Solis v. Thommes & Thomas Land Clearing, Inc. et al

Filing 11

CONSENT ORDER AND JUDGMENT. (Written Opinion). Signed by Chief Judge Michael J. Davis on 9/5/11. (GRR)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
---------------------------------------HILDA L. SOLIS, Secretary of Labor,
:
United States Department of Labor,
:
:
:
Plaintiff,
:
:
v.
:Case No.11-cv-00041
:
THOMMES & THOMAS LAND CLEARING, INC., :
THOMAS BENICK AND JOHN THOMMES,
: Hon. Michael J. Davis
individually and as fiduciaries to the THOMMES &
: Chief Judge
THOMAS LAND CLEARING, INC. SIMPLE IRA
:
PLAN, and the THOMMES & THOMAS LAND
:
CLEARING, INC. SIMPLE IRA PLAN,
:
:
Defendants.
:
----------------------------------------CONSENT ORDER AND JUDGMENT
Plaintiff Hilda L. Solis, Secretary of Labor, United States Department of Labor
("Plaintiff"), pursuant to the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA"), as amended, 29 U.S.C. §1001, et seq., filed a complaint against
defendants Thommes & Thomas Land Clearing, Inc., Thomas Benick and John Thommes
alleging breaches of fiduciary responsibilities under ERISA §§403(c)(1), 404(a)(1)(D),
406(a)(1)(D), 406(b)(1) and (2), and 412, 29 U.S.C. §§1103(c)(1), 1104 (a)(1)(D),
1106(a)(1)(D), 1106(b)(1) and (2), and 1112, with respect to the Thommes & Thomas
Land Clearing, Inc. Simple IRA Plan (“the Plan”).
Defendants Thommes & Thomas Land Clearing, Inc., Thomas Benick, John
Thommes, and the Plan (collectively "the Defendants") have waived service of process of
the complaint and admitted to the jurisdiction of this Court over them and the subject

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matter of this action. Defendants Thomas Benick and John Thommes neither admit nor
deny the allegations contained in the Secretary's Complaint.
The Plaintiff and the Defendants have agreed to resolve all matters in controversy
in this action between them (except for the imposition by Plaintiff of any penalty
pursuant to ERISA §502(l), 29 U.S.C. §1132(l), and any proceedings related thereto), and
said parties do now consent to entry of a Judgment and Order by this Court in accordance
therewith.
The parties agree that, if the Secretary of Labor assesses a penalty pursuant to
ERISA §502(l) in connection with the violations alleged in this matter, the “applicable
recovery amount” shall include all amounts paid in accordance with this Consent Order
and Judgment.
Upon consideration of the record herein, and as agreed to by the parties, the Court
finds that it has jurisdiction to enter this Consent Order and Judgment.

IT IS THEREFORE ORDERED that:
1.

Defendants Thommes & Thomas Land Clearing, Inc., Thomas Benick and

John Thommes are permanently enjoined and restrained from violating the provisions of
Title I of ERISA, 29 U.S.C. §1001 et seq.
2.

Defendants Thommes & Thomas Land Clearing, Inc., Thomas Benick and

John Thommes are jointly and severally liable to the Plan in the total amount of
$24,676.40 which represents the unremitted employee contributions and lost opportunity
costs which accrued as a result of the non-remittance and untimely remittance of
employee contributions to the Plan.

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3.

In addition to the losses owed to the Plan, as set forth in paragraph 2

above, Defendants Thomas Bennick and John Thommes are owed a total of $17,457.25
as a result of their failure to remit employee contributions to the Plan on their own behalf.
Defendants Thomas Bennick and John Thommes hereby waive the repayment of this sum
to their individual Plan accounts as part of the resolution of this matter
4.

Within ten (10) calendar days of the entry of the Consent Order and

Judgment, Defendant Thommes & Thomas Land Clearing, Inc. shall pay $24,676.40 to
the Plan. Upon receipt, the Plan shall credit these monies to any non-defendant
individuals who: (1) were employees of Thommes & Thomas Land Clearing, Inc., (2)
Plan participants during the period January 7, 2005 through December 31, 2008, and (3)
had employee contributions withheld from their pay for contribution to the Plan during
this period and such contributions were never remitted or were not remitted in a timely
manner to the Plan.
5.

Within twenty (20) days of entry of the Consent Order and Judgment, the

Defendants shall cause the Plan to allocate the money received by the Plan pursuant to
paragraph 4 above to be allocated to the Plan's participants in an amount equal to the
unremitted contributions and/or lost income owed to each participant as set forth in
Exhibit A. The money owed to participant J. Benick shall be forwarded to the individual
investment account maintained by the Plan on her behalf at Fidelity. The money owed to
the remaining participants listed on Exhibit A shall be distributed by the Plan directly to
them. Defendants Thomas Benick, John Thommes, and Thommes & Thomas Land
Clearing, Inc. shall provide the Secretary with satisfactory proof of the payment and
disbursement by forwarding such proof to the Regional Director, Kansas City Regional

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Office, Employee Benefits Security Administration, 2300 Main Street, Suite 1100,
Kansas City, MO 64108.
6.

If Defendant Thommes & Thomas Land Clearing, Inc. fails to make

payment in full to the Plan as described in Paragraph 4 above, Defendant Thomas Benick
will automatically be deemed to have authorized the Plan to cause an amount equal to the
lesser of the unpaid judgment set forth in paragraph 4 above or 50% of his Plan account
balance to be reallocated pursuant to §1502(a) of the Taxpayer Relief Act of 1997,
codified at 29 U.S.C. §1056(d)(4). The money shall be relocated to the Plan’s
participants in accordance with paragraph 5 of this Consent Order and Judgment.
7.

If Defendant Thommes & Thomas Land Clearing, Inc. fails to make

payment in full to the Plan as described in Paragraph 4 above, Defendant John Thommes
will automatically be deemed to have authorized the Plan to cause an amount equal to the
lesser of the remaining unpaid judgment set forth in paragraph 4 above or 50% of his
Plan account balance to be reallocated pursuant to §1502(a) of the Taxpayer Relief Act of
1997, codified at 29 U.S.C. §1056(d)(4). The money shall be reallocated to the Plan’s
participants in accordance with paragraph 5 of this Consent Order and Judgment.
8.

Defendants Thomas Benick and John Thommes shall be barred from

obtaining a distribution of their individual accounts in the Plan until such time as
payment to the Plan in compliance with paragraphs 4, 6 and 7 of this Consent Order and
Judgment has been made.
9.

Following restoration of all assets to the Plan and the distribution of those

assets to the participants pursuant to this Consent Order and Judgment, Defendants
Thomas Benick and John Thommes shall be permanently enjoined from serving or acting

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as fiduciaries or service providers with respect to any employee benefit plan subject to
ERISA. Nothing in this Consent Order and Judgment shall preclude Defendants Thomas
Benick and John Thommes from serving or acting as a director, officer or employee of
any entity which maintains an employee benefit plan covered by ERISA.
10.

Each party agrees to bear his, her or its own attorneys’ fees, costs and

other expenses incurred by such party in connection with any stage of this proceeding to
date including, but not limited to, attorneys’ fees which may be available under the Equal
Access to Justice Act, as amended.
11.

The Court shall maintain jurisdiction over this matter only for purposes of

enforcing this Consent Order and Judgment.
12.

Nothing in this Consent Order and Judgment is binding on any

government agency other than the United States Department of Labor.

DATED: September 5, 2011

s/ Michael J. Davis
HON. MICHAEL J. DAVIS
CHIEF JUDGE
UNITED STATES DISTRICT JUDGE

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The parties hereby consent to the entry of this consent order and judgment:
FOR THE SECRETARY OF LABOR
M. PATRICIA SMITH
Solicitor of Labor
Regional Solicitor
JOAN E. GESTRIN

__s/Marla J. Haley_______
MARLA J. HALEY
Trial Attorney

DATED:_8/23/11______________

P.O. ADDRESS:
Office of the Solicitor
U.S. Department of Labor
230 South Dearborn Street, 8TH Floor
Chicago, Illinois 60604
312-353-4455

FOR THE DEFENDANTS:

_s/Thomas Benick_______
THOMAS BENICK

DATED:__8/11/2011_______

_s/John Thommes______________
JOHN THOMMES

DATED:__8/11/2011 _____

THOMMES & THOMAS LAND CLEARING, INC.:
By__s/Thomas Benick___________

DATED:__8/11/2011

Its___Owner _________________

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_

THOMMES & THOMAS LAND CLEARING, INC. SIMPLE IRA PLAN:

By___s/Thomas Benick___________

DATED:__8/11/11_____

Its____Owner_______

s/Ryan R. Dreyer
RYAN R. DREYER, ESQ.
MORRISON, FENSKE & SUND, P.L.L.C.
Attorneys for Defendants Thommes & Thomas
Land Clearing, Inc. and Thomas Benick
5125 County Road 101; Suite 202
Minnetonka, MN 55345
Tel. [phone]

DATED: 8/19/11

s/Beau D. McGraw
BEAU D. MCGRAW, ESQ.
McGraw Law Firm, P.A.
Attorneys for Defendant John Thommes
600 Inwood Ave. North, Suite 200
Oakdale, MN 55128
Tel. [phone]
Fax [phone]

DATED: 8/11/11

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Delinquent Employee Contributions
Thommes and Thomas Land Clearing SIMPLE IRA
Case No. 60-103980
Ross
Anderson
EE by Participant

Neil
Briggs

Joanne
Benick

Jason
Shank

Brandon
Sostak

LOC by Participant
Total EE + LOC

$2,882.87

$12,250.00

$417.16

$142.92

16%

Pro Rata

$3,002.28

15%

66%

2%

1%

$960.52

$922.32

$3,919.15

$133.46

$45.72

$3,962.80

$3,805.19

$16,169.15

Total Delinquent EE Contributions

$5,981.17

TOTAL OWED TO PLAN

$188.64

$18,695.23

Total Lost Earnings

$550.62

$24,676.40

Attachment A

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