Perez v. Samuel McCutchin, et al., involving default judgment of Upper Darby, Pa., heating company

Date of Action: April 16, 2014

Type of Action: Default Judgment

Name(s) of Defendant(s): Samuel McCutchin, Cynthia Lindenman, Snyder Heating Co., and Snyder Heating Co. 401(k) plan

Allegations: Based on an investigation conducted by the U.S. Department of Labor’s Employee Benefits Security Administration, on Sept. 19, 2013, the Secretary of Labor filed a complaint alleging as follows:

Snyder Heating Co. was the sponsor and administrator of the Snyder Heating Co. 401(k) plan. Samuel McCutchin was the owner of Snyder Heating Co. and a trustee of the plan. Cynthia Lindenman performed the duties of plan administration and was also a trustee of the plan. The plan was established by the Snyder Heating Co. on or before 2001 for the benefit of their employees. Snyder Heating Co. is an HVAC business located in Upper Darby, Pa.

McCutchin and Lindenman were responsible for making decisions concerning the remittance of elective contributions to the plan and were considered fiduciaries to the plan. From January 2007 until December 2010, McCutchin and Lindenman failed to ensure that elective employee contributions were remitted to and collected by the plan in a timely manner. In addition, Snyder Heating, McCutchin and Lindenman failed to segregate the plan assets from Snyder Heating Co.’s assets. It was also alleged that Snyder Heating, McCutchin and Lindenman each knew the others had breached their fiduciary duties, but they failed to take actions to remedy their breaches; thereby, enabling each other to commit these actions during the aforementioned time period.

Resolution: The court ordered that the defendants make restitution to the plan in the amount of $28,951.82 for unremitted employee contributions of $20,725.85 and pre-judgment interest of $8,225.97. Additionally, the court appointed Metro Benefits of Pittsburgh, Pa., as the independent fiduciary of the plan and ordered the defendants to pay for the costs of the independent fiduciary. The defendants were removed as fiduciaries to this plan and will be permanently barred from ever serving as fiduciaries to any plan governed by the Employee Retirement Income Security Act.

Court: United States District Court for the Eastern District of Pennsylvania

Docket Number: 2:13-cv-05492-CMR

U.S. Department of Labor materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling (202) 693-7828 or TTY (202) 693-7755.