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McAnarney v. Absolute Environmental, Inc.

United States District Court, D. Massachusetts

April 30, 2018

BARRY C. MCANARNEY, as he is EXECUTIVE DIRECTOR, MASSACHUSETTS LABORERS' HEALTH AND WELFARE FUND, MASSACHUSETTS LABORERS' PENSION FUND, and MASSACHUSETTS LABORERS' ANNUITY FUND; JAMES V. MERLONI, JR., as he is ADMINISTRATOR, NEW ENGLAND LABORERS' TRAINING TRUST FUND; and JOSEPH BONFIGLIO, as he is TRUSTEE, MASSACHUSETTS LABORERS' LEGAL SERVICES FUND, Plaintiffs,
v.
ABSOLUTE ENVIRONMENTAL, INC. and ABSOLUTE ENVIRONMENTAL CONTRACTORS, INC. Defendants.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton United States District Judge.

         Plaintiffs, five employee benefit plans and their individual director, administrator and trustee (collectively “plaintiffs” or “the Funds”) bring this action against the employer of their beneficiaries to enforce the alleged obligation of that employer to make contributions and to pay interest due under a collective bargaining agreement. Plaintiffs allege that defendants Absolute Environmental, Inc. (“AEI”) and Absolute Environmental Contractors, Inc. (“AEC”) (collectively “defendants”) have violated the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1145 and 1132 and the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185. Pending before this Court is defendants' motion to dismiss. For the reasons that follow, the motion to dismiss will be denied.

         I. Background

         Plaintiffs are five employee benefit plans and three individual directors, administrators and trustees. Plaintiff Barry McAnarney is the Executive Director of three of the plaintiff funds which are administered in Burlington, Massachusetts: (1) the Massachusetts Laborers' Health and Welfare Fund, an employee welfare benefit plan which provides health, dental and prescription benefits and insurance to its participants, (2) the Massachusetts Laborers' Pension Fund, an employee pension benefit plan providing participants with a defined pension benefit and (3) the Massachusetts Laborers' Annuity Fund, an employee pension benefit plan which acts as a defined contribution fund.

         Plaintiff James Merloni, Jr. is the Administrator of plaintiff New England Laborers' Training Trust Fund, an employee welfare benefit plan administered in Hopkinton, Massachusetts which trains apprentices and journey workers in the construction industry. Plaintiff Joseph Bonfiglio is a Trustee of plaintiff Massachusetts Laborers' Legal Services Fund, an employee welfare benefit plan administered in Burlington, Massachusetts.

         Defendant AEI is a New Hampshire corporation with its principal place of business in Salem, New Hampshire and defendant AEC is a Massachusetts corporation with its principal place of business in Haverhill, Massachusetts. AEI is an asbestos abatement contractor that was incorporated in 2004 and operated as a non-union contractor until 2010. In January, 2010, AEI signed the Wrecking and Environmental Remediation Acceptance of Agreement and Declaration of Trust (“the Acceptance”) through which it became a party to the collective bargaining agreement between the Massachusetts Laborers District Council Union and the Massachusetts State-Wide Wrecking and Environmental Remediation Specialists Association, Inc. (“the CBA”).

         The CBA requires that signatory employers make contributions to the plaintiff funds for each hour worked by covered employees at the rates prescribed therein. After an employee has met the hours requirement set out by the fund, that employee is entitled to health and welfare benefits. Three months after AEI became a signatory to the CBA, it caused AEC to be incorporated in Massachusetts. AEC is not a signatory to the CBA and undertakes non-union “open shop” work. In its filings with the Massachusetts Secretary of State, AEC identified Elaine McCaffrey and Susan Quinn, the wives of AEI owners Gary McCaffrey and Richard Quinn, as AEC's directors. Plaintiffs allege that Gary McCaffrey and Richard Quinn manage both companies and that their wives are not involved in the operations of either company.

         Plaintiffs allege that AEC performs the same work that AEI performs, within the territorial jurisdiction of the CBA. They contend that AEI and AEC both operate out of the same address in Salem, New Hampshire where both companies use the same trucks, estimator, clerical staff and supervisors. Plaintiffs assert that laborers receive their checks each week from the Salem office regardless of whether they completed jobs for AEI or AEC and that many of laborers work interchangeably for both companies. They allege that one laborer, Jean Jimenez, reported to the Salem office to collect his checks where he was asked if he had a “union” or “non-union” job. According to plaintiffs, employees at the office would provide a different-colored paycheck depending on whether the job was union or non-union and those paychecks reflected different rates of pay and deductions. Plaintiffs describe other overlapping functions of the companies, including the sharing of the same website and email address.

         Plaintiffs brought this action in July, 2015 and filed an amended complaint in April, 2016, alleging violations of ERISA and the LMRA. The parties jointly moved to stay the case and it was stayed from May, 2016 until June, 2017. In June, 2017, defendants moved to dismiss the amended complaint and that motion is the subject of this memorandum.

         II. Defendant's Motion to Dismiss

         A. Legal Standard

sTo survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In considering the merits of a motion to dismiss, the Court may look only to the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the complaint and matters of which judicial notice can be taken. Nollet v. Justices of Trial Court of Mass., 83 F.Supp.2d 204, 208 (D. Mass. 2000), aff'd, 248 F.3d 1127 (1st Cir. 2000). Furthermore, the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Langadinos v. Am. Airlines, Inc., 199 F.3d 68, 69 (1st Cir. 2000). Although a court must accept as true all of the factual allegations contained in a complaint, that doctrine is not applicable to legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662 (2009).

         B. Application

         Defendants contend that plaintiffs' alter ego theory fails as a matter of law because plaintiffs do not allege that AEI and AEC deceived or defrauded the Funds or that AEC was used to divert business away from AEI. According to defendants, because AEI was incorporated first and operated as a non-union company for several years before it entered into the CBA and before AEC was incorporated, AEC was not created for an improper purpose. Defendants aver that plaintiffs' alternative theory, that AEC and AEI are, in fact, a single employer with a unified bargaining unit, is unavailing ...


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