CONTINENTAL AIRLINES, INC. 401(K) SAVINGS PLAN v. ALMODOVAR-ROMAN et al
OPINION. Signed by Judge Madeline Cox Arleo on 9/29/17. (DD, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CONTINENTAL AIRLINES, INC. 401(k)
Civil Action No. 16-5766
BRENDA ALMODOVAR-ROMAN, et al.,
ARLEO, UNITED STATES DISTRICT JUDGE
THIS MATTER comes before the Court on Plaintiff Continental Airlines, Inc. 401(k) Savings
Plan’s (“Plaintiff” or “Continental”) motion for default judgment against Defendants Brenda
Almodovar-Roman and John Does 1 through 10 pursuant to Federal Rule of Civil Procedure
55(b)(2). ECF No. 9. For the reasons set forth herein, the motion is DENIED.
Plaintiff is a defined contribution plan organized under the laws of Texas and licensed to
do business in New Jersey. Compl. ¶ 3. Defendant Brenda Almodovar-Roman is an adult
individual residing at 33 Mill Street, Apartment 3E, Newton, NJ 07860. Id. ¶ 4. Plaintiff is
“ignorant” of the true identities and capacities sued as John Does 1 through 10. Id. ¶ 5.
Continental Airlines sponsored a “defined contribution plan” (the “Plan”), within the
meaning of Section 1002(34) of the Employee Retirement Incomes Security Act of 1974, as
amended (“ERISA”). Id. ¶¶ 6-7. Continental is the fiduciary of the Plan within the meaning of
section 1002(21) of ERISA. Id. ¶7. Almodovar-Roman was a participant in the Plan during her
course of employment with Continental Airlines.1 Id. ¶ 8.
During the last quarter of 2014, the first quarter of 2015, and the second quarter of 2015,
Almodovar-Roman did not have a balance in her Plan account. Id. ¶ 9. On September 4, 2015,
Continental mistakenly rolled over another Plan participant’s funds, in the amount of $149,071.892
(the “Mistaken Payment”), into Almodovar-Roman’s Plan Account. Id. ¶ 10; Affidavit of Jamie
Miller (“Miller Aff.”) ¶6, ECF No. 9-2. On October 3, 2015, Almodovar-Roman was sent a third
quarter Plan account statement that posted the Mistaken Payment and showed her balance as
$149,071.89.3 Compl. ¶ 11, Miller Aff. ¶ 7, Ex. A.
On October 19, 2015, Almodovar-Roman requested a total distribution of her plan account.
Compl. ¶ 12. This equaled a gross payment amount of $152,596.66,4 minus the applicable federal
taxes of $30,519.33, for a net payment of $122,077.33. Id. ¶ 12; Miller Aff. ¶ 8, Ex. B. Continental
processed the payment on October 19, 2015, and mailed a check in the amount of $122,077.33 to
Defendant Almodovar-Rosen’s home address. Compl. ¶ 12; Miller Aff. ¶ 9, Ex. C. Subsequently,
Almodovar-Roman deposited or cashed the check in the amount of $122,077.33. Id. ¶ 13.
In December 2015, Continental discovered the Mistaken Payment and commenced efforts
to recoup the payment from Almodovar-Roman. Id. ¶ 14. Numerous correspondences were sent
It appears Almodovar-Roman is no longer employed by Continental Airlines. See Compl. ¶ 6
(“At all relevant times herein, Defendant, Brenda Almodovar-Roman, was employed by or retired
from Continental Airlines”).
The Complaint at ¶ 10 misstates the amount that was rolled over into Almodovar-Roman’s
account as $152,596.66. Pl’s. Br. at 2, ECF No. 9-1.
The Complaint at ¶ 11 misstates the amount shown in the third quarter Plan account statement as
$152,596.66. Pl’s. Br. at 2.
The gross payment amount of $152,596.66 is greater than the $149,071.89 originally rolled over
into Almodovar-Roman’s Plan account due to earnings between the initial rollover on September
4, 2015 and the time of disbursement on October 19, 2015. Pl’s. Br. at 3.
to Almodovar-Roman requesting repayment of the $122,077.33. Id. Almodovar-Roman has not
responded to any of Continental’s requests. Id. ¶ 15. Plaintiff contends that Almodovar-Roman
is still in possession of all or part of the Mistaken Payment and that all or part of the Mistaken
Payment can be traced from Almodovar-Roman to John Does 1-10. Id. ¶ 16.
On September 21, 2016, Plaintiff filed a Complaint in this Court. ECF No. 1. The Complaint
consists of two counts against Defendants: (1) a claim for equitable relief under ERISA and (2) a
breach of contract or unjust enrichment claim under New Jersey common law. Compl. ¶¶ 17-20.
Under both counts, Plaintiff seeks an accounting of the Mistaken Payment and imposition of a
constructive trust over the Mistaken Payment and any remaining amounts in the possession of
Almodovar-Roman or John Does 1-10, together with costs, prejudgment interest, and attorneys’
fees. Id. Plaintiff also requests other equitable relief, including a restraining order imposed on
Almodovar-Roman and John Does 1 through 10, which may be necessary to maintain and restore
the plan. Id.
On September 23, 2016, service of the Complaint was made on Almodovar-Roman. ECF No.
3. On October 21, 2016, Plaintiff requested the entry of default, and the Clerk entered default on
October 24, 2016. ECF No. 5. On January 6, 2017, the Court directed Plaintiff to move for default
judgment within ten days to avoid dismissal. ECF No. 6. The Court subsequently granted
Plaintiff’s request for an extension of time to file for default judgment. ECF Nos. 7, 8. On January
31, 2017, Plaintiff filed the instant motion for default judgment. ECF No. 9. The motion is
II. LEGAL STANDARD
“The district court has the discretion to enter default judgment, although entry of default
judgments is disfavored as decisions on the merits are preferred.” Animal Sci. Prods., Inc. v. China
Nat’l Metals & Minerals Imp. & Exp. Corp., 596 F. Supp. 2d 842, 847 (D.N.J. 2008). Before
entering default judgment the court must: (1) determine it has jurisdiction both over the subject
matter and parties; (2) determine whether defendants have been properly served; (3) analyze the
Complaint to determine whether it sufficiently pleads a cause of action; and (4) determine whether
the plaintiff has proved damages. See Chanel, Inc. v. Gordashevsky, 558 F. Supp. 2d 532, 535-36
(D.N.J. 2008); Wilmington Savings Fund Soc., FSB v. Left Field Props., LLC, No. 10-4061, 2011
WL 2470672, at *1 (D.N.J. June 20, 2011). Although the facts pled in the Complaint are accepted
as true for the purpose of determining liability, the plaintiff must prove damages. See Comdyne
I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).
In addition, prior to granting default judgment, the Court must make explicit factual
findings as to: (1) whether the party subject to the default has a meritorious defense; (2) the
prejudice suffered by the party seeking default judgment; and (3) the culpability of the party
subject to default. Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171, 177
A. Jurisdiction & Service
The Court has both subject matter jurisdiction over this dispute and personal jurisdiction
over Almodovar-Roman, but the Court does not have enough information to determine whether it
can exercise personal jurisdiction over the unnamed defendants. The Court has subject matter
jurisdiction under 28 U.S.C. § 1331 because this matter raises a federal question: whether Plaintiff
is entitled to recovery of the Mistaken Payment pursuant to 29 U.S.C. § 1132(a)(3) and attorney’s
fees and costs under 29 U.S.C. § 1132(g), both provisions of ERISA. The Court has personal
jurisdiction over Almodovar-Roman, as her residence is in Newton, New Jersey. Service of the
Summons and Complaint was made by personal service on Almodovar-Roman on September 23,
2016. ECF No. 3.
However, the Court cannot determine whether it has jurisdiction over Defendants John Doe
1 through 10 or whether those unnamed defendants have been properly served. Continental seeks
default judgment against John Doe 1 through 10 and imposition of a constructive trust over any
amounts of the Mistaken Payment that are in Defendants John Doe 1 through 10’s possession.
This is improper. See Chanel, Inc. v. Matos, 133 F. Supp. 3d 678, 684 n.4 (D.N.J. 2015).
Consequently, the request to enter default against the “John Doe” Defendants is DENIED.
Plaintiffs have pled an ERISA claim against Almodovar-Roman. ERISA, 29 U.S.C. §
A civil action may be brought … (3) by a participant, beneficiary, or fiduciary (A)
to enjoin any act or practice which violates any provision of this subchapter or terms
of the plan, or (B) to obtain other appropriate equitable relief to (i) redress such
violations or (ii) to enforce any provisions of this subchapter of the terms of the
The term “equitable relief” in 1132(a)(3)(B) refers to “those categories of relief that were
typically available in equity.” Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210
(2002) (quoting Mertens v. Hewitt Assocs., 508 U.S. 248, 256 (1993)). To establish an equitable
recovery under § 1332(a)(3), Continental must show it is seeking to recover property that is (1)
specifically identifiable; (2) belongs in “good conscience” to the plan; and (3) is within the
possession and control of the defendant. See Knudson, 534 U.S. at 213 (2002) (“[A] plaintiff
could seek restitution in equity, ordinarily in the form of a constructive trust or an equitable lien,
where money or property identified as belonging in good conscience to the plaintiff could clearly
be traced to particular funds or property in the defendant’s possession.”). However, if the funds
have been dissipated, Continental’s claim is only that of a general creditor and equitable relief is
unavailable. Id. at 214 (“[F]or restitution to lie in equity, the action generally must seek not to
impose personal liability on the defendant, but to restore to the plaintiff particular funds or property
in the defendant's possession).
Here, Continental alleges (1) the $149,071.89 erroneously placed into AlmodovarRoman’s 401(k), which was later disbursed to her in the amount of $122,077.33, is specifically
identifiable property; (2) the property belongs in “good conscience” to the Plan because it was
mistakenly rolled over from another Plan participant’s fund; and (3) the property is either entirely
or partially in Almodovar-Roman’s possession. See Compl. ¶¶ 10, 13, 16; Miller Aff. ¶¶ 6, 8-11.
While Plaintiff has sufficiently alleged that specifically identifiable property belongs in “good
conscience” to the Plan, it has not shown that the property is clearly traceable to funds in Defendant
Almodovar-Roman’s possession. See, e.g., Unum Life Ins. Co. of Am. v. Grourke, 406 F. Supp.
2d 524, 529 (M.D. Pa. 2005) (finding no equitable cause of action under 1332(a)(3) where plaintiff
failed to provide any evidence that outstanding overpayments remained in defendant’s possession).
As a result, the Court finds Plaintiff has not sufficiently pled a claim for equitable relief under
Plaintiff also alleges state law claims for breach of contract and, alternatively, unjust
enrichment. See Compl. ¶¶ 19-21. However, any state law claims are preempted by ERISA. See
Minnis v. Baldwin Bros. Inc., 150 F. App’x 118, 120 n.1 (3d Cir. 2005) (finding state law claims
preempted where plaintiff alleged an ERISA plan in his complaint); see also 29 U.S.C. § 1144(a)
(providing that ERISA “shall supercede any and all State laws insofar as they may now or hereafter
relate to any employee benefit plan” covered by the statute); Shaw v. Delta Airlines, 463 U.S. 85,
96-96 (“A law ‘relates to’ an employee benefit plan, in the normal sense of the phrase, if it has a
connection with or reference to such a plan.”). Consequently, Plaintiff is not entitled to relief
under either ERISA or state law.5
For the reasons set forth above, Plaintiff Continental Airlines, Inc. 401(k) Savings Plan’s
motion for final judgment by default is DENIED without prejudice. An appropriate order
accompanies this opinion.
Dated: September 29, 2017.
/s Madeline Cox Arleo___________
MADELINE COX ARLEO
United States District Judge
Because the Court finds Plaintiff has not sufficiently pled a cause of action, it will not move on
to consider defenses, prejudice, culpability, or damages.
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