United States District Court, E.D. Virginia, Alexandria Division
Board of Trustees, Sheet M Workers' National Pension Fund, et al., Plaintiffs,
Four-C-Aire, Inc., Defendant.
Liam O'Grady Judge.
ERISA case comes before the Court on Defendant's motion
to dismiss the Amended Complaint for failure to state a claim
upon which relief can be granted. (Dkt. No. 20). The Amended
Complaint seeks to recover for three separate categories of
payments: (1) delinquent payments and audit fees from before
January 2015; (2) delinquent payments and reporting
violations after January 2015; and (3) an exit contribution.
The parties fully briefed the matter, and the Court held oral
argument on April 7, 20! 6. For the reasons that follow, the
Court hereby GRANTS IN PART and
DENIES IN PART the motion. Specifically, the
Court DENIES the motion to dismiss for the
delinquent contributions and reporting that accrued after
January 2015. but GRANTS the motion to
dismiss for all of Count II (seeking an exit contribution)
and the portion of Count 1 that was previously adjudicated in
are six Plaintiffs in this case. They are the separate and
individual Boards of Trustees of the Sheet M Workers'
National Pension Fund ("NPF"), the International
Training Institute for the Sheet M and Air Conditioning
Industry ("ITI"), the National Energy Management
Institute Committee ("NEMI"), the Sheet M
Occupational Health Institute Trust Fund
("SMOHIT"), the Sheet M Workers'1 International
Association Scholarship Fund ("Scholarship Fund"),
and the national Stabilization Agreement for the Sheet M
Industry Trust Fund ("SASMI") (collectively, the
"Funds" or "Plaintiffs"). The Boards of
Trustees are "fiduciaries" with respect to the
Funds. See 29 U.S.C. § 1132(a)(3). As such,
under ERISA, they are empowered to bring this action on
behalf of the Funds. 29 U.S.C. § 1132(g)(2) The NPF,
ITI. and SASMI are jointly trusteed trust funds created and
maintained under LMRA and "multiemployer plans as
defined by ERISA."
is a New York corporation that qualifies as an employer
within the meaning of 29 U.S.C. § 152(2) and Section
3(5) of ERISA, 29 U.S.C. § 1002(37). Until the date of
its withdrawal from the Funds on or about May 1, 2016,
Defendant employed individuals represented by Sheet M Workers
International Association Local Union No. 58 (Local Union No.
58). At all times relevant to this action, Defendant was
bound by a collective bargaining agreement (CBA) between the
Central New York Sheet M Contractors' Association, Inc.
and Local Union No. 58. This CBA included all addenda and is
referred to as the "Labor Agreement." Under the
terms of this Labor Agreement, Defendant was also obligated
to abide by the terms of the Trust Agreements, including
all amendments thereto ("Trust Documents").
the terms of the Labor Agreement and Trust Agreements,
Defendant was obligated to "submit monthly remittance
reports and pay fringe benefit contributions to the Funds for
all hours worked or paid on behalf of Defendant's covered
employees." Am. Compl. ¶ 12. Under these
Agreements, contributions are deemed delinquent if they are
past the fifteenth day of the month.
Funds previously filed suit against Defendant in this Court
in case number 1:15-cv-105-LMB-JFA ("Prior
Litigation"). The Prior Litigation sought to recover
unpaid contributions from November and December 2014, among
other things. On June 5, 2015, the case terminated in a
default judgment against Defendant. (Prior Litigation, Diet.
filed their original complaint in this case on December 29,
2016. On February 14, 2017, Defendant filed amotion to
dismiss. (Dkt. No. 11). Pursuant to Federal Rule of Civil
Procedure 15(a)(1)(B), Plaintiffs filed an amended complaint
on February 27, 2017. (Dkt. No. 18). In light of
Plaintiffs' Amended Complaint, Defendant's original
motion to dismiss was denied as moot, and Defendant then
filed the instant motion to dismiss (Dkt. No. 20).
Alleged Delinquent Payments
the Prior Litigation, Plaintiffs conducted a payroll audit of
Defendant for the work months of May 2014 through March 2015.
The audit revealed that, for December 2014, Defendant owed
$282.56 more than the Funds received through their default
judgment award. The corresponding audit fees were $1, 600.
Under the Funds' "Procedure for the Collection of
Contributions, " Defendant is bound to pay the
delinquency as well as the audit fee.
also failed to make contributions during the months of
January through April 2016. From February to April 2016,
Defendant failed to submit monthly reports as well.
Plaintiffs estimate that Defendant owes at least $9, 734.40
in contributions for the time period of January through April
Defendant's contributions for the months of January 2015
to September 2015 were delinquent when paid. Plaintiffs
assert that all of these delinquent payments amount to a
violation of Section 515 of ERISA. As such, Plaintiffs seek
the following remedies for these delinquent contributions:
(1) interest at the rate of 0.0233% per day; (2) if not
interest, then liquidated damages equal to 20% of the
delinquent contributions; (3) attorneys' fees; (4) late
fees amounting to the greater of 10% of the delinquent
contributions or $50.00.
Alleged Exit Contribution
V, Section 6(a) of the Sheet M Workers' National Pension
Fund Trust Document ("NPF Trust Document") imposes
an "exit contribution" on any employer who (1)
ceased to have an obligation to contribute to the NPF Trust,
and (2) had an event of withdrawal under Title IV of ERISA as
a result of the cessation of its obligation to contribute,
but was not required to pay withdrawal liability. Am. Compl.
¶ 39. Under this provision, the employer shall pay the
exit contribution so long as a new CBA is not executed after
its CBA expires. Id. ¶ 40. The amount of the
exit contribution is equal to the amount of the
employer's contributions for a 36-month period prior to
the month in which the employer ceased to have an obligation
to contribute to the fund. It is due no later than the
twentieth day of the month following the Fund's demand
for an exit contribution. Id. ¶ 42. Plaintiffs
allege that "an Employer's failure to make an Exit
Contribution constitutes a delinquency and is treated in the
same manner as any other delinquent contribution."
October 15, 2015, the NPF Trust Document "was
amended" to include the following language:
By agreeing to contribute, continuing to contribute, or
continuing to be obligated to contribute, to the Fund, each
Employer agrees to pay an Exit Contribution in accordance
with this Section 6. The Employer's obligation to pay an
Exit Contribution under this Section 6 is independent of the
Employer's collective bargaining agreement and continues
to apply after the termination of the collective bargaining
agreement (notwithstanding any language to the contrary in
the collective bargaining agreement).
Id. ¶ 44 (quoting NPF Trust Document Art. V.
§ 6(b)). Because the Labor Agreement expressly
incorporated the Trust Document, Plaintiffs allege that
Defendant was bound to the terms of the amendment, which on
its face survived the termination of the Labor Agreement.
Labor Agreement expired on April 30, 2016. On August 5, 2016,
the NPF Trust assessed an exit contribution against Defendant
and demanded payment by September 20, 2016. Based on the
contribution history, the amount of the exit contribution was
$97, 601.01. To date, Defendant has not made this payment.
Plaintiffs seek the following remedies for the delinquent
exit contribution: (1) interest at the rate of 0.0233% per
day (at least $3, 506.02); (2) an amount equal to the greater
of interest calculated at the above rate or liquidated
damages equal to 20% of the delinquent contributions (at
least $19, 520.02); and (3) attorneys' fees.
considering a motion to dismiss, the Court accepts as true
all of the factual allegations contained in the complaint,
construing them in the light most favorable to the plaintiff.
United States ex rel Oberg v. Pa. Higher Educ. Assistance
Agency, 745 F.3d 131, 136 (4th Cir. 2014). To defeat the
motion, the Plaintiff must allege enough allegations of fact
"to state a claim for relief that is plausible on its
face." Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 570 (2007). In tins regard, bald legal assertions
without factual support need not be accepted. Id.
Indeed, the Court may not rely on mere "labels and
conclusions" or the Complaint's "formulaic
recitation of the elements of a given cause of action in
deciding the motion. Id. at 555. In conducting its
analysis, die Court may take judicial notice of matters of
public record and may also consider documents attached to the
complaint, "as well as those attached to the motion to
dismiss, so long as they are integral to the complaint and
authentic." Sec'y of State For Defence v.
Trimble Navigation Ltd., 484 F.3d 700, 705 (4th
are two counts alleged in the amended complaint: Count I
alleges delinquent contributions, and Count II alleges
liability for an exit contribution imposed by the NPF Trust.
Both of these Counts allegedly arise under § 515 of
ERISA, which provides:
Every employer who is obligated to make contributions to a
multiemployer plan under the terms of the plan or under the
terms of a collectively bargained agreement shall, to the
extent not inconsistent with law, make such contributions in
accordance with the terms and conditions of such plan or such
29 U.S.C. § 1145. The relevant enforcement provisions
are contained in 29 U.S.C. § 1132, which allows for
specific remedies in claims brought by die fiduciaries of
eligible plans. See 29 U.S.C. § ...