BOARD OF TRUSTEES OF CEMENT MASONS' LOCAL 526 COMBINED FUNDS, INC. v. R & B CONTRACTING & EXCAVATION, INC. et al
Filing
59
MEMORANDUM OPINION & ORDER re 51 MOTION for Summary Judgment Against Defendant William Rogers filed by BOARD OF TRUSTEES OF CEMENT MASONS' LOCAL 526 COMBINED FUNDS, INC. Signed by Magistrate Judge Patricia L. Dodge on 07/22/2019. (mqe)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
BOARD OF TRUSTEES OF CEMENT MASONS')
LOCAL 526 COMBINED FUNDS, INC.
)
Plaintiff,
)
)
w
)
)
R & B CONTRACTING & EXCAVATION, INC., )
et al.,
)
Defendants.
)
Civil Action No. 17-1432
Magistrate Judge Dodge
MEMORANDUM OPINION AND ORDER
Introduction
Plaintiff, Board of Trustees of Cement Masons' Local 526 Combined Funds, Inc. (the
"Trustees") brought this action under the Employee Retirement Income Security Act of 1974, 29
U.S.C. §§ 1100-1145 (ERISA), against Defendants, R & B Contracting & Excavation, Inc. ("R
& B"), William Rogers ("Rogers"), Richard Roscoe ("Roscoe") and Daniel Amato ("Amato").
The Trustees seek certain sums of money owed by R & B to the Cement Masons' Local 526
Combined Funds (the "Funds") pursuant to a collective bargaining agreement ("CBA") for fringe
benefit contributions for employees who perform classified work.
On August 8, 2018, the Court entered an approved Consent Decree in favor of the
Trustees and against R & B in the amount of $75,886.49 (including $53,216.49 in contributions
owed with penalties and interest, $15,225.00 in attorney's fees and $7,445.00 in audit fees) (ECF
No. 33). On March 26, 2019, the Court granted the Trustees' motion for summary judgment
against Defendants Roscoe and Amato with respect to Count II of the Complaint, finding that
both are liable under ERISA for breach of fiduciary duty, but denied the Trustees' motion with
respect to their claim for conversion in Count III (ECF No. 47).
On April 17, 2019, Plaintiff filed the pending motion for summary judgment against
Rogers (ECF No. 51).
Presently before the Court is the Trustees' motion for summary judgment against
Defendant Rogers, which was filed on April 17, 2019 (ECF No. 51). 1 The Trustees contend that
as Rogers is the sole shareholder and owner of R & B, he is an ERISA plan fiduciary who is
personally liable for R & B's delinquent fringe benefits (Count II of the Complaint) and that he
committed the tort of conversion (Count III). Rogers' response to the motion was due by May
13, 2019 (ECF No. 56), but no response was filed. On June 7, 2019, the case was reassigned to
the undersigned and Rogers was given additional time until July 5, 2019 within which to respond
(ECF No. 58). Despite having been given additional time within which to respond, Rogers - who
is now proceeding pro se after his counsel was granted leave to withdraw - has failed to respond
to or oppose the Trustees' motion.
Undisputed Facts
The Funds are ERISA multi-employer employee benefit plans consisting of a Defined
Benefit Pension Plan, a Defined Contribution Pension Plan, a Welfare plan, a Supplemental
Income Plan, and an Apprenticeship & Journeyman Education & Training Plan. The plans are
financed through employer contributions made in accordance with applicable collective
bargaining agreements. (Sansosti Aff. , 2)2
R & B was engaged in the business of operating a construction company in Western
Pennsylvania. (Sansosti Aff., 3.) R & B is a signatory to Pittsburgh Building Trades Agreement
("Collective Bargaining Agreement" or "CBA") with the Cement Masons' Union Local No 526
1
Rogers filed a Suggestion of Bankruptcy on July 3, 2018 (ECF No. 28) and thus the automatic
stay of the claims against him went into effect, 11 U.S.C. § 362. However, on January 15, 2019,
the bankruptcy court dismissed his Chapter 11 Bankruptcy and thus the claims against him are
no longer stayed.
2
Pl.'s App. (ECF No. 54) Ex. 1.
2
of the Operative Plasters' and Cement Masons' International Association. (Sansosti Aff.
1 4.)
Under the CBA, R & B was required to make payments into the Funds for R & B's employees
who performed classified work. (Sansosti Aff.
1 5;
CBA at 8, 10, 32, 343; Roscoe Dep. 15:14-
22.)
Rogers is the owner and sole shareholder of R & B. (Roscoe Dep. 13:7-14; Amato Dep.
18:13-17.)4 Rogers was the individual who signed the CBA on behalf of R & B. (Roscoe Dep.
15:23-16:1.)
Rogers took an extended leave of absence from R & B, for a period of three to four years
from 2014 to 2017 for health reasons. (Roscoe Dep. 19:18-20:16.) During this time period,
however, Rogers still made decisions as to who would get paid and exercised control over the
fringe benefits. Rogers determined when to submit fringe benefit contributions to the Funds.
(Roscoe Dep. 16:13-24.)
The CBA provides for assessment of interest, late charges/liquidated damages, and
attorney's fees and costs for each month that R & B failed to timely submit payment to the
Funds. (CBA at 33.) R & B failed to make payment to the Funds for classified work performed
by Defendant's employees during the work months of July 2015; September 2016; April, June,
July, August, and September 2017; October, November, and December 2017. (Audit Report5;
Sansosti Aff. 19.)
R & B's delinquent contributions, with penalties and interest total $53,216.49. (Audit
Report at 3; Kramer Aff. , 5 6 ; Sansosti Aff. , 9.) Additionally, an additional $15,225.00 in
attorney's fees and costs and $7,445.00 in audit fees are owing. (ECF No. 33.) The sum total
3
ECF No.
ECF No.
5
ECF No.
6
ECF No.
4
54 Ex. 2.
54 Exs. 4, 5.
54 Ex. 3.
54 Ex. 6.
3
owed is $75,886.49. (Id.)
The Court entered a consent judgment against R & Bon August 8, 2018 in the amount of
$75,886.49.
Standard of Review
The Federal Rules of Civil Procedure provide 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). Summary judgment may
be granted against a party who fails to adduce facts sufficient to establish the existence of any
element essential to that party's case, and for which that party will bear the burden of proof at
trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party bears the initial
burden of identifying evidence which demonstrates the absence of a genuine issue of material
fact. Once that burden has been met, the non-moving party must set forth "specific facts showing
that there is a genuine issue for trial" or the factual record will be taken as presented by the
moving party and judgment will be entered as a matter of law. Matsushita Elec. Indus. Corp. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986). An issue is genuine only 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). The United States Court of Appeals for the Third Circuit has held
that "where the movant bears the burden of proof at trial and the motion does not establish the
absence of a genuine factual issue, the district court should deny summary judgment even if no
opposing evidentiary matter is presented." National State Bank v. Federal Reserve Bank, 979
F.2d 1579, 1582 (3d Cir. 1992).
In following this directive, a court must take the facts in the light most favorable to the
non-moving party, and must draw all reasonable inferences and resolve all doubts in that party's
4
favor. Hugh v. Butler County Family YMCA, 418 F.3d 265,266 (3d Cir. 2005); Doe v. County of
Centre, Pa., 242 F.3d 437,446 (3d Cir. 2001).
The Trustees argue that: 1) unpaid contributions were the assets of the Funds; 2) Rogers
is liable as an ERISA fiduciary; and 3) his actions also represent conversion of Cement Masons'
property.
Count II: ERISA Fiduciary Liability
ERISA provides that:
Any person who is a fiduciary with respect to a plan who breaches any of the
responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter
shall be personally liable to make good to such plan any losses to the plan
resulting from each such breach, and to restore to such plan any profits of such
fiduciary which have been made through use of assets of the plan by the fiduciary,
and shall be subject to such other equitable or remedial relief as the court may
deem appropriate, including removal of such fiduciary.
29 U.S.C. § 1109(a).
The Court of Appeals for the Third Circuit has explained that:
"ERISA ... defines 'fiduciary' not in terms of formal trusteeship, but in functional
terms of control and authority over the plan." Mertens v. Hewitt Assocs., 508 U.S.
248,262, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993). Accordingly, "[f]iduciary
duties under ERISA attach not just to particular persons, but to particular persons
performing particular functions." Hazier v. Midwest Fasteners, Inc., 908 F.2d
1155, 1158 (3d Cir. 1990). Accordingly, "a person is a fiduciary with respect to a
plan only to the extent that he has any discretionary authority or discretionary
responsibility in the administration of such plan." Varity Corp. v. Howe, 516 U.S.
489,527, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996) (internal quotation marks
omitted).
In re Unisys Corp. Retiree Med. Benefits ER/SA Litig., 579 F.3d 220, 228 (3d Cir. 2009). See
also 29 U.S.C. § 1002(21)(A).
An individual maintains discretionary authority and control over management or
disposition of due and owing fringe benefit contributions when he has authority to determine
what bills to pay; oversees collection of accounts receivable; and has responsibility for
5
submitting remitting reports. Laborers' Combined Funds of W Pa. v. Jennings, 323 F.R.D. 511,
518-19 (W .D. Pa. 2018). In Jennings, the court found requisite discretionary authority when the
defendant was the sole principal of the company, had sole authority to determine what bills to
pay, oversaw collection of accounts receivable, and was responsible for submitting remittance
reports. Id.
The Trustees contend that Rogers retained discretionary control over R & B's fringe
benefit contributions to the Funds based on the following:
•
Rogers was the sole shareholder and owner ofR & B. (Roscoe Dep. 13:7-14; Amato Dep.
18:13- 17.)
•
Rogers signed the CBA on behalf ofR & B. (Roscoe Dep. 15:23-16:1.)
•
Rogers determined when to submit R & B fringe benefit contribution to the Funds.
(Roscoe Dep. 16:13-24.)
• Rogers maintained authority to sign R & B checks. (Amato Dep. 25:1-:16.)
• Rogers made fringe benefit contributions payments using a check stamp. (Roscoe Dep.
17:20-18:3.)
As reflected in the case law cited by Trustees, these factors are sufficient to conclude that
Rogers retained discretionary control over R & B's fringe benefit contributions to the Funds and
thus, Rogers is liable as an ERISA fiduciary for R & B's failure to make fringe benefit
contributions. Therefore, with respect to Count II, summary judgment will be granted in favor of
the Trustees and against Rogers.
Count III: Conversion
Under Pennsylvania law, conversion is "the deprivation of another's right of property in,
or use or possession of, a chattel, or other interference therewith, without the owner's consent
and without lawful justification." HRANEC Sheet Metal, Inc. v. Metalico Pittsburgh, Inc., 107
A.3d 114, 119 (Pa. Super. 2014) (quoting McKeeman v. Corestates Bank, NA.,751 A.2d 655,
6
659 n.3 (Pa. Super. 2000)).
It is undisputed that: the unpaid contributions were the Funds' plan assets based on the
language in the CBA; that R & B did not make payment for fringe benefits for July 2015,
September 2016, April, 2017 and June through December 2017; and that Rogers failed to turn
over the fringe benefits to the Funds. As a matter of law, these undisputed facts confirm the
conclusion that the Funds were deprived of these unpaid contributions without justification, and
thus, were converted.
The Trustees contend that under Pennsylvania's "participation theory," "a corporate
officer who takes part in the commission of a tort by the corporation is personally liable for that
tort." Laborers Combined Funds of W Pa. v. Cioppa, 346 F. Supp. 2d 765, 773 (W.D. Pa. 2004).
See also Laborers' Combined Funds of W Pa. v. Molinaro Corp., 234 F. Supp. 3d 660, 668
(W.D. Pa. 2017); Laborers' Combined Funds of W Pa. v. Parkins, 2002 WL 31435287, at *4
(W.D. Pa. June 5, 2002). As a corporate officer who took part in the conversion, as detailed
herein, Rogers is personally liable for R & B's conversion of the plan assets. Therefore, with
respect to Count III, summary judgment will be granted in favor of the Trustees and against
Rogers.
An appropriate order follows.
7
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
BOARD OF TRUSTEES OF CEMENT MASONS')
LOCAL 526 COMBINED FUNDS, INC.
)
Plaintiff,
)
)
vs
)
Civil Action No. 17-1432
)
R & B CONTRACTING & EXCAVATION, INC., )
et al.,
)
Defendants.
)
Magistrate Judge Dodge
ORDER
AND NOW, this 22nd day of July, 2019, for the reasons explained in the opinion above,
it is hereby ORDERED that the motion for summary judgment against Defendant William
Rogers filed by Plaintiff Board of Trustees of Cement Masons' Local 526 Combined Funds, Inc.
(ECF No. 51) is granted. Judgment is entered in favor of the Board of Trustees of Cement
Masons' Local 526 Combined Funds, Inc. and against William Rogers with respect to Counts II
and III of the Complaint.
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?