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Flynn v. R.C. Tile

January 09, 2004

JOHN FLYNN, JOHN T. JOYCE, LOUIS WEIR, FRANK STUPAR, JAMES BOLAND, GEORGE HARBISON, DOMINIC SPANO, PAUL SONGER, CHARLES VELARDO, EUGENE GEORGE, JOHN WALLNER, WALTER KARDY, DAN SCHIFFER, AND JOSEPH SPERANZA, JR., AS TRUSTEES OF, AND ON BEHALF OF THE BRICKLAYERS AND TROWEL TRADES INTERNATIONAL PENSION FUND, APPELLEES
v.
R.C. TILE, R.C. CONSTRUCTION, RICHARD C. FLORES, AND PRISCILLA JEAN FLORES, APPELLANTS



Appeal from the United States District Court for the District of Columbia (No. 99cv02044 (EGS))

Before: Ginsburg, Chief Judge, and Sentelle and Henderson, Circuit Judges.

The opinion of the court was delivered by: Chief Judge Ginsburg.

Richard Flores, individually and doing business as R.C. Construction, and Priscilla Flores, individually and doing business as R.C. Tile, appeal the judgment of the district court in favor of the Trustees of the Bricklayers and Trowel Trades International Pension Fund upon the Trustees' claim under the Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq., for delinquent pension contributions. The appellants contend the district court overlooked genuine issues of material fact and applied incorrect legal standards in concluding R.C. Tile was the alter ego of R.C. Construction and liable for its delinquent pension contributions. We affirm the judgment.*fn1

I. Background

The three Flores brothers - Joseph, Richard, and Jesse - do tile work on public projects in southern California. Joseph Flores manages all operations of the family's tile installation businesses; his wife, Priscilla Flores, oversees the finances and acts as office manager for the family's businesses. Richard and Jesse Flores set tile and do not have management responsibilities.

Over the past thirty years the Flores family has owned and operated several tile businesses in southern California. Joseph Flores owned and operated Majestic Tile from 1970 to 1995; Richard Flores worked for him. Majestic Tile closed in 1995 after Joseph Flores encountered problems with the IRS owing to Majestic's failure to remit payroll taxes. This case concerns three of the family's businesses that began operations after Majestic was closed.

In 1995 Richard started a business known as R.C. Construction. Although nominally the owner, Richard had little knowledge about or involvement with the management and finances of R.C. Construction. Richard received wages for his work as a tile setter but received no share of the profits. Joseph Flores, who referred to himself as the "operations manager" of R.C. Construction, estimated, bid, and negotiated R.C. Construction's tile setting contracts as he had Majestic's before. Priscilla was in charge of R.C. Construction's finances, as she had been of Majestic's.

In 1996 R.C. Construction entered into a collective bargaining agreement (CBA) with the local affiliate of the International Union of Bricklayers and Allied Craftsmen. R.C. Construction thereby agreed to make contributions to the Bricklayers and Trowel Trades International Pension Fund "for each hour worked by all workmen covered by this agreement" - defined to include all tile setters employed by R.C. Construction - until such time as the company gave effective notice of its withdrawal from the CBA. Although R.C. Construction ceased making payments to the Fund in December 1997, and ceased operating in January 1998, it did not then provide the Fund with a notice of withdrawal from the CBA.

Shortly after R.C. Construction ceased operations, Jesse Flores started R.C. Tile. Although Jesse was listed as the owner, he did not have any involvement in the management of the firm; he worked solely as a tile setter. Joseph, who again styled himself the "operations manager," stated in his deposition that "R.C. Tile was my company." Priscilla served R.C. Tile, as she had R.C. Construction, as the office manager and bookkeeper. Although there was no written contract between the two companies, R.C. Tile assumed R.C. Construction's tile setting sub-contracts and completed jobs R.C. Construction had begun. R.C. Tile did not, however, become a signatory to the CBA or contribute to the Fund.

In 1998 Jesse Flores transferred the assets of R.C. Tile to Priscilla Flores; there was no written contract of sale and apparently no consideration. Priscilla continued to do business under the R.C. Tile name and each member of the Flores family continued to perform his or her job at R.C. Tile.

When R.C. Construction had not made any payments to the Fund for more than a year, the Trustees of the Fund made unavailing demands upon both R.C. Construction and R.C. Tile. Richard and Priscilla Flores respectively notified the Trustees that R.C. Construction and R.C. Tile (although not a signatory) were withdrawing from the CBA.*fn2 The Trustees then sued R.C. Construction, R.C. Tile, and Richard and Priscilla Flores under, 29 U.S.C. §§ 1132(g)(2) and 1145 to recover the delinquent pension fund payments.

The district court granted the Trustees' motion for summary judgment. The court concluded from the undisputed material facts that "R.C. Construction and the two R.C. Tile companies are alter egos" and that "it is in the interest of justice to hold that these three successive companies are alter egos." The appellants moved for reconsideration, which the district court denied, and they now appeal to this court.

II. Analysis

We review the district court's grant of summary judgment de novo. See Workman v. United Methodist Comm. on Relief of the Gen. Bd. of Global Ministries, 320 F.3d 259, 262 (D.C. Cir. 2003). Summary judgment is appropriate only if "there is no genuine issue as to any material fact and - the moving party is entitled to a judgment as a matter of ...


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