Longo v. Trojan Horse Ltd.

208 F. Supp. 3d 700, 62 Employee Benefits Cas. (BNA) 2084, 2016 U.S. Dist. LEXIS 127910, 2016 WL 5118281
CourtDistrict Court, E.D. North Carolina
DecidedSeptember 20, 2016
DocketNo. 5:13-CV-418-BO
StatusPublished
Cited by1 cases

This text of 208 F. Supp. 3d 700 (Longo v. Trojan Horse Ltd.) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Longo v. Trojan Horse Ltd., 208 F. Supp. 3d 700, 62 Employee Benefits Cas. (BNA) 2084, 2016 U.S. Dist. LEXIS 127910, 2016 WL 5118281 (E.D.N.C. 2016).

Opinion

ORDER

TERRENCE W. BOYLE, UNITED STATES DISTRICT JUDGE

This cause comes before the Court on plaintiffs’ motion to certify class and cross-motions for summary judgment filed by plaintiffs and defendant Ascensus Trust. A hearing was held on the matter before the [704]*704undersigned on September 2, 2016, at Raleigh, North Carolina. For the reasons discussed below, plaintiffs’ class is certified and summary judgment is entered in favor of plaintiffs on all claims.

BACKGROUND

Plaintiffs filed this putative class action regarding the alleged failure of defendants to make contributions to a “defined contributions plan,” or 401(k) plan (the Plan), of which plaintiffs are beneficiaries. Plaintiffs, participating employees of defendants Trojan Horse and Glen Burnie Hauling, allege that since January 1, 2009, eligible participants have contributed a portion of their wages to the Plan, but that beginning in May or June 2012, defendants have failed to make deposits into the plan, notwithstanding that they have continued to deduct and withhold the regular contributions from plaintiffs’ wages. Plaintiffs filed this action under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq.

On September 11, 2013, plaintiffs voluntarily dismissed their claims against As-census Trust, Inc. and Frontier Trust Company. [DE 44]. The Court on January 15, 2014, denied a motion to dismiss filed by Trojan Horse, Ltd., Glen Burnie Hauling, Inc., and related defendants (Trojan Horse defendants). [DE 53]. Subsequent to the Court’s order on dismissal, counsel for the Trojan Horse defendants was permitted to withdraw, and clerk’s default under Rule 55 of the Federal Rules of Civil Procedure was entered against defendants Trojan Horse, Glen Burnie Hauling, Trojan Horse Ltd 401(k) Plan, Brian Hicks, and Sherry Korb. [DE 65]. Following a period of discovery, plaintiffs moved to join Capitol Expressways, Inc., BDH Logistics LLC, and Ascensus Trust Company as defendants; plaintiffs further stipulated to dismiss their claims against defendants Stubbs and Korb without prejudice. [DE 75 & 77]. The Court permitted joinder of Capitol Expressways, BDH, and Ascensus Trust as defendants and the filing of an amended complaint on April 2, 2015. [DE 79],

Plaintiffs’ amended complaint alleges claims for recovery of benefits under 29 U.S.C. § 1132(a)(1)(B), breach of fiduciary duties under 29 U.S.C. § 1132(a)(2), in-junctive and other equitable relief under 29 U.S.C. § 1132(a)(3), and for attorneys’ fees under 29 U.S.C. § 1132(g). Clerk’s default has been entered against defendants Capitol Expressways and BDH. [DE 108]. By order entered November 12, 2015, the Court denied Ascensus Trust’s (Ascensus) motion to dismiss. [DE 109]. Specifically, the Court held that the Trust Agreement at issue expressly provided that Ascensus would be responsible for ensuring that Plan contributions were made and that Ascensus was a fiduciary. Id.

The case is now before the Court on plaintiffs’ motion to certify this action as a class action and on cross-motions for summary judgment filed by plaintiffs and defendant Ascensus.

DISCUSSION

I. Cross-motions for Summary Judgment

A motion for summary judgment may not be granted unless there are no genuine issues of material fact for trial and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If that burden has been met, the non-moving party must then come forward and establish the specific material facts in dispute to survive summary judg[705]*705ment. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In determining whether a genuine issue of material fact exists for trial, a trial court views the evidence and the inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). However, “[t]he mere existence of a scintilla of evidence” in support of the nonmov-ing party’s position is not sufficient to defeat a motion for summary judgment; “there must be evidence on which the [fact finder] could reasonably find for the [non-moving party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When ruling on cross-motions for summary judgment,1 a court considers each motion independently to determine whether judgment under Rule 56 may be entered. See, e.g., Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003).

Accordingly, the Court has considered the motions filed by plaintiffs and Ascen-sus and the exhibits thereto,2 as well as the statements of undisputed material facts filed pursuant to Local Civil Rule 56.1. There is no dispute in this matter that contributions were not deposited with the Plan as required. Rather, Ascensus argues that as a matter of law it should not be liable for the fact that contributions were not collected or deposited according to the terms of the Plan.

A. Fiduciary status

As the Court has previously held, Ascensus is a fiduciary in regard to the making of employee contributions to the Plan. [DE 109], In considering Ascensus’ motion to dismiss based on its non-fiduciary status, the Court considered the Plan documents and held that whether Ascen-sus had discretion to interpret or construe the terms of the Plan had no bearing on what the Court found to be its fiduciary obligation to ensure that the Plan receives the funds to which it is entitled or to enforce the Plan Administrator’s obligation to deposit contributions to the Plan. Id. at 7. Ascensus has not submitted any evidence or argument which persuades the Court that’s its prior ruling on Ascensus’ fiduciary status with respect to Plan contributions was in error.

ERISA demands that a fiduciary “discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries.” 29 U.S.C. § 1104(a)(1).

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208 F. Supp. 3d 700, 62 Employee Benefits Cas. (BNA) 2084, 2016 U.S. Dist. LEXIS 127910, 2016 WL 5118281, Counsel Stack Legal Research, https://law.counselstack.com/opinion/longo-v-trojan-horse-ltd-nced-2016.