Opinion
Civil Action No. 2:03-CV-875.
June 16, 2005
OPINION AND ORDER
Plaintiffs bring this action pursuant to § 301 of the Labor-Management Relations Act of 1947, 29 U.S.C. § 185, and § 502 of the Employees Retirement Income Security Act of 1972 [hereinafter "ERISA"], 29 U.S.C. § 1132 et seq., seeking recovery for amounts allegedly due certain employee benefit plans. With the consent of the parties, 28 U.S.C. § 636(c), this matter is before the Court on plaintiffs' motion for summary judgment. There has been no response to that motion.
Summary judgment is appropriate if the record establishes that there exists no genuine issue of material fact. Rule 56, F.R. Civ. Pro. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The mere existence of a scintilla of evidence in support of the opposing party's position will be insufficient; there must be evidence on which the jury could reasonably find for the opposing party. Anderson, 477 U.S. at 251. See also Celotex Corp. v. Catrett, 477 U.S. 317 (1986).
Plaintiffs consist of the Boards of Trustees for the Ohio Laborers' Fringe Benefit Programs [hereinafter "Benefit Programs"], an association of three employee benefit trust funds and one labor management cooperative trust. Complaint, ¶ 2. Defendant Bihn Excavating, Inc., is an employer with its principal place of business in Oregon, Ohio; defendant Michael J. Bihn is its president and controlling corporate officer. Answer, ¶ 3. The motion for summary judgment does not seek judgment against the individual defendant.
The defendant corporation entered into an agreement with the union whereby it agreed to
adopt and accept the terms and conditions of employment as contained in the 1992-1995 Ohio Highway-Heavy-Municipal and Utility Construction State Agreement between The Labor Relations Division, Ohio Contractors Association, and The Laborers' District Council of Ohio, and any successor Highway-Heavy-Municipal and Utility Construction Agreement between the same parties . . . including the obligations of an Employer to make contributions on behalf of its employees to the Health and Welfare Fund, the Pension Fund, and the Training and Upgrading Fund, and this Company agrees to be bound by the Agreements and Declarations of Trust establishing the same.Agreement, attached as Exhibit A to Motion for Summary Judgment. See also Affidavit of Matthew A. Archer, ¶ 11, attached to Motion for Summary Judgment. The Ohio Highway-Heavy-Municipal and Utility State Construction agreement referred to in this agreement provides in relevant part that "[f]ringe benefit contributions shall be paid at the rate specified . . . for all hours paid to each employee by the Contractor under this Agreement. . . ." Ohio Highway-Heavy-Municipal-Utility State Construction Agreement, Article IX, ¶ 47, attached as Exhibit B to Plaintiffs' Motion for Summary Judgment.
The uncontroverted evidence establishes that the defendant corporation failed to make timely contributions to the funds for the period January 2001 through February 2005, Affidavit of Matthew A. Archer, ¶ 12, and an audit of the corporation's records and contribution reports reveals unpaid contributions totaling $8,240.71. Id., ¶ 13; Exhibit C attached to Motion for Summary Judgment. During the same period, the defendant corporation was late in making payments totaling $5,437.90. Affidavit of Matthew A. Archer, at ¶ 14.
Plaintiffs seek judgment in the principle amount of unpaid benefit contributions, as well as interest, liquidated damages and reasonable attorney's fees and costs.
2. Statutory Damages
ERISA's enforcement scheme, with respect to delinquent contribution claims, contains its own remedies provision in § 502(g)(2), 29 U.S.C. § 1132(g)(2):
(2) In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan —
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the greater of —
(i) interest on the unpaid contributions, or
(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court under subparagraph (A),
(D) reasonable attorney's fees and costs of the action, to be paid by the defendant, and
(E) such other legal or equitable relief as the court deems appropriate.
For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under section 6621 of title 26.29 U.S.C. § 1132(g)(2). The language of § 1132(g)(2) is mandatory; once liability for delinquent contributions is determined, the district court must award those damages. See Michigan Carpenters Council Health and Welfare Fund v. C.J. Rogers, Inc., 933 F.2d 376, 388 (6th Cir. 1991). In this action, plaintiffs are entitled to recover the unpaid fringe benefit contributions, interest on those contributions, an amount equal to the greater of the interest on the unpaid contributions or liquidated damages provided for under the plan, as well as costs and reasonable attorney fees.
Plaintiffs contend, and defendants do not dispute, that the corporate defendant owes $8,240.71 in unpaid fringe benefit contributions. Plaintiffs are therefore entitled to liquidated damages, as provided for by the collective bargaining agreement, not to exceed twenty percent (20%) of this unpaid contribution amount. Plaintiffs are also entitled to interest on this unpaid contribution amount.
Plaintiffs also allege that a total of $5,437.90 reflects untimely paid contributions. This Court notes that untimely paid contributions do not qualify as "unpaid contributions" and liquidated damages based thereon are not recoverable under 29 U.S.C. § 1132(g)(2). C.J. Rogers, Inc., 933 F.2d at 989. Thus, plaintiffs may not recover, as statutory damages, liquidated damages or interest based on untimely paid fringe benefit contributions. However, as noted infra, recovery in connection with untimely payments is authorized by the collective bargaining agreement and 29 U.S.C. § 185.
Plaintiffs also request attorney fees in the amount of $5,075.00, and document that their attorney expended a total of 29 hours, for which he charged $175 per hour, in necessary services. Plaintiffs' Affidavit in Support of Their Motion for Summary Judgment and Application for Attorney Fees, attached to Plaintiffs' Motion for Summary Judgment. This Court concludes that the fee request is reasonable given the length and complexity of this case. Plaintiffs' recovery will include this amount.
3. Collective Bargaining Agreement
In addition to statutory damages under § 1132(g)(2), plaintiffs also seek recovery under § 301 of the Labor-Management Relations Act of 1947, 29 U.S.C. § 185, which authorizes recovery under the terms of a collective bargaining agreement. Because plaintiffs are third-party beneficiaries of the collective bargaining agreement, they are entitled to enforce it. See Anderson v. ATT Corp., 147 F.3d 467, 473 (6th Cir. 1998)["We have long recognized that the plaintiff can recover for the employer's breach of a collective bargaining agreement if the plaintiff is a third-party beneficiary of the agreement"] ; Cement and Concrete Workers Dist. Council Welfare Fund, Pension Fund, Legal Services Fund and Annuity Fund v. Lollo, 35 F.3d 29, 34 (2nd Cir. 1994)["Plaintiff Soracco, as administrator of the Funds, may sue on behalf of the Funds as third party beneficiaries of the collective bargaining agreement"]; Central States Southeast and Southwest Areas Pension Fund v. Kraftco, Inc., 799 F.2d 1098 (6th Cir. 1986). Plaintiffs seek to recover liquidated damages for the $5,437.00 in untimely contribution payments made by the corporate defendant.
Section 185 provides:
(a) Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . may be brought in any district court of the United States. . . ."
Damages relating to the delinquent, or untimely, payment of contributions not recoverable under § 1132(g)(2), may, in certain circumstances, be recovered pursuant to the collective bargaining agreement. See C.J. Rogers, Inc., 933 F.2d at 390. In determining whether to award such damages, the Court must examine whether the liquidated damages provision in the operative collective bargaining agreement constitutes a penalty under federal common law. Id. In this regard, the Court must consider whether the harm caused by a breach of the collective bargaining agreement would be difficult or impossible to estimate, and whether the amount fixed in the liquidated damages provision of the agreement represents a reasonable forecast of just compensation for the harm caused. United Order of Am. Bricklayers and Stone Mason Unions No. 21 v. Thorleif Larson Son, Inc., 519 F.2d 331, 332 (7th Cir. 1995). See also Bricklayers Pension Trust Fund v. Rosati, Inc., 187 F.3d 634 (table decision), No. 98-1552, 1999 WL 503501, at *2 (6th Cir. July 7, 1999).
The collective bargaining agreement in this case provides:
If contributions are not received by the fifteenth (15th) day of the month, following the month in which the work was performed, the employer will be subject to and agree to pay liquidated damages of ten percent (10%) plus one percent (1%) per month for each month the employer is delinquent to cover the additional cost and expenses of continuing administration during the period of delinquency, interest and any and all costs of collection including reasonable attorney fees.Ohio Highway — Heavy — Municipal — Utility State Construction Agreement, Article IX, ¶ 47, attached as Exhibit B to Plaintiffs' Motion for Summary Judgment. This Court previously examined an identical liquidated damages provision in Shaw v. National Engineering and Contracting Co., Case No. 2:00-CV-920 (unreported) (S.D. Ohio October 10, 2001), and concluded that the liquidated damages provision in the collective bargaining agreement did not constitute an unenforceable penalty.
The liquidated damages provision in Shaw stated, "liquidated damages of ten percent (10%) plus one percent (1%) per month for each month the employer is delinquent. . . ."
Plaintiffs are entitled to liquidated damages and interest on the $5,437.90 in untimely payments. Plaintiffs have established, and defendants do not dispute, that the liquidated damages and interest due upon the unpaid and untimely contributions total $3,483.10. Affidavit of Matthew A. Archer, ¶ 17; Exhibit C, attached to Plaintiffs' Motion for Summary Judgment. WHEREUPON this Court concludes that plaintiffs' motion for summary judgment, Doc. No. 24, is meritorious and it is therefore GRANTED. Plaintiffs are hereby AWARDED JUDGMENT AGAINST DEFENDANT BIHN EXCAVATING, INC., in the amount of $8,240.71 in unpaid fringe benefit contributions, $1,365.33 in liquidated damages, $2,117.77 in prejudgment interest, and $5,075.00 in attorney fees plus costs, plus interest from the date of judgment.
The Clerk shall enter FINAL JUDGMENT in the total amount of $16,798.81.