Iron Workers Dist. Council of S. Ohio v. Larry N. Carlin, Inc.
| Decision Date | 17 October 2017 |
| Docket Number | Case No. 3:17-cv-00165 |
| Parties | IRON WORKERS DISTRICT COUNCIL OF SOUTHERN OHIO & VICINITY ANNUITY TRUST, et al., Plaintiffs, v. LARRY N. CARLIN, INC., et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
Plaintiffs are three Trusts that are self-described (in the Complaint) as "employee benefit plans." (Doc. #1, PageID #1). They assert that the terms of three Trust Agreements impose a duty upon Defendants Larry N. Carlin, Inc. (LNC) and Carlin Construction, Inc. to allow an audit of Carlin Construction's payroll records. Each Defendant is an ERISA2-defined "employer," according to the Complaint. Id. at 4. Plaintiffs claim that Defendants' refusal to allow the audit violated the terms of the three Trust Agreements and ERISA, 29 U.S.C. § 1132(a)(3). Plaintiffs seek, in part, an Orderrequiring LNC to provide access to all the records it asked to examine in their audit requests.
The case is presently before the Court upon Defendants' Motion to Dismiss Plaintiffs' Complaint and/or Motion to Transfer Venue under 28 U.S.C. § 1404 (Doc. #8), Plaintiffs' Memorandum in Opposition (Doc. #13), Defendants' Reply (Doc. # 15), Plaintiff's Surreply (Doc. # 17), and the record as a whole.
The Complaint identifies three Trust Agreements created by written agreements and trust declarations between various employers and "Participating Unions" affiliated with the International Association of Bridge, Structural and Ornamental Iron Workers, AFL-CIO. The Trusts are maintained and funded under the terms of one or more collective bargaining agreements (CBAs), including a CBA allegedly signed in March 1995 by LNC's President, Larry N. Carlin. The other party to this CBA, the Participating Union, is Iron Workers Local No. 147, Fort Wayne, Indiana. (Doc. #1, ¶s 15-16). Plaintiffs explain that they have attached a true and accurate copy of this CBA as Exhibit 4 to their Complaint.3 Id. at ¶16. More on this CBA later.
The three Plaintiff Trusts are described as the following three employee benefit plans: (1) Iron Workers District Council of Southern Ohio & Vicinity Benefit Trustcreated to provided life insurance, accident and sickness benefits, hospitalization coverage, and medical/dental benefits for participating employees and their families (the Benefit Trust); (2) Iron Workers District Council of Southern Ohio & Vicinity Pension Trust created to provide pension, retirement, and death benefits for participating employees and their beneficiaries (the Pension Trust); and (3) Iron Workers District Council of Southern Ohio & Vicinity Annuity Trust created to provide annuity benefits for participating employees and their beneficiaries (the Annuity Trust).
The Complaint asserts that both Defendants LNC and Carlin Construction are "employers" under ERISA's definition, 29 U.S.C. §§ 1002(5), 1145, with their principal places of business in Indiana. Plaintiffs theorize that Carlin Construction is "an alter ego and/or joint employer with LNC and thereby is bound by the same agreements and has the same statutory obligations as LNC." (Doc. #1, PageID #4, ¶10; see also ¶s 44-53).
Returning to the CBA mentioned above, Plaintiffs state that its Article 41 contains an "evergreen clause" that remains in effect today. Article 41 provides, in Plaintiffs' view, that in the event the CBA expires without notice of termination by a party, it renews itself in one year increments, including any amendments.
Plaintiffs allege that this Local Union CBA requires both Defendants LNC and its alter ego Carlin Construction to submit contributions to them—the Iron Workers District Council of Southern Ohio & Vicinity Benefits, Pension, and Annuity Trusts. Plaintiffs assert, "LNC further evidenced its commitment to contribute to the Funds and to be bound to the Local Union CBA by signing and returning the Iron Workers Local No. 147 Wage & Fringe Package notice on February 17, 2015...." Id. at ¶20.
Apparently concerned that Defendants have unpaid contributions, Plaintiffs "hired an independent auditing firm to audit LNC's payroll records to ensure that LNC was complying with its contribution obligations...." Id. at ¶28. Plaintiffs took this action under the following audit-related language, which is present in the Benefit, Pension, and Annuity Trust Agreements:
The Board of Trustees, or any authorized agent or representative of the Trustees, shall have the right at all reasonable times during business hours, to enter the premises of any Employer obligated to contribution to the Fund and to examine and copy such of the books, records, papers and reports of said Employer as may be necessary to determine the hours of work done and places where done by any Employees and to permit the Trustees to determine whether said Employer is making full payments to the Trustees of the amount required by the Collective Bargaining Agreement....
Plaintiffs asked the auditor "to seek the payroll documents for both LNC and Carlin Construction to confirm that all hours that were performed on behalf of LNC were properly reported and contributed upon as required." Id. at ¶29. Plaintiffs allege that LNC verbally agreed to give the auditor all the LNC payroll documents "but refused to provide any Carlin Con[struction] documents for the audit." Id. at ¶30.
Plaintiffs Complaint contains two Counts. Count I asserts, "LNC is bound to the Local Union CBA and the Trust Agreements." Id. at ¶34. It further asserts that LNC refuses to provide Plaintiff with the requested Carlin-Construction payroll documents. Id. at 35. Plaintiffs seek in Count I to enforce the terms of the Trust Agreements pursuant to ERISA, 29 U.S.C. § 1132(a)(3), "through the issuance of a declaratory order requiring LNC to comply with the Trusts' demands for a payroll audit." (Doc. #1, ¶40). Plaintiffsalso seek, among other things, an order requiring LNC to pay any unpaid contributions plus interest, etc. Id. at ¶41.
Count II of the Complaint maintains that Carlin Construction is jointly and severally liable for any unlawful action by LNC, including any violations of ERISA.
Defendants contend that this Court lacks personal jurisdiction over LNC or Carlin Construction. They argue that the Court lacks general jurisdiction over them because they do not have continuous and systematic contact with Ohio. They argue that specific jurisdiction is lacking here because they did not purposefully avail themselves of the privilege of conducting activities in Ohio. Defendants point out that they do not have an office, agent, or property in Ohio, and they have not reached into Ohio to conduct or solicit business. Defendants, however, aim their jurisdictional arguments in the wrong direction.
ERISA speaks to jurisdiction expansively:
Where an action under this subchapter is brought in a district court of the United States, it may be brought in the district court where the plan is administered, where the breach took place, or where a defendant resides or may be found, and process may be served in any other district where a defendant resides or may be found.
29 U.S.C. § 1132(e)(2). This statute confers nationwide personal jurisdiction in ERISA cases. Medical Mut. of Ohio v. deSoto, 245 F.3d 561, 566 (6th Cir. 2001). Consequently, the required personal-jurisdiction analysis does ask whether the defendant had sufficient minimal contacts with the forum state "to comport with the traditional notions of fair play and substantial justice." Id. at 566-67. The analysisinstead asks whether a defendant has sufficient minimal contacts with the United States. Id. Because Defendants base their personal-jurisdiction arguments on their lack of minimum contacts with Ohio, rather than the United States, they have not demonstrated that this Court lacks personal jurisdiction over them. See id. Additionally, Defendants acknowledge that they are Indiana corporations, and as in deSoto, they "do not dispute that they reside within the United States and thus have meaningful ties with the forum rendering judgment." Id. at 567.
Accordingly, the Court has personal jurisdiction over Defendants in this case.
Defendants maintain that Plaintiffs' Complaint fails to state a plausible claim against them and should therefore be dismissed under Fed. R. Civ. P. 12(b)(6). Before reaching the merits of Defendants' Rule 12(b)(6) contentions, there is a preliminary wrinkle to iron out.
Plaintiffs argue that Defendants' 12(b)(6) Motion is untimely, and should therefore be dismissed, because Defendants filed it after they filed their Answer. Plaintiffs correctly recognize that a motion to dismiss for failure to state a claim upon which relief can be granted must be filed before a defendant files an answer. See Fed. R. Civ. P. 12(b); see McGlone v. Bell, 681 F.3d 718, 728 n.2 (6th Cir. 2012); see also Lohner v. Lake Cnty., Tenn., No. 1:16cv02708, 2017 WL 3160569, at *2 (W.D. Tenn. 2017). This, however, is not fatal to Defendants' Motion.
A defendant may assert the failure to state a claim upon which relief can be granted in a motion for judgment on the pleadings under Rule 12(c). See Fed. R. Civ.P. 12(h)(2)(B); see also General Truck Drivers, Warehousemen, Helpers Sales & Service, Casino Employees, Teamsters Local Union No. 957 v. Heidelberg Distributing Co., No. 3:11cv00420, 2013 WL 831877, at *9 (S.D. Ohio 2013) (Rice, D.J.). The Court may therefore consider Defendants' 12(b)(6) Motion as a Motion for Judgment on the Pleadings under Rule 12(c) and proceed to the merits without further hiccup. See, e.g., Heidelberg Distributing Co., No. 3:11cv00420, 2013 WL 831877, at *9. Or so it seems. Plaintiffs insist that proceeding under Rule 12(c) would be incorrect in the present case because Rule 12(c...
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