Pension Admin. v. Carroll

Court of Appeals for the First Circuit·Decided December 30, 1993·No. 93-1585·Published

Opinion

USCA1 Opinion


December 30, 1993 [NOT FOR PUBLICATION]

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

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No. 93-1585

PENSION ADMINISTRATION COMMITTEE OF THE SHERATON CORPORATION
RETIREMENT PLAN FOR SALARIED EMPLOYEES,
Plaintiff, Appellee,

v.

WILLIAM J. CARROLL D/B/A CARROLL CONSULTING ACTUARIES,
Defendant, Appellant.

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APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Rya W. Zobel, U.S. District Judge]
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___________________

Before

Breyer, Chief Judge,
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Torruella and Selya, Circuit Judges.
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William J. Carroll on brief pro se.
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Jerome P. Facher, Peter A. Spaeth and Hale and Dorr on brief
________________ _______________ _____________
for appellee.

__________________

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Per Curiam. This appeal arises from a civil action
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brought by the named fiduciary of a pension plan to recover

certain assets alleged to be wrongfully held by the

administrator of another pension plan. The plaintiff is the

Pension Administration Committee of the Sheraton Corporation

Retirement Plan for Salaried Employees ("the PAC"). The

defendant is William J. Carroll d/b/a Carroll Consulting

Actuaries (Carroll). Pursuant to Fed. R. Civ. P. 37(b)(2),

the district court entered a default judgment against Carroll

for his failure to comply with multiple orders compelling

discovery. Carroll now appeals from the default judgment.

We affirm.

Background
__________

The PAC commenced this action by filing a five-count

complaint which stated claims for relief under the Employee

Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C.

1001 et. seq., the Declaratory Judgment Act, 28 U.S.C.
___ ____

2201, federal common law, and state law. The complaint

alleged the following facts.

PGA Resort Ltd. (PGA), a Florida limited partnership,

owned the former Sheraton PGA Resort Hotel in West Palm

Beach, Florida. In 1980, PGA began providing retirement

benefits for its salaried and hourly employees. PGA provided

those benefits by becoming a participating employer in the

Pension Plan and Trust for Hotels and Motor Inns Associated

-2-

With The Sheraton Corporation (Plan I). Under Plan I,

individual owners of hotels associated with the Sheraton

Corporation (Sheraton) adopted as their pension plans the

terms of two "master" documents - a Pension Plan Agreement

and a Pension Trust Agreement (the Plan Documents). These

documents provided that a participating employer could

withdraw from Plan I and establish a separate qualified

pension or retirement plan provided that the new plan

provided equal or greater rights and benefits to the

employees covered by Plan I. Under Plan I,

PGA and other participating employers made contributions to a

common trust fund which was held by the Bank of Boston as

trustee. The Plan Documents further provided that, upon an

employer's withdrawal from Plan I, the assets in the

participating employer's account in Plan I shall be

transferred to the trustee designated by the employer.

Carroll is the administrator for Plan I. He has the

duty to account separately for the Plan assets of each

participating employer and exclusive control over the

disposition of Plan I's assets. The complaint alleged that

as a result of the following events, Carroll continued

improperly to exercise control over the assets in PGA's

account in Plan I.

In 1986, PGA decided to participate in a new pension

plan (Plan II) that preserved the rights and benefits of all

-3-

PGA employees covered by Plan I, in addition to providing

other benefits.1 PGA informed Carroll of its intention to

withdraw from Plan I. Carroll informed PGA and its agent,

the actuarial firm of Towers, Perrin, Forster & Crosby

(TPF&C), that a new pension plan and trust approved by the

Internal Revenue Service (IRS) was the only authorization he

required to transfer PGA's assets to the trustee of the new

pension plan. PGA subsequently adopted Plan II and requested

a ruling from the IRS that Plan II was a qualified pension

plan under 26 U.S.C. 401(a). The IRS issued such a ruling

in 1988. Thereafter, TPF&C instructed Carroll to transfer

PGA's assets in Plan I to the Shawmut Bank, the trustee for

Plan II. The complaint alleged that despite PGA's compliance

with the requirements for transferring the assets set forth

in Plan I and Carroll's own conditions, Carroll refused to

transfer PGA's assets without justification.2

Effective January 1, 1989, PGA discontinued providing

retirement benefits to its employees. Pursuant to an

agreement between PGA and Sheraton, the liabilities and

assets of Plan II were merged into a third pension plan, the

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1. Plan II is also known as the Sheraton Salaried and Hourly
Retirement Plans and Trusts for Managed Hotels.

2. The complaint further alleged that TPF&C made further
demands on Carroll to transfer PGA's assets during the
remainder of 1988. Carroll continued to retain control over
the assets.

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