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Coar v. Kazimir

filed: April 15, 1993; As Corrected April 21, 1993.

ROBERT J. COAR
v.
JOSEPH KAZIMIR, ROCCO MORONGELLO, IN THEIR CAPACITY AS TRUSTEES OF THE PENSION FUND-MID JERSEY TRUCKING INDUSTRY-LOCAL 701; WILLIAM LEVINE, IN HIS CAPACITY AS TRUSTEE OF THE PENSION FUND-MID JERSEY TRUCKING INDUSTRY-LOCAL 701; DONATO DESANTI, IN HIS CAPACITY AS TRUSTEE OF THE PENSION FUND-MID JERSEY TRUCKING INDUSTRY-LOCAL 701; ROBERT DUDIK, IN HIS CAPACITY AS TRUSTEE OF THE PENSION FUND-MID JERSEY TRUCKING INDUSTRY-LOCAL 701; PENSION FUND-MID JERSEY TRUCKING INDUSTRY LOCAL 701 JOSEPH KAZIMIR, ROCCO MORONGELLO, WILLIAM LEVINE, DONATO DESANTI AND ROBERT DUDIK, IN THEIR CAPACITY AS TRUSTEES OF THE PENSION FUND MID-JERSEY TRUCKING INDUSTRY LOCAL 701 AND THE PENSION FUND MID-JERSEY TRUCKING INDUSTRY LOCAL 701, APPELLANTS IN NOS. 92-5356 AND 92-5438 ROBERT J. COAR V. JOSEPH KAZIMIR, ROCCO MORONGELLO, IN THEIR CAPACITY AS TRUSTEES OF THE PENSION FUND-MID JERSEY TRUCKING INDUSTRY-LOCAL 701; WILLIAM LEVINE, IN HIS CAPACITY AS TRUSTEE OF THE PENSION FUND-MID JERSEY TRUCKING INDUSTRY-LOCAL 701; DONATO DESANTI, IN HIS CAPACITY AS TRUSTEE OF THE PENSION FUND-MID JERSEY TRUCKING INDUSTRY-LOCAL 701; ROBERT DUDIK, IN HIS CAPACITY AS TRUSTEE OF THE PENSION FUND-MID JERSEY TRUCKING INDUSTRY-LOCAL 701; PENSION FUND-MID JERSEY LOCAL 701 ROBERT COAR, APPELLANT IN NOS. 92-5359 AND 92-5439



On Appeal from the United States District Court for the District of New Jersey. (D.C. Civil No. 91-3116).

Before: Becker, Greenberg, and Weis, Circuit Judges.

Author: Greenberg

Opinion OF THE COURT

GREENBERG, Circuit Judge.

I. FACTUAL AND PROCEDURAL BACKGROUND

Defendants Joseph Kazimir, Rocco Morongello, William Levine, Donato DeSanti, and Robert Dudik, as trustees of the Pension Fund of Mid-Jersey Trucking Local 701 (the Pension Fund), and the Pension Fund itself, together called the "Fund Defendants," appeal from the district court's order of June 23, 1992, granting summary judgment to plaintiff Robert J. Coar, a former trustee and a beneficiary of the Pension Fund, in his suit seeking a declaration that the Pension Fund's actions in withholding his vested pension benefits and applying them as a set-off to his liability to the fund violated the anti-alienation provision of the Employee Retirement Income Security Act of 1974 (ERISA), section 206(d)(1), 29 U.S.C. § 1056(d)(1). Coar

cross-appeals from the district court's denial of his motion for an award of attorney's fees. Because we conclude that Coar cannot invoke ERISA's anti-alienation provision to shield his benefits from liability for breach of his duty to the Pension Fund, we will reverse the district court's grant of summary judgment and dismiss his appeal of the district court's order denying attorney's fees as moot.

The undisputed facts are as follows. In 1986, Coar, a former trustee, and current participant, of the Pension Fund was convicted, along with Frank Scotto, his co-trustee, and Kenneth Zauber, the general counsel to the Pension Fund, of engaging in a RICO conspiracy to receive kickbacks in exchange for channeling $20 million from the Pension Fund's assets to Omni Funding Group, a Florida-based mortgage company.*fn1 See United States v. Zauber, 857 F.2d 137, 140, 149-53 (3d Cir. 1988), cert. denied, 489 U.S. 1066, 109 S. Ct. 1340 (1989). In October 1984, prior to the indictment, the Pension Fund and its trustees had filed a civil case against Coar, his co-conspirators, and certain other defendants, alleging ERISA and RICO violations arising from the Omni investment. On September 13, 1990, the district court in the civil case granted summary judgment on liability to the Pension Fund and the trustees against Coar and certain of the other defendants.

Pursuant to its Findings of Fact and Conclusions of Law Concerning Damages in the fund's civil case, the district court ultimately entered a final, unappealed judgment against Coar for $25,535,887 for fiduciary duty violations under ERISA sections 409(a) and 502(a)(3), and a judgment for $96,607,661 for RICO violations. The district court explained that the $25,535,887 figure represented the difference between what the Pension Fund recovered on its investment with Omni, or received from settlements in litigation to recover its assets, and what it would have earned "had those monies continued to be invested with the Pension fund's other investment managers." On April 16, 1991, prior to the entry of final judgment against Coar, but after the district court found Coar liable, the Pension Fund advised Coar that it would set off Coar's liability to the Pension Fund against his benefits from the fund, beginning with the May 1991 benefits.*fn2

On July 17, 1991, Coar filed this action against the Fund to obtain his benefits relying on section 502(a)(1) of ERISA, 29 U.S.C. § 1132(a)(1). Coar claimed that the Pension Fund's withholding of benefits violated the non-forfeiture and anti-alienation provisions of ERISA, sections 203(a) and 206(d)(1), 29 U.S.C. §§ 1053 (a) and 1056(d)(1). The Fund Defendants answered and filed a counterclaim seeking a declaratory judgment that the Pension Fund's withholding of benefits under sections 409(a) and 502(a)(3) of ERISA, 29 U.S.C. §§ 1109(a) and 1132(a)(3), did not violate ERISA's non-forfeiture and anti-alienation provisions. The parties each subsequently moved for summary judgment.

On May 12, 1992, the district court filed an opinion holding that, although the non-forfeiture provision of ERISA did not bar the set-off, the anti-alienation provision forbade an equitable set-off by the Pension Fund of its damages against Coar . See Coar v. Kazimir, 792 F. Supp. 345 (D.N.J. 1992). While the district court recognized that the Supreme Court's holding in Guidry v. Sheet Metal Workers Nat'l Pension Fund, 493 U.S. 365, 110 S. Ct. 680, 107 L. Ed. 2d 782 (1990), expressly left open the issue of whether section 206(d)(1) of ERISA forecloses a pension fund from setting off benefits to a beneficiary who breached a fiduciary duty to the fund, it nevertheless found that Guidry 's "reasoning [counseled] a strict application of the anti-alienation provision" precluding a set-off by the Pension Fund in this case. Id. at 351. Accordingly, the district court denied the Fund Defendants' motion for summary judgment and granted summary judgment to Coar. Id. The court also awarded Coar attorney's fees under section 502(g)(1) of ERISA, 29 U.S.C. § 1132(g)(1), with the amount to be fixed after an affidavit of services was filed. Id. at n.11.

On May 20, 1992, pursuant to Fed. R. Civ. P. 59, the Fund Defendants moved for reconsideration of the summary judgment decision and the attorney's fees award.*fn3 In an order entered June 23, 1992, the district court reaffirmed the summary judgment for Coar but, on reconsideration, denied an award of fees. The district court then entered judgment for Coar on June 23, 1992.

On June 29 and July 8, 1992, the Fund Defendants and Coar respectively filed notices of appeal and cross-appeal from the order of June 23, 1992. Coar filed his cross-appeal notwithstanding his prior filing, on July 2, 1992, of a motion in the district court, pursuant to Rule 59(e), to have the court reconsider its denial of his request for attorney's fees. The district court denied Coar's motion for reconsideration on July 31, 1992. On August 5 and August 11, 1992, the Fund Defendants and Coar respectively filed second notices of appeal and cross-appeal. On August 13, 1992, we consolidated all four appeals.

II. JURISDICTION

We have jurisdiction pursuant to 28 U.S.C. § 1291. The district court had subject matter jurisdiction pursuant to 29 U.S.C. § 1132(e) (ERISA) and 28 U.S.C. § 1331. We further note that our appellate jurisdiction over the Fund Defendants' first appeal from the summary judgment was not terminated when Coar served his timely motion pursuant to Fed. R. Civ. P. 59(e), notwithstanding Fed. R. App. P. 4(a)(4) which provides that "[a] notice of appeal filed before the Disposition of [such motion] shall have no effect." In this case, Rule 4(a)(4) does not impair our jurisdiction inasmuch as Coar's Rule 59(e) motion related exclusively to the district court's denial of attorney's fees, and did not concern the merits of the final judgment of the district court. See Buchanan v. Stanships, Inc, 485 U.S. 265, 268-69, 108 S. Ct. 1130, 1132, 99 L. Ed. 2d 289 (1988). Furthermore, though Coar's first notice of cross-appeal was ineffective because it was filed while his motion for reconsideration was pending, we nevertheless have jurisdiction over his cross-appeal because he filed a timely second notice of cross-appeal following the district court's denial of his motion for reconsideration.

III. STANDARD OF REVIEW

We exercise plenary review of the order granting summary judgment to Coar and denying it to the Fund Defendants. In most cases an appellate court reversing an order granting summary judgment will not direct the district court to enter judgment in favor of the appellant, because a genuine issue of fact will remain. Kreimer v. Bureau of Police for Town of Morristown, 958 F.2d 1242, 1250 (3d Cir. 1992); First Nat'l Bank v. Lincoln National Life Ins. Co., 824 F.2d 277, 281 (3d Cir. 1987). However, when the appeal concerns only issues of law, and there are no material facts in dispute as in this case, we are free to enter an order directing entry of summary judgment in favor of the appellant. Kreimer, 958 F.2d at 1250; Nazay v. Miller, 949 F.2d 1323, 1328 (3d Cir. 1991); First Nat'l Bank, 824 F.2d at 281.

IV. Discussion

In enacting ERISA, Congress established a comprehensive remedial scheme for the protection of:

the interests of participants in employee benefit plans and their beneficiaries . . . by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate ...


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