Board of Trustees of the Plumbers and Pipefitters Union Local 525 Pension Plan v. Blevins et al

Filing 28

ORDER Granting 27 Stipulation to File Plaintiff's First Amended Complaint to Add Additional Party is Granted. Signed by Judge Richard F. Boulware, II on 10/2/17. (Copies have been distributed pursuant to the NEF - ADR)

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Adam P. Segal, Esq.
Nevada Bar No. 6120
Bryce C. Loveland, Esq.
Nevada Bar No. 10132
BROWNSTEIN HYATT FARBER SCHRECK, LLP
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106-4614
Telephone: [phone]
Facsimile: 702.382.8135
Email: [e-mail]
Email: [e-mail]

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Attorneys for Plaintiff

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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CASE NO.: 2:17-cv-01223-RFB-NJK

BOARD OF TRUSTEES OF THE
PLUMBERS AND PIPEFITTERS UNION
LOCAL 525 PENSION PLAN,
Plaintiff,
v.
TAMARA L. BLEVINS, as an individual;
TAMARA L. BLEVINS, as the CourtAppointed Personal Representative of the
Estate of Lawrence R. Brosi; ZENITH
AMERICAN SOLUTIONS, INC., a Maryland
corporation;

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STIPULATION AND ORDER TO FILE
FIRST AMENDED COMPLAINT TO
ADD ADDITIONAL PARTY
FIRST REQUEST

Defendants.

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Plaintiff, Board of Trustees of the Plumbers and Pipefitters Union Local 525 Pension Plan,

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by and through its counsel of records, Bryce C. Loveland, Esq., of the law firm of Brownstein

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Hyatt Farber Schreck LLP, and Defendant, American Solutions, Inc., by and through its counsel

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of record, Susan L. Meter, Esq. and Craig J. Mariam, Esq., of the law firm of Gordon & Rees,

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LLP, hereby stipulate and agree to the filing of a First Amended Complaint which adds an

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additional party. The proposed First Amended Complaint is attached hereto as Exhibit 1.

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The Discovery Plan and Scheduling Order was entered by the Court on August 9, 2017,

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(ECF No. 22) and the deadline for amending the pleadings and adding parties was September 19,

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2017.

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The Plaintiff’s counsel understands this request comes eleven (11) days after the deadline
and assures the Court this request is not sought for any improper purpose or delay. The delay was
caused by difficulty in obtaining legible copies of the front and back of checks from the bank on
which they were drawn on in order to evaluate and confirm the necessity of filing an amended
complaint against the additional party.

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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BROWNSTEIN HYATT FARBER
SCHRECK, LLP

GORDON & REES LLP

/s/ Bryce C. Loveland
Adam P. Segal, Esq.
Nevada Bar No. 6120
Bryce C. Loveland, Esq.
Nevada Bar No. 10132
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106-4614
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]

/s/ Susan L. Meter
Craig J. Mariam, Esq.,
Nevada Bar No. 10926
300 South Fourth Street, Suite 1550
Las Vegas, Nevada 89101
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]

Attorneys for Plaintiff

Attorneys for Defendant, Zenith American
Solutions, Inc.

Dated: September 29, 2017.

Dated: September 29, 2017.

Susan L. Meter, Esq.
Gordon & Rees LLP
633 West Fifth Street, 52nd Floor
Los Angeles, CA 90071
Telephone: [phone]
Email: [e-mail]

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ORDER

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IT IS SO ORDERED that the Stipulation and Order to File Plaintiff’s First

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Amended Complaint to Add Additional Party is granted.

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________________________________________________
UNITED STATES DISTRICT/MAGISTRATE JUDGE

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CASE NO. 2:17-cv-01223-RFB-NJK
2nd day of October, 2017.
DATED: _______________________________________

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EXHIBIT 1

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Adam P. Segal, Esq.
Nevada Bar No. 6120
Bryce C. Loveland, Esq.
Nevada Bar No. 10132
BROWNSTEIN HYATT FARBER SCHRECK, LLP
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106-4614
Telephone: [phone]
Facsimile: 702.382.8135
Email: [e-mail]
Email: [e-mail]

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Attorneys for Plaintiff

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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Plaintiff,
TAMARA L. BLEVINS, as an individual;
TAMARA L. BLEVINS, as the CourtAppointed Personal Representative of the
Estate of Lawrence R. Brosi; ZENITH
AMERICAN SOLUTIONS, INC., a Maryland
corporation; THE PEOPLES STATE BANK,
an Indiana corporation
Defendants.

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Plaintiff alleges as follows:

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JURISDICTION AND VENUE

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1.

2.

The Court has supplemental jurisdiction over the state law claim in this Complaint

pursuant to 28 U.S.C. § 1367.

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This action arises under the Employee Retirement Income Security Act of 1974

(“ERISA”), 29 U.S.C. §§ 1132(a)(3) and 1132(e)(1).

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FIRST AMENDED COMPLAINT

v.

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CASE NO.: 2:17-cv-01223-RFB-NJK

BOARD OF TRUSTEES OF THE
PLUMBERS AND PIPEFITTERS UNION
LOCAL 525 PENSION PLAN,

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Venue is proper under 29 U.S.C. § 1132(e)(2) because the Plaintiff is administered

in Clark County, Nevada.

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PARTIES

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Pension Plan (the “Trust”), a defined benefit pension plan.

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5.

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District Court of Clark County, Nevada as the personal representative of the Estate of Lawrence
R. Brosi on or around October 24, 2014.
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On information and belief, Tamara L. Blevins is Mr. Brosi’s niece.

9.

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Zenith American Solutions, Inc., is a Maryland corporation licensed to do business

in Nevada, and was a third party administrator for the Trust until January 1, 2016.

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10.

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11.

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14.

Mr. Brosi died on September 28, 2014.

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Zenith continued to send Trust checks (the “Trust Checks”) to Mr. Brosi’s address

and made payable to Mr. Brosi after he died, which were cashed or deposited by Tamara Blevins.

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Mr. Brosi’s pension benefit provided that Dorothy White, as Mr. Brosi’s named

beneficiary, would continue to receive benefit payments for 12 months after Mr. Brosi’s death.

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Mr. Brosi retired, effective April 1, 2007, and upon retirement, elected a normal

pension.

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At all relevant times, Lawrence R. Brosi was a participant in the Trust.

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The Peoples State Bank (“PSB”) is an Indiana for-profit corporation.
FACTUAL BACKGROUND

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Defendant Tamara L. Blevins, as the court-appointed personal representative of

the Estate of Lawrence R. Brosi (the “Estate”) was, on information and belief, appointed by the

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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Defendant Tamara L. Blevins is an individual, who, based on information and

belief, is a resident of the State of Indiana.

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The Board of Trustees are fiduciaries of the Trust for purposes of ERISA.

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Plaintiff is the Board of Trustees of the Plumbers and Pipefitters Union Local 525

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Zenith sent an annual pension verification form to Mr. Brosi on February 1, 2015,

which was returned to Zenith by the post office with an Indiana forwarding address on February
10, 2015.

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Indiana address, but failed to resend the verification form and Ms. Blevins continued to cash the
checks made payable to Mr. Brosi.

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

for their own benefit.
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On each occasion, PSB deposited or cashed the Trust Check amount without an

endorsement by the payee, without any endorsement that even purported to be by the named
payee, or without any endorsement at all, violating the most basic tenet of negotiable instrument
law—a check must bear the endorsement of the named payee.

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Some of the Trust Checks cashed by Ms. Blevins at PSB contained no

endorsement.

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The bulk of the Trust Checks cashed by Ms. Blevins at PSB contained the

unauthorized signature of Tamara Blevins.

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None of the Trust Checks cashed or deposited at PSB by Ms. Blevins contained an

authentic endorsement or signature of the payee, Mr. Brosi.

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Tamara Blevins cashed or deposited the Trust Checks at PSB, totaling $98,304.48.

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On information and belief, Ms. Blevins cashed and/or deposited the $123,155.29

in Trust payments made payable to Mr. Brosi into her own account and into the Estate’s account,

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In total, $123,155.29 was paid by the Trust to Mr. Brosi after his death.

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BeneSys stopped payment to Mr. Brosi in August 2016.

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On June 1, 2016, BeneSys sent a second verification form, which Ms. Blevins

responded to as if she were the pensioner and/or beneficiary.

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On April 4, 2016, BeneSys sent a verification form to Mr. Brosi, with no response.

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On January 1, 2016, Zenith was replaced as the Trust’s third party administrator by

BeneSys, Inc. (“BeneSys”).

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Zenith continued to send Trust checks made payable to Mr. Brosi to the new

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As the drawee bank, PSB was in the position to verify Ms. Blevins’s identity and

authority to cash or deposit the Trust Checks.

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30.

Section 7.10 of the Trust’s Plan states:

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If any recipient (including a Participant, Spouse, Beneficiary or any other person) receives
a payment to which he is not entitled under the terms of the Plan, either because of failure
to retire, an error in computing the benefits payable hereunder or any other reason, the
amount of the improper payment shall be an obligation of the recipient to the Plan, and,
notwithstanding any other provisions hereof, may be recovered by the Plan through
deductions from any future benefits payable to the recipient or any surviving beneficiary,
or any other method as determined by the Trustees or their delegate, and in accordance
with any rules or regulations adopted by the Plan. The Plan shall be entitled to an award of
attorneys’ fees and costs in any action to recover such erroneous payments, as well as
prejudgment and postjudgment interest computed at the Plan’s delinquent contribution
interest rate, not the statutory rate.

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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Administrative Service Agreement with Zenith, which required it to provide day-to-day general
administrative services to the Trust, including administration of the Trust’s Plan provisions in
exchange for a monthly fee (the “Agreement”).
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ERISA as to such actions or conduct, and have the obligations and responsibilities of such a
fiduciary.
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financially responsible for overpayments and obligated to repay the Trust all such overpayments.
36.

37.

Zenith failed to follow-up on Mr. Brosi’s annual verification when he did not

respond in early 2015.
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The Trust’s Plan requires pensioners to complete the Plan’s annual eligibility

verification form.

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The Agreement states that Zenith is liable to the Trust for any acts or omissions

which are not in compliance with the Agreement or the Trust’s Plan provisions, that Zenith is

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The Agreement also stated that to the extent Zenith’s actions or conduct were

actions or conduct of a fiduciary under ERISA, Zenith will be deemed to be a fiduciary under

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The Agreement also required Zenith to implement and monitor administrative

processes and procedures to prevent fraud and abuse.

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The Agreement also required Zenith to use competent and diligent efforts to

accurately maintain, update and keep current individual files for retirees.

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At all times relevant to this matter until January 1, 2016, the Trust had an

The Trust has made multiple requests to Zenith, the Estate and Ms. Blevins to

repay the Trust.

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was not eligible for that benefit, Ms. Blevins has violated the terms of the Trust’s Plan.

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The Trust Plan’s delinquent contribution interest rate is 14% per year.

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The Estate has wrongfully retained amounts erroneously paid by the Trust.

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

In accepting and refusing to repay the benefit erroneously paid when, in fact, it

was not eligible for that benefit, the Estate has violated the terms of the Trust’s Plan.

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Ms. Blevins has wrongfully retained amounts erroneously paid by the Trust.

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In accepting and refusing to repay the benefit erroneously paid when, in fact, she

Trust.

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Zenith has not repaid the Trust for the erroneous payments it made on behalf of the

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The Estate has not repaid the Trust for payments it received.

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Ms. Blevins has not repaid the Trust for the payments she received.

The Trust has incurred and continues to incur attorneys’ fees and costs to recover

the overpayments.

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FIRST CAUSE OF ACTION

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Against Ms. Blevins Only - (ERISA § 502(a)(3) – Unjust Enrichment)

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51.

Pursuant to ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), the Trust is entitled to

equitable relief to enforce the terms of the Plan. In particular, under the Plan, the Trustees are
entitled to recover the overpayments.

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52.

The Plan assets constituting the overpayments are specifically identifiable.

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The overpayments create an unjust enrichment for Ms. Blevins.

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On information and belief, Ms. Blevins cashed and/or deposited the overpayments

made payable to Mr. Brosi into her own account.

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By continuing to pay Mr. Brosi’s pension benefit after his death, the Trust

overpaid his pension by $123,155.29.

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Paragraphs 1 through 47 are incorporated by reference as though fully stated here.

Ms. Blevins has retained the overpayments even though she is aware that she is not

entitled to those funds, which were made payable to Mr. Brosi, not her.

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received.

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Ms. Blevins has refused and failed to repay the Trust the overpayments she

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The Trust is entitled to equitable restitution of the overpayments, with interest and

attorneys’ fees and costs.

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SECOND CAUSE OF ACTION

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Against the Estate Only - (ERISA § 502(a)(3) – Unjust Enrichment)

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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entitled to recover the overpayments.
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The Plan assets constituting the overpayments are specifically identifiable.

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The overpayments create an unjust enrichment for the Estate.

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The Estate has retained the overpayments even though it is aware that it is not

entitled to those funds.

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The Estate has refused and failed to repay the Trust the overpayments it received.

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The Trust is entitled to equitable restitution of the overpayments, with interest and

attorneys’ fees and costs.

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THIRD CAUSE OF ACTION

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Against Zenith Only – Breach of Contract

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66.

The Agreement required Zenith to administer the Trust’s Plan provisions in

exchange for a monthly fee, which the Trust paid.

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Paragraphs 1 through 65 are incorporated by reference as though fully stated here.

67.

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Pursuant to ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), the Trust is entitled to

equitable relief to enforce the terms of the Plan. In particular, under the Plan, the Trustees are

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On information and belief, Ms. Blevins cashed and/or deposited the overpayments

to Mr. Brosi into the Estate’s account.

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By continuing to pay Mr. Brosi’s pension benefit after his death, the Trust

overpaid his pension by $123,155.29.

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Paragraphs 1 through 56 are incorporated by reference as though fully stated here.

68.

Zenith failed to administer the Trust in accordance with the terms of the Trust’s

Plan as it relates to Mr. Brosi’s annual eligibility verification form.
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updating and keeping current individual files for retirees, preventing fraud or abuse or repaying
overpayments Zenith made payable to Mr. Brosi.

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FOURTH CAUSE OF ACTION

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Against Zenith Only – ERISA Violation – Breach of Fiduciary Duties
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the Trust’s Plan, within the meaning of ERISA § 3(21)(A), 29 U.S.C. § 1002(21)(A).
74.

75.

Zenith is liable for the overpayments pursuant to ERISA § 409(a), 29 U.S.C. §

1109(a).

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The Trust has been required to retain the services of attorneys to protect its rights

to recover and redeem Plan assets and to prosecute this action.

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The overpayments are a breach of Zenith’s duty as a functional fiduciary.

76.

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As a functional fiduciary, Zenith was bound by the prudent man standards of care

under ERISA § 404(a)(1), 29 U.S.C. § 1104(a)(1).

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Zenith’s disregard of the Plan’s rules and policies exceeded the limits of

performing purely ministerial functions, and caused Zenith to become a functional fiduciary of

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Paragraphs 1 through 71 are incorporated by reference as though fully stated here.

73.

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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Zenith’s refusal to repay the Trust has required the Trust to bring this suit and

incur attorneys’ fees and costs, which Zenith is obligated to repay under the Agreement.

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Zenith’s failures as described above are breaches of Zenith’s contract with the

Trust, which has suffered a loss of $123,155.29 as a result.

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Zenith failed to abide by the terms of the Agreement as it relates to maintaining,

78.

The Trust is entitled to recover costs and attorneys’ fees incurred in prosecuting

this action pursuant to ERISA § 502(g)(1), 29 U.S.C. § 1132(g)(1).

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FIFTH CAUSE OF ACTION
Against PSB Only – STRICT LIABILITY FOR PAYMENT OF CHECKS NOT
PROPERLY PAYABLE

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79.

Paragraphs 1 through 78 are incorporated by reference as though fully stated here.

80.

The Trust Checks cashed or deposited by Ms. Blevins at PSB contained

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unauthorized signatures and were not properly endorsed.
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Section 4-401 of the Uniform Commercial Code (“UCC”), as enacted by the states
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of Indiana and Nevada, imposes strict liability on any bank that charges against a customer’s
account any item not properly payable, such as a check that is not properly endorsed or contains
an unauthorized signature.

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signatures, and thus were not properly payable under the UCC.

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83.

84.

SIXTH CAUSE OF ACTION
Against PSB Only – FAILURE TO EXERCISE ORDINARY CARE

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

PSB is strictly liable for improperly charging the Trust, and the Trust is entitled to

have its accounts re-credited by PSB in the total amount of the Trust Checks.

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BROWNSTEIN HYATT FARBER SCHRECK, LLP

PSB did not have the right to charge the Trust Checks against the Trust because

they were not properly payable.

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The Trust Checks were not properly endorsed and contained unauthorized

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85.

Paragraphs 1 through 84 are incorporated by reference as though fully stated here.

86.

Section 4-103 of the UCC, as enacted by the States of Indiana and Nevada,

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imposes a duty upon PSB to act with ordinary care.
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87.

The Trust Checks were not properly endorsed and contained unauthorized

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signatures, and thus were not properly payable.
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88.

As the drawee bank, PSB had a duty to exercise ordinary care in determining Ms.

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Blevins’s identity and authority to cash or deposit the Trust Checks.
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89.

PSB failed to exercise ordinary care in its depositing or cashing of the Trust

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Checks.
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90.

PSB’s actions have caused the Trust damages in accordance with § 4-103 of the

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UCC.
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WHEREFORE, the Trust prays for relief as follows:
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1.

Equitable relief in the form of restitution of $123,155.29, jointly and severally,

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from Ms. Blevins and the Estate;
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2.

Judgment in favor of the Trust, for $123,155.29 from Zenith, jointly and severally

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with Ms. Blevins and the Estate;
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Judgment in favor of the Trust and against The Peoples State Bank for actual
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damages incurred;

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For attorneys’ fees and costs incurred herein;
Prejudgment and postjudgment interest at the contributory interest rate of 14% per

year; and

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For such other and further equitable relief as the Court deems proper.

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Dated: September _____, 2017

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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Adam P. Segal, Esq., Nevada Bar No. 6120
Bryce C. Loveland, Esq., Nevada Bar No. 10132
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106-4614
Telephone: [phone]
Facsimile: [phone]

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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Attorneys for Plaintiff

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CERTIFICATE OF SERVICE

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Pursuant to Federal Rule of Civil Procedure 5(b), I certify that I am an employee of
Brownstein Hyatt Farber Schreck, LLP and that on September ___, 2017, I served a true copy of
the foregoing FIRST AMENDED COMPLAINT upon:

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a. BY CM/ECF System.
Craig J. Mariam, Esq.,
GORDON & REES LLP
3770 Howard Hughes Parkway, St. 100
Las Vegas, Nevada 89169

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Susan L. Meter, Esq.
Gordon & Rees LLP
633 West Fifth Street, 52nd Floor
Los Angeles, CA 90071

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Attorneys for Defendant, Zenith American Solutions, Inc.

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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b. BY PERSONAL SERVICE upon:
THE PEOPLES STATE BANK
c/o James L. Chesney, Registered Agent
601 E. Temperance St.
Elletsville, IN 47429-0000

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7/21/2017 BANKRUPTCY STAY:

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Joseph Ross
1503 W. Arlington Road
Bloomington, IN 47404

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Attorney for Tamara L. Blevins as an Individual and as the Court Appointed
Personal Representative of the Estate of Lawrence R. Brosi

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I declare under penalty of perjury that the foregoing is true and correct.

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An Employee of Brownstein Hyatt Farber Schreck, LLP

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