United States District Court, E.D. Michigan, Southern Division
TRUSTEES OF MICHIGAN REGIONAL COUNCIL OF CARPENTERS' EMPLOYEE BENEFITS FUND, et al., Plaintiffs,
INFINITY HOMESCAPES, LLC, et al., Defendants.
OPINION AND ORDER GRANTING IN PART AND DENYING IN
PART PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT (DOC.
CARAM STEEH UNITED STATES DISTRICT JUDGE.
trustees of employer trust funds have brought this Employee
Retirement Income Security Act (“ERISA”) suit for
unpaid fringe benefits owing against two companies, and their
sole owner Jamey Woodson and his wife, Josie Lewis.
Plaintiffs also include the Michigan Regional Council of
Carpenters United Brotherhood of Carpenters and Joiners of
America (the “Union”) and six employees of
Defendant Infinity Homescapes, LLC
(“Homescapes”). Plaintiffs also brought claims
under the Fair Labor Standards Act (“FLSA”) and
related state law claims. Now before the court is
Plaintiffs' motion for summary judgment.
matter had been scheduled for oral argument on March 29,
2018. On March 28, 2018, Defendants Woodson and Lewis
notified the court that they had filed a petition for
bankruptcy and that an automatic stay pursuant to Section
362(a) of the Bankruptcy Code applied. Based on the automatic
stay, this court does not address the claims against the
individual Defendants Woodson and Lewis. On the date
scheduled for oral argument, the court met with counsel for
both sides in chambers to discuss the matter. During the in
chambers conference, defense counsel admitted to liability
only on behalf of Defendant Homescapes and the parties agreed
that they would submit a proposed order to that effect and
agreed that it was unnecessary to put their agreement on the
record. Thereafter, defense counsel e-mailed Plaintiffs'
counsel that she agreed that Homescapes was liable for some
fringe and wage benefits, but was not waiving her argument
that the matter must be arbitrated or that judicial estoppel
barred the action, and noted her intent to appeal. Based on
this procedural background, the court decides the pending
motion based on the written submissions.
reasons set forth below, the court GRANTS Plaintiffs'
motion as to liability only on ERISA and FLSA claims as to
Defendant Homescapes, and DENIES summary judgment on the
claim for the filing of fraudulent W-2s.
are a collection of Michigan Carpenter Employee Benefit Funds
(collectively “Funds”), six former employees of
Homescapes, and the Union. Defendants are Homescapes, a
company that performs residential and commercial carpentry
construction work; Infinity Millworks
(“Millworks”), which performs residential
carpentry work; Woodson, the sole owner of Homescapes and
Millworks; and his wife, Lewis. Lewis is an attorney who
performs legal work for both companies. In addition, she
handles administrative and secretarial work. In addition to
being a named defendant, Lewis also represents all Defendants
in this lawsuit.
came into existence in 2016. Plaintiffs allege that
Homescapes grossed over $500, 000 in 2016, based on invoices
of slightly less than $500, 000 and $175, 000 in change
orders from one of Homescapes' largest jobs. Although
Lewis testified at her deposition that the $175, 000 was
owing, Homescapes now claims the $175, 000 sum was an
estimate not of sales, but of expenses for two other
September 16, 2016, Homescapes executed a
collective-bargaining agreement (the “CBA”) with
the Union. Following execution of the CBA, Homescapes
employed, among others, the six named Plaintiffs in this
lawsuit: (1) John Duval, (2) Brian Patterson, (3) Robert
Swixx, (4) Carl Touchette, (5) Jeff Roettger, and (6) Damien
Hirst. Also, in September, 2016, Homescapes suffered
financial difficulties when general contractor, Thorndale
Construction Services (“Thorndale”), failed to
pay amounts owing.
contend that Defendants' answers to interrogatories and
deposition testimony establish that Defendants failed to pay
wages, issued payroll checks on accounts with insufficient
funds, unlawfully issued 1099s to workers, and issued
incorrect W-2s. Indeed, in their answers to interrogatories,
Defendants admit that Plaintiffs Roettger, Hirst, Swixx,
Touchette, Patterson, and Duval worked for Homescapes during
the time periods in late October, 2016 stated, and admitted
that they were told not to cash their checks because of
insufficient funds. (Doc. 23, Ex. G at PgID 801-804, Ex. C at
42, PgID 607). At his deposition, Woodson admitted that his
workers were not paid wages or fringe benefits for that time
period, but that he paid suppliers. (Doc. 23, Ex. B at PgID
592). An audit conducted by the Funds auditors confirmed that
Homescapes failed to make the required fringe benefit
contributions. (Doc. 23, Ex. H). According to the audit,
Homescapes owes $111, 187.07. (Doc. 23, Ex. H at PgID 819).
Homescapes also admits that some employees were issued 1099s,
which are tax forms used to report income to independent
contractors, because they were “minimizing” their
tax liability. (Doc. 23, Ex. C at 37-38, PgID 606).
Homescapes also admitted that it issued W-2s that were
inaccurate because they included unpaid wages, and did not
contain wages reported on the 1099s. (Doc. 23, Ex. C at 96,
Complaint alleges eleven counts. Count I seeks delinquent
contributions under ERISA. Count II alleges failure
to permit updated audit. Count II is now moot as an updated
audit took place on December 1, 2017. Count III alleges
breach of fiduciary duty under ERISA against Homescapes,
Woodson, and Lewis. Count IV alleges violations of the
Michigan Building Contract Fund Act (“MBCFA”),
Mich. Comp. Laws § 570.151 et seq. Count V
alleges federal minimum wage violations pursuant to the Fair
Labor Standards Act (“FLSA”). Count VI alleges
state minimum wage violations. Count VII alleges federal
overtime violations pursuant to the FLSA. Count VIII alleges
state overtime violations. Count IX alleges failure to pay
wages in violation of Michigan law. Count X alleges failure
to pay amount of dishonored checks pursuant to Mich. Comp.
Laws § 600.2952. Finally, Count XI alleges filing
fraudulent W-2s in violation of 26 U.S.C. § 7434.
Standard of Law
Rule of Civil Procedure 56(c) empowers the court to render
summary judgment "forthwith if the pleadings,
depositions, answers to interrogatories and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of
law." See Redding v. St. Eward, 241 F.3d 530,
532 (6th Cir. 2001). The Supreme Court has affirmed the
court's use of summary judgment as an integral part of
the fair and efficient administration of justice. The
procedure is not a disfavored procedural shortcut.
Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986);
see also Cox v. Kentucky Dep't of Transp., 53
F.3d 146, 149 (6th Cir. 1995).
standard for determining whether summary judgment is
appropriate is "'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.'" Amway Distributors Benefits
Ass'n v. Northfield Ins. Co., 323 F.3d 386, 390 (6th
Cir. 2003) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 251-52 (1986)). The evidence and all reasonable
inferences must be construed in the light most favorable to
the non-moving party. Matsushita Elec. Indus. Co., Ltd.
v. Zenith Radio Corp., 475 U.S. 574, 587 (1986);
Redding, 241 F.3d at 532 (6th Cir. 2001).
"[T]he mere existence of some alleged factual
dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment; the
requirement is that there be no genuine issue of
material fact." Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247-48 (1986) (emphasis in
original); see also National Satellite Sports, Inc. v.
Eliadis, Inc., 253 F.3d 900, 907 (6th Cir. 2001).
movant establishes by use of the material specified in Rule
56(c) that there is no genuine issue of material fact and
that it is entitled to judgment as a matter of law, the
opposing party must come forward with "specific facts
showing that there is a genuine issue for trial."
First Nat'l Bank v. Cities Serv. Co., 391 U.S.
253, 270 (1968); see also McLean v. 988011 Ontario,
Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere
allegations or denials in the non-movant's pleadings will
not meet this burden, nor will a mere scintilla of evidence
supporting the non-moving party. Anderson, 477 U.S.
at 248, 252. Rather, there must be evidence on which a jury
could reasonably find for the non-movant. McLean,
224 F.3d at 800 (citing Anderson, 477 U.S. at 252).
argue that this case must be dismissed because Plaintiffs
have not exhausted the grievance procedure and arbitration
set forth in Article XV of the CBA. Upon review of the
arbitration clause in the CBA and applicable law,
Defendants' argument lacks merit. First, the court
considers Plaintiffs' claim for unpaid fringe benefit
contributions under Section 502 of ERISA. The Supreme
Court's decision in Schneider Moving & Storage
Co. v. Robbins, 466 U.S. 364 (1984) is dispositive on
this issue. In Schneider, as here, trustees of
multi-employer trust funds brought an ERISA action against
two companies for delinquent contributions as required by the
trust agreement, as incorporated into the terms of the
applicable collective bargaining agreement. The Court held
that the presumption of arbitrability did not apply to
disputes between trustees and employers. Id. at
372-73. The Court then examined the trust agreement and
collective bargaining agreement and found that neither
evidenced an intent on the part of the parties to require
arbitration of disputes between trustees and the employers.
case presents an even stronger argument that the parties
evidenced no intent to require arbitration between Plaintiff
Trust Funds and Defendant Employers over delinquent
contributions as the Trust Fund specifically provides,
“No matter respecting the foregoing, or any difference
arising thereunder, or any matter involved in this Trust
Agreement, shall be subject to the grievance procedure
established in any Collective Bargaining Agreement.”
(Doc. 1-2 at PgID 127). Based on this express language in the
Trust Agreement, Plaintiff Trust Funds are not subject to ...