United States District Court, Eastern District of Michigan, Southern Division
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT (ECF #36)
MATTHEW F. LEITMAN UNITED STATES DISTRICT JUDGE
Plaintiffs Michigan Laborers’ Pension Fund, et al., brought this ERISA action against Defendants Rite Way Fence, Inc. (“Rite Way”), Marx Contracting, Inc. (“Marx”), Eugene Zapczynski (“Zapczynski”), and Mark Grundner (“Grundner”) to recover fringe benefits allegedly owed under certain collective bargaining agreements. Plaintiffs moved for summary judgment against the Defendants, jointly and severally, in the amount of $204, 894.53. (See the “Motion, ” ECF #36.) For the reasons explained below, the Court GRANTS IN PART and DENIES IN PART Plaintiffs’ Motion.
RELEVANT FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Plaintiffs are employee fringe benefit funds subject to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. (See Declaration of Plaintiffs’ Trustee Michael Nystrom, ECF #60 at ¶9.) Plaintiffs provide healthcare, pension, vacation, and other benefits to laborers in the road construction industry who meet certain eligibility requirements. (See Id. at ¶¶4, 9.) Plaintiffs are funded by contributions from beneficiaries’ employers pursuant to collective bargaining agreements. (See Id. at ¶10.)
Rite Way and Marx build and install fencing and guardrails. (See Zapczynski Deposition, ECF #36-3 at 15, 21; Pg. ID 274, 276.) Zapczynski is the sole owner and officer of Rite Way. (See Id. at 13-14, Pg. ID 274.) Zapczynski owns 60 percent of Marx; Grundner owns the remaining 40 percent. (See Id. at 20, Pg. ID 275.) Zapczynski and Grundner are also officers of Marx. (See Id. at 18-20, Pg. ID 275.)
Rite Way and Marx each entered into collective bargaining agreements with Plaintiffs. (See the “Agreements, ” ECF #36-5 and #36-6. See also the “Clarification, ” ECF #36-7.) The Agreements required Rite Way and Marx to make monthly contributions to Plaintiffs at defined hourly rates for covered work performed by covered employees. (See ECF #36-5 at 9-11, Pg. ID 394-96 and ECF #36-6 at 7-9, Pg. ID 415-17.)
Plaintiffs periodically audited Rite Way and Marx to ensure that the companies made all required benefit contributions. (See Declaration of Auditor Dawn Aldrich (“Aldrich”), ECF #36-2 at ¶9.) As relevant here, Plaintiffs audited Rite Way for the periods between September 2007 to March 2012 (the “First Rite Way Audit”) and April 2012 to May 2013 (the “Second Rite Way Audit”). (See Id. at ¶¶10-11, 22.) Plaintiffs audited Marx for the periods between September 2007 to April 2012 (the “First Marx Audit”) and May 2012 to May 2013 (the “Second Marx Audit”). (See Id. at ¶23.) The audits concluded that Rite Way and Marx had each failed to make required contributions for certain covered work performed by covered employees during the relevant time periods. (See Id. at ¶¶11, 22-23.)
Plaintiffs filed this action on August 30, 2013. (See the Complaint, ECF #1.) Plaintiffs alleged that Defendants’ failure to make required contributions (1) violated the Agreements and ERISA §§ 1132(a)(3) and 1145, and (2) breached Defendant’s fiduciary duties to Plaintiffs in violation of ERISA §§ 1104(a)(1), 1103(c)(i). (See Id. at ¶¶27-40.)
Plaintiffs now seek summary judgment in the amount of $204, 894.53, representing Rite Way’s and Marx’s unpaid benefit contributions, interest, audit assessments, and audit costs. (See Mot. at 1, Pg. ID 210.) Plaintiffs seek judgment against each Defendant jointly and severally. (See id.) Plaintiffs contend that Rite Way and Marx are each liable for the other’s unpaid contributions and associated costs because they are alter egos and/or operate as a single employer. (See Id. at 17-21, Pg. ID 238-42.) Plaintiffs further argue that Zapczynski and Grundner are personally liable because they operated Rite Way and Marx without regard to corporate formalities and with little separation between corporate and personal finances. (See Id. at 21-25, Pg. ID 242-46.)
The Court heard oral argument on Plaintiffs’ Motion on March 3, 2015. (See Hearing Transcript, ECF #51.) For the reasons explained below, the Court GRANTS IN PART and DENIES IN PART Plaintiffs’ Motion.
GOVERNING LEGAL STANDARD
A movant is entitled to summary judgment when it “shows that there is no genuine dispute as to any material fact....” U.S. SEC v. Sierra Brokerage Services, Inc., 712 F.3d 321, 326–27 (6th Cir. 2013) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251–52 (1986)) (quotations omitted). When reviewing the record, “the court must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor.” Id. “The mere existence of a scintilla of evidence in support of the [non-moving party’s] position will be insufficient; there must be evidence on which the jury could reasonably find for [that party].” Anderson, 477 U.S. at 252. Summary judgment is not appropriate when “the evidence presents a sufficient disagreement to require submission to a jury.” Id. at 251-252. Indeed, “[c]redibility determinations, the weighing of the evidence, and the drafting of legitimate inferences from the facts are jury functions, not those of a judge…” Id. at 255.
1. Plaintiffs Are Entitled to Summary Judgment Against Rite-Way as to Unpaid Contributions that Rite Way Has Admitted Owing and as to Associated Costs and Fees, But Plaintiffs Are Not Entitled to Judgment as to The Remainder of Their Claimed Damages Against Rite-Way
Plaintiffs contend that they are entitled to judgment as a matter of law against Rite-Way in the amount $195, 546.71. (See Mot. at 5, Pg. ID 226. See also Aldrich Decl. at ¶¶11, 22.) This amount includes $113, 856.54 in unpaid benefit contributions for the period covered by the First Rite Way Audit, plus $24, 106.55 in interest; $24, 106.55 in audit assessments; and $14, 198.72 in audit costs associated with those unpaid contributions. (See Mot. at 5, Pg. ID 226. See also Aldrich Decl. at ¶11.) The amount also includes $15, 088.87 in unpaid benefit contributions for the period covered by the Second Rite Way Audit, plus $2, 094.74 in interest and $2, 094.74 in audit assessments associated with those unpaid contributions. (See Mot. at 5, Pg. ID 226. See also Aldrich Decl. at ¶22.)
Rite Way has admitted that it owes Plaintiffs unpaid benefit contributions in the amount of $82, 017.08 for the period covered by the First Rite Way Audit. (See the “Stipulated Order Partially Resolving Plaintiffs’ Claims, ” ECF #31 at ¶3. See also Tr. at 18, Pg. ID 2539.) Rite Way further concedes that it owes $17, 455.51 in interest and $17, 455.51 in audit assessments on the unpaid contributions that it has admitted. ...