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Board of Trustees of Bay Area Roofers Health & Welfare Trust Fund v. Gudgel Yancey Roofing, Inc.

United States District Court, N.D. California, San Jose Division

March 21, 2017

BOARD OF TRUSTEES OF THE BAY AREA ROOFERS HEALTH & WELFARE TRUST FUND, ET AL., Plaintiffs,
v.
GUDGEL YANCEY ROOFING INC., Defendant.

          ORDER DENYING MOTION TO DISMISS RE: DKT. NO. 32

          LUCY H. KOH United States District Judge

         Plaintiffs Board of Trustees of the Bay Area Roofers Health & Welfare Trust Fund; Pacific Roofers Pension Plan; East Bay/North Bay Roofers Vacation Trust Fund, Bay Area Counties Roofing Industry Promotion Fund, Bay Area Counties Roofing Industry Apprenticeship Training Fund; and Doug Ziegler, as Trustee (collectively, “Plaintiffs”), are multi-employer employee benefit plans. Plaintiffs bring this action against Defendant Gudgel Yancey Roofing, Inc. (“Defendant”) alleging violations of the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, and the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185. ECF No. 31 (First Amended Complaint, or “FAC”). Before the Court is Defendant's motion to dismiss. ECF No. 32 (“Def. Mot.”). The Court finds this matter appropriate for determination without oral argument and hereby VACATES the motion hearing set for March 23, 2016. See Civil L.R. 7-1(b). Having considered the parties' submissions, the relevant law, and the record in this case, the Court hereby DENIES Defendant's motion to dismiss.

         I. BACKGROUND

         A. Factual Background

         Plaintiffs are multi-employer employee benefit funds. FAC ¶ 7. Plaintiffs receive contributions from individuals who are parties to a collective bargaining agreement (“CBA”) that exists between Local 81 of the United Union of Roofers, Waterproofers and Allied Workers, AFL-CIO (“Local 81”), and the Associated Roofing Contractors of the Bay Area Counties, Inc. Id. & id. Ex. A (“CBA”). Under the CBA, employers are bound to certain trust agreements (hereinafter, “Trust Agreements”) which obligate employers “to make timely contributions” to certain trust funds, including, for example, the Bay Area Roofer's Health & Welfare Trust. Id. ¶ 16. Under the Trust Agreements and applicable collection policies, “payments received later than the last day of the month following the month in which the hours were worked are delinquent and liquidated damages shall be assessed on all delinquent contributions to the Trust Funds along with interest.” Id. ¶ 21.

         Defendant is a roofing, waterproofing, and contracting business in Sacramento County, California. Id. ¶ 9. Since approximately 2004, Defendant has requested apprentices from Local 81's Joint Apprenticeship and Training Committee Program (“JATC Program”). Id. ¶ 14. Specifically, Defendant has requested apprentices by submitting to Local 81 a “Request for Dispatch of an Apprentice” form. Id. ¶ 15. The FAC does not allege the number of apprentice requests that Defendant has made since 2004, however Plaintiffs allege specific examples of two instances in which Defendant requested and received apprentices from Local 81.

         Specifically, on November 13, 2012, Mike Sperling (“Sperling”) submitted a “Request for Dispatch of an Apprentice” form to Local 81 on behalf of Defendant. Id. ¶ 15 & Ex. B. On November 19, 2012, Sperling “accepted” an apprentice “Referral Page” from Local 81 and, the Court assumes, an accompanying apprentice from Local 81. Id. ¶ 16 & Ex. C. The Referral Page that Sperling allegedly accepted is on Local 81 letterhead and lists the employee name “Eduardo Perez.” Id. The Referral Page states that the individual is to “Report to: Gudgel Yancey” and the Referral Page contains the following “Note”:

By accepting this referral, the individual employer recognizes [Local 81] as the majority collective bargaining representative of his or its employees employed in the counties covered by the [CBA] between Local 81 and the Associated Roofing Contractors of the Bay Area Counties and recognizes the Union as the exclusive collective bargaining agent for such employees and further agrees that it is bound to said [CBA] including all the wages, hours, and all other terms and conditions of such [CBA] including the payment of all wage scales and all trust fund contributions specific and required by said [CBA].

Id.; see also FAC ¶ 16.

         Plaintiffs also allege that on February 22, 2016, Jeff Bushey (“Bushey”) submitted a “Request for Dispatch of Apprentice Form” to Local 81 on behalf of Defendant. Id. ¶ 15 & Ex. C. On February 23, 2016, Bushey “accepted” an apprentice Referral Page from Local 81. Id. ¶ 16 & Ex. C. The Referral Page that Bushey allegedly accepted lists the employee name “Gustavo Perales, ” and states that the individual is to “Report To: Gudgel Yancey Roofing.” Id. The Referral Page contains the same “Note” quoted above. Id.

         Plaintiffs further allege that Defendant has “paid union wages and fringe benefit contributions to the Trust Funds pursuant to the terms of the CBAs and Trust Agreements for dispatched apprentices” from Local 81. Id. ¶ 17 & Ex. D. Moreover, Defendant has submitted monthly employer reports to Plaintiffs. Id. ¶ 18. Plaintiffs attach to the FAC monthly employer reports for the months of July 2015 and April, May, and June of 2016. Id. Ex. E. Id. ¶ 18; see also Id. Ex. E. The monthly employer reports list the name of each Trust Fund, and direct that checks shall be made payable to “Roofers Local Union No. 81 Trust Funds.” Id. Ex. E. There is an instruction that “Payments not received by the last day of the month following the month being reported are delinquent and subject to liquidated damages to each Trust Fund plus interest on the contributions due as provided in each Fund's Trust Agreement.” Id. The attached monthly employer reports include the names and social security numbers of specific employees, the hours worked of each employee, the “fringe rate” for each employee, and the “fringe total owed” for each employee. Id. An “apprentice training fee” is also included in the “total check amount.” Id. The monthly reports are signed by Defendant's office manager, Nancy White, and include language stating: “I certify that the information herein is true and correct to the best of my knowledge and belief and that all contributions due under the Trust Agreement have been included.” Id. Plaintiffs allege that “[t]hese monthly employer reports show Defendant has paid and is paying the fringe benefit contributions called for in the CBAs [and Trust Agreements] for dispatched apprentices.” Id. ¶ 18.

         According to Plaintiffs, “Defendant has failed to submit its employer contribution report including payment owed for the month of October 2016.” Id. ¶ 24. Moreover, “Defendant also owes [Plaintiffs] liquidated damages and interest on its untimely payment of April-June 2016 contributions” to Plaintiffs, as required by the CBA and Trust Agreements. Id. ¶ 25. Plaintiffs also allege that Defendant has refused to submit to an audit of its July 1, 2013 through September 30, 2013 payroll records, although Defendant initially agreed to allow Plaintiffs to conduct such an audit. Id. ¶¶ 28-30.

         B. Procedural History

         Plaintiffs filed suit against Defendant in this Court on July 29, 2016. ECF No. 1. Plaintiffs asserted causes of action under ERISA and the LMRA for delinquent contributions and breach of the CBA and Trust Agreements. See Id. ΒΆΒΆ 35-45. Plaintiffs also requested an injunction to audit ...


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