Opinion
Case No. 03-71056.
September 28, 2004
OPINION AND ORDER
AT A SESSION of said Court, held in the Theodore Levin United States Courthouse, in the City of Detroit, State of Michigan, on I. INTRODUCTION
This matter is before the Court on Plaintiffs' Supplemental Motion for Summary Judgment Regarding Damages and Defendants' Cross-Motion for Summary Judgment Regarding Damages. Plaintiffs' motion has been fully briefed. In addition, Plaintiff responded to Defendants' motion. The Court finds that the facts and legal arguments are adequately presented in the parties' papers and the decisional process would not be significantly aided by oral argument. Therefore, pursuant to E.D. MICH. L.R. 7.1(c)(2), it is hereby ORDERED that the motions be resolved on the briefs submitted. For the reasons set forth below, Plaintiffs' motion for summary judgment is GRANTED IN PART. Defendants' motion for summary judgment is also GRANTED IN PART.
II. BACKGROUND
Plaintiffs in this action are a group of multi-employer fringe benefit trust funds established by collective bargaining agreements entered into by Local Union No. 25, International Association of Bridge, Structural and Ornamental Iron Workers, AFL-CIO, (hereinafter "Union), and various employers and employer associations whose members employ members of the Union. Plaintiffs filed this action pursuant to § 515 of the Employee Retirement Income Security Act of 1974, (hereinafter "ERISA"), 29 U.S.C. § 1145, against McGuire Steel Erection, Inc., (hereinafter "Defendant McGuire Steel"), and its president, Defendant Dan McGuire. Plaintiffs seek the recovery of unpaid fringe benefit contributions and other equitable relief.
The Complaint identifies two individual Defendants, Dan and Daniel McGuire. According to Defendants, however, "Dan McGuire and Daniel McGuire are the same person." Answer to Complaint, at ¶ 3. Plaintiffs have not disputed this assertion and only refer to Dan McGuire. Accordingly, the Court will refer only to Dan McGuire.
A. Factual Background
The facts and procedural history of this matter were previously set forth by the Court in an Opinion and Order dated June 9, 2004. Nevertheless, the Court will briefly state the facts relevant to the pending motions.
On January 11, 1994, Defendant McGuire Steel entered into a collective bargaining agreement, (hereinafter "CBA"), with the Union. Defendant Dan McGuire signed the CBA in his capacity as president of Defendant McGuire Steel. The terms of the CBA require Defendant McGuire Steel to contribute specific sums of money to several employee pension and welfare benefit funds no later than the 26th day of each month. Plaintiffs maintain that Defendant McGuire Steel repeatedly failed to make the required payments and was delinquent in its benefit contributions by more than $700,000.00 during the time period from December 2002 through September 2003. Plaintiffs allege that they were able to collect all but $54,516.20 through partial payments, and liens and bond claims filed against Defendant McGuire Steel's construction projects.
Plaintiffs initially alleged that Defendant McGuire Steel owed $86,849.71 in unpaid benefit contributions for the same time period based on a January 28, 2004, audit of Defendant McGuire Steel's records. Subsequently, however, Plaintiffs revised the figure downward to $54,516.20 as a result of two factors: (1) Defendant Dan McGuire showed that two of Defendant McGuire Steel's laborers were erroneously classified as ironworkers in the January 28, 2004, and (2) additional sums were recovered from Defendants' customers through liens and bond claims. Plaintiffs maintain that the current audit is accurate and takes into consideration any objections voiced by Defendants regarding the January 28, 2004 audit.
Plaintiffs further maintain that they are entitled to liquidated damages, interest, and attorney fees based on the unpaid contributions and any contributions that were either untimely paid or obtained by Plaintiffs through liens and bond claims against Defendants' construction jobs. Specifically, Plaintiffs allege that they are entitled to $17,012.49 in interest owed pursuant to the terms of a Payment Agreement entered into by the parties on April 4, 2003; $3,765.99 in liquidated damages for unpaid contributions pursuant to the CBA; $6,166.04 in liquidated damages pursuant to the CBA for late payments; $3,213.27 in liquidated damages pursuant to the CBA for late payments prior to September 2002; $2,712.07 in interest on the unpaid contributions pursuant to ERISA, 29 U.S.C. § 1132(g)(2)(B); $2,712.07 in interest on the unpaid contributions pursuant to a different provision of ERISA, 29 U.S.C. § 1132(g)(2)(C)(i); and finally, $29,895.00 in attorney fees pursuant to ERISA, 29 U.S.C. § 1132(g)(2)(D).
B. Procedural History
Plaintiffs filed their Complaint on March 17, 2003. With their Complaint, Plaintiffs asserted that under ERISA they are entitled to an entry of judgment in the amount of all unpaid fringe benefit contributions, liquidated damages, accumulated interest, actual attorney fees, and costs. Plaintiffs also asserted that Defendant Dan McGuire was personally liable for breach of fiduciary duty. See Compl. at ¶ 22. Before Defendants answered the Complaint, however, the parties entered into a Payment Agreement allowing Defendant McGuire Steel to pay the delinquent amounts over a period of months. Specifically, the Payment Agreement required twelve monthly installments of $23,543.73 to be made in addition to the existing benefit contributions required by the CBA.
The parties entered into the Payment Agreement on April 4, 2003. Shortly thereafter, on May 29, 2003, Plaintiffs moved for conditional dismissal of the Complaint, allowing the matter to be reopened in the event that Defendants defaulted under the terms of the Payment Agreement. The Court granted Plaintiffs' motion on May 30, 2003, and dismissed the case without prejudice. Only a few days later, however, on June 6, 2003, Plaintiffs filed a motion to reinstate the Complaint based on Defendant McGuire Steel's failure to comply with the terms of the Payment Agreement. The Court granted this motion on June 25, 2003.
On August 6, 2003, Plaintiffs obtained a Clerk's Entry of Default as a result of Defendants' failure to answer the Complaint. On September 3, 2003, Plaintiffs filed a motion for default judgment. Defendants responded to the motion. On October 17, 2003, the Court set aside the Clerk's Entry of Default and denied Plaintiffs' motion for default judgment. On October 28, 2003, Defendants filed an Answer. Defendants also filed a Counter-Complaint on the same day.
On February 19, 2004, Plaintiffs filed a motion requesting summary judgment as to their claims for unpaid benefits and leave to amend the Complaint to add as a party defendant McGuire Steel Erectors, Ltd., which is a different company owned by Defendant Dan McGuire. With their motion, Plaintiffs alleged that there was no genuine issue of material fact regarding Defendants' liability for the unpaid benefit contributions under the CBA and the Payment Agreement. In addition, Plaintiffs alleged that McGuire Steel Erectors, Ltd., should be added as a party defendant based upon statements Defendant Dan McGuire made during a deposition.
Defendants responded to the motion on March 24, 2004. Defendants argued that summary judgment was not appropriate because (1) the amount of unpaid contributions alleged by Plaintiffs was incorrect because the audit erroneously classified two of Defendant McGuire Steel's laborers as ironworkers, and (2) Defendants were not under any obligation to pay benefit contributions because Plaintiffs filed liens and bond claims, which prevented Defendant McGuire Steel from receiving payments from its customers. Defendants further contested the addition of McGuire Steel Erectors, Ltd., as a party-defendant, arguing that Defendant Dan McGuire clearly signed the CBA on behalf of Defendant McGuire Steel only.
On June 9, 2004, the Court granted in part Plaintiffs' motion for summary judgment. See Iron Workers Local No. 25 Pension Fund v. McGuire Steel Erection, Inc., No. 03-71056, Slip Op. (E.D. Mich. June 9, 2004). The Court found no genuine issues of material fact with respect to Defendant McGuire Steel's liability for the delinquent employee contributions under both the CBA and the April 4, 2003, Payment Agreement. In addition, the Court also found no genuine issue of material fact with respect to Defendant Dan McGuire's fiduciary liability or his liability for unpaid interest under the Payment Agreement. The Court, however, denied Plaintiffs' motion to amend the Complaint to add McGuire Steel Erectors, Ltd. In addition, the Court found the existence of a dispute with respect to the amount of unpaid contributions owed by Defendants. Thus, the Court ordered the parties to separately brief the issue of whether a genuine issue of material fact existed with respect to damages.
Currently before the Court are the parties' cross motions for summary judgment on the issue of damages and attorney fees. Plaintiffs filed their motion on July 19, 2004, and Defendants filed their motion on July 20, 2004. The only issues before the Court are whether there exists any genuine issues of material fact regarding damages and whether Plaintiffs have requested reasonable attorney fees.
III. LEGAL STANDARD
Summary judgment is appropriate only if the answers to interrogatories, depositions, admissions, and pleadings combined with the affidavits in support show that no genuine issue as to any material fact remains and the moving party is entitled to a judgment as a matter of law. See FED. R. CIV. P. 56(c). A genuine issue of material fact exists when there is "sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986) (citations omitted). In application of this summary judgment standard, the Court must view all materials supplied, including all pleadings, in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). "If the evidence is merely colorable or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted).
The moving party bears the initial responsibility of informing the Court of the basis for its motion and identifying those portions of the record that establish the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met its burden, the nonmoving party must go beyond the pleadings and come forward with specific facts to demonstrate that there is a genuine issue for trial. See FED. R. CIV. P. 56(e); Celotex, 477 U.S. at 324. The non-moving party must do more than show that there is some abstract doubt as to the material facts. It must present significant probative evidence in support of its opposition to the motion for summary judgment in order to defeat the motion for summary judgment. See Moore v. Philip Morris Co., 8 F.3d 335, 339-40 (6th Cir. 1993).
IV. ANALYSIS
Plaintiffs maintain that there is no genuine issue of material fact regarding the amount of unpaid contributions, interest, liquidated damages, and attorney fees owed under ERISA and the CBA. Defendants respond by arguing that Plaintiffs have incorrectly calculated the amount of unpaid contributions. In addition, Defendants argue that Plaintiffs' $29,895.00 attorney's fee request is unreasonable. As will be discussed below, the Court finds that Defendants have failed to raise a genuine issue of material fact with respect to the amount of unpaid contributions, interest, and liquidated damages. In addition, the Court also finds that Plaintiffs' attorney fee request is reasonable.
A. Damages
ERISA requires an employer to pay multiemployer trust fund contributions according to the terms and conditions of the collective bargaining agreements and benefit plans to which the employer is a signatory. See 29 U.S.C. § 1145. Trust funds, as fiduciaries, are authorized to enforce this requirement. See 29 U.S.C. § 1132(a)(3) (providing that a civil action may be brought by a fiduciary to enforce § 1145 or the terms of a plan). Furthermore, ERISA contains the following mandatory scheme for remedying unpaid contributions:
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) (emphasis added). As noted above, Plaintiffs seek unpaid contributions, double interest, and attorney's fees under § 1132(g)(2). Plaintiffs also seek liquidated damages pursuant to the CBA and interest owed pursuant to the April 4, 2003, Payment Agreement. The Court will first address unpaid contributions and interest under § 1132(g)(2). Thereafter, the Court will address the liquidated damages provided for in the CBA, interest owed pursuant to the Payment Agreement, and attorney fees.
1. Unpaid Contributions and Interest Under § 1132(g)(2)
Plaintiffs allege that Defendants are liable for $54,516.20 in unpaid contributions and $2,712.07 in interest on the unpaid contributions under 29 U.S.C. § 1132(g)(2). In addition, because the employee benefit plan does not provide for liquidated damages, Plaintiffs allege that they are entitled to an additional award of interest in the amount of $2,712.07. See 29 U.S.C. § 1132(g)(2)(C) (providing for an award of interest on the unpaid contributions in addition to an award equal to the greater of interest on the unpaid contributions or liquidated damages provided for under the plan). In support of their allegations, Plaintiffs provide a detailed audit dated May 5, 2004. Plaintiffs also provide an affidavit by the auditor, Robert Reeves, dated July 7, 2004, in which Mr. Reeves attests to the accuracy of the audit. See Plaintiffs' Ex. B. With his affidavit Mr. Reeves, explains why the $54,516.20 figure contained in the May 5, 2004, audit is lower than the $86,849.71 figure contained in the January 28, 2004, audit. According to Mr. Reeves, he revised the amount downward after meeting with Defendant Dan McGuire and agreeing that two individuals were erroneously listed as performing work covered by the CBA. Based on this change, and additional information regarding subsequent payments received by Plaintiffs, Mr. Reeves completed a new audit on May 5, 2004.
In response to Plaintiff's assertions of amounts owed, Defendants argue that "upon information and belief, Plaintiffs have received direct payments from Defendant McGuire Steel Erection Inc.'s customers in amounts not known to Defendants." Defendants' Cross-Motion for Summary Judgment at 3. Defendants also argue that they are not liable for the unpaid contribution because "Plaintiff's have fully admitted that their calculations of the contributions due and owing from the Defendants were incorrect since it included individuals not covered by the Collective Bargaining Agreement." Defendants' Response to Plaintiffs' Motion for Summary Judgment, at 1. Finally, Defendants argue that the amount of unpaid contributions should be reduced because Plaintiffs have entered into a "Joint Payment Agreement" with one of Defendant McGuire Steel's customers in the amount of $50,000.00. Defendants do not challenge Plaintiffs' interest calculations or Plaintiffs' right to receive double interest under 29 U.S.C. § 1132(g)(2)(C).
The Court finds that Defendants have failed to raise a genuine issue of material fact with respect to the amount of unpaid contributions and interest. Defendants have offered no documentation or affidavits to challenge Plaintiffs' calculations. Surviving a motion for summary judgment requires more than simply asserting a fact "upon information and belief." See Sullivan v. Cox, 890 F. Supp. 759, 763 (N.D. Ill. 1995), rev'd on other grounds, 78 F.3d 322 (7th Cir. 1996) ("[Defendant's] self-serving conclusory statement alleging unfair auditing practices, without any reference to supporting records, is insufficient to create a factual dispute."). In addition, Plaintiffs state that as of July 7, 2004, they have received no funds from the Joint Payment Agreement entered into between Plaintiffs and one of Defendant McGuire Steel's customers. See Reeves Aff. at ¶ 9 ("Since publishing the May 5, 2004, audit I have not been provided with any documentation to substantiate a change to the audit results."). Defendants have offered no evidence to challenge Plaintiffs' assertion that no payments have been received pursuant to the Joint Payment Agreement. Finally, according to the unrebutted affidavit of Mr. Reeves, the May 5, 2004, audit takes into account the erroneous classification of employees. Defendants have not cited to any portion of the record indicating that the audit still contains any erroneous classifications. It is well-settled that it is the burden of the party seeking to avoid summary judgment to come forward with significant probative evidence demonstrating a genuine issue of material fact for trial. See Moore v. Philip Morris Co., 8 F.3d 335, 339-40 (6th Cir. 1993). Defendants have failed to meet this burden. Accordingly, the Court finds that no reasonable jury could find for the Defendants. Plaintiffs are entitled to summary judgment under § 1132(g)(2) in the amount of $59,940.34, which represents unpaid benefits and double interest.
Although not addressed by either party, the Court notes that Defendant Dan McGuire may not be held personally liable under § 1132(g)(2). Section 1132(g)(2) provides a remedial scheme to be applied when a fiduciary is successful in an action under section 1145. That section provides as follows:
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 agreement.29 U.S.C. § 1145 (emphasis added). The employer obligated to make contributions in this case is Defendant McGuire Steel, not Defendant Dan McGuire. In its June 9, 2004, Opinion and Order, the Court found no genuine issue of material fact with respect to Defendant Dan McGuire's liability as a fiduciary. See Iron Workers Local No. 25 Pension Fund v. McGuire Steel Erection, Inc., No. 03-71056, at *20 (E.D. Mich. June 9, 2004) (quoting 29 U.S.C. § 1109) ("Furthermore, `[a]ny persons who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries' is personally liable `to make good to such plan any losses to the plan resulting from each such breach. . . .'"). The Court did not "pierce the corporate veil" or find Defendant Dan McGuire liable as an alter ego of Defendant McGuire Steel. See Scarbrough v. Perez, 870 F.2d 1079, 1084 (6th Cir. 1989) (holding that individual corporate officers/owners are not section 1145 employers absent piercing of the corporate veil.). Thus, Defendant Dan McGuire may not be held liable under section 1132(g)(2) for double interest.
2. Liquidated Damages Under the CBA
Unlike the plan, the CBA at issue in this case provides for liquidated damages for late payments and unpaid contributions. See Plaintiffs' Ex. C, Section N. Plaintiffs allege that they are entitled to $3,765.99 in liquidated damages for unpaid contributions and $6,166.04 in liquidated damages for late payments received or obtained. In addition, Plaintiffs further allege that they are entitled to $3,213.27 in liquidated damages for late payments received before the time period covered by the May 5, 2004, audit.
Defendants' response brief contains two sentences responding to Plaintiffs' assertion of liquidated damages for late payments. Defendants argue that the "audits were incorrect because the calculations included individuals who were not covered under the parties [sic] Collective Bargaining Agreement." Defendants' Response Brief, at 2. The Court finds that this unsupported assertion fails to create a genuine issue of material fact. Nevertheless, the Court finds that Plaintiffs are not entitled to all of the liquidated damages they seek.
In the Sixth Circuit it is well-settled that trust funds may obtain double interest and liquidated damages pursuant to the CBA arising from delinquent contributions, as distinguished from unpaid contributions, even though § 1132(g)(2)(C) provides that funds may only receive the greater of liquidated damages or interest on unpaid contributions. See 29 U.S.C. § 1132(g)(2)(C); Michigan Carpenters Council Health and Welfare Fund v. C.J. Rogers, Inc., 933 F.2d 376, 390 (6th Cir. 1991) ("[A] fund has a valid claim for late payment and/or audit damages pursuant to its collective bargaining agreement with defendants, not covered by section 1132(g)."). The court in Michigan Carpenters held that because § 1132(g) remedies only unpaid contributions, it does not apply to provisions of a CBA or trust document imposing liquidated damages for contributions that are untimely, but ultimately paid before judgment. See Michigan Carpenters, 933 F.3d at 389. If, however, a liquidated damages provision in the CBA applies to unpaid contributions within the scope of § 1132(g)(2), the trust funds are limited to the remedy provided in that section. See id. ("We further hold that as to liquidated damage assessments, which are keyed to these `unpaid contributions,' the remedy offered by section 1132(g) is exclusive.). Moreover, although Plaintiffs describe the $3,765.99 figure as representing "audit fees," the CBA imposes these liquidated damages as a result of a shortfall in benefit contributions. See Plaintiffs' Ex. C, at 30 ("Should a shortage in contributions be determined as a result of an audit, the Employer agrees to pay a liquidated damage in the amount of seven (7%) percent of the total shortage found."). Therefore, the Court finds that Plaintiffs are not entitled to $3,765.99 in liquidated damages for unpaid contributions pursuant to the CBA. Plaintiffs are, however, entitled to liquidated damages for late payments received or obtained in a total amount of $9,379.31, which includes $6,166.04 in liquidated damages for late payments received during the time period covered by the May 5, 1004 audit and $3,213.27 for late payments received prior to that time period. Defendant Dan McGuire, however, was not a signatory to the CBA; thus, he is not liable under the CBA for liquidated damages.
3. Interest Owed Pursuant to the April 4, 2003, Payment Agreement
Plaintiffs also allege that they are entitled to $17,012.49 in interest that would have been paid if Defendants had made the required payments under the Payment Agreement. Defendants respond by arguing that "upon information and belief" all amounts due under the Payment Agreement have been paid through direct payments by McGuire Steel's customers. Defendants offer no evidence to support their assertion and the Court finds that Defendants' response fails to raise a genuine issue of material fact. Accordingly, Plaintiffs are entitled to summary judgment with respect to the interest owed on the Payment Agreement. In addition, Defendant Dan McGuire is liable as a guarantor for this amount. See See Iron Workers Local No. 25 Pension Fund v. McGuire Steel Erection, Inc., No. 03-71056, at *15 (E.D. Mich. June 9, 2004) (finding no genuine issue of material fact with respect to Defendant Dan McGuire's liability as a guarantor of the Payment Agreement).
4. Attorney's Fees Under § 1132(g)(2)
An award of attorney fees is mandatory under § 1132(g)(2). See Foltice v. Guardsman Prods., Inc., 98 F.3d 933, 936 (6th Cir. 1996) ("Under § 502(g)(2) of ERISA ( 29 U.S.C. § 1132(g)(2)), the award of reasonable attorney fees is mandatory where a fiduciary has sued successfully to enforce an employer's obligation to make contributions to a multi-employer plan."). Thus, the primary issue with respect to Plaintiffs' request for attorney's fees is whether the request is reasonable. See 29 U.S.C. § 1132(g)(2)(D). Plaintiffs argue that they are entitled to $29,895.00 in attorney fees based on 199.30 hours of work at a billing rate of $150.00 per hour. Defendants argue that Plaintiffs' request is unreasonable because Plaintiffs' attorneys unnecessarily expended a great deal of effort filing liens and bond claims after Defendant McGuire Steel was only two days late on its first payment under the Payment Agreement.
An award of reasonable attorney's fees under § 1132(g)(2) is mandatory. See Michigan Carpenters Council Health Welfare Fund v. C.J. Rogers, Inc., 933 F.2d 376, 388 (6th Cir. 1991). The award must be reasonable under the "lodestar" approach. See Bldg. Serv. Local 47 Cleaning Contractors Pension Plan v. Grandview Raceway, 46 F.3d 1392, 1401 (6th Cir. 1995). The "lodestar" is the "`number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.'" Bldg. Serv. Local 47 Cleaning Contractors Pension Plan, 46 F.3d at 1401 (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). While there is a strong presumption that the lodestar figure represents a reasonable fee, it does not end the inquiry. See id. (citations omitted). "`There remain other considerations that may lead the district court to adjust the fee upward or downward. . . .'" Id. at 1402 (quoting Hensley, 461 U.S. at 434).
Defendants only dispute the hours Plaintiffs' attorneys spent attempting to collect unpaid contributions through liens and bond claims. Defendants argue that these efforts were unnecessary because Defendant McGuire Steel would have been able to make timely payments had these bond claims and encumbrances not been filed. Defendants, however, were repeatedly late in their payments. Defendants' late payment under the Payment Agreement occurred after other late payments and after Plaintiffs' initiation of the present lawsuit. Thus, the Court rejects Defendants' argument that Plaintiffs' collections efforts were unnecessary.
Furthermore, the legislative history of § 1132(g) supports awarding the costs of collection efforts. As the Senate Committee on Labor and Human Resources explained:
Delinquencies of employers in making required contributions are a serious problem for most multiemployer plans. Failure of employers to make promised contributions in a timely fashion imposes a variety of costs on plans. While contributions remain unpaid, the plan loses the benefit of investment income that could have been earned if the past due amounts had been received and invested on time. Moreover, additional administrative costs are incurred in detecting and collecting delinquencies. Attorneys fees and other legal costs arise in connection with collection efforts.
* * *
The public policy of this legislation to foster the preservation of the private multiemployer plan system mandates that provision be made to discourage delinquencies and simplify delinquency collection. The bill imposes a Federal statutory duty to contribute on employers that are already contractually obligated to make contributions to multiemployer plans. A plan sponsor that prevails in any action to collect delinquent contributions will be entitled to recover the delinquent contributions, court costs, attorney's fees, and double interest on the contributions owed. The intent of this section is to promote the prompt payment of contributions and assist plans in recovering the costs incurred in connection with delinquencies.
STAFF OF SENATE COMMITTEE ON LABOR AND HUMAN RESOURCES, 96TH CONG., 2D SESS., S. 1076: THE MULTIEMPLOYER PENSION PLAN AMENDMENTS ACT OF 1980: SUMMARY AND ANALYSIS OF CONSIDERATION at 43-44 (Comm. Print 1980) (emphasis added). Given the remedial purpose of § 1132(g) and Congress's concern for the negative financial impact caused by delinquent benefit contributions on multiemployer benefit plans, the Court finds that Plaintiffs' are entitled to recover the attorney's fees incurred in collecting the delinquent contributions in this matter.
The Court also finds that the "lodestar" represents a reasonable attorney fee award in this case. Defendants failed to timely pay employee benefit contributions and fought to avoid paying those contributions for more than a year. The Court finds that 199.30 hours is not an unreasonable number of hours given the protracted litigation before this Court and the time and effort required to secure a large portion of the delinquent contributions from Defendants' creditors. In addition, other than a blanket objection to Plaintiffs' attempts to recover unpaid contributions through liens and bond claims, Defendants have not identified a single unreasonable entry in Plaintiffs' billing sheet. Furthermore, Defendants have also not contested Plaintiffs' attorneys' $150.00 per hour billing rate. The Court finds this rate to be reasonable in this circumstance, given the qualifications of Plaintiffs' attorneys. Accordingly, the Court finds that Plaintiffs are entitled to $29,895.00 in attorney's fees and $150.00 in costs.
Plaintiffs, however, are not entitled to recover attorney fees from Defendant Dan McGuire. As the Court discussed in Part IV.A.1, supra, Defendant Dan McGuire is liable for breach of fiduciary duty. The Court did not pierce the corporate veil of Defendant McGuire Steel. Therefore, Defendant Dan McGuire may not be held liable for attorney fees under § 1132(g) or the CBA.
B. Defendants' Counter-Complaint
Defendants filed a Counter-Complaint on October 28, 2003. With its Counter-Complaint, Defendants allege Plaintiffs filed various construction liens that did not comply with the Michigan Construction Lien Act, MICH. COMP. LAWS § 570.1101-1305. Because all of the federal claims have been addressed in this matter, and the parties have yet to take any action with respect to Defendants' state law Counter-Complaint, the Court will dismiss the Counter-Complaint without prejudice. See Williams v. City of River Rouge, 909 F.2d 151, 157 (6th Cir. 1990) ("Where an action in federal court includes both federal and pendent state claims and the court dismisses the federal claims before trial on a motion for summary judgment, the pendent state claims are ordinarily dismissed as well.").
V. CONCLUSION
Accordingly, for the reasons set forth above, Plaintiffs' Supplemental Motion for Summary Judgment Regarding Damages is hereby GRANTED IN PART; Plaintiffs are entitled to $54,516.20 in unpaid contributions, $5,424.14 in double interest under ERISA, $9,379.31 in liquidated damages under the CBA; and $17,012.49 in interest under the Payment Agreement for a total of $86,332.14. In addition, Plaintiffs are entitled to $29,895.00 in attorney fees and $150.00 in costs. Thus, Defendant McGuire Steel is liable for a total of $116,377.14. Of that total, Defendant McGuire Steel and Defendant Dan McGuire are jointly and severally liable for $54,516.20, and Defendant Dan McGuire is also liable as a guarantor in the amount of $17,012.49. In addition, Defendants' Cross-Motion for Summary Judgment Regarding Damages is hereby GRANTED IN PART; Defendants are entitled to summary judgment of no liability with respect to $3,765.99 in audit fees pursuant to the CBA. Finally, Defendants' Counter-Complaint is hereby DISMISSED without prejudice.
IT IS SO ORDERED.