Judge orders former company president to restore more than $62K to Woolen Mills Inc. Fully Insured Hospital Life Welfare Plan in Minnesota

Life Welfare Plan in Minnesota

Date of Action: Nov. 9, 2015

Type of Action: Findings of Fact, Conclusions of Law, and Order for Judgment

Names of Defendants: Michael Paul Harris and the Faribault Woolen Mills Inc. Fully Insured Hospital Life Welfare Plan.

Allegations: On Dec. 19, 2012, a civil complaint was filed in the United States District Court, District of Minnesota in St. Paul against Michael Paul Harris and the Faribault Woolen Mills Inc. Fully Insured Hospital Life Welfare Plan. Harris was president and chief operating officer of the Faribault, Minnesota company.

The complaint identified Harris as the fiduciary to the Plan and alleged he breached his fiduciary responsibilities under the Employee Retirement Income Security Act by failing to remit $55,040.61 in contributions withheld from employee paychecks for health insurance premiums between Jan. 9, 2009, and March 20, 2009. This resulted in the retroactive cancellation of the health insurance coverage.

The complaint sought to permanently enjoin Harris from violating ERISA and serving or acting as a fiduciary to any ERISA covered plan. It also sought a judgment requiring Harris to restore any losses to the Plan resulting from fiduciary breaches committed by him and to correct the prohibited transactions in which he engaged.

Resolution: This matter came before United States District Judge during a three day bench trial in June 2015. On Nov. 9, 2015, the United States District Judge issued the Findings of Fact, Conclusions of Law, and Order for Judgment finding:

• Harris was a fiduciary to the Health Plan from at least Jan. 1, 2009 through March 31, 2009;
• Harris breached his fiduciary duties and violated ERISA;
• Harris is liable for restitution of the $55,040.61 in unremitted employee health insurance premiums that were withheld from the Faribault Mills' employees' paychecks in January, February and March 2009; and
• Harris is also liable for $12,798.99 in prejudgment interest on the unremitted employee health insurance premiums for those three months, as calculated through June 1, 2015.

Court: U.S. District Court for the District of Minnesota, St. Paul, Minnesota

Docket Number: 0:12-cv-03136

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