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Acosta v. Chimes District of Columbia, Inc.

United States District Court, D. Maryland

November 21, 2018

R. ALEXANDER ACOSTA, Secretary of Labor, Plaintiff,
v.
CHIMES DISTRICT OF COLUMBIA, INC., et al., Defendants.

          MEMORANDUM OPINION

          RICHARD D. BENNETT UNITED STATES DISTRICT JUDGE

         The United States Secretary of Labor (“the Secretary”)[1] brought a ten-count Amended Complaint against Chimes D.C., Inc. Health & Welfare Plan (the “Plan”) and its alleged fiduciaries and service providers, including Defendants Chimes District of Columbia, Inc.; Chimes International, Ltd.; FCE Benefit Administrators, Inc.; Gary Beckman; Stephen Porter; Martin Lampner; Albert Bussone; Benefits Consulting Group; Jeffrey Ramsey; and Marilyn Ward, alleging violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, 29 U.S.C. §§ 1001, et seq. (First Am. Compl., p. 1-2, ECF No. 102.) The Secretary alleges that the Defendants charged the Plan excessive fees for services and engaged in prohibited transactions by receiving commissions, kickbacks, and inappropriate reimbursements.

         Currently pending before this Court are nine motions, including the instant Moving Defendants' Joint Cross-Motion for Partial Summary Judgment (ECF No. 372).[2] By the instant motion, Defendants seek to time-bar certain claims pursuant to ERISA's statute of limitations. This Court has reviewed the parties' submissions and heard arguments of counsel at a motions hearing held November 13, 2018. For the reasons stated herein, the Moving Defendants' Joint Cross-Motion for Partial Summary Judgment (ECF No. 372) shall be GRANTED. Specifically, the Secretary is precluded from pursuing claims against the Defendants that relate to a time period more than three years prior to each of the Defendants' respective tolling agreements.

         BACKGROUND

         I. The Defendants

         Chimes D.C., Inc. (“Chimes DC”) is a Washington, D.C. corporation established under Section 501(c)(3) of the Internal Revenue Code. (ECF No. 102 at ¶ 10.), and “is a federal government contractor who employs disabled workers for janitorial and custodial service.” (Id.) Chimes DC established its Health & Welfare Plan “to provide a package of medical, prescription, life insurance, accidental death and dismemberment, disability, and unemployment benefits” to its employees. (Id. at ¶ 2.) “The Plan is a partially self-insured health and welfare plan and is mostly funded by contributions required to be paid under Chimes DCs federal government contracts and federal prevailing wage laws.” (Id. at ¶ 21.) The Plan is an employee benefit plan as defined by ERISA, and Chimes DC, as Plan Administrator, is a named fiduciary. (Id. at ¶¶ 10, 21.)

         Defendant Chimes International Limited (“Chimes International”) is the parent company of Chimes DC and The Chimes Foundation, Inc. (the “Chimes Foundation”), “a fundraising arm of Chimes International and its subsidiaries.” (Id. at ¶ 11.) Chimes International is alleged to be a Plan fiduciary, as defined by ERISA. (Id. citing 29 U.S.C. §1002(21)(A).)

         Defendant Albert Bussone (“Bussone”) was Vice President of Chimes DC and Chief Operating Officer and Executive Vice President of Chimes International from at least 2008 until his retirement in December 2014. (Id. at ¶ 12.) He was also Chief Development Officer and Vice President of Chimes DC and Chimes International from February 2012 until December 2014. (Id.)

         Defendant Martin Lampner (“Lampner”) was Executive Vice President of Chimes DC and Chimes International from at least 2008 until July 2010, and from July 2010 to the present, he has been President of Chimes DC and Chimes International. (Id. at ¶ 13.) Lampner was also the Chief Financial Officer of Chimes DC and Chimes International from at least 2008 until January 2011, and from January 2011 to the present, he has been Chief Executive Officer of Chimes DC and Chimes International. (Id.) Defendants Chimes DC, Chimes International, Bussone, and Lampner are collectively referred to herein as the “Chimes Defendants.”

         Defendant FCE Benefit Administrators, Inc. (“FCE”) was the Plan's third party administrator during the relevant time period. (Id. at ¶ 14.) Defendant Gary Beckman (“Beckman”) and Defendant Stephen Porter (“Porter”) were each 50% owners and officers of FCE. (Id. at ¶¶ 15-16.) Collectively, FCE, Beckman, and Porter are referred to as the “FCE Defendants.”

         Defendant Benefits Consulting Group, (“BCG”) is a sole proprietorship, owned by Defendant Jeffrey Ramsey (“Ramsey”), engaged to provide plan representation services to the Plan. (Id. at ¶ 18.) Collectively, BCG and Ramsey are referred to as the “BCG Defendants.”

         Defendant Marilyn Ward (“Ward”) was an appointed Plan trustee and named fiduciary of the Plan. (Id. at ¶ 20.)

         II. Procedural History

         The Secretary filed a Complaint (ECF No. 1) against all Defendants but Ward on October 20, 2015. The Complaint was amended on June 7, 2016, adding Ward as a Defendant. (ECF No. 102.) The First Amended Complaint (ECF No. 102) alleged ten counts:

• Count I - Excessive Plan Expenses (alleged against the Chimes Defendants, the FCE Defendants, and the BCG Defendants)[3]
• Count II - Chimes Defendants' Receipt of Benefits in Connection with Plan's Retention of FCE (alleged against the Chimes Defendants and the FCE Defendants)
• Count III - Chimes Defendants' Receipt of Payments and Discounts from BCG and Ramsey in Connection with Plan's Retention of BCG (alleged against the Chimes Defendants and the BCG Defendants)
• Count IV - FCE's Receipt of Payments from Service Providers (alleged against the FCE Defendants and the Chimes Defendants)
• Count V - Failure to Prudently and Loyally Administer the Plan (alleged against the FCE Defendants and Chimes DC as Plan Administrator)
• Count VI - Plan's Reimbursements to Chimes DC for Work of Its Full-Time Employee (alleged against Chimes DC, Bussone, and FCE)
• Count VII - Ward's Liability for FCE's Payments to the Chimes Foundation and FCE's Employing Lampner's Child (alleged against Defendant Ward)
• Count VIII - Ward's Conflicted Arrangements with FCE (alleged against Defendant Ward)
• Count IX - Ward's Liability for Payment of Fees that Differ from Approved Fee Schedules and for FCE's Administrative Failures (alleged against Defendant Ward)
• Count X - Ward's Liability for Plan's Reimbursements to Chimes DC for Work of Its Full-Time Employee ...

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