Iron Workers' Local No. 25 Pen. v. Mcguire Steel, 03-71056.

• Citation: 352 F.Supp.2d 794
• Decision Date: 09 June 2004
• Docket Number: No. 03-71056.,03-71056.
• Parties: IRON WORKERS' LOCAL NO. 25 PENSION FUND; Iron Workers' Local Union No. 25 Individual Account Retirement Fund; Iron Workers' Health Fund of Eastern Michigan; Iron Workers Local No. 25 Vacation Pay Fund; and Iron Workers' Apprentice Fund of Eastern Michigan, Trust Funds Established and Administered Pursuant to Federal Law, Plaintiffs, v. McGUIRE STEEL ERECTION, INC. a Michigan Corporation, Dan McGuire, and Daniel McGuire, Individually, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

352 F.Supp.2d 794

IRON WORKERS' LOCAL NO. 25 PENSION FUND; Iron Workers' Local Union No. 25 Individual Account Retirement Fund; Iron Workers' Health Fund of Eastern Michigan; Iron Workers Local No. 25 Vacation Pay Fund; and Iron Workers' Apprentice Fund of Eastern Michigan, Trust Funds Established and Administered Pursuant to Federal Law, Plaintiffs, v. McGUIRE STEEL ERECTION, INC. a Michigan Corporation, Dan McGuire, and Daniel McGuire, Individually, Defendants.

No. 03-71056.

United States District Court, E.D. Michigan, Southern Division.

June 9, 2004.

COPYRIGHT MATERIAL OMITTED

Michael J. Asher, David J. Selwocki, Sullivan, Ward, Southfield, MI, for Plaintiffs and Defendants.

David A. Monroe, Howell, MI, for Defendants.

OPINION AND ORDER

ZATKOFF, Chief Judge.

I. INTRODUCTION

This matter is before the Court on Plaintiffs' Motion for Summary Judgment and to Amend Complaint. Plaintiffs' motion has been fully briefed. In addition, Defendants request summary judgment in their response to Plaintiffs' motion. The Court finds that the facts and legal arguments are adequately presented in the parties' papers and the decisional process would not be significantly aided by oral argument. Therefore, pursuant to E.D. MICH. L.R. 7.1(e)(2), it is hereby ORDERED that the motions be resolved on the briefs submitted. For the reasons set forth below, Plaintiffs' Motion for Summary Judgment and to Amend Complaint is GRANTED in part. Defendants' request for summary judgment is DENIED.

II. BACKGROUND

Plaintiffs in this action are a group of multi-employer fringe benefit trust funds, (hereinafter "Plaintiff Funds"), established by collective bargaining agreements entered into between Local Union No. 25, International Association of Bridge, Structural and Ornamental Iron Workers, AFL-CIO, (hereinafter "Union"), and various employers and employer associations whose members employ members of the Union. Plaintiffs filed this action pursuant to § 515 of the Employee Retirement Income Security Act of 1974, (hereinafter "ERISA"), 29 U.S.C. § 1145, against McGuire Steel Erection Inc., (hereinafter "Defendant McGuire Steel"), and its president, Dan McGuire, (hereinafter "Defendant McGuire").¹ Plaintiffs seek the recovery of unpaid fringe benefit contributions and other equitable relief.

A. Facts

On January 11, 1994, Defendant McGuire Steel entered into a collective bargaining agreement, (hereinafter "CBA"), with the Union. Defendant McGuire signed the CBA in his capacity as president of Defendant McGuire Steel. The terms of the CBA require Defendant McGuire Steel to contribute specific sums of money to several employee pension and welfare benefit funds. These employer contributions also include a percentage of employee wages withheld by Defendant McGuire Steel to be contributed to an employee vacation fund. All of these contributions, according to the CBA, must be paid by Defendant McGuire Steel no later than the 26th day of each month. It is undisputed that Defendant McGuire, as president of Defendant McGuire Steel, is responsible for the daily operations of Defendant McGuire Steel, including determining whether to pay benefit contributions to Plaintiff Funds.

Plaintiffs allege that an audit of Defendant McGuire Steel's records, conducted on January 28, 2004, indicates that Defendant McGuire Steel owes $86,849.71 in unpaid benefit contributions for the time period extending from December 2002 to September 2003. Plaintiffs further allege that Defendants owe $5,034.68 in liquidated damages, $5,994.62 in audit fees, $3,213.27 in liquidated damages from prior late payments, and attorney fees in the amount of $15,092.50 for a total amount of $116,184.78 due and owing. Plaintiffs concede, however, that a recent payment of $25,202.00 reduces the $116,184.78 total amount owed to $90,982.78.

To collect the amounts owed, Plaintiffs have filed lien and bond claims against Defendant McGuire Steel's construction projects. According to Defendants, Plaintiffs filed these claims after Defendant McGuire Steel failed to make a benefit contribution on April 26, 2003. Defendants argue, however, that because April 26, 2003, fell on a Saturday, Defendant McGuire Steel's payment on the following Monday, April 28, 2003, was timely; thus, Plaintiffs' lien claims were filed prematurely, according to Defendants. Furthermore, according to Defendants, Plaintiffs' liens have impeded Defendant McGuire Steel's ability to pay the fringe benefit contributions required by the CBA.

B. Procedural History

Plaintiffs filed their Complaint on March 17, 2003. With their Complaint, Plaintiffs assert that under ERISA they are entitled to an entry of judgment in the amount of all unpaid fringe benefit contributions, liquidated damages, accumulated interest, actual attorney fees, and costs. Plaintiffs also assert that Defendant McGuire is personally liable for breach of fiduciary duty. See Compl. at ¶ 22. Before Defendants answered the Complaint, however, the parties entered into a Payment Agreement allowing Defendant McGuire Steel to pay the delinquent contributions over twelve monthly installments of $23,543.73.² The Payment Agreement requires these monthly installments to be made in addition to the existing monthly benefit contributions required by the CBA.

The Payment Agreement includes two additional provisions relevant to the instant dispute. First, the Payment Agreement contains a provision binding Defendant Dan McGuire to the agreement:

PERSONAL LIABILITY

As further consideration for this Payment Agreement, Dan McGuire, personally guarantees this debt and assumes personal liability for its repayment.

Plaintiffs' Ex. C at ¶ 5. Second, the Payment Agreement contains a provision allowing Plaintiffs to continue to collect delinquent contributions under federal or state law:

AGREEMENT NOT A WAIVER OF RIGHTS

This Payment Agreement does not constitute a waiver or limitation of the Trustees' rights and/or fiduciary responsibilities to collect delinquent fringe benefit contributions pursuant to state or federal law.

Plaintiffs' Ex. C, at ¶ 4.

The parties entered into the Payment Agreement on April 4, 2003. Shortly thereafter, on May 29, 2003, Plaintiffs moved for conditional dismissal of the Complaint, allowing the matter to be reopened in the event Defendants defaulted under the terms of the Payment Agreement. The Court granted Plaintiffs' motion on May 30, 2003, and dismissed the case without prejudice. Only a few days later, however, on June 6, 2003, Plaintiffs filed a Motion to Reinstate the Complaint alleging that Defendant McGuire Steel failed to comply with the terms of the Payment Agreement, including failing to make the required payments. The Court granted Plaintiffs' Motion to Reinstate the Complaint on June 25, 2003. Plaintiffs allege that $31,529.72, including interest, remains outstanding under the Payment Agreement.

On August 6, 2003, Plaintiffs obtained a Clerk's Entry of Default as a result of Defendants' failure to answer the reinstated Complaint. On September 3, 2003, Plaintiffs filed a motion for default judgment. Defendants responded to the motion. On October 17, 2003, the Court set aside the Clerk's Entry of Default and denied Plaintiffs' motion for default judgment. On October 28, 2003, Defendants filed an Answer. Defendants also filed a Counter-Complaint on the same day, alleging that Plaintiffs' liens were filed improperly under the Michigan Construction Lien Act, (hereinafter "MCLA"), Mich. Comp. Laws § 570.1101-.1305.³

On February 19, 2004, Plaintiffs filed the instant motion requesting summary judgment on their claims for unpaid benefits and leave to amend the Complaint to add as a defendant McGuire Steel Erectors, Ltd., which is another company owned by Defendant McGuire. Plaintiffs allege that McGuire Steel Erectors, Ltd., should be added based upon statements Defendant McGuire made during a deposition, which Plaintiffs allege demonstrate Defendant McGuire's intention to bind McGuire Steel Erectors, Ltd., to the CBA.

Defendants responded to the motion on March 24, 2004. Their response is also styled as a "Cross-Motion for Summary Judgment." Defendants claim that summary judgment in favor of Plaintiffs is not warranted because (1) the amount of unpaid contributions alleged by Plaintiffs is incorrect, and (2) Defendants are no longer under any obligation to pay benefit contributions because Plaintiffs filed liens preventing Defendant McGuire Steel from receiving payment from its customers. Defendants further contest the addition of McGuire Steel Erectors, Ltd., as a party-defendant, arguing that Defendant McGuire clearly signed the CBA on behalf of Defendant McGuire Steel only. Defendants offer the same arguments in support of their request for summary judgment. Defendants, however, fail to set forth any legal authority to support any of their contentions.

III. LEGAL STANDARD

A. Summary Judgment Standard

Summary judgment is appropriate only if the answers to interrogatories, depositions, admissions, and pleadings combined with the affidavits in support show that no genuine issue as to any material fact remains and the moving party is entitled to a judgment as a matter of law. See FED. R. CIV. P. 56(c). A genuine issue of material fact exists when there is "sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (citations omitted). In application of this summary judgment standard, the Court must view all materials supplied, including all pleadings, in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "If the evidence is merely colorable or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted).

The...