Court Orders Fiduciary to Turn Over Cars in Settlement
You’re aware of the personal liability that comes with being an ERISA fiduciary. Apparently satisfying that liability can include your Lexus — both of them.
That at least turned out to be the court order in a multimillion-dollar judgment in favor of participants and the Department of Labor (DOL) in the case of Perez v. Bruister
(2017 BL 1608, S.D. Miss., No. 3:13-cv-1001-DPJ-FKB, 1/4/17).
And that’s not all. Herbert C. Bruister, owner of a DirecTV installation company accused of mismanaging an ESOP, must turn over three vehicles (including two Lexuses, another car — and another that had been repossessed since that judgment) as part of a $6.5 million judgment (along with $3 million in attorneys’ fees) for causing the employee stock ownership plan to purchase his company stock at an inflated price.
Judge Daniel P. Jordan III of the U.S. District Court for the Southern District of Mississippi also held that Bruister must also cooperate with participants and the DOL in the sale of his multimillion-dollar life insurance policies, which he offered as security pending an appeal. Bruister had failed to comply with a previous court order that granted his request to stay collection efforts by offering certain assets in security.
Not that plaintiffs hadn’t been patient; the judgment in this case was entered more than two years ago and affirmed more than eight months ago, and had still not been fully paid. While Judge Jordan noted that plaintiff Sealy is not yet asking the Court to hold Bruister in contempt, “he now attempts to lay the groundwork for such a motion by requesting that the Court set a deadline for Bruister to satisfy the judgment.”
Bruister, for his part, argued that, given his financial circumstances, his “liability under the Judgment and the attorneys’ fees award should be reduced.” He didn’t have much luck on that account, though, since Judge Jordan noted that the sole authority presented for that argument did not support reduction of the existing judgment against him. He went on to note that the case presented as authority, the defendants’ ability to pay was relevant to causation. However, Jordan noted that nothing in that case “suggests that the Court may, or should, reduce its award — post-judgment — based on Bruister’s ability to pay,” saying that if there had been any application to the Bruister case at all, it should have been raised before judgment was entered.
“The Court agrees with Sealy that the time has come to bring this matter to an end and will order Bruister to satisfy the judgment within 45 days of the entry of this order.”
The court rejected Bruister’s argument that requiring him to turn over the cars would “unnecessarily inconvenience” him and his wife and cause irreparable damage and harm, noting that he should have considered the inconvenience of lacking a vehicle before offering them as security.
Jordan declined Bruister’s request to reduce the multimillion-dollar judgment and to unfreeze his $41,000 bank account.
The court ordered Bruister to:
- transfer the vehicles in question to the plaintiffs within 45 days of the entry of the order;
- cooperate with Sealy relative to the sale of the assigned life-insurance policy, including providing a medical release; and
- satisfy the judgment within 45 days of the entry of the order.