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National Bank & Trust Co. v. Webb

July 10, 2006

NATIONAL BANK & TRUST COMPANY, PLAINTIFF,
v.
LEE WEBB, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Black, M.J.

MEMORANDUM OPINION AND ORDER

Plaintiff National Bank and Trust Company ("NB&T" or "Plaintiff") initiated this action by filing a complaint pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., alleging a breach of fiduciary duties by Defendants as officers and directors of a family-run corporation. (See Doc. 1.) The parties have consented to final disposition by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). (See Docs. 16, 17.)

On March 17, 2006, Plaintiff filed a motion for summary judgment, which pleading is now before the Court. (See Docs. 29-31.) On April 12, 2006, Defendants filed a pro se response to the motion, incorporating by reference the allegations and claims which were presented in their Answer and Counterclaim. (Doc. 35; see Doc. 9.) Although the time in which to supplement their response was extended until May 30, 2006 (see Doc. 41), no further response to the motion for summary judgment has been filed. Accordingly, the matter is now ripe for review.

I. BACKGROUND

Defendants Lee Webb, Keri Webb, and Daniel Webb were officers and directors of a family-run corporation, D&K Aviation, Inc. ("D&K"). (See Doc. 29-2, Ex. A, "Debtor Examination of Lee Webb and Keri Webb" (hereinafter "Debtor Exam.") at 9.) Effective January 1, 2001, D&K adopted a 401(k) retirement plan (the "Plan") for its employees. (See Doc. 31-3 at 3.) Pursuant to the Plan, qualified employees were entitled to have certain amounts deducted from their compensation for deposit into the Plan. (See Doc. 31-1 at ¶ 3.) Additionally, the Plan provided for a three percent non-elective contribution by D&K for qualified employees. (Id.) In 2001, the Summary Plan Description expressly provided that the trustees of the Plan were Keri D. Webb, Daniel Webb, and Lee F. Webb. (See Doc. 31-3 at 11.)

In June 2003, NB&T became the Trustee of the D&K Plan. (See Doc. 31-1 at ¶ 4.) NB&T allegedly discovered that Defendants had failed to deposit amounts withheld from employee compensation and to make the three percent non-elective contributions. (Id.) Through this action, NB&T seeks to recover the amount of $38,878.76, which Defendants failed to deposit in the Plan, plus interest, as well as an award of attorney fees pursuant to ERISA, 29 U.S.C. § 1132(g).*fn1 (See Doc. 1-1 at ¶¶ A-B; Doc. 31-1 at ¶ 7.)

In their counterclaim (incorporated by reference in their response to the motion for summary judgment), Defendants allege, inter alia, that NB&T made material and fraudulent misrepresentations to them concerning the nature of the financial agreement that they entered into, specifically, that the contributions to the Plan would be voluntary on the part of the employees and that D&K's obligation to contribute to the Plan on behalf of its employees was limited to the amount contributed by the employees. (See Doc. 9 at ¶¶ 8-21.) Additionally, Defendants allege that NB&T has breached the terms of the agreement to create an employee benefit plan, and they seek to recover damages for that breach. (See id. at ¶¶ 22-31.)

NB&T contends that it is entitled to summary judgment as a matter of law on its ERISA-based claims because Defendants failed to present any evidence to create a genuine issue of material fact. NB&T further contends that it is entitled to summary judgment with respect to Defendants' counterclaims because Defendants have failed to present any evidence on which a reasonable jury could find in their favor.

NB&T relies in part on Fed. R. Civ. P. 36(a), which provides that in the event a party fails to respond to Requests for Admissions, the matters set forth in the requests are deemed admitted. See Fed. R. Civ. P. 36(a). Defendants did not respond to NB&T's Requests for Admissions. (See Doc. 39.)

Accordingly, the factual matters set forth in the Requests for Admissions (see 29 U.S.C. § 1132(g)(1).

Doc. 30-5 at 13-17, 31-35, 48-53) are deemed admitted. The Court will rely on these admissions, in addition to the other evidence of record, in determining whether Plaintiff is entitled to summary judgment. See Fed. R. Civ. P. 56(c); United States v. Kasuboski, 834 F.2d 1345, 1350 (7th Cir. 1987) ("Admissions made under Rule 36, even default admissions, can serve as the factual predicate for summary judgment.").

II. STANDARD OF REVIEW

Summary judgment is proper "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 a judgment as a matter of law." Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The moving party has the burden of showing the absence of genuine disputes over facts which might affect the outcome of the action. Celotex, 477 U.S. at 323. All facts and inferences must be construed in a light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

When the moving party files a motion for summary judgment, the non-moving party cannot "rest upon the mere allegations or denials of his pleading, but . . . must set forth specific facts showing there is a genuine issue for trial." Anderson, 477 U.S. at 248. The Federal Rules of Civil Procedure require that the non-moving party produce some evidence in support of its allegations supporting its claims, by affidavits or as otherwise provided in the rule. Fed. R. Civ. P. 56(e). If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party. Id.; see also Anderson, 477 U.S. at 248-49; First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289, reh'g denied, 393 U.S. 901 (1968). When a motion ...


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