234 F. Supp. 3d 660
W.D. Pa.2017Background
- Plaintiffs (Laborers’ Combined Funds and Bricklayers’ Combined Funds) are multi-employer ERISA benefit plans that audited Molinaro Corporation and found unpaid fringe benefit contributions and withheld wage deductions for Feb–Jun 2015.
- Molinaro conducted construction work in Western Pennsylvania; Anthony Leone was Molinaro’s sole shareholder, director, and officer and oversaw bill payments, receivables, check-signing, and submission of remittance reports.
- The applicable CBAs and trust agreements state that title to contributions "due and owing" vests in the Funds when due, and provide for interest, liquidated damages, and attorneys’ fees for delinquent payments.
- Plaintiffs sued Molinaro (ERISA collection) and Leone (ERISA breach of fiduciary duty and state-law conversion of withheld wages). Defendants conceded Molinaro’s liability on the ERISA collection claim.
- Leone admitted facts showing authority over plan assets; Defendants failed to file the required Local Rule responsive concise statement disputing Plaintiffs’ facts or damage calculations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ERISA collection claim vs. Molinaro | Molinaro failed to pay due contributions; ERISA §502/§515 permits recovery of contributions, interest, liquidated damages, fees | Defendants did not oppose and conceded liability | Summary judgment for Plaintiffs on Count I (Molinaro liable) |
| ERISA fiduciary breach vs. Leone | Leone exercised control over contributions (plan assets vested when due), so he was an ERISA fiduciary and personally liable for failing to remit funds | Defendants suggested corporate veil/limited liability arguments (and other cases applying veil-piercing under §515) | Summary judgment for Plaintiffs on Count II: Leone is an ERISA fiduciary and personally liable for breach of fiduciary duty |
| Conversion claim vs. Leone | Withheld union dues and PAC deductions were not remitted; under Pennsylvania participation theory, Leone is personally liable for conversion | Defendants raised no substantive defense to conversion (argued limited liability generally) | Summary judgment for Plaintiffs on Count III: Leone personally liable for conversion of withheld wages |
| Damages (interest, liquidated damages, fees) | ERISA and the CBAs mandate recovery of delinquent contributions plus interest, liquidated damages, and attorneys’ fees; Plaintiffs submitted calculations and supporting affidavits | Defendants did not meaningfully dispute the amounts or submit contrary evidence | Court awarded the claimed amounts and statutory/contractual damages as supported by the record |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard and burden-shifting)
- Galgay v. Gangloff, 677 F. Supp. 295 (E.D. Pa. 1987) (language vesting title to "due and owing" contributions makes unpaid contributions plan assets)
- Laborers Combined Funds of W. Pa. v. Cioppa, 346 F. Supp. 2d 765 (W.D. Pa. 2004) (corporate officer can be ERISA fiduciary and personally liable for failure to remit plan assets; conversion claim precedent)
- Srein v. Frankford Trust Co., 323 F.3d 214 (3d Cir. 2003) (ERISA fiduciary status can attach when an individual exercises authority or control over plan assets)
- Glaziers & Glassworkers Union Local No. 252 Annuity Fund v. Newbridge Sec., Inc., 93 F.3d 1171 (3d Cir. 1996) (recognizing that individual authority over plan assets can create fiduciary status)