The opinion of the court was delivered by: John A. Gorman United States Magistrate Judge
The parties have consented to have this case heard to judgment by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c), and the District Judge has referred the case to me. Now before the Court is Defendant Helen M. Struben's Motion for Summary Judgment on Count II [#53]. The motion is fully briefed, and I have carefully considered all of the submissions of the parties. As explained herein, the motion is denied.
This action arises under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1145. This Court therefore has federal question jurisdiction over the subject matter of this action pursuant to 28 U.S.C. 1331.
S&S Fashion Floors Inc. is a dissolved Illinois corporation that was party to various collective bargaining agreements, participation agreements and other trust agreements with the unions and employee benefit funds that are the plaintiffs in this case. Pursuant to those agreements, S&S was contractually obligated to make contributions to various employee benefit funds. For the sake of convenience, the Plaintiff unions and benefit funds are referred to cumulatively as the "Funds" in this Opinion.
Article IV (p.4) of the Central Illinois Carpenters Health & Welfare Trust Fund provides in pertinent part that the Trustees "shall have the power to demand, collect, sue for and receive (i) Employer contributions, ii) Employee contributions. . ." This same document provides that the Trustees administer, control and manage the operation and administration of the Fund, and that no "Employer . . . or any other persons, partnership, corporation or association shall have any right, title, or interest in or to the Fund or any part thereof." Article X, Sections 2 and 3, page 10.
In the Agreement and Declaration of Trust of Carpenters Retirement Savings Fund of Illinois, it is stated that the "control, management and administration" of the Plan is "in the Trustees appointed to act hereunder, who are hereby designated as the "Named Fiduciaries. . ." Part III, Article I, Section 1.
At all pertinent times, the President of S&S was Helen Struben. Although S&S continued to withhold some amount for Fund contributions from employee paychecks, the withheld amounts were not paid to the Funds. The Funds performed an audit showing that S&S owed the plans over $30,000 in delinquent contributions. Struben disputed the findings of the audit, stating that it did not deduct "the amount of contributions Plaintiffs claim in their audit is due to them from the wages of its workers." (Struben's Motion, Statement of Undisputed facts, ¶ 24). In other words, while disputing the precise amount it deducted, S&S has not disputed that it deducted some amount from wages paid and that the amount deducted was payable to the Funds.
During Struben's winding down of the company's affairs, she liquidated the company's assets*fn1 . Although the dispute about the audit remained unresolved, she used the liquidated assets to pay creditors other than the Funds, and she distributed some of the assets to herself and her son. The Funds were not paid.
The Funds then filed this lawsuit. In the three count Second Amended Complaint, Plaintiffs allege three separate violations of ERISA. In Count I, they claim that S&S failed to make contributions required by various collective bargaining agreements and participation agreements, in violation of ERISA. In Count II, the Plaintiffs assert that Helen M. Struben was an ERISA fiduciary with respect to plan assets and that she breached her fiduciary duties by paying corporate debts instead of the amounts due to the Funds. In Count III, Plaintiffs assert that Struben was an alter ego of S&S and is therefore personally liable for the company's debts.
Struben has filed a motion for summary judgment as to Count II only, arguing that she was not a fiduciary of the Funds, and that she could not, therefore, have breached any duty to them.
An ERISA claim for breach of fiduciary duty requires pleading and proof that (1) defendant is a fiduciary; (2) defendant acted with respect to the plan in some way covered by the statute; and (3) some fiduciary duty imposed upon the defendant was breached by that act (4) causing damage or loss to the Plan. Jenkins v. Yager, 444 F.3d 916, 924 (7th Cir. 2006). The issue raised by the ...