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Trustees of the Southern California Bakery Drivers Security Fund v. Middleton

January 6, 2009

TRUSTEES OF THE SOUTHERN CALIFORNIA BAKERY DRIVERS SECURITY FUND; DIRK GEERSEN, PLAINTIFFS,
v.
RICK MIDDLETON; BOB DOSS; RONN ENGLISH; PERRI NEWELL; SOUTH BAY TEAMSTERS AND EMPLOYERS HEALTH AND WELFARE AND RELATED BENEFITS TRUST FUND, DEFENDANTS.



The opinion of the court was delivered by: Hon. Manuel L. Real U.S. District Court Judge

FINDINGS OF FACT AND CONCLUSIONS OF LAW [Fed. R. Civ. P. 52(a)] Date: January 5, 2009 Time: 10:00 a.m. Ctrm: 8 (Spring St.)

Pursuant to the Interlocutory Judgment, entered August 5, 2008 as Docket No. 153, and Rule 53(f) of the Federal Rules of Civil Procedure, a Master was appointed to perform an Accounting for the purpose of determining the final judgment in this case. The Master has issued his report, and the parties have filed a Stipulation Regarding Report of Special Master. This matter came before the Court by noticed motion. The Court being fully advised makes the following findings of facts and conclusions of law:

I. FINDINGS OF FACT

The court makes the following findings of fact:

PARTIES

1. Plaintiffs Trustees of the Southern California Bakery Drivers Security Fund (Bakery Drivers Trustees) are the trustees and fiduciaries as to the Southern California Bakery Drivers Security Fund (Bakery Drivers Fund), and appear here in their fiduciary capacity on behalf of the Bakery Drivers Fund. The Bakery Drivers Fund, is and at all times was, an employee welfare benefit plan within the meaning of ERISA § 3(1), 29 U.S.C. § 1002(1) and a multi-employer plan within the meaning of ERISA § 3(37)(A), 29 U.S.C. § 1002(37)(A). The Bakery Drivers Fund is an express trust, created pursuant to various collective bargaining agreements, in accordance with LMRA § 302(c)(5), 29 U.S.C. § 186(c)(5). The Bakery Drivers Fund is administered in the County of Los Angeles, State of California. [Stipulation of Facts ¶ 1].*fn1

2. Plaintiff Dirk Geersen (Participant) is an individual residing in this district. Participant is, and has been a participant in the Bakery Drivers Fund since 1991. [Declaration of Linda Tonnancour (Tonnancour Decl) ¶ 5].

3. Defendant South Bay Teamsters and Employers Health and Welfare and Related Benefits Trust Fund (South Bay Trust) is and at all times was, an employee welfare benefit plan within the meaning of ERISA § 3(1), 29 U.S.C. § 1002(1) and a multi-employer plan within the meaning of ERISA § 3(37)(A), 29 U.S.C. § 1002(37)(A). The South Bay Trust is an express trust, created pursuant to various collective bargaining agreements. The South Bay Trust is administered in the County of Los Angeles, State of California. [Stipulation of Facts ¶ 2].

4. Defendants Rick Middleton; Bob Doss; Ronn English; Perri Newell (South Bay Trustees), are each individuals, and each have been trustees and fiduciaries of the South Bay Trust. [Stipulation of Facts ¶ 3].

BAKERY DRIVERS FUND

5. The Bakery Drivers Fund provides medical, dental, and other benefits described in ERISA § 3(1), 29 U.S.C. § 1002(1), for qualified participants and their beneficiaries. Pursuant to various collective bargaining agreements, employers contribute at specified rates to the Bakery Drivers Fund, for the purpose of providing such benefits to covered employees of such employers, and their designated beneficiaries. [Tonnancour Decl ¶ 2].

6. Among the benefits which have been provided by the Bakery Drivers Fund from participating employer contributions has been death benefits to designated beneficiaries of employees of employers participating in the Bakery Drivers Fund, as well as certain benefits to participants for the death of a spouse or dependent child. [Stipulation of Facts ¶ 4].

7. Prior to August 1987, the Bakery Drivers Fund provided death and dismemberment benefits to its participants, through the purchase of insurance policy (or policies) from an insurance company. [Stipulation of Facts ¶ 6].

DEATH BENEFIT AGREEMENTS

8. The Trustees of the Bakery Drivers Fund and the Trustees of the South Bay Trust each approved an arrangement, effective August 1, 1987, whereby the Bakery Drivers Fund would pay to the South Bay Trust $5.50 per month for each of the active Bakery Drivers Fund participants, and the South Bay Trust would provide certain death and related benefits for those participants and certain retirees. That arrangement was later reflected in a written document. Subsequent written documents were entered into by the Bakery Drivers Fund and South Bay Trust, with essentially the same terms, but covering different time periods. These written documents, which will be referred to here as "Death Benefit Agreements" are the following exhibits, covering the following time periods: Exhibit 1. August 1, 1987 - July 31, 1990 Exhibit 2. August 1, 1990 - July 31, 1993 Exhibit 3. August 1, 1993 - July 31, 1996 Exhibit 4. August 1, 1996 - until terminated. [Stipulation of Facts ¶ 7].

9. The last Death Benefit Agreement, Exhibit 4, contained an automatic renewal clause, which continued from year to year, until specified notice was given. The dates on which each Death Benefit Agreement was signed, are as indicated on those Exhibits. The dates on which each Death Benefit Agreement were approved by the respective Trustees of each Fund, are as indicated in the minutes of each Fund. [Stipulation of Facts ¶ 8; Exhibits 1-4, 11, 12 and 69].

10. Each of the Death Benefit Agreements provides that "Security Fund desires and South Bay is willing that contributions be paid over from Security Fund to South Bay in order to fund the payment of death benefits to Security Fund participants on terms approximately equal to those which fund similar benefits for South Bay participants." [Ex.s 1, 2, 3 and 4, at p. 1].

11. Each of the Death Benefit Agreements further states "That a plan of death benefits is hereby established for Security Fund participants as set forth below:" Following that is a detailed description of the benefits, the terms of eligibility for those benefits, the manner of administration, and the manner in which the benefits shall be funded. As to funding, each Death Benefit Agreement states that "The Security Fund shall pay to South Bay, commencing [date varies by Agreement], the sum of $5.50 for each eligible active participant per month. The Security Fund shall transmit to South Bay monthly a list of active eligible participants." [Ex.s 1, 2, 3 and 4, at pp. 2 and 6].

ADMINISTRATION, PAYMENTS AND CLAIMS

12. The third-party administration of the benefits in the Death Benefit Agreements, during their terms, was provided by Southwest Administrators, Inc. ...


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