Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_18-cv-04959/USCOURTS-azd-2_18-cv-04959-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.-Employee Benefits

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

R Alexander Acosta, et al.,

Plaintiffs,

v. 

T&M Hardware Incorporated, et al.,

Defendants.

No. CV-18-04959-PHX-DLR

ORDER 

This is a straightforward Employee Retirement Income Security Act (“ERISA”) 

case. The United States Department of Labor (“DOL”) accuses Defendants T&M 

Hardware Incorporated (“T&M”), T&M Hardware Incorporated Profit-Sharing Plan 

(“Plan”), and Pamela Mandile-Croteau of failing to make long-overdue distributions to 

Plan participants. T&M is an Arizona retail hardware company. The Plan is an employee 

pension benefit plan sponsored and administered by T&M. Mandile-Croteau is the 

President and owner of T&M and trustee of the Plan with authority and control over the 

Plan’s assets.

The Plan allows participants to receive distributions upon termination of their 

employment with T&M. Since 2017, at least seven T&M employees have requested posttermination distributions. Morgan Stanley is the Plan’s asset custodian, but it can act only 

at the direction of the Plan’s administrator or trustee. Morgan Stanley will not authorize 

these distributions without direction from Mandile-Croteau who, despite knowing about 

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these distribution requests, has not approved them. 

Following an investigation, the DOL tried unsuccessfully to secure Defendants’ 

cooperation in making these distributions. The DOL filed this lawsuit in December 2018

and Defendants’ lack of cooperation continued from there. Mandile-Croteau seemingly 

attempted to evade service. Defendants then refused to respond to the DOL’s written 

discovery requests or to serve their own initial disclosures. Even after the Court extended 

Defendants’ deadlines for serving initial disclosures and responding to outstanding 

discovery requests, they failed to do so. Defendants’ steadfast refusal to cooperate with 

discovery led their counsel to twice move to withdraw his representation, citing 

Defendants’ failure to communicate or cooperate and irreconcilable differences (the Court

ultimately granted the request). Defendants remain unrepresented to this day. 

Defendants have provided no good reason for their obstinance. Instead, MandileCroteau has twice asked for an indefinite stay of this matter, submitting under seal notes 

from her doctors describing various medical conditions. Most recently, Mandile-Croteau 

filed a notice again citing her medical issues and asserting that Defendants are looking to 

hire new counsel. This notice, however, was filed in August 2019, and in the many months 

that have since passed neither Defendants collectively nor Mandile-Croteau specifically 

have hired new counsel, nor have they taken any other steps to advance this litigation. 

The DOL has moved for summary judgment. (Doc. 30.) Defendants 

characteristically did not respond. Summary judgment is appropriate when there is no 

genuine dispute as to any material fact and, viewing those facts in a light most favorable to 

the nonmoving party, the movant is entitled to judgment as a matter of law. Fed. R. Civ. 

P. 56(a). The DOL’s evidence and arguments are unrebutted. Moreover, Defendants’ 

unreasonable refusal to cooperate with the discovery process has two consequences: (1) 

the DOL’s requests for admissions are deemed admitted, Fed. R. Civ. P. 36(a), and (2) the 

Court will deem the DOL’s facts as true, as permitted by Rule 36(c) and (d). Taken 

together, the DOL has shown that there is no genuine dispute of material fact, and that as 

a matter of law Defendants breached their duties of loyalty and prudence and failed to 

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follow Plan documents, 29 U.S.C. §§ 1104(a)(1)(A), (B), (D), and that Mandile-Croteau is 

liable as a co-fiduciary, § 1105(a). Accordingly,

IT IS ORDERED that, for good cause shown, Mandile-Croteau’s motions to seal 

(Doc. 23, 45) are GRANTED and the Clerk shall file under seal the documents currently 

lodged at Docs. 24 and 46. Mandile-Croteau’s motions to indefinitely stay this case (Docs. 

27, 45) are DENIED, however, because she has not shown good cause for such indefinite 

extensions.

IT IS FURTHER ORDERED that, for the reasons articulated by the DOL in its 

memorandum (Doc. 30-1), the DOL’s motion for summary judgment (Doc. 30) is 

GRANTED as follows:

1. Within 15 days of this order, T&M and Mandile-Croteau shall pay the Plan 

$9,282.11, which constitutes lost-opportunity costs, calculated at the post-judgment

interest rate contained in 28 U.S.C. § 1961, for the overdue distributions. Post-judgment

interest will continue to accrue pending payment.

2. Effective immediately, Mandile-Croteau is permanently enjoined from serving

as a fiduciary or service provider in connection with any ERISA-covered plan.

3. Effective immediately, Metro Benefits, Inc., of 8150 Perry Highway, Suite 311, 

Pittsburgh, Pennsylvania, 15237, is appointed as the Independent Fiduciary to the Plan. 

The Independent Fiduciary has sole responsibility for administering the Plan and shall have 

the following powers, duties and responsibilities:

A. The Independent Fiduciary shall have full fiduciary authority and all the 

powers, rights, discretion, and duties of a trustee, fiduciary, and Plan Administrator 

under ERISA;

B. The Independent Fiduciary’s responsibilities shall include, but shall not 

be limited to, communication with participants regarding their account

disbursement options, collection of any necessary information from those persons

or entities in custody of such information including bankruptcy trustees, and 

calculation of the participants’ and beneficiaries’ account balances, and shall file

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Form 5500;

C. The Independent Fiduciary shall have responsibility and authority to

collect, liquidate, and manage the Plan’s assets for the benefit of the eligible 

participants and beneficiaries who are entitled to receive such assets, until such time 

that the Plan’s assets are distributed to those participants and beneficiaries;

D. The Independent Fiduciary shall exercise reasonable care and diligence

to identify and locate each participant or beneficiary who is eligible to receive a

distribution under the terms of the Plan. Further, the Independent Fiduciary shall

make distributions to each eligible participant and beneficiary of the Plan;

E. The Independent Fiduciary shall have full access to all data, information

and calculations in the Plan’s possession or under its control, including information 

and records maintained by the Plan’s custodial trustee, service providers, and 

Defendants;

F. T&M and Mandile-Croteau shall fully cooperate with all reasonable 

requests by the Independent Fiduciary to facilitate the administration, liquidation 

and/or termination of the Plan. T&M and Mandile-Croteau are specifically ordered 

to identify all bank accounts containing Plan assets and supply any signatures 

necessary to transfer the accounts to the Independent Fiduciary;

G. As soon as administratively practicable after appointment, the

Independent Fiduciary shall provide for the orderly termination and liquidation of

the Plan, including making all distributions and/or rollovers to the participants and

beneficiaries;

H. The Independent Fiduciary shall have full authority to amend the Plan as

necessary to effectuate its termination and the processing of all participant 

distributions; and

I. The Independent Fiduciary shall provide to the Secretary of the DOL any 

and all information he requests concerning the Plan, including but not limited to 

information concerning the assets remaining in the Plan and the status of

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distributions. All information shall be mailed to the Regional Director at this 

address:

Regional Director Crisanta Johnson

U.S. DOL EBSA Los Angeles Regional Office

35 N. Lake Ave., Suite 300

Pasadena, CA 91101-4110

4. T&M and Mandile-Croteau are ordered to pay the reasonable fees of the 

Independent Fiduciary. Within 15 days of this order, T&M and Mandile-Croteau shall pay 

the Independent Fiduciary $3,480.00 to supply the services described in Paragraph 3 above. 

This payment may not come from Plan assets except as set forth in Paragraph 5 below.

Should the Independent Fiduciary require additional payment to complete the functions set 

forth in Paragraph 3 above, the Independent Fiduciary may request approval for additional 

payment from T&M and Mandile-Croteau by submitting a fee application supported by a 

statement of work to this Court. T&M and Mandile-Croteau shall have 10 days to file a 

motion in this Court objecting to the additional fees. Objections must be supported by a 

factual showing of good cause.

5. Should Defendants default under their obligation to pay the Independent

Fiduciary’s fees as set forth in Paragraph 4 above, the Independent Fiduciary may obtain

payment from the Plan of no more than $3,480.00 to cover the Independent Fiduciary’s

reasonable fees. Should the Independent Fiduciary require additional payment to complete 

the functions set forth in Paragraph 3 above, the Independent Fiduciary may request 

additional payment from the Plan by submitting a fee application supported by a statement 

of work to this Court. The Secretary will be afforded 10 days to object. T&M and MandileCroteau shall remain liable for these amounts and any amounts subsequently obtained from 

T&M and Mandile-Croteau in satisfaction of this debt shall be restored to the Plan.

6. Nothing in this order impacts the Secretary’s right or ability to assess a civil

penalty of 20% on amounts recovered pursuant to 29 U.S.C. § 1132(l) (“Penalty”). Upon 

assessment, payment of the Penalty shall be made immediately unless T&M and MandileCase 2:18-cv-04959-DLR Document 50 Filed 03/30/20 Page 5 of 6
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Croteau file a petition for waiver or reduction of the penalty, as provided for in 29 C.F.R. 

§§ 2570.83-2570.87, and the Secretary agrees to waive or reduce the penalty.

7. The Clerk shall enter judgment accordingly and terminate this case. This Court

shall retain jurisdiction to enforce this order and judgment.

Dated this 27th day of March, 2020.

Douglas L. Rayes

United States District Judge

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