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Central Laborers' Pension, Welfare, and Annuity Funds v. Midwest Underground, Inc.

United States District Court, Seventh Circuit

November 1, 2013

CENTRAL LABORERS' PENSION, WELFARE, AND ANNUITY FUNDS ET AL., Plaintiffs,
v.
MIDWEST UNDERGROUND, INC., an Illinois Corporation, WILLIAM MURPHY, Individually, and MICHAEL MURPHY, Individually, Defendants.

OPINION

SUE E. MYERSCOUGH, District Judge.

This cause is before the Court on Defendant Midwest Underground, Inc.'s ("Midwest") Motion to Dismiss or Sever Counts II and III of Plaintiffs' Complaint (d/e 10), Defendant Michael D. Murphy's Motion to Dismiss or Sever Count IV of Plaintiffs' Complaint (d/e 16), and Defendant William Murphy's Motion to Dismiss or Sever Count IV of Plaintiff's Complaint (d/e 20). Defendants Midwest's, William Murphy's, and Michael Murphy's Motions to Dismiss Counts II through IV for lack of standing or grounds to enforce the 2007 Judgment (d/e 10, 16, 20) are GRANTED without prejudice. Plaintiffs are given leave to file an amended complaint clarifying the relief sought by each named Plaintiff. Plaintiffs SHALL file the amended complaint on or before November 15, 2013. Furthermore, the Court DENIES Defendants' Motions to Sever Counts II through IV (d/e 10, 16, 20) because litigating all claims in this action with all Plaintiffs joined promotes efficiency in light of the relationship between Count I and Counts II through IV.

I. BACKGROUND

On July 17, 2012, Plaintiffs filed a four-count Complaint against Defendants seeking employer contributions or payments allegedly owed to Plaintiffs pursuant to Section 301 of the Labor Management Relations Act, as amended, 29 U.S.C. § 185, and Sections 502 and 515 of the Employee Retirement Income Security Act of 1974 ("ERISA") (29 U.S.C. §§ 1132 and 1145).

Count I is a claim against Defendant Midwest for delinquent contributions and liquidated damages for the period October 2011 through January 2012. Plaintiffs seek delinquent contributions and liquidated damages from Midwest totaling $83, 932.20.

Counts II through IV are based on a judgment Plaintiffs obtained in this Court on February 22, 2007 against Murphy Bros., Inc., in Case No. 04-3048, in the amount $153, 980.61. Plaintiffs have not collected on the judgment as Murphy Bros., Inc., ceased operations in March 2004 and was administratively dissolved on May 1, 2006.

Count II of the Complaint alleges a successor liability claim against Defendant Midwest for the contributions owed by Murphy Bros., Inc., to Plaintiffs. Count III alleges an alter ego liability claim against Defendant Midwest for those same contributions owed by Murphy Bros., Inc., to Plaintiffs. Count IV alleges a piercing the corporate veil claim and seeks to hold Defendants William and Michael Murphy liable for the 2007 judgment against Murphy Bros., Inc.

In support of Counts II through IV, Plaintiffs allege that Defendant Midwest uses the same business address that Murphy Bros., Inc., used and, like Murphy Bros., Inc., Midwest is a pipeline contractor. Additionally, Defendants Michael and William Murphy were the sole shareholders of Murphy Bros., Inc., and paid for personal expenses with Murphy Bros., Inc., funds. Defendant Michael Murphy provided the capital for Midwest's startup, and three officers of Murphy Bros., Inc., are now officers of Midwest.

On September 9, 2012, Defendant Midwest filed a Motion to Dismiss or Sever Counts II and III of Plaintiffs' Complaint. Defendant Midwest argues that Counts II and III of Plaintiffs' Complaint should be dismissed as time barred and because not all of the Plaintiffs in this action have standing or grounds to enforce the 2007 judgment. In the alternative, Defendant Midwest seeks severance of Counts II and III from Count I.

On November 19, 2012 and January 31, 2013 respectively, Defendants Michael and William Murphy filed Motions to Dismiss or Sever Count IV of Plaintiff's Complaint. Defendants Michael and William Murphy argue that Count IV should be dismissed as untimely, for failure to state a claim, and because not all of the named Plaintiffs have standing or grounds to enforce the 2007 judgment. Alternatively, Defendants Michael and William Murphy seek severance of Count IV.

II. JURISDICTION AND VENUE

This Court has exclusive jurisdiction over this civil action brought under ERISA pursuant to 29 U.S.C. § 1132(e)(1). Venue is proper under 29 U.S.C. § 1132(e)(2) because the pension plan is administered in this judicial district.

III. LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) challenges a complaint for failure to state a claim upon which relief may be granted. Fed.R.Civ.P. 12(b)(6). At this stage, the court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. Dixon v. Page , 291 F.3d 485, 486 (7th Cir. 2002). To survive a Rule 12(b)(6) motion, the complaint must provide the defendant with fair ...


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