United States District Court, E.D. Michigan, Southern Division
LABORERS PENSION TRUST FUND - DETROIT AND VICINITY, et al., Plaintiffs,
L.V. PAINTING & CONTRACTING, INC., et al., Defendants.
OPINION AND ORDER DENYING PLAINTIFFS' MOTION TO
STRIKE DEFENDANTS' CROSS CLAIMS 
G. Edmunds United States District Judge
move to strike the crossclaims of Defendant L.V. Painting
& Contracting, Inc. (“LV”) and Defendant
Sachse Construction and Development Company, LLC
(“Sachse”). Plaintiffs argue that Defendants'
crossclaims should be stricken because: (1) they do not
conform with Rule 13(g); and (2) they contravene the purpose
of ERISA. For the following reasons, Plaintiffs'
motion is DENIED.
dispute relates to the redevelopment of a building known as
the Moon Building at Merchant's Row (the
“Project”). Sachse was the general contractor on
the Project, and LV was a subcontractor that performed
abatement and demolition work. Defendant Michael Scott is
LV's co-owner and President. The other Defendant,
Travelers Casualty and Surety Company
(“Travelers”), issued a contract bond for Sachse
on the Project and served as a surety to the bond on
are trust funds established under and administered pursuant
to Section 302 of the Labor-Management Relations Act
(“LMRA”), 29 U.S.C. § 186, et seq.,
and the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001. (Dkt. 5, at
¶ 1.) As alleged by Plaintiffs, LV is bound by a
collective bargaining agreement that required it to remit
periodic ERISA payments to Plaintiffs for the work LV
performed on the Project. (Id. at ¶ 10.) LV
allegedly failed to remit such payments, so Plaintiffs
brought this suit against LV and Scott. Plaintiffs later
added Sachse and Travelers as defendants in their Amended
August 10, 2016, after receiving Plaintiffs' Amended
Complaint, LV filed crossclaims against Sachse and Travelers.
(Dkt. 20.) Sachse in turn filed crossclaims against LV and
Scott on August 26, 2016. (Dkt. 26.) Then, on September 28,
2016, Plaintiffs filed this motion to strike the crossclaims
of both LV and Sachse. Plaintiffs argue that Defendants'
crossclaims are not closely related to Plaintiffs'
claims, so the Court reviews all the claims below.
Count I of the Amended Complaint, Plaintiffs allege that LV
is liable for failing to remit required fringe benefit
contributions from April 2015 through March 2016. Count II
alleges that Scott and LV are jointly and severally liable
for these unpaid contributions because they conducted
business under a corporate alter ego to evade their payment
obligations. In Count III, Plaintiffs allege that LV and
Scott are liable for violating the Michigan Builders Trust
Fund Act (“MBTFA”), MCL 570.151, et seq.
According to Plaintiffs, the MBTFA required LV and Scott to
hold the payments they received for work on the Project in
trust for Plaintiffs' benefit. But LV and Scott allegedly
misappropriated such funds, rendering them liable under the
IV next alleges that LV and Scott are liable for actual fraud
because they intentionally submitted false contribution
reports to Plaintiffs. Finally, Count V alleges that Sachse
and Travelers, pursuant to the contract bond, are obligated
to pay the contributions owed to Plaintiffs.
LV's Crossclaims Against Sachse and Travelers
crossclaims against Sachse and Travelers relate to
Sachse's alleged failure to pay both (1) the amount owed
to LV on the subcontract and (2) an additional amount LV
requested when the conditions of the Project increased the
scope of the work and raised labor costs. In Counts I and II,
LV alleges that Sachse, as principal, and Travelers, as
surety, are liable to LV for breach of contract. In Count
III, LV alleges that Sachse and Travelers are liable to LV
for a material breach of the contract bond. Count IV next
alleges that Sachse and Travelers are liable in quantum
meruit. Finally, in Count V, LV alleges that it has a valid
claim of lien on a bond related to the Project.
Sachse's Crossclaims Against LV and Scott
crossclaims comprise six counts. Count I alleges that LV
breached the subcontract by, inter alia, failing to
perform the work timely and properly. Count II alleges that
LV breached its contractual indemnification obligation by
exposing Sachse to claims and liens for labor performed and
materials used on the Project. Count III then alleges that LV
violated the MBTFA by diverting monies paid by Sachse. Counts
IV and V next allege violations of fiduciary duties and
conversion, respectively. Finally, Count VI (erroneously
numbered “Count V”), alleges that LV and Scott
committed fraud by intentionally submitting false statements
regarding payments on the Project.