Opinion
CASE NO.: CV 10-7914 VBF(AGRx)
08-26-2011
HILDA L. SOLIS, Secretary of Labor, United States Department of Labor, Plaintiff, v. SHANNON LESLIE STUART, an individual; STEVEN JOHN SCHMITZ, an individual; and S.J. BURKHARDT, INC. EMPLOYEES' PROFIT SHARING PLAN, an employee benefit plan, Defendants.
LAWRENCE BREWSTER Regional Solicitor DANIELLE L. JABERG, Counsel for ERISA CA State Bar No. 256653 IAN ELIASOPH, Trial Attorney CA State Bar No. 227557 Office of the Solicitor KATHERINE MASTMAN, Trial Attorney CA State Bar No. 266145 UNITED STATES DEPARTMENT OF LABOR San Francisco, California 94103 Attorneys for Hilda L. Solis, Secretary of Labor, United States Department of Labor
LAWRENCE BREWSTER
Regional Solicitor
DANIELLE L. JABERG, Counsel for ERISA
CA State Bar No. 256653
IAN ELIASOPH, Trial Attorney
CA State Bar No. 227557
Office of the Solicitor
KATHERINE MASTMAN, Trial Attorney
CA State Bar No. 266145
UNITED STATES DEPARTMENT OF LABOR
San Francisco, California 94103
Attorneys for Hilda L. Solis, Secretary of Labor,
United States Department of Labor
CONSENT JUDGMENT &
ORDER AGAINST DEFENDANT
STEVEN JOHN SCHMITZ
Plaintiff HILDA L. SOLIS, Secretary of Labor, United States Department of Labor ("Secretary") pursuant to her authority under §§ 502(a)(2) and (5) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132(a)(2) and (5), has filed a Complaint against Defendants SHANNON LESLIE STUART, an individual, STEVEN JOHN SCHMITZ, an individual, and S.J. BURKHARDT, INC. EMPLOYEES' PROFIT SHARING PLAN, an employee benefit plan.
A. The Secretary and DEFENDANT STEVEN JOHN SCHMITZ ("Defendant Schmitz") (collectively, "the parties") admit that the Court has jurisdiction over this action pursuant to ERISA § 502(e)(1), 29 U.S.C. § 1132(e)(1), and that venue lies in the Central District of California pursuant to ERISA § 502(e)(2), 29 U.S.C. § 1132(e)(2).
B. The parties agree to the entry of this Consent Judgment & Order Against Defendant Steven John Schmitz ("Consent Judgment & Order"). The parties further agree that this Consent Judgment & Order shall fully settle all claims of the Secretary asserted in the Complaint against Defendant Schmitz, filed in this matter.
C. The parties expressly waive Findings of Fact and Conclusions of Law.
IT IS HEREBY ORDERED, ADJUDGED, and DECREED that:
1. Defendant Schmitz is liable for $86,421.14 in losses and lost-opportunity costs caused to the Plan as alleged in the Secretary's Complaint, and judgment is hereby entered against him in that amount.
The Parties have stipulated to the nondischargeability of the amount due in a Joint Stipulation of Nondischargeability of Defendant Steven John Schmitz's Debt filed concurrently with this Consent Judgment & Order. A copy of said stipulation is attached hereto as "Exhibit A" and its terms incorporated by reference herein.
2. Defendant Schmitz shall restore $86,421.14 to the Plan as set forth in Paragraph 5, infra.
3. Defendant Schmitz is permanently enjoined and restrained from violating the provisions of Title I of ERISA, 29 U.S.C. §§ 1001-1191c.
4. Defendant Schmitz is hereby permanently enjoined and restrained from future service as a fiduciary of, or service provider to, any ERISA-covered employee benefit plan.
5. Defendant Schmitz shall restore to the Plan the amount of $86,421.14 as follows:
a. Beginning on September 1, 2011, Defendant Schmitz shall remit twelve consecutive monthly payments in the amount of $7,201.76 to the Plan's custodian, First Bank, at the following address:
First BankAll checks should be made out to "S.J. Burkhardt, Inc. Employees' Profit Sharing Plan" and should indicate "Deposit to Account Titled S.J. Burkhardt, Inc. Employees' Retirement Account." The first installment is due and payable on September 1, 2011, and the remaining installments shall be due and payable on or before the same day of each succeeding month thereafter until all installments have been paid.
11010 Limonite Ave.
Jurupa Valley, CA 92509
b. The payments described are summarized as follows:
+-------------------------------+ ¦Due Date ¦Amount Due ¦ +------------------+------------¦ ¦September 1, 2011 ¦$7,201.76 ¦ +------------------+------------¦ ¦October 1, 2011 ¦$7,201.76 ¦ +------------------+------------¦ ¦November 1, 2011 ¦$7,201.76 ¦ +------------------+------------¦ ¦December 1, 2011 ¦$7,201.76 ¦ +------------------+------------¦ ¦January 1, 2012 ¦$7,201.76 ¦ +------------------+------------¦ ¦February 1, 2012 ¦$7,201.76 ¦ +-------------------------------+
+-------------------------+ ¦March 1, 2012 ¦$7,201.76¦ +---------------+---------¦ ¦April 1, 2012 ¦$7,201.76¦ +---------------+---------¦ ¦May 1, 2012 ¦$7,201.76¦ +---------------+---------¦ ¦June 1, 2012 ¦$7,201.76¦ +---------------+---------¦ ¦July 1, 2012 ¦$7,201.76¦ +---------------+---------¦ ¦August 1, 2012 ¦$7,201.76¦ +-------------------------+
6. Within thirty business days of making each payment set forth in Paragraphs 5(a) through (b), supra, Defendant Schmitz shall provide to the Secretary a copy of the front and back of each remittance check, or other appropriate evidence that such payment has been made as requested by the Secretary.
7. Defendant Schmitz hereby forfeits any interest he may have in any amounts restored to the Plan as a result of this Complaint and Consent Judgment & Order and no amounts restored under the terms of this Consent Judgment & Order shall be allocated to any account he may have.
8. Within ten days of the Court's entry of this Consent Judgment & Order, Defendant Schmitz shall provide a copy of this Consent Judgment & Order to the Plan's custodian, First Bank.
9. Upon Defendant Schmitz's restoration of $86,421.14 in losses to the Plan, Defendant Schmitz shall be assessed a penalty under ERISA § 502(l), 29 U.S.C. § 1132(l) in the amount of twenty percent of the applicable recovery amount, or $17,284.23 ("Penalty Amount"). Defendant Schmitz waives the notice of assessment and service requirement of 29 C.F.R. § 2570.83 and, within sixty days following the last payment date outlined in Paragraph 5, supra, Defendant Schmitz shall pay the Penalty Amount to the U.S. Department of Labor, by sending a certified or cashiers check payable to the United States Department of Labor (please write EBSA Case No. 72-032761on the check) to:
Regular U.S. Mail
U.S. Department of Labor
ERISA Civil Penalty
P.O. Box 71360
Philadelphia, PA 19176-1360
10. Whenever a submission is required to be made to the Secretary under the terms of this Consent Judgment & Order, such submission shall be made to:
Regional Director
U.S. Department of Labor
Employee Benefits Security Administration
1055 E. Colorado Blvd., Suite 200
Pasadena, CA 91106-2357
Telephone number: (626) 229-1000
Facsimile number: (626) 229-1098
11. In the event Defendant Schmitz fails to timely make any payment of any of the monthly installments identified in Paragraph 5, supra, then Defendant Schmitz shall be in default, and the total balance remaining unpaid shall then become due and payable within ten days of the default, and interest shall be assessed against such remaining unpaid balance at the rate provided by 28 U.S.C. § 1961 from the date of this judgment until the total amount is paid in full.
12. Defendant Schmitz expressly waives any and all claims of any nature which he has or may have against the Secretary, the Department of Labor, or any of its officers, agents, attorneys, employees or representatives, arising out of or in connection with the allegations contained in the Complaint on file in this action, any other proceedings or investigation incident thereto or based on the Equal Access to Justice Act, as amended.
13. The Secretary and Defendant Schmitz 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.
14. Nothing in this Consent Judgment & Order is binding on any governmental agency other than the United States Department of Labor, Employee Benefits Security Administration.
15. This Court retains jurisdiction of this action for purposes of enforcing compliance with the terms of this Consent Judgment & Order.
16. By signing their names to this Consent Judgment & Order, the parties represent that they are informed and understand the effect and purpose of this Consent Judgment & Order.
The Court directs the entry of this Consent Judgment & Order as a final order.
IT IS SO ORDERED.
____
United States District Judge
Entry of this Consent Judgment & Order is hereby consented to:
M. PATRICIA SMITH
Solicitor of Labor
LAWRENCE BREWSTER
Regional Solicitor
DANIELLE L. JABERG
Counsel for ERISA
IAN ELIASOPH
Trial Attorney
By: KATHERINE MASTMAN
Trial Attorney
Attorneys for HILDA L. SOLIS,
Secretary of Labor,
United States Department of Labor
By: DENNIS COWAN
Attorney for STEVEN JOHN SCHMITZ