Serv. Emps. Int'l Union Nat'l Indus. Pension Fund v. Forest Hill Health Care Ctr., Inc.

• Decision Date: 16 March 2016
• Docket Number: Case No. 14-cv-01531 (CRC)
• Parties: Service Employees International Union National Industry Pension Fund, et al., Plaintiff, v. Forest Hill Health Care Center, Inc., Defendant.
• Court: U.S. District Court — District of Columbia

170 F.Supp.3d 16

Service Employees International Union National Industry Pension Fund, et al., Plaintiff,
v.
Forest Hill Health Care Center, Inc., Defendant.

Case No. 14-cv-01531 (CRC)

United States District Court, District of Columbia.

Signed March 16, 2016

170 F.Supp.3d 17

Lauren Powell McDermott, Diana M. Bardes, Mooney, Green, Saindon, Murphy & Welch, P.C., Washington, DC, for Plaintiffs.

Aaron S. Book, James J. Holt, Webster Book LLP, Alexandria, VA, Cynthia E. Ringel, David F. Jasinski, Jasinski, P.C., Newark, NJ, for Defendant.

MEMORANDUM OPINION AND ORDER

CHRISTOPHER R. COOPER, United States District Judge

Under the Pension Protection Act of 2006, a multiemployer pension benefit fund that falls into “critical” financial status may require participating employers to make supplemental contributions to the fund. See Pub. L. No. 109-280, 120 Stat. 780, 868, 872. Plaintiff, the Service Employees International Union's (“SEIU”) National Industry Pension Fund, found itself in such a state in 2009 and asked its participating employers to increase their contributions accordingly. After one employer—Forest Hill Health Care Center in Newark, New Jersey—failed to make its supplemental contributions, the Fund filed suit under ERISA and now moves for summary judgment.

170 F.Supp.3d 18

As there is no dispute that the Fund was authorized to impose the compulsory contributions or that Forest Hill has not made all of them, the Court will grant the Fund's motion with respect to liability. There is genuine disagreement, however, over the amount Forest Hill still owes. The Fund claims that the amount should be calculated based on a certain contribution schedule, whereas Forest Hill insists another, less-costly schedule should apply. The resulting difference appears to be only about $26,000, plus interest and liquidated damages—a modest enough starting point, one would think, for a mutually agreeable negotiated resolution. But be that as it may, Forest Hill has raised a genuine factual question as to whether it opted for its desired schedule. The Court will therefore deny the Fund's summary judgment motion as to damages.

I. Background

The former collective bargaining agreement (“CBA”) between SEIU and Forest Hill obligated Forest Hill to make monthly contributions to the Plaintiff SEIU Pension Fund based on percentages of each employee's gross earnings. In November 2009, the Fund notified its participating employers that “investment losses in 2008 triggered the Fund entering what [the Pension Protection Act of 2006 (“PPA”) ] calls ‘critical status' (generally referred to as the ‘Red Zone’).” Pls.' Mot. Summ. J. Ex. 7, at 1. The notice also informed employers that pursuant to the PPA, the Fund was adopting a Rehabilitation Plan in order to recoup those losses. That Plan required “additional employer contributions ... in order for the [Fund] to exit the Red Zone ... by the end of 2023.” Id. The parties do not dispute the Fund's authority, under the CBA and the PPA, to impose such a Plan or to require additional monthly employer contributions above the standard contributions the CBA required. See Pls.' Mot. Summ. J. 6–9; Def.'s Opp'n Mot. Summ. J. 4–7.

The Plan required those additional contributions to take two forms—a 10% surcharge on the employer's standard monthly contributions, Pls.' Mot. Summ. J. Ex. 8 (“Anderson Decl.”) ¶ 21, and supplemental monthly contributions according to one of two schedules—a Preferred Schedule or a Default Schedule, Pls.' Mot. Summ. J. Ex. 7, at 1. Under each schedule, the supplemental contributions would be calculated as a percentage increase on the standard contributions, and would themselves increase each year for the first several years and then level off. The Preferred Schedule required lower payments for the first several years than did the Default Schedule. See id. App. A, at 4–5. The notice gave employers the option to renegotiate in their next CBAs with SEIU either the Preferred or the Default Schedule and indicated that the Default Schedule would be imposed if the employer did not make a selection (to be reflected in the new agreement) within “180 days of the termination of the last [collective bargaining] agreement,” or, if the “collective bargaining agreement ha[d] expired prior to the date of this notice, but not yet renewed, ... 180 days ... from the date of this notice.” Id. App. B, at 1. The parties agree that there was an unexpired collective bargaining agreement in place at the time the notice was issued, and therefore that the employer's selection deadline was 180 days from the termination of that agreement.

The parties also agree that, following the notice, Forest Hill paid into the Fund its standard monthly contributions and the 10% surcharge required under the Rehabilitation Plan, totaling about $123,000. See Pls.' Reply Ex. 1 (“Suppl. Anderson Decl.”) ¶ 9; Def.'s Opp'n 1. The Fund contends that Forest Hill failed, however, to pay supplemental contributions under either

170 F.Supp.3d 19

the Preferred or Default Schedules once the prior CBA had expired.¹ And Forest Hill can point to no evidence in the record that it did.

The dispute, then, boils down to whether the supplemental contributions that Forest Hill still owes to the Fund should be calculated based on the Preferred or the costlier Default Schedule. According to the Fund, Forest Hill, for the relevant period, would owe $27,456.32 in unpaid supplemental contributions under the Preferred Schedule and $53,790.44 under the Default Schedule² —for a difference of approximately $26,000. See Anderson Decl. ¶ 26; id. Ex. A; Suppl. Anderson Decl. ¶ 8. Forest Hill does not appear to dispute these calculations. See Def.'s Opp'n Mot. Summ. J...