Hilda L Solis v. Frank L Rudy et al
Filing
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CONSENT JUDGMENT by Judge Jacqueline H. Nguyen. IT IS HEREBY ORDERED, ADJUDGED, and DECREED that: Judgment is hereby entered against Defendant Rudy, Bolstad, Fischer and Company in the amount of $802,901.07 ("Amount Due") (bp)
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MARY K. ALEJANDRO
Acting Regional Solicitor
DANIELLE L. JABERG (CSBN 256653)
Counsel for ERISA
Andrew J. Schultz (CSBN 237231)
Trial Attorney
Office of the Solicitor
United States Department of Labor
90 7th Street, Suite 3-700
San Francisco, California 94103
Direct: (415) 625-7745
Facsimile: (415) 625-7772
Email: schultz.andrew@dol.gov
JS-6
both cases
Attorneys for Plaintiff
United States Department of Labor
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
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FRANK L. RUDY, as an individual, and in his )
individual capacity as a shareholder of Western )
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Mixers, Inc.,
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Plaintiff,
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v.
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DAVID BOLSTAD, an individual; ROBERT )
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J. FISHER, an individual,
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Defendants._
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______________________________________ )
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HILDA L. SOLIS,
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Secretary of Labor,
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United States Department of Labor,
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Plaintiff,
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v.
FRANK L. RUDY, DAVID H. BOLSTAD,
ROBERT J. FISCHER, WESTERN
MIXERS, INC., WESTERN MIXERS INC.
MONEY PURCHASE PENSION PLAN,
Case No. 2:10-cv-04655-JHN-PJWx
Consolidated with:
2:11-cv-07220-JHN -PJWx
CONSENT JUDGMENT
AND ORDER BETWEEN THE
PLAINTIFF SECRETARY OF
LABOR AND DEFENDANTS
FRANK L. RUDY, DAVID H.
BOLSTAD, ROBERT J. FISCHER,
WESTERN MIXERS, INC., and the
WESTERN MIXERS, INC.
MONEY PURCHASE PENSION
PLAN
Defendants
CONSENT JUDGMENT & ORDER
Page 1 of 9
Plaintiff HILDA L. SOLIS, Secretary of Labor, United States Department of
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Labor (“Secretary”), pursuant to her authority under Sections 502(a)(2) and (5) of the
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Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C.
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§§ 1132(a)(2) and (5), has filed a Complaint against Defendants FRANK L. RUDY,
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DAVID H. BOLSTAD, ROBERT J. FISCHER, WESTERN MIXERS, INC. (“the Com-
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pany”), and the WESTERN MIXERS INC. MONEY PURCHASE PENSION PLAN
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(“the Plan”).
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A. The Secretary, the Company, Rudy, Bolstad, Fischer, and the Plan (collectively,
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the “Parties”) admit that the Court has jurisdiction over this action pursuant to
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Section 502(e)(1) of ERISA, 29 U.S.C. § 1132(e)(1), and that venue lies in the
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United States District Court for the Central District of California pursuant to Sec-
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tion 502(e)(2) of ERISA, 29 U.S.C. § 1132(e)(2).
B. The Parties agree to the entry of this Consent Judgment and Order. The Parties
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further agree that this Consent Judgment and Order shall fully settle all claims of
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the Secretary asserted in the Complaint.
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IT IS HEREBY ORDERED, ADJUDGED, and DECREED that:
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1.
Judgment is hereby entered against Defendants Rudy, Bolstad, Fischer and Com-
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pany in the amount of $802,901.07 (“Amount Due”).
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2.
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Bolstad and Fischer shall restore the Amount Due to the Plan as described in Paragraphs
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4-7, below.
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3.
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the Independent Fiduciary appointed under this Consent Judgment and Order shall dis-
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tribute all of the Plan’s assets, $1,795,391.63, to the participants in the amounts desig-
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nated on Exhibit A attached to this Consent Judgment and Order.
Within 10 days of entry of this Consent Judgment and Order, Defendants Rudy,
Following restoration of the Amount Due as described in Paragraphs 4-7, below,
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CONSENT JUDGMENT & ORDER
Page 2 of 9
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4.
The governing Plan documents are hereby amended to allow for the offset of a par-
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ticipant’s Plan benefits against an amount that the participant is required to pay as a re-
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sult of this Consent Judgment and Order.
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5.
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206(d)(4), 29 U.S.C. § 1056(d)(4), Defendant Rudy shall restore such amount by forfeit-
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ing $20,000.00 of his Plan account balance. In so forfeiting, Defendant Rudy waives
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any further allocations into his Plan account and agrees that this sum offset from his Plan
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Account shall be reallocated to the participants listed on Exhibit A to this Consent
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Judgment and Order in order to satisfy Paragraphs 1 and 2 of this Consent Judgment and
Defendant Rudy shall restore to the Plan $20,000.00. Pursuant to ERISA Section
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Order.
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6.
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tion 206(d)(4) of ERISA, 29 U.S.C. § 1056(d)(4), Defendant Bolstad shall restore such
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amount by forfeiting his entire Plan account balance in the amount of $508,161.75 and,
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within 10 days of the entry of this Consent Judgment and Order, by separately paying to
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the Plan the sum of $122,516.40. In so forfeiting, Defendant Bolstad waives any further
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allocations into his Plan account and agrees that this sum offset from his Plan account
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shall be reallocated to the participants listed on Exhibit A to this Consent Judgment and
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Order in order to satisfy Paragraphs 1 and 2 of this Consent Judgment and Order.
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Should Defendant Bolstad fail to timely separately pay the Plan $122,516.40, the out-
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standing amount shall become immediately due and payable. Interest shall accrue on the
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outstanding amount at the rate set forth in 26 U.S.C. § 6621 until such time as the entire
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outstanding amount plus any applicable interest is restored.
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7.
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tion 206(d)(4), 29 U.S.C. § 1056(d)(4), Defendant Fischer shall restore such amount by
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forfeiting his entire Plan account balance in the amount of $152,222.92. In so forfeiting,
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Defendant Fischer waives any further allocations into his Plan account and agrees that
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this sum offset from his Plan account shall be reallocated to the participants listed on
Defendant Bolstad shall restore to the Plan $630,678.15. Pursuant to ERISA Sec-
Defendant Fischer shall restore to the Plan $152,222.92. Pursuant to ERISA Sec-
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CONSENT JUDGMENT & ORDER
Page 3 of 9
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Exhibit A to this Consent Judgment and Order in order to satisfy Paragraphs 1 and 2 of
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this Consent Judgment and Order.
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8.
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of Defendants’ Plan account balances ordered in Paragraphs 5 through 7 of this Consent
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Judgment and Order, as evidenced by the spousal consent forms submitted by the parties
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contemporaneously with the filing of this Consent Judgment and Order (“Waiver of
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Benefits and Spousal Consent Form”).
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9.
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from violating the provisions of Title I of ERISA, 29 U.S.C. §§ 1001-1191c.
The spouses of Defendants Rudy, Bolstad and Fischer have consented to the offset
Defendants Rudy, Bolstad and Fischer are permanently enjoined and restrained
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10.
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serving as fiduciaries to any employee benefit plan governed by ERISA.
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11.
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fornia, 90401, Phone Number 310-451-3225, shall be, and hereby is, appointed Inde-
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pendent Fiduciary of the Plan who:
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Defendants Rudy, Bolstad and Fischer are hereby permanently enjoined from
Nicholas L. Saakvitne, of 532 Colorado Avenue, 2nd Floor, Santa Monica, Cali-
a. Will be responsible for collecting, marshalling, paying out, and administer-
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ing Plan assets, in accordance with the distribution schedule shown in Ex-
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hibit A, which lists the exact balances due to each participant, and taking
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further action with respect to the Plan as appropriate, and, if necessary, ter-
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minating the Plan when all of its assets are distributed to all eligible partici-
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pants and beneficiaries;
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b. Pursuant to the procedures outlined in the Employee Benefits Security Ad-
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ministration’s Field Assistance Bulletin 2004-02, must exercise reasonable
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care and diligence to identify and locate each Plan participant and benefici-
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ary who is eligible to receive a distribution under the terms of the Plan to
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the extent the Plan has distributable assets;
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c. Has all the rights, duties, discretion and responsibilities of a trustee, fiduci-
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ary and Plan Administrator under ERISA, including filing a final Form
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5500;
CONSENT JUDGMENT & ORDER
Page 4 of 9
d. Has the authority to delegate or assign fiduciary duties as appropriate and
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allowed under the law and may retain assistance as needed including attor-
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neys, accountants, actuaries and other service providers;
e. Shall have full access to all data, information and calculations in the Plan’s
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possession and under its control, including information and records main-
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tained by the Plan’s custodial trustee or service provider;
f. Shall have the authority to give instructions respecting the disposition of as-
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sets of the Plan;
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g. Shall comply with all applicable rules and laws;
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h. Shall be entitled to reasonable compensation, fees and expenses, paid by
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Defendant Western Mixers, Inc. Defendant Western Mixers, Inc. shall pay
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such reasonable compensation, fees and expenses within 30 days of receiv-
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ing an invoice from the Independent Fiduciary. Assets of the Plan shall not
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be used to satisfy this obligation.
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12.
Within 10 days of the entry of this Consent Judgment and Order, the Independent
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Fiduciary shall take all steps necessary to complete the offsets ordered in Paragraphs 5
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through 7 of this Consent Judgment and Order.
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13.
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to the Secretary within twenty (20) calendar days of said payment.
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14.
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Fischer shall be assessed a penalty under Section 502(l) of ERISA, 29 U.S.C. § 1132(l),
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in the amount of 20 percent of the applicable recovery amount, or $4,000.00 for Defen-
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dant Rudy, $126,136.83 for Defendant Bolstad and $30,444.58 for Defendant Fischer
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(“Penalty Amounts”). Defendants Rudy, Bolstad and Fischer waive the notice of as-
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sessment and service requirement of 29 C.F.R. § 2570.83. Upon assessment, Defendants
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Rudy, Bolstad and Fischer shall submit immediate payment of the Penalty Amount to
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the address listed in this Paragraph unless any such Defendant files a petition for waiver
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or reduction of the penalty as provided for in 29 C.F.R. §§ 2570.83–2570.87 and the
The Independent Fiduciary shall provide evidence of payment of the Amount Due
Upon Defendants’ restoration of the Amount Due, Defendants Rudy, Bolstad and
CONSENT JUDGMENT & ORDER
Page 5 of 9
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Secretary agrees to waive or reduce the penalty. Defendants Rudy, Bolstad and Fischer
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may not challenge the applicable recovery amount, the validity of the violations alleged,
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or their liability for the violations. Defendants Rudy, Bolstad and Fischer shall pay the
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Penalty Amount to the United States Department of Labor, by sending a certified or
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cashiers check payable to the United States Department of Labor (please write EBSA
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Case No. 72-031855(48) on the check) at the following address:
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U.S. Department of Labor
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ERISA -- Civil Penalty
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P.O. Box 71360
Philadelphia, PA 19176-1360
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15.
Wherever submission to the Secretary is required under the terms of this Consent
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Judgment and Order, such submission shall be made to:
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Regional Director
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Employee Benefits Security Administration
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United States Department of Labor
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1055 E. Colorado Blvd., Ste 200
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Pasadena, CA 91106-2357
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16.
Following the appointment of the Independent Fiduciary identified in Paragraph
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11 of this Consent Judgment and Order, Defendant Company is hereby removed as Plan
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Administrator and as fiduciary to the Plan.
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17.
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11 of this Consent Judgment and Order, Defendants Rudy and Bolstad are hereby re-
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moved as Plan Trustee and as fiduciary to the Plan.
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18.
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Independent Fiduciary herein appointed by the Court in providing documents or infor-
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mation that Defendants may have relevant to the Plan’s administration and management.
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19.
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third party administrator, custodian, and any other Plan service provider to cooperate
Following the appointment of the Independent Fiduciary identified in Paragraph
Defendants Company, Rudy, Bolstad and Fischer shall cooperate fully with the
Defendants Company, Rudy, Bolstad and Fischer shall instruct the Plan’s current
CONSENT JUDGMENT & ORDER
Page 6 of 9
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with the Independent Fiduciary, and shall serve a copy of this Consent Judgment and
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Order on said persons.
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20.
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torney’s fees incurred to date in connection with any stage of this proceeding, including
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but not limited to attorney’s fees which may be available under the Equal Access to Jus-
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tice Act, as amended.
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21.
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may have against the Secretary, the United States Department of Labor, or any of its of-
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ficers, agents, attorneys, employees, or representatives, arising out of or in connection
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with the allegations contained in the Complaint on file in this action, or any other pro-
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ceedings or investigation incident thereto or based on the Equal Access to Justice Act, as
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amended.
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agency other than the United States Department of Labor, Employee Benefits Security
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Administration.
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with the terms of this Consent Judgment and Order.
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24.
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that they are informed and understand the effect and purpose of this Consent Judgment
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and Order.
The Secretary and Defendants shall each bear their own costs, expenses, and at-
Defendants expressly waive any and all claims of any nature which they have or
Nothing in this Consent Judgment and Order is binding on any governmental
This Court retains jurisdiction of this action for purposes of enforcing compliance
By signing their names to this Consent Judgment and Order, the parties represent
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The Court directs the entry of this Consent Judgment and Order as a final order.
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IT IS SO ORDERED, ADJUDGED, and DECREED.
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Dated: May 01, 2012
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______________________________
Jacqueline H. Nguyen
United States District Judge
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CONSENT JUDGMENT & ORDER
Page 7 of 9
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Entry of this Consent Judgment and Order is hereby consented to:
M. PATRICIA SMITH
Solicitor of Labor
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MARY K. ALEJANDRO
Acting Regional Solicitor
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DANIELLE L. JABERG
Counsel for ERISA
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Dated: May 1, 2012
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Trial Attorney
Attorneys for Plaintiff
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/s/ Andrew J. Schultz
ANDREW J. SCHULTZ
Defendants consent to the entry of this Consent Judgment and Order:
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Dated: March 23, 2012
/s/ David H. Bolstad
DAVID H. BOLSTAD,
Individually and on behalf of Defendant the Western Mixers, Inc. Money
Purchase Pension Plan
Dated: March 29, 2012
/s/ David H. Bolstad
DAVID H. BOLSTAD,
on behalf of Defendant WESTERN
MIXERS, INC.
Dated: April 23, 2012
/s/ Frank L. Rudy
FRANK L. RUDY
Defendant
Dated: March 26, 2012
/s/ Robert J. Fischer
ROBERT J. FISCHER
Defendant
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CONSENT JUDGMENT & ORDER
Page 8 of 9
EXHIBIT A
TO CONSENT JUDGMENT
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Final
Balances
Participant Name
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Bolstad, David H
Bolstad, David H Jr
Bolstad, Kristin
Bolstad, Michelle
Bolstad, Stephen R.
Calvano, Peter
Conlon, Mark
Espinosa, Margarito M
Fischer, Robert J
Foster, Jeffrey
Goldman, Burt
Grinstead, Leslie
Juarez, Hugo
Koga, Dick
Osborne, Greg
Quintanilla, Melvin W
Rudy, Frank L
Rudy, Mark F
Vasquez, Marcelino
Villescas, Absalom
Akahoshi, Greg
Bolstad, William C
Garcia, Radames
Hernandez, Luciano
Hernandez, Walter
Minguela Vasquez, J. C.
Munoz, Antonio
Nader Margaret
Patruno, Luke Sr
Peraza, Jose
Quiroz, Constantino A
Ramos, Carlos
Salinas, Herminio
Torres, Manilo
Vasquez, Jose G
Vega, Macario
Vela, Reyshell
Total
$
0.00
55,219.82
44,935.04
5,602.29
31,743.34
87,174.22
43,508.09
32,791.39
0.00
75,532.10
69,434.83
129,036.70
23,474.44
352,347.80
35,041.13
6,675.21
292,673.06
114,705.25
39,265.59
14,403.65
4,693.93
264,174.02
191.39
4,902.72
120.02
4,579.60
2,447.61
10,469.77
13,736.45
7,437.70
2,379.61
2,197.30
3,299.54
526.73
6,829.02
1,711.43
12,130.84
$ 1,795,391.63
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CONSENT JUDGMENT & ORDER
Page 9 of 9
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