United States District Court, D. Maryland
ELLEN LIPTON HOLLANDER, District Judge.
Eight plaintiffs, including seven multiemployer benefit plans and one labor union, filed suit against MESCO, Inc. ("MESCO") and Michael E. Sewell & Associates, Inc. ("Sewell" or "Sewell & Associates"), pursuant to section 502(a)(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. § 1132(a)(2). They contend that defendants failed to make required contributions and remittances pursuant to a collective bargaining agreement and other related agreements.
In particular, plaintiffs allege that MESCO failed to pay contributions due for the months of October 2007 through July 2011, as well as October 2011 through September 2012, and owes plaintiffs contributions, liquidated damages, and interest in the amount of $228, 810.87. See ECF 35, Exh. 1, Affidavit of Administrator Claire M. Kratz, May 24, 2013 ("Kratz Aff.") ¶ 7. Further, they allege that Sewell failed to pay contributions for the period beginning in January 2009 and ending in December 2011,  and owes plaintiffs contributions, liquidated damages, and interest in the amount of $260, 633.92. Id. ¶ 8. Plaintiffs also maintain that defendants operated as a single entity, and thus each defendant is jointly and severally liable for all unpaid contributions and associated damages.
Plaintiffs have moved for summary judgment (ECF 35, "Motion" or "Mot."), which defendants oppose (ECF 44). Plaintiffs have also filed a "Motion To Strike The Material Change To Deposition Testimony Of James W. Conkel, Jr." (ECF 34, "Motion to Strike"), which defendants also oppose (ECF 36). No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons that follow, I will grant plaintiffs' summary judgment motion, in part, and deny it in part, and deny as moot the Motion to Strike.
I. Factual Background
Seven of the eight plaintiffs are multiemployer employee benefit plans (the "Plan Plaintiffs"), as defined in section 3(1) of ERISA, 29 U.S.C. § 1002(1)-(2). The remaining plaintiff is a labor organization.
As to the Plan Plaintiffs, five are multiemployer employee welfare benefit plans, as defined in 29 U.S.C. § 1002(1): Maryland Electrical Industry Health Fund ("Health Fund"); Maryland Electrical Industry Joint Apprenticeship and Training Committee ("JATC"); National Electrical Benefit Fund ("NEBF"); National Labor Management Cooperation Committee ("NLMCC"); and Maryland Electrical Industry Labor Management Cooperation Committee ("MEILMCC"). The two other Plan Plaintiffs are multiemployer employee pension benefit plans, as defined in 29 U.S.C. § 1002(1): Maryland Electrical Industry Pension Fund ("Pension Fund") and Maryland Electrical Industry Severance and Annuity Fund ("Severance Fund"). The remaining plaintiff is Local Union No. 24, International Brotherhood of Electrical Workers, AFL-CIO ("Local 24"), an unincorporated labor organization as defined in section 2(5) of the Labor Management Relations Act, 29 U.S.C. § 152(5), as well as an "employee organization, " as defined in section 3(4) of ERISA, 29 U.S.C. § 1002(4). Complaint (ECF 1) ¶ 10.
MESCO is a Maryland corporation engaged in the electrical contracting and construction business. See Mem. Exh. 14 (MESCO Articles of Incorporation). Sewell, also a Maryland corporation engaged in the electrical trade, dissolved on December 28, 2011, shortly before suit was filed in this case. See Mem. Exh. 16 (Sewell Articles of Incorporation) and 17 (Sewell Articles of Dissolution). Michael E. Sewell ("Mr. Sewell") was the sole owner and officer of Sewell. Mem. Exh. 18, Deposition of Michael E. Sewell, as representative of Sewell, at 11. Mr. Sewell testified that Sewell typically performed deliveries and other support services for MESCO. Id. at 31.
Central to this dispute is a Collective Bargaining Agreement (the "CBA") between Local 24 and the Baltimore Division, National Electrical Contractors Association, Maryland Chapter. See Mem. Exh. 3 (CBA) at 1. The CBA states that the jurisdiction covered by the agreement includes Baltimore, Harford, Frederick, Carroll, Howard, and Anne Arundel Counties, as well as Baltimore City and Annapolis. Id. at 77. Further, the CBA states that it "shall apply to all firms who sign a Letter of Assent to be bound by the terms of this Agreement." Id. at 1 (emphasis in CBA). Both MESCO and Sewell, d/b/a Mr. Electric, signed such letters of assent. See Mem. Exh. 2 (MESCO Letter of Assent); Opp. Exh. 2 (Sewell Letter of Assent).
In their Opposition, defendants expressly adopted a portion of the statement of facts found in plaintiffs' Memorandum, pertaining to MESCO's Letter of Assent and its obligations under the CBA to make contributions to plaintiffs. See Mem. at 4; Opp. at 4. That portion states, id. :
On December 30, 1998, Mesco signed the Letter of Assent obligating it to adhere to the terms of the CBA negotiated between the Baltimore Division, National Electrical Contractors Association, Maryland Chapter, and Local Union 24, [International Brotherhood of Electrical Workers]. [Mem. Exh. 2 (Mesco Letter of Assent).] The CBA provides for the rates of pay, wages, hours of employment, and other conditions of employment for Mesco's employees covered by the CBA. The CBA specifically provides for the payment of contributions by Mesco to the Health Fund, Pension Fund, Severance Fund, NLMCC and MEILMCC of specified amounts per hour worked by each of Mesco's employees covered by the CBA. [CBA] Articles VI, VII, VIII. In addition, the CBA provides for payment of employee benefit contributions by Mesco to the JATC and the NEBF of specified percentages of gross earnings of Mesco's employees covered by the CBA. [CBA] Article V, Section 5.16 and Article VI, Section 6.01. All such payments are to be made by the 15th day of the month following the month in which the hours were worked, and such payments are to be accompanied by a remittance report showing the hours worked by each covered employee, the gross wages for such employees, and the amounts owed. [Kratz Aff. ¶ 6]; [CBA] Article VI, Sections 6.01, 6.07. The Letter of Assent specifically provides that the signatory employer "agrees to comply with, and be bound by, all of the provisions contained in [the] current and subsequent approved labor agreements." [Mem. Exh. 2]. The CBA further provides for certain authorized deductions to be made from the wages of Mesco's employees. Specifically, union dues are to be deducted from the wages of Mesco's employees and are to be remitted to Local 24. [CBA] Article III, Section 3.07. Remittances to Local 24 are to be made by the 15th day of the month following the month in which the hours were worked, and such remittances are to be accompanied by a remittance report showing the hours worked by each covered employee, and the amounts owed for such hours. [ Id. ] Article VI, Section 6.07.
As defendants readily acknowledge, Sewell and MESCO signed identical Letters of Assent. See Opp. at 3 ("Sewell was signatory to the same Letter of Assent that Plaintiffs assert is the source of MESCO's participation in the Local 24 CBA and duty to contribute to the Funds."); Opp. Exh. 2 (Sewell Letter of Assent). Defendants further recognize that, "if there is an obligation on the part of MESCO to contribute to the Funds and/or Local 24 by virtue of its identical Letter of Assent, that same obligation would have existed as to Sewell & Associates." Opp. at 3.
Plaintiffs explain that an auditor working on their behalf performed an audit of MESCO for the months of October 2007 through July 2011 and determined that MESCO owes delinquent employee fringe benefit contributions in the amount of $26, 047.42. Mem. Exh. 4 at 4. The auditor also allegedly conducted an audit of MESCO's payroll records, produced in the course of this litigation, and remittance reports submitted by MESCO to plaintiffs for the months of October 2011 through September 2012, and determined that $167, 882.56 in unpaid contributions is due to plaintiffs for those months. Mem. Exh. 5 at 4. Further, the auditor conducted an audit of Sewell's payroll records for the months of January 2009 through December 2011, and determined that Sewell owes plaintiffs $199, 158.00 in unpaid contributions for that period. Mem. Exh. 6 at 4. In total, plaintiffs seek to recover $393, 087.98 in unpaid contributions, jointly and severally.
Additionally, plaintiffs maintain that defendants are jointly and severally liable for $16, 028.21 in prejudgment interest owed by MESCO, and for $41, 156.19 in prejudgment interest owed by Sewell. Mem. at 41-42. Plaintiffs also claim joint and several entitlements to $18, 852.68 in liquidated damages owed by MESCO, and $20, 319.73 in liquidated damages owed by Sewell. Id. at 42-44. In sum, plaintiffs seek $489, 444.79 in delinquent contributions, interest, and liquidated damages, jointly and severally. Id. at 44.
In support of their contention that MESCO and Sewell are jointly and severally liable for the damages sought, plaintiffs argue that the two defendants operated as a single employer and/or were alter egos of one another. See Mem. at 2, 8-9. To that end, plaintiffs cite numerous exhibits to establish, among other things, that MESCO and Sewell: (1) had multiple, common business locations; (2) had common employees; (3) had numerous common projects, with Sewell periodically paying wages on behalf of MESCO, despite contractual provisions preventing MESCO from assigning work to others, and with MESCO representing that work performed by employees of Sewell was performed by its own employees; (4) paid employees interchangeably; (5) had common financial ties; and (6) shared the same fax number. Mem. at 9-31.
Additional facts are included in the Discussion.
A. Summary Judgment Standard
Plaintiffs' Motion is governed by Rule 56 of the Federal Rules of Civil Procedure. It provides, in part: "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); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986). A fact is "material" if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
"A party opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials of [its] pleadings, ' but rather must set forth specific facts'" establishing a triable issue. Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (quoting former Fed.R.Civ.P. 56(e)), cert. denied, 541 U.S. 1042 (2004); accord Dash v. Mayweather, 731 F.3d 303, 311 (4th Cir. 2013). In other words, the non-moving party must show disputes of material fact so as to preclude the award of summary judgment as a matter of law. Matsushita Elec. Indus. Co. v. Zenith, Radio Corp., 475 U.S. 574, 586 (1986). "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." Liberty Lobby, 477 U.S. at 247-48 (emphasis in original).
In resolving a summary judgment motion, the court may not make credibility determinations. Black & Decker Corp. v. United States, 436 F.3d 431, 442 (4th Cir. 2006). Moreover, the court must view all of the facts, including reasonable inferences to be drawn from them, in the light most favorable to the nonmoving party. See Matsushita, 475 U.S. at 587; see also FDIC v. Cashion, 720 F.3d 169, 173 (4th Cir. 2013); Dennis v. Columbia Colleton Med. Ctr., Inc., 290 F.3d 639, 645 (4th Cir. 2002). The "judge's function" in reviewing a motion for summary judgment is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Liberty Lobby, 477 U.S. at 249. However, there must be "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (citations omitted).
B. Statutory Background
ERISA provides a "comprehensive and reticulated" statutory framework for the administration and regulation of employee pension plans. Massachusetts v. Morash, 490 U.S. 107, 113 (1989). Its regulatory scheme is guided by a specific purpose:
"[T]o ensure that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in [them].... Congress wanted to guarantee that if a worker has been promised a defined pension benefit upon retirement-and if he has fulfilled whatever conditions are required to obtain a vested benefit-he will actually receive it."
Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Trust for S. Cal., 508 U.S. 602, 607 (1993) (quoting Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 214 (1986)) (alterations in Concrete Pipe ). Among those pension plans subject to ERISA are "multiemployer plans, " like the Plan Plaintiffs, "to which more than one employer contributes, " and which are "maintained to fulfill the terms of collective-bargaining agreements." Concrete Pipe, 508 U.S. at 606; see 29 U.S.C. § 1301(a)(3) (defining "multiemployer plan").
As amended by the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. §§ 1132 and 1145 "provide specific remedies for the enforcement of federal pension laws and the collective bargaining and trust agreements executed pursuant to these laws." Trs. of Glaziers Local 963 v. Walker & Laberge Co., 619 F.Supp. 1402, 1403 (D. Md. 1985); accord Int'l Painters and Allied Trades Indus. Pension Fund v. Libmak Co., LLC, 2012 WL 5383313, at *4 (D. Md. Oct. 31, 2012) (quoting Trs. of Glaziers Local 963 ); Nat'l Elec. Ben. Fund v. Rabey Elec. Co., 2012 WL 3854932, at *3 (D. Md. Sept. 4, 2012) (same). In particular, section 515 of ERISA, codified at 29 U.S.C. § 1145, provides:
Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.
Further, ERISA section 502(g) states, in relevant part, 29 U.S.C. § 1132(g)(2):
In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan -
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the ...