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Central Laborers' Pension, Welfare, and Annuity Funds v. River Bend Contractors

July 25, 2007

CENTRAL LABORERS' PENSION, WELFARE, AND ANNUITY FUNDS, PLAINTIFFS,
v.
RIVER BEND CONTRACTORS, INC., DONALD M. BARTON, JR., INDIVIDUALLY AND DONALD BARTON, SR., INDIVIDUALLY, DEFENDANTS.



The opinion of the court was delivered by: Gilbert, District Judge

MEMORANDUM AND ORDER

This matter comes before the Court on a motion by Defendants Donald M. Barton, Jr. and Donald Barton, Sr. to dismiss Count II and Count III of the complaint under Federal Rule of Civil Procedure 12(b)(6) (Doc. 17). For the reasons set forth below, the motion to dismiss Count II against Barton Jr. is DENIED and the motion to dismiss Count III against Barton Sr. is GRANTED.

Plaintiffs, Central Laborers' Pension, Welfare, & Annuity Funds, brought this action against River Bend Contractors, Inc., and against Barton Jr. and Barton Sr. as individuals (Doc. 4). Count I alleges violations of the Employee Retirement Income Security Act, 29 U.S.C §§ 1132 & 1145 (hereinafter ERISA), against River Bend Contractors for unpaid employer contributions and contractual damages. Count II against Barton Jr. and Count III against Barton Sr. allege individual liability for the above damages because the Defendants are "employers" under section 1145 of ERISA (Doc. 4, Ct. II, ¶3) and are personally bound by contract (Id. at ¶24).

Plaintiffs attached agreements to their complaint signed by Barton Jr. with "Pres." handwritten next to his signature. The attached agreements contained a personal liability clause in Section 3 of Article VI. The clause holds officers or directors personally liable if they are responsible for willful failure to report contribution hours.

In his motion to dismiss, Barton Jr. argues that he cannot be personally liable because the Plaintiffs never alleged he was an officer. Also, Barton Jr. argues he cannot be personally liable because he signed the agreements as a representative of the corporation, not as an individual (Doc. 22). In their response (Doc. 29), Plaintiffs focus their arguments on Barton Jr. being liable because he signed agreements containing the personal liability clause. Plaintiffs included the terms of the personal liability clause in their response.

I. Standard for Dismissal

When reviewing a Rule 12(b)(6) motion to dismiss, the Court will dismiss a complaint that fails "to state a claim upon which relief can be granted," Fed. R. Civ. P. 12(b)(6). Federal notice pleading only requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "All a complaint need do is narrate a claim for relief." Gale v. Hyde Park Bank, 384 F.3d 451, 453 (7th Cir. 2004).

Recently, the Supreme Court attempted to clarify the adequacy of pleadings rule in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007). The traditional rule for the last fifty years has been that "a complaint should not be dismissed for failure to state a claim 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, 47 (1957) (emphasis added). In Twombly, there is a strong reference to a change in the pleading standards when the Supreme Court said Conley's "no set of facts" language "has earned its retirement." Twombly, 127 S.Ct. at 1969; see also Walker v. S.W.I.F.T. SCRL, No. 06-3447, 2007 WL 1704293 at *2 (N.D. Ill. Jun. 12, 2007). Also, the Supreme Court said a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Twombly, 127 S.Ct. at 1974 (emphasis added). Here, the facts pled are sufficient whether the Court gave a broad or narrow interpretation of what is an adequate level of facts under the Twombly pleading requirements.

Additionally, a Rule 12(b)(6) motion to dismiss requires the court to accept as true all well-pled facts and draw all reasonable inferences in favor of the plaintiff. Chicago Dist. Council of Carpenters Welfare Fund v. Caremark, Inc., 474 F.3d 463, 471 (7th Cir. 2007). When reviewing a motion to dismiss, contracts attached to a complaint and referred to in the complaint are considered part of the pleading. Fed. R. Civ. 10(c); Caremark, Inc., 474 F.3d at 466; see also Venture Associates Corp. v. Zenith Data Systems Corp., 987 F.2d 429, 431 (7th Cir. 1993).

II. Analysis

COUNT II

The complaint sufficiently alleges Barton Jr. is liable under section 1145 because he signed agreements that personally bound him to liability for willful failure to report contribution hours. Section 1145 of ERISA states:

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.

"ERISA essentially imposes a federal obligation on employers who contractually agree to contribute to employee pension plans." Sullivan v. ...


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