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Fastener Dimensions, Inc. v. Massachusetts Mutual Life Insurance Co.

United States District Court, S.D. New York

October 28, 2014

FASTENER DIMENSIONS, INC., DARRYL HINKLE, DARRYL HINKLE as TRUSTEE of FASTENER DIMENSIONS, INC. PROFIT SHARING PLAN, and KATHLEEN HINKLE, Plaintiffs,
v.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, MASSMUTUAL HOLDING LLC, MML INVESTORS SERVICES, LLC, FIFTH AVENUE FINANCIAL, COWAN FINANCAL GROUP, STERLING TRUST, EQUITY TRUST COMPANY, DANIEL TUMMINIA, MICHAEL FEUER, DENNIS MANNARINO, MASSMUTUAL CONTRACTING CORP., CYPRESS LAWN CARE, J&D ITALIAN SPECIALTY MEATS, ESTATE OF JANICE BOHA, and DOES 1-10, Defendants. INNA IPPOLITOV, individually and as representative of beneficiaries of the pension and/or profit sharing plans of Fastener Dimensions, Inc., Plaintiff,
v.
FASTENER DIMENSIONS, INC., DANIEL TUMMINIA, MICHAEL FEUER, DARRYL HINKLE, MASS MUTUAL CONTRACTING CORP., CYPRESS LAWN CARE, J&D ITALIAN SPECIALTY MEATS,

OPINION & ORDER

DENISE COTE, District Judge.

These consolidated cases, now settled, concerned the alleged mismanagement of a retirement fund created for the benefit of the employees of Fastener Dimensions, Inc. ("Fastener"). Before the Court is the August 22, 2014 motion by plaintiff Inna Ippolitov ("Ippolitov") and thirteen other putative beneficiaries of Fastener's Pension and Profit Sharing Plan (the "Ippolitov Plaintiffs" and the "Plan, " respectively) for an award of attorney's fees for their counsel Irina Shpigel ("Shpigel") and for a "case contribution award" to Ippolitov. For the reasons stated below, Shpigel is awarded $6, 000 and judgment is reserved as to reimbursement of Ippolitov for legal fees pending the subsequent submission of documentary evidence about such payments.

BACKGROUND

I. Facts Alleged by Complaints

The complaints in the above-captioned actions allege as follows. Fastener is a New York corporation that supplies fasteners and hardware for military aircraft, particularly helicopters. In 1992, Fastener established two pension and profit-sharing plans for its employees, which were eventually merged to become the Plan. In 2000 or 2001, Darryl Hinkle ("Hinkle"), Fastener's president, hired Daniel Tumminia ("Tumminia") to manage the Plan and its life insurance policies and investments. Tumminia, acting with co-conspirators including Michael Feuer ("Feuer"), Dennis Mannarino ("Mannarino"), and Janice Boha ("Boha"), stole from the Plan; Tumminia, Feuer, and Mannarino have pled guilty to conspiracy to commit wire fraud in violation of 18 U.S.C. § 1349.

Boha died in 2012. Before her death, it is alleged that she used Plan funds to take out a life insurance policy with Massachusetts Mutual Life Insurance Co. ("MassMutual"). The proceeds of this policy and a second MassMutual life insurance policy insuring Boha, which then equaled $920, 488.76, were paid into the Court on April 25, 2013 (the "Interpleader Funds").

II. Procedural History

A. These Actions Are Filed and Consolidated.

Fastener, Hinkle (acting both individually and as trustee of the Plan), and his wife Kathleen Hinkle filed the first of the above-captioned actions in this district on December 7, 2012. Fastener Dimensions, Inc. v. Mass. Mutual Life Ins. Co., 12cv8918 (DLC) (the "Fastener Action"). The Fastener Action included a variety of state common-law claims as well as claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968 ("RICO"). These were brought against Tumminia, Feuer, Mannarino, and Boha's estate, certain companies they controlled, as well three sets of institutions MassMutual; Fifth Avenue Financial and Cowan Financial Group (the "FAF/Cowan Defendants"); and Sterling Trust and Equity Trust Company (the "Sterling Defendants").

Ippolitov filed the second of the above-captioned actions, Ippolitov v. Fastener Dimensions, Inc., 13cv4782 (DLC) (the "Ippolitov Action"), on April 30, 2013, in the Eastern District of New York, through a man purporting to be an attorney named Stephen G. Dickerman ("Dickerman").[1] Ippolitov brought suit on behalf of herself and as representative of a purported class composed of beneficiaries of the Plan, and brought claims similar to those advanced in the Fastener Action under RICO and state common law, as well as claims under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"). Unlike the Fastener Action, which was brought by Fastener and Hinkle, the Ippolitov Action included Fastener and Hinkle as defendants, alleging that Hinkle was another co-conspirator.

On June 24, MassMutual filed a motion to transfer the Ippolitov Action to this district, arguing that it was closely related to the Fastener Action. The transfer motion was opposed by Hinkle and Fastener. Ippolitov failed to respond. On July 10, 2013, the transfer motion was granted, and this Court accepted the Ippolitov Action as related to the Fastener Action.

Following an opinion on motions to dismiss in the Fastener Action, Ippolitov filed an Amended Complaint on September 3, 2013. The Amended Complaint alleged breach of fiduciary duty in violation of ERISA, as well as a number of state common-law claims.

B. Motions to Dismiss in Ippolitov

On October 3, 2013, defendant Mannarino filed a motion to dismiss for lack of personal jurisdiction because Ippolitov had failed to serve him with process. Ippolitov's counsel did not oppose the motion. In an opinion of December 12, 2013, the Court noted that Mannarino's counsel had "personally brought th[at] motion to Mr. Dickerman's attention, " that Mannarino had been properly served in the Fastener Action, and that there was no indication Mannarino was attempting to evade service. Accordingly, on December 11, the Court dismissed the Ippolitov Action as to Mannarino, without prejudice. The Court noted in that Order that "Mr. Dickerman's failure to serve Mannarino or to oppose the October 3 motion is very much in line with his dilatory conduct over the course of this litigation thus far."

On October 11, MassMutual as well as Fastener, Hinkle, and his wife (the "Fastener Plaintiffs") moved to dismiss certain claims; Ippolitov opposed. On December 12, MassMutual's motion was granted in full and the Fastener Plaintiffs' motion was granted in part.

C. The Ippolitov Notice of Pendency

On January 13, 2014, the Court approved a notice to alert the beneficiaries of the Plan to the pendency of the Ippolitov Action and provide them an opportunity to join the suit (the "Notice of Pendency"). On January 16, counsel for Ippolitov filed the final notice, which states, "[I]f plaintiffs win their claims in this lawsuit, Mr. Dickerman will ask the Court to be compensated based on a reasonable percentage of the total benefits to the beneficiaries that he represents." Thirteen putative beneficiaries joined the suit and consented to be represented by Dickerman.

D. Recurring Issues in the Representation of Ippolitov

From the very beginning of this consolidated litigation, Ippolitov's counsel have shown a lack of diligence. A pretrial conference was held on August 15, 2013, which was to be the first to address the Fastener Action together with the recently transferred Ippolitov Action. Dickerman requested an adjournment, which was denied. He then chose not to appear at the conference. At the pretrial conference, counsel for the other parties in these cases explained to the Court that Dickerman had for months been neglecting his responsibilities in connection with these cases. An Order to Show Cause was issued on August 15 setting a hearing for August 16 to determine if Dickerman should be sanctioned. Dickerman failed to appear at the August 16 hearing. Accordingly, on August 16 Dickerman was sanctioned for his willful failure to appear at the August 15 pretrial conference. The Court also ordered Dickerman to show cause why the Ippolitov Action should not be dismissed for failure to prosecute. Dickerman subsequently appeared and satisfied the Court, which did not dismiss the action.

As noted above, Dickerman failed to serve Mannarino in the Ippolitov Action, even after Mannarino's counsel reached out to him. Dickerman then chose not to oppose Mannarino's motion to dismiss, which was subsequently granted.

Although defendant Tumminia was served, Tumminia failed to answer or otherwise respond to the complaint. Tumminia's deadline for answering was, at the latest, October 3, 2013. Four months passed, but Dickerman took no action. On January 28, 2014, the Court, sua sponte, entered an Order directing Dickerman to file an Order to Show Cause for default judgment by February 7 if Ippolitov wished to continue to prosecute the claims against Tumminia.

Also on January 28, the Court entered an Order noting that Ippolitov had failed to file affidavits of service on four defendants (the "Unserved Defendants"), although the window in which to effect service had closed weeks before. The Order directed Ippolitov to file affidavits of service by February 7 or a submission showing good cause why the Ippolitov Action ...


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