U.A. Local No. 343 Pension Plan et al v. G.A.R. Plumbing Partners, Inc.

Filing 48

ORDER signed by District Judge John A. Mendez on 3/31/2021 GRANTING IN PART AND DENYING IN PART Plaintiffs' 40 Motion for Summary Judgment. (Zignago, K.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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U.A. LOCAL NO. 343 PENSION
PLAN, et al.,
Plaintiffs,

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v.
G.A.R. PLUMBING PARTNERS,
INC.,

No.

2:19-cv-01381-JAM-DB

ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFFS’
MOTION FOR SUMMARY JUDGMENT

Defendant.

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On July 22, 2019, U.A. Local No. 343 Pension Plan, U.A.

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Local Nos. 343 and 355 Defined Contribution Plan, Plumbers and

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Steamfitters Managed Health Care Plan, (collectively the “Benefit

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Funds”), the Board of Trustees of the Benefit Funds, and U.A.

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Local No. 343 ( “Plaintiffs”) filed this action against G.A.R.

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Plumbing Partners, Inc. (“Defendant” or “G.A.R.”), seeking to

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collect contributions owed by G.A.R. under a collective

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bargaining agreement.

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claims against G.A.R.: (1) failure to make required contributions

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in violation of the Employee Retirement Income Security Act of

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1974 (“ERISA”), 29 U.S.C. § 1001 et seq., and (2) breach of a

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collective bargaining agreement and the trust agreement in

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violation of the Labor Management Relations Act of 1947 (“LMRA”),

Compl., ECF No. 1.

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Plaintiffs assert two

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29 U.S.C. § 185.

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Compl. ¶¶ 21-28.

On August 28, 2020, G.A.R. filed a counterclaim against

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Plaintiffs, bringing two claims for: (1) restitution of overpaid

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amounts pursuant to ERISA, and (2) breach of a collective

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bargaining agreement and the trust agreement in violation of the

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LMRA.

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Countercl. ¶¶ 21-34, ECF No. 25.
Plaintiffs now move for summary judgment on their claims and

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Defendant’s counterclaims.

Mot. Summ. J. (“Mot.”), ECF No. 40.

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Defendant filed an opposition, Opp’n, ECF No. 45, to which

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Plaintiffs replied, Reply, ECF No. 46.

For the reasons set forth

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below, the Court GRANTS in part and DENIES in part Plaintiffs’

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Motion for Summary Judgment.1

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I.

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BACKGROUND

G.A.R. is a plumbing services company owned and operated by

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George Robertson and his wife.

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of Undisputed Facts (“SUF”) ¶¶ 6-7, ECF No. 45-4.

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licensed to perform plumbing work, and its only source of revenue

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is plumbing work.

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31, 2016, G.A.R. was a signatory to the U.A. Local 343 Master

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Labor Agreement (“MLA”).

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contributions into the Benefit Funds for all hours of covered

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work, which includes plumbing work.

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Id. ¶¶ 8-10.

Def.’s Resp. to Pls.’ Statement
G.A.R. is only

From April 1, 2012, to December

Id. ¶ 1.

The MLA requires

Id. ¶¶ 3-4.

This lawsuit commenced after Plaintiffs performed a payroll
audit on G.A.R. for the April 1, 2012 to December 31, 2016

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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was
scheduled for February 23, 2021.
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period.

Id. ¶ 11.

The audit revealed that G.A.R. had not

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reported any hours of covered work for the period between July 1,

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2016 to December 31, 2016.

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disbursement journals and invoices for that period, however,

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indicated that G.A.R. had made $20,368.93 in plumbing supply

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purchases, signaling to the auditors that covered work may have

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been performed.

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information with the Chairmen of the U.A. Local 343 Benefit Funds

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and explained it was customary under the circumstance here –where

Id.

SUF ¶ 30, ECF No. 41.

Cash

Plaintiffs’ auditors shared this

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adequate time records were not kept yet it appeared covered work

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had been performed – to either presume full-time, forty hours per

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week of work, or to divide the material purchases by the

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journeymen wage rate; and then after adopting one of those two

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presumptions, shift the burden to the employer to show the actual

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hours of work performed.

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Local 343 Benefit Funds decided to adopt a presumption of forty

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hours of work per week and then shift the burden to G.A.R. to

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demonstrate the actual hours of work performed for the July to

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December 2016 period.

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Id. ¶ 31.

The Chairmen of the U.A.

Id.

G.A.R. appealed the presumption of forty hours per week of

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covered work.

Def.’s Resp. to Pls.’ SUF ¶¶ 33-34.

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appeal process, G.A.R. did not provide time records or other

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evidence showing the actual hours of covered work performed in

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that period.

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G.A.R.’s appeal.

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initiated this lawsuit to collect the delinquent contributions

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they allege G.A.R. owes for covered plumbing work performed in

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the latter half of 2016.

Id.

During the

In February 2019, the Board of Trustees denied
Id. ¶ 35.

A few months later, Plaintiffs

See generally Compl.
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Over a year later, G.A.R. filed its counterclaim for return

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of ineligible pension contributions.

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G.A.R.’s two counterclaims arise from a separate compliance audit

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Plaintiffs performed on G.A.R. for the period from June 2012

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through April 17, 2020.

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miscalculated and overbilled G.A.R. $30,229.77 for that nearly

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eight-year period and seeks return of those funds.

Id. ¶ 17.

See generally Countercl.

G.A.R. claims Plaintiffs

Id.

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II.

OPINION

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A.

Legal Standard

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A Court must grant a party’s motion for summary judgment

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“if the movant shows that there is no genuine dispute as to any

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material fact and the movant is entitled to a judgment as a

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matter of law.”

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initial burden of “informing the district court of the basis for

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its motion and identifying [the documents] which it believes

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demonstrate the absence of a genuine issue of a material fact.”

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Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

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material if it “might affect the outcome of the suit under the

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governing law.”

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248 (1986).

Fed. R. Civ. Proc. 56(a).

The movant bears the

A fact is

Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

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Once the movant makes this initial showing, the burden

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rests upon the nonmoving party to “set forth specific facts

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showing that there is a genuine issue for trial.”

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of fact is genuine if “the evidence is such that a reasonable

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jury could return a verdict for the nonmoving party.”

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Id.

An issue

Id.

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B.

Analysis

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Plaintiffs move for summary judgment as to their own claims

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and Defendant’s counterclaims.

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1. Plaintiffs’ Claims

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Mot. at 1-2.

Plaintiffs first argue they are entitled to summary judgment

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on both of their claims under the MLA.

Mot. at 7-8; Reply at 3-

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5.

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to keep records for the latter half of 2016 as it was required to

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under ERISA, the Trustees were entitled under Section 165(f) of

Specifically, Plaintiffs contend that because G.A.R. failed

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the MLA to determine a formula for benefits owing between June 1,

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2016 to December 31, 2016, which the Trustees did when they

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adopted the forty hour per week presumption.

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3.

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disclosed by the audit for which no fringe benefit payment was

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received by the Trust Funds, and for which the number of hours

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worked cannot be plainly ascertained, the Trustees will determine

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the appropriate formula to be applied to compute the fringe

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benefit contributions owed. The Individual Employer shall be

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required to comply with such formula and make payments to the

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Trust Funds immediately upon being advised of the amount due.”

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Mot. at 8; Reply at

Section 165(f) of the MLA states: “If a payment obligation is

As an initial matter, the Court agrees with Plaintiffs that

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the language of this provision is unambiguous: Section 165(f)

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clearly allows the Trustees to create a formula to compute the

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amount of fringe benefits owed when the amount due cannot be

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plainly ascertained and requires employers to comply with the

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Trustees’ formula under such circumstances.

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added).

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Robertson in the 2016 period at issue could not be ascertained,

Id. (emphasis

Thus, if it were undisputed that the hours worked by Mr.

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G.A.R. would be required to pay in accordance with the Trustees’

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formula under the clear language of the MLA.

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In their Motion, Plaintiffs assume “it is undisputed GAR

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failed to keep records of George Robertson’s time” and thus that

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it is undisputed that the amount due is not plainly

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ascertainable.

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opposition brief and its response to Plaintiffs’ Statement of

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Undisputed Facts that it does dispute whether the amount due for

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the latter half of 2016 can be ascertained.

Mot. at 7.

Not so.

Defendant makes clear in its

Opp’n at 1-2; Def.’s

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Resp. to Pls.’ SUF ¶¶ 13, 29-31.

Yet, these arguments are left

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largely unaddressed by Plaintiffs.

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significantly, Plaintiffs do not address Defendant’s response to

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Undisputed Material Fact No. 13 (“Mr. Robertson and GAR did not

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keep records of his time during this testing period of April

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1,2012 to December 31, 2016”) in which Defendant cites to

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deposition testimony and declarations to show there is genuine

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dispute as to whether G.A.R.’s records for this period are

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sufficient to ascertain the amount due.

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SUF ¶ 13.

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and the evidence Defendant points to in support of its challenge,

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Plaintiffs instead focus on an undisputed fact: SUF ¶ 34 (“In its

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appeal, G.A.R. did not provide records or other evidence showing

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the actual hours of covered work performed by Mr. Robertson

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during the period of July 1, 2016 to December 31, 2016.”).

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at 2.

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forward records during its appeal to the Board of Trustees –

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Plaintiffs ask the Court to infer that G.A.R. does not have

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records at all for this period thereby triggering Section 165(f)

See Reply.

Most

Def.’s Resp. to Pls.’

Ignoring Defendant’s challenge to this critical fact

Reply

From this undisputed fact – that G.A.R. did not bring

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of the MLA.

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matter-of-law, particularly given Plaintiffs’ failure to address

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the evidence Defendant has brought forward in support of its

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position that G.A.R. has sufficient records such that the number

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of hours worked by Mr. Robertson is ascertainable.

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to Pls.’ SUF ¶¶ 13, 29-31.

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But the Court cannot draw this inference as a

Def.’s Resp.

Because there is a genuine factual dispute as to the

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ascertainability of the hours of covered work performed by

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Robertson in the latter half of 2016, there is also a genuine

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question as to whether Section 165(f) of the MLA is triggered in

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the first instance.

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they are entitled to summary judgment under Section 165(f) of the

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MLA fails.

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Accordingly, Plaintiffs’ first argument that

Next, Plaintiffs contend that even if the Court does not

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grant summary judgment under the MLA, the Court may grant summary

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judgment under the Ninth Circuit’s burden-shifting approach set

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forth in Brick Masons Pension Trust v. Industrial Fence & Supply,

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Inc., 839 F.2d 1333 (9th Cir. 1988).

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In Brick Masons, which concerned a collection action brought by

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union benefit trust funds against two brick-mason employers, the

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Ninth Circuit explained in relevant part that: “once the trustees

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produce evidence raising genuine questions about the accuracy of

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the employer's records and the number of hours worked by the

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employees, the burden shifts to the employer to come forward with

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evidence of the precise amount of work performed.”

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Mot. at 8-10; Reply at 5.

Id. at 1338.

Plaintiffs argue that G.A.R. has failed to meet its

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evidentiary burden under the Brick Masons test.

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problem once again with Plaintiffs’ argument is that it proceeds
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Mot. at 9.

The

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based upon a mistaken assumption that “G.A.R. concedes it kept no

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records of Mr. Robertson’s time.”

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this lack of records is undisputed, they further assume Brick

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Masons is triggered in the first place and that the burden has

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therefore shifted to G.A.R.

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does not concede this point.

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records are sufficient to determine the work performed, bringing

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forward evidence to support that position.

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Def.’s Resp. to Pls.’ SUF ¶¶ 13, 29-31.

Id.

Id.

Because Plaintiffs assume

Yet, as discussed above, G.A.R.

Rather, G.A.R. insists that its

See Opp’n at 1-2, 6;

Notably, in reply,

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Plaintiffs do not tackle Defendant’s arguments about the

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sufficiency of the records head on, instead they simply repeat

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“G.A.R. has not produced any evidence to meet its burden to prove

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the precise amount of work performed.”

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light of Defendant’s arguments as to the sufficiency of its

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records, the Court cannot assume, as Plaintiffs do, that the

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Brick Masons test is triggered in the first place let alone that

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the burden has shifted to G.A.R.

Reply at 5.

However, in

Id.

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Accordingly, for the same reason Plaintiffs fail to show

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they are entitled to summary judgment under the MLA, they fail to

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establish an entitlement to summary judgment under Brick Masons:

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there is a genuine dispute as to whether G.A.R.’s records are

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sufficient to determine the amount of work performed.

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this genuine dispute of material fact, Plaintiffs are not

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entitled to judgment as a matter of law on their two claims under

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either the MLA or under Brick Masons.

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2. Defendant’s Counterclaims

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Because of

Plaintiffs also move for summary judgment on Defendant’s
counterclaims.

Mot. at 12-15; Reply at 5-6.
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G.A.R.’s two

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counterclaims are for: (1) restitution of overpaid amounts

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pursuant to ERISA, and (2) breach of a collective bargaining

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agreement and the trust agreement in violation of the LMRA.

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Countercl. ¶¶ 21-34.

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In opposition, G.A.R. appears to concede its second claim

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fails as a matter of law because the LMRA does not provide a

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cause of action for return of pension contributions.

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15; see also Award Service, Inc. v. N.Cal. Retail Clerks Unions,

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763 F.2d 1066, 1071 (9th Cir. 1985) (refusing to recognize any

See Mot at

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implied right of action for return of ERISA contributions under

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the ERISA).

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Circuit made clear in Award Service that an employer seeking a

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return of pension contributions has no right of action under the

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LMRA and must instead proceed under Section 403(c)(2) of ERISA.

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Id.

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Accordingly, the Court finds G.A.R.’s second counterclaim fails

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as a matter of law and grants summary judgment for Plaintiffs on

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this claim.

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As Plaintiffs point out in their Motion, the Ninth

G.A.R. does not dispute this in opposition.

See Opp’n.

As to its first counterclaim, G.A.R. properly proceeds

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under Section 403(c)(2) of ERISA.

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403(c)(1) sets forth the general rule that: “the assets of a

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plan shall never inure to the benefit of any employer and shall

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be held for the exclusive purposes of providing benefits to

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participants in the plan their beneficiaries and defraying

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reasonable expenses of administering the plan.”

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Section 403(c)(2)(A) lays out an exception to the rule,

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providing for the return of contributions to an employer where

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there has been a mistake of fact: “In case of a contribution . .
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Countercl. ¶¶ 21-34.

Section

However,

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. (ii) made by an employer to a multiemployer plan by a mistake

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of fact or law . . . paragraph (1) shall not prohibit the return

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of such contribution or payment to the employer within 6 months

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after the plan administrator determines that the contribution

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was made by such a mistake.”

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at 1068 (noting that employers have a cause of action under

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Section 403(c)(2) to recover mistaken contributions).

See also Award Service, 763 F.2d

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Plaintiffs advance two arguments as to why they are

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entitled to summary judgment on Defendant’s Section 403(c)(2)

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claim.

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G.A.R. is not entitled to a refund because the Trustees have not

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made a determination on G.A.R.’s request for return of

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contributions and no refund can be made under Section 403 of

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ERISA without such a determination that a refund is owing.

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at 13-14; Reply at 5.

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cite to Bds. of Trs. of the Northwest Ironworkers Health & Sec.

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Fund v. Western Rebar Consulting, Inc., 2:18-cv-00486-BAT, 2020

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WL 4000967 (W.D. WA. July 15, 2020) (granting motion to dismiss

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defendant’s counterclaim seeking return of overpaid funds).

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Reply at 6.

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for multiemployer plans regulated by ERISA and LMRA, filed an

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action seeking unpaid contributions from the defendant-employer;

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and the defendant-employer later filed a counterclaim seeking

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return of incorrectly submitted funds, which plaintiffs moved to

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dismiss.

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Mot. at 12-14; Reply at 5-6.

First, Plaintiffs argue

Mot.

To support their position, Plaintiffs

In Western Rebar, plaintiffs, the board of trustees

2020 WL 4000967 at *1.

As an initial matter, this unreported opinion issued by a

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magistrate judge in the Western District of Washington is not

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binding on this Court.

Further, the Western Rebar court’s
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discussion of whether the defendant there had sufficiently

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alleged a mistake of fact such that it was entitled to

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restitution of its contributions and whether the defendant had

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sufficiently alleged that the equities justified the return of

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the contributions is of limited utility to this Court deciding a

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motion for summary judgment.

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Defendant does not address Western Rebar nor does it bring

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forward any authority of its own.

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Id. at *1.

For its part,

See Opp’n at 6-7.

Despite Defendant’s failure to address Western Rebar, this

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Court does not find Plaintiffs are entitled to judgment as a

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matter of law under this lone non-binding authority.

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Rebar does not clearly authorize this Court to grant summary

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judgment for Plaintiffs merely because the Trustees have not

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made a determination on G.A.R.’s request.

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Western

Second, Plaintiffs argue G.A.R. has failed to meet its

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burden to show the equities favor restitution.

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Reply at 5-6.

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an employer seeking a refund under Section 403(c)(2)(A) must not

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only show a mistake of fact, but also must establish that the

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equities favor restitution.

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determining whether the equities favor restitution may consider

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“the effect on the beneficiaries of the Fund.”

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& Welfare Fund v. W.A. Rasic Constr. Co., 145 F.3d 1338, 1998 WL

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279400 at *2 (9th Cir. 1998).

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Mot. at 14-15;

As the Ninth Circuit explained in Award Service,

763 F.2d at 1069.

A court

Laborers' Health

Plaintiffs contend the equities do not favor restitution

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because there is a pending payroll testing audit that the

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Trustees have reason to believe may show the underpayment of

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contributions.

Reply at 6.

As such, the Trustees as fiduciaries
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are concerned about the beneficiaries and have therefore deferred

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their decision on G.A.R.’s request for return of the funds.

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In light of this concern about G.A.R.’s underpayment and the

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effect on the beneficiaries of the Benefit Funds, the equities,

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according to Plaintiffs, do not favor restitution.

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Id.

Id.

Defendant does not specifically respond to Plaintiffs’

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argument.

See Opp’n.

Instead, Defendant generally counters that

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because “G.A.R. is a husband and wife-run plumbing business to

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whom [$30,229.77] would make a substantial impact,” the equities

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favor their position.

Opp’n at 7.

Further, Defendant requests

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the Court order an immediate return of the $30,229.77.

Id.

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The Court finds that neither party has shown the equities

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clearly favor their position, at least not as a matter of law.

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Plaintiffs are therefore not entitled to summary judgment on

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G.A.R.’s first counterclaim for return of ineligible

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contributions and G.A.R. is not entitled to a court order

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requiring immediate return of the funds.

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III. ORDER
For the reasons set forth above, the Court GRANTS

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Plaintiffs’ motion for summary judgment only as to Defendant’s

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second counterclaim.

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claims.

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Their motion is DENIED as to all other

IT IS SO ORDERED.
Dated: March 31, 2021

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