Trustees of the National Automatic Sprinkler Industry Welfare Fund et al v. IT&M Division, Inc.
Filing
35
MEMORANDUM OPINION. Signed by Judge Peter J. Messitte on 8/4/2014. (kns, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
TRUSTEES OFTHE NATIONAL
AUTOMATIC SPRINKLER
INDUSTRY WELFARE FUND, ct al.
Plaintiffs
...•FIlID --PfIEll£D
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AUG - 42014
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v.
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Civil No. PJM 12-3434
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IT&M DIVISION, INC.
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Defendant
MEMORANDUM OPINION
Plaintiffs Trustees of the National Automatic Sprinkler Industry Welfare Fund, Trustces
of the National Automatic Sprinkler Local 669 UA Education Fund, Trustees of the National
Automatic Sprinkler Industry Pension Fund, and Trustees of the Sprinkler Industry Supplemental
Pension Fund ("'NASI Funds" or "Funds") have sued IT&M Division, Inc. ("IT &M") to recover
delinquent contributions and associated damages.
Following oral argument, Plaintiffs' Motion
for Summary Judgment (Dkt. 17) was granted as to liability and deferred as to damages.
Funds were dirccted to file a supplemcntal
The
affidavit and interest and liquidated damages
worksheets, which they have done. IT&M has tiled an Opposition.
For the reasons
that follow,
Plaintiffs'
Motion
for Summary
GRANTED in the total amount of $151,902.27 in contributions,
Judgment
will be
liquidated damages and
interest, and $29,893.85 in attorneys' fees and costs. I
I The Court notes that the NASt Funds appear to have misstated the sum of its requested damages in their proposed
Order. The proposed Order (Dk!. 32-5) lists the sum as S201,465.67, whereas the requested damages actually total
$181,796.12. The Court assumes the lower figure correctly states what the Funds seek.
I.
The NASI Funds are employee benefit plans organized under the provisions of the
Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C.
9
1001 et seq. On
March 28, 2007 and April I, 2010 IT&M executed Assent and Interim Agreements, agreeing to
be bound by the collective bargaining agreement ("CBA") between Local 669 and the National
Fire Sprinkler Association.
By the Asset and Interim Agreements, IT&M also agreed to be
bound by the Declarations of Trust ("Trust Agreements") governing each of the NASI Funds.
The CBAs bind IT&M to the Trustees' Guidelines for Participation in the NASI Funds
C'Guidelines").
Under the CBA, Trust Agreements, and Guidelines, IT&M was required to make
monthly contributions to the Funds at a rate prescribed by the CBA for each hour worked by a
covered employee.
IT&M was also obligated to submit monthly reports to the Funds indicating
the names of the employees who performed the work and the hours they worked. Contributions
and reports were due by the 15,h day following the end of each calendar month. Under the Trust
Agreements and Guidelines, IT&M was obligated to pay liquidated damages and interest on any
late contributions.
The Funds designated Salter & Company, LLC as their representative to conduct an audit
of IT&M's payroll records and tax statements for the period January 2009 through June 30,
2012. Salter concluded the audit on August 3, 2012.2 The Funds base a number of their claims
on the results of the audit. The Funds have also claimed untimely contributions by IT&M for the
period of November 2010 through July 2011, based upon monthly reports submitted by IT&M.
Records examined included Employers Quarterly Withholding Repol1s (Form 941); Quarterly State
Unemployment Returns; Fornl 1099-MISC; Form 1096 Annual Summary and Transminal of U.S. Information
Returns; W-2 Wage and Tax Statements; Yearly Payroll Records - Quickbooks payroll summary reports; Cash
Disbursement Journal. Audit Report. Supp. Eger Decl. Ex. L.
2
2
Additionally, the Funds have calculated unpaid contributions owed for the period of July 2012
through March 31,2013 based on spreadsheets submitted by IT&M to the Court in IT&M's first
Opposition to Plaintiffs' Motion for Summary Judgment. Finally, the Funds have calculated and
claim appropriate interest as well as liquidated damages on all sums sought and have submitted a
supplemental declaration in support of those calculations.
Revisiting the Funds' Motion for Summary Judgment, the Court considers the
supplemental declaration filed by the Funds and IT&M's opposing affidavit.
The Funds seek damages for three time periods.
A. November 2010 - July 2011
In this period, the Funds received contributions but claim they were received late.
Accordingly, they seck interest ($666.28) and liquidated damages ($6,424.24) for those untimely
contributions for this period. Since IT&M does not specifically dispute these calculations, the
Court will GRANT the Funds summary judgment as to this portion of their claim.
B. January I. 2009 - June 30. 2012
The Funds received some contributions-timely
make no claim for those contributions.
and untimely3 -during
this period, and
However, the Funds claim that their audit revealed that
additional non-duplicative contributions were owed for the same period. Specifically, the audit
revealed that additional contributions had not been paid in the amount of$59,575.01.
The Funds
claim that amount plus interest ($8,833.42) plus liquidated damages ($11,915.01) as to those
unpaid contributions. IT&M disputes the number of hours the Funds say were worked and
In Case NO.8: IO-cv-O1612-R WT, the Funds obtained a judgment against IT&M for the period of July 2007
through November 2010. The NASI Funds' Motion for Default Judgment in that case indicates that the Funds
received late contributions for the months of February 2009 through June 2009, August 2009 through December
2009, and February 20 I0 through July 20 IO. IT&M failed to make contributions to the Funds for the months of
August 20 I 0 through November 20 IO. The Funds made no claim for contributions for the months of January 2009,
July 2009, or January 20 IO. In the present pleadings, IT&M indicates that from November 20 I0 through July 20 II,
the Funds received a total ofS32,121.8 in untimely contributions. See Suppl. Eger Decl., Ex. J. (remittance
summaries showing \vhen reports and contributions were received).
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therefore
the contributions
purportedly
August 2011 through November
owed.
IT &M also argues that damages
2011 are duplicative
claimed for
of an earlier judgment.
C. July 1,2012 - March 31, 2013
Unquestionably,
IT &M ceased providing
2012,4 which led the Welfare Fund to terminate
30,2012.
IT&M therefore
be deducted
IT&M's
claims that contributions
participation
allegedly
for this entire period because no health insurance
employees
when the Fund terminated.
expire until March 31,2013;
March 31,2013.
liquidated
reports or contributions
hence contributions
($9,907.80)
in that Fund effective June
owed to the Welfare Fund should
benefits were provided
to IT &M
The Funds reply that the CSA that bound IT &M did not
to all Funds remained
The Funds seek $49,539.0 I in contributions,
damages
to the Funds alier June
due and owing until
plus interest ($5,041.50)
plus
for this period.
D. Costs and Fees
Finally, the Funds also seek to recover the cost of the audit ($1,645.10),
($27,703.75)
and costs ($545.00).
attorneys'
fees
IT&M has not opposed this request.
II,
;;The court shall grant summary judgment
dispute as to any material
fact and the movant is entitled to judgment
Federal Rule of Civil Procedure
;'a reasonable
if the movant shows that there is no genuine
56(a).
A genuine dispute is one where the evidence
jury could return a verdict for the nonmoving
of Am., 673 F.3d 323, 330 (4th Cir. 2012).
of the suit under governing
law."
as a matter of law."
A material
party."
is such that
Dulaney \'. Packaging Corp.
fact is one ;;that might affect the outcome
Erwin \'. Uniled Slales, 591 F.3d 313, 320 (4th Cir. 2010)
(ciling Anderson \'. Liberly Lobby, fnc., 477 U.S. 242,248
(1986».
When assessing
a motion for
, tT&M asserts that it ceased making Fund contributions beginning in December 20 t t, while the NASt Funds state
that contributions ceased as of June 2012.
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summary judgment, the court views the record in the light most favorable to the nonmoving
party and draws all reasonable inferences in his or her favor. Dulaney, 673 F.3d at 330. A
nonmoving party may not, however, defeat summary judgment by making assertions lacking
sufficient factual support or by relying on a mere "scintilla of evidence." Am. Arms Int'l v.
Herbert, 563 F.3d 78, 82 (4th Cir. 2009). A party opposing a properly supported motion lor
summary judgment bears the burden of establishing a genuine issue of material fact on each
essential element of its case. Anderson, 477 U.S. at 248-49; Celotex Corp. v. Catrell, 477 U.S.
317,323 (1986). The party opposing summary judgment '''may not rest upon the mere
allegations or denials of [his] pleadings,' but rather must 'set forth specific facts showing that
there is a genuine issue for trial.'"
80uchat v. Baltimore Ravens Footbal! Club, Inc., 346 F.3d
514, 525 (4th Cir. 2003).
"Where a benefit fund has conducted an audit and no other barriers to liability or
damages exist, judgment is appropriate, absent some specific challenge to the audit's findings."
ivfaryland Elec. Indus. Health Fund v. ivfESCO, Inc., 2014 WL 853237, at *14 (D. Md. Feb. 28,
2014). As Judge Williams of this District has explained:
Neither the Fourth Circuit nor its district courts have addressed the specific
standard of review for a summary judgment motion where an employer that is
required to contribute to a multi employer pension plan challenges the plan's audit
findings. However, other courts have held that judgment as a matter of law is
appropriate where the plan presents an audit demonstrating that contributions are
owed and the employer fails to identify specific errors in the audit or provide
documentation to rebut the audit's conclusions.
Nat'! Elec. Ben. Fund v. Rabey Elec. Co., fnc., 2012 WL 3854932, at *4 (D. Md. Sept. 4, 2012)
(citing Michigan Laborers' Health Care Fund v. Grimaldi Concrete, Inc., 30 FJd 692, 695-97
(6th Cir. 1994); Trustees of Plumbers & Steamjillers Local Union No. 43 v. Crawford, 573 F.
5
Supp. 2d 1023, 1036-38 (E.D. Tenn. 2008); Durso v. Cuppy's Food EII/poriulll, Ltd., 2006 WL
3725546, at *1-2 (E.D.N.Y. Dec. 14,2006)).
III.
A.
January I. 2009 - June 30. 2012
IT&M for some reason states that it is "undisputed" that it owed no contributions for the
period January 1,2009 through November 2011,5 despite the fact that the Funds' audit found
additional contributions were due and owing.
IT&M has not demonstrated the impropriety or
inaccuracy of the Funds' claim through such evidence as cancelled checks.
As for the period
December
201 I through June 30, 2012, IT&M concedes
that
$24,894.51 in contributions is due for this period,6 but disputes that the $59,575.01 the Funds
seek is due.
IT&M supports its argument by disputing the number of employees performing
covered work and the number of hours worked by them for this period, as disclosed by the audit.
IT&M also asserts, as to the period August 2011 through November 2011, that the contributions
claimed are duplicative of an earlier judgment, so that any judgment awarded for this period
should be reduced by $45, I73.12.
As stated above, an employer must "identify specific errors in the audit or provide
documentation to rebut the audit's conclusions", Nal'! £lec. Ben. Fund, 2012 WL 3854932, at *4.
This IT&M has not done. It is not enough for IT&M to oppose an audit simply by declaring that
its own un-audited numbers should be accepted as evidence or merely by asserting in general
, IT&M's Memorandum states that "[uJp to and including December 01'20 II, it is undisputed that no contributions
are owed by the Company" but this is not supported by the Briceno affidavit, which calculates payroll liabilities of
$57.45 for December 20 II in Ex. C to the affidavit. See also Briceno Aff. ~2 (IT &M "stopped making Fund
contributions after the contributions were made for November 2011. Up until that point we were completely
current, and did not O\\'C any contributions to the Funds.") .
• See Briceno Aff. Ex. C. (adding payroll liabilities for December 2011 through June 2012 = $24,984.51).
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terms that certain damages are duplicativc of an earlicr judgment. Clear supportive evidence
must be adduced.
In view of the foregoing, the Funds are entitled to summary judgment as to this time
peri od as we II.
B.
Julv I. 2012 - March 31. 2013
The Funds seek $49,539.01
in unpaid
contributions
for this period,
relying on
spreadsheets IT&M filed with the Court. For this period the Funds have relied on IT&M's own
documents showing that four of its employees worked 2,829.25 hours in covered employment
between July 2012 and March 2013.
IT&M asserts that "when accurate calculations
are
performed" the "true" amount of unpaid contributions is $48,244.05, which should be further
reduced by contributions owed to the NASI Welfare Fund l'or this period ($22,631.8 I).
The
Funds reply that IT&M has not explained or illustratcd the formula by which its numbers were
arrived at, and that IT&M's unsubstantiated calculations are clearly contradictcd by evidence in
the record7
The Funds have submitted a table showing, for each ofIT&M's
four employees, the
hours each worked, the applicable contribution rate for each, and the total contributions due and
owing for each to each Fund for each month. See Supp!. Eger Decl., Ex. P. IT&M has not
shown how it calculated the contributions it says are due and owing, much less has it
demonstrated that the rates used by the Funds were incorrect. In other words, IT&M has failed
Some oflT&M's own calculations do not compute. For example, pursuant to the CBA,IT&M was required to pay
the NASI Pension Fund 55.35 per hour worked by each employee. IT&M represents that employee Bushnell
worked 7 hours in January 2012. Therefore the correct amount owed to the NASI Pension Fund for Bushnell for
January 2012 should be listed as $37.45, not the 536.85 listed by IT&M.
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to "set forth specific facts showing that there is a genuine issue for trial." BOllchat, 346 F.3d at
525 (quoting Fed. R. Civ. P. 56(e)).
IT&M's contention that it owes no contributions to the Welfare Fund after IT&M's
participation was terminated is similarly unavailing. The CBA to which IT&M was bound
expressly states that termination "will stop the accrual of any benefits but will not affect any
action to enforce the Collective Bargaining Agreement or to collect contributions and liquidated
damages due the Funds." Guidelines, Supp. Eger Decl. Ex. I at 5. In any event, IT&M
employees were in fact eligible to receive credit for hours worked for IT&M after June 30, 2012
when contributions might be received from IT&M, and any claims incurred during this period by
an otherwise eligible employee would have been paid. Jacobson Decl. ~4. The Court previously
rejected IT&M's argument that it somehow was legally entitled to disavow the CBAs after June
2012. The Court found IT&M liable for contributions up to and including March 3 1,2013 to all
the NASI Funds once before, and it does so again now.
IV.
Summary judgment, then, will be ENTERED
in favor of the NASI Funds and against
IT&M, calculated as follows:
A.
November2010-Julv
Liquidated
Contributions
Total
Interest
DllIDages
$666.28
$6,424.24
None
B.
201 I
57,090.52
Januarv I, 2009 - June 30. 2012
Contributions
$59,575.01
Liquidated
Interest
DllIDllges
$8,833.42
$11,915.01
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Totlll
$80,323.44
C.
July I, 2012 - March 31, 2013
Contributions
Liquidated Damages
D.
$64,488.31
Total
Contributions
Total
Interest
Liquidated Damages
$109,114.02
E.
$5,041.50
$9,907.80
$49,539.01
Total
Interest
$14,541,20
$28,247.05
$151,902.27
Costs and Fees
Attorneys' Fees
$27,703.75
Total
Cost of Audit
Costs
$1,645.10
$545.00
$29,893.85
A separate Order will ISSUE.
lsI
R J. MESSITTE
TES DISTRICT JUDGE
August 4, 2014
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