Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Local Union No. 98 International Brotherhood of Electrical v. Rgb Services

January 28, 2011

LOCAL UNION NO. 98 INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, ET AL.
v.
RGB SERVICES, LLC, ET AL.



The opinion of the court was delivered by: Padova, J.

MEMORANDUM

Plaintiffs in this action brought pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 ("ERISA") are Local Union No. 98, International Brotherhood of Electrical Workers ("Local 98"), and the trustees of the following employee benefit funds: Local 98 Health & Welfare Fund ("Health Fund"), Local 98 Pension Fund ("Pension Fund"), Local 98 Vacation Trust Fund ("Vacation Fund"), Local 98 Apprenticeship Training Fund ("Training Fund"), Local 98 Deferred Income Fund ("Deferred Income Fund"), Local 98 Local Labor-Management Cooperation Committee Fund ("Cooperation Fund"), and National Electrical Benefit Fund ("National Fund") (collectively, "the Funds"). Defendants are RGB Services, LLC ("RGB"), a limited liability company engaged in the business of providing electrical services to the public, and Michael and Rhea Metsikas ("the Metsikases"), who are husband and wife and alleged to be principals, agents, employees, and servants of RGB. Plaintiffs have sued Defendants for failure to timely remit contributions and deductions due and owing to the Funds pursuant to a multiple-employer collective bargaining agreement between Local 98 and the Philadelphia division of the Penn-Del-Jersey Chapter of the National Electrical Contractors Association (the "Commercial Agreement"), and for failure to furnish monthly reports as required by the Commercial Agreement.

Plaintiffs seek to hold the Metsikases personally liable for RGB's unpaid contributions to the Funds. Presently before the Court is the Metsikases' Motion to Dismiss. For the reasons that follow, the Motion is granted in part and denied in part.

I. BACKGROUND

The Complaint alleges the following facts. At all relevant times, RGB was a party to the Commercial Agreement. (Compl. ¶ 12.) The Commercial Agreement requires RGB to make monthly contributions to the Health Fund, the Pension Fund, the Training Fund,*fn1 the Deferred Income Fund, the Cooperation Fund and the National Fund, consistent with the Commercial Agreement and trust agreements referenced therein. (Id. ¶¶ 14-18.) The Commercial Agreement also requires RGB to remit monthly wage deductions from its employees to the Vacation Fund consistent with the Commercial Agreement and trust agreements referenced therein. (Id. ¶¶ 19, 21.) The Commercial Agreement further requires RGB to deduct dues from the pay of each employed Local 98 member consistent with the amount specified in the Local 98 bylaws and to remit the same to Local 98. (Id. ¶ 20.) The Commercial Agreement also requires RGB to furnish monthly reports to Local 98, listing the names of each Local 98 member employed, the number of hours each worked, and each employee's gross earnings. (Id. ¶ 13.)

The Complaint alleges that, "[d]espite repeated demands by Plaintiffs, RGB has failed to timely remit contributions and deductions due and owing and has failed to furnish required monthly reports." (Id. ¶ 26.) RGB has failed to pay the Funds contributions and remittances totaling an estimated $512,806.21.*fn2 (Id. ¶ 31.) In addition, RGB is liable for penalties in the amount of $50,498.06 and interest in the amount of $208,509.66 pursuant to the Commercial Agreement and additional penalties and interest that will have to be determined at trial. (Id. ¶¶ 32, 33.)

The Complaint alleges that the Metsikases functioned as directors of RGB. (Id. ¶¶ 36, 48.) The Metsikases siphoned funds of RGB to further their personal agendas and ignored their duties and responsibilities as principal officers of RGB. (Id. ¶¶ 38, 50.) The Metsikases commingled the assets of RGB with their own funds and used company funds to satisfy their personal expenses. (Id. ¶¶ 40, 52.) RGB was a facade for the operations of the Metsikases, and the alter ego of the Metsikases. (Id. ¶¶ 41-42, 52-53.) RGB was under-capitalized and failed to observe corporate formalities. (Id. ¶¶ 37, 39, 49, 51.)

The Metsikases, as acting principals of RGB, were responsible for and ratified administrative decisions exercised on behalf of RGB, and were vested with the authority to exercise discretionary control over the management of the finances and business affairs of RGB. (Id. ¶¶ 60, 73.) Their discretionary control over the management of the financial responsibilities and business affairs of RGB included, but was not limited to, authorizing and tendering the payment of contributions and withholdings due to the Funds pursuant to the Commercial Agreement and the trust agreements. (Id. ¶¶ 61, 74.)

The Complaint asserts five causes of action pursuant to ERISA. Count I asserts a claim against RGB for delinquent contributions, penalties, and interest pursuant to 29 U.S.C. § 1145. Counts II and IV assert claims against Michael Metsikas for RGB's unpaid contributions, penalties, and interest pursuant to 29 U.S.C. § 1145 (Count II) and 29 U.S.C. § 1109 (Count IV). Counts III and V assert claims against Rhea Metsikas for RGB's unpaid contributions, penalties, and interest pursuant to 29 U.S.C. § 1145 (Count III) and 29 U.S.C. § 1109 (Count V). The Metsikases have moved to dismiss Counts II, III, IV, and V pursuant to Federal Rule of Civil Procedure 12(b)(6) on the ground that the Complaint fails to state a claim against either of them upon which relief may be granted.

II. LEGAL STANDARD

When considering a motion to dismiss pursuant to the Federal Rules of Civil Procedure 12(b)(6), we look primarily at the facts alleged in the complaint and its attachments. Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010). We take the factual allegations of the complaint as true and draw all reasonable inferences in favor of the plaintiff. Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citing Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). Legal conclusions, however, receive no deference, and the court is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 286 (1986) (cited with approval in Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

A plaintiff's pleading obligation is to set forth "a short and plain statement of the claim," Fed. R. Civ. P. 8(a)(2), which gives the defendant "fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555 (quotation omitted). The "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). "The plausibility standard is not akin to a 'probability requirement.' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at 556). In the end, we will dismiss a complaint if the factual allegations in the complaint are not sufficient "to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, at 1235-36 (3d ed. 2004)).

III. DISCUSSION

Plaintiffs bring this suit pursuant to ERISA, which imposes liability on any "employer" that fails to make contributions to an employee benefit fund as required by a collective bargaining agreement. See 29 U.S.C. § 1145. ERISA defines an "employer" as "any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan; [including] a group or association of employers acting for an employer in such capacity." 29 U.S.C. § 1002(5). The Metsikases argue that they are not liable to the Funds for contributions that RGB failed to make because RGB was the "employer," as defined by ERISA. Plaintiffs do not dispute that RGB was the "employer." Rather, Plaintiffs claim that the Metsikases are liable for RGB's failure to make required contributions to the Funds because they are officers of RGB and the facts in this case justify piercing the corporate veil, and because the Metsikases are fiduciaries, as that term is ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.