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 the motion by Plaintiffs (#98) to alter or amend the judgment that was entered in this case on February 24, 2009. See Opinion and Judgment Order (Doc.#96) and Judgment (Doc. #97). As explained herein, that Motion is granted.
Also before the Court is the Defendant's motion (#100) to alter or amend the Judgment. That motion is denied.
In the Opinion and Judgment Order (hereinafter "Order"), the Court found in favor of the Plaintiffs and against S&S Fashion Floors on the Plaintiffs' ERISA claim for delinquent contributions, liquidated damages and interest (Count I) . Damages were awarded in the amount of $56,386.39 plus attorney's fees and costs. In Count III, the Court found that Helen Struben was an alter ego for S&S and awarded damages to the Plaintiffs in the amount of $56,386.39. No mention was made to attorney's fees or costs as to Count III in either the Order or the Judgment. All other counts were resolved against the Plaintiffs.
In the instant motion, Plaintiffs argue that section 29 U.S.C. 1132(g)(2)(D) of ERISA makes attorney's fees mandatory "in any action ... by a fiduciary on behalf of a plan to enforce Section 1145 of ERISA." Section 1145 authorizes actions to recover delinquent contributions from an employer. The issue before the Court is whether Count III falls within the scope of an action "to enforce Section 1145."
According to Plaintiffs, Count III was such an action, citing paragraphs 6 and 11 of the Third Amended Complaint (Doc. #67). Paragraphs 6 and 11, first alleged in Count I but adopted and incorporated into Count III, read as follows:
6. Pursuant to ERISA, 29 U.S.C. §1145, S&S FASHION FLOORS, INC., was required to make contributions to the Funds in accordance with the terms and conditions of the Fund's Agreement and Declaration of Trust, and to pay liquidated damages in the event said contributions are not timely made, as shown by Plaintiff's Exhibit C, which was attached to Plaintiffs' Original Complaint and made a part thereof, and by reference is made a part hereof;
11. That pursuant to the terms of the Agreement and Declaration of Trust (Exhibit C) and ERISA, 29 U.S.C. § 1132(g)(2), the Defendant is liable for reasonable attorney fees and court costs and all other reasonable expenses incurred by the Fund in collection of delinquent contributions[.]
These two paragraphs do not help Plaintiffs' position, because the defendant in Count I is S&S, not Helen Struben. Moreover, these 2 paragraphs are contradicted by paragraph 1 of Count III, which states that it arises under ERISA, 29 U.S.C. § 1109,*fn1 which section governs liability for breach of fiduciary duty. Breach of fiduciary duty was the claim asserted against Helen Struben in Count II and as to which the Court found in her favor.
There is, however, nothing that requires a plaintiff to plead the legal basis for a claim. Moreover, from the time the alter ego claim was first plead, there has been no question that this claim was not a traditional state law alter ego claim. Rather, it was an effort to impose individual ERISA liability for delinquent contributions on a corporate officer who would be liable for general corporate debts under state law theories of piercing the corporate veil. See, Order (Doc. #39), citing Plumbers' Pension Fund v. Niedrich, 891 F.2d 1297, 1301 (7th Cir. 1989); Levit v. Ingersoll Rand Financial Corp., 874 F.2d 1186, 1193-94 (7th Cir. 1989). Any such direct liability would arise under Section 1145, not Section 1109.
Neither the apparently erroneous reference in Count III to Section 1109, nor the failure to allege the specific section of ERISA under which Count III was brought alters the legal basis for the claim asserted in Count III. To accept Defendant's argument that Plaintiffs are somehow "changing position" at this late date would be to ignore the realities of this case. At no time did this matter form the basis of any motion by Defendant, nor was it brought to the Court's attention in the pretrial order as a disputed issue of law. A claim against Struben to recover from her the delinquent contributions of the corporation for which she was an alter ego is a claim that arises under only one statutory section: §1145.
This complaint could even now be amended. Fed.R.Civ.P. 15(b)(2) specifically states that a complaint may be amended to include an un-pled claim that was tried by the parties' implied consent. Such claims "must be treated in all respects as if raised in the pleadings," and ...