Laborers Pension Trust Fund - Detroit and Vicinity v. Kirko Manix Construction, LLC
2:14-cv-11122
E.D. Mich.Aug 15, 2014Background
- Trustees sue Kirco Manix Construction under LMRA §302 and ERISA for fringe benefit contributions allegedly owed by Kirco and its subcontractors on various projects (Oct 2009–Mar 2013)
- Kirco signed a CBA with CAM; audit identified $1,664,194.04 unpaid contributions, mostly from subcontractors
- Plaintiffs seek judgment for unpaid contributions, records, and related relief; defendants move to dismiss under Rule 12(b)(6) arguing no liability for subcontractors under the CBA
- CBA language cited: (i) subcontractor adherence to CBA terms, (ii) definition of regular employee, (iii) broad obligation to remit contributions for all employees; issue is whether Kirco is liable for subcontractors’ contributions
- Court holds the CBA unambiguous and within scope limits, finds Kirco not responsible for subcontractors’ contributions, grants dismissal, and denies amendment as moot
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Kirco liable for fringe benefits for subcontractors under the CBA? | Kirco breached by failing to ensure subcontractors’ compliance | CBA obligates payments only for Kirco’s own employees; subcontractors are not covered | Kirco not liable for subcontractors; CBA unambiguous; dismissal affirmed |
| Does the Scope of Work clause create secondary liability for Kirco? | Clause ensures subcontractors adhere to CBA; liability for unpaid fringes flows from breach | Clause is about subcontractor compliance, not Kirco’s payment obligation | Clause does not impose Kirco’s responsibility to pay for subcontractor employees; no liability |
| Should extrinsic evidence be considered to interpret the CBA? | Language support broader interpretation | Explicit language governs; contract not ambiguous | Extrinsic evidence not needed; contract unambiguous; no reinterpretation |
| Should plaintiffs be allowed to amend the complaint? | Amendment should be permitted to address issues | Court should dismiss as moot given ruling | Motion to amend denied as moot |
Key Cases Cited
- Tackett v. M&G Polymers USA, 561 F.3d 478 (6th Cir. 2009) (contract interpretation begins with explicit language; interpretation ends when language clear)
- UAW v. Yard-Man, 716 F.2d 1476 (6th Cir. 1983) (interpretation of CBAs starts with explicit language; extrinsic evidence limited)
- Moore v. Menasha Corp., 690 F.3d 444 (6th Cir. 2012) (consideration of extrinsic evidence in contract interpretation)