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Malinowski v. The Lichter Group, LLC

United States District Court, D. Maryland, Northern Division

March 11, 2015

STEVEN MALINOWSKI, et al., Plaintiffs,
v.
THE LICHTER GROUP, LLC, et al., Defendants.

MEMORANDUM OPINION

WILLIAM D. QUARLES, Jr., District Judge.

Steven Malinowski, and others, [1] sued The Lichter Group, LLC ("Lichter"), and others, [2] for violating the Employee Retirement Income Security Act ("ERISA").[3] The Plaintiffs moved for leave to amend the complaint to dismiss claims against Ascensus and Cambridge Investment, [4] change the ERISA provision at issue in its claim against Lichter, and add a state negligent misrepresentation claim. ECF No. 24.

The Court previously granted the Plaintiffs' motion as to the dismissal of Ascensus and Cambridge Investment, denied it as to the amended ERISA claim against Lichter, and requested briefing on whether the Court had diversity jurisdiction over the state claim. ECF No. 31. Having received the Plaintiffs' briefing, ECF No. 32, the remainder of the Plaintiffs' motion for leave to amend, ECF No. 24, is ready for review. No hearing is necessary. Local Rule 105.6 (D. Md. 2014). For the following reasons, the Court will grant the Plaintiffs' motion for leave to amend to add a state negligent misrepresentation claim.

I. Background

A. Facts[5]

Trojan Horse, Ltd. ("Trojan Horse") is a mail transportation contractor, providing mail services for the U.S. Postal Service under the McNamara-O'Hara Service Contract Act[6] ("SCA"). ECF No. 24-2 ¶ 19. Malinowski was employed by Trojan Horse as a Manager/Supervisor at its Bethpage, New York facility. Id. ¶ 6. Miley, Dotzler, Frantz, and McMillen were employed as Trojan Horse truck drivers. Id. ¶¶ 7-14. Lichter is a Maryland limited liability company that provides certified public accounting and business consulting services. Id. ¶¶ 15-16.

The SCA required Trojan Horse to establish benefits for the Plaintiffs and putative class members that included "pensions on retirement or death' or equivalents." Id. ¶ 21. On January 1, 2009, Trojan Horse established the Plan: a "single employer Plan, with a Trust Plan funding and benefit arrangement." Id. ¶¶ 22-23. Trojan Horse administered the Plan. Id. ¶¶ 26-27.

Trojan Horse retained Lichter, which "held itself out as experts in performing audits of Employee Benefit Plans, " to audit the Plan's December 31, 2010 and December 31, 2011 financial statements (respectively, the "2010 audit" and "2011 audit"). Id. ¶¶ 31, 52, 53, 92.[7] Lichter audited "statement[s] of net assets available" for the Plan as of December 31, 2009 and December 31, 2010. Id. ¶ 56. It also "prepared and approved Form 5500 [s][8] for Plan years 2009, 2010, and 2011." Id. ¶¶ 33, 103.[9]

1. The 2010 Audit

In a January 7, 2011 Letter of Engagement prepared in connection with the 2010 audit, Lichter noted, "You acknowledge that the Form 5500 for the year ended December 31, 2009, was filed without the required financial statements and auditor's report attached." Id. ¶¶ 54-55.

Lichter audited Trojan Horse's statement of net assets available for the Plan for the years ending December 31, 2009 and December 31, 2010. Id. ¶ 56. Lichter's December 31, 2010 Financial Report ("2010 Financial Report") stated that "Plan contributions totaled $1, 427, 885" for the year ending December 31, 2010. Id. ¶ 58. That same report stated that, as of December 31, 2009, the Plan's fair value of assets was $464, 866, and, as of December 31, 2010, the Plan's fair value of assets was $1, 824, 702. Id. ¶¶ 59, 60. The 2010 Form 5500 reported that the Plan's fair value of assets, as of December 31, 2010, was $1, 900, 604. Id. ¶ 61. Lichter "later reported [that] the fair value of assets in the Plan, as of December 31, 2010, [was] $1, 901, 143." Id. ¶ 62.[10]

The 2010 Financial Report further stated that:

During 2010 and 2009, [Trojan Horse] inadvertently failed to deposit $5, 268 and $539, respectively, of participant deferrals within the required time frame as stated by the [Department of Labor ("DOL")]. [Trojan Horse] will calculate lost earnings and remit them to the Plan in 2011. Also, [Trojan Horse] will file Form 5330[11] and pay ...

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