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No. 136377
| Selflube, Inc., |
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Plaintiff, |
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| v |
(Appeal from Ct of Appeals) |
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(Kent - Johnston, D.) |
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| JJMT, Inc., and James A. Dehaan, |
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Neil P. Jansen |
Defendants/Cross-Defendants/Fourth-Party |
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Defendants-Appellees, |
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| and |
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| Action Industrial Supply Company, |
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Defendant/Cross-Plaintiff/Third-Party Plaintiff, |
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| v |
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| H.S. Die & Engineering, Inc., |
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Michael E. Stroster |
Third-Party Defendant/Fourth-Party Plaintiff- |
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Appellant, |
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| and |
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| Thomas Wood, |
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Defendant. |
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| __________________________________________ |
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Click to view briefs in Adobe format:
Plaintiff's Brief on Appeal>> (not yet available)
Defendants/Cross-Defendants/Fourth-Party Defendants-Appellees' (DeHaan) Brief on Appeal>>
Third-Party Defendant/Fourth-Party Plaintiff-Appellant's (H.S. Die & Engineering) Brief on Appeal>>
Third-Party Defendant/Fourth-Party Plaintiff-Appellant's (H.S. Die & Engineering) Reply Brief>>
Third-Party Defendant/Fourth-Party Plaintiff-Appellant's (H.S. Die & Engineering) Supplemental Brief>>
Background
James DeHaan, the purchasing manager for H.S. Die & Engineering, was convicted of fraud against his employer. The trial court entered a temporary restraining order, prohibiting DeHaan from transferring, encumbering, disposing or concealing his interest in H.S. Die’s 401(k) plan, which is a qualified plan under the Employee Retirement Income Security Act, 29 USC 1001 et seq. The trial court then entered a preliminary injunction that preserved DeHaan’s right, title and interest in his 401(k) money, but also required him to notify H.S. Die before withdrawing any funds, and to coordinate any withdrawal with H.S. Die. After this, the trial court entered a default judgment in favor of H.S. Die and against DeHaan for approximately $1.7 million. But before the court entered judgment against him, DeHaan filed a motion to set aside the preliminary injunction and withdraw his 401(k) funds. He argued that the preliminary injunction violated ERISA’s anti-alienation provision, 29 USC 1056(d)(1), which provides that “[b]enefits provided under the plan may not be assigned or alienated.” H.S. Die argued that DeHaan’s motion should be deniedpursuant to State Treasurer v Abbott, 468 Mich App 143 (2003). The Michigan Supreme Court held in Abbott that a court did not violate ERISA by ordering a prisoner to have his monthly ERISA benefits deposited in his prison account, where the funds would be used to help reimburse the state for his imprisonment costs. After a hearing on DeHaan’s motion, the trial court entered a permanent injunction barring DeHaan from transferring, disposing of, encumbering, taking a distribution of, or liquidating his interest in the 401(k) plan without 30 days prior written notice to H.S. Die. Any transfer or distribution of funds should be deposited into an account at a financial institution selected by his former employer, the court ordered. DeHaan appealed; in a published opinion, the Court of Appeals vacated the permanent injunction, concluding that it violated ERISA’s anti-alienation provision. The Court of Appeals stated that “to the extent that the injunction conflicts with ERISA, it is preempted.” The Court of Appeals also concluded that ERISA preempted the permanent injunction because the injunction did not allow the plan to be administered as written. H.S. Die appeals.
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