Opinion
02-1848, Section "T"(1)
October 25, 2002
Before the Court is a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) filed on behalf of the Defendant, Corey Melancon. The Court, having considered the arguments of counsel, the record, the law and applicable jurisprudence, is fully advised in the premises and ready to rule.
ORDER AND REASON
I. BACKGROUND:
The Plaintiffs, Iron Workers Local 58, Iron Workers Local 58 Apprenticeship Fund, Iron Workers Local 58 Vacation Fund, Iron Workers 623, and Iron Workers 623 Apprenticeship Fund, seek various forms of relief including but not limited to remittance reports, unpaid contributions, a payroll audit, interest on unpaid contributions, . . . injunctive relief, and an order requiring the Defendants to post bond as security against future debts. The Plaintiffs seek such relief pursuant to §§ 502 and 515 of the Employee Retiree Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. § 1109, 1132, and 1144, § 301 of the Labor Management Relations Act, 29 U.S.C. § 185 and Louisiana Law. This Court, therefore, has jurisdiction and venue.
Defendant, Wolfe Steel Erectors, Inc., hereinafter "Wolfe," is party to a collective bargaining agreement with the Plaintiffs, Iron Workers Local 58 and Iron Workers Local 623, hereinafter "Unions." Wolfe is an out-of-state business corporation registered to do business in Louisiana. Defendant, Bay Steel, L.L.C., hereinafter "Bay," is a limited liability company domiciled and doing business in Louisiana. Defendant, Bay Steel of Louisiana, L.L.C., hereinafter "Bay Louisiana," is also a limited liability company domiciled and doing business in Louisiana. Both Bay and Bay Louisiana are allegedly alter egos and/or successor entities to Wolfe or members of a single business enterprise with Wolfe and the other named Defendants. As alter egos and/or successor entities to Wolfe or members of a single business enterprise with Wolfe and the other named Defendants, the Defendant, Corey Melancon, is allegedly liable for all debts of Wolfe.
Wolfe entered into a collective bargaining agreement with the Unions. The agreement binds the Contractor (Wolfe) to pay monthly contributions to the Apprenticeship and Vacation Funds, as well as withheld employee dues/contributions to the Unions. The Funds require that contributing employers file monthly remittance reports and the employers calculate the payments due to the Funds based on the monthly remittance reports. For the months of November 1998 forward, Wolfe failed to file remittance reports or to pay contributions owed for work performed in the Unions' jurisdictions. Since the contributions were not paid timely, late fees and interest are owed on the delinquent contributions.
The Plaintiffs filed an ERISA action against Wolfe on December 8, 1999 seeking the debts accrued from November 1998 until May 2001. A consent judgment was entered whereby Wolfe admitted liability of $131,184.88 and consented to settlement by scheduled payment. The Judgment was entered on April 11, 2001 by this Court. The judgment was made executionary on July 13, 2001 upon Wolfe's violation of the terms of the consent judgment.
The Plaintiffs filed another ERISA action on November 28, 2001 seeking debts from June 1, 2001 forward. A default judgment was taken against Wolfe on February 20, 2002.
II. ARGUMENTS OF THE RESPECTIVE PARTIES:
A. Arguments of the Defendant Corey Melancon in Support of the Motion to Dismiss:
The Defendant argues that the Plaintiffs have failed to state a right or cause of action upon which relief can be granted. Corey Melancon is only involved with Bay Louisiana and he had no involvement in the formation of Bay, as shown by the report from the Secretary of the State of Louisiana. The Defendant has no involvement with Wolfe and neither the Defendant nor Bay Louisiana were party to the collective bargaining agreement between Wolfe and the Unions.
The Defendant further argues that the allegations in the Complaint, applicable to Corey Melancon, are both conclusory and contradicted by the public record. The Plaintiffs claim that Bay is the alter ego of Wolfe and that Bay Louisiana is the alter ego of Bay. Neither the Defendant nor Bay Louisiana was a party to the agreement upon which the claims are based. The Defendant is only involved with Bay Louisiana, the penultimate link in the chain, and none of the veils have been pierced.
In their Reply to the Plaintiffs' Opposition to the Defendant's Motion to Dismiss, the Defendant argues that, even if the facts as alleged by Plaintiffs are true, the man behind the Wolfe/Bay/Bay Louisiana scheme was Joe W. Cline, Jr. and not the Defendant. Even if Bay is found liable, the Defendant himself is not automatically personally liable. The Defendant will only be held personally liable if the affairs of the corporation are indistinguishable from the affairs of the officer or where an officer commits fraud, malfeasance, or criminal wrongdoing in the corporation's name. The Defendant, Corey Melancon, has done neither. The facts alleged do not, therefore, make the Defendant personally liable for the debts, obligations, or liabilities of the company.
B. Arguments of the Plaintiff in Opposition to the Motion to Dismiss:
The Plaintiffs argue that they have pled facts sufficient to prevent the Defendant's FRCP 12(b)(6) Motion to Dismiss. The Plaintiffs have alleged facts to prove that Bay and Bay Louisiana are alter egos and/or successor entities to Wolfe. The facts alleged in the complaint are sufficient because there are a broad range of factors that need to be considered in determining whether a corporate veil should be pierced.
III. LAW AND ANALYSIS:
A. Law on Motion to Dismiss pursuant to Rule 12(b)(6):
A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("FRCP") "is viewed with disfavor and is rarely granted."Lowery v. Texas AM University System, 117 F.3d 242, 247 (5th Cir. 1997); Kaiser Aluminum Chem. Sales v. Avondale Shipyards, 677 F.2d 1045, 1050 (5th Cir. 1982). The complaint must be liberally construed in favor of the plaintiff, and all facts pleaded in the original complaint must be taken as true. Campbell v. Wells Fargo Bank, 781 F.2d 440, 442 (5th Cir. 1980). A district court may not dismiss a complaint under FRCP 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957); Blackburn v. Marshall, 42 F.3d 925, 931 (5th Cir. 1995). The Fifth Circuit defines this strict standard as, "(t)he question therefore is whether in the light most favorable to the plaintiff and with every doubt resolved in his behalf, the complaint states any valid claim for relief." Lowrey, 117 F.3d at 247, citing 5 Charles A. Wright Arthur R. Miller, Federal Practice and Procedure, § 1357, at 601 (1969).
B. The Court's Analysis:
The Plaintiffs' complaint, when liberally construed, alleges facts that would entitle him to relief. The Plaintiffs allege that Bay Louisiana was formed in order to evade paying the Plaintiffs the monies owed to them. Regardless of Joe W. Cline, Jr.'s involvement in Bay Louisiana, the Defendant, Corey Melancon, organized Bay Louisiana and may possibly be held personally liable if Bay Louisiana is proven to be an alter ego and/or a successor of Bay.
Accordingly,
IT IS ORDERED that the Motion to Dismiss filed on behalf of the Defendant, Corey Melancon, be and the same is hereby DENIED.