Opinion
Civil No. 99-718-KI
December 6, 2000
Paul B. Meadowbrook, 285 Liberty Street, N.E. Suite 360, Salem, Oregon 97301, Attorney for Plaintiff
Richard T. Ligon, 8355 S.W. Citizens Drive, Suite 104, Wilsonville, Oregon 97070, Attorney for Defendants
OPINION AND ORDER
Plaintiff Randall Conger alleges wage claims and ERISA violations against his former employers. Before the court is plaintiff's amended motion for partial summary judgment on wage claims (#57) and plaintiff's motion for summary judgment on ERISA claims (#64).
LEGAL STANDARDS
Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). The initial burden is on the moving party to point out the absence of any genuine issue of material fact. Once the initial burden is satisfied, the burden shifts to the opponent to demonstrate through the production of probative evidence that there remains an issue of fact to be tried. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On a motion for summary judgment, the evidence is viewed in the light most favorable to the nonmoving party. Robi v. Reed, 173 F.3d 736, 739 (9th Cir.), cert. denied, 120 S.Ct. 375 (1999).
DISCUSSION
I. Wage Claim
Conger seeks summary judgment of liability against Vitamin Village and Universal Marketing on his wage claims under the Fair Labor Standards Act and the Oregon wage laws, ORS 652.010 et seq. He is leaving for trial the amount owed in unpaid wages, penalties, and liquidated damages. Conger alleges: (1) his check due June 20, 1998, and issued on June 22, 1998, could not clear the bank because of nonsufficient funds until June 30, 1998; and (2) his check for the period from June 15, 1998, until he quit was paid late.
Conger's last day of work was on June 24, 1998. He did not tell anyone that he was quitting who remembers being told. Reeves was out of town for several days around that time and did not learn of Conger's disappearance. Another employee, Shannon Parnell, was at work on June 24. When Conger left, he said to her words to the effect of "I am out of here." She assumed that he was leaving for the night and would return on the next work day. Conger remembers telling her that he would work for the rest of the day, "and then I was done." Parnell also states that Conger frequently failed to appear for work and it was several days before anybody realized that he had quit. As of July 6, 1998, a final paycheck was available for Conger at Universal Marketing's office. Conger did not pick the check up and Universal Marketing mailed it to him in mid-August.
The company's regular payday was on the 5th and 20th of the month. June 20, 1998, was a Saturday. Thus, the payday rolled over to Monday, June 22, and the check issued on that date was not late. The check could not be cashed, however, because of insufficient funds. It is not relevant that Conger did not properly perform his job to collect and deposit funds so that the company would be able to pay him. Paying wages is the company's obligation. If it cannot do so, it should lay off the employees. Partial summary judgment is granted that Conger's employer during June 1998 is liable under the federal and state wage laws for late payment of wages during the time of employment. At the time of trial, Conger must provide evidence on which defendant was his employer.
Concerning the timeliness of the final check, Conger contends that preclusive effect should be given to the Oregon Employment Appeals Board's determination that he voluntarily quit on June 24, 1998, for good cause due to late checks and checks not covered by sufficient funds. Thus, he contends that the final paycheck, issued on July 6, 1998, was late and that he is owed penalty wages.
The doctrine of issue preclusion, also known as collateral estoppel, prevents relitigation of issues actually litigated and necessarily decided in a prior proceeding, after a full and fair opportunity for litigation.Shaw v. Hahn, 56 F.3d 1128, 1131 (9th Cir.), cert. denied, 116 S.Ct. 418 (1995).
I conclude that issue preclusion should not be applied to the decision of the Oregon Employment Appeals Board. The Board was determining if Conger had good cause to quit and was thus entitled to unemployment benefits. The precise date of his termination was not important to the good cause determination. Here, the precise date of termination is very important because it determines when the final paycheck is due under ORS 652.140. The dates here are close enough that it is possible that Conger's final check was available on time. Conger's attendance was not flawless and his notice of termination, if given, was ambiguous and not understood.
Accordingly, there are material issues of fact on whether Conger's final paycheck was late. Summary judgment for liability on that issue is denied.
II. ERISA Claim
Conger seeks a ruling that: (1) Reeves breached his fiduciary duties; (2) Reeves engaged in prohibited transactions; and (3) Reeves failed to furnish Conger copies of the summary plan descriptions, annual reports, and other required documents. Conger also seeks appointment of a special master to determine any ERISA losses to the plan or profits to Reeves.
A. Breach of Fiduciary Duties and Prohibited Transactions
Vitamin Village has a pension plan and profit-sharing retirement plan (the "Plans") for the related companies with Reeves as trustee and administrator. Conger is a participant of the Plans. Reeves voices some concern that Conger's three-week period of not working in 1997 may have severed his right to retirement benefits. The Plan documents state, however, that a break in service only occurs in years with 500 or less hours of service.
The Plan documents allow loans to participants under the following conditions: (1) in an amount not to exceed either $50,000 or 50% of the participant's nonforfeitable balance; (2) at the market rate of interest; (3) with a promissory note requiring regular payments of interest and principal; (4) for a term not to exceed five years unless used for the participant or his family's principal residence; (5) made available to all participants on a reasonably equivalent basis; (6) loans are treated as segregated investments of a participant's account; (7) a clear statement of the charges are provided; (8) the amount of any outstanding loan plus accrued interest outstanding on any loan is charged against the participant's vested interest before distribution; and (9) rules and regulations are to be adopted concerning loans. Profit sharing plan and pension plan ¶ 6.13.
Although Conger's evidence was filed in a very disorganized fashion, I have been able to confirm the following facts.
The Plans made a $100,000 loan to Carol Lundquist, Reeves' wife, on April 15, 1997, to be paid in three installments with the last one due April 15, 2000. Lundquist had not paid the loan back as of May 2000. Reeves was unsure if she had made any payments by then. Some loans were made to participants, including Reeves himself, without promissory notes. Reeves has taken several loans from the Plans. Reeves is delinquent on his loans from the Plans but has received no demands to pay. In May 2000, Reeves had just arranged for a law firm to review the Plans' loans and call in ones that are overdue. With Reeves approval, the Plans made loans to a business associate of Reeves for medical expenses, without securing the loans. These loans are not paid back. In the summer of 1997, after he was vested, Conger asked for a $8,000 to $10,000 loan, but was told by Reeves that there not funds in the Plans to cover the loan. Conger did receive other loans from the Plans. In 1997, the Plans reported to the IRS that extensions had been granted on delinquent loans in the amount of $200,041, when the Plan's assets at the end of the year were $223,844. Reeves approved loans to business customers of his companies, who owed money to his companies, and who paid some of the debt with the loan proceeds.
ERISA requires a fiduciary to discharge his duty "with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims." 29 U.S.C. § 1104(a)(1)(B). Certain transactions are prohibited. For example, a fiduciary may not "deal with the assets of the plan in his own interest or for his own account." 29 U.S.C. § 1106(b)(1).
There are no factual issues requiring a trial on liability. I conclude that Reeves has violated his fiduciary duty to the Plan by making loans above the amount allowed by the Plans, by making loans without proper promissory notes or collateral, by making loans to debtors who have doubtful abilities to repay them, and by not collecting loans when overdue. He has also engaged in prohibited transactions by making loans to himself. There may be other violations but the record before me proves these, at a minimum.
B. Copies of Plan Documents
Conger, through his attorney, made a written request for a copy of plan documents on January 28, 1999, but received nothing until September 1999. Reeves received the letter making the request on February 3, 1999. When documents were eventually provided, no plan documents were included for plan years ending June 30, 1999. The parties dispute whether Conger received Plan documents on a regular basis during his employment.
ERISA requires that a plan administrator shall, on written request of a participant, furnish a copy of various plan documents, including the latest annual report and latest updated summary plan description. 29 U.S.C. § 1024(b)(4). The material must be mailed within 30 days unless the failure results from matters reasonably beyond the control of the administrator. 29 U.S.C. § 1132(c)(1).
Reeves contends that he forwarded the request on to his attorney, who failed to act on the request. That is a matter between Reeves and his attorney. As administrator for the Plan, he is responsible for complying with requests for documents. I conclude that he has violated 29 U.S.C. § 1024(b)(4) and assess the statutory fine of $100 per day for the period from March 5, 1999, until September 1, 1999.
Thirty days after Reeves received the request.
CONCLUSION
Plaintiff's amended motion for partial summary judgment on wage claims (#57) is granted in part.
Plaintiff's motion for summary judgment on ERISA claims (#64) is granted.
IT IS SO ORDERED.