CA1: in an ERISA case, a trustee is personally liable (and a note of caution for defendants)

Indianapolis Life v. Herman, No. 07-1797.  This case holds that the trustee of an ERISA plan is personally liable for a default judgment (as well as liable in her trustee capacity) that were the result of cross-claimed filed by defendants, alleging that the defendants had misappropriate a retiree/Doctor’s funds and failed to execute directives to transfer assets in the retirement plans.  The District Court denied a motion under FRCP 60(b) to vacate that judgment.  The underlying lawsuit sought to invalidate an insurance policy, and summary judgment in that was granted in favor of the insurance company.  This case was first reviewed by the First in Indianapolis Life Ins. Co. v. Herman, 204 Fed. Appx. 908, 910 (1st Cir. 2006) (unpublished) (our coverage here).  Whatever the case, in enforcing the judgment, a fight started (and so did discovery) over who was liable for the on the judgment. 

If you don't read on, you are a goose.

The First discusses how the District Courts have inherent powers to fix writs of execution.   

Going to the merits as to who the lawsuit was against the First looks at the caption.  It still can’t figure it out, and decides that “What matters most, in our view, is the substance of the cross-complaint so far as it sought to impose liability on Herman, and the course of proceedings so far as it casts any light upon the matter.”  It concludes that some counts run against Herman in an official capacity and some could run in a personal capacity.  But, the First says that the defendant essentially waived all those arguments “Thus, when Herman failed to answer the complaint or to timely oppose the order of default or the entry of default judgment, she was taking a substantial risk as to personal liability. Nor, it appears, did she oppose the showing of Meiselman's damages by calculations made in his affidavit.”

Looking at the actual final judgment, the First tells the District Court what he should have done right (to avoid the confusion), but concludes that Herman never seriously sought any relief in the District Court, and concludes that “If what happened here is due not to Herman but her former counsel, that is a matter to be settled between them.”