American Cleaners and Laun. v. Textile Processors

• Decision Date: 20 March 2007
• Docket Number: No. 4:05CV02271ERW.,4:05CV02271ERW.
• Parties: AMERICAN CLEANERS AND, LAUNDRY CO. INC., Plaintiff(s), v. TEXTILE PROCESSORS, SERVICE TRADES, HEALTH CARE, PROFESSIONAL AND TECHNICAL EMPLOYEES INTERNATIONAL UNION LOCAL 161, et al., Defendant(s).
• Court: U.S. District Court — Eastern District of Missouri

482 F.Supp.2d 1103

AMERICAN CLEANERS AND, LAUNDRY CO. INC., Plaintiff(s), v. TEXTILE PROCESSORS, SERVICE TRADES, HEALTH CARE, PROFESSIONAL AND TECHNICAL EMPLOYEES INTERNATIONAL UNION LOCAL 161, et al., Defendant(s).

No. 4:05CV02271ERW.

United States District Court, E.D. Missouri, Eastern Division.

March 20, 2007.

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Robert W. Stewart, Stanley G. Schroeder, Lowenbaum Partnership, L.L.C., James N. Foster, Jr., Robert D. Younger, McMahon and Berger, St. Louis, Mo, for Plaintiffs.

James C. Chostner, Arthur J. Martin, Schuchat and Cook, Jerald A. Hochsztein Jerald A. Hochsztein, L.L.C., St. Louis, MO, for Defendants.

MEMORANDUM AND ORDER

WEBBER, District Judge.

This matter comes before the Court on Defendants Trustees of the Local No. 108 Pension Fund ("108 Fund"), Noel Beasley, Mark Rosen, and Mark Birenbaum, the UNITE HERE National Retirement Fund ("NRF"), and the Trustees of the National Retirement Fund, Noel Beasley, Harold Bock, Mark Fleischman, John Gillis, Christine Kerber, David Melman, Warren Pepicelli, Bruce Raynor, Harris Raynor, Edgar Romney, Richard Rumelt, and Lynn Talbott's (collectively the "Fund Defendants") Motion to Dismiss [doe. # 13], Defendants Textile Processors, Service Trades, Health Care, Professional and Technical Employees International Union Local 161 ("Local 161") and Textile Processors, Service Trades, Health Care, Professional and Technical Employees International Union Local 108 ("Local 108")'s Motion to Dismiss [doe. # 11], Fund Defendants' Motion to Dismiss Plaintiffs Second Amended Complaint [doc. # 32], Defendant Local 161's Motion to Dismiss Plaintiff's Second Amended Complaint [doe. # 34], and Defendant Local 108's Motion to Dismiss Defendant's Second Amended Complaint [doc. # 36].

I. PROCEDURAL HISTORY

Plaintiffs filed suit against the Fund Defendants, Local 161, and Local 108 on December 2, 2005, alleging four counts against the various defendants, and filed their First Amended Complaint a month later of January 3, 2006. The Fund Defendants' first motion to dismiss, and the Locals 108 and 161's Joint Motion to Dismiss (docs. # 13 and # 11 respectively), were filed after the Plaintiffs First Amended Complaint was filed. On November 20, 2006, this Court allowed the Plaintiff to amend their complaint a second time. Following the Plaintiffs Second Amended Complaint, the Fund Defendants renewed their arguments asserted in their first motion to dismiss in a second motion to dismiss [doe. # 32]. Rather than repeating the claims made in their joint motion to dismiss, Local 161 and Local 108 filed separate Motions to Dismiss [does. # 34 and # 36] to address new claims added by the Plaintiff that are unique to Local 108. Plaintiffs Second Amended Complaint contains seven counts: Count I alleges a violation of 29 U.S.C. § 185; Count II alleges a violation of 29 U.S.C. § 186; Count III alleges common law unjust enrichment against the 108 Fund and the NRF; Count IV alleges Federal Common Law Unjust Enrichment against the 108 Fund and the NRF; Count V alleges Common law unjust enrichment against Local 108; Count VI alleges Federal Common Law unjust enrichment against Local 108; and Count VII alleges Common law conversion against Local 108. All five motions to dismiss are currently before the Court.¹

II. BACKGROUND FACTS²

On December 1, 2000, the Plaintiff was required by law to recognize Local 161 as the exclusive collective bargaining representative for a number of its employees consisting of all permanent full-time cleaning production employees, employed by Plaintiffs St. Louis, Missouri Metro facilities. The Plaintiff and Local 161 entered into a collective bargaining agreement effective December 1, 2000 through November 30, 2003 ("the 2000 agreement"). That agreement required the Plaintiff to contribute five cents per hour worked, for each employee covered by the 2000 agreement, to the Textile Processors Local No. 161 Pension Fund. Effective December 1, 2003 through November 30, 2004, the Plaintiff and Local 161 entered into a second collective bargaining agreement ("the 2003 agreement"), which contained a similar provision. At the time the 2000 agreement was entered into the Textile Processors Local No. 161 Pension Fund did not exist. The Plaintiff was advised by an employee and business agent for Local 161, that the fund would be established, however, no such fund was ever formed. At some point after the execution of the 2000 agreement, the number 161 was lined out, and replaced with the number 108, so that the agreement read "the Company will contribute to the Textile Processors Local No. 161 108 Pension Fund...." Pl. Second Amend. Comp., ¶ 25. The Plaintiff also alleges that the initials JM were inserted next to the deletion. It is assumed that JM is intended to refer to Joseph Mach, who is the President and Chief Executive Officer of the Plaintiff company. The Plaintiff further alleges that at no time did any officer or agent, including Joseph Mach, of the Plaintiff company authorize the changes to the 2000 agreement. The Plaintiff became aware of the changes to the 2000 agreement on September 22, 2005.

The Plaintiff refuses to continue making contributions to the 108 Fund, or the NRF³ with respect to its Local 161 employees. However, the Plaintiff alleges that the Defendants have ratified and condoned the fraud and forgery noted in the 2000 agreement, and continue to assert the enforceability of the 2000 agreement as altered. The Plaintiff further alleges that the Defendants have claimed potential contribution and withdrawal liability against the Plaintiff based on the presumed enforceability of the altered agreement. Similar alterations were made to the 2003 agreement.

During the term of the 2000 and 2003 agreements, the Plaintiff made all fund contributions, as specified under the terms. These payments were made by the Plaintiff to the Local 108, and were then transmitted by Local 108, to the Local 108 Fund and ultimately into the NRF. The Plaintiff asserts liability against the Local 108 Fund and the NRF, as well as their trustees, as they are third party beneficiaries of the 2000 and 2003 agreements entered into between the Plaintiff and Local 161. Although they are not a party to the collective bargaining agreements, the Plaintiff asserts that they are necessary parties in this lawsuit based on their status as third-party beneficiaries. All of the Plaintiffs claims are based on their potential withdrawal liability under the terms of the agreement, and the allegedly improper contributions to the 108 Fund and the NRF.

III. LEGAL STANDARD

Under the Federal Rules of Civil Procedure, a defendant may file a motion to dismiss for failure to state a claim upon which relief may be granted. Fed.R.Civ.P. 12(b)(6). The standards governing motions to dismiss are well-settled. A complaint shall not be dismissed for its failure to state a claim upon which relief may be granted unless it appears beyond a reasonable doubt that the plaintiff can prove no set of facts in support of a claim entitling him or her to relief. Breedlove v. Earthgrains Baking, 140 F.3d 797, 799 (8th Cir.1998) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). When deciding a motion to dismiss under Rule 12(b)(6), the Court must assume that all material facts alleged in the complaint are true. Davis v. Monroe County Bd. of Educ., 526 U.S. 629, 633, 119 S.Ct. 1661, 143 L.Ed.2d 839 (1999). The court must view all facts and inferences in the light most favorable to the non-moving party and "may dismiss the complaint only if it is clear that no relief can be granted under any set of facts that could be proved consistent with the complaint." McMorrow v. Little, 109 F.3d 432, 434 (8th Cir.1997); Stone Motor Co. v. Gen. Motors Corp., 293 F.3d 456, 464 (8th Cir.2002). Thus, as a practical matter, a dismissal under Rule 12(b)(6) should be granted "only in the unusual case in which a plaintiff includes allegations that show, on the face of the complaint, that there is some insuperable bar to relief." Strand v. Diversified Collection Serv., Inc., 380 F.3d 316, 317 (8th Cir.2004). The issue on a motion to dismiss is not whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled to present evidence in support of his or her claim. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).

IV. DISCUSSION

A. The Fund Defendants Motion to Dismiss [dots. # 13 and # 32]⁴

There are four counts alleged against the Fund Defendants. Count I alleges that the Fund Defendants breached the 2000 agreement, in violation of Section 301(a) of the labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a), by altering the terms of the agreement. Count II alleges that the Fund Defendants' unlawfully accepted contributions from the Plaintiff without a written agreement as required by Section 302(c)(5)(B) of the LMRA, 29 U.S.C. § 186(c)(5)(B). Counts III and IV allege Unjust Enrichment, under both state common law, and federal common law of ERISA, due to the Fund Defendants unlawful retention of contributions. The Fund Defendants raise a number of arguments, why each of these counts should be dismissed for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), as well as under Federal Rule of Civil Procedure 9(b), for failure to plead fraud with particularity. The Court will first address each count in turn, and the arguments unique to each count. The Court will then address the Fund Defendants broad arguments that relate to all four Counts.

1. Count I-Lack of Jurisdiction

The Fund Defendants' first argument is that because they were not a party to the 2000 agreement, they cannot be liable under the Labor. Management Relations Act ("LMRA") for the unilateral alteration of the agreement. The LMRA states, in pertinent part, that "[s]uits for, violation of...