Mintjal v. Prof'l Benefit Trust, Case No. 08–cv–5681

146 F.Supp.3d 981

David Mintjal and Therese Mintjal, Plaintiffs,

v.Professional Benefit Trust, Multiple Employer Welfare Benefit Plan & Trust, PBT Administration, Ltd., Tracy Sunderlage, Linda Sunderlage, Maven Assurance, Ltd., Sunderlage Resource Group, Inc., and SRG International, Inc., Defendants.

Case No. 08–cv–5681

United States District Court, N.D. Illinois, Eastern Division.

Signed September 29, 2015

William F. Fitzpatrick, Fitzpatrick & Fitzpatrick, Chicago, IL, for Plaintiffs.

Matthew Scott Sorem, Nicolaides Fink Thorpe Michaelides Sullivan LLP, James Peter Fieweger, Williams Montgomery & John, Ltd., Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

Robert M. Dow, Jr., United States District Judge

This action is brought pursuant to various provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) for alleged breaches of fiduciary duties. Before the Court is Plaintiffs' motion for partial summary judgment “on the issue of the Defendants' liability for the conduct alleged in the second amended complaint.” [269]. Defendants Tracy Sunderlage and Linda Sunderlage (“the Sunderlages”) and Maven Assurance, Ltd. (“Maven”) have opposed the motion. For the reasons that follow, the Court grants in part and denies in part the motion. The Court grants Plaintiffs' motion [281] on the issues of liability against (1) the Sunderlages for breaches of their fiduciary duties with regard to the transactions with Maven, (2) Maven's liability as a party in interest in prohibited transactions with the named plan fiduciaries PBT Administration and PBT Ltd., (3) the termination of the PBT Trust, (4) the award of the $2,163,000 administrative fee when the PBT Trust was terminated, and (5) SRG Inc. and SRG International's liability for aiding and abetting the breaches of fiduciary duties by Tracy Sunderlage. The Court denies Plaintiffs' motion as to the 2002 and 2004 Loans from the PBT Trust to Dufferin.

I. Background

A. Statements of Facts and Supporting Memoranda

Unless otherwise indicated, the Court has taken the relevant facts from the parties' Local Rule (“L.R.”) 56.1 Statements, which include Plaintiffs' L.R. 56.1 Statement of Material Facts [280], the Sunderlages' Response to Plaintiffs' L.R. Statement [294], Maven's Response to Plaintiffs' L.R. Statement and Statement of Additional Facts [298], and Plaintiffs' Response to Maven's Additional Facts [311]. Rule 56.1 requires a party moving for summary judgment to submit a statement of material facts as to which the movant contends there is no genuine issue and which entitles the movant to judgment as a matter of law. As the Seventh Circuit has stressed, facts are to be set forth in Rule 56.1 statements, and it is not the role of the Court to parse the parties' exhibits to construct the facts. Judges are not “like pigs, hunting for truffles buried in briefs.” United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.1991). It simply is not the Court's job to sift through the record to find evidence to support a party's claim. Davis v. Carter, 452 F.3d 686, 692 (7th Cir.2006). Rather, it is “[a]n advocate's job * * * to make it easy for the court to rule in [her] client's favor[.]” Dal Pozzo v. Basic Machinery Co., 463 F.3d 609, 613 (7th Cir.2006).

The Court carefully reviews the parties' statements of material facts and eliminates from consideration any argument, conclusions, and assertions that are unsupported by the documented evidence of record offered in support. See, e.g., Sullivan v. Henry Smid Plumbing & Heating Co., Inc., 2006 WL 980740, at *2 n. 2 (N.D.Ill. Apr. 10, 2006) ; Tibbetts v. RadioShack Corp., 2004 WL 2203418, at *16 (N.D.Ill. Sept. 29, 2004). Merely including facts in a responsive memorandum is insufficient to put issues before the Court. Midwest Imports, Ltd. v. Coval, 71 F.3d 1311, 1313 (7th Cir.1995) ; Malec v. Sanford, 191 F.R.D. 581, 594 (N.D.Ill.2000). Rule 56.1 also requires that statements of facts contain allegations of material fact and that factual allegations be supported by admissible record evidence. See L.R. 56.1 ; Malec, 191 F.R.D. at 583–85.

Of particular importance here is the requirement that a party's disagreement with a particular statement of fact be supported by the record. Local Rule 56.1(b)(3) states:

Each party opposing a motion filed pursuant to Fed.R.Civ.P. 56 shall serve and file * * * a concise response to the movant's statement that shall contain: * * * a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific reference to the affidavits, parts of the record, and other supporting materials relied upon [.]

(emphasis added). Accordingly, under this rule, “a general denial is insufficient to rebut a movant's factual allegations; the nonmovant must cite specific evidentiary materials justifying the denial.” Malec, 191 F.R.D. at 584. The upshot is that where a party improperly denies a statement of fact by failing to provide evidentiary support for the denial, the Court deems that statement of fact to be admitted. As the district court put it in Malec, We cannot stress the importance of [the nonmovant's L.R. 56.1 response] enough: a nonmovant's failure to adhere to [L.R. 56.1(b)(3) ] is equivalent to admitting the movant's case. Id. Indeed, “the penalty for failing to properly respond to a movant's 56.1(a) statement is usually summary judgment for the movant (at least if the movant has done his or her job correctly) because the movant's factual allegations are deemed admitted.” Id. Here, the Sunderlages have disagreed with many of Plaintiffs' fact statements, but often fail to cite to the record in support of their disagreement. The Court accordingly must deem any facts that have not been properly denied as admitted.

In addition, the Sunderlages failed to submit a brief in opposition to Plaintiffs' motion for summary judgment, despite having more than two months to do so. To be sure, the Court must liberally construe a pro se litigant's pleadings to “give [him] a break when, although he stumbles on a technicality, his pleading is otherwise understandable,” Greer v. Bd. of Educ. of City of Chicago, 267 F.3d 723, 727 (7th Cir.2001), but that forgiving standard does not permit this Court to excuse a pro se litigant's failure to file the required pleading altogether. Plaintiffs' motion for summary judgment was filed on November 4, 2014, and on November 21, 2014, this Court set a briefing schedule that called for response briefs to be filed by January 9, 2015.[289]. The Sunderlages never requested an extension of time. In addition, when Plaintiffs moved for summary judgment they notified the Sunderlages that their response must comply with the Local Rule 56.1, see [271], which requires the opponent of a motion for summary judgment to file a supporting memorandum of law, see L.R. 56.1(b)(2). The Sunderlages nonetheless failed to file a response brief setting forth their legal arguments for why the Court should deny summary judgment on these issues. The absence of any response has hampered the Court's ability to understand the Sunderlages' position as to their compliance with their alleged status as fiduciaries under ERISA.

The Court further notes that it previously denied the Sunderlages' request to have an attorney recruited to represent them free of charge, as the assets listed on the Sunderlages' financial affidavit vastly exceed the resources available to litigants who qualify for in forma pauperis status. See [293]. “[E]ven pro se litigants must follow rules of civil procedure,” Cady v. Sheahan, 467 F.3d 1057, 1061 (7th Cir.2006), and the Court “may insist upon adherence to its local rules even from a pro se litigant.” Nowak v. Transp. Joint Agreement of Cmty. Consol. Sch. Dist. No. 47, 255 Fed.Appx. 85, 87 (7th Cir.2007). The Court accordingly may grant summary judgment against the Sunderlages based on their failure to properly oppose Plaintiffs' motion. See id. (“Local Rule 56.1(b)(2) requires the opponent of a motion for summary judgment to file a supporting memorandum of law. [The plaintiff] did not comply, and on that basis alone the district court was within its authority to grant summary judgment to [the defendant].”).

The Court also notes that the various bankruptcy proceedings of three of the defendants do not bar the proceedings before the Court. The U.S. Bankruptcy Court for the Northern District of Illinois terminated both PBT Administration's bankruptcy case and the Sunderlage Resource Group's bankruptcy case on June 27, 2014 and April 13, 2015, respectively. Tracy Sunderlage's bankruptcy is still pending, but the Bankruptcy Court entered orders in each of the three defendants' bankruptcy cases which lifted the automatic stay of bankruptcy and permitted Plaintiffs to proceed with this case. See [316], Ex. 1 at 1–3.

B. Facts

Beginning in 1995, Plaintiffs' employer, General Produce Distributors, Inc., participated in the Professional Benefit Multiple Employer Welfare Benefit Plan & Trust (“the PBT Trust”), which provided death and living benefits to employees of participating employers. [311], Maven's Add'l Facts at 1–2. Plaintiffs David and Therese Mintjal were beneficiaries of the Trust between 1995 and 2006. Id. at 4. Defendant Professional Benefit Trust, Ltd. (“PBT Ltd.”) was the trustee of the PBT Trust, id. at 3, Defendant PBT Administration, LLC (“PBT Administration”) was the administrator, and a company called Professional and Small Business Council Inc. was the trust sponsor. [281], Pls.' Mem. at 33. Plaintiffs allege that Tracy Sunderlage owned, controlled, and operated PBT, Ltd. and PBT Administration and that he was a fiduciary with respect to the PBT Trust. [145], Sec. Am. Compl. (“SAC”) at 6. The evidence indicates that Tracy Sunderlage was the CEO and Chairman of the PBT Trust. See, e.g., [274] Ex. 36. Plaintiffs further allege that Linda Sunderlage, Tracy's wife and business partner, also was a fiduciary as she exercised...