Walsh v. Sills et al

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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
LORI CHAVEZ-DEREMER
Secretary of Labor, US Dept 	CIVIL ACTION
of Labor
VERSUS 	23-41-SDD-SDJ
KELLY SILLS, COASTAL BRIDGE
COMPANY, LLC AND COASTAL
BRIDGE LLC HEALTH PLAN
RULING
This matter is before the Court on the Motion for Summary Judgment 1 filed by
Plaintiff Lori Chavez-Deremer, the Secretary of Labor, United States Department of Labor
(“Plaintiff”).2 Defendant Kelly Sills (“Defendant”) filed an Opposition 3 to the Motion and
then filed several additional briefs without leave of Court.4 Plaintiff filed Replies. 5 For the
reasons which follow, the Plaintiff’s Motion will be granted.
I. 	BACKGROUND
Plaintiff sued Defendant under the Employee Retirement Income Security Act
(“ERISA”). Defendant is the president of Coastal Bridge Company, LLC (“Coastal”).
Coastal is owned by Coastal Investment Holdings, of which Defendant owns one hundred
percent. Coastal offered a group benefit Plan (the “Plan”) that included health, life, dental,
1 Rec. Doc. 76.
2 This action was originally filed on behalf of Martin Walsh, then-Secretary of Labor, and the United States
Department of Labor. The current Secretary of Labor, Lori Chavez-Deremer, has been substituted as the
proper Plaintiff.
3 Rec. Doc. 82.
4 Rec. Docs. 83, 86, 87, 100.
5 Rec. Docs. 85, 101.
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vision, short term disability, long-term disability, accidental death and dismemberment,
cancer, accident, and critical illness insurance coverages for full time employees of
Coastal who worked at least 30 hours per week. The agreement for the Plan was entered
into by Coastal and Blue Cross Blue Shield of Louisiana (“BCBSLA”) on April 1, 2019.
The insurance broker for the Plan was BXS Insurance (“BXS”). From September 1, 2019,
until the Plan was retroactively terminated by Defendant on January 6, 2020, with an
effective date of December 27, 2019, employees of Coastal had contributions withheld
from their paychecks. Coastal frequently failed to timely pay the premiums for the Plan, if
it paid at all. In December 2019, none of the insurers that provided the Plan were paid.
At least 78 employee participants in the Coastal BCBSLA Plan had health
insurance claims denied or delayed due to lapses in coverage caused by Defendant’s
failure to pay premiums. Plaintiff maintains Defendant has violated the following sections
of ERISA:
• 	Sections 502(a)(2) and 502(a)(5), 29 U.S.C. §§ 1132(a)(2) and 1132(a)(5);
• 	Sections 409(a) and 502(a)(5), 29 U.S.C. §§ 1109(a) and 1132(a)(5);
• 	Sections 403(c)(1) of ERISA, 29 U.S.C. § 1103(c)(1);
• 	Section 404(a)(1)(A) of ERISA, 29 U.S.C. § 1104(a)(1)(A);
• 	Section 404(a)(1)(B) of ERISA, 29 U.S.C. § 1104(a)(1)(B);
• 	Section 406(a)(1)(D) of ERISA, 29 U.S.C. § 1106(a)(1)(D);
• 	Section 406(b)(1) of ERISA, 29 U.S.C. § 1106(b)(1);
• 	Section 406(b)(2) of ERISA, 29 U.S.C. § 1106(b)(2); and
• 	Section 405, 29 U.S.C. § 1105.
On June 22, 2023, a default judgment was entered against Coastal Bridge
Company, LLC. Defendant has been representing himself pro se since that time. As the
record reflects, after Plaintiff filed a Motion for Summary Judgment, Defendant filed an
Opposition and numerous other briefs/motions, without leave of Court, none of which
substantively responded to Plaintiff’s arguments under ERISA.
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II. 	LAW AND ANALYSIS
A. Summary Judgment Standard
In reviewing a party’s motion for summary judgment, the Court will grant the motion
if (1) there is no genuine issue of material fact, and (2) the mover is entitled to judgment
as a matter of law. 6 This determination is made “in the light most favorable to the opposing
party.”7 “When seeking summary judgment, the movant bears the initial responsibility of
demonstrating the absence of a genuine issue of material fact with respect to those issues
on which the movant bears the burden of proof at trial.”8 If the moving party satisfies its
burden, “the non-movant must respond to the motion for summary judgment by setting
forth particular facts indicating that there is a genuine issue for trial.” 9 However, the non-
moving party’s burden “‘is not satisfied with some metaphysical doubt as to the material
facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of
evidence.’” 10
Notably, “[a] genuine issue of material fact exists ‘if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.’” 11 All reasonable factual
inferences are drawn in favor of the nonmoving party. 12 However, “[t]he Court has no duty
to search the record for material fact issues. Rather, the party opposing the summary
6 FED. R. C IV . P. 56(a).
7 Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970) (citing United States v. Diebold, Inc., 369 U.S.
654, 655 (1962); 6 V. MOORE , FEDERAL PRACTICE 56.15(3) (2d ed. 1966)).
8 Transamerica Ins. Co. v. Avenell, 66 F.3d 715, 718 (5th Cir. 1995) (citing Celotex Corp. v. Catrett, 477
U.S. 317, 333–34 (1986)).
9 Byers v. Dallas Morning News, Inc., 209 F.3d 419, 424 (5th Cir. 2000) (citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248–49 (1986)).
10 Willis v. Roche Biomedical Lab., Inc., 61 F.3d 313, 315 (5th Cir. 1995) (quoting Little v. Liquid Air Corp.,
37 F.3d 1069, 1075 (5th Cir. 1994)).
11 Pylant v. Hartford Life and Accident Ins. Co., 497 F.3d 536, 538 (5th Cir. 2007) (quoting Anderson, 477
U.S. at 248)).
12 Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985).
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judgment is required to identify specific evidence in the record and to articulate precisely
how this evidence supports his claim.” 13 “Conclusory allegations unsupported by specific
facts . . . will not prevent an award of summary judgment.”14
B. Pro Se Status
From the inception of this litigation Defendant has represented himself, and he
initially attempted to represent Coastal; however, the Court advised Defendant that
corporations 	and 	partnerships 	must 	be 	represented 	by 	counsel. 15 	The 	Court
acknowledges that “[p]ro se pleadings are to be held “to less stringent standards than
formal pleadings drafted by lawyers.” 16 However, a pro se litigant is not entitled to greater
rights than would be a litigant represented by a lawyer,”17 and as set forth by the district
court for the Eastern District of Louisiana: “Courts grant leniency to pro se litigants, but
this leniency has its limits.”18 Moreover, “[d]espite our general willingness to construe pro
se filings liberally, we still require pro se parties to fundamentally ‘abide by the rules that
govern the federal courts.’”19 “Pro se litigants must abide by the Federal Rules of Civil
Procedure....”20 and the Local Rules of this Court.21
C. Local and Federal Rules
Although Rule 56 and this Court’s local rules governing summary judgment are
procedural rules, they explain what evidence must be placed in the record for the Court
13 RSR Corp. v. Int’l Ins. Co., 612 F.3d 851, 857 (5th Cir. 2010) (citing Ragas v. Tenn. Gas Pipeline Co., 136
F.3d 455, 458 (5th Cir.1998)).
14 Nat’l Ass’n of Gov’t Emps. v. City Pub. Serv. Bd. of San Antonio, Tex., 40 F.3d 698, 713 (5th Cir. 1994).
15 Rec. Doc. 42.
16 Berry v. LoanCity, 489 F.Supp.3d 441, 446 (M.D. La. 2020)(cleaned up).
17 Id. (cleaned up).
18United States of America v. 1369 Madrid Street, New Orleans, Louisiana 70122, 2021 WL 5232472, *3
(E.D. La. Nov. 10, 2021).
19 E.E.O.C. v. Simbaki, Ltd., 767 F.3d 475, 484 (5th Cir. 2014), as revised (Sept. 18, 2014) (citation omitted).
20 Stewart v. Atherio Inc., No. 16-1731, 2018 WL 1899291, at *2 (N.D. Tex. Apr. 19, 2018).
21 Perkins v. Advance Stores Co., Inc., No. 23-73, 2023 WL 2731033, at *1 (M.D. La. Mar. 30, 2023).
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to consider when deciding a motion for summary judgment. The Court can only base its
decision on competent evidence that has been properly submitted into the record. 	If a
party does not submit such evidence, the Court’s hands are tied. It cannot consider
unsupported statements or arguments. Under these circumstances, the Court must
decide the motion based only on the evidence that is properly in the record, and the
absence of such evidence can be fatal to a party’s claim or defense.
Defendant has repeatedly failed to follow the Federal Rules of Civil Procedure and
the Local Rules for the Middle District. Local Rule 7(f) requires that, “Leave of court must
be obtained to file surreplies in Rule 12 and Rule 56 motions.” Defendant filed at least six
purportedly substantive responses to Plaintiff’s Motion without seeking leave of court,
clearly violating Local Rule 7(f). However, considering Defendant’s pro se status, the
Court reviewed Defendant’s filings.
Defendant also and failed to submit an Opposing Statement of Material Facts as
required by Local Rule 56(c) or comply with responses due by Local Rule 56(f). Local
Rule 56(c) requires that
A party opposing a motion for summary judgment shall submit with its
opposition a separate, short, and concise statement of material facts. The
opposing statement shall admit, deny or qualify the facts by reference to
each numbered paragraph of the moving party’s statement of material facts
and unless a fact is admitted, shall support each denial or qualification by a
record citation as required by this rule. Each such statement shall begin with
the designation “Admitted,” “Denied,” or “Qualified” and, in the case of an
admission, shall end with such designation. The opposing statement may
contain in a separately titled section additional facts, each set forth in a
separately numbered paragraph and supported by a record citation as
required by subsection (f) of this rule.
A party who fails to provide an opposing statement of material facts suffers the
consequences of rule 56(f), which provides that: “Facts contained in a supporting or
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opposing statement of material facts, if supported by record citations as required by this
rule, shall be deemed admitted unless properly controverted.” Plaintiff complied with this
rule and filed its Statement of Uncontested Material Facts supported by citation to
competent summary judgment evidence in the record. 	Defendant failed to file an
opposing statement of material facts, and he failed to admit, deny, or qualify any of the
facts asserted by Plaintiff. Accordingly, each of Plaintiff’s facts is deemed admitted for the
purposes of this motion.
Defendant contends that, under Federal Rule of Civil Procedure 56(d), the Court
should 	deny 	Plaintiff’s 	motion 	for 	summary 	judgment. 	But 	Rule 	56(d) 	requires 	a
nonmovant to show, by affidavit or declaration, specific reasons he cannot present facts
essential to justify his opposition. Defendant has failed to provide any affidavit or
declaration or make any showing why he cannot present facts essential to opposing
Plaintiff’s motion.
D. Facts Deemed Admitted and Supported by Record Evidence
1. 	Defendant oversaw and was responsible for all activities of Coastal.22
Defendant was the president and owner of Coastal at all relevant times. Defendant
acted on Coastal’s behalf in working with BSX to secure the BCBSLA Plan in Baton
Rouge, 	Louisiana, 	within 	the 	jurisdiction 	of 	this 	Court. 	Defendant 	possessed 	and
exercised discretionary authority, control, and responsibility over Plan management and
administration, and he exercised actual control over Plan assets. Defendant was the sole
owner of Coastal and had authority to hire, promote, and fire any of its employees.
Defendant was an authorized signatory to Coastal’s bank account with the authority to
22 Rec. Doc. 76-1, ¶¶ 4-20.
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transfer funds to and from this account. Among other duties, Defendant directed the
finances of the Company.
2. 	Defendant was a fiduciary of Coastal for purposes of ERISA.23
Defendant was also a fiduciary and party in interest with respect to the Plan within
the meaning of ERISA. The Company offered fully insured dental and vision coverage
through Ameritas; it offered fully insured cancer, accident, and critical illness insurance
through Guardian; and it offered self-insured health insurance through Blue Cross Blue
Shield Louisiana. Defendant deducted health care premiums from employees’ paychecks
for dental, vision, cancer, accident, and critical illness. Coastal and BCBSLA entered into
an Administrative Service Agreement (“ASA”), which was effective April 1, 2019.
3. 	Defendant intentionally failed to comply with ERISA.24
Under the ASA, Coastal was required to fund the Plan, pay monthly administrative
fees, and claim reimbursement to BCBSLA. Employees paid their portion of their
insurance 	coverage 	through 	payroll 	withholdings. 	Coastal 	served 	as 	the 	Plan
Administrator and was responsible for collecting and forwarding employee contributions
withheld from participants’ paychecks to Ameritas, Guardian, and BCBSLA, and for
satisfying the notice, disclosure, and other obligations placed on Plan administrators by
ERISA.
Defendant chose not to pay those invoices and eventually cancelled all health
insurance, but not before health care providers refused to ensure that Plan participants
had coverage in effect. Defendant was the ultimate decision-maker concerning what bills
were paid or not paid. Defendant also refused to implement a run-out agreement offered
23 Id. at ¶¶ 4, 12, 13, 14, 51, 52.
24 Id. at ¶¶ 16, 18, 21, 22.
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by BXS, which would have required Coastal to pay the past due health care invoices and
would have resulted in restoring health care coverage for the remaining health care claims
to be reviewed and paid.
4. 	Defendant withheld insurance payments from his employees but did not
use that money to pay for their insurance coverage.25
Because Defendant and Coastal continued to withhold employee contributions
from 	participants’ pay 	through 	December 	27, 	2019, 	participants 	and 	beneficiaries
reasonably 	believed 	their 	medical 	claims 	would 	be 	processed 	and 	paid. 	Coastal
processed its own payroll. Although Defendant had the ability and means to stop the
deductions, Defendant continued to allow employee health care contributions to be
deducted from employees’ paychecks even though the deductions did not pay the
intended purpose. As a result of Defendant’s failure to notify all participants and
beneficiaries that amounts owed to BCBSLA were unpaid, participants and beneficiaries
continued to seek benefits under the Plan with the belief that coverage and claims
processing remained active. Thus, participants and beneficiaries did not seek other health
insurance coverage.
5. 	Coastal’s May 4, 2020, payment of $78,119.85, via check signed by
Defendant, did not cover all unpaid claims. The balance remains
$209,466.34, plus prejudgment interest.26
This payment covered the amount billed for medical and prescription drug claims
that accrued before the Plan was terminated effective December 27, 2019, but it did not
cover claims that remained unpaid due to the suspension of the ASA for nonpayment or
denied 	claims 	that 	BCBSLA 	received 	during 	lapses 	in 	coverage 	that 	were 	not
25 Id. at ¶¶ 45, 46, 47, 51, 52.
26 Id. at ¶ 38.
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reprocessed. This amount also did not include run-out claims, i.e., claims in which a Plan
participant received service before December 27, 2019, but BCBSLA did not receive the
claim before the Plan was terminated. Coastal and Defendant are responsible for all
unpaid 	claims 	during 	the 	suspension 	of 	the ASA, 	claims 	not 	reprocessed 	after
reinstatement of insurance coverage, and all run-out claims.
6. 	Nationwide is not responsible for Defendant’s and/or Coastal’s ERISA
violations. 27
Nationwide 	Mutual 	Insurance 	Company 	(“Nationwide”) 	issued 	various
performance and payment bonds that name Coastal as principal. To induce Nationwide
to execute these surety bonds, Coastal and Defendant executed a General Indemnity
Agreement, or an amendment thereto, in favor of Nationwide. Nationwide never had any
role whatsoever regarding medical claims associated with the Plan, specifically but not
limited to those medical claims that went unpaid or uncovered.
E. Defendant has Substantively Failed to Respond
Despite Defendant’s procedural failures, the Court nevertheless considered the
merits of his filings and the evidence he submitted in defending Plaintiff’s motion. The
Court finds that Defendant has failed to substantively oppose Plaintiff’s motion, and he
has failed to demonstrate the existence of any genuine disputes of material facts that
would preclude summary judgment in favor of Plaintiff.
First, Defendant has provided no admissible evidence. While Defendant offers
documents he believes support his argument that he is not an ERISA fiduciary, the
contents of the documents do no such thing. In fact, Defendant has failed to offer a single
document that controverts any evidence submitted by Plaintiff.
27 Id. at ¶¶ 57, 68.
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Second, 	Defendant 	has 	not 	taken 	any 	depositions 	in 	this 	matter, 	and 	he
erroneously claims he was not provided with a copy of his own deposition. 28 Although
discovery in this matter closed on March 3, 2025, and Defendant took no action to obtain
discovery in the past year, Defendant inexplicably claims he needs more time for
discovery. 29
Third, Defendant has routinely failed to comply with discovery and other orders
issued by the Court. 30 For example, although Defendant was obliged to deliver documents
to Plaintiff, he ordered the Plaintiff to retrieve the documents from his own business office.
Finally, Defendant has not advanced a single legal theory or argument supported
by any applicable authority. Although Defendant repeatedly claims he is not a fiduciary
as defined by ERISA, and that Plaintiff has failed to meet its summary judgment burden,
he has offered no meritorious justification or reasoning aside from his own conclusory
opinions.
28 See Rec. Docs. 78, 81, 81-1, 81-2.
29 Rec. Doc. 43.
30 See Rec. Docs. 43, 74, 88.
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III. 	CONCLUSION
For the foregoing reasons, Motion for Summary Judgment 31 filed by Lori Chavez-
Deremer, the Secretary of Labor, United States Department of Labor is GRANTED.
Within ten (10) days from the date of this Ruling, Plaintiff shall submit a Proposed
Judgment and/or advise the Court if a hearing on damages is necessary.
IT IS SO ORDERED.
Baton Rouge, Louisiana, this 12th day of March, 2026.
________________________________
SHELLY D. DICK
CHIEF DISTRICT JUDGE
MIDDLE DISTRICT OF LOUISIANA
31 Rec. Doc. 76.
S
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