Board of Trustees of the Local Union No. 373 United Assocation of Journeymen…

Background

The Board of Trustees of the Local Union No. 373 United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry Benefit Funds sued Mid Orange Mechanical Corp., Mid-Orange Plumbing and Heating, Inc. (MOPHI), Mid-Orange Fire Protection Corp., and 1191 Dolsontown Road, LLC. The claims arose under the Employee Retirement Income Security Act (ERISA) and the Multiemployer Pension Plan Amendments Act. The Funds sought unpaid benefit contributions, withdrawal liability, interest, liquidated damages, costs, and attorney’s fees.

The Funds moved for summary judgment under Federal Rule of Civil Procedure 56. Summary judgment is appropriate when the evidence shows no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law. The defendants opposed the motion, arguing that legal authority and factual disputes prevented judgment without a trial.

Unpaid Contributions and Earlier Judgment

Mid-Orange had agreed through a collective bargaining agreement to make contributions to the Funds. The Funds calculated $147,611.35 in unpaid contributions for work performed from April 25, 2012, through May 1, 2013. The defendants did not dispute the calculation but asserted that Mid-Orange had submitted the required reports. The court found that assertion unsupported, particularly because the defendants offered no evidence beyond stating that Mid-Orange’s financial records had been lost in a flood.

The court held Mid-Orange liable for the unpaid contributions, plus interest, liquidated damages, and reasonable costs and attorney’s fees. It also held MOPHI jointly and severally liable. Applying ERISA principles concerning alter egos and successor companies, the court relied on the companies’ common ownership and management, shared phone number, overlapping employees and customers, payroll transition, similar business operations, and transfers of equipment and vehicles. The court concluded that MOPHI was a successor to Mid-Orange and that no reasonable jury could find otherwise.

For the same reasons, the court held MOPHI jointly and severally liable for a $173,061.53 judgment previously entered against Mid-Orange for unpaid benefit contributions.

Withdrawal Liability

The Funds also sought to enforce a $631,978.00 withdrawal-liability judgment against MOPHI, Mid-Orange Fire, and 1191 Dolsontown. The defendants argued that Mid-Orange qualified for an exception for employers in the building and construction industry. The court rejected that challenge because the defendants had not initiated the required arbitration before the earlier judgment and had not provided facts supporting the exception.

The court held MOPHI jointly and severally liable for the withdrawal-liability judgment because it was a successor to Mid-Orange. The court also held Mid-Orange Fire liable under ERISA’s common-control rule. That rule can impose withdrawal liability on commonly controlled businesses if they operate for income or profit with continuity and regularity. The court found that Mid-Orange Fire’s tax returns, reported income, work performed for income, and relationships with Mid-Orange and MOPHI showed that it was a trade or business.

The court denied judgment against 1191 Dolsontown. Although the parties were not disputing common control generally, 1191 Dolsontown was incorporated in May 2014, after withdrawal liability attached in May 2013. The court held that the controlled group must be determined when the employer withdraws from the pension plan, so 1191 Dolsontown could not be jointly and severally liable for this withdrawal liability.

Disposition

Judge Nelson S. Roman granted the Funds’ summary-judgment motion in part and denied it in part. The court granted judgment in favor of the Funds: (1) against Mid-Orange and MOPHI jointly and severally for $147,611.35 in unpaid fringe-benefit contributions; (2) against MOPHI for $173,061.53 based on the earlier contribution judgment against Mid-Orange; and (3) against MOPHI and Mid-Orange Fire for $631,978.00 based on the withdrawal-liability judgment, together with actuary fees. The awards also included interest, liquidated damages, reasonable costs, and attorney’s fees as applicable. The court denied judgment against 1191 Dolsontown for the $631,978.00 withdrawal-liability amount.

The court directed the Funds to file a proposed judgment with supporting calculations by April 16, 2024, allowed defendants to object by May 7, 2024, and stated that it would enter final judgment afterward. The opinion contains an apparent inconsistency: its factual discussion states that the relevant contribution period ended May 1, 2013, while the conclusion states May 1, 2023; one part of the discussion also states the contribution calculation as $147,611.45, while the requested and awarded amount is $147,611.35.