UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

 

SERVICE EMPLOYEES
INTERNATIONAL UNION NATIONAL
INDUSTRY PENSION FUND, ef ai.,

 

 

Plaintiffs, Case No. 1:17-cv-01215 (TNM)
v.
HEBREW HOMES HEALTH
NETWORK, INC,, ef al.,
Defendants.
MEMORANDUM OPINION

 

The Service Employees International Union National Industry Pension Fund (the “Fund’’)
seeks to recover a total of $847,290.62 in required pension contributions that Defendants Hebrew
Homes Health Network, Inc., Aventura Plaza, Inc., Jackson Plaza, Inc., Hebrew Homes Sinai,
Inc., Arch Plaza, Inc., Hebrew Homes South, Inc., and Hebrew Homes of South Beach, Inc.
(collectively, the “Employers”) admit that they failed to pay. The Court referred this matter to
Magistrate Judge G. Michael Harvey for full case management, and following discovery, the
parties filed cross-motions for summary judgment. Upon consideration of the Magistrate
Judge’s Report and Recommendation (the “Report”), R. & R., ECF No. 50, the Court adopts the
Report in full, over the Employers’ objections. The Court will deny the Employers’ Motion for
Summary Judgment and grant in part and deny in part the Fund’s Cross-Motion for Summary
Judgment.

The Employers objected to the Report. See Objs. to R. & R., ECF No. 52. The Court
reviews de novo any part of the Magistrate Judge’s disposition a party properly objects to. Fed.

R. Civ. P. 72(b)(3). The Employers mainly object to the Magistrate Judge’s finding that
Amendment Three is a contractual limitations period.' The Employers’ reasoning is far from
clear. They insist that the Court should consider Amendment Three “to be an adoption of . . . the
Florida five-year statute of limitations.” Objs. to R. & R. at 19-20. Fine. But in that case, the
Employers still lose because, as the Report persuasively explains, the Fund’s Complaint was
timely under Florida’s statute of limitations.

The Employers’ real gripe is that, according to them, Amendment Three was an unfair,
unilateral “cram down.” But nowhere in their Objections do the Employers argue that
Amendment Three is therefore unenforceable or that they are not bound by its terms. Nor could
they. They did not make that argument to the Magistrate Judge, see R. & R. at 16, and parties
may not present new issues or arguments for the first time in their objections to the Magistrate
Judge’s Report. See Sciacca v. FBI, 23 F. Supp. 3d 17, 27 (D.D.C. 2014); Aikens v. Shalala, 956
F. Supp. 14, 19-20 (D.D.C. 1997) (collecting cases).

In any event, the Employers got what they bargained for. In each Employer’s negotiated
Collective Bargaining Agreement with the Fund, they agreed to be bound by Amendments
adopted by the Trustees, like Amendment Three.” Indeed, the Employers appear to concede that
their obligation to abide by the Trust Amendment is a product of their negotiations with the
Fund. See Objs. to R. & R. at 24 (“the Plaza Facilities agreed in their CBAs to accept any
changes in the Plan’). More, rather than a unilateral “cram down,” Amendment Three was

adopted by the Fund’s Board of Trustees, see ECF No. 39-1, which is comprised of equal parts

 

' As described more fully in the appended Report, the Employers’ sole defense is that the Fund filed its Complaint
outside the statute of limitations. Amendment Three is incorporated into the Collective Bargaining Agreements
between the Fund and the Employers and establishes the applicable statute of limitations here.

> ‘I'he Collective Bargaining Agreements provide that the Employers “agree|| 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.” See, e.g., Arch Plaza CBA at 20, ECF No. 36-1
(emphasis added).
representatives from SEIU affiliated labor unions and representatives from participating
employers, see SOF § 2, ECF No. 36-16. Had they objected to such a process, they should not
have entered into the Collective Bargaining Agreements. The Employers have cited no authority
that such Amendments passed by the Fund’s Trustees are defective. And again, they do not
make that argument. Thus, whatever unfairness the Employers perceive, the Court agrees with
the Magistrate Judge that Amendment Three is binding on the Employers.

The Employers’ other objections are arguments considered and rejected by the Magistrate
Judge. The Court has considered the Employers’ objections de novo. None has merit for the
reasons set forth in the Magistrate Judge’s thorough and well-reasoned Report. So the Court will
adopt in full the Magistrate Judge’s Report as its own opinion and append it below.

For these reasons, the Court will deny the Employers’ Motion for Summary Judgment
and grant in part and deny in part the Fund’s Cross-Motion for Summary Judgment. A separate

order will issue.

2019.09.12
15:37:07 -04'00'

Dated: September 12, 2019 TREVOR N. McFADDEN
United States District Judge

 

 
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

 

SERVICE EMPLOYEES
INTERNATIONAL UNION NATIONAL
INDUSTRY PENSION FUND, et al,

Plaintiffs,
Civil Action No.
v. 1:17-cv-1215 (TNM/GMH)
HEBREW HOMES HEALTH
NETWORK, INC., ef al,
Defendants.

 

 

REPORT AND RECOMMENDATION

This matter was referred to the undersigned for full case management. Pending before the
Court are the parties’ cross-motions for summary judgment. Service Employees International Un-
ion National Industry Pension Fund (‘the Fund”) and its Trustees (collectively “Plaintiffs”) filed
this action under sections 502 and 515 of the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C. §§ 1132, 1145, against Hebrew Homes Health Network, Inc. and related
corporations (“Defendants”). Plaintiffs seek to recoup from Defendants pension contributions to
the Fund which Defendants failed to pay. Specifically, they seek $847,290.62 in delinquent con-
tributions, interest, liquidated damages, fees, and costs, as well as declaratory and injunctive relief,
After reviewing the entire record,' the undersigned recommends denying Defendants’ motion and

granting in part and denying in part Plaintiffs’ motion.

 

' The relevant docket entries for the purposes of this Report and Recommendation are: (1) the third amended complaint
(ECF No. 28); (2) Plaintiffs’ motion for summary judgment and exhibits (ECF Nos. 36 through 36-18); (3) Defend-
ants’ motion for summary judgment and exhibits (ECF Nos. 37 through 37-12); (4) Defendants’ notice of filing cor-
rected exhibits (ECF Nos. 38 through 38-3); (5) Plaintiffs’ notice of filing of corrected exhibit (ECF Nos. 39 through
39-1); (6) Plaintiffs’ memorandum in opposition to Defendants’ motion for summary judgment (ECF No. 40); and
(7) Defendants’ memorandum in opposition to Plaintiffs’ motion for summary judgment and exhibits (ECF Nos. 41
I. BACKGROUND?

A. Factual Background

Defendants do not dispute that they underreported and underpaid pension contributions to
the Fund between January 2009 and December 2010. Rather, they contend that Plaintiffs’ claims
to recover those delinquent contributions are untimely. Similarly, Defendants do not dispute the
accuracy of Plaintiffs’ underpayment and related damages calculations, except to contend that
Plaintiffs have applied incorrect employee eligibility criteria for contributions that were due during
a three-month period in 2010. The factual background that follows will focus on these disputes.

1. Defendants’ Collective Bargaining Agreements with Local 1199

Defendants are a network of six residential nursing and rehabilitation centers located in
Miami-Dade County, Florida, and a nonprofit corporation that “provid[es] administration and sup-
port” to the centers.?> ECF No. 37-1 at 2-3. The Fund is a multiemployer pension plan under
ERISA that provides pension benefits to eligible employees of contributing employers. ECF No.

36-16 at 1-2; see also 29 U.S.C. § 1002(37). The Fund is administered in the District of Columbia

 

through 41-2); (8) Defendants’ response to Plaintiffs’ statement of material facts (ECF No. 42); (9) Plaintiffs’ response
to Defendants’ statement of material facts (ECF No. 46); (10) Plaintiffs’ reply in further support of their motion for
summary judgment (ECF No. 47); and (11) Defendants’ reply in further support of their motion for summary judgment

(ECF No. 48). Citations to page numbers herein reflect the pagination assigned by the Court’s Electronic Case Filing
system.

* The following factual allegations are undisputed (or deemed undisputed) unless otherwise noted. Where a fact from
one of the parties’ statements of undisputed material facts is explicitly undisputed, the undersigned generally cites the
statement of undisputed material facts. In other circumstances, such as when a fact is insufficiently disputed because,
for example, either the opposing party’s objection fails to cite record evidence or the evidence cited does not support
the objection, the undersigned cites the record evidence supporting the fact.

’ These facilities are: Aventura Plaza, Inc. (“Aventura Plaza”); Jackson Plaza, Inc. (“Jackson Plaza”); Hebrew Home
Sinai, Inc. (“Sinai Plaza”); Arch Plaza, Inc, (“Arch Plaza”); Hebrew Homes South, Inc. (“Hebrew Home South
Beach”); and Hebrew Homes of South Beach, Inc. (“South Pointe Plaza”). ECF No, 36-16 at 2-3; ECF No. 37-1 at

2~3. Hebrew Home South Beach closed in November 2013, and South Pointe Plaza “was sold to another entity” in
April 2018. ECF No. 37-1 at 3.
by a board of trustees made up of equal numbers of labor and management representatives. ECF
No, 36-16 at 1-2.

Employees at Defendants’ nursing and rehabilitation centers are represented by Service
Employees International Union Local 1199 United Healthcare Workers East (“Local 1199”). ECF
No. 36-16 at 3. In October 2008, Defendants entered into collective bargaining agreements
(“CBAs”) with Local 1199 that established the terms and conditions of employment for various
covered classifications of employees. ECF No. 36-16 at 3-6; ECF Nos. 36-1 through 36-6. These
CBAs were initially effective from the time that Local 1199’s members ratified the agreements
through September 30, 2010. Id.

Under the terms of the CBAs, Defendants agreed to become and remain participating em-
ployers in the Fund “throughout the term of th[e] Agreement[s], including any extensions thereof.”
ECF Nos. 36-1 through 36-6 at § 26.2. Defendants agreed to make contributions on behalf of each
covered employee based on the number of hours each employee worked. Jd. at § 26.3. The CBAs
also required each employer to submit a remittance report, including information such as the em-
ployees’ names and dates and hours of employment, along with its contributions each month. ECF
No. 36-16 at 6-7; ECF Nos. 36-1 through 36-5, 36-6 at J 26.3(c); ECF No. 36-15 at 6. As noted
above, Defendants do not dispute that between January 1, 2009 and December 31, 2010, they
underreported and underpaid their contributions to the Fund.

2. The Fund’s Trust Agreement and Amendment Three

Central to the parties’ dispute is whether Plaintiffs’ claims are governed by the statute of
limitations period contained in the parties’ agreement. The CBAs between Defendants and Local
1199 provide that each employer “‘agrees to be bound by the provisions of the [Trust Agreement],

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.” ECF Nos. 36-1-36-6 at J 26.4. The
Trust Agreement, in turn, explains that the Fund’s trustees are empowered “to establish such pro-
cedures, rules and regulations .. . as shall be necessary to carry out the operation of the Plan and
effectuate the purpose thereof.” ECF No. 36-7 at 6; ECF No. 36-16 at 7. On November 12, 2013,
the Fund’s trustees adopted Amendment Three to the Trust Agreement, which provides:

In any action by the Trust to collect delinquent contributions from contributing em-

ployers to the Trust, the limitations period for such action shall be governed by the

law of the state in which all or the majority of the employees on whose behalf the

contributing employer makes contributions work, unless such limitations period is

less than three years, in which case the limitation period under the law of the Dis-

trict of Columbia shall govern.
ECF No. 39-1 at 17. The District of Columbia has a three-year limitations period for contract
claims. D.C. Code § 12-301(7). The employees covered by the CBAs all worked at facilities in
the State of Florida (ECF No. 36-16 at 2-3; ECF No. 37-1 at 2-3), which has a five-year statute
of limitations applicable to contract claims, Fla. Stat. § 95.11(2)(b).

3. Plaintiffs’ Discovery of Defendants’ Delinquencies

Plaintiffs filed suit on June 21, 2017, seeking to recoup from Defendants delinquent pen-
sion contributions from January 1, 2009, to December 31, 2010, associated interest, penalties, and
fees. ECF No. 1. Plaintiffs contend that their claims did not accrue until they completed an audit
of Defendants’ 2009-2010 payroll records on January 30, 2015. ECF No. 40 at 11. By contrast,
Defendants argue Plaintiffs’ claims accrued much earlier when Plaintiffs became aware of infor-
mation that Defendants contend would have led a reasonably prudent pension fund to initiate an
audit that would have revealed the 2009-2010 delinquencies. ECF No. 37-2 at 23-26. Specifi-
cally, Defendants contend that the claims accrued in January 2013, when Plaintiffs filed an action

against Defendants for unpaid contributions to the Fund or, at the latest, in August 2013, when a

whistle-blower informed the Fund that Defendants had underreported their employees’ hours. Jd.
As background for the Court’s consideration of these issues, summarized below are the Fund’s
audit procedures, as well as the circumstances that led to the discovery of the delinquencies at
issue.

a. The Fund’s Audit Procedures

Employers participating in the Fund self-report the number of hours worked by covered
employees each month and remit contributions consistent with those calculations. ECF No. 36-16
at 13. Because this system relies on data self-reported by participating employers, the Trust Agree-
ment authorizes the Fund to conduct periodic random audits of employers’ payroll data to ensure
the hours employers have reported are accurate. Jd. at 13-14; ECF Nos. 36-7 at 5, 36-8 at 6-9.
Using a lottery system keyed to the record number the Fund has assigned to each employer, the
Fund “endeavors to audit about one third of participating employers every year” so that “every
employer is usually audited once every three years or so.” ECF No. 36-16 at 14.

Typically, the Fund’s audits review two to three years of employer records, comparing the
employers’ payroll information in tax and unemployment documents with the payroll! information
the employer remitted to the Fund. ECF No. 36-15 at 13-14. Where an audit reveals an under-
payment, the Fund sends the employer a billing letter assessing the amount of the underpayment
as well as interest, liquidated damages, and a testing fee that charges the employer for the cost of
the audit. /d. at 15-16. When an employer fails to pay after receiving a billing letter, the Fund
initiates litigation. Jd.

b. The Fund’s 2009 Employer Audit
, In 2009, the Fund randomly selected for a payroll review the employer record number
assigned to Defendants, but that number was also assigned to another participating employer based

on the Fund’s erroneous understanding that the other employer was related to and jointly-operated
by Defendants. ECF No. 36-16 at 16. When the Fund’s auditor arrived and learned that the em-
ployers were not related or jointly-operated, he audited only the other employer and did not audit
Defendants in 2009. Jd. at 16-17. Plaintiffs then assigned the other employer a new record number
so that the issue would not recur. /d. at 17.

C, The Fund’s 2013 Lawsuit Against Defendants

In January 2013, Plaintiffs filed suit against Defendants in the U.S. District Court for the
Southern District of Florida seeking to recover delinquent contributions that Defendants’ monthly
remittance reports allegedly had revealed for the years 2008-2012. ECF No. 37-1 at 17; ECF No.
40 at 15-16; see also Serv. Emps. Int’l Union Nat'l Indus. Pension Fund v. Hebrew Homes Health
Network, Inc., Civ. Action No. 13-cv-20175-JEM (S.D. FI. Jan. 16, 2013). Plaintiffs explain that
Defendants accrued the delinquency at issue “by failing to pay the full amount due as stated in
[their] own reports submitted during the 2008-2012 period.” ECF No. 40 at 16. Plaintiffs suggest
that this sort of arrearage differs from amounts due under an audit, which “represent the difference
in what was reported to the Fund and what was actually worked by covered employees.” Jd.

The parties settled that case in March 2013, but the Fund reserved the right “to pursue any
amounts that the Fund may be entitled to recover as a result of an audit conducted in accordance
with the Fund’s Trust Agreement and Statement of Policy for the Collection of Delinquent Con-
tributions” for the period of November 2003 through December 2012. ECF No. 37-1 at 18; ECF
No. 37-11 at 55,

d. Michael Alexander’s Letter and Meeting with Local 1199

Following the settlement, on August 12, 2013, the Fund received a letter from Michael

Alexander, a former administrator for Defendants, alleging that Defendants had “for close to 10
years” underreported covered employees’ hours and consequently underpaid Defendants’ contri-
butions to the Fund.* ECF No. 36-16 at 17; ECF No. 37-1 at 19-20; ECF No. 41 at 18-19. Based
on the issues raised in Mr. Alexander’s letter, the Fund decided to conduct an audit of Defendants’
payroll records from January 1, 2011, through August 2013. ECF No. 36-16 at 17; ECF No. 37-1
at 19; ECF No. 42 at 4. The Fund selected this timeframe because its usual practice is to examine
two to three years of employer records during an audit.> ECF No. 36-16 at 13, 17. In late August
2013, Local 1199 officials received from Mr. Alexander (1) a copy of Defendant Aventura Plaza’s
remittance report for June 2013 which listed only 36 covered employees and (2) a full roster of the
112 covered employees working at that facility. ECF No. 36-16 at 18; ECF No. 37-1 at 20-21.
Local 1199 then sent the materials it received from Mr. Alexander to the Fund along with a com-
parison of the June 2013 remittance report with a list of bargaining unit employees that the union
received from Aventura Plaza in March 2013. Jd.; ECF No. 38-2 at 52, 54, 56.
e. The Fund’s Audit of Defendants’ 2011-2013 Records

In late October 2013 the Fund conducted an on-site audit of Defendants’ 2011-2013 pay-
roll records according to its normal procedures, comparing the employers’ payroll information in
tax and unemployment documents with the payroll information Defendants had remitted to the
Fund. ECF No. 36-16 at 14-15, 19; ECF No. 37-1 at 22-23. The audit revealed that Defendants
had significantly underreported covered employees’ hours and consequently substantially under-
paid the contributions due during the 2011-2013 period. ECF No. 36-16 at 18-19. The Fund

notified Plaintiffs of the audit’s findings and requested payment for the amounts it had calculated

 

4 Although Defendants apparently attempted to include a copy of Mr. Alexander’s letter as Exhibit 4 to Andre Joseph’s
deposition, no such exhibit appears in the documents they have submitted. See ECF No. 37-1 at 19. Nevertheless,
Plaintiffs do not dispute the accuracy of Defendants’ quotes from the letter. See ECF No. 46 at 6.

> Defendants dispute whether, in light of the information available to it, the Fund should have followed this practice,
but they do not dispute that auditing two to three years of records is the Fund’s usual practice or that following that
practice was the Fund’s rationale in selecting the window of records to audit. ECF No. 42 at 4.

i
Defendants to owe. ECF No. 36-16 at 19; ECF No. 37-1 at 23. Between April and July 2014, the
parties negotiated a settlement of the amounts owed under the 2011-2013 audit. ECF No. 36-16
at 19; ECF No. 37-1 at 24. Asa result, those amounts are not at issue in this case.
f. The Fund’s Audit of Defendants’ 2009-2011 Records
Because the 2011-2013 audit revealed significant underreporting, the Fund decided to au-
dit Defendants’ payroll records from 2006-2010. ECF No. 36-16 at 19. Defendants evidently had
some difficulty obtaining their payroll records for years before 2009, but they provided the Fund
with payroll records for 2009 and 2010. ECF No. 36-16 at 19-20; ECF No. 37-1 at 24; ECF No.
42 at 4. The Fund conducted a payroll audit of those records, which concluded on January 30,
2015. ECF No. 36-16 at 20. Like the prior audit, the 2009-2010 audit found that Defendants had
underpaid their contributions for that period because of the underreporting of employees’ hours.
Id; see also ECF No. 36-14 (comparing employee hours reported to hours due under the CBAs).
Based on the outcome of the 2009-2010 audit, the Fund sent billing letters to Defendants in May
2017, explaining the outcome of the audit and requesting payment for the unpaid contributions,
interest, liquidated damages, and testing fees. ECF No. 36-16 at 20; ECF No. 37-! at 25. When
those letters went unanswered, Plaintiffs initiated this action on June 21, 2017. Id; ECF No. |.
4, Agreement Terms Defining Employee Eligibility for Pension Contributions
Defendants do not dispute the accuracy of Plaintiffs’ damages calculations except to con-
tend that Plaintiffs have applied the incorrect criteria for determining which employees were eli-
gible for pension contributions between October 1, 2010, and December 31, 2010. This argument
turns on when the modified eligibility criteria found in appendices to the CBAs became effective

(“Pension Appendix” or “Pension Appendices”). Plaintiffs’ damages calculations apply these
modified eligibility criteria beginning on October 1, 2010, a date drawn from the Pension Appen-
dices themselves. Defendants contend that the modified eligibility criteria did not become effec-
tive until January 1, 2011, which they contend is the effective date of a memorandum of agreement
(“MOA”) Defendants executed with Local 1199. To place that issue in context, a summary of the
contested eligibility criteria, the Appendices, and the MOA follows.

The CBAs with Local 1199 required Defendants to make pension contributions on behalf
of full-time employees (defined as those that work at least 32 hours per week), and part-time em-
ployees on a pro-rated basis. ECF No. 36-1 through 36-6 at {§ 1.6, 26.3. Under the original terms
of the CBAs, “per diem employees,” defined as those “who have no regular schedule of work, but
report to work on an ‘on-call’ basis as replacement for regular full and part time employees,” were
not entitled to participate in the pension plan or other benefits. Jd. at 71.5.

The CBA for the Sinai Plaza Facility provided that the employer would make these contri-
butions for each covered employee who had worked at the facility for at least 90 days. ECF No.
36-5 at 10, 22. The CBAs for the other Defendants provided that the employer would make con-
tributions for all covered employees with at least one year of service. ECF Nos. 36-1—36-4, 36-6
at J 26.3.

Although the original term for each of the CBAs ended in October 2010, Defendants “‘con-
tinued to abide by the CBAs” thereafter. ECF No. 37-1 at 7. In the summer of 2011, Defendants
and Local 1199 engaged in negotiations regarding extending the CBAs and modifying the eligi-
bility criteria for employee pension contributions. Jd. at 7,9. Asa result of these negotiations,
Defendants and Local 1199 executed a Pension Appendix for each Defendant on November 15,
2011. Jd. at 9; ECF No. 36-9 at 2, 5, 8, 11, 14, 17. Apart from the name of each employer, the

Pension Appendices are materially identical for each Defendant.
In relevant part, the Appendices state that “[a]s of October 1, 2010, the Employer agrees
to contribute to the Fund... for all employees covered by the [CBA]” and provide that “[r]egular
full-time and regular part-time employees shall be covered after the completion of 90 days of em-
ployment” and that per diem employees are covered once they satisfy certain conditions. ECF No.
36-9 at 2, 5, 8, 11, 14, 17. Each Appendix also explains that “[i]n the event of any inconsistency
between this Appendix and the [CBAs], the terms of this Appendix shall prevail.” ECF No. 36-9
at 4, 7, 10, 13, 16, 19.

At roughly the same time, Defendants and Local 1199 also entered into the MOA, which
modified certain provisions in the CBAs, extended the CBAs’ terms through December 31, 2011,
and provided that they would continue in effect on a month-to-month basis beginning in January
2012.© ECF No. 37-1 at 7; ECF No, 36-10 at 2, The MOA reads, in pertinent part:

The parties agree to amend and extend the collective bargaining agreement[s] . . .
for [Defendants’ Facilities] as follows:

1. Term of Agreement: through December 31, 2011. As of January 1,
2012, the parties agree to extend the agreements on a month to month
basis during contract negotiations. Either party may terminate the ex-

tension by providing the other not less than ten (10) days notice of ter-
mination.

5. No change to pension contributions at each facility, except the employer
will begin contributions after 90 days of employment, as required by the
pension plan.

ECF No. 36-10 at 2. The MOA attached and incorporated by reference the Pension Appendices.

Id.

 

6 Defendants’ statement of material facts describes these negotiations as taking place in the summer of 2012, but the
MOA is dated November 15, 2011 (the employer signature block is dated January |, 2012, and the union signature
block is dated February 2, 2012), and emails from Local 1199’s assistant regional director regarding the negotiations
are dated August 18, 2011. ECF No. 38-2 at 15, 17. Accordingly, it would appear that Defendants’ references to
negotiations taking place in the summer of 2012 are the result of a scrivener’s error.

10
B. Procedural Background

Plaintiffs filed their original complaint in this case on June 21, 2017. ECF No, 1. In it,
they sought delinquent contributions due under the audit for the 2009-2010 period; other delin-
quent contributions for certain months between November 2013 and February 2017; interest, liq-
uidated damages, testing fees, attorney’s fees and costs; and declaratory and injunctive relief. ECF
No. | at 12-24. The parties settled the claims for delinquent contributions unrelated to the 2009-
2010 audit, and in February 2018, Plaintiffs filed a first amended complaint to narrow the issues
before the Court. ECF No. 19 at 2; ECF No. 20; ECF No. 36-16 at 20 nn.2—3. As a result of
discovery, the Fund revised its audit to correct certain errors in calculating the amounts due under
the audit. ECF No. 37-1 at 26-27. In July and August 2018, Plaintiffs filed their second and third
amended complaints to reflect the revised amounts due under the Fund’s post-discovery audit re-
visions. ECF No. 24; ECF No. 28; ECF No. 36-16 at 20-21 n.3; ECF No. 37-1 at 26-27. Plaintiffs
seek judgment against each defendant in the following amounts:

(1) $120,927.27 against Arch Plaza, Inc.;

(2) $106,832.58 against Hebrew Homes South, Inc.;

(3) $112,116.18 against Aventura Plaza, Inc.;

(4) $101,888.46 against Jackson Plaza, Inc.; and

(5) $240,218.59 against Hebrew Home Sinai, Inc.
These amounts include all delinquent contributions, testing fees, liquidated damages, and interest
calculated through July 21, 2018, the date of Plaintiffs’ last revision to their damages calculations.
Plaintiffs also seek an award of additional pre-judgment interest since that date accruing at a rate
of 10 percent per year and post-judgment interest.

The parties’ cross-motions for summary judgment are now ripe for adjudication. ECF Nos.

36-37,
Il. LEGAL STANDARD

Summary judgment is appropriate when the moving party demonstrates that there is no
genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter
of law. Fed. R. Civ. P. 56(a). “A fact is material if it ‘might affect the outcome of the suit under
the governing law,’ and a dispute about a material fact is genuine ‘if the evidence is such that a
reasonable jury could return a verdict for the non[-]moving party.’” Steele v. Schafer, 535 F.3d
689, 692 (D.C. Cir. 2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
In adjudicating such a motion, all reasonable inferences from the facts in the record must be made
in favor of the nonmoving party. Anderson, 477 U.S, at 255. To prevail on such a motion, the
moving party must show that there is no genuine issue of material fact. Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). To do this, it may cite the record, including “affidavits or declarations.”
Fed. R. Civ. P. 56(c)(1)(A). Factual assertions made in the moving party’s affidavits or declara-
tions may be accepted as true in the absence of contrary assertions made in affidavits, declarations,
or documentary evidence submitted by the nonmoving party. Neal v. Kelly, 963 F.2d 453, 456
(D.C. Cir. 1992),

For issues on which the nonmoving party would bear the ultimate burden of proof, a party
moving for summary judgment can carry its burden on the summary judgment motion by pointing
out “that there is an absence of evidence to support the nonmoving party’s case.” Celotex, 477
U.S, at 325. If the moving party carries its burden, the nonmoving party “must do more than
simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, it must show that a rational

trier of fact could find in its favor. Jd. Thus, “‘conclusory allegations’ and ‘unsubstantiated spec-

12
ulation,’ whether in the form of a plaintiff's own testimony or other evidence submitted by a plain-
tiff to oppose a summary judgment motion, ‘do not create genuine issues of material fact.’” Mokh-
tar v. Kerry, 83 F,. Supp. 3d 49, 61 (D.D.C. 2015) (quoting Bonieskie v. Mukasey, 540 F. Supp. 2d
190, 200 n.12 (D.D.C. 2008)), aff'd, No. 15-5137, 2015 WL 9309960 (D.C. Cir. Dec. 4, 2015).
Nor can a sufficiently supported motion for summary judgment be defeated by statements and
evidence that is “rendered unreasonable given other undisputed evidence in the record.” Jd. at 74;
see also Wadley v. Aspillaga, 209 F. Supp. 2d 119, 125 (D.D.C. 2002) (granting motion for sum-
mary judgment where “facts and arguments proffered by plaintiffs are immaterial, illogical, or
conclusory”).
III. DISCUSSION

Plaintiffs move for summary judgment as to liability, the amount of damages, and their
entitlement to equitable and declaratory relief. ECF No. 36 at 1. Defendants cross move for sum-
mary judgment on the issue of liability. Defendants do not generally contest that they underre-
ported and underpaid their contributions to the Fund for the 2009-2010 period. Rather, they argue
that Plaintiffs’ claims are untimely. ECF No. 37 at 1; ECF No. 37-2 at 6-7. They also argue that
they should be granted summary judgment as to liability for one of their facilities, South Pointe
Plaza, because that entity’s overpayments in fact exceeded its underpayments during the years in
question. ECF No. 37-2 at 15.

The Court should deny Defendants’ motion in full and grant Plaintiff’s motion in part. As
explained below, Plaintiffs’ claims were filed well within Florida’s five-year statute of limitations
that should be applied to this action. The undersigned also finds that Plaintiffs have used the
correct eligibility criteria for determining the amount of the delinquent contributions due from

Defendants, and therefore recommends granting Plaintiffs summary judgment as to their measure

13
of damages. That said, the Court should deny Plaintiffs’ claims for injunctive relief because they
have not demonstrated that such relief is appropriate in this case. Finally, the Court should deny
Defendants’ motion for summary judgment on the issue of South Pointe Plaza’s liability even
though Plaintiffs’ audit found the facility’s overpayments exceeded its underpayments during the
years in question.

A. Timeliness of Claims

In their motion, Plaintiffs argue that their delinquent contribution claims are timely because
Florida’s five-year statute of limitations for breach of contract actions applies, and, in the alterna-
tive, that their claims did not accrue until January 2015—two and one-half years before they filed
suit—when Plaintiffs completed their audit of Defendants’ 2009-2010 payroll records. ECF No.
36-17 at 17-20. Not surprisingly, Defendants disagree. They contend that the applicable limita-
tions period is the District of Columbia’s three-year statute of limitations for contract claims, and
that Plaintiffs claims accrued no later than August 22, 2013—nearly four years prior to the filing of
the original complaint—when Plaintiffs should have discovered the underpayments at issue had
they exercised due diligence. ECF No. 37-2 at 26. For the reasons that follow, the undersigned
recommends finding that Florida’s five-year statute of limitations applies, and that Plaintiffs’
claims are timely.

1. Which Statute of Limitations Applies

Although ERISA provides a statute of limitations for fiduciary claims, see 29 U.S.C. §
1113, it does not contain a statute of limitations for delinquent contribution claims like those at
issue in this case. See Connors v. Hallmark & Son Coal Co., 935 F.2d 336, 341 (D.C. Cir. 1991),
Courts hearing ERISA delinquent contribution claims in this district generally apply the District

of Columbia’s three-year statute of limitations for breach of contract actions because it is “the most

14
closely analogous statute of limitations from the state in which the court sits.” Connors, 935 F.2d
at 341; D.C. Code § 12-301(7); see also Kifafi v. Hilton Hotels Ret. Plan, 616 F. Supp. 2d 7, 36
(D.D.C. 2009), aff'd. 701 F.3d 718 (D.C. Cir. 2012) (“Because employee benefit plans are con-
tracts, courts in this jurisdiction have borrowed the statute of limitations provision for breach of
contract actions in the District of Columbia.”). Defendants seek application of that rule to Plain-
tiffs’ claims. ECF No. 37-2 at 17; ECF No. 41 at 5-9. However, the D.C. Circuit has recognized
that “in the absence of a controlling statute to the contrary, the parties to a... . potential law-
suit may, by agreement, modify a statutory period of limitation.” Hunter-Boykin v. George Wash-
ington Univ., 132 F.3d 77, 79 (D.C. Cir. 1998) (emphasis omitted) (quoting 54 C.J.S. Limitations
of Actions § 25). That is what happened here. Properly read, the parties’ agreement directs that
Florida’s five-year statute of limitations should be applied to actions like this one seeking to collect
delinquent contributions for the benefit of employees, the majority of which worked in Florida.
Given that contractual language and ERISA’s lack of a limitations period for delinquent contribu-
tion claims, Florida’s five-year statute of limitations should be used to evaluate the timeliness of
Plaintiffs’ action.

Under the CBAs, the parties agreed “to be bound by the provisions of the [Trust Agree-
ment] 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.” ECF
Nos. 36-1 through 36-6 at § 26.4. Amendment Three to the Trust Agreement, in turn, provides:

In any action by the Trust to collect delinquent contributions from contributing em-

ployers to the Trust, the limitations period for such action shall be governed by the

law of the state in which all or the majority of the employees on whose behalf the

contributing cmploycr makes contributions work, unless such limitations period is

less than three years, in which case the limitation period under the Jaw of the Dis-
trict of Columbia shall govern.

15
ECF No. 39-1 at 17 (emphasis added). Application of Amendment Three to the facts of this case
establishes Florida’s five-year limitations period as the operative statute of limitations. Plaintiffs’
complaint is an “action” by the Fund to “collect delinquent contributions from contributing em-
ployers to the Trust,” thus triggering the amendment. It is undisputed that “the majority of the
employees on whose behalf [Defendants] make contributions” work in Florida. ECF No. 36-16 at
2-3; ECF No. 37-1 at 2-4. As between Florida’s different statutory limitations periods, there is
also no dispute that it is Florida’s five-year limitations period for breach of contract actions that
would be applicable to an ERISA claim seeking delinquent contributions under a CBA. See Kifafi,
616 F. Supp. 2d at 36 (applying state’s breach of contract statute of limitation to ERISA delinquent
contribution claim); Connors, 935 F.2d at 341 (same); Fla. Stat. § 95.11(2)(b) (establishing a five-
year statute of limitations for contract claims); see also ECF No. 37-2 at 17 (arguing that a statute
of limitations for breach of contract claims should apply); ECF No. 41 at 7 (same). Thus, under
the amendment, it is that five-year limitations period that should be applied here.

Defendants do not dispute any of this. That is, they do not dispute how the amendment
would operate were it applicable to Plaintiffs’ action. Nor do they dispute that the amendment ts
valid or enforceable against them. They do not argue, for example, that they are not bound by the
amendment through their CBAs, because adoption of the amendment was a unilateral act of the
Trustees amending the Trust Agreement.’ ECF No. 48 at 7 (‘As the Pension Fund notes in its
Opposition, Defendants did not challenge the Trust Amendment No. 3... The Plaza Facilities
only dispute the Pension Fund’s misguided attempt for retroactive application of the Amendment.

....”), Rather, Defendants contend that the amendment’s designation of a limitations period for

 

7 Nor would such an argument be persuasive. Defendants agreed, through their CBAs, “to be bound by the provisions
of the [Trust Agreement] 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.” ECF Nos. 36-1 through
36-6 at J 26.4.

16
delinquent contribution actions applies only to claims that accrued after November 12, 2013, the
effective date of the amendment’s adoption by the Trustees. ECF No. 41 at 8-9. According to
Defendants, claims accruing prior to that date should be subject to D.C.’s three-year statute of
limitations. Jd.

But that is not what Amendment Three says. Its language does not limit its application to
claims accruing after the amendment’s adoption. Indeed, it makes no reference to claims or their
accrual, whatsoever. Again, the limitations period prescribed in the amendment operates “in any
action by the Trust to collect delinquent contributions from contributing employers to the Trust.”
ECF No. 39-1 at 17 (emphasis added). Its language is thus focused on actions without reference
to when the claims on which a given action is based accrued. Compare Action, Black's Law Dic-
tionary (11th ed. 2019) (“A civil or criminal judicial proceeding.”) with Claim, Black's Law Dic-
tionary (11th ed. 2019) (“An interest or remedy recognized at law; the means by which a person
can obtain a privilege, possession, or enjoyment of a right or thing; Cause of Action.”); cf RSM
Prod. Corp. v. Freshfields Bruckhaus Deringer U.S. LLP, 800 F. Supp. 2d 182, 190 (D.D.C.
2011), aff'd, 682 F.3d 1043 (D.C. Cir. 2012) (discussing the doctrine of res judicata and distin-
guishing between claims and actions). Moreover, “[rJead naturally, the word ‘any’ has an expan-
sive meaning, that is, ‘one or some indiscriminately of whatever kind.” Norfolk S. Railway Co.
v. Kirby, 534 U.S. 14, 31 (2004) (quoting United States v. Gonzales, 520 U.S. 1, 5 (1997)). This
case being such an action, application of the amendment’s language is straightforward.

Defendants respond by focusing not on the amendment’s language—there being little for
them to gain there—but on the perceived “retroactivity” that the amendment imposes. Defendants
object to delinquent contribution claims that may have otherwise been deemed extinguished under

D.C.’s three-year statute of limitations, living on through application of the Amendment Three’s

17
choice of Florida’s five-year limitations period. Of course, that is the very nature of contractual
provisions choosing between competing statutes of limitations: some claims that would otherwise
be barred may be allowed by the parties’ agreement.’ Nevertheless, Defendants assert that the
“enlargement of a statute of limitations,” which it contends Amendment Three accomplished, may
not operate retroactively as it would violate the “well settled ‘presumption against retroactive leg-
islation.’” ECF No. 48 at 9 (quoting Casey v. Ward, 67 F. Supp. 3d 54, 57 (D.D.C. 2015)). This
argument is inapt. To state the obvious, the presumption against retroactive legislation is an inter-
pretive doctrine that applies to legislation, not private contracts. See, e.g., Landgrafv. USI Film
Prod., 511 U.S. 244, 280 (1994) (“If [a] statute would operate retroactively, our traditional pre-

sumption teaches that it does not govern absent clear congressional intent favoring such a result.”

 

8 There is a hint of sour grapes in Defendants’ argument. But while Amendment Three’s rule for selecting the limita-
tions periods might work to the Fund’s benefit in this case, it is not unfair, much less unreasonable. Cf Milanovich v.
Costa Crociere, S.p.A., 954 F.2d 763, 768 (D.C. Cir. 1992) (“[C]ourts should honor a contractual choice-of-law pro-
vision . . . unless the party challenging the enforcement of the provision can establish that ‘enforcement would be
unreasonable and unjust,’ ‘the clause was invalid for such reasons as fraud or overreaching,’ or ‘enforcement would
contravene a strong public policy of the forum in which suit is brought.’” (quoting M/S Bremen v. Zapata Off-Shore
Co., 407 U.S. 1, 15 (1972))). Amendment Three’s rule for selecting limitations periods is at least as reasonable as the
borrowing rule in Connors. See Connors, 935 F.2d at 341. Given the many venue options available to a pension fund
bringing an action under ERISA, see 29 U.S.C. § 1132(e)(2) (permitting ERISA actions to be brought either “in the
district where the plan is administered, where the breach took place, or where a defendant resides or may be found.”),
the borrowing rule could subject a putative defendant to a variety of different statutes of limitations. Compare Robbins
v. lowa Rd. Builders Co., 828 F.2d 1348, 1355 (8th Cir. 1987) (borrowing lowa’s ten-year statute of limitations for
written contracts), with Pierce Cty. Hotel Employees & Rest. Employees Health Tr. v. Elks Lodge, B.P.O.E. No. 1450,
827 F.2d 1324, 1328 (9th Cir. 1987) (borrowing Washington State’s six-year statute of limitations for breach of con-
tract claims). By contrast, Amendment Three narrows those options to one. Regardless of where the Fund brings its
action, the limitations period that applies will either be that of the state where a majority of the defendant’s pension-
eligible employees work or the District of Columbia’s three-year limitations period, whichever is longer. See ECF
No. 39-1 at 17. That calculus may work to the Fund’s advantage in some cases but not in others. For example, in an
action filed in a forum with a longer statute of limitations than that provided by the state where a majority of the
defendant’s employees work, Amendment Three would lead to a limitations period shorter than that which would be
produced through application of the borrowing rule. Amendment Three is, therefore, something of a ‘win some, lose
some” proposition for the parties. While that result may seem random, because it focuses on where the putative
defendant’s employees work, application of Amendment Three is at least as predictable as the Connors rule, which
leaves defendants to guess which forum state’s limitations period for breach of contract might apply to the Fund’s
claims. There are 1,082 employers participating in the Fund, ECF No. 36-16 at 14, and it appears reasonable for the
Trustees to have adopted a rule that increases predictability for those employers without systematically advantaging
the Fund. In any event, it would be difficult to argue—and Defendants make no attempt to do so—that Amendment
Three’s choice of the contract limitations period of the state where the majority of the employees whose pensions are
at stake work, is unreasonable. Indeed, it appears from the amended complaint that Defendants are Florida corpora-

tions doing business in Florida. ECF No. 28 at 3-6. They can hardly be heard to complain, then, that application of
their home forum’s law is unfair,

18
(emphasis added)). It is motivated by concerns about the reach of state power, and fair process
due the governed, that are raised by, and unique to, the legislative context. Jd. at 286 (“The pre-
sumption against statutory retroactivity is founded upon sound considerations of general policy
and practice and accords with long held and widely shared expectations about the usual operation
of legislation.”). No such presumption is applicable to private contracts, To the contrary, retroac-
tive provisions are not unusual in contracts and courts give them full force and effect, even in
collective bargaining agreements. See, e.g., Spectrum Health-Kent Cmty. Campus v. N.L.R.B.,
647 F.3d 341, 346 (D.C. Cir. 2011) (discussing CBA provisions, including changes to retirement
and health plans, had retroactive effect preceding the effective date of the agreement); Winery,
Distillery & Allied Workers Union, Local 186 v. E & J Gallo Winery, Inc., 857 F.2d 1353, 1357-
58 (9th Cir. 1988) (giving retroactive effect to CBA provisions such that they applied to the interim
period between the previous contract’s expiration and the new one’s execution).

Perhaps Defendants’ retroactivity argument would be more persuasive had this action been
filed prior to the effective date of the Amendment Three’s adoption. But that is not what happened
here. Plaintiffs’ complaint was filed over three years after the Trustees adopted the amendment.
Because Plaintiffs’ amended complaint is an “action by the Trust to collect delinquent contribu-
tions from contributing employers to the Trust [Defendants]” (ECF No. 39-1 at 17) filed after the
Trustees adopted Amendment Three, the plain language of the parties’ agreement directs that Flor-
ida’s five-year statute of limitations should be applied.

Defendants’ other argument seeking to avoid this result fails. They contend that Yolanda
Montgomery, a Deputy Director and Associate Counsel at the Fund, admitted in her deposition

that Amendment Three “only operates prospectively.” ECF No. 48 at 9. This argument is unper-

19
suasive for two reasons. First, it attempts to use parol evidence to contradict the parties’ unam-
biguous writing as to the amendment’s applicability and operation in this action. See Common-
wealth Commce’ns, Inc. v. N.L.R.B., 312 F.3d 465, 468 (D.C. Cir. 2002) (“In the absence of ambi-
guity in the collective bargaining agreement [] [courts] have no cause to examine extrinsic evi-
dence of the parties’ intent.” (quoting 4m. Postal Workers Union, AFL-CIO v. U.S. Postal Serv.,
940 F.2d 704, 708 (D.C. Cir. 1991))); see also Musto v. Am. Gen. Corp., 861 F.2d 897, 910 (6th
Cir. 1988) (holding that “the clear terms of a written employee benefit plan may not be modified
or superseded by oral undertakings on the part of the employer” and collecting cases); Cent. States,
Se. & Sw. Areas Pension Fund v. Gerber Truck Serv., Inc., 870 F.2d 1148, 1151-56 (7th Cir. 1989)
(Easterbrook, J.) (discussing the hazards of permitting extrinsic evidence to contradict pension
agreements and observing that ERISA section 515 “prevents a court from giving force to oral

understandings . . . that contradict the writings.”).

In any event, the deposition passage, reproduced below, contains no admission that the
amendment applies only to claims which accrue after the effective date of the its adoption:

Q This, again, trust agreement by virtue of your prior statements automatically
goes into effect and thereby binds contributing employers after it has been
approved by the Board of Trustees.

A Yes.

Q Again, the reason that this affects or impacts contributing employers is
based on their agreement as set forth in their collective bargaining agree-
ments with individual! local unions to comply with the terms of the trust
agreement. Is that your understanding?

A Can you repeat that again?

Q So, in other words, this Amendment Number 3 or modification to the trust
agreement has been approved by the board of directors as you have testified.

So my question is, based on your prior testimony, once the board of direc-

tors, Board of Trustees has modified the trust agreement, automatically all
of the contributing employers are bound by the terms of that modification

20
to the trust agreement by virtue of their agreement in collective bargaining
agreements to comply with the trust agreement. Is that correct?

A Correct.

ECF No. 38-3 at 9. That confusing back-and-forth between Defendants’ counsel and the witness
provides no support for their argument seeking to avoid application of Amendment Three. Ms.
Montgomery does not state that the amendment was intended to be applicable only to claims ac-
cruing after its effective date. In context, her responses were not directed to the operation of the
amendment at all, but to the process by which it was incorporated into the Trust Agreement and,
by extension, the CBA. That is, Ms. Montgomery testified that the amendment applies to all par-
ticipating employers by operation of law upon its ratification by the Trustees. That is not, as De-
fendants claim, an admission that the amendment applies only prospectively to claims accruing
after its effective date. Indeed, that testimony could easily be read to support the position that,
once Amendment Three was approved only later-filed actions would be governed by its terms.
After all, Ms. Montgomery agrees that the modification “automatically” binds “all of the contrib-
uting employers.” Id.

In light of the amendment’s plain language the relevant rule is the one noted above: “[I]n
the absence of a controlling statute to the contrary, the parties to a... potential lawsuit may, by
agreement, modify a statutory period of limitation.” Hunter-Boykin, 132 F.3d at 79 (emphasis
omitted) (quoting 54 C.J.S. Limitations of Actions § 25); see also Milanovich, 954 F.2d at 768
(“{C]ourts should honor a contractual choice-of-law provision . . . unless the party challenging the
enforcement of the provision can establish that ‘enforcement would be unreasonable and unjust,’
‘the clause was invalid for such reasons as fraud or overreaching,’ or ‘enforcement would contra-
vene a strong public policy of the forum in which suit is brought.’” (quoting M/S Bremen, 407 U.S.

at 15)). Here, no statute prohibits the parties from agreeing to modify the limitations period that

21
may otherwise apply to this case. As noted previously, ERISA does not specify any particular
statute of limitations for nonfiduciary claims. See Connors, 935 F.2d at 341. Where, as here, there
has been no showing that application of their agreement’s contractual limitations period would be
unreasonable or contrary to federal policy, the parties’ agreement should control. See Wang Labs.,
Inc. vy. Kagan, 990 F.2d 1126, 1128-29 (9th Cir. 1993) (“In an ERISA case, we ordinarily borrow
the forum state’s statute of limitations so long as application of the state statute’s time period would
not impede effectuation of federal policy .... [However,] [w]here a choice of law is made by an
ERISA contract, it should be followed, if not unreasonable or fundamentally unfair.”); Young v.
Verizon's Bell Atl. Cash Balance Plan, 615 F.3d 808, 816 (7th Cir. 2010) (applying Pennsylvania’s
statute of limitations to ERISA nonfiduciary claims brought in Illinois based on the parties’ agree-
ment and a contractual choice of law provision).
2. Accrual of Claims

The parties devote considerable effort to arguing about when Plaintiffs’ claims accrued for
purposes of assessing their timeliness. See ECF No. 36-17 at 19-20; ECF No. 37-2 at 19-26; ECF
No. 40 at 8-24; ECF No. 41 at 9-25; ECF No. 47 at 8-12; ECF No. 48 at 9-20. As explained
below, application of Florida’s five-year statute of limitations avoids the major points of conten-
tion that application of D.C.’s three-year statute of limitations would otherwise raise.

The D.C. Circuit made clear in Connors that courts should use the “discovery rule” to
determine the date of accrual of ERISA delinquent contribution claims. See Connors, 935 F.2d at
343, Under that rule, contribution claims accrue when the plaintiff knew or should have discovered
the employer’s underpayments. Jd. at 342-43. Application of the discovery rule is necessary in
this context because the failure to make contributions is “likely to be a hidden injury” that is “ac-

cessible in the first instance only to the [employers].” Jd. at 342. Despite employers’ duty to make

22
regular reports, “the [fund] Trustees remain dependent upon the [employers’] honesty and accu-
racy: the records with which the Trustees might verify the accuracy of the [employers’] report-
ing—as well as the accuracy of their contributions—both originate and stay with the [employers].”
Id. at 342-43. The question that courts must answer, then, is when a pension fund “discovered,
or with due diligence should have discovered, the injury.” Id. at 342.

Here, Plaintiffs filed their original complaint in June 2017.2 ECF No. 1. Under Florida’s
five-year statute of limitations, their claims are therefore timely as long as they accrued, through
operation of the discovery rule, after June 2012. Every event that Defendants argue put or should
have put Plaintiffs on notice of the 2009-2010 delinquencies occurred after June 2012, including:
(a) January 2013, when Plaintiffs filed their lawsuit in Florida; (b) March 2013, when they settled
that lawsuit; (c) August 2013, when the Fund received Michael Alexander’s report regarding cer-
tain delinquencies by Defendants and a list of their current employees; or (d) October 2013, when
the Fund’s auditors received employee lists from Defendants’ human resources director.'° ECF
No. 37-2 at 26; ECF No. 41 at 16.

The only significant event discussed in Defendants’ briefs that occurred before June 2012
is Plaintiffs’ failure to exercise their right to audit Defendants in 2009. Yet even Defendants do

not suggest that that failure caused Plaintiffs’ claims to accrue. ECF No. 41 at 17. Defendants

 

° Defendants do not contest that Plaintiffs’ third amended complaint relates back to June 21, 2017, the filing date of
the original complaint, because the successive amended complaints either withdrew claims included in the original
complaint or merely revised Plaintiffs’ damages calculations. See Fed. R. Civ. P. 15(c)(1) (‘An amendment to a
pleading relates back to the date of the original pleading when .. . the amendment asserts a claim or defense that arose
out of the conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading.”); cf
United States v. Hicks, 283 F.3d 380, 388 (D.C. Cir. 2002) (“[W]hile amendments that expand upon or clarify facts
previously alleged will typically relate back, those that significantly alter the nature of a proceeding by injecting new
and unanticipated claims are treated far more cautiously.”); see also ECF No. 36-16 at 20-21 & nn. 2-3 (explaining

that Plaintiffs’ amended complaints withdrew certain claims that settled and corrected Plaintiffs’ damages calculations
based on revisions to the audit).

10 For their part, Plaintiffs argue that their claims did not accrue until they completed their audit of Defendants’ payroll
records in January 2015 and discovered their underpayment of contributions in 2009-2010. ECF No. 47 at 5.

23
argue that it put Plaintiffs on notice that they had not yet audited Defendants, but not that it alone
put them on notice of the claims in this case. See id. at 16, 21-23 (explaining that the failure to
perform the 2009 audit was “information known [to Plaintiffs] as of August 22, 2013,” and arguing
that “[b]ased on all of the information received [] as of August 22, 2013, the Pension Fund failed
to exercise due diligence’).

In any event, the Connors court rejected the argument that a failure to exercise a right to
audit is alone sufficient to trigger accrual of a delinquent contribution claim. Connors, 935 F.2d
at 343. Indeed, one of the reasons the court of appeals adopted the discovery rule for such claims
is because “[a]uditing ... even if pursued with the utmost diligence,” cannot ensure compliance.
Id.; see also Sheet Metal Workers, Local 19 v. 2300 Grp., Inc., 949 F.2d 1274, 1282 (3d Cir. 1991)
(rejecting an employer’s argument that a pension fund’s “failure to exercise their right to audit
demonstrates a lack of reasonable diligence”). Accordingly, because the earliest accrual date De-
fendants have proposed for Plaintiffs claims is January 2013—a date well-within Florida’s five-
year limitations period—the Court should grant Plaintiffs summary judgment as to liability and

deny the Defendants’ cross motion for summary judgment on that issue.

 

11 Should the Court find that the District of Columbia’s three-year limitations period applies, the undersigned recom-
mends denying the parties’ cross-motions for summary judgment on that issue because a material dispute exists be-
tween the parties concerning whether the information available to the Plaintiffs as of June 2014—three years before
filing suit—was sufficient to trigger accrual of the 2009-2010 delinquent contribution claims. See ECF No. 37-2 at
26 (arguing that “depending on the level of due diligence necessary” Plaintiffs’ claims accrued sometime between
January 2013 and October 2013); ECF No. 47 at 8 (arguing that Plaintiffs “could not have known about the Defend-
ants’ delinquencies at issue in this case until [they] reviewed Defendants’ payroll records” in January 2015); see also
Firestone v. Firestone, 76 F.3d 1205, 1210 (D.C. Cir. 1996) (“Summary judgment is not appropriate in a case applying
the discovery rule if there is a genuine issue of material fact as to when, through the exercise of due diligence, the
plaintiff knew or should have known of her injury.” (quoting Byers v. Burleson, 713 F.2d 856, 861 (D.C. Cir. 1983)));
cf. U.S. ex rel. Miller v. Bill Harbert Int'l Const., 505 F. Supp. 2d 1, 12-18 (D.D.C. 2007) (finding after conducting
an evidentiary hearing that government attorneys failed to exercise due diligence for purposes of the discovery rule).

24
B. Damages

As for damages, Plaintiffs contend that Defendants owe them $847,290.62 for delinquent
contributions from the 2009-2010 period, Pension Protection Act surcharges and supplemental
contributions, interest, liquidated damages, and audit fees. ECF No. 36-16 at 23; ECF No. 36-17
at 11-15. Plaintiffs support their damages calculations with an affidavit from Andre Joseph, the
Fund’s Payroll Review Manager, who describes the methodology used for assessing unpaid con-
tributions, interest, and liquidated damages resulting from the audit of Defendants’ 2009-2010
payroll records. ECF No. 36-16 at 19-20; ECF No. 36-15 at 14-16, 19-20. During the audit,
Plaintiffs reviewed Defendants’ remittance reports and compared them with Defendants’ tax, un-
employment, and payroll records to verify that Defendants did not exclude any eligible employees
and that Defendants accurately reported their hours worked and salaries. ECF No. 36-15 at 14—
15. When the audit revealed that Defendants had underreported covered employees’ hours, the
Fund determined the extent of the delinquent contributions and assessed interest and liquidated
damages. Id.

Based on that audit, Plaintiffs have summarized their findings in spreadsheets detailing the
amounts that Defendants were obligated to contribute each month on behalf of each covered em-
ployee, the amounts Defendants actually paid, and a resulting calculation of the amounts of under-
or over-payment. See ECF No. 36-16 at 21-23; ECF No. 36-15 at 19-23; see also, generally, ECF
No. 36-14. Based on these calculations, Plaintiffs determined Defendants’ liability for liquidated
damages, testing fees, other surcharges and supplemental contributions, and interest through July

21,2018. Jd. at 2-3. Plaintiffs’ damages calculations with respect to each Defendant are summa-

rized in the table below:

25
 

 

 

 

 

 

 

 

 

 

le Koay Aventura Jackson
Arch Plaza | Homes South Plaza Eva) Sinai Plaza
Delinquent
Contributions $42,923.81 $37,557.61 $39,615.60 $95,325.17 $85,263.52 | $300,685.71
Interest through
7/21/2018 $37,530.37 $33,458.74 $34,382.49 $82,902.05 $74,036.16 | $262,309.81
Liquidated Damages $37,530.37 $33,458.74 $34,382.49 $82,902.05 $74,036.16 | $262,309.81
Testing Fee $944.80 $944.80 $944.80 $413.35 $944.80 $4,192.55
Overpayment ($570.83) ($349.09) - - - ($919.92)
Rehabilitation Plan Sup-
plemental Contributions $509.66 $230.38 $914.10 $1,569.69 $1,412.00 $4,635.83
PPA Surcharges $2,059.09 $1,531.40 $1,876.70 $4,993.60 $4,525.95 $14,986.74
TOTAL $120,927.27 | $106,832.58 | $112,116.18 | $268,105.91 | $240,218.59 | $848,200.53

 

 

 

 

 

 

ECF No. 36-17 at 11-13; ECF No. 36-14 at 2-3; ECF No. 36-18 at 1-2.

Defendants do not dispute that they underpaid the Fund during the 2009-2010 time period.

 

Nor do they dispute Plaintiffs’ damages calculations, except to argue that they rely on erroneous
employee eligibility criteria during a three month period at the end of 2010. See ECF No. 42 at 5,
As explained below, the undersigned recommends finding that Plaintiffs have applied the correct
eligibility criteria. Accordingly, because Defendants have not demonstrated that there are any
material facts in dispute as to the calculation of damages, the undersigned recommends granting
summary judgment for Plaintiffs on that issue as well.
1. Employee Eligibility Criteria

The parties’ arguments concerning the calculation of damages center on Plaintiffs’ treat-
ment of Defendants’ obligation to make pension contributions for regular and per diem employees
during the period between October 1, 2010 and December 31, 2010. Under the original terms of
the CBAs, Defendants were obligated to make pension contributions only on behalf of regular
employees who had worked for at least 90 days at the Sinai Plaza Facility (ECF No. 36-5 at 10,

22), or one year at Defendants’ other facilities (ECF Nos. 36-1 through 36-4, 36-6 at { 26.3).

26
Defendants were not obligated to make any pension contributions on behalf of per diem employ-
ees.!* ECF Nos. 36-1 through 36-6 at J 1.5. The Pension Appendix applicable to each Defendant,
however, loosened those eligibility criteria. Under the Appendices, Defendants were obligated to
make pension contributions for all regular employees at any facility after 90 days of employment,
and for per diem employees after 1,000 hours in their first year of employment or in the following
calendar year. ECF No. 36-9. Plaintiffs’ damages calculation applies that modified eligibility
criteria to the three-month period during which they assert the Appendices were operative in 2010,
i.e., between October 1, 2010, and December 31, 2010. ECF No. 47 at 14-15.

Defendants, on the other hand, contend that the Appendices’ less restrictive eligibility cri-
teria were not operative until January 1, 2011, the effective date of Defendants’ MOA which ex-
tended the CBAs and incorporated the Appendices by reference. ECF No. 41 at 27; ECF No. 36-
10 at2. If correct, Defendants would have no obligation during the last three months of 2010 to
make pension contributions on behalf of any of their per diem employees or regular employees
who did not meet the CBAs’ original, more restrictive time-in-service requirements. '3

Plaintiffs’ interpretation is correct. While the Pension Appendices were executed on No-
vember 15, 2011, they expressly make the less restrictive employee eligibility criteria they con-
tain operative as of October 1, 2010. Specifically, Section 3 of each Appendix states, in relevant
part:

As of October 1, 2010, the Employer agrees to contribute to the Fund. .. for all

employees covered by the Collective Bargaining Agreement. Regular full-time

and regular part-time employees shall be covered after the completion of 90 days
of employment, measured from their date of hire. Employees who are not regular

 

'? Recall, the CBAs define regular employees to include both full- and part-time employees who work a regular sched-

ule. ECF No. 36-1 through 36-6 at J 1.6. Per diem employees are defined as those employees without a regular
schedule who work on an on-call or as-needed basis. /d. at 71.5.

13 Neither party has provided a calculation of the impact this potential error would have on Plaintiffs’ computations,
but the total amount of damages would clearly be less than what Plaintiffs are seeking.

27
full-time or regular part-time ... shall be covered after they... [have] worked,

or been compensated, for one thousand (1,000) hours or more during the twelve

month period beginning twitch the employee’s date of hire. If such an employee

does not work, or is not compensated for, at least 1,000 hours during his first year

of employment, the computation period shall be based on the calendar year begin-

ning after the end of his first year of employment.
ECF No. 36-9 at 2, 5, 8, 11, 14, 17 (emphasis added).

Notwithstanding this plain language, Defendants argue the Pension Appendices did not go
into effect on October 1, 2011, because the MOA, which was not signed until November 12, 2011,
operated as a constraint on the Appendices. ECF No. 41 at 26-28. But this cannot be true. The
Pension Appendix includes a provision explaining that “[i]n the event of any inconsistency be-
tween this Appendix and the [CBA], the terms of this Appendix shall prevail.’ ECF No, 36-9 at
4,7, 10, 13, 16, 19. That is, because the MOA is an amendment to the CBA, even if the MOA did
purport to operate as a constraint on the Pension Appendix’s retroactive application, as Defendants
allege, the terms of the Pension Appendix would control. See ECF No. 36-9. Moreover, the MOA
does not conflict with the Pension Iuopendix. Indeed, the MOA expressly references and attaches
the Appendices, including its retroactive effective date for the less restrictive employee eligibility
criteria they contain. ECF No. 36-10 at 2. Further, the MOA states that the parties intend no
change to the “pension contributions at each facility, except the employer will begin contributions
after 90 days of employment, as required by the pension plan (Pensions Appendices attached).”
Id. (emphasis added). Thus, both the MOA and the Pension Appendices make reference to those
modified eligibility requirements.

Defendants’ other arguments seeking to overturn this straightforward interpretation of the
language of the Pension Appendices are not persuasive. First, they contend that the unilateral

change doctrine under the National Labor Relations Act (“NLRA”) prevented the parties from

making any changes to Defendants’ pension contribution obligations until the effective date of the

28
MOA because “an expired collective bargaining agreement . . . continues to be effective until a
subsequent agreement is reached or the parties negotiate to impasse.” ECF No. 41 at 27 (citing
Litton Bus. Sys., Inc. v. N.L.R.B., 501 U.S. 190, 198-200 (1991)). Second, they assert, based on
extrinsic evidence, that Defendants and Local 1199 had an understanding that, notwithstanding its
text, that each Appendix became effective only on January 1, 2011. ECF No. 41 at 26-28. Neither
argument is successful.

To begin, Defendants’ invocation of the NLRA is perplexing. Under the unilateral change
doctrine, an employer violates its duty to bargain in good faith, thereby committing an unfair labor
practice under the NLRA, when it changes the terms or conditions of employment without first
bargaining with the employees’ representatives. See, generally, N.L.R.B. v. Katz, 369 U.S. 736
(1962); see also Litton, 501 U.S. at 205—08 (finding the unilateral change doctrine did not extend
to an employer’s refusal to arbitrate layoffs it conducted in the period after a collective bargaining
agreement expired), Since Plaintiffs have not alleged Defendants breached their duties under the
NLRA, they appear to be suggesting that the unilateral change doctrine somehow prevents a sub-
sequent agreement between an employer and a union from retroactively applying to a period during
which a CBA was expired. But Defendants have not presented any authority for this proposition—
probably because it is incorrect.

The Supreme Court has cautioned district courts against interpreting claims under ERISA
sections 515 and 502(g)(2) as implicating an employer’s duties under the NLRA. See Laborers
Health & Welfare Tr. Fund For N. California v. Advanced Lightweight Concrete Co., 484 US.
539, 548-49 (1988) (“[B]oth the text and the legislative history of §§ 515 and 502(g)(2) provide
firm support for the Court of Appeals’ conclusion that this remedy is limited to the collection of

‘promised contributions’ and does not confer jurisdiction on district courts to determine whether

29
an employer’s unilateral decision to refuse to make postcontract contributions constitutes a viola-
tion of the NLRA.”). Moreover, it is undisputed that the MOA and Pension Appendices were the
product of bargaining between Defendants and the union; that is, they were not unilateral changes.
ECF No. 37-1 at 8-9 (explaining that the MOA, which incorporated the Pension Appendices, was
the product of collective bargaining negotiations between Local 1199 Vice President Dale Ewart
and Defendants’ CEO Dr. William Zubkoff). Further, courts routinely interpret CBA provisions
to apply retroactively. See, e.g., Spectrum Health, 647 F.3d at 346 (finding CBA provisions, in-
cluding changes to retirement and health plans, had retroactive effect preceding the effective date
of the agreement); E & J Gallo Winery, 857 F.2d at 1357 (giving retroactive effect to CBA provi-
sions such that they applied to the interim period between the previous contract’s expiration and
the new one’s execution).

Defendants’ other argument that extrinsic evidence, including emails from Local 1199,"
indicate that the union and Defendants intended that the MOA and the Pension Appendices should
only apply prospectively, is not well taken. The emails in question are consistent with the terms
of the final executed MOA; their explanation that the “Term of Agreement” of the MOA would
be “January 1, 2011 through December 31, 2011” does not preclude the retroactive application of
the Pension Appendices, especially because the email explains that the changes to Defendants’
pension obligations are “‘as required by the pension plan.” ECF No. 38-2 at 15, 17. Nevertheless,

to the extent that these emails could be construed as contradicting the unambiguous terms of the

 

'4 Defendants have submitted two emails dated August 18, 2011, sent by an assistant regional director of Local 1199
to Dr. William Zubkoff, Defendants’ CEO who negotiated the MOA and Appendices on behalf of Defendants. ECF
No. 37-1 al 8; ECF No. 38-2 at 15,17. The emails describe the proposed terms for the MOA and describe the “Term
of Agreement” as “January 1, 2011 through December 31, 2011.” ECF No. 38-2 at 15, 17. All other terms are
consistent with the final MOA. /d. Plaintiffs have also submitted a handwritten draft of the MOA dated August 18,
2011. ECF No. 36-10 at 3-5. The terms of the handwritten version are consistent with the typed version Defendants
executed with Local 1199, except that the term of the agreement is described as “Effective and retro-active to: January

1, 2011,” and that phrase is repeated at the beginning of the paragraphs describing changes to wages and minimum
pay rates. Id.

30
Appendices, the undersigned recommends finding that they are barred by the parol evidence rule.
See Commonwealth Commc'ns, Inc., 312 F.3d at 468 (“In the absence of ambiguity in the collective
bargaining agreement [] [courts] have no cause to examine extrinsic evidence of the parties’ in-
tent.”); see also Pace v. Honolulu Disposal Serv., Inc., 227 F.3d 1150, 1157-58 (9th Cir. 2000)
(“Although the parol evidence rule is not applied as strictly in the context of collective bargaining
agreements, it still operates to bar extrinsic evidence of an agreement inconsistent with an unam-
biguous writing.” (footnote omitted)).

For these reasons, the undersigned recommends finding that the Pension Appendices ob-
ligated Defendants to make contributions for covered per diem employees after working 1,000
hours in their first year of employment, or else in the following calendar year, and for regular full-
and part-time employees after 90 days of employment. It is undisputed that Plaintiffs used that
criteria in their damages calculations. See ECF No. 41 at 26; ECF No. 47 at 15. The Court there-
fore should find that Plaintiffs applied the correct eligibility criteria in calculating their damages.

2. Calculation of Damages

“When damages under an ERISA multiemployer pension plan are in dispute, an employer
opposing summary judgment must .. . ‘point to specific facts in the record to demonstrate a gen-
uine issue for trial.’” Serv. Employees Int’l Union Nat’l Indus. Pension Fund vy. Bristol Manor
Healthcare Ctr., Inc., 153 F. Supp. 3d 363, 374 (D.D.C. 2016) (quoting Flynn v, Dick Corp., 565
F. Supp. 2d 141, 147 (D.D.C. 2008)). Where a defendant fails to contest a plaintiffs damages
calculations and does not produce evidence demonstrating that a genuine dispute of material fact
exists on the issue of damages, the court may find that plaintiffs are entitled to summary judgment
on the issue of damages. See Serv. Employees Int'l Union Nat'l Indus. Pension Fund v. Roseen

Realty Corp., 308 F. Supp. 3d 132, 136-39 (D.D.C. 2018) (granting summary judgment on the

31
issue of damages, reasoning that defendants could not “avoid summary judgment by speculating—
without evidence—that the Fund may have made a miscalculation”); Serv. Employees Int’l Union
Nat’! Indus. Pension Fund v. Harborview Healthcare Ctr. Inc., 191 F. Supp. 3d 13, 19 (D.D.C.
2016) (“[D]efendant cannot avoid summary judgment simply by speculating that plaintiffs may
have erroneously included ineligible hours without offering any evidentiary support for that con-
tention.”); Bristol Manor, 153 F. Supp. 3d at 375 (granting summary judgment on the issue of
damages where the defendants “produced no admissible evidence contradicting Plaintiffs’ spread-
sheets, nor any colorable argument calling the spreadsheets’ accuracy into doubt”).

Here, there are no genuine disputes as to the accuracy of Plaintiffs’ damages calculations.
Defendants prepared versions of Plaintiffs’ spreadsheets highlighting employees and contributions
that they contend Plaintiffs erroneously included in their damages calculations, but they have failed
to identify any alleged errors with respect to these employees other than Plaintiffs’ application of
the allegedly incorrect eligibility criteria addressed above. See ECF No. 41-1 at 3-4, 5-52; see
also ECF No. 42 at 4-6. Defendants do not otherwise dispute the accuracy of the Fund’s calcula-
tions of the amount of cetnguent contributions, the amount of any overpayments the Fund has
credited against those delinquencies, or the amounts of the various penalties and fees the Fund has
assessed against Defendants. Accordingly, in light of Mr. Joseph’s Declaration and Defendants’
failure to dispute the accuracy of the Fund’s calculations, the undersigned recommends finding
that Plaintiffs have provided an accurate calculation of the amounts owed resulting from the audit
of Defendants’ 2009-2010 payroll records.

The undersigned notes that Plaintiffs’ damages calculations properly include surcharges
authorized by the Pension Protection Act of 2006 (“PPA”). P.I.. 199-280 (2006). It is undisputed

that for the plan years 2009 through 2017, the Fund was determined to be in “critical status,” a

on
term used to identify pension funds that are undercapitalized because their liabilities significantly
exceed the value of their assets. ECF No. 36-16 at 11; see also 29 U.S.C. § 1085(b)(2) (describing
a variety of circumstances in which a multiemployer pension plan should be considered in critical
status). Due to its critical status, the PPA required the Fund to implement a rehabilitation plan to
remedy its financial situation. ECF No. 36-12; ECF No. 36-16 at 11; see also 29 U.S.C. §
1085(e)(1). Under the Fund’s rehabilitation plan, participating employers are required to pay cer-
tain surcharges and supplemental contributions. ECF No. 36-16 at 12. The Fund notified partici-
pating employers, including Defendants, of the rehabilitation plan and associated required sur-
charges and supplemental contributions in November 2009. Id. Effective October 1, 2010, De-
fendants elected to make supplemental contributions of 10% of all contributions. Jd. In accord-
ance with the PPA and the Fund’s rehabilitation plan, Defendants were required to pay surcharges
of 5% of all contributions in 2009 and surcharges or supplemental contributions of 10% of all
contributions in 2010, including those delinquent contributions at issue in this case. Jd. at 12-13.
Under the PPA, unpaid surcharges and supplemental contributions due under a rehabilitation plan
“shall be treated as a delinquent contribution under section 1145... and shall be enforceable as
such.” 29 U.S.C. § 1085(e)(7)(B). Defendants do not dispute Plaintiffs’ calculations of the sur-
charges and supplemental contributions owed as a result of the 2009-2010 underreporting and
underpayments.

Plaintiffs’ damages calculations also properly include interest and liquidated damages. The
Fund has adopted a Statement of Policy for Collection of Delinquent Contributions (“Collection
Policy”). ECF No. 36-16 at 7; ECF No. 36-8. It provides that when an audit determines that an

employer has failed to pay its required contributions the Fund is entitled to collect 10% interest

33
per annum, calculated from the due date of the delinquent contributions through the date the con-
tributions are paid to the Fund. ECF No. 36-8 at 9. In the event the Fund files suit to collect the
delinquent contributions, the Trust Agreement and Collection Policy also authorize the Fund to
collect liquidated damages, calculated as the greater of: (a) 20% of the delinquent contributions or
(b) the value of the interest due. Id. This mirrors the Fund’s statutory remedies for delinquent
contributions under ERISA. 29 U.S.C. § 1132(g)(2) (following entry of judgment in delinquent
contributions case, “the court shall award the plan ... the unpaid contributions, . . . interest on the
unpaid contributions . . . [and] an amount equal to the greater of . . . interest on the unpaid contri-
butions, or. . . liquidated damages provided for under the plan in an amount not in excess of 20
percent [of the delinquent contributions”). Defendants do not contest that the Collection Policy
sets the applicable interest rate here. Nor do they contest that Plaintiffs have accurately calculated
the total amount of interest or liquidated damages owed through July 21, 2018.

Plaintiffs’ damages calculations also include a testing fee, reimbursing the Fund for the
costs of the audit of Defendants’ 2009-2010 payroll records. While the testing fee is not among
the relief required by 29 U.S.C. § 1132(g)(2), it is a contractual remedy included in the Fund’s
Collection Policy. Specifically, that policy provides that the Fund may charge a testing fee to
employers with delinquent contributions. ECF No. 36-16 at 8; ECF No. 36-8 at 8-9. Defendants
do not dispute that the testing fee is a contractual remedy for delinquent contributions under the
Collection Policy. While the Collection Policy does not specify the amount of the testing fee,
Defendants have not disputed the validity or reasonableness of the amounts Plaintiffs charge
here—$413.35 for Jackson Plaza and $944.80 for each of the other facilities (ECF No. 36-14 at 2—

3)—and the undersigned does not find them unreasonable either.

34
Because, except for the eligibility determinations addressed above, Defendants do not dis-
pute the accuracy of Plaintiffs’ audit findings and damages calculations, the undersigned recom-
mends finding Plaintiffs are entitled to summary judgment on the issue of damages in the amounts
they claim in their motion. The undersigned therefore recommends that the Court enter judgment
for Plaintiffs against each Defendant in the following amounts:

(1) $120,927.27 against Arch Plaza, Inc.;

(2) $106,832.58 against Hebrew Homes South, Inc.;

(3) $112,116.18 against Aventura Plaza, Inc.;

(4) $268.105.91 against Jackson Plaza, Inc.; and

(5) $240,218.59 against Hebrew Home Sinai, Inc.!°

 

'5 Plaintiffs’ proposed order seeks judgment entered against Hebrew Homes Health Network, Inc. for the liabilities of
each of the other Defendant corporations. See ECF No. 36-18 at 1-3. Plaintiffs’ motion for summary judgment makes
ho argument on this issue, except to assert that Defendants are “commonly owned and operated” and that they jointly
negotiated their CBAs with Local 1199. ECF No. 36-17 at 1. The complaint likewise alleges only that Defendants
“are related corporations and constitute a control group.” ECF No. 28 at 6-7; see also 29 U.S.C. § 1002(40)(B) (ex-
plaining that “two or more trades or businesses . . . shall be deemed a single employer if such trades or businesses are
within the same control group” and that “the term ‘control group’ means a group of trades or businesses under common
contro!”); 26 C.F.R. § 1.414(c)-2 (defining three types of common control: parent-subsidiary, brother-sister, and com-
bined). A plaintiff seeking to demonstrate that nominally distinct corporations are related must either show that one
of the entities owns the other or else that they are co-owned by the same five or fewer individuals. See 26 C.F.R. §
1.414(c)-2 (defining the parent-subsidiary and brother-sister tests for common ownership); see also LA.M. Nat. Pen-
sion Fund v. TMR Realty Co., 431 F. Supp. 2d 1, 11-13 (D.D.C. 2006) (finding the plaintiff demonstrated defendants
were part of a common control group where uncontradicted evidence demonstrated that the same individual owned
100% of nominally separate corporations and exercised control over them). Plaintiffs have introduced no evidence of
Defendants’ common ownership. The closest Plaintiffs come is a conclusory statement in an affidavit by Andre Jo-
seph, the Fund’s Payroll Review Manager, that “Hebrew Homes does business as Arch Plaza, Hebrew Homes South,
Aventura Plaza, Jackson Plaza, Sinai Plaza, and South Pointe Plaza, and operates the Arch Plaza, Hebrew Homes
South, Aventura Plaza, Jackson Plaza, Sinai Plaza, and South Pointe Plaza health care facilities.” ECF No. 36-15 at
4. Yet Mr. Joseph’s statement makes no claim about whether Hebrew Homes Health Network, Inc. owns the other
facilities, or if they have a common owner ot owners, Accordingly, because Plaintiffs have provided no evidence
demonstrating that Hebrew Homes Health Network, Inc. should be held liable fur the delinquencies of the other de-
fendant corporations, the undersigned recommends finding this argument forfeit and entering a judgment against each
Defendant separately in the amounts indicated above. See, e.g., CTS Corp. v. E.P.A., 759 F.3d 52, 64 (D.C. Cir. 2014)
(argument made in conclusory fashion forfeited); Cruz v. Kelly, 241 F. Supp. 3d 107, 113 n.4 (D.D.C. 2018) (issue
raised in opening brief without support or discussion may be deemed forfeited), appeal docketed No, 17-5113 (D.C.
Cir. May 22, 2017); Anglers Conservation Network v. Pritzker, 139 F. Supp. 3d 102, 116 n.10 (D.D.C. 2015) (argu-
ment not made in opening brief forfeited).

35
The undersigned also recommends that the Court award additional pre-judgment interest that has
accrued since July 21, 2018 at a rate of 10% per annum. See ECF No. 36-8 at 8 (setting the rate
of interest for delinquent contributions at 10% per annum). Plaintiffs are also entitled to post-
judgment interest pursuant to 28 U.S.C. § 1961, See 28 U.S.C. § 1961 (providing that “[i]nterest
shall be allowed on any money judgment in a civil case recovered in a district court,” and describ-
ing the interest calculation); see also Crabtree v. Island Breeze Marine, Inc., No. CV 18-1054
(CKK), 2019 WL 2569662, at *6 (D.D.C. June 21, 2019) (awarding post-judgment interest under
28 U.S.C. § 1961 to a pension fund that prevailed on a delinquent contribution claim).

C. Attorney’s Fees

Plaintiffs also seek attorney’s fees for the costs of litigating this action. Where a multiem-
ployer plan sues to recover delinquent contributions under ERISA section 515, 29 U.S.C. § 1145,
and obtains a judgment in its favor, “the court shall award the plan... reasonable attorney’s fees
and costs of the action.” 29 U.S.C. § 1132(g)(2) (emphasis added); see also Connors v. Petitte
Bros. Min. Co., 70 F.3d 637, at *2 (D.C. Cir. 1995) (per curiam) (explaining that “[t]he statute is
clear” that attorney’s fee awards are mandatory under 29 U.S.C. § 1132(g)(2)). Defendants do not
contest that if Plaintiffs obtain a judgment in their favor, they are entitled to recover reasonable
attorney’s fees. Because the undersigned recommends granting summary judgment in Plaintiffs’

favor on both liability and damages, the undersigned also recommends finding that they are entitled

to recover reasonable attorney’s fees.
D. Injunctive Relief
In addition to monetary damages, Plaintiffs request injunctive relief under Section

502(g)(2)(E) of ERISA, which provides that a court may award “such other legal or equitable relief

36
as [it] deems appropriate.” 29 U.S.C. § 1132(g)(2). Plaintiffs seek a permanent injunction requir-
ing Defendant to remit reports and contributions going forward in accordance with the CBAs, the
Fund’s documents, and federal law. Defendants object to such relief, arguing that Plaintiffs have
made no showing that absent an injunction they will suffer an “irreparable harm’ for which money
damages cannot compensate.” ECF No. 41 at 30. The undersigned agrees with Defendants.

Several courts in this district have found that injunctive relief is appropriate when “the
defendant has demonstrated no willingness to comply with either its contractual! or statutory obli-
gations or to participate in the judicial process,” Carpenters Labor-Mgmt. Pension Fund v. Free-
man-Carder LLC, 498 F. Supp. 2d 237, 242 (D.D.C. 2007), or because an injunction serves to
“reiterate[] what [are] already the defendant[s’] contractual obligations,” Teamsters Local 639-
Employers Health Tr. v. Boiler & Furnace Cleaners, Inc., 571 F. Supp. 2d 101, 108 (D.D.C. 2008).
Nevertheless, a party seeking a permanent injunction must show the following:

(1) that it has suffered an irreparable injury; (2) that remedies available at law, such

as monetary damages, are inadequate to compensate for that injury; (3) that, con-

sidering the balance of hardships between the plaintiff and defendant, a remedy in

equity is warranted; and (4) that the public interest would not be disserved by a
permanent injunction.

Morgan Drexen, Inc. v. Consumer Fin. Prot. Bureau, 785 F.3d 684, 694 (D.C. Cir. 2015) (quoting
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)).

Applying that test, Plaintiffs’ request for injunctive relief fails. Even assuming they could
show that the requested injunction serves the public interest and that the balance of hardships fa-
vors an equitable remedy, Plaintiffs have not demonstrated that they have suffered an irreparable
injury or that monetary damages for a future violation would be an inadequate remedy. As one
court in this district observed in a similar delinquent contribution case, “even substantial ‘eco-
nomic loss alone will rarely constitute irreparable harm.’” Bricklayers & Trowel Trades Int'l Pen-

sion Fund v. Kel-Tech Constr., Inc., 319 F. Supp. 3d 330, 346 (D.D.C. 2018) (quoting Naegele v.
37
Albers, 843 F. Supp. 2d 123, 129 (D.D.C. 2012)). This is because “economic injuries are generally
reparable with monetary damages in the ordinary course of litigation.” Naegele, 843 F. Supp. 2d
at 129. And courts should consider “the possibility that a monetary judgment might serve to alter
the defendant’s conduct as effectively as a permanent injunction would, rendering the latter un-
necessary.” Bricklayers, 319 F. Supp. 3d at 346 (citing SAS Inst., Inc. v. World Programming Ltd.,
874 F.3d 370, 385-86 (4th Cir. 2017)).

Here, this reasoning is especially applicable because the claims at issue arise under a stat-
utory framework that provides for penalties and attorney’s fees. See 29 U.S.C. § 1132(g)(2); see
also Serv. Employees Int'l Union Nat’l Indus. Pension Fund v. Bristol Manor Healthcare Ctr.,
Inc., No. CV 12-1904 (RC), 2016 WL 3636970, at *2 (D.D.C. June 30, 2016) (observing that
ERISA’s attorney’s fees provisions “‘encourage enforcement of employer contributions’ and pro-
tect funds from ‘the high cost of litigation and collection expenses’” (quoting Sheet Metal Workers
Health & Welfare Tr. Fund v, Big D Serv. Co., 876 F.2d 852, 854 (10th Cir. 1989)). Moreover,
Plaintiffs do not allege that Defendants have continued to remit inaccurate payments or reports
since the inception of this litigation. See ECF No. 36-16 at 22—24; cf. Bricklayers & Trowel Trades
Int'l Pension Fund v. Barron, 3\7 F. Supp. 3d 157, 163 (D.D.C. 2018) (granting injunctive relief
where the defendant failed to make reports or payments and refused to participate in the judicial
process).

Accordingly, the undersigned recommends denying Plaintiffs’ request for injunctive relief,

E. Declaratory Relief and Defendant South Pointe Plaza

Plaintiffs also seek a declaration that Defendants violated the CBAs by underreporting and
underpaying their contributions to the Fund. ECF No, 36-18 at 3; ECF No. 28 at 13. Declaratory

relief is appropriate where the court finds that it “will serve a useful purpose in clarifying and

38
settling the legal relations in issue, and [that] it will terminate and afford relief from the uncertainty,
insecurity and controversy giving rise to the proceeding.” Spriggs v. Wilson, 467 F.2d 382, 386
(D.C. Cir. 1972) (quoting Edward M. Borchard, Declaratory Judgments 299 (2d ed. 1941)). Here,
Defendants were obligated to make accurate reports and contributions to Plaintiffs, and it is undis-
puted that between January 1, 2009 and December 31, 2010, they failed to do so. Accordingly, in
order to clarify Defendants’ contractual obligations to the Fund, the undersigned recommends de-
claring that Defendants violated the CBAs by underreporting and underpaying their 2009-2010
contributions.

Defendants have moved for summary judgment as to Defendant South Pointe Plaza be-
cause although Plaintiffs’ audit revealed the company owed the Fund for delinquent contributions
in the amount of $613.30, it also revealed South Pointe Plaza had overpaid certain other contribu-
tions such that, on net, the company overpaid the Fund by $909.91. ECF No. 37-2 at 15. Defend-
ants argue that this net overpayment means Plaintiffs’ claims against South Pointe Plaza must be
dismissed. Jd. An employer’s overpayments do not automatically discharge liability for delin-
quent contributions under ERISA, however. See Greater St. Louis Const. Laborers Welfare Fund
v. Park-Mark, Inc., 700 F.3d 1130, 1134 (8th Cir. 2012) (holding that an employer bears the burden
of demonstrating its entitlement to restitution of overpayments before a court will apply the over-
payments as a set-off for delinquent contribution liability); Brown v. Health Care & Ret. Corp. of
Am., 25 F.3d 90, 94 (2d Cir. 1994) (same); S. Cent. United Food & Commercial Workers Unions
v. C & G Markets, Inc., 836 F.2d 221, 225-26 (5th Cir. 1988) (holding that while employers are
entitled to a set-off for overpayments, they remain liable to the pension fund for interest, attorney’s
fees, and auditor’s costs). Here, Defendants do not contest the finding in Plaintiffs’ audit that

South Pointe Plaza underpaid its required contributions by $613.30, See ECF No. 37-2 at 15; ECF

39
No. 36-16 at 23; ECF No. 42 at 5. Accordingly, while Defendant South Pointe Plaza is entitled to
an offset for its overpayments, those overpayments do not discharge its liability for its underre-
porting and underpayments to the Fund. The undersigned therefore recommends denying Defend-
ants’ motion as to South Pointe Plaza, although no damages should be granted Plaintiffs for South
Pointe Plaza’s violation of ERISA.'®
IV. CONCLUSION

For the reasons stated above, the undersigned RECOMMENDS that the Court GRANT
IN PART and DENY IN PART Plaintiffs’ cross-motion for summary judgment (ECF No. 36)
and DENY Defendants’ cross-motion for summary judgment (ECF No. 37). The undersigned
further RECOMMENDS that the Court enter judgment for Plaintiff against each Defendant in the

following amounts, to include all delinquent contributions, testing fees, liquidated damages, and

interest calculated through July 21, 2018:
(1) $120,927.27 against Arch Plaza, Inc.;
(2) $106,832.58 against Hebrew Homes South, Inc.;
(3) $112,116.18 against Aventura Plaza, Inc.;
(4) $268.105.91 against Jackson Plaza, Inc.; and

(5) $240,218.59 against Hebrew Home Sinai, Inc.

The undersigned also RECOMMENDS the Court award Plaintiffs with additional pre- judgment

interest that has accrued since July 21, 2018 at a rate of 10 percent per annum, and post-judgment

 

'§ Defendants also contend that the Court should deny Plaintiffs’ claims for declaratory and injunctive relief against
Defendants South Pointe Plaza and South Beach Plaza because they claim that the first facility closed in November
2013 and the second “was sold” in April 2018. ECF No. 41 at 28-29; ECF No. 37-1 at 3. Defendants have not
provided adequate information about the purported closure and sale of these facilities—e.g., whether they involved
bankruptcy proceedings, whether the purchaser agreed to assume the facility’s liabilities, etc—to determine what, if
any, effect these transactions might have on their liability for the 2009-2010 delinquencies. Accordingly, because
Defendants have failed to explain why these transactions would render a declaration as to these defendants inappro-
priate, the undersigned recommends entering declaratory judgment as to all Defendants.

40
interest at the statutory rate. See 28 U.S.C. § 1961. Finally, the Court should award Plaintiffs
reasonable attorney’s fees in an amount to be determined following an appropriate petition to the
Court for the same.
* oe ok ok

The parties are hereby advised that under the provisions of Local Rule 72.3(b) of the United
States District Court for the District of Columbia, any party who objects to the Report and Rec-
ommendation must file a written objection thereto with the Clerk of this Court within 14 days of
the party’s receipt of this Report and Recommendation. The written objections must specifically
identify the portion of the report and/or recommendation to which objection is made, and the basis
for such objections. The parties are further advised that failure to file timely objections to the
findings and recommendations set forth in this report may waive their right of appeal from an order

of the District Court that adopts such findings and recommendation. See Thomas v. Arn, 474 US.

140 (1985). Digitally signed by G.
Michael Harvey

ng Date: 2019.07.24
12:49:06 -04'00'

G. MICHAEL HARVEY

UNITED STATES MAGISTRATE JUDGE

 
  

Date: July 24, 2019

 

4\
