United States District Court, E.D. Michigan, Southern Division
TRUSTEES OF THE OPERATING ENGINEERS' LOCAL 324 PENSION FUND, Plaintiff,
BOURDOW CONTRACTING, INC., Defendant.
OPINION AND ORDER DENYING DEFENDANT'S MOTION FOR
SUMMARY JUDGMENT 
STEPHEN J. MURPHY, III United States District Judge.
GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT 
Plaintiff, a pension fund, brought the instant
withdraw-liability claim pursuant to the Employee Retirement
Income Security Act (ERISA). Plaintiff argues that Defendant,
a construction company, is in fact the alter ego of a
now-defunct predecessor company. DEFENDANT denied the claim
and the two parties have filed cross motions for summary
judgment. The Court has reviewed the initial and
supplementary briefs and determined that a hearing is
unnecessary. See E.D. Mich. LR 7.1(f). For the following
reasons, the Court will deny Defendant's motion and grant
Fringe Benefits and Withdrawal Liability Under ERISA and the
passed ERISA in 1974. One of the principal purposes of ERISA
"was to ensure that employees and their beneficiaries
would not be deprived of anticipated retirement benefits by
the termination of pension plans before sufficient funds have
been accumulated in the plans." Pension Ben. Guar.
Corp. v. R.A. Gray & Co., 467 U.S. 717, 720 (1984). But
soon after its passage, Congress recognized that certain
problems might arise concerning multiemployer plans and
passed an additional act: the Multiemployer Pension Plan
Amendments Act of 1980 (MPPAA). The MPPAA:
requires that an employer withdrawing from a multiemployer
pension plan pay a fixed and certain debt to the pension
plan. This withdrawal liability is the employer's
proportionate share of the plan's "unfunded vested
benefits, " calculated as the difference between the
present value of vested benefits and the current value of the
Id. at 725 (quoting 29 U.S.C. §§ 1381,
also recognized "the transitory nature of contracts and
employment in the building and construction industry"
and therefore treated employers within that industry slightly
differently. Bd. of Trs., Sheet Metal Workers'
Nat'l. Pension Fund v. Palladium Equity Partners,
LLC, 722 F.Supp.2d 854, 873 (E.D. Mich. 2010) (citing
Carpenters Pension Tr. Fund for N. Cal. v. Underground
Constr. Co., 31 F.3d 776, 778 (9th Cir.1994). Under the
MPPAA's construction-industry exception, a withdrawal
occurs only if the employer "ceases to have an
obligation to contribute under the plan, " yet
"continues to perform work in the jurisdiction of the
collective bargaining agreement of the type for which
contributions were previously required, " or
"resumes such work within 5 years after the date on
which the obligation to contribute under the plan ceases, and
does not renew the obligation at the time of the
resumption." 29 U.S.C. § 1383(b)(2).
Bourdow Trucking: 1967-2013
Trucking Company ("Trucking") was incorporated in
1967. ECF 29, PgID 529, ¶ 1. Its incorporators and
original board of directors included Daniel Bourdow, Sr.,
Thomas Marx, and Mary Kruske, ECF 39-1, PgID 559. By 2012,
the company was owned by four shareholders, all members of
the Bourdow family. Dan Sr. and Patricia Bourdow-a married
couple-each owned 30.7% of the company, and Dan Jr., Barb,
Cindy, and Joe-their children-each owned 9.65%. ECF 31, PgID
839-40. Dan Sr., Patricia, Dan Jr., and Joe also served as
the company's officers, ECF 29-12, PgID 722. In addition
to being officers, Dan Jr. and Joe also worked in supervisory
roles, ECF 29-4, PgID 633; ECF 29-3, PgID 608, and other
Bourdow family members worked for the company, too. For
instance, Barb's husband Craig Kelly worked as an
equipment operator from 1980 through 2012, ECF 29-15, 737,
and Dan Jr.'s son Jason worked as a laborer, ECF 29-3,
sold dirt and gravel and did site preparation and excavation
work within the Lower Penninsula for several decades. ECF 31,
PgID 840. The Bourdow children grew up working for the
company, some never working anywhere else, ECF 29-2, PgID
567; ECF 29-3, PgID 592-93; ECF 29-4, PgID 632, and for as
long as Barb Kelly could remember, Trucking was bound to a
collective bargaining agreement (CBA) with Local 324 (the
Union), ECF 29-2, PgID 571. But the company encountered
"financial difficulties" in 2007 and terminated its
agreement with the Union. ECF 28, PgID 426; ECF 29-2, PgID
569; ECF 28-6, PgID 485-86. Trucking negotiated with the
Union for some time, but they did not reach an agreement. ECF
29-2, PgID 572-73.
the terminated CBA, Trucking's financial difficulties
persisted. Around 2010, Trucking hired a CPA, Gregg
Greenwood, to help Trucking address the financial problems.
ECF 28-6, PgID 495. Greenwood attended Trucking's annual
meetings and, according to him, in at least one meeting Joe
and Dan Jr. seemed "disgruntled as to how things were
going" with Trucking. Id. at 496. Specifically,
they seemed concerned about "the top-heaviness of the
company"-for instance, Cindy was continuing to draw
compensation and fringe benefits despite not actually working
within the company. Id. at 496-97. Greenwood
testified that Joe and Dan Jr. were "adamant in the
meetings . . . that the company [could] no longer operate in
this fashion without making decisive cuts." Id.
at 496. But changes were never made. Id. at 497.
a CBA was no longer in effect, Trucking continued to remit
fringe payments to the Union's pension fund (the Fund)
into 2011. ECF 29-2, PgID 570-71; ECF 27-8, PgID 271. Barb
testified that she continued to remit the funds
"[b]ecause nobody told [her] to stop." ECF 29-2,
PgID 570. Trucking eventually stopped paying fringes after
the Fund sent back an uncashed check. Id. at 571,
573. All the while, Barb requested and received
Trucking's withdrawal liability estimates. Id.
at 575; ECF 29-6.
August 27, 2012, Defendant Operating Engineers Local 324
Pension Fund ("the Fund") sent Trucking a letter.
ECF 29-8. The subject read, "Notice of Complete
Withdrawal and Demand for Payment of Withdrawal
Liability." The letter explained that "[b]ased on
information currently available" to the Fund, it had
"determined that Bourdow Trucking Co. completely
withdrew from the Fund on or about July 2011, "
resulting in an estimated withdrawal liability of $1, 163,
279. Accordingly, the letter laid out a payment schedule:
Trucking was to pay 29 quarterly installments of $44, 456.15,
along with one final payment of $23, 864.99. The first
quarterly payment was due on November 1, 2012.
the family members disagreed with the liability assessment,
so a meeting was called. ECF 28-6, PgID 489. The shareholder
Bourdows attended the meeting, as did Greenwood, David Masud
(Trucking's longtime labor lawyer), and John Lozano (a
bankruptcy lawyer recently hired by Trucking). ECF 29-2, PgID
580; ECF 27-3, PgID 187. Greenwood recalled the meeting
lasted one to two hours and, by the end, everyone was aware
of Trucking's withdrawal liability and agreed that they
could not pay the assessed amount. ECF 29-9, PgID 696.
Greenwood also recalled that three options were put forward:
(1) liquidate the company, (2) file for bankruptcy, or (3)
work with the Fund on a compromise. Id. 697. No.
decision was reached at the meeting. Id.
September 5, 2012, Masud called Paula Johnson, the Plant
Manager for the Fund. ECF 29-5, PgID 661-63. According to
Johnson, Masud informed her that Trucking "was a small
family-owned company and that they didn't have any
resources to fight an assessment and that they were just
going to wind down their business and shut their doors[,
]" but "they were not interested in filing
bankruptcy[.]" ECF 29-5, PgID 661-62. Johnson referred
Masud to the Fund's attorney, Nancy Pearce, and in a
subsequent conversation with Pearce, Masud allegedly asked
"if there was a way that the withdrawal liability
assessment could be undone." Id. at 663. No.
reply to Masud's question is in the record.
Trucking failed to make its first payment on November 1, 2012
and the Fund referred the matter to outside counsel to pursue
collection. ECF 28-6, PgID 499.The Fund then filed a lawsuit
to recover the withdrawal liability payment later that month.
See Operating Eng'rs Local 324 Pension Fund v.
Bourdow Trucking Co., No. 2:12-cv-15118. Trucking filed
for bankruptcy on March 12, 2013, thereby automatically
staying the lawsuit and halting Trucking's then-active
road project. ECF 32-4, PgID 1044-46.
Bourdow Contracting: 2012-present
Trucking was coming to an end in the f5all of 2012, a new
Bourdow enterprise was beginning. Jason Bourdow signed the
Articles of Organization for Defendant Bourdow Contracting,
LLC ("Contracting") on October 29, 2012. ECF 32-11,
PgID 1132. Lozano had prepared the documents and faxed them
to the Michigan Department of Labor and Economic Growth on
October 31, 2012; they were filed two days later.
Id. at 1131. Under Contracting's operating
agreement, Jason, Joe, and Dan Jr. each had a one-third
interest. Id. at 1142. Dan Jr. explained that his
"goal [in forming Contracting] was to keep working. I
could not afford to retire so I had to keep working."
ECF 27-3, PgID 192. Joe made a similar statement. ECF 29-4,
bid on its first project on March 10, 2013 and more work has
followed. ECF 32-4, PgID 1048; ECF 32-12, PgID 1144. The work
is similar to that of Trucking: 90% of Contracting's work
is in site preparation and excavation. ECF 28-3, PgID 441.
The company is small-3-8 employees, depending on workload-and
serves customers in Saginaw, Bay, and Midland counties.
Id. at 442.
judgment is proper if there is "no genuine dispute as to
any material fact and the movant is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(a). A fact is material
for purposes of summary judgment if its resolution would
establish or refute an "essential element of a cause
of action or defense asserted by the parties[.]"
Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.
considering a motion for summary judgment, the Court must
view the facts and draw all inferences in the light most
favorable to the non-moving party. Stiles ex rel. D.S. v.
Grainger Cty., Tenn., 819 F.3d 834, 848 (6th Cir. 2016).
The Court must then determine "whether the evidence
presents a sufficient disagreement to require submission to a
jury or whether it is so one-sided that one party must
prevail as a matter of law." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 251-52 (1986). And although
the Court may not make credibility judgments or weigh the
evidence, Moran v. Al Basit LLC, 788 F.3d 201, 204 (6th
Cir. 2015), a mere "scintilla" of evidence is
insufficient to survive summary judgment; "there must be
evidence on which the jury could reasonably find for the
plaintiff, " Anderson, 477 U.S. at 252.
bankruptcy meant that its withdrawal liability to the
Fund-assessed at $1, 163, 279-went largely unpaid. The Fund
now seeks to recover the liability payments from Contracting.
The Fund argues that Contracting is actually the successor or
alter-ego of Trucking and is therefore liable for the
payments. Contracting denies this, and insists that the two
companies are different in several important ways.
Alter Ego Liability
Actionability of Alter Ego ...