Wilson v. Chagrin Valley Steel Erectors, Inc.

• Decision Date: 27 March 2018
• Docket Number: Case No. 2:16-cv-1084
• Parties: CAROL A. WILSON, et al., Plaintiffs, v. CHAGRIN VALLEY STEEL ERECTORS, INC., Defendant/Third-Party Plaintiff, v. JUSTIN M. HELMICK, Third-Party Defendant.
• Court: U.S. District Court — Southern District of Ohio

CAROL A. WILSON, et al., Plaintiffs, v. CHAGRIN VALLEY STEEL ERECTORS, INC., Defendant/Third-Party Plaintiff, v. JUSTIN M. HELMICK, Third-Party Defendant.

Case No. 2:16-cv-1084

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

March 27, 2018

CHIEF JUDGE EDMUND A. SARGUS, JR.

Magistrate Judge Kimberly A. Jolson

OPINION AND ORDER

This matter is before the Court on Plaintiffs' Partial Motion to Dismiss Counts One and Two of Chagrin Valley's Second Amended Counterclaim and Second Amended Third-Party Complaint (Mot. to Dismiss, ECF No. 30), Defendant/Third-Party Plaintiff Chagrin Valley Steel Erectors, Inc.'s Memorandum in Opposition (Mem. Op., ECF No. 32), and Plaintiffs' Reply (Pl. Reply., ECF No. 33). Also before the Court is Plaintiffs' Motion for Summary Judgment (Pl. Mot. S.J., ECF No. 35), Defendant's Memorandum in Opposition (Mem. Op., ECF No. 58), and Plaintiffs' Reply (Pl. Reply, ECF No. 66). Additionally, Defendant has filed a Motion for Leave to File First Amended Answer to Assert Affirmative Defense, Instanter (Mot. to Amend Answer, ECF No. 42), and in turn, Plaintiff filed a Response in Opposition (Pl. Mem. Op., ECF No. 52), to which Defendant has filed a Reply (Def. Reply, ECF No. 63). Finally, Defendant/Third-Party Plaintiff Chagrin Valley has filed a Motion for Summary Judgment (Def. Mot. S.J., ECF No. 59), to which Plaintiffs have filed an Opposition (Pl. Opp., ECF No. 67) and Defendant/Third-Party Plaintiff has filed a Reply (Def. Reply, ECF No. 68). These motions are ripe for consideration.

I. BACKGROUND

Carol A. Wilson, Administrator, and the Trustees of the Ohio Operating Engineers Pension Fund, the Trustees of the Ohio Operating Engineers Health and Welfare Fund, the Trustees of the Ohio Operating Engineers Apprenticeship and Training Fund, and the Trustees of the Ohio Operating Engineers Education and Safety Fund ("Plaintiffs" or "Funds") commenced this action to collect allegedly delinquent contributions owed by Defendant Chagrin Valley Steel Erectors, Inc., under the collective bargaining agreements for the Funds, pursuant to Section 515 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. §1145. (Compl., ECF No. 1.) The Funds and their affiliated trusts are "employee benefit plans" under ERISA. See 29 U.S.C. §§1002(3), 1132, and Carol A. Wilson and the Trustees manage the Funds as fiduciaries. See 29 U.S.C. §1104. (Compl., ECF No. 1.)

Chagrin Valley Steel Erectors, Inc. ("Defendant" or "Chagrin Valley") is a signatory employer to collective bargaining agreements between the Construction Employers Association and the International Union of Operating Engineers, Locals Nos. 18, 18A and 18B (the "Union"). (Compl., ECF No. 1, at p. 2.) Chagrin Valley executed an Interim Construction Employers Association Agreement ("CEA Agreement") dated April 23, 2012; a Short Form Building Construction Agreement For Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain and Medina Counties In The State Of Ohio ("Short Form Agreement") dated June 20, 2012; and a 2000 Hour Addendum Agreement dated March 31, 2014. By the terms of these Agreements Defendant also became a party to the Agreement and Declaration of Trust (the "Health and Welfare Trust Agreement") that established the Ohio OperatingEngineers Health and Welfare Plan, and became bound by the terms and conditions set forth therein. These agreements contain provisions whereby Defendant agreed to make timely payments to the Health and Welfare Trustees for each employee covered by the agreement. (Compl., ECF No. 1, ¶6.)

A. The Agreements

It is undisputed that Chagrin Valley entered into three different agreements with the Union (collectively, "the Agreements"). On April 23, 2012, Chagrin Valley signed the CEA Agreement for the period beginning May 1, 2012 through April 30, 2016. The Agreement specifically provides that

the undersigned employer or its successor agree to sign and be bound to the newly negotiated agreement and to pay without exception all newly negotiated CEA increased wages, fringes and other terms retroactive to May 1, 2012.

(Compl., ECF No. 1-1, Ex. A.)

On June 20, 2012, Chagrin Valley signed the Short Form Agreement. The Agreement specifically provides that

3. The Company is not represented by any employer bargaining unit nor has any employer bargaining unit authority to act as an agent for the Company; however, the Company agrees to adopt and accept all the terms, wage rates and conditions of the 2012- 2015 CEA Building Agreement (hereafter "The Agreement") except as modified herein. The Company further agrees to make contributions to the Health and Welfare Fund, Pension Fund, Apprenticeship Fund, and Safety Training and Educational Trust Fund as outlined in said CEA Building Agreement.

(Compl., ECF No. 1-1, Ex. A.)

On March 31, 2014, Chagrin Valley signed the International Union of Operating Engineers 2000 Hour Addendum Agreement. The Agreement specifically provides that

3. the employer will pay on behalf of the Principal Operating Engineer a minimum of 2000 hours per signatory year into the Ohio Operating Engineers' Health and Welfare Plan;

4. the employer shall transmit all fringe benefit payments in accordance with theterms and conditions of the collective bargaining agreement and the payment protocols of the Fringe Benefit Fund. . . .

(Compl., ECF No. 1-1, Ex. A.)

B. The Funds' Claims

The Funds claim that, under the provisions of the agreements as described in Paragraph 6 of the Complaint, Defendant became a party to Agreements and Declarations of Trust, and is alleged to have failed to make timely payments to: (Count I) the Health and Welfare Trustees; (Count II) the Pension Trustees; (Count III) the Apprenticeship and Training Trustees; and (Count IV) the Education and Safety Trustees. (Id., at ¶¶7, 8, 13, 18, 23.) The allegations of failure to make timely payments stem from the results of Trustees' audits, alleged in the Complaint as follows:

Count I:

8. The Trustees' Field Auditor audited Defendant's payroll records on October 31, 2016. This audit disclosed unpaid contributions for the period August 1, 2015 to October 1, 2016, owed to the Health and Welfare Trustees. Defendant is delinquent in making contributions to the Health and Welfare Trustees in the total amount of $31,338.59.

Count II:

13. The Trustees' audit disclosed unpaid contributions owed for the period August 1, 2015 to October 1, 2016, to the Pension Trustees. Defendant is delinquent in making contributions to the Pension Trustees in the total amount of $25,062.00.

Count III:

18. The Trustees' audit disclosed unpaid contributions for the period August 1, 2015 to October 1, 2016, owed to the Apprenticeship and Training Trustees. Defendant is delinquent in making contributions to the Apprenticeship and Training Trustees in the total amount of $3,132.78.

Count IV:

23. The Trustees' audit disclosed unpaid contributions for the period August 1, 2015 to October 1, 2016, owed to the Education and Safety Trustees. Defendant is delinquent in making contributions to the Education and Safety Trustees in the total amount of $375.96.

(Compl., ECF No. 1, ¶¶7, 8, 13, 18, 23.) Plaintiff seeks judgment in the amount of $60,661.00, plus accumulated interest charges in the amount of $11,154.47 calculated to August 9, 2017, plus $13.83 per day thereafter and statutory interest in the amount of $11, 154.47 calculated to August 9, 2017, plus $13.83 per day, with the interest and statutory interest accruing daily until judgment is paid. The Funds also seek injunctive relief. (Compl., ECF No. 1.)

C. Chagrin Valley's Counterclaims

Chagrin Valley filed a counterclaim against the Funds, and also added an employee of the Funds, Justin Helmick ("Mr. Helmick"), as a third-party defendant. (ECF Nos. 7, 18.) Defendant's Second Amended Counterclaim and Second Amended Third-Party Complaint (Def. Counterclaim, ECF No. 29) assert four claims¹: (Count I) breach of contract against the Funds; (Count II) declaratory judgment against the Funds; (Count III) defamation claim against the Funds and Mr. Helmick; and (Count IV) tortious interference with business relations against the Funds and Mr. Helmick. (Id.) The Funds have filed a partial motion to dismiss Counts One and Two of Defendant's second amended counterclaim and second amended third-party complaint. (Mot. to Dismiss, ECF No. 30.) Chagrin Valley also moved for leave to file a First Amended Answer to Assert Additional Affirmative Defense, Instanter (ECF No. 42), which is hereby granted.² In that filing, Chagrin Valley provides this factual background:

Since at least 2005, Chagrin Valley contributed fringe benefits to the Funds pursuant certain International Union of Operating Engineers, Union Nos. 18, 18A, and 18B (the "Union") collective bargaining agreements to which Chagrin Valley agreed to participate. See Declaration of John Ruple (the "Ruple Dec") ¶¶5, 9, 11. (ECF Nos. 37, 38 and 41 at its Exhibit A.) In summary, Chagrin Valley routinely paid fringe benefits to the Funds when its covered employees, including family members (the "Family Members"), performed "operator work" (e.g., operating a crane) and did not pay fringe benefits when these employees performed "shop work" (e.g., general business operations). Ruple Dec. ¶¶5, 8, 12. Chagrin Valley's payroll records, which it regularly submitted to the Funds, and which the Funds routinely audited and approved, clearly evidenced Chagrin Valley's fringe benefit contribution calculation methods. Ruple Dec. ¶¶5-9, 12. The Union expressly permitted these calculations, and the Funds agreed to and accepted these calculations and contributions for over nine years. Ruple Dec. ¶¶5, 6, 8, 9, 10, 12; see also Exhibits B and C hereto.

Chagrin Valley continued to timely and fully make all fringe benefit payments and contributions under the collective bargaining agreements, including the most recent agreement of 2012 (the "2012 CBA") in the same manner it had done for

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