Serv. Emps. Int'l Union Nat'l Indus. Pension Fund v. Hebrew Homes Health Network, Inc., Case No. 1:17-cv-01215 (TNM)

CourtUnited States District Courts. United States District Court (Columbia)
Writing for the CourtTREVOR N. McFADDEN United States District Judge
Docket NumberCase No. 1:17-cv-01215 (TNM)
Decision Date12 September 2019


Case No. 1:17-cv-01215 (TNM)


September 12, 2019


The Service Employees International Union National Industry Pension Fund (the "Fund") seeks to recover a total of $847,290.62 in required pension contributions that Defendants Hebrew Homes Health Network, Inc., Aventura Plaza, Inc., Jackson Plaza, Inc., Hebrew Homes Sinai, Inc., Arch Plaza, Inc., Hebrew Homes South, Inc., and Hebrew Homes of South Beach, Inc. (collectively, the "Employers") admit that they failed to pay. The Court referred this matter to Magistrate Judge G. Michael Harvey for full case management, and following discovery, the parties filed cross-motions for summary judgment. Upon consideration of the Magistrate Judge's Report and Recommendation (the "Report"), R. & R., ECF No. 50, the Court adopts the Report in full, over the Employers' objections. The Court will deny the Employers' Motion for Summary Judgment and grant in part and deny in part the Fund's Cross-Motion for Summary Judgment.

The Employers objected to the Report. See Objs. to R. & R., ECF No. 52. The Court reviews de novo any part of the Magistrate Judge's disposition a party properly objects to. Fed. R. Civ. P. 72(b)(3). The Employers mainly object to the Magistrate Judge's finding that

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Amendment Three is a contractual limitations period.1 The Employers' reasoning is far from clear. They insist that the Court should consider Amendment Three "to be an adoption of . . . the Florida five-year statute of limitations." Objs. to R. & R. at 19-20. Fine. But in that case, the Employers still lose because, as the Report persuasively explains, the Fund's Complaint was timely under Florida's statute of limitations.

The Employers' real gripe is that, according to them, Amendment Three was an unfair, unilateral "cram down." But nowhere in their Objections do the Employers argue that Amendment Three is therefore unenforceable or that they are not bound by its terms. Nor could they. They did not make that argument to the Magistrate Judge, see R. & R. at 16, and parties may not present new issues or arguments for the first time in their objections to the Magistrate Judge's Report. See Sciacca v. FBI, 23 F. Supp. 3d 17, 27 (D.D.C. 2014); Aikens v. Shalala, 956 F. Supp. 14, 19-20 (D.D.C. 1997) (collecting cases).

In any event, the Employers got what they bargained for. In each Employer's negotiated Collective Bargaining Agreement with the Fund, they agreed to be bound by Amendments adopted by the Trustees, like Amendment Three.2 Indeed, the Employers appear to concede that their obligation to abide by the Trust Amendment is a product of their negotiations with the Fund. See Objs. to R. & R. at 24 ("the Plaza Facilities agreed in their CBAs to accept any changes in the Plan"). More, rather than a unilateral "cram down," Amendment Three was adopted by the Fund's Board of Trustees, see ECF No. 39-1, which is comprised of equal parts

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representatives from SEIU affiliated labor unions and representatives from participating employers, see SOF ¶ 2, ECF No. 36-16. Had they objected to such a process, they should not have entered into the Collective Bargaining Agreements. The Employers have cited no authority that such Amendments passed by the Fund's Trustees are defective. And again, they do not make that argument. Thus, whatever unfairness the Employers perceive, the Court agrees with the Magistrate Judge that Amendment Three is binding on the Employers.

The Employers' other objections are arguments considered and rejected by the Magistrate Judge. The Court has considered the Employers' objections de novo. None has merit for the reasons set forth in the Magistrate Judge's thorough and well-reasoned Report. So the Court will adopt in full the Magistrate Judge's Report as its own opinion and append it below.

For these reasons, the Court will deny the Employers' Motion for Summary Judgment and grant in part and deny in part the Fund's Cross-Motion for Summary Judgment. A separate order will issue.

Dated: September 12, 2019

United States District Judge

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Civil Action No. 1:17-cv-1215 (TNM/GMH)


This matter was referred to the undersigned for full case management. Pending before the Court are the parties' cross-motions for summary judgment. Service Employees International Union National Industry Pension Fund ("the Fund") and its Trustees (collectively "Plaintiffs") filed this action under sections 502 and 515 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1132, 1145, against Hebrew Homes Health Network, Inc. and related corporations ("Defendants"). Plaintiffs seek to recoup from Defendants pension contributions to the Fund which Defendants failed to pay. Specifically, they seek $847,290.62 in delinquent contributions, interest, liquidated damages, fees, and costs, as well as declaratory and injunctive relief. After reviewing the entire record,3 the undersigned recommends denying Defendants' motion and granting in part and denying in part Plaintiffs' motion.

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A. Factual Background

Defendants do not dispute that they underreported and underpaid pension contributions to the Fund between January 2009 and December 2010. Rather, they contend that Plaintiffs' claims to recover those delinquent contributions are untimely. Similarly, Defendants do not dispute the accuracy of Plaintiffs' underpayment and related damages calculations, except to contend that Plaintiffs have applied incorrect employee eligibility criteria for contributions that were due during a three-month period in 2010. The factual background that follows will focus on these disputes.

1. Defendants' Collective Bargaining Agreements with Local 1199

Defendants are a network of six residential nursing and rehabilitation centers located in Miami-Dade County, Florida, and a nonprofit corporation that "provid[es] administration and support" to the centers.5 ECF No. 37-1 at 2-3. The Fund is a multiemployer pension plan under ERISA that provides pension benefits to eligible employees of contributing employers. ECF No. 36-16 at 1-2; see also 29 U.S.C. § 1002(37). The Fund is administered in the District of Columbia

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by a board of trustees made up of equal numbers of labor and management representatives. ECF No. 36-16 at 1-2.

Employees at Defendants' nursing and rehabilitation centers are represented by Service Employees International Union Local 1199 United Healthcare Workers East ("Local 1199"). ECF No. 36-16 at 3. In October 2008, Defendants entered into collective bargaining agreements ("CBAs") with Local 1199 that established the terms and conditions of employment for various covered classifications of employees. ECF No. 36-16 at 3-6; ECF Nos. 36-1 through 36-6. These CBAs were initially effective from the time that Local 1199's members ratified the agreements through September 30, 2010. Id.

Under the terms of the CBAs, Defendants agreed to become and remain participating employers in the Fund "throughout the term of th[e] Agreement[s], including any extensions thereof." ECF Nos. 36-1 through 36-6 at ¶ 26.2. Defendants agreed to make contributions on behalf of each covered employee based on the number of hours each employee worked. Id. at ¶ 26.3. The CBAs also required each employer to submit a remittance report, including information such as the employees' names and dates and hours of employment, along with its contributions each month. ECF No. 36-16 at 6-7; ECF Nos. 36-1 through 36-5, 36-6 at ¶ 26.3(c); ECF No. 36-15 at 6. As noted above, Defendants do not dispute that between January 1, 2009 and December 31, 2010, they underreported and underpaid their contributions to the Fund.

2. The Fund's Trust Agreement and Amendment Three

Central to the parties' dispute is whether Plaintiffs' claims are governed by the statute of limitations period contained in the parties' agreement. The CBAs between Defendants and Local 1199 provide that each employer "agrees to be bound by the provisions of the [Trust Agreement], as it may from time to time be amended, and by all resolutions and rules adopted by the Trustees

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pursuant to the powers delegated to them by that agreement." ECF Nos. 36-1-36-6 at ¶ 26.4. The Trust Agreement, in turn, explains that the Fund's trustees are empowered "to establish such procedures, rules and regulations . . . as shall be necessary to carry out the operation of the Plan and effectuate the purpose thereof." ECF No. 36-7 at 6; ECF No. 36-16 at 7. On November 12, 2013, the Fund's trustees adopted Amendment Three to the Trust Agreement, which provides:

In any action by the Trust to collect delinquent contributions from contributing employers to the Trust, the limitations period for such action shall be governed by the law of the state in which all or the majority of the employees on whose behalf the contributing employer makes contributions work, unless such limitations period is less than three years, in which case the limitation period under the law of the District of Columbia shall govern.

ECF No. 39-1 at 17. The District of Columbia has a three-year limitations period for contract claims. D.C. Code § 12-301(7). The employees covered by the CBAs all worked at facilities in the State of Florida (ECF No. 36-16 at 2-3; ECF No. 37-1 at 2-3), which has a five-year statute of limitations applicable to contract claims, Fla. Stat. § 95.11(2)(b).

3. Plaintiffs' Discovery of Defendants' Delinquencies

Plaintiffs filed suit on June 21, 2017, seeking to recoup from Defendants delinquent pension contributions from January 1, 2009, to December 31, 2010, associated...

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