Greater St. Louis Construction Laborers Welfare Fund et al v. Alford Environmental Services, Inc. et al

Filing 28

MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that the motion of defendants Alford Environmental Services, Inc., Jerry Alford, and Julianne Alford for a more definite statement (Doc. 26 ) is denied. Signed by Magistrate Judge David D. Noce on 3/26/14. (KJS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

GREATER ST. LOUIS CONSTRUCTION
LABORERS WELFARE FUND, et al,
Plaintiffs,
v.
ALFORD ENVIRONMENTAL
SERVICES, INC,. JERRY ALFORD, and
JULIANNE ALFORD,
Defendants.

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No. 4:13 CV 972 DDN

MEMORANDUM AND ORDER
This action is before the court on the motion of defendants Alford Environmental
Services, Inc., Jerry Alford, and Julianne Alford for a more definite statement. (Doc. 26.)

I. BACKGROUND
On May 21, 2013, plaintiffs Greater St. Louis Construction Laborers Welfare Fund, et al,
commenced this action against defendants Alford Environmental Services, Inc., Jerry Alford,
and Julianne Alford. (Doc. 1.) According to the complaint, the following occurred. Plaintiffs
include the four employee benefit plans as defined by the Employee Retirement Income Security
Act of 1974, 29 U.S.C. § 1002, and their trustees.1 (Id. at ¶¶ 1-4.) Plaintiffs also include Local
Unions Nos. 42, 53, and 110, Laborers International Union of North America, AFL-CIO, which
are labor organizations as defined by the National Labor Relations Act, 29 U.S.C. § 152. (Id. at
¶ 5.) Defendant Julianne Alford owns defendant Alford Environmental Services, an employer,
and her duties include paying fringe benefit contributions to plaintiffs. (Id. at ¶ 8.) Defendant
Jerry Alford is a salaried employee of Alford Environmental Services and the spouse of Julianne
Alford. (Id. at ¶ 7.)

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Plaintiffs refer to the employee benefit plans as the Welfare Fund, the Pension Trust, the
Vacation Fund, and the Training Fund.

A collective bargaining agreement bound Alford Environmental Services and required
monthly payments to the employee benefit funds and the submission of monthly report forms.
(Id. at ¶ 10.) The collective bargaining agreement and the employee benefit plans allow the
trustees of the employee benefit plans to examine the books and records periodically to ensure
that the payments conform with the terms of the collective bargaining agreement. (Id.) Plaintiffs
audited Alford Environmental Services for the period of April 2009 through February 2013. (Id.
at ¶ 11.) The audit revealed that Alford Environmental Services reported that Jerry Alford
worked significantly more hours than he did for the purpose of preserving his eligibility for
medical benefits from the Welfare Fund. (Id.)
Plaintiffs’ policy requires contributions for at least forty hours per week to maintain the
coverage of salaried individuals who perform covered work but do not maintain records of their
hours in the field. (Id. at ¶ 13.) Because Alford Environmental Services failed to report at least
forty hours per week for Jerry Alford between April 2009 and February 2013, Alford
Environmental Services owes plaintiffs $75,426.84 in contributions, $15,085.28 in liquidated
damages, and $4,358.94 in interest. (Id. at ¶¶ 14.) Alford Environmental Services also failed to
report at least forty hours per week for Jerry Alford between May 2003 and March 2009. (Id. at
¶ 15.) However, no audit has been performed to ascertain the amount owed to plaintiffs as a
result. (Id. at ¶ 16.)
Further, the summary plan description of the Welfare Fund states that a participant’s
coverage continues to the next quarter only if the participant worked 275 hours of covered
employment. (Id. at ¶ 20.) Alford Environmental Services through Julianne Alford falsely
reported that Jerry Alford worked 275 hours per quarter for the period of May 2003 through the
present. (Id. at ¶ 21.) As a result of the false report, plaintiffs erroneously paid Welfare Fund
claims on behalf of the Alford family in the amount of $335,512.41. (Id. at ¶ 22.)
Plaintiffs allege two counts under ERISA. In Count I, plaintiffs allege under 29 U.S.C. §
1145 that Alford Environmental Services failed to pay contributions. (Id. at ¶¶ 12-18.) In Count
II, plaintiffs alternatively allege that they erroneously paid the amounts to Jerry Alford from the
Welfare Fund. (Id. at ¶¶ 19-23.) Plaintiffs request an interlocutory order of accounting requiring
Alford Environmental Services to submit its books and records to an accountant selected by
plaintiffs to determine the amounts owed for the period of May 2003 through March 2009 and an
order requiring Alford Environmental Services to pay the employee benefit funds in accordance
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with present and future collective bargaining agreements. (Id. at 6-7.) Plaintiffs also request the
amount of the contributions owed, interest, liquidated damages, costs, accounting fees, and
attorney fees, or the amounts erroneously paid from the Welfare Fund. (Id. at 6-8.)

II. DISCUSSION
Defendants move for a more definite statement of plaintiffs’ claims.

Specifically,

defendants argue that plaintiffs failed to set forth the jurisdictional basis for Count II.
Additionally, defendants argue that Count II is a claim of common law fraud and that Fed. R.
Civ. P. 9(b) requires plaintiffs to plead the circumstances of the alleged fraud with particularity.
Plaintiffs respond that the complaint alleges an equitable claim of restitution under ERISA, 29
U.S.C. § 1132(a)(3).
“A party may move for a more definite statement of a pleading to which a responsive
pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare
a response.” Fed. R. Civ. P. 12(e). “Rule 12(e) is not designed to remedy an alleged lack of
detail, rather, the Rule is intended to serve as a means to remedy unintelligible pleadings.”
Resolution Trust Corp. v. Fiala, 870 F. Supp. 962, 977 (E.D. Mo. 1994). Rule 12(e) motions are
generally disfavored, particularly when discovery will clarify the issues.    Thrasher v. Missouri
State Highway Comm'n, 534 F. Supp. 103, 106 (E.D. Mo. 1981), aff'd, 691 F.2d 504 (8th Cir.
1982); Zamora v. Massey-Ferguson, Inc., 336 F. Supp. 588, 592 (S.D. Iowa 1972).
29 U.S.C. § 1132(a) authorizes civil actions by fiduciaries to enjoin and obtain other
equitable relief for any act or practice that violates any term of an employee benefit plan. The
court concludes that plaintiffs’ demand for the return of payments from the Welfare Fund falls
squarely within this provision. See Sereboff v. Mid Atl. Med. Servs., Inc., 547 U.S. 356, 360
(2006); Dillard's Inc. v. Liberty Life Assur. Co. of Boston, 456 F.3d 894, 900-01 (8th Cir. 2006).
Moreover, plaintiffs’ complaint adequately establishes federal question jurisdiction. (Doc. 1 at ¶
9.) The Count II allegations incorporate the jurisdictional allegations, which expressly refer to
29 U.S.C. § 1132(a). (Id. at 19.)
Fed. R. Civ. P. 9(b) states, “In alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake.”

To satisfy the particularity

requirement of Rule 9(b), the complaint must include “such facts as the time, place, and content
of the defendant's false representations, as well as the details of the defendant's fraudulent acts,
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including when the acts occurred, who engaged in them, and what was obtained as a result.”
U.S. ex rel. Joshi v. St. Luke's Hosp., Inc., 441 F.3d 552, 556 (8th Cir. 2006).

Although the

Count II allegations could arguably support a fraud claim, Count II is an equitable claim that
does not rely on allegations of fraud. See Dillards, 456 F.3d at 901. Therefore, the pleading
requirements of Fed. R. Civ. P. 9(b) do not apply. Additionally, even if plaintiffs pled a claim of
fraud, the fact allegations satisfy the particularity requirement. Finally, the defendants’ answer
includes responses to each allegation in the complaint, indicating the absence of the ambiguity
necessary to sustain a motion for a more definite statement. (Doc. 17.)
Accordingly, defendants’ motion for a more definite statement is denied.

III. CONCLUSION
For the reasons stated above,
IT IS HEREBY ORDERED that the motion of defendants Alford Environmental
Services, Inc., Jerry Alford, and Julianne Alford for a more definite statement (Doc. 26) is
denied.

/S/ David D. Noce______________
UNITED STATES MAGISTRATE JUDGE
Signed on March 26, 2014.

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