LABORERS COMBINED FUNDS OF WESTERN PENNSYLVANIA, AS AGENT FOR PHILLIP AMERIS AND PAUL V. SCABILLONI, TRUSTEES AD LITEM, LABORERS' DISTRICT COUNCIL OF WESTERN PENNSYLVANIA WELFARE AND PENSION v. JENNINGS
MEMORANDUM OPINION AND ORDER - upon consideration of the Funds' Motion for Summary Judgment (ECF No. 37 ) and Defendant Rummel's Motion for Summary Judgment (ECF No. 43 ), and in accordance with the accompanying Memorandum Opinion, IT IS HEREBY ORDERED as follows: 1. The Court will GRANT the Funds' Motion for Summary Judgment (ECF No. 37 ) in its entirety. a. The Court directs the Clerk to enter judgment in favor of the Funds on their claims against Defendant Jennings (Counts I and Counts II). b. For Count I, the Court directs the Clerk to enter a judgment of $658,656.50, plus per diem interest of $88.62 after September 18, 2017. c. For Count II, the Court directs the Clerk to enter a judgment of $44,253.9 9, plus per diem interest of $10.95 after September 18, 2017. 2. The Court will GRANT Defendant Rummel's Motion for Summary Judgment (ECF No. 43 ) in its entirety. 3. Finally, the Court directs the Clerk to close the case, and as more fully stated in said Memorandum Opinion and Order. Signed by Judge Kim R. Gibson on 2/9/2018. (dlg)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
LABORERS' COMBINED FUNDS OF
WESTERN PENNSYLVANIA, et. al,
CIVIL ACTION NO. 2:15-1693
JUDGE KIM R. GIBSON
KATHLEEN JENNINGS, SHERI
RUMMEL, and JAMES REDDEN,
Pending before the Court are two motions for summary judgment, one filed by Plaintiff
Laborers' Combined Funds of Western Pennsylvania, et. al (the "Funds") (ECF No. 37) and one
filed by Defendant Sheri Rummel (ECF No. 43). For the reasons explained below, the Court will
grant both motions.
This Court has subject matter jurisdiction over the Funds' Employee Retirement Income
Security Act of 1974 ("ERISA") claims as they arise under federal law. 28U.S.C.§1331. The Court
has supplemental jurisdiction over the Funds' state law claims pursuant to 28 U.S.C. § 1367.
This dispute arises from a construction company's failure to remit salary withholdings
back to the Funds as required under governing collective-bargaining agreements ("CBAs") and
Trust Agreements. The Court will first summarize the course of the litigation before evaluating
the relevant facts.
On March 3, 2017, the Funds filed their Amended Complaint1 against Kathleen Jennings,
Sheri Rummel, and James Redden, former employees of On Call Flagging, Inc. ("On Call"), a
construction company that signed a labor agreement with the Union Plaintiffs2 that required On
Call to remit employee benefit contributions to the Funds. (See ECF No. 17.) The Funds' Amended
Complaint contains two counts against each defendant: one count for breach of fiduciary duty
under ERISA and one count for common-law conversion. (See id. at':[':[ 15-80.)
The Funds moved for default and default judgment against Redden, who failed to
respond to the Amended Complaint. (See ECF Nos. 24, 26.) The Clerk of Court entered default
(ECF No. 25) and this Court entered a default judgment. (ECF No. 27.) Accordingly, only claims
against Jennings and Rummel remain unresolved at this time.
On September 29, 2017, the Funds filed for summary judgment against Defendant
Jennings. 3 Pursuant to this Court's Scheduling Order entered on June 13, 2017, Jennings had thirty
(30) days to file her response to the Funds' motion for summary judgment. (See ECF No. 33.)
However, Jennings never filed a response.
The Funds filed their original Complaint on December 23, 2015. (ECF No. 1.) The original Complaint only
named Jennings as a defendant. (See Id.)
2 The Union Plaintiffs are the Laborers' International Union of North America and the Laborers' District
Council of Western Pennsylvania. (ECF No. 2 at 'II 3.)
3 The Funds do not move for summary judgment against Defendant Rummel.
On October 7, 2017, Defendant Rummel filed for summary judgment. (See ECF No. 43.)
The Funds had thirty (30) days to respond to Rummel's motion. (See ECF No. 33.) However, the
Funds never filed a response.
"Summary judgment is appropriate only where ... there is no genuine issue as to any
material fact ... and the moving party is entitled to judgment as a matter of law." Melrose, Inc. v.
Pittsburgh, 613 F.3d 380, 387 (3d Cir. 2010) (quoting Ruehl v. Viacom, Inc., 500 F.3d 375, 380 n.6 (3d
Cir. 2007)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Fed. R. Civ. P. 56(a). Issues of
fact are genuine "if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also McGreevy v.
Stroup, 413 F.3d 359, 363 (3d Cir. 2005). Material facts are those that will affect the outcome of the
trial under governing law. Anderson, 477 U.S. at 248. The Court's role is "not to weigh the evidence
or to determine the truth of the matter, but only to determine whether the evidence of record is
such that a reasonable jury could return a verdict for the nonmoving party." Am. Eagle Outfitters
v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009). "In making this determination, 'a court must
view the facts in the light most favorable to the nonmoving party and draw all inferences in that
party's favor.'" Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000) (quoting Armbruster
v. Unisys Corp., 32 F.3d 768, 777 (3d Cir. 1994)).
The moving party bears the initial responsibility of stating the basis for its motion and
identifying those portions of the record that demonstrate the absence of a genuine issue of
material fact. Celotex, 477 U.S. at 323. If the moving party meets this burden, the party opposing
summary judgment "may not rest upon the mere allegations or denials" of the pleading, but
"must set forth specific facts showing that there is a genuine issue for trial." Saldana v. Kmart Corp.,
260 F.3d 228, 232 (3d Cir. 2001) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 n.11 (1986)). "For an issue to be genuine, the nonmovant needs to supply more than a
scintilla of evidence in support of its position-there must be sufficient evidence (not mere
allegations) for a reasonable jury to find for the nonmovant." Coolspring Stone Supply v. Am. States
Life Ins. Co., 10 F.3d 144, 148 (3d Cir. 1993); see also Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594
(3d Cir. 2005) (noting that a party opposing summary judgment "must present more than just
bare assertions, conclusory allegations or suspicions to show the existence of a genuine issue")
(internal quotation marks omitted).
Federal Rule of Civil Procedure 56 governs summary judgment. See Fed. R. Civ. P. 56.
Section (c) describes the "Procedures" a party must follow when moving for summary judgment.
Id. Subsection (c)(l), titled "Supporting Factual Positions," requires that:
A party asserting that a fact cannot be or is genuinely disputed must support the
(A) citing to particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits or
declarations, stipulations (including those made for purposes of the
motion only), admissions, interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(l).
Section (e) applies where a party fails to address a fact contained in the moving party's
concise statement of material facts. Under Rule 56(e),
If a party fails to properly support an assertion of fact or fails to properly address
another party's assertion of fact as required by Rule 56(c), the court may:
(2) consider the fact undisputed for purposes of the motion; [or]
(3) grant summary judgment if the motion and supporting materialsincluding the facts considered undisputed-show that the movant is
entitled to it ....
Id.; see, e.g., Cooper v. Martucchi, No. 2:15-CV-00267-LPL, 2016 WL 1726113, at *2 (W.D. Pa.
Apr. 28, 2016) (citing Fed. R. Civ. P. 56(e)(l)-(3)) (noting that "[w]here the non-moving
party fails to respond to a summary judgment motion, that failure does not automatically
result in the entry of summary judgment for the movant" and explaining that the Court
may, however, "consider the asserted facts undisputed" and grant summary judgment in
favor of the moving party if the undisputed facts establish that the movant is entitled to
relief as a matter of law.)
Local Rule 56(E) provides ... [that] the uncontroverted content of the movant's
statement of material fact is deemed admitted and carries conclusive weight for the
purposes of summary judgment motions." Wylie v. TransUnion, LLC, No. 3:16-CV-102,
2017 WL 4386404, at *3 (W.D. Pa. Sept. 29, 2017) (Gibson, J.); see Westfield Ins. v. Detroit
Diesel Corp., No. 3:10-CV-100, 2012 WL 1611311, at *1 (W.D. Pa. May 8, 2012) (deeming
facts in moving party's concise statement of material facts admitted when opposing party
failed to file a responsive concise statement of material facts); see also Kitka v. Young, No.
CIV.A. 3:10-189, 2013 WL 5308016, at *1 (W.D. Pa. Sept. 20, 2013) (Gibson, J.) (holding that
"[f]acts insufficiently denied and not otherwise controverted, however, have been
deemed admitted per Local Civil Rule of Court ("Local Rule") 56E.").
As noted above, Defendant Jennings never filed a responsive concise statement of
material facts to the Funds' Concise Statement of Material Facts, and the Funds never filed
a responsive concise statement of material facts to Defendant Rummel's Concise
Statement of Material Facts. In accordance with Federal Rule of Civil Procedure 56(e) and
Local Civil Rule of Court 56.E, the Court will deem all facts contained in (1) the Funds'
Concise Statement of Material Facts (ECF No. 39) and (2) Defendant Rummel's Concise
Statement of Material Facts (ECF No. 44) admitted.
Having deemed these uncontroverted facts contained in these concise statements
of material facts admitted, the Court will next determine whether the Funds and Rummel
have shown that they are entitled to summary judgment.
The Funds' Motion for Summary Judgment
Before evaluating the merits of the Funds' motion for summary judgment, the Court will
review the facts that the Court deems admitted due to Defendant Jennings' failure to respond to
the Funds' Concise Statement of Material Facts. The following facts are derived from the Funds'
Concise Statement of Material Facts (ECF No. 39) unless otherwise noted.
The Funds "are employee fringe benefit plans" under ERISA. (ECF No. 39 at 'Il 1.) On Call
is a construction company that was bound by two CBAs that required On Call to "submit monthly
reports with payment to the Funds for pension, medical, annuity, apprenticeship, industry and
wage deductions for the benefit of employees covered under such agreements." (Id. at <]I 3.) On
Call was also bound by two Trust Agreements. (Id. at <]14.)
The Trust Agreements provide that "[n]o Employer obligated to pay contributions shall
have any right, title or interest to any sum payable by such Employer to the Fund, but not yet
paid to the Fund[,]" and specify that "[t]itle to all monies paid into and/or due and owing the
Fund shall be vested in the Find and/or its Trustees." ("Agreement and Declaration of Trust,"
ECF No. 40-6 at 8; "Trust Agreement and Pension Plan," ECF No. 40-7 at 30; see also ECF No. 39
at <]I 5.) The Trust Agreements further provide that, for each month On Call fails to remit the
employee benefit contributions to the Fund, On Call will be assessed interest, late charges and/or
liquidated damages, and attorneys' fees equal to twenty (20) percent the delinquency. (ECF No.
40-6 at 8; ECF No. 40-7 at 29.)
"From May 2013 to October 2016, On Call employed laborers ... who performed work
covered by the CBAs, [but] On Call failed to pay [the Funds] all the fringe benefit contributions
and wage deductions on behalf of On Call's laborers due for such work." (ECF No. 39 at <]16.)
At all relevant times, Defendant Jennings was the sole shareholder and President of On
Call. (Id. at <]19.) Jennings "exercised discretionary authority and control" over On Call's finances.
(Id. at <]113.) Specifically, Jennings:
Paid all of On Call's bills and managed On Call's financials (id. at <]l 13(a));
2. Possessed authority to determine which of On Call's bills would be paid and
which would not be paid (id. at <]l 13(b));
3. Signed loan documents for On Call (id. at cir 13(c));
4. Negotiated and signed documents for On Call (id. at cir 13(d));
5. Signed the CBAs between On Call and the Plaintiff Unions (id. at cir 13(e));
6. Maintained a debit card linked to On Call's "field account" (id. at cir 13(f));
7. "[R]eserved and exercised the right to review the debit card usage of employees
of On Call" who also had debit cards linked to On Call's "field account" (id. at cir
8. Personally guaranteed a credit line for On Call (id. at cir 13(h));
9. Personally borrowed money from On Call "on at least one occasion" when On Call
was behind on its payments to the Funds (id. at cir 13(i));
10. With the exception of April 15, 2015 to October 6, 2015, Jennings4 "had the sole
authority to issue On Call checks on its operating account to the Funds at all times
material" until On Call filed for Chapter 11 Bankruptcy on November 2, 2016 (id.
at cir 13(j); see also id. at cir 8);
11. Signed "all checks" that the Funds received during the pertinent time period. (Id.
at cir 13(k).)
Jennings "knew or should have known" that On Call owed monies to the Funds. (Id. at cir
18.) Jennings served as On Call's President. (Id.) Furthermore, On Call "submitted reports without
payment to the Funds listing the amounts owed .... " (Id.) Moreover, "On Call received Auditor
From April 15, 2015 to October 6, 2015, both Jennings and Rummel signed all checks, as explained infra.
(ECF No. 39 at 'j[ 15.)
Reports from the Funds listing the amounts of the audit deficiencies" that On Call owed to the
From February 9, 2015 to October 6, 2015, On Call employed Defendant Rummel as its inhouse Accountant/Accounts Administrator. (Id. at 110.) During this period, Rummel prepared
the monthly reports that On Call submitted to the Funds. (Id. at 114.) While Rummel worked for
On Call, both her and Jennings' signature appeared on the checks issued to the Funds. (Id. at 1
15.) After Rummel's employment terminated, only Jennings signed the checks. (Id.) During the
period that Rummel worked for On Call, the Funds "received all the fringe[ payments] due,
though some payments were late .... " (Id. at 117.) Accordingly, for the period that Rummel was
employed by On Call, On Call only owes "liquidated damages and interest on the late payments
From March 2015 onwards, Jennings knew that On Call was struggling financially and
that union workers were "losing their medical coverage with the Funds because of On Call's
nonpayment of fringe benefits to the Funds." (Id. at 119.) Further, Jennings spoke by phone and
in person with several representatives from the Funds regarding the delinquency that On Call
owed to the Funds, such as James Wolcott, the Funds' Collection Manager, and Dierde Price, the
Funds' auditor. (Id. at 120.)
Despite knowing that On Call owed delinquency payments to the Funds, Jennings "paid
her own salary ahead of the pension and medical benefits contributions payable to the Funds for
On Call's laborer employees." (Id. at 1 21.) At all relevant times, Jennings received her full On
Call salary on a weekly basis. (Id. at 123.) Further, Jennings, Rummel, and Redden entered into
an agreement on April 15, 2015 that awarded Jennings a "consideration bonus" of $15,000 and
increased Jennings' salary from $40,000 to $75,000. (Id. at
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