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Elizabeth M. Ross, M.D. v. Sigurdsson

United States District Court, D. Maryland

May 5, 2014



JILLYN K. SCHULZE, Magistrate Judge.

This case was referred to me pursuant to 28 U.S.C. § 636(b) and Local Rule 301.6 for review of Plaintiff's Motion for Judgment by Default. ECF Nos. 11, 12. Defendants were properly served and failed to plead or otherwise respond to the complaint, and the Clerk of the Court entered default against them. ECF Nos. 5, 6, 7, 9. For the following reasons, I recommend that Plaintiff's motion be granted in the amounts requested.

1. Background.

On December 11, 2012, Plaintiff Elizabeth M. Ross, M.D. & Kenneth M.H. Lee, M.D., P.C., filed a complaint against Defendants Ivar Sigurdsson, Sigurdsson & Company, Inc., and International Financial Fellowship, LTD (IFF). ECF No. 1. Count I is brought against all three Defendants under Section 502(a) of Title 29 of the United States Code (ERISA) and alleges breach of fiduciary duty by fraudulent conversion. Id. Counts II and III are brought against IFF and allege common law conversion and unjust enrichment. Id.

The complaint alleges that Plaintiff is the administrator of Plaintiff's profit sharing plan (the Plan) and that all Defendants were Plan Fiduciaries within the meaning of ERISA. ECF No. 1 at ¶¶ 1, 21. In 1990, Plaintiff retained Defendants Sigurdsson and Sigurdsson & Co. to provide accounting and management of the Plan assets. Id. at ¶ 8. The assets were invested with IFF. Id. at ¶ 9. Sometime after 2008, Plaintiff decided to change service providers and requested that Defendants transfer all Plan funds and supporting records to its new service provider. Id. at ¶ 14. Despite requests, Defendants have failed to transfer the funds or to provide an accounting of the Plan's assets. Id. at ¶¶ 14-17.

The motion for default judgment outlines steps Plaintiff has taken, in addition to service of process in this case, to obtain a responsive pleading and to notify Sigurdsson of these proceedings. It also sets forth the damages now being sought and the evidence upon which the requested amounts are based. ECF No. 11.

2. Analysis.

a. Liability.

In determining whether to award default judgment, the court takes as true the wellpleaded factual allegations in the complaint as to liability. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001). Where none of the Defendants has sought to set aside the default as provided by Federal Rule of Civil Procedure 55(c), or suggested in any way that it has a meritorious defense, the standard for default judgment has been satisfied. Fanning v. Hotel Mgmt. Advisors-Troy, LLC, 282 F.R.D. 280, 283 (D.D.C. 2012).

Plaintiff has pled facts which establish all Defendants' liability under ERISA. The facts alleged in the complaint are supplemented by the affidavit of Plaintiff's principal, Elizabeth M. Ross, and by copies of canceled checks endorsed by Sigurdsson. ECF No. 11-1. The complaint, affidavit, and exhibit establish liability as to all Defendants under Count I and a default judgment should be entered in Plaintiff's favor.

b. Damages.

If the court finds that liability is established, it should then determine appropriate damages. Agora Fin. Inc. v. Samler, 725 F.Supp.2d 491, 494 (D. Md. 2010) (citing Ryan, 253 F.3d at 780-81). The court must make an independent determination of damages. Id. Where, as here, Plaintiff has submitted with its motion for default judgment an affidavit and documentary evidence which are sufficient to establish the amount that should be awarded, no hearing is necessary. Fed. Rule Civ. P. 55(b)(2); General Ins. Co. v. O'Keefe, 275 F.Supp. 107, 109 (D. Md. 1967). Instead, the court may rely on the affidavit and other evidence to determine the appropriate sum to award. See Fanning, 282 F.R.D. at 283 (quoting Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001)); see also United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979).

As all Defendants are liable under Count I, damages for breach of fiduciary duty in an ERISA case should be awarded.[1] Such damages include any losses to the Plan resulting from the breach, 29 U.S.C. § 1109 (a); here, the amount converted plus lost profits from investment funds. Dardaganis v. Grace Capital Inc., 889 F.2d 1237, 1243 (2d Cir. 1989); Meyer v. Berkshire Life Ins. Co., 250 F.Supp.2d 544, 572 (D. Md. 2003), aff'd, 372 F.3d. 261 (4th Cir. 2004); In re State St. Bank and Trust Co. Fixed, 842 F.Supp.2d 614 (S.D.N.Y. 2012).

Dr. Ross attests that Plaintiff received quarterly statements until December 31, 2004, with the final statement showing the value of the Plan's assets as $285, 189.47. ECF No. 11-1. A copy of the quarterly statement of that date is attached to her affidavit and confirms this amount. Id. at 14. As previously noted, Defendants were served with the Complaint and have not responded; thus, this amount is uncontested. The court should ...

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