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International Union, Security, Police and Fire Professionals v. Bogues

United States District Court, Fourth Circuit

June 14, 2013



CATHERINE C. BLAKE, District Judge.

Plaintiffs International Union, Security, Police, and Fire Professionals of America and its Local Union 444 (collectively, "the Union") filed this action against defendants Anthony Bogues and Terril Ellison alleging that, as former officers of the Union, they misappropriated funds in breach of their fiduciary duty. The Union has filed a motion for summary judgment. For the reasons set forth below, the motion will be granted.


Bogues and Ellison were members of Local 444 as security officers for Wackenhut Services, Inc. assigned to Fort Meade. In early 2009, Local 444's Fort Meade members voted to create an independent local chapter, and the International Union established Local 282 for five work sites, including Fort Meade. Following the creation of Local 282, Bogues was elected president and Ellison was elected secretary-treasurer. To help establish the new local, the International Union sent Bogues and Ellison between ten and fifteen thousand dollars in funds. ( See Pls.' Mot., Exs. 5 & 6, ECF Nos. 52-6 & 52-7). The defendants also were provided a copy of the union's Financial Officers Handbook and, by letter, given basic instructions on the need to document expenditures and issue tax documents for lost time paid by the local.

Article XXXIII of the Union's Constitution states that "[t]he funds of each Local Union shall be used to defray all necessary expenses which must be approved by the Local Union in regular meetings[, ]" (Pls.' Mot., Ex. 7, ECF No. 52-8, at 17), but the document does not define the term "regular meeting" or the procedural requirements for such approvals. The Union's Financial Officers Handbook similarly authorizes the use of local funds only for "necessary and appropriate" expenses. (Pls.' Mot, Ex. 14, ECF No. 52-15, at 17-18).

Over the few months they were in office, throughout the summer of 2009, Bogues and Ellison expended over $15, 000 of Local 282's funds. They assert that each and every expenditure was legitimate and approved by the local's executive board, but they have produced only two handwritten documents as evidence of such meetings. ( See Pls.' Mot., Exs. 8 & 11, ECF Nos. 52-9 & 52-12). On May 16, 2009, Local 282's executive board met and approved the purchase of "computers and software for Treasury or President" and "cell phones for chief shop stewards on each site." Ellison subsequently spent $4000 at the Apple Store on a laptop, an iPhone, and bookkeeping software. (Pls.' Mot., Ex. 9, ECF No. 52-10). Bogues purchased a $270 BlackBerry phone. (Pls. Mot., Ex. 10, ECF No. 52-11). A second executive board meeting was held on August 1, 2009. The only business apparently conducted at this meeting was the approval of $500 a month stipends, retroactive to July 1, 2009, for Bogues and Ellison. (Ex. 11). Bogues and Ellison each paid themselves $1500 ($3000 total) in stipends over the next few months. (Pls.' Mot., Ex. 12, ECF No. 52-13).

Aside from these allegedly approved transactions, Bogues and Ellison conducted a variety of other questionable transactions as to which they have adduced no evidence that the transactions were approved by the union. On June 16, 2009, they spent $143 in union funds on lunch together at McCormick and Schmick's without justification. ( See Pls.' Mot., Ex. 3, ECF No. 52-4, at 144-47). On July 28, 2009, they withdrew $8, 550 in cash from the bank, nearly all of Local 282's remaining funds, in order to "protect" the funds from being reclaimed by the International Union. ( See Pls.' Mot., Exs. 2 & 3, ECF Nos. 52-3 at 72-79 & 52-4 at 91-92). Ellison was reimbursed $129.33 from the union for part of a Comcast bill that included television, voice, and data services. (Pls.' Mot., Ex. 20, ECF No. 52-21). They also spent an unapproved $1694.68 on catering services for three meetings, (Pls.' Mot., Ex. 21, ECF No. 52-22), and $2500, in cash, on "bookkeeping services" despite their previous purchase of $300 bookkeeping software. It is also notable that the financial transactions for Local 282 that occurred during this time fit on one page. ( See id., Ex. 6).

Finally, Bogues and Ellison were disbursed an unjustified series of "lost time" vouchers that are supposed to be used only to reimburse union officers for loss of pay due to performing union activities. ( See Defs.' Opp., Ex. A, ECF No. 74-1, at 6-14). Bogues approved the vouchers for Ellison, and, likewise, Ellison signed Bogues's vouchers. ( Id. ) The Union's Financial Officers Handbook expressly states that an example of an inappropriate expenditure would be "[p]ayment of lost time when no lost time (from work) has occurred." (Pls.' Mot., Ex. 14, at 17-18). Nevertheless, Bogues and Ellison do not dispute that they each received hundreds of dollars in lost time payments, in cash, when they were not scheduled to work and where they lost no time. (Pls. Mot., Exs. 16 & 17, ECF No. 52-17 & 52-18). In fact, Ellison was receiving workers compensation payments on the days he received "lost time" payments. Bogues and Ellison defend the payments by alleging that they were approved by a regional union official, but not that they were otherwise valid under union guidelines. Most egregiously, Ellison charged the union for 60 hours in lost time between June 18th and July 23rd, 2009, but claims that any records or documents that could explain the work he conducted on behalf of the union during that time were erased, six months after this suit was filed, before he turned his laptop over to the Union. ( Id., Ex. 3 at 93-94, 104-05, 113-114).

On September 2, 2009, the NLRB conducted an election at the Wackenhut Fort Meade bargaining unit, and the International Union was disaffiliated from that unit in favor of a rival union. As a result, Bogues and Ellison, along with their immediate co-workers, joined the new union, and the other four work sites affiliated with Local 282 merged back into Local 444. Bogues and Ellison were, at that time, instructed to turn over all books, records, and property to the Union, as required by Article XXVII of the Union Constitution, ( Id., Ex. 7, at 15), but they refused to return any of the phones, computer equipment, or other items they purchased during their time in office. The Union filed this suit in November 2009, alleging breach of fiduciary duty under the Labor Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. ยง 501, and state law, as well as breach of contract and common law conversion. On May 17, 2010, Bogues and Ellison finally returned the computer equipment they had purchased. They had not turned over any financial records until April 22, 2010. Neither defendant turned over their cell phones until August 2010. Ellison continued to use his union cell phone until it was turned over; Bogues could not remember if he continued using it, and he never returned his phone's SIM card, which would contain its usage data. (Pls.' Mot., Ex. 2, ECF No. 52-3, at 152-56; Ex. 3 at 111-12). Bogues and Ellison also admit that they erased all the data off the laptop and their phones before returning them to the Union. ( Id., Ex. 3 at 115-16).


I. Standard of Review

Federal Rule of Civil Procedure 56(a) provides that summary judgment should be granted "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). The Supreme Court has clarified that this does not mean that any factual dispute will defeat the motion. "By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). Whether a fact is material depends upon the substantive law. See id.

"A party opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials of [his] pleadings, ' but rather must set forth specific facts showing that there is a genuine issue for trial.'" Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (alteration in original) (quoting Fed.R.Civ.P. 56(e)). The court must "view the facts and draw reasonable inferences in the light most favorable to the party opposing the [summary judgment] motion, '" Scott v. Harris, 550 U.S. 372, 378 (2007) (alteration in original) (quoting United States v. Diebold, 369 U.S. 654, 655 (1962)), but the court also must abide by the "affirmative obligation of the ...

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