Abuse of Discretion – Damages – ERISA

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WI Court of Appeals – District IV

Case Name: Jeffrey A. Riggert v. John H. Reed

Case No.: 2017AP2369

Officials: Lundsten, P.J., Kloppenburg and Fitzpatrick, JJ.

Focus: Abuse of Discretion – Damages – ERISA

Jeffrey Riggert brought multiple claims against John Reed under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 (2012) et seq., and under state law. The dispute centered on Riggert’s employment at Innovologie, LLC, a company solely owned and managed by Reed. Riggert alleged that Reed had failed to deposit both Riggert’s and Innovologie’s mandatory retirement contributions into Riggert’s Individual Retirement Account during his employment at Innovologie. After the circuit court decided Riggert’s first motion for summary judgment resolving the claims pleaded in his first amended complaint, the court allowed Riggert to amend the first amended complaint to plead a claim for denial of benefits under ERISA. The court then granted Riggert’s second motion for summary judgment, determining that Reed was individually liable for Riggert’s claim for denial of benefits under ERISA and calculating Riggert’s damages to be $84,494.83. Additionally, the court awarded Riggert attorney fees and expenses in the amount of $57,626.11.

On appeal, Reed argues that the circuit court erred when it: (1) allowed Riggert to amend his first amended complaint to plead a claim for denial of benefits under ERISA after deciding Riggert’s first motion for summary judgment resolving the other claims that Riggert had pleaded; and (2) ruled on Riggert’s second motion for summary judgment that Reed was individually liable for Riggert’s claim. Riggert cross-appeals, arguing that the court selected an incorrect method to calculate damages and that the court misused its discretion in failing to award Riggert the full amount of his request for attorney fees.

We conclude that the circuit court erroneously exercised its discretion in allowing Riggert to amend his first amended complaint because the court did so after it decided Riggert’s first motion for summary judgment resolving the claims pleaded in his first amended complaint and did not apply the legal standard that applies to a post-summary judgment motion to amend. Following Mach v. Allison, 2003 WI App 11, ¶2, 259 Wis. 2d 686, 656 N.W.2d 766 (2002), we reverse the court’s ruling allowing Riggert to amend and remand with directions, to allow the court the opportunity to exercise its discretion while applying the correct legal standard. We retain jurisdiction over both the appeal and the cross-appeal.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.