Summary
In North American Coal Corp. Retirement Savings Plan v. Roth, No. A4–03–124, 2004 WL 434150 (D.N.D. Mar. 5, 2004), an ERISA plan and its administrator asserted a claim for unjust enrichment against former employee Roth after the Plan mistakenly paid Roth 401K benefits that undisputedly belonged to his former spouse.
Summary of this case from Pharmacia Corp. Supplemental Pension Plan v. WeldonOpinion
Case No. A4-03-124
March 5, 2004
ORDER GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AS OF DEFENDANT ROTH AND PARTIAL SUMMARY JUDGMENT AS TO DEFENDANT SCHLAHT
Summary:
The Court granted the plaintiffs' motion for summary judgment, finding that there were no material facts in dispute with respect to the plaintiffs' claim that the defendants had been unjustly enriched.
Before the Court is the Plaintiffs' Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. The Plaintiffs, North American Coal Corporation Retirement Savings Plan and its Plan Administrator, the North American Coal Corporation ("North American Coal"), assert that there are no disputes as to the material facts and that North American Coal is entitled to summary judgment as a matter of law.
I. BACKGROUND
This dispute arises out of an erroneous overpayment from a qualified ERISA plan. On or about September 5, 2003, North American Coal erroneously issued a check to a former employee, the defendant, Todd Roth, in the amount of $42,738.79 which represented a purported distribution of Roth's entire 401K benefits from the plan. Roth endorsed the check over to Defendant Mitchell Schlaht. Schlaht then endorsed the check and either cashed or deposited the check at Capital Credit Union in Bismarck, North Dakota, on September 18, 2003. North American Coal contends that Roth was not entitled to $28,651.78 of the distribution due to a divorce judgment entered on July 28, 2003, by the District Court of the State of North Dakota, Burleigh County, South Central Judicial District, Civil No. 01-C-2505, and a subsequently entered Qualified Domestic Relations Order ("QDRO"), which awarded Roth's former spouse a share of Roth's 401K account. Pursuant to the terms of their divorce on July 28, 2003, Roth's former spouse (Lynette Hoffer) was to receive 65% of Roth's vested 401K account balance with North American Coal. It is undisputed that the former spouse's share of the 401K account on the date of the purported distribution to Roth equaled the overpayment amount, i.e., $28,651.78, or 65% of the total distribution of $42,738.79. North American Coal contends that Roth knew, or should have known, he was not entitled to the overpayment.
On November 4, 2003, the Plaintiffs filed a Motion for a Preliminary Injunction. On December 31, 2003, this Court issued an Order Granting Plaintiffs' Motion for a Preliminary Injunction. The Court enjoined defendants Roth and Schlaht from directly or indirectly transferring or disposing of the overpayment of $28,651.78 paid by the issuance of a check made payable to Todd Roth and endorsed over to Mitchell Schlaht.
On December 17, 2003, Roth filed a Motion for Summary Judgment and for Judgment on the Pleadings. On January 22, 2004, the Court denied Roth's Summary Judgment motion finding that (1) North American Coal had standing and capacity to sue; (2) this Court has subject matter jurisdiction over the dispute; and (3) North American Coal had stated a claim upon which relief could be granted. In denying Roth's Motion for Summary Judgment, this Court made the following findings:
1.As of July 28, 2003, 65% of the 401K monies no longer belonged to Roth. This was confirmed in the QDRO [Qualified Domestic Relations Order] wherein it was noted that Roth "shall have no authority or rights with respect to the Alternative Payee's Account (Lynette Hoffer) effective July 28, 2003."
2.The record clearly reveals that Roth understood that he was not entitled to 65% of the 401K account balance as that sum of money had been awarded to his former spouse in the divorce judgment.
3.The present action arose from an administrative error on the part of North American Coal which enable Roth to receive the disputed assets. The facts of this case fit the typical unjust enrichment scenario.
Order Denying Defendant Roth's Motion for Summary Judgment and for Judgment on the Pleadings, pp. 6-7 (Docket No. 21).
II. LEGAL DISCUSSION
It is well-established that summary judgment is appropriate when, viewed in a light most favorable to the non-moving party, there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Graning v. Sherburne County, 172 F.3d 611, 614 (8th Cir. 1999). A fact is "material" if it might effect the outcome of the case and a factual dispute is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The basic inquiry for purposes of summary judgment is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law. Quick v. Donaldson Co., Inc., 90 F.3d 1372, 1376 (8th Cir. 1996). The moving party has the initial burden of demonstrating to the Court that there are no genuine issues of material fact. If the moving party has met this burden, the non-moving party cannot simply rest on the mere denials or allegations in the pleadings. Instead, the non-moving party must set forth specific facts showing that there are genuine issues for trial. Fed.R.Civ.P. 56(e). A mere trace of evidence supporting the non-movant's position is insufficient. Instead, the facts must generate evidence from which a jury could reasonably find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
To set forth a claim for unjust enrichment, North American Coal must show one of three elements: (1) North American Coal had a reasonable expectation of payment; (2) Roth should reasonably have expected to pay, or (3) society's reasonable expectations of person and property would be defeated by nonpayment. Neal v. General Motors Corp., 266 F. Supp.2d 449, 456-57 (W.D. N.C. 2003). North American Coal has satisfied all three elements. First, it is entirely reasonable for North American Coal to expect repayment of incorrectly disbursed funds, especially considering their prompt notice to Roth upon realizing the error. Second, Roth should reasonably have expected to repay the monies, for Roth was aware he was no longer entitled to the full amount of the 401K plan. Finally, society's reasonable expectations would be defeated if Roth were not required to return the monies, for the interests of society are best served by the equitable decision and by the proper administration of an ERISA benefits plan. The Court finds that North American Coal is clearly entitled to recover the incorrectly disbursed monies.
III. CONCLUSION
The Court GRANTS the Plaintiffs' Motion for Summary Judgment (Docket No. 22) and ORDERS the Plaintiff to submit a proposed judgment for the Court's approval.