United States District Court, D. Maryland
TRUSTEES OF THE HEATING, PIPING AND REFRIGERATION PENSION FUND, ET AL
CONDITIONED AIR SYSTEMS, INC., ET AL
CATHERINE C. BLAKE, District Judge.
Plaintiffs (collectively, "the 602 Funds") brought suit under the Employee Retirement Income Security Act of 1974 ("ERISA") to recover delinquent contributions to various employee benefit funds from defendants Conditioned Air Systems, Inc. ("Systems") and Complete Air Solutions, Inc. ("Solutions"). The 602 Funds' motion for summary judgment is currently pending before the court. The parties have fully briefed the issues, and no hearing is necessary. See Local Rule 105.6. The motion will be granted in part and denied in part.
Plaintiffs are a union, Steamfitters Local Union No. 602 ("Local 602"), and the trustees of various employee benefit funds covered by ERISA that are associated with Local 602. In 2004, Systems signed an Agreement of Assent, (Savia Decl. Ex. 9, ECF No. 32-31), agreeing to be bound by the collective bargaining agreement ("CBA") between Local 602 and the Mechanical Contractors Association of Metropolitan Washington, Inc. ("the Association"), (2007-2010 CBA, Savia Decl. Ex. 10, ECF No. 32-32; 2010-2013 CBA, Savia Decl. Ex. 11, ECF No. 32-33). By the Agreement of Assent, Systems also agreed to be bound by the Restated Agreements and Declarations of Trust ("Trust Agreements") governing each of the funds on behalf of which suit was brought here. (Savia Decl. Ex. 9.)
Under the CBA and Trust Agreements, Systems was required to make monthly contributions to the 602 Funds at a rate prescribed by the CBA for each hour worked by a covered employee. ( See, e.g., Restated Agreement and Declaration of Trust Heating, Piping and Refrigeration Medical Fund [hereinafter Medical Fund Trust Agreement], Savia Decl. Ex. 1, ECF No. 32-23, Art. VI, § 3; 2010-2013 CBA ¶ 168.) In addition, Systems was obligated to submit monthly reports to the Association, Local 602, and the trustees of the 602 Funds that contained the names of each employee whose wages were covered by the CBA that had been employed during the preceding calendar month and the number of hours each had worked. ( See, e.g., Medical Fund Trust Agreement Art. VI, § 4; 2010-2013 CBA ¶ 170.)
In December 2010 Systems entered into a consent judgment ("the Settlement Agreement" or "the Agreement") with the 602 Funds under which it acknowledged that it owed $269, 619.09 in delinquent contributions, interest, liquidated damages, costs, and attorneys' fees for the period from January through October 2009 and December 2009 through August 2010. (Settlement Agreement, Savia Decl. Ex. 13, ECF No. 32-35, ¶ 2.) It agreed to pay $200, 960.07 with interest assessed on that amount at a rate of ten percent per annum. ( Id. ¶ 3.) The 602 Funds agreed to waive the remaining $68, 659.03 in liquidated damages as long as Systems made every scheduled payment under the Settlement Agreement and submitted all future remittance reports and contributions as required by the CBA and Trust Agreements. ( Id. ¶ 4.) The parties agreed that if Systems failed to comply with any part of the Agreement the entire amount of waived liquidated damages would be reassessed and the entire amount still due under the Agreement would be declared immediately due and payable. ( Id. ) Systems failed to comply with the terms of the Agreement; it only made payments through February 2011, and again from September through December 2011. (Putnam Aff., ECF No. 38-1, ¶¶ 39-40; Def.'s Opp'n Ex. 1, ECF No. 38-2.)
When the parties entered into the Settlement Agreement, an audit was ongoing to review Systems' payroll records. (Settlement Agreement ¶ 10.) The audit reviewed Systems' records for the period between and including January 2008 and July 2011. (Coyle Decl., ECF No. 32-39, ¶ 3.) It ultimately revealed $276, 983.71 in unpaid contributions to the Local 602 Funds for that period of time. (Coyle Decl. ¶ 4; Audit Report, Coyle Decl. Ex. A, ECF No. 32-40.) When the audit was complete, Virginia Merrigan, an officer of Systems, disputed its accuracy, claiming Systems was not required to make contributions for non-union helpers or to make contributions at a minimum of forty hours per week for company officers. (Audit Report at 2.) In addition to the unpaid contributions revealed by the audit, Systems also failed to meet its obligations accruing in the months after the audit period. (Putnam Aff. ¶¶ 20-21; Savia Decl., ECF No. 32-22, ¶¶ 15, 21.)
The 602 Funds filed this action in February 2012 seeking delinquent contributions that accrued from January 2008 through the date of judgment, liquidated damages and interest for the same period through the date of payment, an order that the defendants submit payroll records for an audit of the period from August 1, 2011, through the present, unpaid dues and work assessments, and injunctive relief requiring the defendants to comply with their obligations in the future. (Compl., ECF No. 1, at 11-12.) The 602 Funds now ask this court to enter summary judgment in their favor for $959, 749.24 in unpaid contributions, liquidated damages, and interest covering the period from January 2008 through May 2013. They also request that the court grant summary judgment as to Solutions' liability as Systems' alter ego and as to Solutions owner Richard Putnam's individual liability.
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) (emphasis added). Whether a fact is material depends upon the substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Accordingly, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." 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 evidence in the light most favorable to the nonmovant and draw all justifiable inferences in his favor. Scott v. Harris, 550 U.S. 372, 378 (2007) (citation omitted); see also Greater Baltimore Ctr. for Pregnancy Concerns, Inc. v. Mayor and City Council of Baltimore, 721 F.3d 264, 283 (4th Cir. 2013) (citation omitted). At the same time, the court must not yield its obligation "to prevent factually unsupported claims and defenses from proceeding to trial." Bouchat, 346 F.3d at 526 (citation and internal quotation marks omitted).
I. Defendants' Liability under ERISA
A. Conditioned Air Systems, Inc.'s Liability
ERISA mandates that employers obligated to make contributions to multiemployer benefit plans under the terms of such plans or a collective bargaining 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." 29 U.S.C. § 1145. When employers fail to make required contributions, ERISA empowers beneficiaries, such as the plaintiffs in this case, to bring civil actions to recover benefits, enforce rights under the relevant plan or agreement, or clarify future benefits. Id. § 1132(a)(1)(B). Where a plan prevails in enforcing its rights to contributions, it can recover not only unpaid contributions, but also interest, liquidated damages, and attorneys' fees. Id. § 1132(g)(2).
It is undisputed that Systems was under an obligation to submit monthly remittance reports and make contributions to the 602 Funds by virtue of its assent to be bound by the CBA and the Trust Agreements. ( See, e.g., Agreement of Assent, Savia Decl. Ex. 9.) ERISA mandates that it comply with those obligations. 29 U.S.C. § 1145. Where Systems has failed to meet its obligations, therefore, plaintiffs are entitled to recover damages as set forth under ERISA. 29 U.S.C. 1132(g)(2); see also Int'l Painters and Allied Trades Indus. Pension Fund v. Capital Restoration & Painting, Co., 919 F.Supp.2d 680, 685-86 (D. Md. 2013) (noting that "[t]he Supreme Court has found that these sections [§§ 1132(g) and 1145] provide trustees of multiemployer benefit plans ...