Trs. of Nat'l Elevator Indus. Pension Fund v. Maple Mgmt. LLC
| Decision Date | 15 December 2020 |
| Docket Number | CIVIL ACTION No. 19-4305 |
| Parties | TRUSTEES OF THE NATIONAL ELEVATOR INDUSTRY PENSION FUND, et al., v. MAPLE MANAGEMENT LLC d/b/a RAE LIFTS, et al. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Plaintiffs, four multiemployer employee benefit funds and one labor-management fund (collectively, the Plaintiff Funds), bring this action against Defendants Maple Management LLC d/b/a Rae Lifts and James Mecha pursuant to the employee Retirement Income Security Act (ERISA). The Plaintiff Funds allege six counts which seek damages for the amounts owed under certain collective bargaining agreements with the International Union of Elevator Constructors (IUEC), a permanent injunction to prevent Defendants from failing to pay those amounts owed in the future, and breach of fiduciary duty against Mecha. The Plaintiff Funds move for summary judgment on each count. Defendants oppose summary judgment and argue the amounts owed must be offset because upon joining the IUEC, Defendants signed a "written waiver" which did not require them to make certain payments to one of the Plaintiff Funds. Defendants also move for partial summary judgment on the claim for a permanent injunction. Because there is no genuine dispute of material fact as to the amounts owed to the Plaintiff Funds, and because the "written waiver" is not enforceable against the Plaintiff Funds, the Court will grant the Plaintiff Funds' motion for summary judgment on their claims for unpaid contributions and breach of fiduciary duty against Mecha. The Court will, however, deny the Plaintiff Funds' motion and grant Defendants' motion on the claim for a permanent injunction because the Plaintiff Funds have failed to show irreparable harm or the absence of an adequate remedy at law.
The Plaintiff Funds include four benefit funds and one labor-management fund: the Trustees of the National Elevator Industry Pension Fund, National Elevator Industry Health Benefit Plan, National Elevator Industry Educational Plan, and Elevator Constructors Annuity and 401(k) Retirement Plan (collectively, the Benefit Funds), and the Elevator Industry Work Preservation Fund (the Labor-Management Fund). The Benefit Funds are organized as multiemployer employee benefit plans under ERISA. The Labor-Management Fund is labor-management cooperation committee as provided for in the Taft-Hartley Act and the Labor-Management Cooperation Act of 1978. See 29 U.S.C. § 186(c)(9); 29 U.S.C. § 175a. The Plaintiff Funds are all governed by their Restated Agreements and Statements of Trust. They are all financed by contributions paid by employers in the elevator industry pursuant to a collective bargaining agreement with the IUEC.
Defendant Rae Lifts is an Illinois limited liability company transacting business as a contractor or subcontractor in the elevator industry. Defendant James Mecha is the owner and president of Rae Lifts. On May 4, 2017, Mecha, on behalf of Rae Lifts, executed a "Short Form Agreement" with the IUEC. The Short Form Agreement bound Rae Lifts to the collective bargaining agreement with the IUEC. Pursuant to the Short Form Agreement Rae Lifts also agreed to be bound to the Plaintiff Funds' Restated Agreements and Statements of Trust (collectively, the governing documents).2
The collective bargaining agreement requires employers to make contributions to the Plaintiff Funds for each hour of work an employee performs. The amount of these contributions is determined when employers send the Plaintiff Funds monthly contribution reports detailing the number of hours worked by each individual employee. The number of hours is multiplied by the contribution rate to determine the monthly contribution owed. The monthly contributions are due on the 15th day of the month following the reporting month. Rae Lifts, as an employer, was thus required to submit monthly contribution reports and pay the owed contributions.
When an employer-company's owner or officer performs work covered by the collective bargaining agreement, the employer must pay contributions for a minimum of 165 hours per month to the Health Benefit Plan and a minimum of 160 hours to the remaining Benefit Funds and Labor-Management Fund. Therefore, because Mecha is the owner and president of Rae Lifts, Rae Lifts is required to report a minimum of 165 hours per month to the Health Benefit Plan and 160 hours per month to each of the other Plaintiff Funds.
Defendants stipulated the governing documents require an employer to make contributions for a minimum of 165 hours to the Health Benefit Plan on behalf of an officer, Mecha is an officer of Rae Lifts, and Mecha performed work covered by the collective bargaining agreement. See Stip. ¶ 4-5. However, Defendants dispute whether the 165-hour requirement applies to them. According to Defendants, the 165-hour requirement was waived when Mecha signed the Short Form Agreement on behalf of Rae Lifts, with the IUEC. Defendants contend the 165-hour requirement was waived in a written agreement (the written waiver) in which Mecha and the IUEC representative allegedly executed contemporaneously with the Short Form Agreement.
The written waiver is a document titled "2017 Minimum Benefit Contributions for Company Owner participating in the NEI Benefit Plans." See Defs.' Ex. 6-B. The document explains the 165-hour requirement to the Health Benefit Plan for owners who perform work covered by the collective bargaining agreement. See id. It also has a chart which "shows the Hourly Benefit Contribution Rate for the . . . limited liability company owner's Health Benefit Plan." Id. Mecha crossed out this chart and above it, wrote "Waved [sic] per Joe Dupont." Id. The statement is initialed by a Rae Lifts employee, Ken Nogar, who contends he witnessed the execution of the Short Form Agreement and written waiver. See Defs.' Ex. 7, ¶ 2.
Below the Health Benefit Contribution Rate chart is a paragraph explaining the 160-hour requirement for the remaining Plaintiff Funds for owners who perform work covered by the collective bargaining agreement. A second chart shows the Hourly Benefit Contribution Rate for an owner to make contributions to the other Plaintiff Funds. The second chart is unaltered.
At the bottom of the document, there are three additional charts. The first provides "The Minimum Monthly contribution to the NEI Health Benefit Plan" and multiplies the contribution rate by the 165-hour requirement to arrive at a monthly contribution of $2,520.375. Mecha crossed out this chart. The second chart provides "The Minimum Contributions to all Other NEI Benefit Plans" and multiplies the contribution rate by the 160-hour requirement to arrive at a monthly contribution of $2,657.600. Mecha circled this table and wrote next to it "Monthly." The final chart provides "The Total Minimum Monthly . . . limited liability company owner contribution to all NEI Benefit Plans." The first row in the chart states the monthly contribution to the Health Benefit Plan, the second row states the monthly contribution to the other Plaintiff Funds, and the final row states the total monthly contribution as $5,177.975. Next to the second row, Mecha wrote, "OK."
According to Mecha, while discussing Rae Lifts joining the IUEC, he informed the IUEC representatives that a company of his size could not pay the contributions required. Mecha contends Joe DuPont, an IUEC representative, told him "the hours were ok'd." Defs.' Ex. 6-B, ¶ 3; see also Ex. 6-A (message from DuPont). At the May 4, 2017, meeting to sign the Short Form Agreement, an IUEC representative handed Mecha the 2017 Minimum Benefit Contributions document. After reading this document, Mecha contends he clarified that "a significant part" of the minimum contributions were waived and crossed out those parts he believed were waived. The IUEC representative "confirmed" this understanding. See id. ¶ 4. Although Mecha does not state this was a verbal confirmation, there is no evidence the IUEC representative provided a written confirmation of that understanding.
After executing the Short Form Agreement, Rae Lifts was required to, and did, begin submitting its contribution reports and paying contributions in April 2018. Its obligation to pay monthly contributions pursuant to the Short Form Agreement continues to date.
Pursuant to the governing documents, the Plaintiff Funds were permitted to conduct a payroll audit of any employer to ensure the employer made proper contributions. Although the Plaintiff Funds attempted to conduct a payroll audit of Rae Lifts, Defendants refused to cooperate with the proposed audit. As a result, the Plaintiff Funds initiated this case to compel the payroll audit and collect any unpaid contributions revealed therefrom. See Compl., Sept. 18, 2019, ECF No. 1. The Plaintiff Funds also asserted a claim for breach of fiduciary duty against Mecha.
After initiating this case, the Plaintiff Funds filed another complaint against Defendants seeking unpaid contributions and injunctive relief to prevent Rae Lifts from failing to make contributions in the future. Defendants moved to consolidate the two cases, and the Court granted the motion. The Plaintiff Funds subsequently filed an Amended Complaint alleging six counts: (I) to compel a payroll audit and unpaid contributions discovered by the payroll audit; (II) unpaid contributions owed to the Benefit Funds from November 2019 through the present; (III) unpaid contributions owed to the Health Benefit Plan from deductions of employees' wages from November 2019 through the present; (IV) unpaid contributions owed to the Labor-Management Fund from November 2019 through the present; (V) request for a permanent injunction; and (VI) breach of fiduciary duty against Mecha. See Am. Compl., Jan. 28, 2020, ECF No. 14.
During the course of discovery, the Plaintiff Funds completed a payroll audit on June 4, 2020, using a third-party accountant, Daniel...
To continue reading
Request your trial