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Service Employees International Union National Industry Pension Fund v. Tnuzeg Holdings, LLC

United States District Court, District of Columbia

August 17, 2018

SERVICE EMPLOYEES INTERNATIONAL UNION NATIONAL INDUSTRY PENSION FUND, et al., Plaintiffs,
v.
TNUZEG HOLDINGS, LLC, Defendant.

          MEMORANDUM OPINION

          ROSEMARY M. COLLYER UNITED STATES DISTRICT JUDGE.

         The Trustees of the Service Employees International Union National Industry Pension Fund (collectively, the Fund) seek delinquent pension fund contributions from Tnuzeg Holdings, LLC (doing business as New Vista Nursing and Rehabilitation Center, or New Vista). The Fund alleges that New Vista owes $194, 390.51 in delinquent contributions, interest, and liquidated damages for the period between July 2013 and April 2017, plus additional pre- and post-judgment interest and attorneys' fees and costs. New Vista contends that the Fund's calculations are unreliable, but it fails to provide a factual or legal basis for its contention or to counter the Fund's demonstration of its calculations. Because the Fund satisfactorily identifies the underlying obligation and the monies owed, there is no genuine dispute on any material fact. The Court will grant summary judgment to the Fund.

         I. BACKGROUND

         The Fund, an “employee benefit plan” and “a multiemployer plan” under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1002, was established and maintained to provide pension benefits to eligible employees of contributing employers. New Vista, part of a group of nursing homes, is one such contributing employer. In the present action, the Fund and its trustees allege that New Vista owes unpaid contributions, interest, and liquidated damages as required under the controlling trust agreements and collective bargaining agreements, in violation of ERISA and the Labor Management Relations Act of 1947 (LMRA), 29 U.S.C. § 185(a).

         Specifically, the Fund seeks unpaid contributions from New Vista for the period between July 2013 and April 2017. See Ex. 11, Pls.' Mot. for Summ. J. (Mot.) [Dkt. 14], Decl. of Kisha Smith (Smith Decl.) [Dkt. 14-11] ¶ 27. Deriving eligible work hours by covered employees from monthly remittance reports submitted by New Vista, the Fund calculates that New Vista underpaid $133, 925.29 in total contributions for the period of July 2013 through April 2017, and that New Vista owes additional interest for late payments and underpayments as well as liquidated damages for underpaid or late contributions. In total, the Fund alleges that New Vista owes $194, 390.51 for the period July 2013 through April 2017, plus additional interest since that month, and attorneys' fees and costs for this litigation. Id. ¶¶ 27-31.

         New Vista has been signatory to a series of contracts that require it to contribute to the Fund. See Id. ¶¶ 6-17. New Vista signed a memorandum of agreement (2008 MOA) with the Union dated July 17, 2008 by which it agreed to a master collective bargaining agreement known as the “Tuchman Agreement.” Id. ¶ 6; see also Ex. 1, Mot., Tuchman Agreement [Dkt. 14-1]. At least by then, SEIU Local 1199 United Health Care Workers East was recognized by New Vista as the exclusive bargaining representative for all employees it employed excluding office clerical employees, supervisors, watchmen, and guards. See Compl. [Dkt. 1] ¶ 9. The Tuchman Agreement was in effect from March 13, 2008 (before New Vista became a signatory through the 2017 MOA) to February 28, 2013. Id. ¶ 10. As part of a group of nursing homes, New Vista underwent interest arbitration with the Union in 2012 to decide the terms for a new collective bargaining agreement. See Id. ¶ 11; see also Smith Decl. ¶ 7; Ex. 3, Mot., Arbitration Decision [Dkt. 14-3]. The arbitrator's award extended the term of the Tuchman Agreement from March 1, 2012 through June 30, 2016 with amendments. See Arbitration Decision at 14-15. On March 20, 2017, New Vista signed a memorandum of agreement with the Union, which renewed the Tuchman Agreement through December 31, 2020. See Smith Decl. ¶ 8; see also Ex. 4, Mot., 2017 MOA [Dkt. 14-4].

         The Tuchman Agreement has required New Vista to contribute periodically to the Fund on behalf of all covered employees and to comply with the Fund's collections policy (the Collection Policy) which imposes interest on any late or unpaid contributions (delinquent contributions), additional liquidated damages for delinquent contributions if a lawsuit must be filed to collect the delinquencies, and attorneys' fees and court costs incurred in collecting amounts owed. See Tuchman Agreement. As relevant here, the base contribution rate was 2.75% of gross monthly earnings for all bargaining unit employees. See Id. ¶ 30.3. New Vista also was bound to an agreement establishing the Fund (the Trust Agreement), and to the Fund's Collection Policy for delinquent contributions. See id. ¶ 30.4; see also Ex. 5, Mot., Trust Agreement [Dkt.14-5]; Ex. 6, Mot., Collection Policy [Dkt. 14-6]. The Tuchman Agreement specifically states:

The Employer hereby agrees to be bound by the provisions of the Agreement and Declaration of Trust establishing the Fund, as it may from time to time be amended, and by all resolutions and rules adopted by the Trustees pursuant to the powers delegated to them by that agreement, including collection policies, receipt of which is hereby acknowledged.

         Tuchman Agreement ¶ 30.4 (emphasis added).

         The Collection Policy provides that a delinquent employer is liable for interest at a rate of 10 percent (10%) per annum, plus liquidated damages at a rate of 20 percent (20%) after the commencement of legal action, plus attorneys' fees and costs. See Collection Policy § 5.

         Further, New Vista's obligations to the SEIU Pension Fund are governed by the Pension Protection Act of 2006 (PPA), 29 U.S.C. § 1085. That statute requires a pension fund facing certain funding deficiencies to issue notices of “critical status” to contributing employers and to institute a “rehabilitation plan” that may adjust benefits and/or contributions or assess surcharges to mitigate a fund's financial instability. 29 U.S.C. § 1085(a)(2), (e)(1), (e)(7). Beginning January 1, 2009, and in January of every year thereafter through 2017, the Fund was, pursuant to these statutory requirements, determined to have such funding deficiencies and to be in “critical status.” See Ex. 7, Mot., Notices of Critical Status [Dkt. 14-7]. The Fund duly issued the required notices of critical status each April in 2009 through 2017. See Id. at 3; see also Smith Decl. ¶ 18. Also as required under the PPA, the Fund adopted a rehabilitation plan on November 25, 2009, under which New Vista was required to pay a surcharge on delinquent contributions; initially the rate for this surcharge was 5% and it rose to 10% effective January 1, 2010. See Ex. 8, Mot., Rehabilitation Plan Notice [Dkt. 14-8] at 2.

         The renewed Tuchman Agreement obligated New Vista to remit supplemental contributions as well (the Preferred Schedule). See Arbitration Decision at 19. Pursuant to the Preferred Schedule, New Vista was obligated to remit supplemental contributions at a rate of 37.6% of base contributions due beginning on July 1, 2013, 48.3% beginning July 1, 2014, and 59.8% beginning July 1, 2015. Id. at 25; see also Smith Decl. ¶ 22. The 2017 MOA continued this obligation and New Vista became required to remit supplemental contributions at a rate of 72.1% beginning July 1, 2016 and 85.5% beginning July 1, 2017. See 2017 MOA ¶ 4. Failure to pay such additional contributions under a rehabilitation plan is treated as a delinquency by ERISA. 29 U.S.C. § 1085(e)(3)(C)(iv). None of these obligations is denied by New Vista.

         The Fund alleges that New Vista failed to remit required contributions, supplemental contributions, interest, and liquidated damages for the period of July 2013 through April 2017. Mot. at 2. It calculates that New Vista owes a total of $194, 390.51 for this period, plus still-accruing interest and attorneys' fees and costs. Id.

         The Smith Declaration details how the Fund determined these liabilities and includes a spreadsheet (Exhibit A) specifying the monthly amounts owed by New Vista from July 2013 through April 2017. The Fund calculates amounts due based on the total gross monthly earnings of all covered employees as reported by the employer in monthly “remittance reports”; this amount is then multiplied by the 2.75% rate set forth in the Tuchman Agreement to determine the base contribution amount due per month. See Smith Decl. ¶ 26; see also Id. at Exhibit A (noting in spreadsheet column a the “CBA Rate” of 0.0275 by which “Base CBA Contributions Due” are calculated). The spreadsheet also shows the “Total Contributions Due, ” and “Amount Received, ” which include base contributions as well as supplemental contributions (i.e., surcharges as set forth in the Rehabilitation Plan); another column for “Contribution Underpayment” shows the ...


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