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Carpenters Health and Welfare Fund of Philadelphia and Vicinity v. Kenneth R. Ambrose Inc.

decided: December 30, 1983.

CARPENTERS HEALTH AND WELFARE FUND OF PHILADELPHIA AND VICINITY BY ROBERT GRAY, TRUSTEE AD LITEM & CARPENTERS PENSION FUND OF PHILADELPHIA AND VICINITY BY ROBERT GRAY, TRUSTEE AD LITEM & CARPENTERS JOINT APPRENTICE COMMITTEE BY ROBERT GRAY, TRUSTEE AD LITEM & INDUSTRY ADVANCEMENT PROGRAM BY JOSEPH WASHKILL, TRUSTEE AD LITEM & METROPOLITAN DISTRICT COUNCIL OF PHILADELPHIA AND VICINITY UNITED BROTHERHOOD OF CARPENTERS AND JOINDERS OF AMERICA, APPELLEES IN NO. 82-1733, APPELLANTS IN NO. 82-1734
v.
KENNETH R. AMBROSE, INC. & KENNETH R. AMBROSE & LINDA AMBROSE, APPELLANTS IN NO. 82-1733, APPELLEES IN NO. 82-1734



Appeal From the United States District Court For the Eastern District of Pennsylvania.

Hunter and Higginbotham, Circuit Judges, and Ziegler, District Judge.*fn*

Author: Higginbotham

Opinion OF THE COURT

HIGGINBOTHAM, A. LEON, JR., Circuit Judge.

Kenneth and Linda Ambrose appeal from a judgment of the district court finding them personally liable along with Ambrose, Inc. for delinquent fringe benefit contributions in a suit brought by the Carpenters Health and Welfare Fund of Philadelphia and Vicinity (the "Fund")*fn1 under Section 301 of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185(a) (1976), and the Pennsylvania Wage Payment and Collection Law ("WPCL"), PA. STAT. ANN. tit. 43, §§ 260.1-.11. (Purdon Supp. 1983-84). The district court also awarded attorneys' fees to the Fund's attorneys. Counsel for the Fund cross-appeal from the district court's attorneys' fee award which reduced the lodestar by 50% and assessed liability for the attorneys' fees only against Ambrose, Inc., a bankrupt corporation.*fn2

I.

The Ambroses are the sole officers and majority shareholders of Ambrose, Inc., a construction firm. The corporation failed to make its required contributions to the various union pension funds as provided by their collective bargaining agreement. The delinquency in contributions resulted from financial difficulties caused in great part by Ambrose, Inc.'s failure to be paid for work it performed at the behest of the United Brotherhood of Carpenters and Joiners of America ("the Union").

The Fund filed a Section 301 LMRA*fn3 suit in federal court to recover the delinquent contributions. It also asserted a pendant state claim to collect liquidated damages equal to 25% of the amount owed as provided by the WPCL.*fn4

During the district court proceedings, Ambrose, Inc. did not contest its liability to the Fund for the delinquent fringe benefits. Indeed, prior to trial it agreed to an entry of judgment against it for $17,199.25, as part of the sum owed to the Fund for attorneys' fees and for costs. Ambrose, Inc. only disputed the claim against it for liquidated damages. Linda and Kenneth Ambrose, however, contested both their individual liability for the delinquent contributions and liquidated damages, they also objected to the imposition of any counsel fees against them in their individual capacity.

The district court ruled that the Ambroses were personally liable as employers under both the LMRA and the WPCL for delinquent contributions in the amount of $14,747.82. The district court also found both the Ambroses and Ambrose, Inc. liable under the WPCL for liquidated damages in the amount of 25% of the judgment or $8,173.14. It awarded attorneys' fees to plaintiffs' counsel, but after considering the fee application, the district court reduced the lodestar of $12,955.35 by 50% and imposed liability only against the corporation "because of overriding equitable considerations . . . ." Joint Appendix ("J.A.") at 53a.

The Ambroses appeal the District Court's finding that, in their individual capacities, they are liable as employers for the delinquent contributions.*fn5

II. The Ambroses' Individual Liability

A. The WPCL

The WPCL defines employer as:

every person, firm, partnership, association, corporation, receiver or other officer of a court of this Commonwealth and any agent or officer of any of the above-mentioned classes employing any person in this Commonwealth.

PA. STAT. ANN. tit. 43, § 260.2a (Purdon Supp. 1983-1984). The district court concluded that as the "agents and officers" of Ambrose, Inc. the Ambroses fit within the meaning of the term employer as used in the WPCL, and were therefore ...


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