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Acosta v. Calderon

United States District Court, D. Maryland

September 11, 2017

R. ALEXANDER ACOSTA, Acting Secretary of Labor, United States Department of Labor. Plaintiff,
v.
CARLOS CALDERON, et al., Defendants.

          MEMORANDUM OPINION

          David Copperthite United States Magistrate Judge

         R. Alexander Acosta ("Plaintiff'), Acting Secretary of Labor, moves this Court for summary judgment in favor of Plaintiff and against Defendants Carlos Calderon and C.R. Calderon Construction Company ("Defendants") ("Plaintiffs Motion") (ECF No. 23).[1] Plaintiff seeks a ruling from the Court that Defendants, in their capacity as fiduciaries of the Contractors & Employees 401(k) Profit Sharing Plan (the "Plan"), failed to forward employee contributions and remit mandatory prevailing wage employer contributions to the Plan in violation of Title I of the Employee Retirement and Income Security Act of 1974 ("ERISA"), as codified and amended in 29 U.S.C. § 1001, et seq. Defendants filed an opposition to Plaintiffs motion for summary judgment and cross-motion for summary judgment in favor of Defendants and against Plaintiff ("Defendants' Cross-Motion") (ECF No. 29).

         After considering the motions, and responses thereto (ECF Nos. 23, 29, 32), the Court finds that no hearing is necessary. See Loc.R. 105.6 (D.Md. 2016). In addition, having reviewed the pleadings of record and all competent and admissible evidence submitted by the parties, the Court finds that there is no genuine issue of material fact as to the claims asserted. For the reasons that follow, the Court will GRANT IN PART AND DENY IN PART Plaintiffs Motion for Summary Judgment (ECF No. 23) and GRANT IN PART AND DENY IN PART Defendants' Cross-Motion for Summary Judgment (ECF No. 29).

         Factual Background

         Defendant C.R. Calderon Construction, Inc. ("CRC"), a Maryland corporation, was founded in 1994 by Defendant Carlos Calderon ("Calderon") and his wife Ana Calderon. Calderon is the president and part-owner of CRC. During the time period relevant to this action. CRC was engaged in the construction business providing drywall and ceiling installation services on both public and private properties. As a subcontractor for drywall and ceiling work, CRC bid for jobs from general contractors and owners. The submitted bids included all labor, material, and equipment costs associated with a particular job. In calculating its labor costs for a job, CRC typically employed the prevailing wage scale.

         On or about January 1, 2005, CRC adopted the Plan. See ECF No. 23-11. The purpose of the Plan was to provide benefits for the exclusive benefit of plan participants-the employees of the CRC-and their beneficiaries. Under the terms of the Plan, participants were permitted to contribute a portion of their compensation in the form of elective salary deferrals to be deducted and withheld from employee salaries and remitted to the Plan. The Plan also required that the employer, CRC, make mandatory prevailing wage employer contributions. The Plan was to be primarily funded by elective employee salary deferrals and mandatory employer prevailing wage contributions.

         The following outlines CRC's process for handling the funds associated with its employee benefit plan. CRC first submitted an invoice to the owner or general contractor of a specific job. Once the invoice was approved, CRC received a single check, for the total billed amount. Notably, neither the invoices CRC provided to contractors nor the checks issued back to them distinguished between labor, material, and equipment costs. Upon receipt of a check from a contractor, CRC would deposit the payment received into its designated operating account. Funds from CRC's operating account were then transferred to CRC's designated payroll account to cover employee payroll. Thereafter, any remaining available operating account funds were used to fund CRC's employee benefit plan.

         The underlying material facts, which are not disputed by the parties, tend to establish that, from January 2012 through December 2012, CRC deducted $35, 235.00 from participant compensation for employee contributions which subsequently were not remitted into the Plan. In addition, from January 2012 through December 2013, CRC failed to collect and remit to the Plan $346, 523.12 in mandatory prevailing wage employer contributions.

         Procedural Background

         On April 1, 2016, Plaintiff initiated this action pursuant to ERISA, 29 U.S.C. § 1001 et seq. See ECF No. 1 ("the Complaint"). The Complaint alleged that Defendants, in their capacity as fiduciaries of the Plan, failed to forward employee contributions and remit mandatory prevailing wage employer contributions to the Plan in violation of Title 1 of ERISA.

         On March 13, 2017, Plaintiff filed Plaintiffs Motion (ECF No. 23) seeking summary judgment on his breach-of-fiduciary-duty claims against Defendants pursuant to ERISA.[2] On April 12. 2017, Defendants filed Defendants' Cross-Motion (ECF No. 29) seeking summary judgment on Plaintiffs ERISA claims against them. On May 10, 2017, Plaintiff filed a reply to Defendants' Cross-Motion (ECF No. 32). This matter is now fully briefed and the Court has reviewed each party's cross-motion for summary judgment. For the foregoing reasons and pursuant to Federal Rule of Civil Procedure 56(d), Plaintiffs Motion (ECF No. 23) is granted in part and denied in part and Defendant's Cross-Motion (ECF No. 29) is granted in part and denied in part.

         Standard of Review

         Pursuant to Rule 56, a movant is entitled to summary judgment where the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact. Fed.R.Civ.P. 56(a): see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The Supreme Court has clarified that not every factual dispute will defeat a motion for summary judgment but rather, there must be a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248 (1986) C'[T]he 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." (emphases in original)). An issue of fact is material if, under the substantive law of the case, resolution of the factual dispute could affect the outcome. Id. at 248. There is a genuine issue as to material fact "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.; see also Dulaney v. Packaging Corp. of Am., 673 F.3d 323, 330 (4th Cir. 2012). On the other hand, if after the court has drawn all reasonable inferences in favor of the nonmoving party, "the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (internal citations omitted).

         The party seeking summary judgment bears the initial burden of either establishing that no genuine issue of material fact exists or that a material fact essential to the non-movanf s claim is absent. Celotex Corp., 477 U.S. at 322-24. Once the movant has met its burden, the onus is on the non-movant to establish that there is a genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586 (1986). In order to meet this burden, the non-movant "may not rest upon the mere allegations or denials of [its] pleadings, " but must instead "set forth specific facts showing that ...


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