Operating Engineers Local 324 Pension Fund et al v. Pacitto & Forest Construction Company et al
ORDER Denying Motion to Enforce Settlement Agreement or for Summary Judgment on Count IV and Execution of Consent Judgment 14 . Signed by District Judge Denise Page Hood. (LSau)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
TRUSTEES OF THE OPERATING
ENGINEERS’ LOCAL 324 PENSION FUND,
OPERATING ENGINEERS’ LOCAL 324
HEALTH CARE PLAN, OPERATING
ENGINEERS’ LOCAL 324 VACATION
& HOLIDAY FUND, OPERATING FUND,
OPERATING ENGINEERS’ LOCAL 324
APPRENTICESHIP FUND, and
OPERATING ENGINEERS’ LOCAL 324
DEFINED CONTRIBUTION PLAN, Trust
Funds Established and Administered Pursuant
to Federal Law,
Case No. 17-10431
Hon. Denise Page Hood
PACITTO & FOREST CONSTRUCTION
COMPANY, a dissolved Michigan corporation,
JAT MANAGEMENT & CONSULTING, INC.,
a dissolved Michigan corporation, DAVID FOREST,
STEVE PACITTO, UMBERTO PACITTO,
JOSEPH PACITTO and THOMAS FOREST,
individually AND D/B/A PACITTO & FOREST
CONSTRUCTION COMPANY, and JAT
MANAGEMENT & CONSULTING, INC.,
ORDER DENYING MOTION TO ENFORCE SETTLEMENT
AGREEMENT OR FOR SUMMARY JUDGMENT ON COUNT IV
AND EXECUTION OF CONSENT JUDGMENT [Dkt. No. 14]
Plaintiffs (also referred to as the “Funds”) filed a four-count Complaint against
Defendants for alleged failure to make employee fringe benefit contributions, in
violation of a collective bargaining agreement. On August 31, 2017, Plaintiffs filed
the instant Motion to Enforce Settlement Agreement or for Summary Judgment on
Count IV and Execution of Consent Judgment. [Dkt. No. 14] The Motion is fully
briefed. The Court, having concluded that the decision process would not be
significantly aided by oral argument, orders that the motion be resolved on the motion
and briefs submitted by the parties. E.D. Mich. L.R. 7.1(f)(2). For the reasons that
follow, the Court denies the Motion.
Under the terms and provisions of a Collective Bargaining Agreement between
the Defendants (doing business as “Pacitto and Forest Construction” and “JAT
Consulting and Management”) and the Plaintiffs (the “CBA”), Defendants agreed to
make employee fringe benefit contributions to the Funds on behalf of each employee
employed by the Defendants and covered by the CBA.
Plaintiffs allege that
Defendants, in violation of the CBA, failed to remit the required fringe benefit
contributions to the Funds. As a result of that failure, an audit was conducted on May
20, 2016, that revealed the Defendants owed the Funds $69,722.63 for the period of
January 2013 through December 2015.
The parties engaged in negotiations over the course of months in order to come
to an agreement for Defendants to pay delinquent fringe benefits owed to the Funds.
On October 5, 2016, as a result of these on-going negotiations, the parties allegedly
reached an agreement on the essential terms of the payment agreement. On October
20, 2016, Plaintiffs’ counsel tendered to Defendants’ counsel proposed settlement
documents that memorialized the allegedly agreed upon essential terms. The proposed
settlement documents consisted of a Payment Agreement, pursuant to which the
Defendants would pay $74,575.63 according to a schedule of payments, and if such
payments and/or other conditions were not met, a Consent Judgment could be entered
upon the filing of a complaint.
On November 10, 2016, Defendants’ counsel indicated to Plaintiffs’ counsel
that his clients had indicated they would sign the documents but most of the
Defendants never signed the documents. Only Defendant Steve Pacitto, on behalf of
himself and Pacitto and Forest Construction Company, signed the Payment
Only Steven Pacitto (on behalf of himself, Pacitto and Forest
Construction Company, and JAT Management and Consulting Inc.) signed the
Consent Judgment. David Forest, Thomas Forest, Umberto Pacitto, and Joseph
Pacitto never signed either document, and no one signed the Payment Agreement on
behalf of JAT Management & Consulting, Inc.
In the latter half of 2016 and early in 2017, counsel for the Defendants was
informed that the Plaintiffs would file a complaint for entry of the Consent Judgment
for Breach of the Payment Agreement and for Defendants’ failure to sign same.
Plaintiffs’ counsel was informed that only Steve Pacitto would sign at this time and
to move forward with the filing. None of the payments have been made pursuant to
the Payment Agreement, and Defendants have not paid ongoing contributions for
several months,1 both of which are requirements under the terms of the Payment
Agreement. A breach of the Payment Agreement based on the failure to comply with
either of those requirements can trigger the entry of the Consent Judgment.
Plaintiffs filed the instant Motion seeking to enforce what they believe was an
agreed upon settlement agreement covering the amounts owed for the period of
January 2013 through December 2015. In the alternative, Plaintiffs seek partial
summary judgment on Count Four of the Complaint and ask the Court to order an
audit from January 2016 - present. Plaintiffs also request that they be allowed to
begin execution of the Consent Judgment against all Defendants, while the audit for
the subsequent period (January 2016 - present) is conducted.
APPLICABLE LAW & ANALYSIS
Defendants allegedly became delinquent in their Fringe Benefit payments
subsequent to the audit and are currently delinquent for the period July 2016
through the present.
Rule 56(a) of the Rules of Civil Procedures provides that the court “shall grant
summary judgment if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). The presence of factual disputes will preclude granting of summary
judgment only if the disputes are genuine and concern material facts. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is
“genuine” only if “the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.” Id. Although the Court must view the motion in the light
most favorable to the nonmoving party, where “the moving party has carried its
burden under Rule 56(c), its opponent must do more than simply show that there is
some metaphysical doubt as to the material facts.” Matsushita Electric Industrial Co.
v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Celotex Corp. v. Catrett, 477 U.S.
317, 323-24 (1986). Summary judgment must be entered against a party who fails to
make a showing sufficient to establish the existence of an element essential to that
party's case, and on which that party will bear the burden of proof at trial. In such a
situation, there can be “no genuine issue as to any material fact,” since a complete
failure of proof concerning an essential element of the nonmoving party's case
necessarily renders all other facts immaterial. Celotex Corp., 477 U.S. at 322-23. A
court must look to the substantive law to identify which facts are material. Anderson,
477 U.S. at 248.
Enforcement of the Settlement Agreement
Plaintiffs argue that the parties reached an enforceable settlement agreement on
all material terms regarding Defendants’ payment of delinquent fringe benefits owed
to the Funds. Plaintiffs state that the parties’ agreement was memorialized in the
Payment Agreement and Consent Judgment signed by Steve Pacitto. Plaintiffs
suggest that Defendants’ counsel: (1) indicated that Defendants would sign those
documents; and (2) “had a responsibility to ensure the agreed upon terms were fully
and timely carried out, which he has failed to do.” For those reasons, Plaintiffs argue
that there is an enforceable agreement that the Court has the power to enforce. Citing
ARO Corp. v. Allied Witan Co., 531 F.2d 1368, 1372 (6th Cir. 1976) (“Agreements
settling litigation are solemn undertakings invoking a duty upon the involved lawyers,
as officers of the court, to make every reasonable effort to see that the agreed terms
are fully and timely carried out”); Bowater N. Am. Corp. v. Murray Mach., Inc., 773
F.2d 71 (6th Cir. 1985) (it is within the inherent powers of the federal court to
summarily enforce settlement agreements).
Before a district court can enforce a settlement agreement, it must conclude that
the agreement has been reached on all material terms. Citing Brock v. Scheuner Corp.,
841 F.2d 151 (6th Cir. 1988). In this case, only one of the five individuals to the
Payment Agreement and the Consent Judgment (Steve Pacitto) has signed those
documents.2 No one signed the Payment Agreement on behalf of JAT Management
& Consulting, Inc. (incidentally, no one signed either the Payment Agreement or the
Consent Judgment on behalf of Plaintiffs).
As Defendants argue, the terms of the Payment Agreement govern the
“Company.” There are no terms that attribute any actions, duties or responsibilities
to any named Defendant. There are only three places in the Payment Agreement that
the named Defendants (including Thomas Forest and David Forest, both of whom
have been dismissed from this action) appear in any manner other than as part of the
“Company:” (a) in the caption; (b) in the first preamble paragraph (which defines
“Company” to mean all Defendants); and (c) in the signature block. Plaintiffs have
not offered any evidence that demonstrates that Steve Pacitto had the authority to bind
any party other than himself. The documents reflect that Steve Pacitto signed them
as “President” of Pacitto and Forest Construction Company, but there is no evidence
in the record that he had that authority.
Steve Pacitto also is the only one of the three remaining individual Defendants in this
action. Plaintiffs previously voluntarily dismissed two of the individual Defendants set forth in
the caption and as signatories to the Payment Agreement and Consent Judgment (David Forest
and Thomas Forest).
The Court finds that there is a genuine dispute of material fact whether all of
the parties have agreed upon all of the material terms in the Payment Agreement (or
the Consent Judgment). Based on that finding, the Court cannot as a matter of law
conclude that there is any “settlement agreement” in effect. And, even if the Court
were to find that the Payment Agreement (and/or Consent Judgment) constituted a
settlement agreement, Plaintiffs have not cited any terms in either document, nor any
legal authority, that would permit the Court to enforce the documents against the
Defendants who have not signed them. The Court denies Plaintiffs’ motion to enforce
a “settlement agreement.”
Summary Judgment of Count IV
Plaintiffs argue that there is no genuine dispute of material fact regarding the
amounts owed by Defendants pursuant to the May 20, 2016 audit (totaling
$74,575.63). Plaintiffs assert that: (a) the amounts due have been admitted by
Defendant Steve Pacitto; (b) Defendants’ counsel has made a written representation
that those amounts are due; and (c) Defendants have become delinquent in their
contributions to the Funds since the “execution” of the Payment Agreement and
Consent Judgment. For those reasons, Plaintiffs contend that summary judgment on
Count Four of the Complaint and entry of the Consent Judgment is appropriate. The
Court is not persuaded by Plaintiffs’ argument.
First, as discussed above, although Steve Pacitto may have signed the
documents, Plaintiffs have not identified any facts or law that demonstrates that Steve
Pacitto has the authority to speak on behalf of the other Defendants. Plaintiffs do not
indicate how Steve Pacitto’s actions: (1) eliminate any genuine dispute about the
amounts owed, as Steve Pacitto may have agreed to the amounts in order to avoid
litigation, or (2) are binding on the other Defendants. Second, Plaintiffs do not
specify the alleged written representation of Defendants’ counsel regarding the
amounts owed by Defendants. Plaintiffs have included as exhibits to their motion
some emails from Defendants’ counsel, including an email where he stated, “I was
told that my client was going to sign the docs [the Payment Agreement and Consent
Judgment] and I have not heard back.” The Court does not find that the cited
statement by Defendants’ unequivocally demonstrates that Defendants’ counsel
admitted the amounts set forth in the documents (the amounts Plaintiffs claim is
undisputed). The Court denies Plaintiffs’ motion for summary judgment on Count IV.
Partial Execution of the Judgment
Plaintiffs assert that “the Court may allow the Plaintiffs to execute on the
already signed payment agreement because it is a sum that is not in dispute.” Relying
on United States ex rel. Gonter v. General Dynamics, 2006 U.S. Dist. LEXIS 92512.
For the reasons discussed in Sections III.B.1. and 2. above, the Court cannot conclude
that the “signed” Payment Agreement is enforceable or that the sum sought by
Plaintiffs is not in dispute and Gonter is not applicable to this matter. Accordingly,
the Court declines to allow Plaintiffs to execute on the Payment Agreement, in whole
or in part, at this time.
IT IS ORDERED that Plaintiffs’ Motion to Enforce Settlement Agreement or
for Summary Judgment on Count IV and Execution of Consent Judgment [Dkt. No.
14] is DENIED.
IT IS ORDERED.
S/Denise Page Hood
Denise Page Hood
Chief Judge, United States District Court
Dated: November 14, 2017
I hereby certify that a copy of the foregoing document was served upon counsel of record on
November 14, 2017, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
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