Bricklayers Union Local No. 6 of Indiana Pension Fund et al v. H.E.S.S. Caulking & Restoration, Inc.

Filing 19

OPINION AND ORDER GRANTING 13 MOTION for Leave to File Amended Complaint by Plaintiffs and ORDERING Plaintiffs to file the Amended Complaint by 9/5/2016, currently on the docket as an attachment to the instant Motion, with the typographical corrections as described in their reply brief. Signed by Magistrate Judge John E Martin on 8/31/2016. (lhc) Modified on 8/31/2016 to correct document title (lhc).

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
FRED A. COLVIN, CHAIRMAN of the
BOARD OF TRUSTEES, on behalf of
BRICKLAYERS UNION LOCAL NO. 6
OF INDIANA PENSION FUND, et al.,
Plaintiffs,
v.
H.E.S.S. CAULKING AND
RESTORATION, INC.,
Defendant.

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CAUSE NO.: 2:15-CV-376-JVB-JEM

OPINION AND ORDER
This matter is before the Court on Plaintiffs’ Motion for Leave to File First Amended
Complaint [DE 13], filed on May 2, 2016. Plaintiffs request that the Court grant them leave to
amend the Complaint to add two counts naming Charles Ramsey, individually, d/b/a H.E.S.S.
Caulking & Restoration, Inc., as a party defendant, and asserting that he is personally liable for the
contributions and deductions owed to Plaintiffs. Defendant filed a response on May 12, 2016, and
on May 19, 2016, Plaintiffs filed a reply.
I.

Background
On September 29, 2016, Plaintiffs, employee benefit funds collectively referred to as the

Trust Funds, filed a Complaint pursuant to the Employment Retirement Income Security Act of
1974, as amended, alleging that Defendant breached obligations owed to Plaintiffs. In particular,
Plaintiffs allege that Defendant owes delinquent contributions and deductions to Plaintiffs, plus
liquidated damages, interest, and attorney fees.
The Court entered a discovery plan requiring Plaintiffs to file any motion for leave to amend

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pleadings or add parties before May 1, 2016. The instant Motion was filed on April 27, 2016, with
the proposed First Amended Complaint attached as an exhibit. Plaintiffs seek to add two counts
against Charles Ramsey, individually, d/b/a H.E.S.S. Caulking & Restoration, Inc. They allege that
Charles Ramsey may have been acting in an individual capacity when he signed a Memorandum of
Agreement (“MOA”) with Plaintiff Bricklayers’ Union, Local No. 6 of Indiana, Administrative Unit
of Indiana of the International Union of Bricklayers and Allied Craftsmen, AFL-CIO, on behalf of
an employer identified as H.E.S.S. Caulking & Restoration on November 4, 1992. Plaintiffs allege
that H.E.S.S. may not have been incorporated at that time, and that Ramsey therefore may be
personally liable for the contributions and deductions owed to Plaintiffs.
II.

Analysis
Federal Rule of Civil Procedure 15(a) provides that, when a party seeks leave to amend a

pleading, the “court should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2).
Thus, if the underlying facts or circumstances relied upon by a plaintiff are potentially a proper
subject of relief, the party should be afforded an opportunity to test the claim on the merits. Foman
v. Davis, 371 U.S. 178, 182 (1962). The decision whether to grant or deny a motion to amend lies
within the sound discretion of the district court. Campbell v. Ingersoll Milling Mach. Co., 893 F.2d
925, 927 (7th Cir. 1990). However, leave to amend is “inappropriate where there is undue delay,
bad faith, dilatory motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of
the amendment, or futility of the amendment.” Villa v. City of Chi., 924 F.2d 629, 632 (7th Cir.
1991) (citing Foman, 371 U.S. at 183). An amendment is considered “futile” if it would not
withstand a motion to dismiss or motion for summary judgment. Sound of Music Co. v. Minnesota

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Min. & Mfg. Co., 477 F.3d 910, 923 (7th Cir. 2007); Vargas-Harrison v. Racine Unified Sch. Dist.,
272 F.3d 964, 974 (7th Cir. 2001).
When a plaintiff seeks to add a new defendant through an amended complaint, Federal Rule
of Civil Procedure 20 is implicated. See Chavez v. Ill. State Police, 251 F.3d 612, 631-32 (7th Cir.
2001). It provides that defendants may be joined to an action if “(A) any right to relief is asserted
against them jointly, severally, or in the alternative with respect to or arising out of the same
transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact
common to all defendants will arise in the action.” Fed. R. Civ. P. 20(a)(2). “The standard for
permissive joinder under Rule 20 is liberal,” Eclipse Mfg. Co. v. M & M Rental Ctr., Inc., 521 F.
Supp. 2d 739, 744 (N.D. Ill. 2007), and “courts are inclined to find that claims arise out of the same
transaction or occurrence when the likelihood of overlapping proof and duplication in testimony
indicates that separate trials would result in delay, inconvenience, and added expense to the parties
and to the court.” 7 Charles Alan Wright et al., Federal Practice and Procedure § 1653 (3d ed.
2001); see also Chavez, 251 F.3d at 632; Thompson v. Boggs, 33 F.3d 847, 858 (7th Cir. 1994).
Plaintiffs seek leave to add as a party defendant an entity who they allege may be personally
liable for benefits owed Plaintiffs pursuant to the agreement between the parties in this case.
Defendant does not dispute that the right to relief asserted against Ramsey does not arise out of the
same transaction or occurrence, but argues that the additional counts seeking personal liability
against Charles Ramsey would be futile. It argues that there can be no personal liability of corporate
officers, and that since H.E.S.S. Caulking was incorporated prior to the MOA that is at issue in this
case and there is no evidence that Ramsey was acting in his individual capacity in signing the MOA
or in his subsequent dealings with the Trust Funds, there is no basis to assess personal liability

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against him. Plaintiffs argue that Ramsey signed the MOA as an individual sole proprietor doing
business as H.E.S.S. Caulking & Restoration, which had not properly incorporated at that time, and
therefore Ramsey may be exposed to personal liability for the obligations arising out of the
collective bargaining agreement.
If H.E.S.S. was a sole proprietorship, with Ramsey as a sole proprietor, he would be
personally liable for the business’s debts and obligations. See, e.g., Bledsoe v. State Farm Fire &
Cas. Co., No. 1:04 CV 1584 DFH-TAB, 2005 WL 2491577, at *4 (S.D. Ind. Oct. 7, 2005). The
parties agree that H.E.S.S. was not incorporated until May 2, 1995. Plaintiffs argue that Ramsey
was acting in his individual capacity when he signed the 1992 MOA and therefore may be
personally liable for the benefits owed Plaintiffs. Defendant argues that the MOA binding H.E.S.S.
to a collective bargaining agreement signed on June 9, 2005, is the operative MOA governing
H.E.S.S.’s obligations to Plaintiffs, and as H.E.S.S. was incorporated prior to that signing, Ramsey
cannot be held personally liable for the obligations that arose as a result of that agreement.
Neither the Complaint nor the proposed Amended Complaint identify the document that
initially created the collective bargaining agreement between the parties in this case, and the Answer
admits that H.E.S.S. is a signatory to a collective bargaining agreement with Plaintiffs. On the basis
of the pleadings and the parties’ arguments, the Court cannot conclude that the proposed Amended
Complaint would not survive a motion to dismiss or motion for summary judgment. Since the
underlying facts relied upon by Plaintiffs are potentially a proper subject of relief and the claims
they seek to add against Ramsey arise out of the same operative facts, amendment is appropriate.
III.

Conclusion
For the foregoing reasons, the Court hereby GRANTS Plaintiffs’ Motion for Leave to File

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First Amended Complaint [DE 13] and ORDERS that Plaintiffs shall have through September 5,
2016, within which to file the Amended Complaint, currently on the docket as an attachment to the
instant Motion, with the typographical corrections as described in their reply brief.
SO ORDERED this 31st day of August, 2016.
s/ John E. Martin
MAGISTRATE JUDGE JOHN E. MARTIN
UNITED STATES DISTRICT COURT
cc:

All counsel of record

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