, supra, ~ 2688.

However, '''[a] defendant's

dcfault docs not in itself warrant the court in entering a dcfault judgment.

Thcre must be a

suffieicnt basis in the pleadings for the judgment entered. '" DIRECTV, Inc. v. l'erniles, 200 F.
App'x 257, 258 (4th Cir. 2006) (quoting Nishima/su, 515 F.2d at 1206). This is becausc "the
party making the requcst is not cntitled to a det:~ult judgment as of right, even when defcndant is
technically in dcfault and that I~lcthas bcen noted undcr Rule 55(a)."
~ 2685.

Rather, "the district judge

is required to exercise

Wright & Miller, supra,

sound judicial

discretion

in

determining whether the judgmcnt should be entercd," and thc Court may "refuse to enter a
default judgmcnt"

It!. Accordingly, the Court must "consider whcther the unchallenged facts

constitute a legitimate cause of action, since a party in default does not admit mere conclusions
of law,"

It!. ~ 2688; see Ryan, 253 F.3d at 780 ('"'The dcfendant is not held ...

conclusions of law ....

to admit

[A] default is not treated as an absolute confession by the defendant of

his liability and of the plaintiffs

right to recover.'" (quoting Nishimatsu, 515 F.2d at 1206) (first

ellipsis in original)); Agora Fin.. LLC, 725 F. Supp. 2d at 494 (quoting Ryan, 253 F.3d at 78081); see also Ohio Cenl. lUi. v. Celli. 7i'zlsl Co., 133 U.S. 83, 91 (1890) (stating that even though
plaintiff's allegations may be taken as true and "the defendant may not be allowed, on appeal, to

6

question the want of testimony or the insufficiency or amount of the evidence, he is not
precluded from contesting the sufficiency of the bill, or from insisting that the averments
contained in it do not justify the decree"); SEC v, Lawbaugh, 359 F. Supp, 2d 418, 422 (0, Md.
2005) (concluding

that "Plaintiffs

pleadings,

taken as true, establish

all of the alleged

violations"),
More than nine months have passed since Defendants Thomas Buckingham and Sun
Control were served with the Complaint, yet they have not pleaded or otherwise asserted a
defense by filing a motion,

Thus all of Plaintiffs

factual allegations in the Complaint not

pertaining to damages are deemed admitted as against those Defendants.

Fed. R. Civ, P. 8(b)(6);

Ryan, 253 F.3d at 780. Plaintiff has moved for both an entry of default on May 9, 2013 and a
default judgment on August 20, 2013, and Defendant still did not respond,

It is within the

Court's discretion to grant default judgment when a defendant is unresponsive.

See Park CO/po

1',

Lexinglon Ins, Co., 812 F,2d 894, 896 (4th Cir. 1987) (upholding a default judgment when the

defendant lost its summons and did not respond within the proper period); Disney Enlers" 446 F,
Supp, 2d at 405-06 (holding that entry of default judgment was proper because defendant had
been served properly with complaint and did not respond, even after plaintiffs tried repeatedly to
contact him); see also Lawbaugh, 359 F. Supp, 2d at 422 (concluding that default judgment was
appropriate because defendant was "unresponsive

for more than a year" after denial of his

motion to dismiss, even though he was properly served with plaintiffs
default and default judgment).

motions for entry of

Thus, the Court should grant default judgment on this Complaint

if PlaintifT has established Thomas Buckingham and Sun Control's liability,
With regard to liability, ERISA authorizes the Secretary to bring a civil action for
breaches of fiduciary duties to require a fiduciary to make good any losses resulting from a

7

breach. 29 U.S.c.
Plaintiffs

S

1132(a)(2), or for equitable relief, 29 U.S.C.

S

1132(a)(5).

According to

well-pleaded allegations, Defendants were the fiduciaries responsible for managing

the Plans, Compl.

'i'i 11-13, and therefore

had a duty to manage the Plans for the exclusive

benefit of participants and thcir beneficiaries, 29 U.S.c.
trust by one or more trustecs, 29 U.S.C.

S

S

II04(a)(1)(A), and to hold all assets in

II 03(a). They also had a duty to ensure that the asscts

of the plan not inure to the benefit of Sun Control, as the employer, 29 U.S.c.

S

II 03(c), a duty

not to transfer any assets to Sun Control or to any party in interest, including themselves, 29
U.S.c.

S

II06(a)(1)(D),

and a duty not to "deal with the assets of the plan in [their] own interest

or for [their] own account," 29 U.S.c.

S

II 06(b)(I).

Plaintiff has alleged that Sun Control, with John Buckingham, caused plan assets to be
moved from Plan accounts into Sun Control accounts on several occasions, Compl. ~~ 19-21, in
violation of29 U.S.c.

SS

1103(a), II03(c), II04(a)(1)(A),

II06(a)(I)(D),

and II06(b)(I).

Sun

Control, with John Buckingham, used plan assets to satisfy a tax levy on Sun Control, Compl.
~ 22, in violation of 29 U.S.C.

sS

II03(a).

II03(c),

1104(a)(1)(A), and II06(b)(I).

Thomas

Buckingham and Sun Control permitted Bank of America to take Plan assets out of Plan
Accounts to satisfy a Writ of Garnishment of Property for a Sun Control debt, Com pI. ~ 23, in
violation

of 29 U.S.c.

Buckingham
employees'

SS

II03(a),

II03(c),

II04(a)(I)(A),

and Sun Control, with John Buckingham,
pay but did not remit those contributions

and

deducted

II06(b)(l).

Thomas

Plan contributions

from

to the Plan or did not remit those

contributions to the Plan in a timely fashion, Compl. ~ 24, in violation of29 U.S.c.

SS

II03(a),

II03(c), at the very least. And Thomas Buckingham and Sun Control, with John Buckingham,
failed to segrcgate plan asscts from Sun Control's gcneral assets, in violation of 29 U.S.c.

SS

I I03(a) and II 06(b)( I), at the least.

8

Becausc Thomas Buckingham and Sun Control did not respond to the Complaint, thcse
facts conclusively are establishcd as against thcm. See Ryan, 253 FJd at 780. These facts also
show that Thomas Buckingham and Sun Control cither participated knowingly in these breaches,
See 29 U.S.C.

* 1105(a)(1).

However, there are no facts in the Complaint, or presented by

competent evidencc, showing that Thomas Buckingham had knowledge of John Buckingham's
breaches, and accordingly he cannot be liable for those brcaches. See 29 U.S.C.

* 1105(a)(3).

B. Relief Sought
Although liability has been established, an allegation "relating to the amount of damages"
is not deemed admitted based on a defendant's failure to deny in a required responsive pleading.
Fed. R. Civ. P. 8(b)(6); Trs. of the Elec. Welfare Trust Fund v. MH !'assa £Iec. Contracting,
Inc., No. DKC-08-2805, 2009 WL 2982951, at *1 (D. Md. Sept. 14,2009) ("Upon default, the
well-pled allegations in a complaint as to liability are taken as true, although the allegations as to
damages are not'').

Therefore, with respect to a default judgment, ,.[c]Iaims for damages must

generally be established in an evidentiary proceeding at which the defendant is afforded the
opportunity to contest the amount claimed"

U2 Home Entl/1't, Inc. v. Fu Shun Wang, 482 F.

Supp. 2d 314, 318 (E.D.N.Y. 2007); see Greyhound Exhihitgroup, Inc. v. E.L. u.L. Realty Corp.,
973 F.2d 155, 158 (2d Cir. 1992) (same). Yet, the Court may award damages without a hearing
if the record supports the damages requested. See !'entech Fin. Servs., Inc. \', Old Dominion Sa\l'
Works, Inc., No. 6:09cv00004, 2009 WL 1872535, at *2 (W.O. Va. June 30, 2009) (concluding
that there was "no need to convene a formal evidentiary hearing on the issue of damages" after
dcfault judgment

was entered against defendant because plaintiff submitted affidavits and

printouts of electronic records establishing the amount of damages it sought); DirecTV, Inc. v.
Yancey, No. CivA

404CVOOOII, 2005 WL 3435030, at *2 (W.O. Va. Dec. 12, 2005)

9

(concluding

that a hearing was "not rcquired to enter default judgmcnt"

bccause Plaintiff

"prescnted sufficicnt evidence to support its claim for damages, costs and fces by way of
uncontradicted affidavits"); see also Virgin Records Am., Inc. v. Lacey, 510 F. Supp. 2d 588, 593
(S.D. Ala. 2007) (noting that an entry of default judgment "in no way obviates the need for
determinations

of the amount and charactcr of damages," but an evidentiary hearing is not

requircd if "all essential evidcncc is alrcady of rccord"); Maloney v. Disciples Lid., LLC, No.
1:06CVOO124, 2007 WL 1362393, at *2 (M.D.N.C.

May 8, 2007) (noting that, in cascs

conccrning default judgments and promissory notcs, "it is not nccessary to conduct a hearing
and ... damages may bc detcrmincd by way of affidavit and othcr documcntary evidence").
In conjunction with a dcfault judgmcnt, thc Court also may order cquitablc rclief. See
Flynn v. Jocanz, 480 F. Supp. 2d 218, 221 (D. D.C. 2007) (concluding, after reviewing plaintiffs
submissions,

that plaintiffs

requcsted injunctive relicf, i.e., that "defcndants be 'dirccted to

comply with its obligations to rcport and to contribute to [spccific unions and funds] all
additional rcports, contributions, and dues chcckoff money due and owing' under the Collcctive
Bargaining Agrecmcnt," was appropriate); Wine v. SCH Eiec., LLC, No. CV08-0874-PHX-LOA,
2008 WL 4073853, at *4 (D. Ariz. Aug. 28, 2008) (concluding, aftcr an evidcntiary hearing, that
cntry of an order rcquiring defcndant cmploycr to liIc timely contribution
contributions
appropriate'"

S

timcly constituted such '''other
and thcrcfore

forms and to pay

Icga1 or cquitable rclicf as thc Court dccm[cd]

was appropriatc

in an ERISA

action

(quoting

29 U.S.c.

I 132(g)(2)(E)); Disney Enters., 446 F. Supp. 2d at 405-06 (granting a pcrmancnt injunction on

dcfault judgmcnt);

DirecTV, 2005 WL 3435030, at *4 (granting injunctivc rclief on dcfault

judgmcnt).
Here, Plaintiff sccks:

10

(l) The removal of Thomas Buckingham and Sun Control as fiduciaries of the plans and
an injunction preventing them from acting in a fiduciary capacity or exercising
custody, control, or decision-making authority with respect to the plans in the future;
(2) Appointment

of LeFoldt & Co. as an independent

authorizing certain compensation

fiduciary of the Plans, and

for services with respect to the Plans to be paid

from Plan assets, to be reimbursed jointly and severally by Thomas Buckingham and
Sun Control;
(3) For Thomas Buckingham and Sun Control to provide to Plaintiff and the independent
tiduciary all books and records relating to the Plans, and to make an accounting to the
Secretary and the independent fiduciary of all contributions

to the Plans and all

transfers, payments, or expenses incurred or paid in connection with the Plans;
(4) An order requiring Thomas Buckingham and Sun Control to restore all losses,
including lost opportunity costs and costs of independent fiduciaries, caused by their
misconduct; and
(5) An order requiring the plans to set off any balances in the account of Thomas
Buckingham against losses, if not otherwise restored to the Plans, as required by 29
u.S.c.

S

I I 56(d)(4).

I find that the removal of Thomas Buckingham and Sun Control as fiduciaries, as well as
an injunction barring them from serving as fiduciaries of the Plans in the future, is warranted and
is supported by the facts showing their repcated ERISA violations.
Meredith Hochman, an Investigator with the Washington District Office of the Employee
Benefits Security Administration,

S

has submitted a declaration, sworn pursuant to 28 U.S.c.

1746, supporting the appointment

of Lefoldt & Co. and a calculation of damagcs.

J

I

See

Hochman Dccl., Dcfault Mem. Ex., ECF No. 21-2.
credible, see Bd. of Trustees of Operating
Eagles

Cumberland

Eng

'1'.1'

I accept Ms. Hochman's representations as
Local 37 Ben~fit Fund v. Fraternal

Order of

# 245, No. WDQ-09-3123, 20 I0 WL 4806975, at *3 (D. Md. Nov. 18,

20 I0), and therefore lind that a hearing is unnecessary.
The Hochman Declaration states that bids were sought and received, following which
Lefoldt & Co. is recommended to serve as independent liduciary.

I find the appointment of

Lel'oldt & Co. to be reasonable, and the fees they seek reasonable in light of the proposals that
they have provided.

Hochman Dec!. I, Exs. 1-3. ECF No. 21-2. Accordingly, Lefoldt & Co.

shall be appointed as independent liduciary, and they shall be entitled to receive up to $10,070
for service to Plan I, up to $21,216.25 l'or service to Plan II, and up to $2,855 far service to Plan
III. See Hochman Dcc!.

'i 2.n.

However, I note that while the Estate of John D. Buckingham has consent cd to the
appointment of Lel(lldt & Co. and award of fees in the Consent Judgment, thc Consent Judgment
does not appear to allow far the recovery of the fees from the Estate of John D. Buckingham.
Accordingly, allowing the rccovery of the full fee amount from Thomas Buckingham and Sun
Control, jointly and severally, see Proposed Default J. ~ E, would force thcm to reimburse the
Plans for fees that properly are chargeable to thc Estate of John D. Buckingham but that may not
be recoverable as against him. Any fees l'or Lel'oldt & Co. that properly are chargeable to John
Buckingham may not bc recovcred from Thomas Buckingham or Sun Control.
I lind that it is reasonable to require Thomas Buckingham to turn over all books, papers,
and records of the Plans. and to rcnder a full accounting to the Secretary and the independent
liduciary, as sought by Plaintiff.

12

With respect to thc losses resulting from Defcndants' breaches, the Hochman Declaration
enumerates at least $160,319.58 in losses solely attributed to John Buckingham and Sun Control,
at least $11,862.94 solely attributed to Thomas Buckingham and Sun Control, and at least
$117.60 attributed to John Buckingham, Thomas Buckingham, and Sun Control.
Decl. 'i,\2.e-j.

Hochman

The Hochman Declaration also enumerates $40,447.95 in total, undifferentiated

interest owed.

lel.'l

2.m.

Because there is no allegation that Thomas Buckingham had

knowledge of John Buckingham's

breaches, Thomas cannot be liable for losses that he did not

cause, or for interest on those losses.

Further, the Estate of John D. Buckingham already has

agreed to pay $80,628.00, plus penalties, to restore losses to the Plans, and is not covered by this
default judgment.

Consent J.

'1 E.

Accordingly (and assuming that Sun Control still has assets

sufficient to cover the losses), Sun Control and Thomas Buckingham cannot be made to pay any
recovery properly charged to John Buckingham; to the extent that John Buckingham may owe
more than his estate is paying under the Consent Judgment, any such amounts were waived by
the Consent Judgment. Accordingly, while 1will order Thomas Buckingham and Sun Control to
restore losses caused by their fiduciary misconduct, I must clarify that this includes only those
amounts specifically resulting from the fiduciary misconduct of Thomas Buckingham and Sun
Control, jointly and severally, and excludes losses caused by John Buckingham, whether or not
those losses have becn recovered.
Finally, insofar as such losses as are attributable to Thomas Buckingham are not rcstored,
lind that the Plans are entitled to deduct such amounts from his account balances under 29
U.S.c. ~ 1156(d)(4).

13

III.

CONCLUSION
For the aforementioned reasons, Plaintiffs

Motion for Default Judgment, ECF No. 21, is

GRANTED as modified herein. A separate Default Judgment shall follow.

Dated: Januarv~,

lSI

2014

Paul W. Grimm
United States Dist iet Judge

dsy

14