Fanning v. Langenfelder Marine, Inc. ( 2010 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
)
MICHAEL R. FANNING, Chief Executive Officer )
of the Central Pension Fund, )
)
Plaintiff, )
)
v. ) Civil Action No. 07-2182 (PLF)
)
LANGENFELDER MARINE, INC., )
)
Defendant. )
__________________________________________)
MEMORANDUM OPINION
This matter is before the Court on plaintiff Michael R. Fanning’s motion for
summary judgment. After careful review of the parties’ papers, the relevant statutory and case
law, and the entire record in this case, the Court will grant the plaintiff’s motion and enter
judgment in favor of the plaintiff in the amount of $32,043.13.
I. BACKGROUND
Plaintiff Michael R. Fanning is the chief executive officer of the Central Pension
Fund of the International Union of Operating Engineers and Participating Employers (“the
Central Pension Fund”), a pension benefit plan organized under and governed by the Employee
Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001 et seq. Plaintiff’s Motion for
Summary Judgment (“MSJ”) at 2. In 2005 and 2006, defendant Langenfelder Marine, Inc.
(“Langenfelder”) entered into collective bargaining agreements with local affiliates of the
International Union of Operating Engineers. Id. Those agreements obligated Langenfelder to
make contributions to the Central Pension Fund. Id.On December 4, 2007, the Central Pension Fund filed this action, alleging that
Langenfelder had failed to pay $101,951.50 in contributions due for the months of April through
September 2007. Complaint ¶ 16; Declaration of Michael R. Fanning (attached to MSJ)
(“Fanning Decl.”) ¶ 7. Langenfelder denied those allegations, see Answer ¶ 16, and on June 23,
2008, the Central Pension Fund filed a motion for summary judgment. Based on the parties’
representations that they intended to settle most of the disputed issues raised by the complaint,
the Court denied the original motion for summary judgment as moot on March 24, 2009. On
March 31, 2009, the parties stipulated that, after the filing of the plaintiff’s motion for summary
judgment, Langenfelder had paid the delinquent contributions owed to the Central Pension Fund.
Stipulation ¶ 1. On April 15, 2009, Mr. Fanning filed the currently pending motion for summary
judgment, which addresses the only disputed issues remaining in this case: the amount of
interest, liquidated damages, and attorneys’ fees and costs that must be paid to the plaintiff by the
defendant. MSJ at 1-2.
II. DISCUSSION
Because Langenfelder has paid to the Central Pension Fund the $101,851.50 owed
in delinquent contributions, the plaintiff nows seeks only ancillary relief: $20,390.30 in
liquidated damages, MSJ at 4-5; $11,605 in attorneys’ fees and costs, id. at 6; and $47.83 in
unpaid interest. Id. at 7. Langenfelder does not contest the claim for unpaid interest and
concedes that it must pay $8,725 in attorneys’ fees and costs to the plaintiff, but contends that it
2
is not obligated to pay liquidated damages or the remaining $2,880 in fees and costs claimed by
Mr. Fanning. Defendant’s Opposition to Plaintiff’s Motion for Summary Judgment (“Opp.”)
at 2.
A. Liquidated Damages
The relevant provision of ERISA states:
In any action under this subchapter by a fiduciary for or on
behalf of a plan to [collect delinquent contributions] in which a
judgment in favor of the plan is awarded, the court shall award the
plan —
....
(C) an amount equal to the greater of —
(i) interest on the unpaid contributions, or
(ii) liquidated damages provided for under
the plan in an amount not in excess of 20
percent. . . .
29 U.S.C. § 1132(g)(2). The Central Pension Fund’s Restated Agreement and Declaration of
Trust provides for liquidated damages equal to twenty percent of unpaid contributions. Fanning
Decl., Ex. A at 12-13. Mr. Fanning thus argues that Langenfelder owes the Fund twenty percent
of the contributions that were delinquent when this case was filed, or $20,390.30. MSJ at 5.
Langenfelder does not dispute the facts underlying Mr. Fanning’s argument, but
instead argues that “the liquidated damages provision of [29 U.S.C. § 1132(g)(2)] applies only
when there are unpaid contributions when judgment is entered.” Opp. at 3-4. Langenfelder
relies for this proposition on Michigan Carpenters Council Health & Welfare Fund v. C.J.
Rogers, Inc., 933 F.2d 376, 388 (6th Cir. 1991), in which the Sixth Circuit held that liquidated
3
damages may be awarded under 29 U.S.C. § 1132(g)(2) “only if there were unpaid contributions
on the date of the award.”
The court of appeals in this circuit has yet to rule on this question of law, but the
Court notes that the conclusion reached by the Sixth Circuit has been rejected by every other
court of appeals that has considered the question. See United Auto Workers Local 259 Soc. Sec.
Dep’t v. Metro Auto Center, 501 F.3d 283, 288-89 (3d Cir. 2007); Operating Eng’rs Local 139
Health Benefit Fund v. Gustafson Constr. Corp., 258 F.3d 645, 654 (7th Cir. 2001); Nw. Adm’rs,
Inc. v. Albertson’s, Inc., 104 F.3d 253, 257 (9th Cir. 1996); Iron Workers Dist. Council v.
Hudson Steel Fabricators & Erectors, Inc., 68 F.3d 1502, 1507 (2d Cir. 1995); Carpenters
Amended & Restated Health Ben. Fund v. John W. Ryan Constr. Co., 767 F.2d 1170, 1172
(5th Cir. 1985); see also Carpenters & Joiners Welfare Fund v. Gittleman Corp., 857 F.2d 476,
478 (8th Cir. 1988). The Court is persuaded by the reasoning of the Second, Third, Fifth,
Seventh, Eighth, and Ninth Circuits and concludes that relief is available under 29 U.S.C.
§ 1132(g)(2) as to all contributions that were delinquent at the time this enforcement action was
filed. “Permitting delinquent employers to avoid paying § 1132 penalties after suit is filed . . .
would largely thwart the purpose of § 1332(g)(2) to provide plan fiduciaries with an effective
weapon against delinquent employers.” Iron Workers Dist. Council v. Hudson Steel Fabricators
& Erectors, Inc., 68 F.3d at 1508.
As Langenfelder does not dispute, see Opp. at 1, it owed the plaintiff
$101, 951.50 in delinquent contributions at the time this suit was filed. MSJ at 4. Consequently,
Langenfelder is liable to the plaintiff for twenty percent of that amount pursuant to 29 U.S.C.
§ 1132(g)(2). The Court therefore will enter judgment for the plaintiff as to this claim.
4
B. Attorneys’ Fees and Costs
ERISA requires that “reasonable attorney’s fees and costs” be awarded to
prevailing plan fiduciaries in enforcement actions. 29 U.S.C. § 1132(g)(2)(D). Langenfelder
does not dispute that the plaintiff is entitled to an award of attorneys’ fees and costs in this
action, but insists that the award should amount only to the $8,725 requested by the plaintiff in
his first motion for summary judgment, not the $11,605 now sought. Opp. at 2. Langenfelder’s
entire argument against the plaintiff’s request for an additional $2,880 in fees and costs consists
of the conclusory assertion that “the additional $2,880 . . . is entirely applicable to rebriefing the
liquidated damages issue which had already been completely briefed and on which Defendant
should prevail.” Id.The plaintiff has submitted a detailed affidavit showing that since June 2008,
when he submitted his first motion for summary judgment, he has incurred fees and costs that
resulted from his counsel’s “reviewing the Defendant’s original opposition to the Plaintiff’s
[original] Motion for Summary Judgment, preparing the original reply brief, participating in . . .
subsequent Court conferences, drafting and negotiating a stipulation of dismissal, and preparing
the Amended Motion for Summary Judgment.” Reply in Support of Amended Motion for
Summary Judgment at 4; see Declaration of Richard Hopp (attached to MSJ), Ex. D at 2-4. In
response, the defendant has submitted no evidence whatsoever, nor has it explained why the
tasks performed in this case by plaintiff’s counsel since June 2008 have been anything other than
necessary and reasonable. Furthermore, the defendant has failed to explain — and the Court
doubts that it could — why the plaintiff is not entitled to fees and costs incurred during the
5
rebriefing of the liquidated damages issue simply because the defendant (wrongly) feels that it
“should prevail” on that issue. The Court therefore will enter judgment in favor of the plaintiff
on the question of attorneys’ fees and costs.
III. CONCLUSION
For the foregoing reasons, the Court will grant the plaintiff’s motion for summary
judgment and enter judgment against the defendant in the amount of $32,043.13. An Order
consistent with this Opinion shall issue this same day.
SO ORDERED.
/s/_______________________________
PAUL L. FRIEDMAN
United States District Judge
DATE: March 29, 2010
6