Welfare and Annuity Funds v. Wyandotte Corp.

          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. ...