Summary
finding that the plaintiffs did not have actual notice because, although they received regular reports of remittances to their 401(k) accounts, they would not have detected the late remittances without carefully studying those reports
Summary of this case from Harris v. Finch, Pruyn Company, Inc.Opinion
00 CIV. 4598 (SAS)
February 27, 2002
For Plaintiffs, John P. McConnell, Esq., Hargraves McConnell Costigan, P.C., New York, New York.
For Defendant, William F. Costigan, Esq., Costigan Company, P.C., New York, New York.
OPINION AND ORDER
On June 21, 2000, John P. McConnell, James D. McConnell Jr., and Andrew J. Costigan sued their employer, William F. Costigan and Costigan Company, P.C. (f/k/a William F. Costigan, P.C., Costigan Berns, P.C., and Costigan Hargraves McConnell, P.C.) (the "Firm"), asserting claims under both the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001-1461, and state law.
This Court declined to exercise supplemental jurisdiction over the state law claims, but denied the defendants' motion to dismiss the remaining ERISA claims. See McConnell v. Costigan, No. 00 Civ. 4598, 2000 WL 1716273, at *4-*5 (S.D.N.Y. Nov. 16, 2000). In addition, the Court granted the plaintiffs' request for leave to amend their Complaint. On December 18, 2000, the plaintiffs filed an amended Complaint to include claims for unpaid profit-sharing contributions and failure to provide information pursuant to 29 U.S.C. § 1024. See Plaintiffs' Amended Complaint ("Am. Compl.").
The parties cross-move for partial summary judgment. The following issues must now be resolved: (1) Did the plaintiffs actually know, more than three years prior to filing suit, that their employer had untimely remitted certain contributions to their retirement accounts? (2) What rate of interest applies to plaintiffs' untimely remitted contributions for the period during which the contributions were not invested in the retirement plan? (3) Did a December 12, 1996 memorandum from William Costigan amend plaintiffs' retirement plan thereby obligating him to make annual profit-sharing contributions? (4) Did plaintiffs waive their right to seek statutory penalties for defendants' failure to provide information about their retirement plan, by filing suit less than thirty days after they requested the information? and (5) Should defendants be sanctioned for their failure to comply with the briefing schedule and their delay in paying a monetary sanction?
For the reasons stated below, defendants' motion for summary judgment is denied in its entirety, plaintiffs' motion is denied in part and granted in part, and sanctions are imposed for defendants' continued failure to comply with court orders.
I. BACKGROUND
William Costigan, an attorney licensed to practice law in the State of New York, is the controlling shareholder of the Firm, a professional corporation organized under the laws of the State of New York, with offices in New York County. See Complaint ("Compl.") ¶¶ 1, 2, 4. Plaintiffs, each of whom is licensed to practice law in the State of New York, were employees of the Firm for the relevant time period. See Defendants' Local Rule 56.1 Statement of Undisputed Facts ("Def. 56.1") ¶ 1.
All of the individual parties are related. John and James McConnell are brothers and are first cousins of Andrew and William Costigan, who are also brothers. See Complaint ¶¶ 9, 18.
In 1991, Costigan instituted a pension benefit plan for his employees. The Firm was designated as the Plan Administrator. See Plaintiffs' Local Rule 56.1 Statement of Undisputed Facts ("Pl. 56.1") ¶ 5. John McConnell became a participant in the Plan in December 1991, James McConnell in August 1992, and Andrew Costigan in November 1993. See id. ¶¶ 2-4. The Plan evolved through several versions. See infra Part I.B. (listing the different versions). On November 15, 1998, James McConnell resigned from the Firm, John McConnell resigned on December 10, 1998, and Andrew Costigan on December 11, 1998. See Am. Compl. ¶¶ 12-14.
A. Defendants' Untimely Remittances of Deferred Salary and Matching Contributions
Under the terms of the Plan, plaintiffs could contribute to their respective 401(k) retirement accounts by designating a percentage of semi-monthly earnings to be withheld by their employer ("salary deferrals" or "employee contributions" or "participant contributions").See id. ¶ 16. As Plan Administrator, the Firm was responsible for withholding and remitting employee contributions, as well as for remitting its own contributions to match 50% of the first 5% of salary designated ("matching contributions"), to State Street Bank Trust Company, the Plan custodian ("State Street Bank"). See Def. 56.1 ¶ 1.
However, the Firm often failed to segregate the employee contributions, and remit such amounts along with matching contributions, within the time prescribed by ERISA. Rather, the funds withheld from plaintiffs' compensation often remained in the Firm's general operating account well past such deadline. See 1/14/02 Reply Declaration of William Costigan ("W. Costigan Reply Decl.") ¶ 2. It is undisputed that at all times between July 12, 1996, to August 29, 2000 (with the exception of a few weeks in May and June of 1998), defendants held certain of plaintiffs' contributions without remitting them to the Plan. See Plaintiffs' Opposition to Defendants' Motion for Summary Judgment ("Pl. Opp.") at 14; Schedules of Late Remittances Admitted by Defendants ("Late Remit. Sched."), Ex. E to 12/28/01 Declaration of John P. McConnell ("12/28 J.P. McCon. Decl.").
Plaintiffs received quarterly and annual statements of their retirement account activity from the Plan Sponsor, the American Bar Retirement Association ("ABRA"). See Def. 56.1 ¶ 5 (referring to 6/30/96 ABRA Master Profit Sharing Plan Quarterly Statement for Andrew Costigan ("Sample Quarterly Statement" or "Sample Qtr. Stmt."), Ex. D to 12/16/01 Declaration of William Costigan ("12/16 W. Costigan Decl.) and ABRA Participant Summary Report for Period 01/01/95 Through 12/31/95 ("Sample Annual Statement" or "Sample Ann. Stmt."), Ex. E to 12/16 W. Costigan Decl.). These statements summarized employee and matching contributions, profit-sharing contributions and investment returns. In addition, plaintiffs received confirmation from ABRA and State Street Bank of receipt of each employee's deferral and matching contributions. See Def. 56.1 ¶ 3 (referring to 1/7/97 State Street Bank/ABRA Confirmation Notice for Andrew Costigan ("Sample Confirmation Notice" or "Sample Conf. Not."), Ex. B to 12/16/01 W. Costigan Decl.). The same customer service phone number is provided at the bottom of the Sample Annual Statement and the Sample Confirmation Notice, with the message "Please review and keep this notice for your records. If you have any questions regarding this [document], please contact a Customer Service Representative at. . . ." Sample Ann. Stmt.; Sample Conf. Not. The Sample Quarterly Statement includes a line at the top of the document which reads "Direct Inquiries to Our Toll-Free Telephone Number 1-800-. . . ." Sample Qtr. Stmt.
This document presents a snapshot of Andrew Costigan's retirement account balance as of 4/01/96 and as of 6/30/96. The statement is divided into three rows representing the three funds in which A. Costigan's retirement monies were invested at the time, Growth Equity, Index Equity and Aggressive Equity. See Sample Qtr. Stmt. "Contributions" are listed in the amounts $656.23, $656.25 and $874.98, allocated per fund respectively, for the quarter. Id. At the bottom of the statement, Contributions are broken down by "Source" — Employer Matching and Employee 401(k) Deferral — and then broken into Quarter-To-Date and Year-To-Date Categories to complete the two-by-two grid. See id. The first quadrant indicates that $520.85 in employer matching contributions was remitted quarter-to-date, the second shows that $1,666.61 in employee salary deferrals was remitted quarter-to-date, the third shows $833.36 for year-to-date employer matching contributions, and the fourth quadrant shows that $2,666.60 in employee salary deferrals was remitted year-to-date. See id.
This document is similar to the Quarterly Statement in that the statement is organized by Fund, except that each Fund is further divided by source — "Salary Deferral," "Matching," and "Employer," which apparently signifies profit sharing contributions. Sample Ann. Stmt. Similar to the Quarterly Statement, the annual statement shows the opening balance in each investment vehicle as of 01/01/95, the closing balance as of 12/31/95 and the net investment results. Id. It also shows "Total Contributions" per fund, per source, for the year. Id.
Plaintiffs' response to this paragraph of defendants' Rule 56.1 Statement will be considered as an admission pursuant to S E.D.N Y Civ. R. 56.1(b), (c):
Plaintiffs received certain quarterly and annual statements from the ABRA, each of which was produced by plaintiffs along with the specimen annexed as Exhibit E to the [W.] Costigan Declaration. Plaintiffs controvert the statement to the extent it is intended as an assertion that plaintiffs received statements other than those produced during discovery.See Plaintiffs' Response to Def. 56.1("Pl. 56.1 Reply") ¶ 5. The response does not clearly deny that plaintiffs received such reports, but instead attempts to evade the question.
This document purports to show the following for Andrew Costigan's retirement account: "Transaction Details Effective 01/07/97" per investment vehicle, per "Source" — which are listed as "Sal Defer," "QNEC/QMAC" and "ER Match." Sample Conf. Not. The statement does not indicate a time period, nor how often this type of statement was sent to employees.
Once again, plaintiffs offer a convoluted and evasive response almost identical to that quoted in note 4, supra. The Court deems both responses to be admissions pursuant to the Local Rules.
On April 23, 1997, plaintiffs jointly prepared and submitted to W. Costigan a memorandum listing the debts that they claimed he owed them.See 12/16 W. Costigan Decl. ¶ 11 (referring to undated, unaddressed Memorandum ("4/27 Firm Debts Memo" or "April 1997 Memo"), Ex. G to 12/16 W. Costigan Decl.); Defendants' Reply Memorandum in Further Support of Summary Judgment ("Def. Reply") at 6 n. 7 (stating that a transcript of conference held before this Court proves that plaintiffs do not contest that they prepared this memorandum). The "debts" listed on the memorandum include "Profit-Sharing Accruals" and "Bonuses." 4/97 Firm Debts Memo.
Costigan claims that he knows that this memorandum was created on or around April 23, 1997 because its corresponding electronic file is time-stamped on the Firm's computer system. See 12/16 W. Costigan Decl. ¶ 11 n. 2. Plaintiffs do not contend otherwise.
This fact is not included in defendants' 56.1 statement.
B. Unpaid Profit-Sharing Contributions
Plaintiffs claim that in December 1996, William Costigan made a written promise to pay into each plaintiff's retirement account 5% of each plaintiff's total compensation per year ("profit-sharing contributions").See Am. Compl. ¶¶ 52-55. They contend further that this written promise was incorporated into, and therefore effectively amended the terms of, the Plan. See Plaintiffs' Memorandum of Law in Support of Their Motion for Summary Judgment ("Pl. Mem.") at 4.
The current Plan states: "Profit-Sharing Plan: For each Plan Year the Employer in its discretion shall determine the amount to be contributed on behalf of all Participants." See Defendants' Memorandum in Opposition to Plaintiffs' Motion ("Def. Opp.") at 3 (quoting American Bar Association Members Retirement Plan, Amended and Restated Effective December 16, 1996 (the "Plan"), Ex. H to 12/14/01 Declaration of John P. McConnell ("12/14 J.P. McCon. Decl."), § 4.1(a)).
Previous versions of the Plan contained similar, discretionary language with respect to the Firm's payment of profit-sharing contributions. In 1991, defendants adopted the "Automatic Data Processing Prototype 401(k) Plan" ("ADP Plan") offered by the Firm's payroll processing company, ADP. See id. at 2; "Automatic Data Processing Prototype 401(k) Plan" Document ("ADP Plan"), Ex. C to 12/14 J.P. McCon. Decl.; 1/10/02 Declaration of William Costigan ("1/10 W. Costigan Decl.)" ¶ 2. Under that plan, profit-sharing contributions were characterized as "non-elective contributions," which "[e]ach Employer [could] elect in its sole discretion" to pay "for any Plan Year." ADP Prototype § 3.1.3.
Neither party provides the actual plan document for the years 1991-1994; this particular document is merely a prototype or form that has not been customized. However, the Court relies on this form and Costigan's affidavit stating that it is the plan for those years — because neither is challenged by plaintiffs.
In 1994, defendants replaced ADP as trustee with ABRA, and executed a Profit-Sharing Participation Agreement with ABRA that was "to the same effect" as the ALP Plan. Def. Opp. at 3 (referring to "Nonstandardized Profit Sharing Participation Agreement 01-005: American Bar Association Members Retirement Plan" dated June 28, 1994 ("6/28/94 ABRA Plan"), Ex. G to 12/14 J.P. McCon. Decl.). The 6/28/94 ABRA Plan stated that "the Employer may, in its discretion, decide to make a contribution in an amount to be determined each year (not in excess of 15% of aggregate Participant Compensation . . .) and allocated in proportion to each Participant's Compensation." Id. at 3 (quoting 6/28/94 ABRA Plan). The ABRA Plan was amended effective December 16, 1996, to its current form.See id. (referring to ABRA Plan (again, the "Plan"), Ex. H to 12/14 J.P. McCon. Decl.).
Similar to the ADP Plan, the Plan appended as Exhibit H to the 12/14 McConnell Declaration is not customized for this employer but merely employs general language and appears to be a form or template. Again, however, neither party points to the actual Plan document nor challenges this form as not representing the exact language of the actual Plan document.
The Firm made 5% profit-sharing contributions for "each year through 1994." 1/10 W. Costigan Decl. (presumably referring to 1994, 1993, 1992 and 1991, when the Firm's first pension benefits plan came into existence). In December 1996, the Firm made a 2.5% qualified non-elective contribution ("QNEC") for its non-highly compensated employees James McConnell and Andrew Costigan, but not for John McConnell, for the Plan year 1995. See id. ¶ 4. John McConnell was a highly compensated employee and therefore was not eligible for this contribution. See id.
Because QNEC contributions are different than profit-sharing, Costigan maintains that he made no profit-sharing contribution for 1995.See 1/10 W. Costigan Decl. ¶¶ 4, 6.
Throughout 1996, plaintiffs complained to William Costigan that he did not pay them enough. See 12/16 W. Costigan Decl. ¶ 11. On December 12, 1996, Costigan distributed a memorandum to plaintiffs to address their dissatisfaction, stating that he believed that attorney compensation was "fair when considered in conjunction with the matrix of bonuses, employer matching and profit-sharing." 12/26/96 Memorandum from William Costigan to Plaintiffs Re: Attorney Compensation ("12/96 Memo"), Ex. B to 12/14 J.P. McCon. Decl., at 1. The memorandum concludes with the statement that "[t]he firm will continue its practices of . . . (ii) making § 401(k) profit-sharing contributions equal to 5% of eligible compensation." Id. at 4. Accordingly, in January 1998, Costigan paid 7.5% for Plan year 1996 to "make up for the shortfall" and maintain the average of 5% per year. 1/10 W. Costigan Decl. ¶ 6. Whether this memorandum amended the Plan is the subject of debate between the parties.
Apparently, this contribution was credited to Plan year 1997 due to a processing error by ABRA. See 1/10 W. Costigan Decl. ¶ 6. It is for this reason that plaintiffs claim that defendants made no profit-sharing contribution for Plan year 1996.
The Court notes the confusion created by defendants in maintaining that they "tried to contribute 5% per year" and therefore paid 7.5% profit-sharing for plan year 1996 to make up for the 2.5% in 1995. 1/10 W. Costigan Decl. ¶ 6. They are essentially referring to apples and oranges (QNEC one year for two people, profit-sharing the next year for all three). See id.
What is not disputed, however, is that the Plan could, by its terms, only be amended by the employer "`by executing a new Participation Agreement or by attaching a statement to the Participation Agreement' or by adding `certain model amendments published by the Internal Revenue Service.'" Def. Opp. at 7 (quoting Plan § 12.1)
By late 1998, when a profit-sharing contribution for Plan year 1997 "would have been made," the Firm's financial condition had deteriorated, according to defendants, due to "plaintiffs' concerted actions, including excessive absences, low productivity, late billing, and failure to record time." 1/10 W. Costigan Decl. ¶ 7. Thus, Costigan did not make any profit-sharing contributions for the years 1997 and 1998 on behalf of any employee. See id. Plaintiffs claim that Costigan failed to make profit-sharing contributions for 1995, 1996 and 1998.
On July 16, 1997, James McConnell wrote and presented to Costigan a memorandum listing what he understood to be Costigan's outstanding obligations to him, including an "`unfunded 1995 1996 401k contribution'" of $11,000. 12/16 W. Costigan Decl. ¶ 12 (referring to 7/16/97 Memorandum from "JDM" to "WFC" Re: Accounts (7/97 JDM Memo"), Ex. H to 12/16/01 W. Costigan Decl.). That figure represents a 5% profit-sharing contribution for each of two years. See 7/97 JDM Memo ("(10% of $110,000)").
C. Minimum Contributions
All versions of the Plan contain language indicating that where the Firm makes a profit-sharing contribution to any employee's retirement account of 3% of compensation or more, it shall make a minimum contribution of 3% to the accounts of all participants. The 6/28/94 ABRA Plan stated that "if the Employer's total contribution for all Participants is less than a 3% contribution, the lesser contribution will be sufficient." 6/28/94 ABRA Plan § IV.2. The current Plan provides that "the minimum contribution can be less than three per cent — it can be zero — as long as no Key Employee receives more." Def. Opp. at 5. The actual language of the Plan is as follows:
Minimum Contribution. "Minimum contribution' means the Employer contribution . . . as to a particular Plan Year: (a) . . . the Employer contributions . . . allocated on behalf of each Participant who is not a Key Employee shall not be less than 3% of the Participant's Compensation (or if less, . . . the largest percentage of Employer contributions [of a Key Employee's compensation for that year] . . . allocated on behalf of any Key Employee).
The minimum contribution terms have been the same in all material respects since the adoption of the ADP Plan in 1991. See Def. Opp. at 5 n. 5.
D. Failure to Provide Information in Accordance with 29 U.S.C. § 1024, 1132
Neither Costigan nor the Firm furnished the plaintiffs with any annual report, supplemental report, or trust agreement relating to their Plan.See Pl. 56.1 ¶¶ 12-14; Defendants' Amended Response to Request for Admissions, Ex. M to 12/14 J.P. McCon. Decl., ¶¶ 21-29, 44, 46. Defendants claim that it is ABRA's responsibility to file annual reports and to prepare summary plan descriptions. See Defendants' Response to Interrogatories, Ex. K to 12/14 J.P. McCon. Decl., ¶¶ 10-11. Plaintiff requested all such information by letter on June 1, 2000. See 6/1/00 Letter from James McConnell to W. Costigan, 6/1/00 Letter from John McConnell to W. Costigan; 6/1/00 Letter from Andrew Costigan ("6/1/00 Letters"), Ex. I to 12/14 J.P. McCon. Decl. They filed suit against Costigan and the Firm twenty days later on June 21, 2000. Plaintiffs renewed their request for information by letters dated July 11, 2000. See 7/11/00 Letter from James McConnell to Costigan; 7/11/00 Letter from John McConnell to Costigan; 7/11/00 Letter from Andrew Costigan to Costigan ("7/11/00 Letters"), Ex. J to 12/14 J.P. McCon. Decl.
Plaintiffs point to the language of the 6/28/94 ABRA Plan to refute this assertion: "The Firm will act as a Plan Administrator and as such will fulfill the reporting and disclosure requirements of the Internal Revenue Service and the Department of Labor." Plaintiffs' Reply in Further Support of Their Motion for Summary Judgment ("Pl. Reply"), at 2 n. 1 (quoting from 6/28/94 ABRA Plan § VIII).
E. Defendants' Rule 60(b) Motion and Plaintiffs' Request to Strike Defendants' Pleading
On November 16, 2001, Magistrate Judge Katz issued an opinion finding that defendants had willfully failed to comply with various discovery orders. See McConnell v. Costigan, No. 00 Civ. 4598, 2001 WL 1456609 (S.D.N.Y. Nov. 16, 2001). By order dated December 12, 2001 ("December 12 Order"), Judge Katz imposed a sanction of $2,240 on defendants for their failure to comply. See 1/23/02 Letter from James D. McConnell to the Court ("1/23/02 Pl. Ltr."). On January 7, 2002, defendants requested reconsideration of that order as well as Judge Katz's November 16, 2001 opinion. See 1/29/02 Letter from William Costigan to the Court ("1/29/02 Def. Ltr."). On January 9, Judge Katz denied the request for reconsideration. See 1/23/02 Pl. Ltr.
Because defendants still had not paid the fine as of January 23 for the untimely filing of their opposition brief, plaintiffs wrote to the Court requesting that the Court impose an additional penalty by striking the defendants' late filing, and considering plaintiffs' motion for summary judgment as if unopposed. See 1/23/02 Pl. Ltr.
Defendants finally paid the sanction on January 29, see 1/29/02 Def. Ltr. ("[W]e will pay the $2,240.00 sanction today."), but now request permission to move, pursuant to Rule 60(b), for relief from Judge Katz's November 16 opinion and the December 12 Order imposing the sanction, see id.
II. LEGAL STANDARD
Rule 56 of the Federal Rules of Civil Procedure provides for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). "An issue of fact is `material' for these purposes if it `might affect the outcome of the suit under the governing law[,]' [while] an issue of fact is `genuine' if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Konikoff v. Prudential Ins. Co. of Am., 234 F.3d 92, 97 (2d Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-50 (1986)).
In determining whether issues of material fact are in dispute, a court must view the evidence "in the light most favorable" to the nonmovant.See Breland-Starling v. Disney Publishing Worldwide, 166 F. Supp.2d 826, 829 (S.D.N Y 2001) (citing Anderson, 477 U.S. at 255). A court must then resolve all ambiguities and draw all reasonable factual inferences in favor of the non-moving party. See Parkinson v. Cozzolino, 238 F.3d 145, 150 (2d Cir. 2001). Although the moving party bears the initial burden of establishing that there are no genuine issues of material fact, once such a showing is made, the non-movant must `set forth specific facts showing that there is a genuine issue for trial.'" Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d Cir. 2000) (quoting Anderson, 477 U.S. at 256).
The non-moving party may not "rest upon . . . mere allegations or denials." St. Pierre v. Dyer, 208 F.3d 394, 404 (2d Cir. 2000). "Statements that are devoid of any specifics, but replete with conclusions, are insufficient to defeat a properly supported motion for summary judgment." Bickerstaff v. Vasser Coll., 196 F.3d 435, 452 (2d Cir. 1999), cert. denied, 530 U.S. 1242 (2000); see also Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998) ("If the evidence presented by the non-moving party is merely colorable, or is not significantly probative, summary judgment may be granted.") (quotation marks, citations, and alterations omitted).
II. STATUTE OF LIMITATIONS
A. Legal Standard
Section 413 of ERISA prescribes the period within which suit must be brought for violations of the statute:
No action may be commenced under this subchapter with respect to a fiduciary's breach of any responsibility, duty, or obligation under this part, or with respect to a violation of this part, after the earlier of — (1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission, the latest date on which the fiduciary could have cured the breach or violation, or (2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation; except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation.29 U.S.C. § 1113.
1. Fraud or Concealment
As the statute makes clear, a six-year limitations period applies in the case of "fraud or concealment." 29 U.S.C. § 1113 (emphasis added); Caputo v. Pfizer, Inc., 267 F.3d 181, 188-89 (2d Cir. 2001). "Fraud" is "a false representation of a matter of fact, whether by words or conduct, which deceives and is intended to deceive another so that he shall act upon it to his legal injury." Id. at 189 (citing Black's Law Dictionary 670 (rev. 4th ed. 1968)).
The six-year statute also applies in the absence of fraud or concealment to bar claims brought more than six years after the violation occurred, where the plaintiff never actually learns of the violation.See 29 U.S.C. § 1113.
Concealment is defined as "a withholding of something which one knows and which one, in duty, is bound to reveal." Id. at 189-90 (citingBlack's Law Dictionary 360 (rev. 4th ed. 1968)). "Concealment of a cause of action [is] defined as `to prevent running of a limitations, some trick or artifice [is] employed to prevent inquiry or elude investigation, or to mislead and hinder a party who has a cause of action from obtaining information.'" Id. at 189 (citing Black's Law Dictionary (7th ed. 1999)). Concealment thus becomes irrelevant where there is actual knowledge of a claim, i.e., an employer cannot conceal the existence of a claim that is already known to its employees.
2. Actual Knowledge
To succeed on a defense based on the statute of limitations, defendants must establish that the plaintiffs had actual, not constructive, knowledge of the claimed violations. See Caputo, 267 F.3d at 194; Gluck v. Unisys Corp., 960 F.2d 1168 (3d Cir. 1992). Gluck explained that:
[s]ection 1113 [of ERISA] sets a high standard for barring claims against fiduciaries . . . [T]he statute clearly measures the three-year bar only by reference to the plaintiff's knowledge of the breach. [A] plaintiff may have constructive knowledge . . . before he actually knows of the breach, but section 1113 requires actual knowledge.Gluck, 960 F.2d at 1176 (emphasis added). Defendants must satisfy this requirement with respect to each plaintiff. See id. (remanding to district court for a finding as to when each employee had actual knowledge of the material facts).
Actual knowledge requires a showing that plaintiffs had "knowledge of all material facts necessary to understand that an ERISA fiduciary has breached his or her duty or otherwise violated the Act." Caputo, 267 F.3d at 193. Defendants must therefore show that plaintiffs knew not only of the relevant events that occurred, but also that those events supported a claim for breach of fiduciary duty or violation under ERISA. See Int'l Union v. Murata Erie North Am., 980 F.2d 889, 890 (3d Cir. 1992); see also Caputo, 267 F.3d at 193 ("The disclosure of a transaction that is not inherently a statutory breach of fiduciary duty cannot communicate the existence of an underlying breach.").
B. Analysis
Defendants move for partial summary judgment on the ground that plaintiffs are time-barred from bringing claims for late remittances of employee deferrals and matching contributions and for unpaid profit-sharing amounts. Defendants argue that plaintiffs were aware that they had a claim in April 1997 if not earlier, but waited until June 21, 2000 to file suit for late remittances. In response, plaintiffs make two arguments.
Because the profit-sharing contributions claim is dismissed, for all intents and purposes, on other grounds, see infra Part IV, there is no need to analyze whether those claims are time-barred.
1. No Fraud or Concealment
First, they argue that a six-year limitations period should apply to their claims because defendants fraudulently concealed their non-remittance of salary deferrals. Plaintiffs claim that defendants "conceal[ed] their defalcations," id. at 13, by failing to notify plaintiffs of late remittances, see Pl. Opp. at 12 (citing cases holding that plan administrators have duty to notify of untimely remittances). Plaintiffs argue that "defendants also concealed their defalcations by failing to file annual reports for 1994, 1995 and 1997-1999 with the Department of Labor, and [to] provide annual report summaries to their employees" as required by 29 U.S.C. § 1024. Id. at 13.
Plaintiffs' argument is unavailing. They adduce no evidence of any affirmative act by Costigan intended to hide the fact that plaintiffs had a claim for late remittances. Not filing annual reports and not sending notices of late remittances are omissions. Failure to send such reports or notices is not an affirmative act or evidence of any "trick or artifice . . . to prevent inquiry or elude investigation." Caputo, 267 F.3d at 189. ABRA's telephone number was available to plaintiffs to permit them to investigate any failure to timely remit.
2. Whether Each Plaintiff Had Actual Knowledge
Second, plaintiffs contend that even if a three-year limitations period applies, their claims are not barred because defendants cannot show that each of them had actual knowledge of defendants' breach of fiduciary duty before sometime in 1998 or 1999.
Defendants base their contention — that plaintiffs had actual knowledge of their ERISA claims for failure to timely remit salary deferrals by April 1997 — on the April 1997 Firm Debts Memo, as well as on other evidence of notice, e.g., paystubs, quarterly and annual reports, etc. See Def. Mem. at 4. Contrary to William Costigan's representation, however, the 4/97 Firm Debts Memo covered plaintiffs' grievances with respect to unpaid bonuses, profit-sharing, and other types of compensation, but does not appear to address 401(k) employee and matching contributions. See 4/97 Firm Debts Memo. The figures that it lists are large and round, resembling profit-sharing contributions, as opposed to the typical semi-monthly, or even aggregate, salary deferral amount that is small and fractious. In fact, the April 1997 Memo refers to Profit-Sharing but does not mention salary deferrals. An issue of fact exists as to whether the April 1997 Firm Debts Memo shows actual knowledge of late remittances. Because there is no other evidence to suggest that plaintiffs had actual knowledge that their employer was failing to timely remit their salary deferrals, the issue is material.
It is true that each plaintiff was a licensed attorney who received regular reports of remittances to his 401(k) account and would know, upon learning that his salary contributions were not being remitted to the Plan, that he had a claim under ERISA. However, such constructive knowledge is insufficient to trigger the three-year limitations period under ERISA. Furthermore, the amounts of monthly remittances were small, and it is therefore possible that years could pass before each plaintiff realized that certain remittances were delayed.
In addition, the layout of the reports themselves would not reveal to anyone but the most studious observer whether (or what portion of) an employee's contributions or the Firm's matching contributions were paid late, or not paid at all. For example, the Firm remitted $1,666.61 of Andrew Costigan's employee contributions for the time period 04/01/96 to 06/30/96. See Sample Qtr. Stmt. This sum is not divided into the six semi-monthly salary deferrals it represents, see supra Part I.A (defining employee contributions), and therefore one can only compare each quarter to the next but cannot easily determine whether any one remittance is too low. The same is true of the annual statements. See Sample Ann. Stmt. Finally, the statement that confirms the remittance of a Plan participant's salary deferrals and employer matching contributions does not specify the time period over which the contributions were made and paid into the Plan, preventing one from tracking what was remitted and when. See Sample Conf. Not.; supra Part I.A. (describing Sample Confirmation Notice). None of the reports reveals discrepancies between expected and actual remittances, nor the length of delay in remitting a salary deferral.
In short, viewing the evidence in the light most favorable to plaintiffs and drawing all reasonable inferences therefrom, I conclude that it is possible that each plaintiff did not know of the facts giving rise to a claim for late remittance of participant contributions by April 1997. This remains an issue for trial. Thus, summary judgment is inappropriate and defendants' motion with respect to the statute of limitations must be denied.
III. INTEREST RATE
A. Legal Standard
Where an employer untimely remits employee contributions into a pension plan, the employer shall compensate the employee in:
[t]he amount that otherwise would have been earned on the participant contributions from the date on which such contributions were paid to, or withheld by, the employer until such money is transmitted to the plan had such contributions been invested during such period in the investment alternative under the plan which had the highest rate of return.29 C.F.R. § 2510.3-102(d)(3) (ii) (emphasis added). Paragraph (d) (3)(i) applies to those participant contributions where the employer elected to extend the payment deadline pursuant to the provisions of ERISA. Common sense dictates that the same rate of interest applies to extensions that the employer has taken without permission.
"Participant contributions" are defined in the regulations as those amounts of an employee's compensation "received or withheld by the employer." 29 C.F.R. § 2510.3-102(d)(1).
B. Analysis
Defendants were admittedly late — by hundreds of days in many cases — in remitting many of plaintiffs' employee contributions and their own matching contributions to ABRA/State Street Bank. Further, defendants do not dispute that they, as fiduciaries, had this responsibility. Thus, defendants are liable for the amount that the late remittances of salary contributions and matching contributions, many of which were over 100 days late and in some cases over 600 days late, would have been earning in the vehicle earning the highest rate of return over each period. See 29 C.F.R. § 2510.3-102(d)(3).
Which late remittances come within the limitations period will be decided at trial, where it will be determined when plaintiffs had actual knowledge of defendants' violation with respect to the untimely remittance of salary deferrals.
In addition, the length of time by which each remittance was overdue will be calculated from two days after the employee's wages were paid by the employer to the date when the amount was remitted to State Street Bank. See 29 C.F.R. § 2510.3-102(f) (providing illustrations of the time from which lateness calculation should be measured, for small companies — two business days, and large national corporations — ten business days). Defendants' argument that the interest should be calculated from a later date for each delayed remittance is rejected.
Defendants argue that (1) plaintiffs should receive only 5 1%2% interest for the overdue remittances; and (2) even if the lateness period is extended to the fullest allowable period, the interest calculation still results in a de minimis claim that should be dismissed.
Defendants' argument regarding the applicable rate of interest fails because section 2510.3-02 of the regulations clearly requires a different result. Neither Algie v. RCA Global Communications, 891 F. Supp. 875 (S.D.N.Y. 1994), nor Kinek v. Paramount Communications, Inc., 22 F.3d 503 (2d Cir. 1994), cited by defendants, stands for the contrary. Further, neither case cites or interprets the pertinent regulation — 29 C.F.R. § 2510.3.
Algie involved a claim for severance pay, not salary deferrals to be invested in a 401(k) plan. Algie, 891 F. Supp. at 880. Kinek addressed the issue of whether an employer was liable for the failure to fully fund a pension plan for employees of a spin-off company, and if so, what interest rate applied. In awarding prejudgment interest of 9 1%2%, the court applied 29 U.S.C. § 1344(c), a general provision which merely states that "any increase or decrease in plan assets" resulting from a termination shall be credited to, or suffered by, the plan sponsor. See Kinek, 22 F.3d at 513-15.
Defendants cite no case law or other authority in support of their de minimis defense, nor do they attempt to define de minimis. It is also impossible to know the exact amount of interest until the principal amounts are calculated at trial. Therefore, defendants' motion for summary judgment on this issue is denied.
IV. PROFIT-SHARING
A. Legal Standard
"Every employee benefit plan shall be established and maintained pursuant to a written instrument," 29 U.S.C. § 1102(a)(1), and administered solely in the interests of the participants, see Morse v. Stanley, 732 F.2d 1139, 1144-45 (2d Cir. 1984). "Interpretation of the terms of an ERISA pension plan is governed by the `federal common law of rights and obligations under ERISA-regulated plans.'" Aramony v. United Way of America, 254 F.3d 403, 411 (2d Cir. 2001) (quoting Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 110 (1989)). In applying federal common law principles, courts "interpret and enforce the unambiguous language in an ERISA plan according to its plain meaning." Id. at 412.See also Siskind v. Sperry Retirement Program, 47 F.3d 498, 506 (2d Cir. 1995) ("[T]he policy of ERISA requires strict adherence to the actual language of the Plan's governing documents.").
1. Amending an ERISA Plan
Section 402(b)(3) of ERISA requires that every employee benefit plan set out "a procedure for amending [the] plan." 29 U.S.C. § 1102(b) (3). See also Siskind, 47 F.3d at 506 ("ERISA's requirement that the procedure for amending a pension plan be specified in the documents . . . serves the important policy of providing plan beneficiaries with certainty and security regarding their benefits."). While certain conditions or circumstances may also operate to amend the plan, informal communications between employer and employee do not serve to amend an ERISA plan "absent a showing tantamount to proof of fraud." Kelly v. Chase Manhattan Bank, 717 F. Supp. 227, 230 (S.D.N.Y. 1989).
2. Promissory Estoppel
Under extraordinary circumstances, principles of promissory estoppel apply in ERISA cases. See Devlin v. Blue Cross Blue Shield, 274 F.3d 76 (2d Cir. 2001). A plaintiff must show (1) a promise, (2) reliance on the promise, (3) injury caused by the reliance, and (4) an injustice if the promise is not enforced. See id. at 85. In addition, the plaintiff must adduce evidence "sufficient to satisfy an extraordinary circumstances requirement as well." Id. (finding that such a requirement could be satisfied where plaintiffs presented evidence showing that they were lured away from higher-paying jobs to work for defendant, who promised them "lifetime life insurance benefits" in the summary plan description, and then modified the plan when plaintiffs were too old to change jobs).
B. Analysis
In each of its three versions, the Plan explicitly stated that the employer had discretion as to whether to make profit-sharing contributions. See supra Part I.B. The issue here is whether William Costigan's December 12, 1996 memorandum amended the Plan document such that he was thereafter obligated to make profit-sharing contributions to each plaintiff at a rate of 5%.
Plaintiffs argue that Ballone v. Eastman Kodak Co., 109 F.3d 117 (2d Cir. 1997), is controlling and renders defendants liable for making "definite assurances" that profit-sharing contributions would be made and then failing to pay them. Id. at 126. Ballone held that an employer's discretion to adjust benefit levels did not allow it to falsely represent to employees, who later retired, that benefit levels would remain the same, when it "knew that plan changes might well be made in the near future." Id. (emphasis added).
Plaintiffs also argue that they are entitled to profit-sharing contributions because defendants are estopped from denying this benefit under Devlin, 274 F.3d 76. See supra Part IV.A.2 (providing legal standard for promissory estoppel in ERISA cases). Devlin, however, requires a showing of "extraordinary circumstances," Devlin, 274 F.3d at 87, which plaintiffs have failed to demonstrate.
Plaintiffs have produced no evidence that the memorandum was anything other than an informal communication, or that Costigan lied because he "knew" that he would not continue to make profit-sharing contributions. Costigan's December 12, 1996 Memo stated: [t]he firm will continue its practices of. (ii) making § 401(k) profit-sharing contributions equal to 5% of eligible compensation." 12/96 Memo. The memorandum was informal — it was short (three and a half pages, double spaced, 12 point Courier font), and referred to "practices" rather than policy. See Kelly, 717 F. Supp. at 230 (holding that verbal promise to make profit-sharing payments to employees did not amend the Plan's discretionary language regarding profit-sharing because it was informal). That this promise was written, not verbal, is not controlling in light of the Plan's specific requirements for amendments. In addition, Costigan did not lie; the Firm did in fact "continue its practice" by disbursing profit-sharing contributions in January 1998 for Plan year 1996. See supra Part I.B.
The memorandum did not conform to any of the prescribed methods of amending the Plan. See supra Part I.B (describing the prescribed methods of amendment under the Plan).
Further, Costigan's promise regarding profit-sharing was more in the nature of a prediction than a definite assurance upon which plaintiffs could reasonably rely. See Ballone, 109 F.3d at 126 (employer made "definite assurances"). The memorandum was not something that Costigan himself initiated but instead was a response to plaintiffs' complaints about salary progression at the Firm. It begins with an assertion in defense of current compensation levels — that the salary progression is fair when considered in conjunction with other factors, including profit-sharing, which the Firm had been paying, with the exception of plan year 1995. See 12/96 Memo at 1. The bulk of the memorandum is devoted to a discussion of associate salary levels based on the number of years spent at the Firm, raises, partnership and bonuses.See id. at 1-3.
The December 12, 1996 Memo also made no false statements of fact in conjunction with its promise to pay profit-sharing. See Ballone, 109 F.3d at 126 (holding employer liable because it knew it would not continue paying certain benefits, yet made assurances supported by "false statements of fact"). A false statement of fact in this context may have included a reference to the Firm's financial health or excess profits. Instead, in the last paragraph of the memorandum, Costigan merely stated that the Firm would continue making 401(k) matching and profit-sharing contributions. See 12/96 Memo at 4.
Therefore, as a matter of law, the December 12, 1996 Memo did not amend the Plan, which clearly provides that profit-sharing is discretionary. Plaintiffs' motion for summary judgment with respect to profit-sharing is denied.
The minimum contribution language in each of the Plan versions does not change this result. See supra Part I.C (explaining that the minimum contribution section in each version of the Plan allowed the employer to make no profit-sharing contribution for any given year).
Because there is no fact in dispute, summary judgment in favor of defendants on plaintiffs' profit-sharing claim may be appropriate. See Lowenschuss v. Kane, 520 F.2d 255, 262 (2d Cir. 1975) ("We have sanctioned a sua sponte award by the court of summary judgment to a non-moving party where it appeared from the papers, affidavits and other proofs submitted by the parties that there were no disputed issues of material fact and that judgment for the non-moving party would be appropriate as a matter of law"); Martinson v. Massachusetts Bay Co., 947 F. Supp. 124, 127 (S.D.N.Y. 1996) (same). Plaintiffs have certainly had an opportunity to put forth their best evidence on this claim, see Lowenschuss, 520 F.2d at 262 (listing factors to consider), yet have failed to raise an issue of fact with respect to whether Costigan was obligated to make profit-sharing contributions for any Plan year.
However, granting summary judgment against a party who has not had a chance to oppose it, even against the moving party, is "firmly discouraged" in the absence of explicit notice. Bridgeway Corp. v. Citibank, 201 F.3d 134, 140 (2d Cir. 2000) (Calabresi, J.). This opinion, of course, now provides appropriate notice. Thus, in the absence of any further submission by plaintiffs, the motion will be granted in defendants' favor at the start of the trial.
V. STATUTORY PENALTIES UNDER 29 U.S.C. § 1024(b)(4), 1132(c)
A. Legal Standard
ERISA prescribes penalties for administrators who fail to satisfy their disclosure obligations:
[a]ny administrator . . . who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary . . . may . . . be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal29 U.S.C. § 1132(c). This subchapter of ERISA requires plan administrators to "furnish, upon written request of any participant or beneficiary":
a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract or other instruments under which the plan is established or operated.29 U.S.C. § 1024(b)(4). Congress's purpose in enacting these disclosure provisions was to ensure that "the individual participant knows exactly where he stands with respect to the plan." Firestone Tire, 489 U.S. at 118.
The penalty imposed for failure to supply requested information, as well as whether to impose any penalty at all, lies within the discretion of the trial court. See 29 U.S.C. § 1132(c). The following factors inform the exercise of that discretion: (1) the administrator's bad faith or intentional conduct; (2) the length of the delay; (3) the number of requests made; (4) the extent and importance of the documents withheld; and (5) the existence of any prejudice to the participant or beneficiary. See McDonald v. Pension Plan of the NYSA-ILA Pension Trust Fund, No. 99 Civ. 9054, 2001 WL 1154630, at *6 (S.D.N.Y. Oct. 1, 2001);Pagovich v. Moskowitz, 865 F. Supp. 130, 137 (S.D.N.Y. 1994).
While prejudice is a "significant factor," Austin v. Ford, No. 95 Civ. 3730, 1998 WL 88744, at *6 (S.D.N.Y. Mar. 2, 1998), the plan participant need not allege prejudice to be entitled to a statutory penalty. "[T]hat harm need not be shown is supported by the Supreme Court's statement that `Congress' purpose in enacting the ERISA disclosure provisions was to ensure that the individual participant knows exactly where he stands with respect to the plan.'" Gillis v. Hoechst Celanese Corp., 4 F.3d 1137, 1148 (3d Cir. 1993) (citing Firestone Tire, 489 U.S. at 118). See also Pagovich, 865 F. Supp. at 137-38 ("Every circuit which has squarely considered the issue has determined that prejudice or injury to a participant is not a prerequisite to the award of statutory penalties for the administrator's failure to disclose requested documents.") (citing cases)
B. Analysis
Plaintiffs claim that defendants owe them $100 per day for each day, beginning on July 1, 2000, thirty days after they failed to provide the information that plaintiffs requested on June 1, 2000. Defendants respond by stating that even if they were obligated to furnish such information, plaintiffs waived their right to it by failing to wait thirty days before filing suit on June 21, 2000.
The plaintiffs' calculation of that time period is 269 days with respect to certain of the requested documents, which were ultimately provided on March 27, 2001, and 531 days (as of the date of plaintiffs' memorandum, December 14, 2001) with respect to the annual reports and report summaries. See Pl. Mem. at 11.
Defendants also argue that plaintiffs requested "far more documentation than the statute entitles them to receive." Def. Opp. at 9. However, Costigan made no attempt to comply with his duty as Plan Administrator by responding to plaintiffs' requests for information. Therefore, statutory penalties are appropriate.
Defendants cite two cases in support of their defense, neither of which is persuasive. In First Atlantic Leasing Corp. v. Tracy, 738 F. Supp. 863 (D.N.J. 1990), the court declined to award penalties against an employer pursuant to 29 U.S.C. § 1132 where it was "undisputed that [plaintiff] never made a written request for information before [the] suit was instituted." Id. at 875. In that case, plaintiff requested information only after suit was instituted. See id. It was in this context that the court stated that "[p]ursuant to the statute at hand, [plaintiff] is required to make a request to the administrator of the plan and wait thirty days before he can commence suit." Id. The second case cited by defendants, Aquilo v. Police Benevolent Ass'n of N Y State Troopers, 857 F. Supp. 190, 213 (N.D.N Y 1994), relies on First Atlantic to bar a claim for statutory penalties on similar facts.
In both of these cases, plaintiffs made no written request for information pursuant to 29 U.S.C. § 1024 prior to bringing suit for a violation of that statute. Thus, these cases are easily distinguished.First, plaintiffs in this case made a written request for information on June 1, 2000, prior to bringing a suit which, in fact, did not allege a violation of 29 U.S.C. § 1024. Second, plaintiffs did not sue for a violation of 29 U.S.C. § 1024 until more than six months after sending their written request for information to Costigan. See Am. Compl. ¶¶ 89-95 (filed December 18, 2000).
In addition, the application of the factors outlined in McDonald, supra, weigh in favor of the plaintiffs. Defendants' failure to provide any information in response to plaintiffs' two written requests, the delay of several months, as well as defendants' obvious bad faith and intentional misconduct in this litigation, warrant imposing statutory penalties against them.
See McConnell, 2001 WL 1456609, at *4-*5 (Katz, M.J.) (finding that William Costigan, in the context of discovery, "stonewalled and mislead plaintiffs and the Court into believing that he was producing responsive documents," "wilfully disregarded Court orders" and demonstrated "complete indifference to communicating with the Court and his adversaries").
Plaintiffs' motion for summary judgment is granted on their section 1024 claim, with the exact amount of damages to be calculated at trial.
VI. SANCTIONS AND MOTION FOR RELIEF FROM JUDGMENT
Plaintiffs ask this Court to consider their motion for summary judgment as unopposed because of defendants' (1) late filing of their opposition brief to plaintiffs' motion, and (2) delay in paying the monetary sanction imposed by Judge Katz. See 1/23/02 Pl. Ltr. In support of this request, plaintiffs cite Antonio A. Alevizopolous Assoc., Inc. v. Comcast Int'l Hldgs, Inc., No. 99 Civ. 9311, 2000 WL 1677984, at *2 (S.D.N.Y. Nov. 8, 2000), in which this Court dismissed a complaint pursuant to Rule 41(b) where plaintiff had litigated his case with "extreme indolence." As set forth in that opinion, Rules 16(f), 37(b) and 37(d), and 41(b) permit a court to impose sanctions for, inter alia, failure to comply with a scheduling order. See id. at *4 (citing to the Federal Rules of Civil Procedure).
Rule 16(f) permits a court to impose sanctions for failure to obey a scheduling order where sanctions are "just." Fed.R.Civ.P. 16(f). A court may also enter "any of the orders provided in Rule 37(b)(2)(B), (C), (D)." Id. The latter provisions permit a court to "refus[e] to allow the disobedient party to support or oppose designated claims or defenses," Fed.R.Civ.P. 37(b)(2)(B), "strik[e] out pleadings or parts thereof . . . or dismiss the action or proceeding or part thereof, or render a judgment by default against the disobedient party," Fed.R.Civ.P. 37(b)(2)(C), or enter "an order treating as contempt of court the failure to obey any orders except [a circumstance not present in this case]," Fed.R.Civ.P. 37(b)(2)(D).
An order striking pleadings, which often results in dismissal or judgment for one party, is considered to be "draconian" under most circumstances. Forum Ins. Co. v. Keller, No. 91 Civ. 4528, 1992 WL 297580, at *2 (S.D.N.Y. Oct. 8, 1992). Dismissal is a "`harsh remedy' that [is] appropriate only in `extreme circumstances.'" Mordechai v. St. Luke's-Roosevelt Hosp. Ctr. et al., No. 99 Civ. 3000, 2001 WL 699062, at *1 (S.D.N.Y. Jun. 21, 2001).
Defendants ask the Court to excuse their lateness in submitting their opposition papers, i.e., their noncompliance with my scheduling order entered November 27, 2001 ("Scheduling Order"), because William Costigan had bronchitis during that period, and had to attend to the pressing needs of his law firm's clients. See 1/29/02 Def. Ltr. Plaintiffs give no credence to this explanation, as defendants were able to draft a "three-and-one-half page letter" moving for reconsideration of Judge Katz's opinion during that time period. 1/23/02 Pl. Ltr. Defendants explain in response that drafting the letter to Judge Katz did not require extra work because it grew naturally out of William Costigan's work on his opposition papers. See 1/29/02 Def. Ltr. Defendants offer no excuse, however, for their two-month delay in paying the fine imposed by Judge Katz. Nevertheless, these infractions, while serious, do not warrant striking defendants' opposition. Thus, plaintiffs' request that their motion for summary judgment be considered unopposed is denied.
The more appropriate sanction for defendants' lateness in submitting their opposition papers and in paying the monetary sanction imposed by Judge Katz, is an additional monetary sanction. I therefore impose a further fine of $1,000, payable to plaintiffs, as reimbursement for the expenses and inconvenience incurred as a result of defendants' continued misbehavior.
Defendants, in turn, wish to move pursuant to Rule 60(b) for relief from Judge Katz's December 12 Order. Rule 60(b) permits a court, "on terms that are just," to "relieve a party or a party's legal representative from a final judgment, order, [etc.] for . . . mistake." Fed.R.Civ.P. 60(b). There was no mistake here and there appears to be no other basis for pursuing Rule 60(b) relief. Defendants may make their motion, but it is unlikely they will obtain any relief. After many years, it is time for the parties to resolve the issues on the merits rather than fighting their skirmishes that tax the Court's resources when it needs to preserve its energies for resolving disputes on the merits.
VII. CONCLUSION
Plaintiffs' motion for summary judgment is denied as to the profit-sharing issue, but granted as to their request for statutory penalties pursuant to 29 U.S.C. § 1024 and 1132. Defendants' motion for summary judgment is denied in its entirety. A trial will be held to calculate statutory penalties, and the amount the untimely remitted deferrals and matching contributions would have earned, as well as to adjudicate plaintiffs' remaining claims. A conference is scheduled for March 15, 2002 at 4:30 p.m.