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United Association of Journeyman v. Maniglia Landscape, Inc.

United States District Court, N.D. California

July 22, 2019

MANIGLIA LANDSCAPE, INC., et al., Defendants.




         This case involves several moving parts. First, there is a dispute between plaintiff United Association of Journeyman and Apprentices of the Plumbing and Pipefitting Industry, Underground Utility/Landscape Local Union No. 355 (“UA Local 355”), and its rival, defendant Northern California District Council of Laborers (“Laborers Union”). UA Local 355 alleges the Laborers Union pressured employers who were signatories to collective bargaining agreements with both unions to hire only Laborers Union members and force UA Local 355 members to join the Laborers Union. Plaintiff Alejandro Trejo, a former member of Laborers Union affiliate Local 270, also alleges in the Sixth Claim for Relief that trustees of the Laborers Union's fringe-benefit trust funds (the “Laborers Trust Funds”) breached their fiduciary duties to him. These trustees (the “Laborers Trustees”) now seek summary judgment with respect to the Sixth Claim, the only remaining claim levied against them. For the reasons set forth below, this motion is granted.


         The Sixth Claim alleges the Laborers Trustees breached their fiduciary duties by improperly expending funds on a prior lawsuit against employer Cohen Landscape Service, Inc. and Maniglia Landscape, Inc. (“Cohen/Maniglia”). In 2014, the Laborers Trustees brought a collection action against Cohen/Maniglia to recover benefit contributions allegedly owed to the Laborers Trust Fund under a collective bargaining agreement. That action, which will be referred to as the “2014 Collection Action, ” settled without any monetary payment by Cohen/Maniglia. Lozano-Batista Decl., Ex. A, ¶ 3. According to Trejo, the 2014 Collection Action was brought to help the Laborers Union expand its jurisdiction rather than for the benefit of Laborers Trust Fund beneficiaries, such as himself.

         Trejo was previously a member of Laborers Union affiliate Local Union 270 (“Local 270), which was a party to the Laborers Landscape Agreement. Arguello Decl. ¶ 9 (Mot. Summ. J.). Trejo worked as a Local 270 member during two time periods: from June 2014 to August 2015 and from April 2016 to July 2017. Prior to joining Local 270, Trejo was a member of UA Local 355. Id. Ex. G. In January 2017, Trejo worked for Maniglia Landscaping, Inc, which in turn made benefits contributions on Trejo's behalf. Loney Decl. Ex. A. After January, however, Trejo began working exclusively for Martina Landscape, Inc., another employer associated with Local 270. Id. Exs. A-B. Martina submitted a final contribution report regarding Trejo in August 2017 for hours worked in July. Id. ¶ 18, Ex. B. This was the last contribution report submitted on Trejo's behalf to the Laborers Trust Fund. Trejo's membership in Local 270 was suspended in October 2017 and terminated in August 2018. Arguello ¶¶ 10-12. In July 2017, Trejo returned to UA Local 355. Id.

         Under the terms of the Laborers Landscape Agreement, there are six benefits trust funds. Loney Decl. ¶ 11, Ex. C. Because of his classification as a “Landscape Tech 2, ” Trejo only participated in four of these funds during his tenure with Local 270, namely the (1) Health and Welfare Fund, (2) Vacation-Holiday Fund, (3) Training and Retraining Fund, and (4) Contract Administration Fund. Id. ¶¶ 5-9, 12-13, Ex. D-E. The Health and Welfare Trust Agreement defines a “participant” as “an employee of an individual employer who has established eligibility under the Plan.” Id. Ex. G at 1-2. The term “employee” is defined as a person on whose behalf contributions are made. Id. The last contribution submitted on Trejo's behalf to the Health and Welfare Fund was provided by Martina and was submitted on July 2017. Id. ¶ 18, Ex. B. On February 1, 2018, Trejo exhausted his Hour Bank balance under the Health and Welfare Fund and was therefore no longer eligible for benefits under the plan. Id. ¶ 20.

         The Vacation-Holiday Plan defines a plan participant as an employee of a contributing employer “who performs one or more hours of covered work” under one of the Laborers Union's collective bargaining agreements. Id. ¶ 21, Ex. H at Art. I § 3. A participant's eligibility depends upon receipt of contributions from the participant's employer. Id. Ex. H at Art. II §§ 11-12. Trejo was paid his last two payments as an active plan participant on October 31, 2017 and July 20, 2018. Id. ¶¶ 122-23; id Exs. I at 8-9, Ex. E. Similarly, the Training and Retraining Trust Agreement provides that only “employees” may participate in the fund and defines the term to mean “any Individual Employer who performs one or more hours of work covered by the Collective Bargaining Agreement.” Id. Ex. J at Art. I § 4. Funds for this program are used to maintain and operate training and educational programs for employees. Id. Ex. J at Art. II § 3.


         The purpose of summary judgment “is to isolate and dispose of factually unsupported claims or defenses.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Summary judgment is proper if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56. The Court must ultimately decide “whether the ‘specific facts' set forth by the nonmoving party, coupled with undisputed background or contextual facts, are such that a rational or reasonable jury might return a verdict in its favor based on that evidence.” T.W. Elec. Serv. Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987). When making this evaluation, courts draw all reasonable inferences in favor of the non-moving party. Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520-21 (1991).


         A. Whether Trejo Qualifies as a Plan Participant Under ERISA

         In order to sue a defendant for breach of fiduciary duty under ERISA, a plaintiff must be a “participant” in the plan that gave rise to the fiduciary duty. A “participant” is “any employee or former employee of an employer . . . who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer.” 29 U.S.C. § 1002(7). A plaintiff may become eligible if there is “a colorable claim that (1) he or she will prevail in a suit for benefits, or that (2) eligibility requirements will be fulfilled in the future.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 117-18 (9th Cir. 1989). In the Ninth Circuit, qualification as a “participant” is a substantive element of an ERISA claim rather than a prerequisite for subject matter jurisdiction. Vaughn v. Bay Environmental Mgmt., Inc. 567 F.3d 1021, 1024 (9th Cir. 2009). “Whether a plaintiff is a plan participant is determined as of the time he [or she] files the lawsuit.” Spies v. Life Ins. Co. of N. Am., 312 F.Supp.3d 805, 812 (N.D. Cal. 2018) (quoting Curtis v. Nevada Bonding Corp., 53 F.3d 1023, 1027 (9th Cir. 1995)).

         The Laborers Trustees argue that summary judgment is proper because Trejo is no longer a participant in any of the trust funds at issue in this action. As explained above, a plaintiff's status as a participant is determined at the time of filing.[1] The Laborers Trustees' own evidence reveals that, as of May 25, 2017 when this action was filed, Trejo was an active participant in three funds: the Training and Retraining Fund, the Health and Welfare Fund, and the Vacation-Holiday Fund. Accordingly, ...

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