Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_02-cv-02722/USCOURTS-caed-2_02-cv-02722-4/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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28 SETTLEMENT AGREEMENT AND CONSENT 

ORDER AS TO DEFENDANTS 

MARK AND JILL SINGLETON

W. IRIS BARBER (DC SBN 436398) 

Senior Trial Attorney 

CATHERN H. SMITH (DC SBN 475586) 

Trial Attorney 

U.S. Department of Labor 

Office of the Solicitor 

Plan Benefits Security Division 

P.O. Box 1914 

Washington, DC 20013 

Telephone (202) 693-5600 

Facsimile (202) 693-5610 

COUNSEL FOR THE SECRETARY 

IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA

ELAINE L. CHAO, Secretary, 

United States Department of 

Labor, 

 Plaintiff, 

 v. 

MARK S. SINGLETON, an 

individual; JILL SINGLETON, an 

individual; CAROLYN B. BENNETT, 

an individual; JENNIFER DOWNER, 

an individual; WESTERN SPRAY 

PAINTING, INC., a California 

Corporation; WESTERN SPRAY 

PAINTING INC. AMENDED EMPLOYEE 

STOCK OWNERSHIP PLAN AND TRUST, 

an employee benefit plan; and 

any parent, predecessor, 

successor, or subsidiaries of 

Western Spray Painting, Inc., 

 Defendants. 

_______________________________

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Civil Action No. CIV.S-02-2722 

LKK KJM 

SETTLEMENT AGREEMENT AND 

CONSENT ORDER AS TO DEFENDANTS 

MARK AND JILL SINGLETON 

Hearing Date: SUBMITTED ON 

Hearing Time: THE PAPERS 

Location: 

Judge: Hon. Lawrence K. Karlton

 

 Plaintiff Elaine L. Chao, Secretary of the United States 

Department of Labor ("Secretary"), and defendants Mark and Jill 

Singleton (the "settling defendants") have negotiated an 

agreement to settle all civil claims and issues between them in 

this action, and each consents to the entry of this Settlement 

Agreement and Consent Order ("Order") by the Court as the sole 

and complete memorialization of the terms of such agreement. 

Case 2:02-cv-02722-LKK -KJM Document 171 Filed 05/26/06 Page 1 of 11
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ORDER AS TO DEFENDANTS 

MARK AND JILL SINGLETON

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1. This action was filed by the Secretary pursuant to her 

authority under Title I of the Employee Retirement Income 

Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., as 

amended. 

2. The Secretary's complaint alleged, among other things, 

that the settling defendants and others failed to discharge their 

fiduciary duties with respect to the Western Spray Painting, Inc. 

Amended Employee Stock Ownership Plan and Trust (the "Plan") 

solely in the interests of the Plan's participants and 

beneficiaries, and with the care, skill, prudence, and diligence 

required of them, and that they failed to act in accordance with 

the documents and instruments governing the Plan, in violation of 

section 404(a)(1)(A),(B) and (D) of ERISA, 29 U.S.C. § 

1104(a)(1)(A),(B) and (D). 

3. The Secretary's complaint further alleged that the 

settling defendants and others, as fiduciaries with respect to 

the Plan, caused the Plan to engage in transactions that they 

knew or should have known constituted the sale or exchange of 

property between the Plan and parties in interest, the lending of 

money or other extension of credit between the Plan and a party 

in interest, and also constituted a direct or indirect transfer 

of assets of the Plan to, and use by and for the benefit of 

persons and entities each of whom was a party in interest with 

respect to the Plan, in violation of section 406(a)(1)(A),(B) and 

(D) of ERISA, 29 U.S.C. § 1106(a)(1)(A),(B) and (D) resulting in 

losses, including lost opportunity income, for which the 

Case 2:02-cv-02722-LKK -KJM Document 171 Filed 05/26/06 Page 2 of 11
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28 SETTLEMENT AGREEMENT AND CONSENT 

ORDER AS TO DEFENDANTS 

MARK AND JILL SINGLETON

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defendants are jointly liable under section 409 of ERISA, 29 

U.S.C. § 1109. 

4. On February 25, 2005, this Court found that the settling 

defendants violated their fiduciary duties under ERISA and 

specifically held that: (i) Defendant Mark Singleton is liable 

for losses caused to the Plan in connection with the December 20, 

1995 stock purchase of 10,500 shares of stock from Defendant 

Carolyn Bennett, and (ii) the settling defendants are liable for 

losses to the Plan in connection with the 665 shares of newly 

issued WSP stock the Plan purchased on June 6, 1997, the 697 

shares of newly issued WSP stock it purchased on June 15, 1997, 

and the 736 shares of newly issued stock it purchased on August 

15, 1997. 

5. The settling defendants admit that the Court has 

jurisdiction over the parties to this Order and the subject 

matter of this action. 

6. The Secretary and the settling defendants expressly 

waive Findings of Fact and Conclusions of Law as to the amount of 

the losses resulting from the transactions for which the settling 

defendants are liable and consent to the entry of this Order as a 

full and complete resolution of all of the civil claims and 

issues which were alleged in this action, without trial or 

adjudication of any issue of fact or law raised in the complaint. 

7. The settling defendants acknowledge that they have been 

informed by the Secretary that, at their own cost, they may have 

an attorney advise them as to the effect and purpose of this 

Order. 

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ORDER AS TO DEFENDANTS 

MARK AND JILL SINGLETON

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Accordingly, it is ORDERED, ADJUDGED, AND DECREED that: 

1. The Court has jurisdiction over the parties to this 

Order and the subject matter of this action and is empowered to 

provide the relief herein. 

2. The settling defendants are hereby permanently 

enjoined from: 

(a) Serving or acting, directly or indirectly, for 

compensation or otherwise, as a trustee, fiduciary, 

service provider, investment manager, agent, consultant 

or representative with respect to any employee benefit 

plan subject to ERISA or to any other entity subject to 

ERISA because it holds or controls the assets of an 

employee benefit plan; 

(b) Occupying any position that involves, directly or 

indirectly, decision making authority with respect to, 

or custody or control of, the assets or administration 

of any employee benefit plan subject to ERISA; 

(c) Committing or participating in any fiduciary 

breach of ERISA; and 

(d) Promoting, selling, marketing or engaging, directly or 

indirectly, in any enterprise, including an employee 

leasing company, that offers, provides, or administers 

employee benefits. 

3. The Secretary agrees, in reliance on their August 21, 

2005 asset affidavit and other financial information provided to 

the Secretary by the settling defendants during the course of the 

settlement negotiations, that the settling defendants will pay 

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28 SETTLEMENT AGREEMENT AND CONSENT 

ORDER AS TO DEFENDANTS 

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$100,000 (one hundred thousand dollars) to settle the Secretary's 

claims against settling defendants as described above. Pursuant 

to ERISA § 502(l), 29 U.S.C. § 1132(l), and the regulations 

thereunder, the Secretary has determined that the statutory 

penalty is $20,000 (twenty thousand dollars). 

4. The Secretary agrees to accept the settling 

defendants' payment in four installments. The first installment 

of $25,000 (twenty five thousand dollars) is due no later than 

May 11, 2006. The second installment of $25,000 (twenty five 

thousand dollars) will be due on August 11, 2006. The third 

installment of $25,000 (twenty five thousand dollars) will be due 

on November 13, 2006. The fourth installment of $25,000 (twenty 

five thousand dollars) will be due on February 12, 2007. 

5. In addition, the settling defendants agree that for 

the next five (5) years, to the extent that their gross income 

and other earnings as defined in paragraph 11 below exceed 

$100,000 (one hundred thousand dollars), they will pay to the 

Plan within 10 days of receipt of a notice from the Secretary or 

an Independent Fiduciary appointed to represent the Plan, a sum 

equal to 50% of their gross income in excess of $100,000. Such 

additional payments (excluding the initial $100,000 payment and 

any applicable appropriate 502(l) penalty), will not exceed $1.8 

million (one million, eight hundred thousand dollars). 

6. The settling defendants expressly represent, and by 

affixing his signature to this Order, Al Singleton expressly 

agrees to personally guarantee the settling defendants' payments 

to the Plan of $100,000. 

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28 SETTLEMENT AGREEMENT AND CONSENT 

ORDER AS TO DEFENDANTS 

MARK AND JILL SINGLETON

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7. By affixing his signature hereto, Al Singleton 

expressly agrees to submit to the jurisdiction of this Court, 

agrees not to challenge the enforceability of this Order, and 

agrees that he is contractually bound to the provisions of 

paragraph 6. 

8. At the end of this five year period, or on May 11, 

2011, the settling defendants will also pay their ERISA § 502(l) 

penalty. This ERISA § 502(l) penalty will, at a minimum, include 

a $20,000 (twenty thousand dollar) penalty assessed as of the 

date of this Order, but will also include an additional twenty 

(20) percent assessment on any additional payments made to the 

Plan in accordance with this Order. 

9. In the event the settling defendants predecease the 

May 11, 2011 date, settling defendants expressly agree to the 

imposition of a first priority lien against their estates for 

their remaining monetary liability under Section 502(l) of ERISA. 

10. For purposes of this Order and paragraph 5 above, 

gross income and all other earnings shall include property of the 

settling defendants, whether acquired through gifts, inheritance, 

life insurance, or lottery winnings or other gambling income. 

The Secretary agrees to exclude the two separate $1 million (one 

million dollars) life insurance policies currently held by Mark 

and Jill Singleton respectively. 

11. The settling defendants and the Secretary expressly 

understand and agree that the Secretary's agreement to accept 

payment as described above is based upon all of the financial 

information made available to the Secretary during the course of 

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28 SETTLEMENT AGREEMENT AND CONSENT 

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the negotiations and that the Secretary has agreed not to seek 

any additional monetary relief to the extent that such financial 

information is materially true and accurate to the best of the 

settling defendants' knowledge at the time such information was 

provided. 

12. If at any time the Secretary determines that the 

settling defendants transferred assets for the purpose of 

avoiding disclosure, for the purpose of avoiding making full 

repayment to the Plan as set forth in this Order, or materially 

misrepresented their financial status in their financial 

statements submitted to the Secretary's counsel, the Secretary, 

by appropriate motion, may reopen her case against the settling 

defendants and seek restitution to the full extent of settling 

defendants' liability to the Plan. 

13. The settling defendants expressly agree that at the 

same time their personal income tax filings are made with the 

Internal Revenue Service, they will concurrently file true and 

accurate copies of their tax returns, any requests for 

extensions, and a notarized statement detailing their newly 

acquired real or personal property, whether acquired through 

gifts, inheritance, life insurance, or lottery winnings or other 

gambling income with: 

 Mr. Francis C. Clisham 

 Regional Director 

 U.S. Department of Labor 

 Employee Benefits Security 

 Administration 

 71 Stevenson Street, Suite 915 

 San Francisco, CA 94105 

 Phone: 415-975-4600 

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28 SETTLEMENT AGREEMENT AND CONSENT 

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 Fax: 415-975-4589 

The notarized statement will be made under penalty of perjury. 

Delivery shall be made by facsimile transmission or reliable 

overnight express courier service. 

14. The settling defendants expressly waive any and all 

monetary recovery or benefit to which they may become entitled 

from the Plan or any other WSP employee benefit plan. 

15. The settling defendants expressly consent to the 

appointment of an Independent Fiduciary, selected by the 

Department of Labor, with full discretionary authority to 

administer the Plan, marshal all of its assets, undertake 

distribution of the Plan's assets to appropriate participants and 

beneficiaries, undertake the orderly termination of the Plan, and 

any other necessary actions required by ERISA, the Plan's 

governing documents, and the Court's Order. 

16. The settling defendants expressly consent to fully 

cooperate with the Independent Fiduciary, including turning over 

all Plan records and documents that are in their possession. 

 17. Prior to obtaining payment for services and expenses 

authorized pursuant to this consent judgment, the Independent 

Fiduciary shall present to the court an itemized fee application, 

accompanied by a description of work performed, as well as an 

itemized statement of expenses. The Independent Fiduciary shall 

provide to the Secretary of Labor at the address below a copy of 

said fee application when it is filed with the court. Absent 

objection from the Secretary within fifteen business days, the 

fee application shall be deemed approved. If the Secretary 

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objects, the court will decide whether the Independent 

Fiduciary's request should be granted. 

18. The settling defendants expressly waive any and all 

claims of whatsoever nature which they, jointly and severally, 

have or may have against the Secretary and any of her officers, 

agents, employees, or representatives, arising out of or in 

connection with the filing, prosecution, and maintenance of this 

civil action or any other proceeding and investigation incident 

thereto. 

19. This Order represents the final and complete judicial 

resolution of all claims between the Secretary and the settling 

defendants contained in this action, and the Secretary's claims 

against the settling defendants will be dismissed with prejudice 

once full payment is made. This Order is binding on the United 

States Department of Labor only and not on any other agency of 

the United States. 

20. Each party to this Order shall bear his or her own 

costs, expenses, and attorney fees incurred in connection with 

this action and all matters relating thereto. 

21. The settling defendants agree to be bound by the terms 

of this Order. 

22. The Court shall retain jurisdiction over the parties 

hereto as may be necessary to enforce the provisions of this 

Order. 

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28 SETTLEMENT AGREEMENT AND CONSENT 

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23. The Court, finding that there is no just reason to 

delay the entry of the Order, expressly directs the entry hereof 

as a final Order, pursuant to Rule 54(b) of the Federal Rules of 

Civil Procedure. 

DATED: May 24, 2006.

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The Secretary, by her authorized counsel, and the settling defendants, 

together with her counsel, consent to the entry of the foregoing Order. 

FOR PLAINTIFF SECRETARY OF LABOR: 

HOWARD M. RADZELY 

Solicitor of Labor 

TIMOTHY D. HAUSER 

Associate Solicitor 

LESLIE C. PERLMAN 

Counsel for Fiduciary Litigation 

/signature on original DATE________________ 

W. IRIS BARBER 

Senior Trial Attorney 

CATHERN H. SMITH 

Trial Attorney 

U.S. Department of Labor 

Office of the Solicitor 

Plan Benefits Security Division 

P.O. Box 1914 

Washington, DC 20013 

COUNSEL FOR THE SECRETARY 

THE SETTLING DEFENDANTS: 

/signature on original _________________________ 

MARK SINGLETON DATE 

/signature on original _________________________ 

JILL SINGLETON DATE 

THE PERSONAL GUARANTOR: 

/signature on original _________________________ 

AL SINGLETON DATE 

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