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Central Laborers' Pension, Welfare and Annuity Funds v. Bland's Sewer & Water

July 28, 2011


The opinion of the court was delivered by: Herndon, Chief Judge:


Defendant Danny Bland is no stranger to being involved in litigation with plaintiffs Central Laborers' Pension, Welfare and Annuity Funds for failure to allegedly pay required fringe benefit contributions and turn in required reports. This case represents the fourth time that either Bland or one his companies, here, defendant Bland's Sewer & Water, Inc. (Bland's Sewer), has been sued by plaintiffs for failure to make the required contributions or turn in required reports. The last case (07-cv-252) between these parties resulted in a settlement and Bland and Bland's Sewer now claim in their motions for summary judgment that this current suit is barred by the settlement agreement entered into between the parties and by the doctrine of res judicata. For the reasons that follow, the Court grants Bland's and Bland's Sewer's motions for summary judgment (Docs. 31 & 32) in part and denies in part.

I. Background

The lawsuits against Bland's companies stem back to February 17, 2004, when plaintiffs filed suit against two of Bland's companies, Paradise Environmental Services, Inc. (Paradise) (04-cv-104) and Bland Construction Co., Inc. (Bland Construction) (04-cv-105), under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001, et seq. (ERISA). Plaintiffs alleged generally that Paradise and Bland Construction failed to make fringe benefit contributions to plaintiffs required by various agreements entered into between plaintiffs and Paradise and Bland Construction. Default judgment was entered in favor of plaintiffs and against Paradise in the amount of $61,900.07 (Doc. 31, 04-cv-104) and against Bland Construction in the amount of $34,978.87 (Doc. 15, 04-cv-105). The collection of those judgments, however, became another issue and carried over into future litigation between Bland and his companies and plaintiffs.

The plaintiffs next lawsuit against Bland was filed on April 10, 2007 (07-cv-252) (the prior litigation). That complaint (Doc. 2, 07-cv-252) was filed against Bland's Sewer and Bland (collectively defendants) alleging three counts. Count I was against Bland's Sewer and alleged Bland's Sewer was obligated to make fringe benefit contributions to plaintiffs under the various agreements entered into between Bland's Sewer and plaintiffs, that according to the trust agreements between the parties, plaintiffs are entitled to collect liquidated damages on all contributions that are paid late, and that based "[u]pon careful review of all records maintained by plaintiffs there is a total of [$4,577.03] known to be due and owing from defendant to plaintiffs." The complaint further alleged that "there is a possibility that additional contributions and liquidated damages will come due during the pendency of this lawsuit," and that an audit of defendant's payroll records and books was necessary to determine the amounts due and owing. The count referred the Court to plaintiffs' attached exhibit eight. That exhibit showed the audit liabilities of Bland Construction due between January 1, 2001, and June 30, 2004, and liquidated damages due, totaling $34,783.87, the amount that plaintiffs claimed Bland Construction still owed on the prior default judgment entered against Brand Construction. It also included a page entitled new delinquencies for Bland Construction that was dated November 15, 2005. That page showed liquidated damages allegedly due plaintiffs from dates ranging from September 2003 through October 2006, the total of which came to $4,577.03.

Count II was also against Bland's Sewer and alleged that Bland's Sewer was the alter-ego to Bland Construction, and/or its successor corporation, and was therefore liable for the outstanding $34,783.87 judgment balance owed to plaintiffs from the $34,978.87 judgment mentioned above. Count III was brought against Bland individually, seeking to hold Bland personally liable for the actions alleged in count I.

Defendants answered the complaint and a discovery schedule was set, but the case was eventually dismissed after the parties filed a joint motion to dismiss, advising the Court that a settlement had been reached. (Doc. 19). On March 31, 2008, the Court entered judgment dismissing the case with prejudice (Doc. 20, 07-cv-252).

The settlement agreement, dated December 3, 2007, provided, in relevant part, that Bland, Bland's Sewer, and Paradise (collectively the Bland Parties) shall pay plaintiffs the sum of $42,000 within seven days of the agreement. Furthermore, the agreement contained the following relevant provisions:

" 4. Subject to the payment described in paragraph 1 hereof and except as otherwise provided in paragraph 5 hereof, [plaintiffs] hereby release and forever discharge the Bland Parties . . . of and from any and every claim, demand, cause of action or suit of any character or description whatsoever relating to or arising out of any claim against or liability or obligation of Paradise or Bland's Construction Co., Inc. ("Bland's Construction") or any order or judgment entered in the Paradise Case [04-cv-104] or [the] Bland Case [07-cv-252]. Except as otherwise provided in paragraph 5 hereof, the foregoing is intended as a general release of the Bland Parties and shall forever release and discharge all claims of any character or description whatsoever in favor of [plaintiffs] and against any one or more of the Bland Parties that relate in any way to any one or more of the Bland Parties, Bland's Construction or Paradise, including (without limitation) any claim that has been or could be asserted in the Litigation.[*fn1 ]

5. Excluding unpaid contributions and related liabilties specifically alleged in [plainitffs'] complaint in the Bland Case (liability for which is hereby released and discharged), [plaintiffs] reserve the right to recover from Bland Sewer for any delinquent and unpaid employer contributions for the period beginning December 1, 2005 through September 1, 2007, and consistent with the agreements executed by Bland Sewer with the various entities covered by the Central Laborers Pension, Welfare and Annuity Funds prospectively, and so long as Bland Sewer is bound by the terms and conditions of the agreements executed by it." (Doc. 42-3) (Emphasis in original).

The settlement agreement then set forth how and when an audit of Bland Sewer's payroll records and books would be conducted for the time period beginning December 1, 2005, through September 1, 2007, "to determine what amount, if any, is due and owing to [plaintiffs] as delinquent contributions, and any and all other damages that reasonably flow from same, of which [plaintiffs] are entitled to collect." (Doc. 42-3). It then provided the procedures for Bland's Sewer to follow should it decide to challenge the results of the audit. The agreement stated in bold: "In the event a dispute arises as to the [sic] whether any disputed amounts are subject to collection by [plaintiffs], the parties shall submit same to a court of competent jurisdiction for adjudication." (Doc. 42-3).

On June 26, 2008, Kevin W. Bragee, a certified public accountant, sent a letter to plaintiffs entitled "Independent Accountant's Report on Applying Agreed-Upon Procedures." (Doc. 34-4). As a result of the procedures performed, Bragee found that additional contributions were due in the amount of $123.27 for the time period of December 1, 2005, through December 31, 2007.

On September 16, 2008, plaintiffs' counsel sent defendants' counsel a letter stating the following:

" Enclosed please find a copy of the completed audit and all corresponding documents to same. Please also find a revised breakdown of amounts due and owing delineating the audit liabilities due and owing, along with newly discovered liquidated damages, all of which were not included or contemplated in our most recent settlement of the prior claims against Dan Bland, et al. As you can see, there are contributions and liquidated damages due and owing to ...

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