United States District Court, E.D. Michigan, Southern Division
Michigan Regional Council of Carpenters Employee Benefits Fund, et. al., Plaintiffs,
Elite Poured Walls, Inc., et. al., Defendants.
OPINION & ORDER DENYING DEFENDANTS' MOTION TO
F. Cox United States District Judge
case involves Plaintiffs' claims that Defendants violated
their collective bargaining agreement (“CBA”)
with Plaintiff Michigan Regional Council of Carpenters
(“Union) by failing to pay fringe benefits and by
failing to submit pertinent books and records for an audit.
Plaintiffs are the Union and 11 separate trust funds.
Plaintiffs bring claims under ERISA and the Michigan Building
Contract Fund Act. Defendants Elite Poured Walls and Mark
Worrell conduct business in the building and construction
industry. Defendants are allegedly obligated by the CBA to
make employee fringe benefit contributions, for each employee
covered by the CBA, to the Plaintiff Funds. According to the
CBA, Defendants are also required to submit to periodic
auditing of their books by Plaintiffs to ensure proper
contributions are being made.
before the Court is Defendants' Motion to Dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6). In it,
Defendants argue that: (1) Plaintiffs' complaint should
be dismissed because no effective CBA or trust agreement was
effective to require contributions for the period of 2011
through present; (2) Plaintiffs' complaint should be
partially dismissed with respect to all claims for damages
for the period of August 1, 2012 through present because the
CBA was terminated as of August 1, 2012; (3) Plaintiffs'
personal liability claims against Defendant Worrell should be
dismissed because Plaintiffs have not plausibly alleged that
Worrell is a fiduciary under ERISA; and (4) Plaintiffs'
claims under the Michigan Building Contract Fund Act should
be dismissed because they are preempted by ERISA. The motion
has been fully briefed by the parties and the Court heard
oral argument as to the motion on May 11, 2017.
12(b)(6) motion should be dismissed because it pertains
largely to issues of fact as opposed to the insufficiency of
the pleadings. The motion is therefore DENIED.
in this case are: (1) the Michigan Regional Council of
Carpenters (“Union”); (2) the Trustees of the
Michigan Regional Council of Carpenters' Employee
Benefits Fund; (3) Trustees of the Carpenters' Pension
Trust Fund - Detroit and Vicinity; (4) Trustees of the
Michigan Regional Council of Carpenters' Annuity Fund;
(5) Trustees of the Michigan Statewide Carpenters and
Millwrights Joint Apprenticeship and Training Fund; (6)
Trustees of the Michigan Fund for the Advancement of the
Carpentry Trade; (7) Trustees of the Carpenters' Labor
Management Productivity and Training Fun; (8) Trustees of the
Carpenters' Guaranty Fund; (9) Trustees of the
Carpenters' Industry Advancement Fund; (10) Trustees of
the Carpenters' Apprentice Reimbursement Fund; (11)
Trustees of the Carpenters' Working Dues Fund; and (12)
the Michigan Regional Council of Carpenters, United
Brotherhood of Carpenters and Joiners of America.
Mark Worrell (“Worrell) is an owner, officer and member
of Defendant Elite Poured Walls, Inc. (“EPW”)
In Plaintiff's Amended Complaint
30, 2003, Defendant Worrell (on behalf of Defendant EPW)
executed a Poured Concrete Wall Association CBA, which
extended through the 2003 year. (Am. Compl. at ¶10). The
CBA, originally dated 1999-2001, is between Defendant EPW and
Plaintiff Michigan Regional Council of Carpenters (the
“Union”). The Plaintiff Funds are third-party
beneficiaries to the CBA. (Id. at ¶13).
its terms, the CBA “shall be renewed from year to year
unless either party shall notify the other party, in writing,
at least 90 days prior to any August 1st,
beginning with August 1, 2001, of its desire to change in any
way or terminate this Agreement.” (Ex. 1 to Am. Compl.
at Pg ID 30). The CBA further provides that “[s]uch
written notice shall be sent by certified mail to the other
party. In the event notice is given by either party to change
and no agreement on such changes is reached prior to August
1, 2001, this Agreement shall be deemed to have terminated on
August 1, 2001.” (Id.).
allege that since at least May 30, 2003 to present, EPW was
bound to the parties' CBA. (Id. at ¶11).
Pursuant to the CBA, EPW agreed to make employee fringe
benefit contributions and assessments to the Funds for each
employee covered by the CBA, which are individuals in the
appropriate bargaining unit who perform covered work, and to
be bound by the terms and conditions set forth in the
Funds' Trust Agreements. (Id. at ¶9). EPW
was also required to submit pertinent books and records for
an audit by the Funds for verification of said contributions.
(Id. at ¶14).
of the Funds were allegedly employed by EPW to perform work
and provide labor on various construction projects in
Michigan. (Id. at ¶29). Plaintiffs allege that
EPW was obligated to pay fringe benefit contributions to the
Funds (Id. at ¶32) and that the participants
earned outstanding fringe benefit contributions in connection
with and in furtherance of their employment and labor on said
projects. (Id. at ¶31). Plaintiffs allege that
EPW received money on the projects, but failed to pay all of
the fringe benefit contributions owed to the Funds.
(Id. at 34).
allege that Defendant EPW and Defendant Worrell attempted to
fraudulently avoid paying benefit contributions by sending
Plaintiffs a letter, dated September 23, 2011, which falsely
claimed that EPW was a “one employee unit.”
(Id. at ¶25). The letter, which is signed by
Defendant Worrell, stated as follows:
Elite Poured Walls has maintained a stable one man unit for
almost two years, has no expectations of expanding such unit
in the future and has not had a signed collective bargaining
agreement with your Union for about eight years. Therefore,
Elite Poured Walls is withdrawing recognition and/or
repudiating any agreement it may have with the Michigan
Regional Council of Carpenters and/or any of its local
(Ex. B to Def.'s Mo). Plaintiffs allege that this was not
an effective notice to terminate the CBA (Id. at
¶12) because EPW was not a one employee unit during the
times relevant to this complaint. (Id. at ¶25).
filed this action against Defendants on August 10, 2016.
Plaintiff's Amended Complaint is the operative complaint
in this case and it alleges the following counts: Count I -
Failure to Permit Audit, in violation of ERISA and the CBA;
Count II - Delinquent Contributions, in violation of ERISA
and the CBA; ...