Acosta v. Vision Airlines, Inc. et al

Filing 17

CONSENT JUDGMENT in favor of Plaintiff R. Alexander Acosta and against Defendants Vision Airlines, Inc. and William Acor in the amount of $219,716.98. David M. Lipkin is appointed Independent Fiduciary of the Plan. The Court directs the entry of this Consent Judgment and Order as a final order. (see Order for additional details). Signed by Judge Andrew P. Gordon on 10/25/2018. (Copies have been distributed pursuant to the NEF - SLD)

1
2
3
4
5
6
7
8
9
10

JANET M. HEROLD
Regional Solicitor
IAN H. ELIASOPH
Counsel for ERISA
ROSE DARLING (CA # 243893)
Senior Trial Attorney
United States Department of Labor
Office of the Solicitor
90 Seventh Street, Suite 3-700
San Francisco, California 94103
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]
Attorneys for Plaintiff, R. Alexander Acosta,
U.S. Secretary of Labor

11

UNITED STATES DISTRICT COURT

12

DISTRICT OF NEVADA

13
14
15
16
17
18
19
20
21

R. ALEXANDER ACOSTA, Secretary of Labor,
United States Department of Labor,

) Case No. 2:18-cv-682
)
)
Plaintiff,
) CONSENT JUDGMENT AND ORDER
)
v.
)
)
VISION AIRLINES, INC., a Nevada Corporation;
WILLIAM ACOR, an individual; SHELLEY LYNNE, )
an individual; VISION AIRLINES, INC. HEALTH
)
AND WELFARE PLAN, an ERISA employee welfare )
benefit plan.
)
)
Defendants.
)

22
23
24

WHEREAS:
A.

Plaintiff R. ALEXANDER ACOSTA Secretary of Labor, United States Department of

25

Labor (the “Secretary”), under the authority granted to him by §§ 502(a)(2) and (5) of the Employee

26

Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132(a)(2) and (5), has filed a

27

Complaint against VISION AIRLINES, INC., a Nevada Corporation; WILLIAM ACOR, an individual;

28
Consent Judgment and Order
Case No.: 2:18-cv-682

1

1

SHELLEY LYNNE, an individual; and VISION AIRLINES, INC. HEALTH AND WELFARE PLAN,

2

an ERISA employee welfare benefit plan within the meaning of Section 3(3) of ERISA, 29 U.S.C. §

3

1002(3), (collectively “Defendants”).1

4
5
6
7

B.

“parties”) admit that the Court has jurisdiction over this action under ERISA § 502(e)(1), 29 U.S.C. §
1132(e)(1), and that venue lies in the District of Nevada under ERISA § 502(e)(2), 29 U.S.C. §
1132(e)(2).

8
9
10
11

C.

14

The parties agree to the entry of this Consent Judgment and Order. The parties further

agree that this Consent Judgment and Order shall fully settle all claims of the Secretary asserted in the
Complaint.
D.

12
13

The Secretary, Vision Airlines, Inc., William Acor, and Shelley Lynne (collectively, the

The Secretary alleged in the Complaint that Defendants violated Sections 403, 404, and

406 of ERISA, 29 U.S.C. §§ 1103, 1104, 1106, by (1) failing to forward withheld employee
contributions and COBRA payments to the Vision Airlines, Inc. Health and Welfare Plan (the “Plan”);

15

and (2) failing to provide Plan participants with notice that they were at risk of losing their health

16

insurance coverage, and in fact that their coverage was retroactively terminated, because the Plan

17

fiduciaries had failed to pay insurance premiums.
E.

18

The Secretary further alleged in the Complaint that as a result of the aforementioned

19

violations of ERISA, Defendants are jointly and severally liable under ERISA Section 409, 29 U.S.C. §

20

1109, for Plan losses and uncovered medical claims for Plan participants.

21

F.

This Consent Judgment and Order is intended to restore losses to eligible Plan

22

participants and beneficiaries other than Defendants William Acor and Shelley Lynne (“Eligible Plan

23

Participants”) as identified in Exhibit A, attached hereto.

24

G.

25

All parties expressly waive Findings of Fact and Conclusions of Law.

IT IS HEREBY ORDERED, ADJUDGED, and DECREED that:

26
27
28

1

The Plan is named in the Secretary’s Complaint as a party necessary for complete relief under Fed. R.
Civ. P. 19(a).
Consent Judgment and Order
Case No.: 2:18-cv-682

2

1

1.

Defendant Vision Airlines, Inc. and Defendant William Acor are jointly and severally

2

liable for $219,716.98 and judgment is hereby entered against them in that amount (“Judgment

3

Amount”). The Judgment Amount is comprised of: (a) $99,427.33 in Plan losses in the form of

4

outstanding employee contributions not forwarded to the Plan, which includes interest calculated at the

5

rate set forth in 26 U.S.C. § 6621 from October 1, 2015 to October 2, 2018; (b) $6,755.65 in Plan losses

6
7
8
9
10

in the form of outstanding COBRA payments not forwarded to the Plan, which includes interest
calculated at the rate set forth in 26 U.S.C. § 6621 from October 1, 2015 to October 2, 2018; and (c)
$113,534.00 in Plan participants’ uncovered medical claims resulting from their loss of health
insurance coverage because the Plan fiduciaries failed to pay insurance premiums.
2.

11
12
13
14

Within 90 calendar days of the Court’s approval of this Consent Judgment and Order,

Defendants shall pay the Judgment Amount by remitting $219,716.98 to the Independent Fiduciary
appointed under Paragraph three (3) below. The amount paid to the Independent Fiduciary under this
Paragraph shall be distributed to each Eligible Plan Participant who is owed funds as determined by the

15

United States Department of Labor, Employee Benefits Security Administration (“EBSA”), and as

16

previously provided to Defendants. The Secretary shall provide the last-known contact information for

17

the Eligible Plan Participants to the Independent Fiduciary to facilitate payment of the Judgment

18

Amount. Attached as Exhibit A is a summary of the portion of the Judgment Amount due and owing to

19

each Eligible Plan Participant, as calculated by EBSA.

20

3.

David M. Lipkin, F.S.A., c/o Metro Benefits, Inc., 8150 Perry Highway, Suite 311,

21

Pittsburgh, Pennsylvania 15237, shall be, and hereby is, appointed Independent Fiduciary of the Plan

22

who:

23
24
25
26
27

a.

Will receive and distribute the Judgment Amount on a pro rata basis to the Eligible Plan

Participant as identified in Exhibit A;
b.

For any Eligible Plan Participants who cannot be located, will distribute their portion of

the Judgment Amount in accordance with EBSA’s Field Assistance Bulletin 2014-01
(https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2014-

28
Consent Judgment and Order
Case No.: 2:18-cv-682

3

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

01), which may include setting up IRAs and escheating funds to one or more states;
c.

Will follow up with Eligible Plan Participants as necessary to ensure that they receive

their portion of the Judgment Amount;
d.

Has all the rights, duties, discretion, and responsibilities of a trustee, fiduciary, and Plan

Administrator under ERISA, including filing annual and/or final Form 5500;
e.

Has the authority to delegate or assign fiduciary duties as appropriate and allowed under

the law and as permitted by the Plan document and may retain assistance as needed including attorneys,
accountants, actuaries, and other service providers;
f.

Shall have full access to all data, information, and calculations in the Secretary’s

possession and under his control, and if applicable, information and records maintained by the Plan’s
custodial trustee or service provider;
g.

Shall comply with all applicable rules and laws; and

h.

Shall terminate and wind down the Plan.

4.

Within 15 calendar days of the Court’s approval of this Consent Judgment and Order,

16

Defendants shall pay the Independent Fiduciary $13,575.00, which represents reasonable compensation

17

for the services identified in Paragraph three (3) of this Consent Judgment and Order. The Independent

18

Fiduciary’s compensation rates are identified in Exhibit B.

19

5.

The fees of the Independent Fiduciary shall be capped at $13,575.00. If the Independent

20

Fiduciary determines that additional fees are required to administer the Plan, the Independent Fiduciary

21

shall file with the Court an itemized fee application, which shall indicate the additional services that are

22

required and the additional fees for them. The parties shall have 15 calendar days to object to all or any

23

part of the application. The Independent Fiduciary shall not be entitled to any additional fees until the

24

Court approves the expenditure. Defendants shall pay any additional fees that are approved by the

25
26
27

Court. The cap on fees described in this Paragraph does not include reasonable fees and expenses
incurred by the Plan to service providers other than the Independent Fiduciary, even where the
Independent Fiduciary approves such charges.

28
Consent Judgment and Order
Case No.: 2:18-cv-682

4

1

6.

Defendants shall cooperate fully with the Independent Fiduciary appointed by the Court

2

in (a) providing documents or information they may have relevant to the Plan’s administration and

3

management to the Independent Fiduciary; (b) authorizing third parties in possession of documents or

4

information relevant to the Plan’s administration and management to turn over such documents and

5

information to the Independent Fiduciary; and (c) facilitating the transfer of possession and control of

6
7
8
9
10
11
12
13
14
15

Plan assets to the Independent Fiduciary.
7.

Upon the appointment of the Independent Fiduciary named in Paragraph three (3) above,

Vision Airlines, Inc. shall be removed as Administrator of the Plan and Defendants William Acor and
Shelley Lynne shall be removed as fiduciaries of the Plan.
8.

Vision Airlines, Inc., William Acor, and Shelley Lynne are permanently enjoined and

restrained from violating the provisions of Title I of ERISA, 29 U.S.C. §§ 1001-1191c.
9.

Defendant William Acor is hereby permanently enjoined and restrained from future

service as a fiduciary of, or service provider to, any ERISA-covered employee benefit plan.
10.

Defendant Shelley Lynne is hereby enjoined for two (2) years from the date of entry of

16

this Consent Judgment and Order from future service as a fiduciary of, or service provider to, any

17

ERISA-covered employee benefit plan.

18
19
20

11.

Within ten (10) calendar days of the Court’s entry of this Consent Judgment and Order,

the Secretary shall provide a copy of this Consent Judgment and Order to the Independent Fiduciary.
12.

This Consent Judgment and Order does not in any manner affect the right of the United

21

States Department of Labor to assess a civil penalty of twenty percent (20%) on amounts recovered

22

under ERISA § 502(l), 29 U.S.C. § 1132(l). Defendants waive the notice of assessment and service

23

requirement of 29 C.F.R. § 2570.83. Upon assessment, payment of the penalty shall be made

24

immediately unless Defendants file a petition to waive or reduce the penalty as set forth in 29 C.F.R. §§

25
26
27

2570.83–2570.87, and the Secretary agrees to waive or reduce the penalty. If the Secretary does not
agree to waive or reduce the penalty, Defendants shall remit the penalty amount to the Secretary within
90 calendar days of receipt of the Secretary’s decision denying Defendants’ petition. Defendant may

28
Consent Judgment and Order
Case No.: 2:18-cv-682

5

1

not challenge the Secretary’s decision regarding any petition submitted to waive or reduce the penalty

2

amount.

3

13.

Defendants expressly waive all claims of any nature which they have or may have

4

against the Secretary, the Department of Labor, or any of its officers, agents, attorneys, employees or

5

representatives, arising out of or in connection with the allegations contained in the Complaint on file

6
7
8
9
10
11
12
13
14
15
16
17
18

in this action, any other proceedings or investigation incident thereto or based on the Equal Access to
Justice Act, as amended.
14.

The Secretary and all Defendants shall each bear their own costs, expenses, and

attorneys’ fees incurred to date in connection with any stage of this proceeding, including but not
limited to attorneys’ fees which may be available under the Equal Access to Justice Act, as amended.
15.

Nothing in this Consent Judgment and Order is binding on any governmental agency

other than the United States Department of Labor, Employee Benefits Security Administration.
16.

This Court retains jurisdiction of this action for purposes of enforcing compliance with

the terms of this Consent Judgment and Order.
17.

By signing their names to this Consent Judgment and Order, the parties represent that

they are informed and understand the effect and purpose of this Consent Judgment and Order.
18.

This Consent Judgment and Order may be executed in counterparts, each of which shall

19

be deemed to be an original, but all of which, taken together, shall constitute one and the same

20

instrument.

21

//

22

//

23
24
25
26
27
28
Consent Judgment and Order
Case No.: 2:18-cv-682

6

1

The Court directs the entry of this Consent Judgment and Order as a final order.

2
3

Respectfully Submitted,

4
5

Dated: October 23, 2018

6
7
8
9
10
11
12
13
14

HOGAN HULET PLLC

KATE S. O’SCANNLAIN
Solicitor of Labor
JANET M. HEROLD
Regional Solicitor
IAN H. ELIASOPH
Counsel for ERISA
ss:// Rose Darling
_____
ROSE DARLING
Senior Trial Attorney
Attorneys for Plaintiff United States Secretary
of Labor

ss:// Kenneth Hogan________________
KENNETH E. HOGAN
1140 N Town Center Drive, Suite 300
Las Vegas, Nevada 89144
Attorneys for Defendants Vision Airlines, Inc.,
William Acor, and Shelley Lynne.

15
16
17

Dated: _________________

IT IS SO ORDERED:
_____________________________________
__________________________________
UNITED STATES DISTRICT JUDGE
Dated: October 25, 2018.

18
19
20
21
22
23
24
25
26
27
28
Consent Judgment and Order
Case No.: 2:18-cv-682

7

1
CERTIFICATE OF SERVICE

2
3
4
5
6
7
8
9
10
11

I hereby certify that on October 23, 2018, I electronically filed the foregoing CONSENT
JUDGMENT AND ORDER with the Clerk of Court using the CM/EFC system, which will send a
notification of the filing to the following attorney of record:
KENNETH E. HOGAN
Nevada Bar No. 10083
E-mail: [e-mail]
JEFFREY L. HULET
Nevada Bar No. 10621
E-mail: Jeff @h2legal.com
1140 N Town Center Drive, Suite 300
Las Vegas, Nevada 89144
Tel: [phone]

12
13

Dated: October 23, 2018

14
15

/s/ Rose Darling
ROSE DARLING
Senior Trial Attorney
United States Department of Labor

16
17
18
19
20
21
22
23
24
25
26
27
28
Consent Judgment and Order
Case No.: 2:18-cv-682

8

EXHIBIT A

EXHIBIT A 

Plan Participant or
Beneficiary Name
Danielle Acor
Steven Acor
Lisandra Alexandriny
Jennifer Alvarado
Lisa Anderson
Randal Ashwill
Roger Avila
Fausto Baca
Patrick Michael Barker
James Belleveau
Charles Benson
Gregory Blatt
Donna Boschert
Russell Boyd
Donald Burgess
Dalton Burgess
Jeffrey Burgett
Erica Bumbaugh
Rodolfo Buyao
Camille Campbell
Russell Carr
Michael Cheladyn
Jerry Cubillian
Kerry Cuthbert
Brain Daggett
Nicholas Davis
Alexander Dela Victoria
James Dusharm
Clover Edwards
Dominique Espinosa
Skylar Esposito
Vincent Esposito
Paige Ewell
Kathleen Farrell
Patrick Foley
Ashley Francis
Jerry Hale

Total Amount Owed to Plan
Participant or Beneficiary
$3,515.45
$145.00
$2,608.26
$102.81
$5,063.03
$754.53
$440.31
$776.05
$89.64
$1,085.24
$5,993.95
$711.24
$3,240.06
$2,467.06
$1,876.38
$1,348.00
$711.24
$440.31
$5,975.54
$720.60
$187.18
$660.46
$12,679.33
$1,925.84
$125.00
$711.24
$711.24
$395.00
$1,460.24
$440.31
$291.00
$1,742.38
$1,361.24
$720.60
$3,567.86
$110.86
$278.36

EXHIBIT A 

Ken Hashimoto
Todd Havers
Jimmy Hernandez
Jennylyn Hilario
David Hollar
Steven Honeyfield
Wendy Hudson
Leslie Hughes
Sean Hughes
Shannon Hughes
Uel Hunter
Angelica Jimenez
Judith Jones
Junko Kanazawa
Annie Karapetyan
Bradley Kinkeade
Yuko Kubo
Todd Lynch
James Maguire
Jim Martin
Stephen Martin
Brandon Mason
Callaway McCann
Alexis McCoy
Chistopher McCoy
Steve Mena
Miro Mihailoff
Thomas Miller
Carl Millican
Miguel Montoya
John Morris
Brandon Mosher
Frank Mosher
Shannon Murphy
Pamela Neal
Kirk Nelson
Gary Nelson
Tamako Nelson
Krista Nettles

$440.31
$1,593.65
$8,568.57
$711.24
$406.42
$711.24
$65.07
$4,301.48
$369.00
$305.00
$877.70
$711.24
$2,306.96
$1,054.24
$711.24
$3,437.50
$2,102.40
$1,243.24
$1,444.15
$3,269.07
$817.51
$660.46
$110.08
$2,076.38
$513.00
$2,453.01
$1,016.06
$274.76
$2,126.24
$1,083.90
$660.46
$183.00
$2,456.10
$3,050.73
$711.24
$40.05
$50,892.29
$2,609.91
$636.00

EXHIBIT A 

Steven Nettles
Jason Orton
Michael Page
Bruce Parker
Charles Payne
Jason Persun
Lorena Pichardo
Leslie Raymond
Michael Raymond
Linda Rocha
Yari Rodriguez
Angela Ross
Steven Russell
Robert Senft
Marcelo Sepulveda
Matthew Shepard
Jesse Smith
Kristopher Smith
Michael Smith
Michelle Smith
Marcus Snyder
Daniel Sprenger
Barbara Stacey
Robert Stienke
Sandra Stockton
William Stromire
Bruce Suetsugu
Ramon Tapia
Cheryl Templin
Kenneth Templin
Janet Terrill
Gergana Torneva
Jeannette Tuilaepa
Garrett Van Horne
Armando Velasco
Felipe Velasco-Cruz
Maribel Walden
Tesannie Walters
Steven Weiss

$2,609.91
$483.06
$144.96
$826.45
$220.15
$766.24
$711.24
$1,561.00
$3,827.84
$711.24
$440.31
$440.31
$660.46
$48.26
$3,940.62
$440.31
$354.00
$776.05
$106.53
$1,857.21
$2,154.07
$660.46
$784.00
$4,083.74
$295.97
$1,055.46
$1,082.46
$1,876.38
$2,252.63
$769.85
$736.69
$776.05
$875.46
$3,194.80
$711.24
$776.05
$437.00
$480.40
$2,620.86

EXHIBIT A 

Johnathon Wilson

TOTAL

$733.52

$219,716.98 (Judgment Amount)

EXHIBIT B

Exhibit B
Metro Benefits, Inc.

8150 Perry Highway
Suite 311
Pittsburgh, PA 15237
Phone [phone]
Fax [phone]
www.metrobenefits.com
Proposal for:

VISION AIRLINES, INC. HEALTH AND WELFARE PLAN
PLAN FEE AND SERVICE SCHEDULE

The following outlines the fees for the administrative and consulting services which Metro Benefits,
Inc. can provide on behalf of the plan to assume Trusteeship of the plan, with the intention of
terminating it efficiently and paying out all remaining participants. This proposal assumes that the
health plan proceeds are to be treated as if they came from a 401(k) Plan.

1.
2.

3.

Services
Initial review of Plan files
 2 hours @ $175/hour
Take custody of Plan assets once received,
set up account review - if any
 3 hours @ $175/hour
 Obtain fidelity bond



6.

$

350.00

$

925.00

$

7,995.00

Preparation of employee communication, updating on
status, preparation of distribution packages
and coordination of distributions in accordance with
Participant elections (including setup of any default

IRA’s, for non-locatable/ non-responding participants
and coordination and deposit of any Federal tax
withholding, if needed, using the IRS EFTPS) All prepared
in accordance with FAB 2014-01.)

5.

Fee

123 participants @ $ 65 per participant

Preparation of Form 1099-R & Form 945

123 forms @ $ 35 per form

To be prepared by John Hancock
Total Charges

$

4.305.00

$

13,575.00