United States District Court, S.D. Illinois
CENTRAL LABORERS' PENSION, WELFARE AND ANNUITY FUNDS, Plaintiff,
v.
WYANDOTTE CORP. and KEVIN KENT, Defendants.
MEMORANDUM & ORDER
J.
PHIL GILBERT, UNITED STATES DISTRICT JUDGE
I.
INTRODUCTION
This is
a suit regarding allegedly unpaid fringe benefits under the
Employee Retirement Income Security Act of 1974
(“ERISA”). Before the Court is Defendant
Kent's Motion to Dismiss and Plaintiffs Central
Laborers' Pension, Welfare & Annuity Funds'
Motion for Leave to File Plaintiffs' Second Amended
Complaint. For the reasons that follow, Defendant Kent's
Motion to Dismiss is DENIED, and
Plaintiffs' Motion for Leave to File Plaintiff's
Second Amended Complaint is GRANTED.
II.
PROCEDURAL & FACTUAL HISTORY
Plaintiffs
Central Laborers' Pension, Welfare & Annuity Funds
(or the “Funds”) were established pursuant to an
employee-benefit plan to provide benefits to eligible
workers. Defendant Wyandotte Corporation is an
employer-participant in the Funds.
In
2017, Defendant Wyandotte Corporation-through its director of
operations, Defendant Kent-entered into a Memorandum of
Agreement with the affiliated local unions of the
Laborers' International Union of North America. Under the
terms of the Memorandum of Agreement, Defendant Wyandotte
Corporation agreed to make fringe-benefit contributions to
the Funds. (Mem. of Agreement 29-30, ECF No. 1-4).
The
Pension and Welfare Funds are separate and independent trust
funds that were created, organized, administered, and
governed by separate trust agreements. The Annuity Fund was
established in the Pension Fund Agreement and shares the same
provisions, powers, and duties; but it too is separate and
independent from the Pension and Welfare Funds. (Restated
Agreement & Decl. of Trust of the Cent. Laborers'
Pension Fund (“Pension Fund Agreement”), ECF No.
1-5; Restated Agreement & Decl. of Trust of the Cent.
Laborers' Welfare Fund (“Welfare Fund
Agreement”), ECF No. 1-6).
Although
the Pension Fund Agreement and Welfare Fund Agreement contain
similar provisions, they are not identical. For example,
different associations are parties to the agreements; the
Pension Fund Agreement contains a claims-review procedure and
an arbitration provision, whereas the Welfare Fund Agreement
does not; and, relevant to Defendant Kent's Motion to
Dismiss, the agreements contain different provisions
regarding personal liability of corporate officers and
directors. The Pension Fund Agreement states the following:
Where an audit discloses a difference between hours actually
worked by an employee and hours reported to the Trust by his
Employer and where such audit discloses any willful violation
of any of the requirements of this Trust Agreement or rules
and regulations adopted in connection herewith, those
officers and directors of such Employer, if a corporation,
who supervised the completion of report forms, signed report
forms or can be determined to have had personal knowledge of
such conduct, shall be personally liable for any
underpayment or other pecuniary loss to the Fund as a result
of such conduct.
(Pension Fund Agreement 21) (emphasis added). By contrast,
the Welfare Fund Agreement lacks operative language and is an
incomplete sentence:
Where an audit discloses a difference between hours actually
worked by an employee and hours reported to the Trust by his
Employer and where such audit discloses any willful violation
of any requirements of this Trust Agreement or rules and
regulations adopted in connection herewith, those officers
and directors of such Employer, if a corporation, who
supervised the completion of report forms, signed report
forms or can be determined to have had personal knowledge of
such conduct.
(Welfare Fund Agreement 21).
Plaintiffs
filed suit against Defendants to collect unpaid fringe
benefits.[1] Defendant Kent filed a Motion to Dismiss
arguing that he should not be held personally liable for
Defendant Wyandotte Corporation's alleged violation of
the Memorandum of Agreement. Plaintiffs responded, pointing
to the personal-liability provision in the Pension Fund
Agreement.
III.
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