Trustees for the Michigan Carpenters' Council Pension Fund et al v. D.N. West Enterprises, Ltd. et al

Filing 66

OPINION; signed by Magistrate Judge Ellen S. Carmody (Magistrate Judge Ellen S. Carmody, cbh)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

TRUSTEES FOR THE MICHIGAN
CARPENTERS’ COUNCIL
PENSION FUND, et al.,
Plaintiff,

Hon. Ellen S. Carmody

v.

Case No. 1:11-CV-860

D.N. WEST ENTERPRISES, LTD., et al.,
Defendant.
______________________________________/
OPINION
This matter is before the Court on Defendants’ Motion for Partial Summary Judgment,
(dkt. #44), and Plaintiffs’ Motion for Summary Judgment, (dkt. #46). On December 13, 2011, the
parties consented to proceed in this Court for all further proceedings, including trial and an order of final
judgment. 28 U.S.C. § 636(c)(1). By Order of Reference, the Honorable Gordon J. Quist referred this
case to the undersigned. (Dkt. #12). For the reasons articulated below, Plaintiffs’ and Defendants’
motions for summary judgment are both denied.

BACKGROUND
The following allegations are contained in Plaintiffs’ complaint.1 (Dkt. #1). Defendant
D.N. West2 Enterprises (West Enterprises) was, during the relevant time period, party to collective

1

Plaintiffs are the trustees for four separate trust funds established to provide benefits to members of the Michigan Carpenters’
Council. The trust funds in question are the Michigan Carpenters’ Council: (1) pension fund; (2) health and welfare fund; (3) apprenticeship and
training fund; and (4) annuity fund.
2

West Enterprises was founded by Doug West in 1982.

bargaining agreements with the Michigan Regional Council of Carpenters (MRCC). Pursuant to these
agreements, West Enterprises was required to make certain contributions to the plaintiff trust funds. An
audit conducted by Plaintiffs revealed that West Enterprises owes Plaintiffs seventy-one thousand, threehundred seventy-nine dollars and fifty-eight cents ($71,379.58).3
Defendant Oak Construction4 is not party to the aforementioned collective bargaining
agreements. Oak Construction was created “in part for the purpose of allowing West [Enterprises] to
benefit by being able to bid and perform work as a non-union contractor, thereby avoiding the terms of
the collective bargaining agreement between West [Enterprises] and the MRCC.” West Enterprises and
Oak Construction “have worked together to avoid [West Enterprises’] obligations under the collective
bargaining agreement.” Because Oak Construction is the “alter ego or successor” to West Enterprises,
Oak Construction is subject to the terms of the collective bargaining agreements to which West
Enterprises is party. Oak Construction and West Enterprises are, therefore, jointly liable for payment
of the aforementioned amounts. The parties have each moved for summary judgment on the alter ego
issue. Plaintiffs also seek additional relief (damages, attorneys’ fees, and costs) which are obtainable
only if Plaintiffs prevail on the alter ego issue.

LEGAL STANDARD
Summary judgment “shall” be granted “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). A party moving for summary judgment can satisfy its burden by demonstrating “that the

3

In subsequent pleadings, Plaintiffs assert that the amount owed has increased to more than ninety-six thousand dollars. (Dkt.

#46).
4

Oak Construction was founded in 2007 by Holly Faler (Doug West’s daughter) and her husband, Bret Faler.

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respondent, having had sufficient opportunity for discovery, has no evidence to support an essential
element of his or her case.” Minadeo v. ICI Paints, 398 F.3d 751, 761 (6th Cir. 2005); see also, Amini
v. Oberlin College, 440 F.3d 350, 357 (6th Cir. 2006) (quoting Celotex Corp. v. Catrett, 477 U.S. 317,
325 (1986)). The fact that the evidence may be controlled or possessed by the moving party does not
change the non-moving party’s burden “to show sufficient evidence from which a jury could reasonably
find in her favor, again, so long as she has had a full opportunity to conduct discovery.” Minadeo, 398
F.3d at 761 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986)).
Once the moving party demonstrates that “there is an absence of evidence to support the
nonmoving party’s case,” the non-moving party “must identify specific facts that can be established by
admissible evidence, which demonstrate a genuine issue for trial.” Amini, 440 F.3d at 357 (citing
Anderson, 477 U.S. at 247-48; Celotex Corp. v. Catrett, 477 U.S. at 324). While the Court must view
the evidence in the light most favorable to the non-moving party, the party opposing the summary
judgment motion “must do more than simply show that there is some metaphysical doubt as to the
material facts.” Amini, 440 F.3d at 357. The existence of a mere “scintilla of evidence” in support of
the non-moving party’s position is insufficient. Daniels v. Woodside, 396 F.3d 730, 734-35 (6th Cir.
2005) (quoting Anderson, 477 U.S. at 252). The non-moving party “may not rest upon [his] mere
allegations,” but must instead present “significant probative evidence” establishing that “there is a
genuine issue for trial.” Pack v. Damon Corp., 434 F.3d 810, 813-14 (6th Cir. 2006) (citations omitted).
Moreover, the non-moving party cannot defeat a properly supported motion for summary
judgment by “simply arguing that it relies solely or in part upon credibility determinations.” Fogerty
v. MGM Group Holdings Corp., Inc., 379 F.3d 348, 353 (6th Cir. 2004). Rather, the non-moving party
“must be able to point to some facts which may or will entitle him to judgment, or refute the proof of

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the moving party in some material portion, and. . .may not merely recite the incantation, ‘Credibility,’
and have a trial on the hope that a jury may disbelieve factually uncontested proof.” Id. at 353-54. In
sum, summary judgment is appropriate “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.” Daniels, 396 F.3d at 735.
While a moving party without the burden of proof need only show that the opponent
cannot sustain his burden at trial, see Morris v. Oldham County Fiscal Court, 201 F.3d 784, 787 (6th
Cir. 2000); Minadeo, 398 F.3d at 761, a moving party with the burden of proof faces a “substantially
higher hurdle.” Arnett v. Myers, 281 F.3d 552, 561 (6th Cir. 2002); Cockrel v. Shelby County Sch. Dist.,
270 F.3d 1036, 1056 (6th Cir. 2001). “Where the moving party has the burden -- the plaintiff on a claim
for relief or the defendant on an affirmative defense -- his showing must be sufficient for the court to
hold that no reasonable trier of fact could find other than for the moving party.” Calderone v. United
States, 799 F.2d 254, 259 (6th Cir. 1986) (quoting W. SCHWARZER, Summary Judgment Under the
Federal Rules: Defining Genuine Issues of Material Fact, 99 F.R.D. 465, 487-88 (1984)). The Sixth
Circuit has repeatedly emphasized that the party with the burden of proof “must show the record
contains evidence satisfying the burden of persuasion and that the evidence is so powerful that no
reasonable jury would be free to disbelieve it.” Arnett, 281 F.3d at 561 (quoting 11 JAMES WILLIAM
MOORE, ET AL., MOORE’S FEDERAL PRACTICE § 56.13[1], at 56-138 (3d ed. 2000); Cockrel, 270 F.2d
at 1056 (same). Accordingly, summary judgment in favor of the party with the burden of persuasion
“is inappropriate when the evidence is susceptible of different interpretations or inferences by the trier
of fact.” Hunt v. Cromartie, 526 U.S. 541, 553 (1999).

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ANALYSIS
The alter ego doctrine is an equitable doctrine “developed to prevent employers from
evading obligations under the National Labor Relations Act merely by changing or altering their
corporate form.” Trustees of Detroit Carpenters Fringe Benefit Funds v. Industrial Contracting, LLC,
581 F.3d 313, 317-18 (6th Cir. 2009). The doctrine operates “to bind an employer to a collective
bargaining agreement if it is found to be an alter ego of a signatory employer.” Id. at 318. Courts have
found alter ego operations in two contexts: (1) where the “new entity” is “merely a disguised
continuance of the old employer”; and (2) where “two or more coexisting employers performing the
same work are in fact one business, separated only in form.”
When deciding whether two businesses are alter egos, the Court must examine “whether
the two enterprises have substantially identical management, business purpose, operation, equipment,
customers, supervision and ownership.” Id.; see also, Road Sprinkler Fitters Local Union No. 669 v.
Dorn Sprinkler Co., 669 F.3d 790, 794 (6th Cir. 2012). None of these factors is dispositive, rather “all
the relevant factors must be considered together.” Trustees of Detroit Carpenters Fringe Benefit Funds,
581 F.3d at 318; Road Sprinkler, 669 F.3d at 794. Furthermore, evidence, or lack thereof, of “an
employer’s intent to evade the obligations of a collective bargaining contract is merely one of the factors
to be considered and is not a prerequisite to the imposition of alter-ego status.” Road Sprinkler, 669
F.3d at 794; see also, Trustees of Detroit Carpenters Fringe Benefit Funds, 581 F.3d at 318.
The parties insist that there do not exist any factual disputes that preclude granting
summary judgment in this matter. While the parties concede that certain disputes of fact are present,
they nevertheless assert that any such factual disputes are immaterial and, therefore, do not preclude
granting summary judgment. The Court, however, is not persuaded.

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As previously noted, a party is entitled to summary judgment if it demonstrates the
absence of a “genuine dispute as to any material fact” and, furthermore, that it “is entitled to judgment
as a matter of law.” In the context of a motion for summary judgment, a fact is material if “might affect
the outcome of the suit under the governing law.” Anderson, 477 U.S. at 248; see also, Stamtec, Inc.
v. Anson Stamping Co., 346 F.3d 651, 654 (6th Cir. 2003). Given the analysis applicable to Plaintiffs’
alter ego claim, any fact that noticeably bears on one or more of the aforementioned factors is, therefore,
material. While the parties may be correct that a great many of the most impactful facts are not
disputed, such does not necessarily lead to the conclusion that the facts that are yet disputed are
immaterial. The Court concludes, therefore, that the parties have both failed to demonstrate the absence
of a “genuine dispute as to any material fact” in this matter.
The parties have both likewise failed to satisfy their burden as to the second prong of the
summary judgment standard. The parties’ arguments in favor of summary judgment rest on inferences
drawn from the undisputed facts. However, the parties have failed to establish that the inferences on
which their arguments rest are the only reasonable inferences that can be drawn from such facts and,
furthermore, that such inferences will not be impacted by the resolution of the material facts which are
still in dispute. Accordingly, the Court concludes that the parties have both failed to demonstrate that
they are “entitled to judgment as a matter of law.” The Court, therefore, denies both parties motions for
summary judgment.

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CONCLUSION
For the reasons articulated herein, Defendants’ Motion for Partial Summary Judgment,
(dkt. #44), and Plaintiffs’ Motion for Summary Judgment, (dkt. #46), are both denied. An Order
consistent with this Opinion will enter.

Date: June 18, 2013

/s/ Ellen S. Carmody
ELLEN S. CARMODY
United States Magistrate Judge

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