Service Employees International Union National Industry Pension Fund v. Parkway Healthcare, LLC

          MEMORANDUM OPINION

          DABNEY L. FRIEDRICH United States District Judge.

         The Service Employees International Union National Industry Pension Fund (the Fund) and its Trustees bring this action under the Employee Retirement Income Security Act of 1974 (ERISA), §§ 1132(a)(3), (d)(1), (g)(2), 1145, and the Labor Management Relations Act of 1947 (LMRA), 29 U.S.C. § 185(a), to collect unpaid contributions, interest, liquidated damages, audit testing fees, attorneys' fees, and costs from defendant Parkway Healthcare, LLC. Before the Court is the plaintiffs' Motion for Summary Judgment, Dkt. 11, under Rule 56 of the Federal Rules of Civil Procedure.

         I. BACKGROUND

         The parties dispute nearly every fact in this case. Compare Pls.' Statement of Facts, Dkt. 11-2, with Def.'s Resp. to Pls.' Statement of Facts, Dkt. 15-1. Thus, the Court must examine each party's submissions to decide whether any of these disputes are “genuine” and warrant a trial. See Fed. R. Civ. P. 56(a); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).

         A. Contractual History

         According to the plaintiffs, the Fund qualifies as an “employee pension benefit plan” and a “multiemployer plan” under ERISA. See 29 U.S.C. §§ 1002(2)-(3), 1002(37)(A). Three legal documents govern the Fund's relationship with the defendant: a Collective Bargaining Agreement requiring certain contributions, a Trust Agreement establishing the Fund, and a Collection Policy adopted by the Trustees. See Smith Decl. ¶¶ 6-7, 9-10, Dkt. 11-3; see also Pls.' Mot. for Summ. J. Ex. 1, Dkt. 11-5 (Collective Bargaining Agreement); Pls.' Mot. for Summ. J. Ex. 2, Dkt. 11-6 (Trust Agreement); Pls.' Mot. for Summ. J. Ex. 3, Dkt. 11-7 (Collection Policy).

         Since April 1, 2010, the Collective Bargaining Agreement has required the defendant to make contributions to the Fund on behalf of certain categories of employees, including certified nursing assistants, dietary and housekeeping workers, and recreational aides. Smith Decl. ¶¶ 6- 7; see also Pls.' Mot. Summ. J. Ex. 1. In the Collective Bargaining Agreement, the defendant also “agree[d] to be bound by the provisions of the [Trust Agreement] establishing the Fund . . . and by all resolutions and rules adopted by the Trustees pursuant to the powers delegated to them by the Agreement, including collection policies.” Smith Decl. ¶ 9 (quoting Pls.' Mot. for Summ. J. Ex. 1, Art. 25.4). The Trustees adopted a Collection Policy that requires employers to submit contributions each month along with a remittance report detailing the hours paid (excluding overtime) for all contribution-eligible employees. Id. ¶ 11. If an employer fails to submit contributions by the due date, the Collection Policy allows the Fund to collect interest on the delinquent contributions at 10% per annum, or to collect liquidated damages equal to 20% of the delinquent contributions, whichever is greater. Id. ¶ 12-13 (citing Pls.' Mot. for Summ. J. Ex. 3 §§ 5.1, 5.2). If the Fund does not receive a remittance report for a given period and thus cannot determine the contributions owed, it can estimate them using the contributions from the most recent period and consider the employer delinquent for that amount. Id. ¶ 14; see also Pls.' Mot. for Summ. J. Ex. 3 § 2. Further, the Collection Policy provides for the assessment of attorneys' fees and costs against a delinquent employer. Smith Decl. ¶ 15 (citing Pls.' Mot. for Summ. J. Ex. 3 § 5.3-5.4).

         B. The Rehabilitation Plan

         From 2009 to 2017, the Fund was determined to be in “critical status” under the Pension Protection Act of 2006 (PPA), Pub. L. 109-280, 120 Stat. 780 (codified as amended in scattered sections of 26 and 29 U.S.C.), ^[1] and the Fund notified participating employers of that determination each year. Smith Decl. ¶ 17; Pls.' Mot. for Summ. J. Ex. 4, Dkt. 11-8 (critical status letters). Pursuant to the PPA, the Fund established a “Rehabilitation Plan” and notified participating employers of that plan in 2009. Smith Decl. ¶ 18; Pls.' Mot. for Summ. J. Ex. 5, Dkt. 11-9 (letter to employers outlining Rehabilitation Plan). The Rehabilitation Plan required participating employers to pay certain “surcharges” and “supplemental contributions” on top of the “base contribution rate” normally applied to each dollar of contribution-eligible wages. Smith Decl. ¶¶ 19, 22-25.

         An initial 5% surcharge applied as of June 1, 2009, and that surcharge rose to 10% as of January 1, 2010. Id. ¶ 19. Under the Rehabilitation Plan, this 10% surcharge remained effective until replaced by a supplemental contribution schedule agreed to in a Collective Bargaining Agreement. Id. When the defendant negotiated its Collective Bargaining Agreement in 2010, it elected the “Preferred Schedule” of supplemental contributions, which when added to the 2009 and 2010 surcharges led to the following schedule:

• 5% as of June 1, 2009

• 10% as of January 1, 2010

• 18.5% as of April 1, 2011

• 27.7% as of April 1, 2012

• 37.6% as of April 1, 2013

• 48.3% as of April 1, 2014

• 59.8% as of April 1, 2015

• 72.1% as of April 1, 2016

• 85.5% as of April 1, 2017

Id. ¶¶ 19-21 (citing Pls.' Mot. for Summ. J. Ex. 5). The Rehabilitation Plan applied the relevant surcharge or supplemental contribution rate to the defendant's 2% base contribution rate, such that the total contribution rate for 2010 would equal 2.2% (2% plus 10% surcharge, or .02 x 1.1), the total contribution rate beginning April 2011 would equal 2.37% (2% plus 18.5% supplemental contribution, or .02 x 1.185), and so forth. Id. ¶¶ 22-23 (citing Pls.' Mot. for Summ. J. Ex. 1, Art. 25.3).

         C. Delinquent Contributions

         Based on these rates and the defendant's own remittance reports, the Fund's Contribution Compliance Manager, Kisha Smith, found the defendant delinquent with respect to three categories of employees, classified by “[s]ite number.” Id. ¶ 1, 26-27. To illustrate the precise contributions due, she prepared detailed spreadsheets that list for each month: (1) the hours reported by the defendant (that is, the self-reported total gross monthly earnings of all covered employees); (2) the base contribution rate; (3) the base contributions due; (4) the supplemental rate; (5) the supplemental contributions due; (6) the total contributions due; (7) the amount paid by the defendant; (8) the overpayment/underpayment, if any; (9) any applicable interest or liquidated damages due;^[2] and (10) the total amount due. See Id. ¶¶ 27-33; see also Id. Exs. A, B, C (spreadsheets). These spreadsheets indicate that the defendant owes contributions, interest, and/or liquidated damages totaling:

• $13, 151.85 for Site 2362 (dietary and housekeeping ...