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Painters and Floorcoverers Joint Committee v. Bello

United States District Court, D. Nevada

March 2, 2015

PAINTERS AND FLOORCOVERERS JOINT COMMITTEE; EMPLOYEE PAINTERS' TRUST; PAINTERS, GLAZIERS AND FLOORCOVERERS JOINT APPRENTICESHIP AND JOURNEYMAN TRAINING TRUST; PAINTERS INDUSTRY PROMOTION FUND; PAINTERS JOINT COMMITTEE INDUSTRY PROMOTION FUND; PAINTERS ORGANIZING FUND; SOUTHERN NEVADA PAINTERS AND DECORATORS AND GLAZIERS LABOR MANAGEMENT COOPERATION COMMITTEE TRUST; PAINTERS, GLAZIERS AND FLOORCOVERERS SAFETY TRAINING TRUST FUND, each acting by and through their designated fiduciaries John Smirk and Thomas Pfundstein; INTERNATIONAL UNION OF PAINTERS & ALLIED TRADES INDUSTRY PENSION TRUST FUND, acting by and through its designated fiduciary, Gary J. Meyers, Plaintiffs/Counter-Defendants,
v.
MICHAEL R. BELLO, an individual; AMERICAN CONTRACTORS INDEMNITY COMPANY, a California corporation; COMMITTED COMPANIES, LLC, a Nevada limited liability company; STEVE HUNTINGTON, an individual; JOHN DOES I-XX, inclusive; and ROE ENTITIES I-XX, inclusive. Defendants.

ORDER ON MOTION FOR SUMMARY JUDGMENT (Dkt. ## 57, 61, 72)

ANDREW P. GORDON, District Judge.

Plaintiffs are trusts seeking to recover contributions allegedly owed to them by Walldesign, Inc. under a union contract. Walldesign is in bankruptcy, so the trusts filed this lawsuit against various other individuals and companies. Three parties remain, including Michael R. Bello, Walldesign's president; Steve Huntington, Walldesign's CFO; and American Contractors Indemnity Company ("ACIC"), a bond issuer allegedly liable for Walldesign's debts.

Plaintiffs assert different claims against each defendant, but each claim merely provides a different legal theory for why defendants should be liable for contributions Walldesign owed to the trusts. Plaintiffs claim Bello is personally liable for contributions under a corporate liability provision in one of the trusts-the Employee Painters' Trust-and that he also breached his fiduciary duties under the Employee Retirement Income Security Act ("ERISA"). Plaintiffs bring only an ERISA fiduciary claim against Huntington. Finally, plaintiffs' single claim against ACIC is that it is liable for Walldesign's owed contributions under a contractor's bond.

Plaintiffs move for summary judgment on all of their claims. (Dkt. #57.) Defendants Bello and Huntington also move for summary judgment that they are not liable to plaintiffs. (Dkt. ##61, 72.)

I find there are genuine issues of material fact as to whether Walldesign owed contributions to the trusts and whether defendants are liable for all owed contributions. Therefore, no party is entitled to summary judgment at this time. But I do find that, under the corporate officer liability provision, Bello will be liable for any contributions Walldesign is found to owe to the Employee Painters' Trust. I also find that Bello and Huntington breached their ERISA fiduciary duties to some of the trusts and will therefore be liable if contributions are owed to those trusts. Finally, Plaintiffs are not entitled to summary judgment against ACIC because plaintiffs have not yet proved if, and to what extent, Walldesign owed contributions to the trusts.

I. BACKGROUND

Plaintiffs are trusts and beneficiaries of a collective bargaining agreement ("CBA") between Walldesign and the International Union of Painters & Allied Trades, District Council 15, Local Union 159.[1] Under the CBA (and an accompanying memorandum of understanding), Walldesign had to make contributions to the trusts for every hour it employed union members on certain commercial projects and multi-family homes.[2] Single family homes and certain other types of projects were excluded.[3]

Walldesign filed for bankruptcy in 2012.[4] Plaintiffs audited Walldesign's records and concluded that Walldesign had failed to report 17, 331.4 hours of work for which contributions were due to the trusts, and that roughly $138, 000.00 was then owed to the trusts.[5] Plaintiffs allege that, after all payments and costs are accounted for, Walldesign now owes the trusts $127, 569.60.[6]

Bello was Walldesign's president and Huntington was Walldesign's chief financial officer. Bello and Huntington allege that another Walldesign employee handled contributions, not them.

Walldesign purchased bonds from American Contractors Indemnity Company to comply with Nevada licensing requirements.[7] Plaintiffs seek to collect on these bonds for contributions Walldesign allegedly owed.

II. LEGAL STANDARDS

A. Summary Judgment

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law."[8] For summary judgment purposes, the court views all facts and draws all inferences in the light most favorable to the nonmoving party.[9]

If the moving party demonstrates the absence of any genuine issue of material fact, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial."[10] The nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts."[11] She "must produce specific evidence, through affidavits or admissible discovery ...


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