New England Health Care Employees Welfare Fund v. iCare Management, LLC
886 F. Supp. 2d 82
D. Conn.2012Background
- Funds seek ERISA §1145 contributions from one management company and eight nursing facilities operators (the Employers).
- Dispute centers on how to calculate gross payroll under 2005, 2009, and 2011 CBAs; Funds advocate all paid hours for 20+ hour workers, including paid time off.
- Employers previously changed method in 2008 to count only hours actually worked over 20 per week; this reduced payments by ~$30k/month.
- Judge Margolis ruled in the Underlying Action that Funds’ interpretation was correct but denied damages for April–September 2009; Second Circuit affirmed.
- This court later granted prejudgment remedy and now addresses three periods (April–Sept 2009; Oct 2009–Aug 2011; Sept 2011–onward) and related motions.
- Funds and Employers filed cross-motions for summary judgment; court resolves issues largely on res judicata/issue preclusion and unsigned CBA theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the April–September 2009 delinquency is precluded by res judicata. | Funds had a full and fair opportunity; Margolis’ Supplemental Decision was prejudicially limited. | Judgment denied that period; preclusion applies due to prior adjudication. | Precluded; Funds barred from recovery for April–September 2009. |
| Whether the April–September 2009 delinquency jurisdiction lies where no signed CBA was in effect. | Contractual rights under unsigned CBAs bind Employers. | No CBA in effect, so no liability. | Court rejects lack of jurisdiction; res judicata controls. |
| Whether the Oct 2009–Aug 2011 delinquency is recoverable under res judicata given the 2009 CBA interpretation. | Funds’ interpretation remains correct; consistent with prior rulings. | Employers’ new reading should control for this period. | Summary judgment for Funds; Employers’ liability for this period is established by res judicata. |
| Whether the Sept 2011 onward delinquency is recoverable under the 2011 CBAs given court-approved interpretation of gross payroll. | Court should apply Funds’ interpretation consistent with prior decisions. | Employers adhered to their interpretation in 2011. | Summary judgment for Funds; September 2011 onward recoverable. |
Key Cases Cited
- Kremer v. Chem. Constr. Corp., 456 U.S. 461 (U.S. 1982) (preclusion framework and full and fair opportunity to litigate)
- Ali v. Mukasey, 529 F.3d 478 (2d Cir. 2008) (test for issue preclusion/fair opportunity to litigate)
- Covanta Onondaga Ltd. v. Onondaga Cnty. Res. Recovery Agency, 318 F.3d 392 (2d Cir. 2003) (comity and prejudice in res judicata)
- Brown v. C. Volante Corp., 194 F.3d 351 (2d Cir. 1999) (unsigned CBAs and LMRA implications)
- Carbon Fuel Co. v. United Mine Workers of Am., 444 U.S. 212 (U.S. 1979) (reliance on court interpretations of contract language over time)
- Saylor v. Lindsley, 391 F.2d 965 (2d Cir. 1968) (limits of real or substantial grounds doctrine in res judicata)
- Carbon Fuel Co. v. United Mine Workers of Am., 444 U.S. 212 (U.S. 1979) (reliance on prior court interpretations of language)