West Virginia Laborers' Pension Trust Fund et al v. Accurate Pro-Cut LLC et al

Filing 15

MEMORANDUM OPINION & ORDER granting plaintiff's 6 MOTION to Strike to Strike 5 MOTION by Accurate Pro-Cut LLC to Dismiss re: 1 Complaint; directing defendant's 5 MOTION to Dismiss is stricken from the record; denying defendant Kelli J. Ross's 4 MOTION to Dismiss. Signed by Judge Joseph R. Goodwin on 8/22/2012. (cc: attys; any unrepresented party) (tmh)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION
WEST VIRGINIA LABORERS’ PENSION
TRUST FUND, et al.,
Plaintiffs,
v.

CIVIL ACTION NO. 2:12-cv-00689

ACCURATE PRO-CUT LLC, et al.,
Defendants.

MEMORANDUM OPINION & ORDER
Pending before the court is the defendant Accurate Pro-Cut LLC’s (“Accurate”) Motion to
Dismiss [Docket 5], the defendant Kelli J. Ross’s Motion to Dismiss [Docket 4], and the plaintiffs’
Motion to Strike Motion by Accurate Pro-Cut LLC to Dismiss [Docket 6]. For the reasons
discussed below, the plaintiff’s Motion to Strike [Docket 6] is GRANTED and the court
ORDERS the defendant Accurate’s Motion to Dismiss [Docket 5] stricken from the record. The
court DENIES the defendant Kelli J. Ross’s Motion to Dismiss [Docket 4].
I.

Background
A.

Facts

This case is a dispute over allegedly unpaid benefits. The plaintiffs describe themselves
as “a local labor union” and represent individuals in West Virginia and “affiliated multiemployer
benefit funds.” (Mem. Supp. Pls.’ Resp. to Mot. to Dismiss [Docket 9], at 2.) The defendant
Accurate acts as a contractor that employs laborers and has signed several collective bargaining

agreements. (Id.) Accurate is a limited liability company of which Kelli Ross is the sole
member. (Id.)
The plaintiffs have brought this suit under ERISA. The plaintiffs assert that starting on
June 3, 2011, they have sought “certain employee records and information and payroll records” for
an audit they were conducting. (Id. at 3.) They claim that they are entitled to those records under
the terms of various collective bargaining agreements, but that Ms. Ross has denied them access.
(Id.) By initiating the instant suit, the plaintiffs are seeking access to those records and any
“unpaid contributions and deductions to the various benefit funds and laborers’ locals as
determined by the audit.” (Id.) The plaintiffs also request that the court find that Ms. Ross is an
alter ego of Accurate and that she is a fiduciary―findings that could make Ms. Ross personally
liable for any unpaid contributions.
B.

Procedural History

On March 13, 2012, the plaintiffs initiated the instant suit by filing the Complaint, seeking
monetary damages and equitable relief. Both defendants filed Motions to Dismiss in response to
the Complaint. Ms. Ross is proceeding pro se, and she filed the motions on behalf of herself and
Accurate. The plaintiffs have filed a Motion to Strike Accurate’s Motion to Dismiss, asserting
that Accurate’s Motion should be stricken from the record as it is a corporation and Ms. Ross is not
a member of the West Virginia bar. These Motions are now ripe for review.
II.

Motion to Dismiss for Failure to State a Claim upon Which Relief Can Be Granted

Legal Standard
A motion to dismiss filed under Rule 12(b)(6) tests the legal sufficiency of a complaint or
pleading. Giarranto v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). Federal Rule of Civil
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Procedure 8 requires that a pleading contain a “short and plain statement of the claim showing that
the pleader is entitled to relief.” FED. R. CIV. P. 8. As the Supreme Court reiterated in Ashcroft v.
Iqbal, that standard “does not require ‘detailed factual allegations’ but ‘it demands more than an
unadorned, the-defendant-unlawfully-harmed-me accusation.’” 129 S. Ct. 1937, 1949 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “[A] plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and
a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555
(citing Papasan v. Allain, 478 U.S. 265, 286 (1986) for the proposition that “on a motion to
dismiss, courts ‘are not bound to accept as true a legal conclusion couched as a factual
allegation’”). A court cannot accept as true legal conclusions in a complaint that merely recite the
elements of a cause of action supported by conclusory statements. Iqbal, 129 S. Ct. at 1949-50.
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’” Id. at 1949 (quoting Twombly, 550
U.S. at 570). To achieve facial plausibility, the plaintiff must plead facts that allow the court to
draw the reasonable inference that the defendant is liable, and those facts must be more than
merely consistent with the defendant’s liability to raise a claim from merely possible to probable.
Id.
In determining whether a plausible claim exists, the court must undertake a
context-specific inquiry, “[b]ut where the well-pleaded facts do not permit the court to infer more
than the mere possibility of misconduct, the complaint has alleged―but it has not
‘show[n]’―‘that the pleader is entitled to relief.’” Id. at 1950 (quoting FED. R. CIV. P. 8(a)(2)).
A complaint must contain enough facts to “nudge[] [a] claim across the line from conceivable to
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plausible.” Twombly, 550 U.S. at 570.
III.

Analysis of Kelli J. Ross’s Motion to Dismiss
Ms. Ross has moved to dismiss the plaintiffs’ Complaint, asserting that the plaintiffs failed

to state a claim against her. (Def.’s Mot. to Dismiss [Docket 4].) In her Motion, Ms. Ross
asserts that she is not personally liable for the responsibilities of Accurate because it is a limited
liability company. (Id.) Ms. Ross claims that Accurate was a “real, legitimate business” and that
she kept separate records for the business. (Id.) In response, the plaintiffs claim that Ms. Ross is
personally liable for Accurate’s obligations because she is an alter ego of Accurate and because
she was a fiduciary of the funds. (Pls.’ Mem. Supp. Resp. to Mot. to Dismiss [Docket 9], at 5.)
The plaintiffs have alleged sufficient facts to state a claim against Accurate for which Ms.
Ross could be personally liable. The Complaint alleges that the collective bargaining agreements
signed by Accurate and Ms. Ross provide the plaintiffs with the right to audit Accurate’s records.
The United States Supreme Court has held that such provisions in a collective bargaining do not
violate ERISA. Cent. States Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559,
581 (1985).

The plaintiffs have also alleged that they are entitled to the deductions and

contributions under the collective bargaining agreements signed by the defendants. Thus, the
court FINDS that there are sufficient facts alleged in the Complaint to state a plausible claim for
relief against the defendants.
Officers and shareholders of a corporation may be personally liable for contributions or
deductions in certain circumstances. When examining claims brought pursuant to ERISA, courts
are willing to pierce the corporate veil and hold individuals personally liable in certain instances.
See, e.g., Connors v. Princeton Coal Grp., 770 F. Supp. 1132, 1138-39 (S.D. W. Va. 1991); W.
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Va.-Oh. Valley Area IBEW Welfare Fund v. Ball Elec. Co., Inc., 685 F. Supp. 953, 954 (S.D. W.
Va. 1988). Courts have also found individual officers and shareholders personally liable under
ERISA as fiduciaries. See Connors v. Paybra Mining Co., 807 F. Supp. 1242, 1247 (S.D. W. Va.
1992). In this case, the plaintiffs’ Complaint contains sufficient factual allegations to make it
plausible that Ms. Ross could be personally liable for unpaid contributions or deductions.
Accordingly, the court DENIES Ms. Ross’s Motion to Dismiss.
IV.

Legal Analysis Regarding the Plaintiffs’ Motion to Strike
The plaintiffs have also moved to strike Accurate’s Motion to Dismiss because it was filed

by Ms. Ross. Specifically, the plaintiffs claim that Accurate is a corporation, meaning that it
cannot proceed pro se. The plaintiffs assert that Ms. Ross is not an attorney in West Virginia and,
because she filed Accurate’s Motion, it should be stricken from the record.
It is well established that a corporation cannot proceed pro se and must be represented by
an attorney. See, e.g., Forth’s Foods, Inc. v. Allied Benefit Adm’r, Inc., No. 3:07-cv-0670, 2008
WL 88610, at *2 (S.D. W. Va. Jan. 7, 2008). A retained attorney is the only individual permitted
to act for the corporation. Id. “A corporation, which is an artificial entity that can only act
through agents cannot proceed pro se . . . . Accordingly, only retained counsel could have acted
on behalf of [this] corporation.” Id. (quoting Codapro Corp. v. Wilson, 997 F. Supp. 322, 326
(E.D.N.Y. 1998)).
In this case, Accurate is a corporation and the plaintiffs assert that Ms. Ross is not an
attorney in West Virginia. Ms. Ross has not challenged that assertion. The docket entries in this
case show that Ms. Ross filed the Motion to Dismiss on behalf of Accurate. Accordingly, the

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court GRANTS the plaintiffs’ Motion to Strike Motion by Accurate Pro-Cut LLC to Dismiss
[Docket 6] and ORDERS the Motion to Dismiss [Docket 5] be stricken from the record.
The court DIRECTS the Clerk to send a copy of this Order to counsel of record and any
unrepresented party.
ENTER:

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August 22, 2012