Carpenters Health and Welfare Fund v. BLDG. TECH
| Decision Date | 01 October 1990 |
| Docket Number | Civ. A. No. 89-8493. |
| Citation | 747 F. Supp. 288 |
| Parties | CARPENTERS HEALTH AND WELFARE FUND OF PHILADELPHIA AND VICINITY, et al. v. BUILDING TECH, INC., et al. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Robert S. Goldstein, Philadelphia, Pa., for plaintiffs.
Marian A. Kornilowicz, Philadelphia, Pa., for defendants.
DECISION AND ORDER
Plaintiffs, Carpenters Health and Welfare Fund of Philadelphia and Vicinity, Carpenters Pension and Annuity Fund of Philadelphia and Vicinity, Carpenters Joint Apprentice Committee, General Building Contractors Association Industry Advancement Program, Metropolitan District Council of Carpenters of Philadelphia and Vicinity, United Brotherhood of Carpenters and Joiners of America, Carpenters Political Action Committee of Philadelphia and Vicinity, Edward Coryell, and John Reith, (hereinafter "the Plaintiff Funds"), filed suit on November 28, 1989 against Building Tech, Inc., (hereinafter "BTI Corporation"), and individually against its owner, Harry Forrest.1 The Plaintiff Funds sought monetary payment of unpaid contributions, with interest and liquidated damages penalties under ERISA; payment of liquidated damages contractually assessed on late contributions paid before suit; and injunctive relief enjoining defendants to permit an audit of their records in order to determine the amount of unpaid contributions and to refrain from future violations of the collective bargaining agreement.
This court has jurisdiction in this matter pursuant to the Employee Retirement Income Security Act (hereinafter "ERISA") § 502(e), 29 U.S.C.A. § 1132(e) (West 1985) and the Labor Management Relations Act § 301(a), 29 U.S.C.A. § 185(a) (West 1978). From the non-jury trial held on September 12, 1990, in Easton, Pennsylvania, we make the following findings of fact.
1. Plaintiff Funds collect medical, health-related, pension annuity, apprenticeship, and industry advancement plan fringe benefits from employers who are parties to collective bargaining agreements with the Metropolitan District Council of Carpenters of Philadelphia and Vicinity. The Plaintiff Funds maintain extensive records and employ a collections manager and an eight-member auditing staff.
2. BTI Corporation is a corporation whose business address is in Swarthmore, Pennsylvania. BTI Corporation employs persons who are covered by the Plaintiff Funds.
3. Defendant Harry Forrest is president of BTI Corporation.
4. On March 24, 1989, Harry Forrest signed and agreed to be legally bound by a master agreement (the 1989 Agreement) negotiated at arms length between the Metropolitan District Council of Carpenters and the General Building Contractors Association and the Concrete Contractors Association. The Agreement contained provisions relating to payment, collection, and delinquency of employer contributions to the Plaintiff Funds.
5. The 1989 Agreement art. 16, sec. 1(a) contains the following provisions:
6. BTI Corporation has a persistent record of untimely payments and reports to the Plaintiff Funds.
7. This suit commenced when plaintiffs filed their complaint on November 28, 1989.
8. As of November 28, 1989, the following contributions were due and owing the Plaintiff Funds: (a) contributions for the weeks of October 1, October 8, October 15, October 22, and October 29, 1989, (b) contributions for the weeks of November 5, and November 12, 1989, and (c) $33.95 remaining on the contributions for June 1989. The Plaintiff Funds had found BTI Corporation's June 1989 contribution to be $254.57 short. In August 1989, BTI Corporation overpaid its contributions by $220.62, leaving $33.95 still outstanding.
9. The Plaintiff Funds received partial payment of the October 1989 contributions on December 19, 1989, and the remaining balance on May 7, 1990. The Plaintiff Funds received the November 1989 contributions on the same day.
10. As of November 28, 1989, BTI Corporation had not paid liquidated damages assessed pursuant to the 1989 Agreement for delinquently paid contributions from May, June, July, and August 1989.
11. The remaining contributions for November 1989, contributions for December 1989, and contributions for January, February, March, May, and June 1990 became delinquent after the Plaintiff Funds began this action, but were paid before trial. The Plaintiff Funds assessed BTI Corporation liquidated damages for these late payments as well as for the late payments of October 1989 and the first two weeks of November 1989.
12. On May 7, 1990, BTI Corporation paid to the Plaintiff Funds $29,494.70, the total amount of the delinquent contributions as of that date.
13. As of trial, the liquidated damages assessed pursuant to the 1989 Agreement, after crediting BTI Corporation the overage paid in August 1989, amounted to $6683.38.
To understand the court's adjudication of this action, it is essential to review the conduct of this lawsuit from its inception through its trial.
On March 24, 1989, Harry Forrest signed a Non-Association Employer's Acceptance of the 1989 Agreement on behalf of BTI Corporation agreeing to be bound by the provisions of the master agreement negotiated between two employer associations and the carpenters and joiners union. (Plaintiffs' Exh. 1 at 54.) The 1989 Agreement provided the procedure for employers to contribute to various Plaintiff Funds for the health and welfare of their employees. The 1989 Agreement obligated an employer to submit weekly remittance reports for covered employees listing the hours they worked and the amount of benefits the employer owed the Plaintiff Funds.2 Without these reports, the Plaintiff Funds cannot determine how much is owed to them. The 1989 Agreement art. 16, sec. 1(a) called for the payment of weekly contributions within ten days after the end of the payroll week:
(a) Commencing on May 1st, 1988, each Employer shall, on or before the tenth day following the end of each payroll week, pay to Mellon Bank ... a sum as specified in clauses (i) or (ii) of this subsection (a) for each hour ... for which wages or any type of compensation payable (under this Agreement) are payable during such payroll week to any employee....
Plaintiffs' Exh. 1 at 19-20 (emphasis added).
In the event of delinquency, the 1989 Agreement art. 16, sec. 1(a) also states that liquidated damages of 10% of the gross amount due would be levied against the breaching employer:
Plaintiffs' Exh. 1 at 20-21 (emphasis added).
From April 1988 through April 1989, BTI Corporation continually paid its contributions to the Plaintiff Funds weeks, and in many cases, months after they became due. BTI Corporation did not regularly submit the remittance reports by which the Plaintiff Funds could verify the amounts BTI Corporation contributed and the benefits to which its employees were entitled.
On November 28, 1989, Plaintiff Funds filed a six count complaint. In Count I, Plaintiff Funds alleged BTI Corporation had not paid contributions for June, July, and August 19893 as it was obligated to do under the 1989 Agreement. The Plaintiff Funds asked for judgment on these amounts "plus any additional amounts which are found to be due and owing during the pendency of this litigation." (Complaint at ¶ 19.) In Count II, the Plaintiff Funds claimed judgment for the unpaid contributions, interest, liquidated damages, and attorney's fees under ERISA. Count III complained of the Plaintiff Funds' inability to calculate the precise amounts due and owing because of BTI Corporation's failure to submit contractually-required remittance reports, and requested an order forcing BTI Corporation to comply with an audit. Counts IV and V asked for judgment respectively under the 1989 Agreement and under ERISA, for the unpaid contributions discovered after the audit. Finally, Count VI requested court ordered compliance with the terms and obligations of the 1989 Agreement.
From January through May 1990, the parties' counsel discussed BTI Corporation's delinquent submission of remittance reports and fund contributions and the terms upon which the matter could be resolved. The Plaintiff Funds insisted upon payment of liquidated damages and attorneys fees in addition to the late contributions while BTI Corporation was only willing to submit its reports and forward the late payments, which it finally did on May 7, 1990.
In an effort to promote settlement, defendant's counsel, Mr. Marian Kornilowicz, requested a conference with ...
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