IUOE Local 324 Retirement Trust Fund et al v. LGC Global FM, LLC et al

Filing 63

OPINION and ORDER Denying Plaintiff's 56 Motion for Limited Scope Discovery. Signed by District Judge Linda V. Parker. (RLou)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
IUOE LOCAL 324 RETIREMENT TRUST
FUND, ET AL.,
Plaintiffs,

Civil Case No. 17-13921
Honorable Linda V. Parker

v.
LGC GLOBAL FM, LLC (f/k/a Lakeshore
Rickman JV, LLC) and AVINASH RACHMALE,
Defendants.
_____________________________________/
OPINION AND ORDER DENYING PLAINTIFFS’ MOTION FOR
LIMITED SCOPE DISCOVERY
This is an action to recover fringe benefit contributions allegedly owed to
Plaintiffs, which are pension and welfare benefit trust funds established and
administered pursuant to Section 302 of the Labor Management Relations Act of
1947, as amended, 29 U.S.C. § 186, and the Employee Retirement Income Security
Act of 1974, 29 U.S.C. § 1001 et seq. Presently before the Court is Plaintiffs’
“Motion for Limited Scope Discovery on Plaintiffs’ Amended Complaint,” filed
December 13, 2019. (ECF No. 56.) The motion has been fully briefed. (ECF
Nos. 57, 58.) For the following reasons, the Court is denying Plaintiffs’ motion.

Background
On December 5, 2017, Plaintiffs initiated this lawsuit against LGC Global,
FM, LLC (“LGC”) and Avinash Rachmale (“Mr. Rachmale”) (collectively
“Defendants”). (See ECF No. 1.) Plaintiffs claim that LGC owes unpaid
contributions to the funds pursuant to a collective bargaining agreement (“CBA”).
This CBA covered work that LGC’s operating engineers performed at a number of
Detroit Public Schools (“DPS”) pursuant to LGC’s contract to perform operations
management at the schools. Plaintiffs seek to hold Mr. Rachmale personally liable
for the unpaid contributions as an ERISA fiduciary.
Defendants initially did not respond to Plaintiffs’ Complaint and clerk’s
entries of default were entered against them on January 25, 2018. (ECF Nos. 8, 9.)
Only after Plaintiffs filed a motion for default judgment on February 23, 2018
(ECF No. 12), did counsel for Defendants enter an appearance. (ECF No. 14.)
The parties then stipulated to the withdrawal of Plaintiffs’ motion for default
judgment and the clerk’s entries of default were vacated. (ECF No. 16.)
The Court thereafter conducted an initial scheduling conference and entered
its first scheduling order in this matter. (ECF No. 20.) The scheduling order was
then amended two times at the parties’ request (ECF Nos. 24, 29), with the Second
Amended Scheduling Order setting a discovery deadline of December 12, 2018.
Approximately one month after the discovery deadline, on January 11, 2019,
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Plaintiffs filed a motion to file an amended complaint. (ECF No. 34.) The purpose
of the amendment was to add a count of “liability as a single employer” against
Defendants. (Id. at Pg ID 173.)
Specifically, Plaintiffs maintain that LGC and Tiskono and Associate, LLC
(“Tiskono”) are alter ego/single employers and that Defendants therefore owe
contributions for certain work Tiskono performed at DPS pursuant to a subcontract
with LGC. Plaintiffs indicated in their motion to amend that operating engineers
working for LGC were transferred to Tiskono in January 2016, to perform the
exact work they previously had been doing for LGC at the Detroit Public Schools.
(Id. ¶ 7.) Plaintiffs further stated that the employees remained on Tiskono’s
payroll until at least December 31, 2016, and that during this period, LGC gave
Tiskono enough money to cover its payroll for those employees. (Id. ¶¶ 8, 9.)
Plaintiffs claim that LGC made decisions for Tiskono and controlled its
management, and that Tiskono had no operating engineers before this point. (Id.
¶ 10.)
In seeking to amend their Complaint, Plaintiffs represented to the Court that
they “did not wish to delay this matter, and will not seek any period of
discovery….” (Id. ¶ 25.) Plaintiffs sought only the opportunity to amend their
pleading and a briefing schedule. (Id.) Plaintiffs indicated that they would not
object, however, if Defendants needed a period of discovery as a result of the
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amended pleading. (Id.) On the same date that they filed their motion to amend,
Plaintiffs requested an emergency extension of the dispositive motion deadline,
which had passed a month earlier. (ECF No. 33.)
On January 11, 2019, the Court granted Plaintiffs’ motion to extend the
dispositive motion deadline and Plaintiffs filed a motion for partial summary on
February 11, 2019. (ECF No. 36.) In their motion, Plaintiffs sought inter alia a
judgment against Defendants for the amounts set forth in audit reports for the
periods October 2015 to January 2016 and April through June 2018, which were
attached as exhibits to the motion. Plaintiffs also asked the Court to order LGC to
open its books and records for Plaintiffs to conduct an audit to determine the
amount of unpaid contributions due to Plaintiffs for all unaudited periods
beginning January 2016. (Id. at Pg ID 271.) In response to Plaintiffs’ motion,
Defendants asked for time to conduct discovery under Federal Rule of Civil
Procedure 56(d) with respect to the audit reports attached to Plaintiffs’ motion, as
Defendants had not previously received those reports. (ECF No. 50 at Pg ID 394.)
In the interim, the deadline for Defendants to respond to Plaintiffs’ motion to
file an amended complaint passed without Defendants responding to the motion.
On April 15, 2019, the Court granted Plaintiffs’ motion and Plaintiffs filed their
Amended Complaint on April 19, 2019. (ECF No. 43.) In an Answer to the
Amended Complaint filed May 3, 2019, Defendants denied Plaintiffs’ allegations
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concerning LGC’s relationship with Tiskono and Tiskono’s operating engineers.
(ECF No. 44 at Pg ID 755-67.)
On September 27, 2019, the Court filed an opinion and order granting in part
and denying in part Plaintiffs’ motion for partial summary judgment. (ECF No.
50.) Over Defendants’ objection, the Court granted Plaintiffs’ request to conduct
additional audits. (Id. at Pg ID 900-01.) The Court reached this decision despite
finding it unclear “why Plaintiffs did not previously conduct the audit they
[sought] to perform.” (Id. at 900.) The Court also extended discovery for an
additional thirty days, but only to allow Defendants to pursue specific discovery
related to the results of the audits attached to Plaintiffs’ motion and for the parties
to determine whether any of the amounts reflected in those reports as being due
were among the contributions LGC paid pursuant to a settlement with the National
Labor Relations Board. (Id. at 901.) On October 7, 2019, the parties submitted,
and the Court signed, a stipulated order extending this limited discovery an
additional thirty days. (ECF No. 53.)
On December 6, 2019, the Court entered a Third Amended Scheduling
Order, setting a final pretrial conference for March 25, 2020, and a trial date of
April 14, 2020. (ECF No. 55.) A week later, on December 13, 2019, Plaintiffs
filed the pending motion for limited scope discovery. (ECF No. 56.) Plaintiffs
seek additional discovery to address Defendants’ contention that they are not liable
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under the CBA for Tiskono’s failure to pay the required fringe benefit
contributions. (Id. ¶ 13.)
Applicable Law and Analysis
Federal Rule of Civil Procedure 16(b)(4) provides that “[a] schedule may be
modified only for good cause and with the judge’s consent.” The Sixth Circuit has
identified five factors relevant to a party’s request for additional time for
discovery:
(1) when the moving party learned of the issue that is the subject of
discovery; (2) how the discovery would affect the ruling below; (3)
the length of the discovery period; (4) whether the moving party was
dilatory; and (5) whether the adverse party was responsive to prior
discovery requests.
Dowling v. Cleveland Clinic Found., 593 F.3d 472, 478 (6th Cir. 2010) (citing
Audi AG v. D’Amato, 469 F.3d 534, 541 (6th Cir. 2006)) (additional citation
omitted). “The overarching inquiry in these overlapping factors is whether the
moving party was diligent in pursuing discovery.” Id.
As to the first factor, Plaintiffs should have been aware of at least a potential
alter ego issue concerning LGC and Tiskono when Plaintiffs obtained records for
the audit reflecting that Tiskono hired LGC’s employees to do work from January
2016 through January 15, 2017. (See ECF No. 56 at Pg ID 919.) While the record
does not reflect when Plaintiffs received these documents, it does reflect that
Plaintiffs took the deposition of Tiskono’s owner, Tiskono Crawford, on December
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28, 2018. (ECF No. 34-5.) At his deposition, Mr. Crawford testified about his
company’s employment of LGC’s engineers, how LGC agreed to cover the payroll
for those engineers, and that LGC agreed to provide a managing engineer to
oversee their work. (Id. 13-14, 17-18.)
Further, Plaintiffs sought to amend their Complaint to add their single
employer claim on January 11, 2019. Clearly Plaintiffs were aware of the issue on
which they now seek to conduct discovery at that time. Plaintiffs maintain that it
was only during the discovery conducted after the Court’s summary judgment
decision that they learned that Defendants contest their liability for the
contributions Tiskono failed to pay. (See ECF No. 56 at Pg ID 921.) However, as
set forth earlier, Defendants denied their liability in their Answer to Plaintiff’s
Amended Complaint, which was filed on May 3, 2019.
With respect to the second factor, the Court is not able to determine how a
denial of Plaintiffs’ request for further discovery will impact the proceedings
moving forward as Plaintiffs do not specifically identify what additional discovery
they are seeking to support their assertion that LGC and Tiskono are alter-ego
companies or a single employer. It does appear, however, that Plaintiffs possess
evidence already to support LGC’s liability for contributions owed for the period
when Tiskono assumed LGC’s duties at DPS.

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Turning to the third factor, the Court believes Plaintiffs had ample time
during the discovery period to seek the information they are now pursuing. The
schedule in this case has been extended multiple times, thereby also extending the
deadline for the parties to conduct discovery. This does not account for the
additional period of discovery after the summary judgment hearing. The Court
recognizes that this latter discovery was limited to discrete issues that did not
include Plaintiffs’ alter-ego theory. Nevertheless, Plaintiffs never expressed a need
to engage in further discovery on that subject and, in fact, expressly assured the
Court that no discovery would be needed on that issue when seeking to amend
their Complaint. For that reason, the Court also believes that Plaintiffs have not
been diligent in pursuing their discovery requests.
Finally, as to the fifth factor, Plaintiffs suggest in their motion that
Defendants have not been forthcoming in providing documentation. However,
Plaintiffs fail to identify any documentation sought from Defendants regarding the
alter-ego issue, which Defendants failed to produce. Plaintiffs certainly have never
filed a motion to compel in this litigation to obtain any discovery, much less
discovery on this issue.
For all these reasons, the Court does not find good cause to modify the
scheduling order to allow Plaintiffs limited scope discovery.
Accordingly,
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IT IS ORDERED that Plaintiffs’ Motion for Limited Scope Discovery on
Plaintiffs’ Amended Complaint (ECF No. 56) is DENIED.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: January 30, 2020

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