Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Detroit Carpenters Fringe Benefit Funds v. Tri-Crossing Installation Services, Inc.

United States District Court, E.D. Michigan, Southern Division

May 8, 2017

TRUSTEES OF THE DETROIT CARPENTERS FRINGE BENEFITS FUNDS, Plaintiffs,
v.
TRI-CROSSING INSTALLATION SERVICES, INC., a MI corporation, and SYNERGY INSTALLATION SOLUTIONS, LLC, a South Carolina limited liability company, jointly and severally, Defendants.

          OPINION AND ORDER DENYING DEFENDANTS' MOTION TO DISMISS AND GRANTING PLAINTIFFS' MOTION TO AMEND COMPLAINT

          HON. JOHN CORBETT O'MEARA UNITED STATES DISTRICT JUDGE.

         Before the court are Defendants' motion to dismiss and Plaintiffs' motion to file an amended complaint. For the reasons explained below, Defendants' motion is denied and Plaintiffs' motion is granted.

         BACKGROUND FACTS

         Plaintiffs are Trustees of the Detroit Carpenters Fringe Benefit Funds, who bring this action to recover unpaid fringe benefit contributions pursuant to ERISA. Plaintiffs allege that Defendant Tri-Crossing Installation Services, Inc. entered into a collective bargaining agreement with the Michigan Regional Council of Carpenters. Plaintiffs contend that pursuant to the collective bargaining agreement, Tri-Crossing is obligated to contribute to the fringe benefit funds represented by the plaintiff trustees. Plaintiffs also allege that Defendant Synergy Installation Solutions, LLC, is the alter ego of Tri-Crossing and is likewise obligated to make fringe benefit contributions under the collective bargaining agreement.

         Defendants filed a motion to dismiss Plaintiffs' initial complaint, which did not include a copy of the parties' collective bargaining agreement, arguing that there was no evidence that Tri-Crossing was obligated to make fringe benefit contributions. Plaintiffs seek leave to amend their complaint to include a copy of the collective bargaining agreement (“CBA”) signed by Tri-Crossing on January 7, 2004. Defendants oppose Plaintiffs' amendment on futility grounds, contending that the CBA is invalid and/or any determination of its validity is within the primary jurisdiction of the National Labor Relations Board.

         LAW AND ANALYSIS

         Pursuant to Federal Rule of Civil Procedure 15(a)(2), the court should “freely” permit a plaintiff to amend his complaint “when justice so requires.” The court may deny leave when amendment would be futile - that is, when the amendment could not withstand a motion to dismiss pursuant to Rule 12(b)(6). See Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420-21 (6th Cir. 2000). To survive a motion to dismiss, the plaintiff must allege facts that, if accepted as true, are sufficient “to raise a right to relief above the speculative level” and to “state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). See also Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50 (2009). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 1949. See also Hensley Manuf. v. Propride, Inc., 579 F.3d 603, 609 (6th Cir. 2009).

         Defendants contend that the CBA is invalid because Plaintiffs are improperly attempting to enforce a construction industry CBA on a non-construction workforce and because the CBA does not have the support of the majority of employees. Defendants argue that these issues are “primarily representational” and therefore fall within the jurisdiction of the National Labor Relations Board, not this court.

         Defendants' arguments are without merit. As a threshold matter, the court's jurisdiction is clear. See, e.g., Benson v. Brower's Moving & Storage, Inc., 907 F.2d 310, 312-13 (2d Cir. 1990) (“We begin our analysis by noting that ERISA sections 502 and 515 clearly give a district court subject matter jurisdiction to hear an action brought by benefit plan trustees to enforce an employer's promise to make contributions.”).

         Moreover, Defendants' objections are not recognized defenses to an action by ERISA funds to collect delinquent contributions. See Operating Engineers Local 324 Health Care Plan v. G & W Const. Co., 783 F.3d 1045, 1052-1053 (6thCir. 2015). Section 515 of ERISA “protects and streamlines the procedure for collecting delinquent contributions owed to ERISA plans by limiting ‘unrelated' and ‘extraneous' defenses.” Id. at 1051. ERISA funds are “accorded a special status and are entitled to enforce the written contracts, without regard to the understandings or common-law contract defenses of the original parties, similar to a holder in due course in commercial law.” Id. at 1053 (citation omitted). The passage of § 515 arose from Congress's concern that “simple collection actions brought by plan trustees [had] been converted into lengthy, costly and complex litigation concerning claims and defenses unrelated to the employer's promise and the plans' entitlement to the contributions, and steps [were required] to simplify delinquency collection.” Id. at 1051-52 (quoting Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 87 (1982)).

         In order to simplify delinquency collection, “[c]ourts generally permit a few defenses, including illegality of the contributions, the contract requiring the contributions was void at its inception [because of fraud in the execution], or the union was decertified.” G & W Const., 783 F.3d at 1052. In addition, the Sixth Circuit “has permitted limited examination of a contract termination defense, at least if the parties' conduct shows, based on a cursory review, that the contract has been terminated.” Id.

         Defendants argue that the CBA was invalid (or void) because it was a construction industry pre-hire agreement entered into without the support of the majority of the employees and Defendants are not in the construction industry.

         This is precisely the type of defense that is precluded by § 515 of ERISA:

If the employer simply points to a defect in formation - such as fraud in the inducement, oral promises to disregard the text, or the lack of majority support for the union and the consequent ineffectiveness of the pact under labor ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.