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Solis v. Couturier

June 17, 2009

HILDA L. SOLIS, SECRETARY OF THE UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF,
v.
CLAIR R. COUTURIER, JR., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ralph R. Beistline United States District Judge

ORDER DENYING DEFENDANTS DAVID JOHANSON AND JOHANSON BERENSON LLP'S MOTION TO DISMISS AT DOCKET 59

I. INTRODUCTION

Before the Court are Defendants David Johanson and Johanson Berenson LLP ("Defendants") with a Motion to Dismiss at Docket 59. Defendants request the following relief:

1. That Count I of the Amended Complaint be dismissed against Johanson Berenson LLP as barred by the statute of limitations;

2. That all claims against Johanson Berenson LLP be dismissed because it is not a "party in interest" who is alleged to have received any ill gotten gains such that may be sued under ERISA;

3. That the Claim for a permanent injunction be dismissed because it is not an available remedy under ERISA;

4. That the Counts against David R. Johanson be dismissed because there are no allegations sufficient to demonstrate that he breached his duty to monitor;

5. That Count I be dismissed or summarily adjudicated because the primary allegation is not supported by the undisputed facts.

Plaintiff Hilda Plaintiff Hilda L. Solis, Secretary of the U.S. Department of Labor ("Secretary"), opposes the motion in all respects at Docket 77.

II. BACKGROUND

As the very complex facts of this case are familiar to all parties, no extensive recitation is necessary.

The present action was filed in this Court on November 13, 2008. The complaint alleges violations of ERISA stemming from two separate transactions. The first was a 2004 transaction in which the named defendants allegedly breached their fiduciary duty to the Employee Stock Ownership Plan ("ESOP"), the sole shareholder of The Employee Ownership Holding Company ("TEOHC") by failing to properly value the compensation granted to Defendant Couturier in his capacity as president of Noll Manufacturing Company.*fn1 The Amended Complaint alleges that Johanson was the managing partner of Johanson Berenson and was directly responsible for orchestrating the $34.4 million buyout.*fn2 Johanson's alleged fiduciary duties arose from his roles as "service provider to the ESOP, named fiduciary of the ESOP, director of TEOHC, corporate officer of TEOHC, outside General Counsel to TEOHC, estate planning counsel to TEOHC's president, and a 50% partner in an investment firm that was negotiating to purchase TEOHC."*fn3

The second transaction was a 2007 sale of the ESOP's assets. Plaintiff alleges that the sale was structured in such a way that ESOP participants would not be paid from the receipts of the sale until after the individual defendants had received payments under what Plaintiff characterizes as "invalid agreements to indemnify certain of the defendants in the event they were sued for, among other things, fiduciary breach."*fn4

Based on their involvement with the above transactions, Plaintiff alleges that David Johanson and Johanson Berenson LLP are liable for violating various provisions of ERISA.

III. LEGAL STANDARDS

In reviewing a Fed. R. Civ. P. 12(b)(6) motion to dismiss,

"[a]ll allegations of material fact in the complaint are taken as true and construed in the light most favorable to the nonmoving party."*fn5 A claim should only be dismissed under Rule 12(b)(6) if "it appears beyond doubt that a plaintiff can prove no set of facts in support of his claim which would entitle him to relief."*fn6

IV. DISCUSSION

Defendants request dismissal of the various counts against them on several independent grounds. The Court will address each one in the order in which they are ...


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