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Board of Trustees of Painters and Floorcoverers Joint Committee v. Super Structures Inc.

United States District Court, D. Nevada

March 22, 2019

SUPER STRUCTURES INC., et al., Defendants.


          Glori M Navarro, Chief Judge.

         Pending before the Court is the Motion to Dismiss, (ECF No. 5), filed by Super Structures, Inc. (“SS1”), Super Structures Inc. (“SS2”), Tracy Reynolds, Robert Reynolds, and Western National Mutual Insurance Company (collectively “Defendants”). Plaintiffs Board of Trustees of the Painters and Floorcoverers Joint Committee, et al. (collectively “Plaintiffs”), filed a Response, (ECF No. 12), and Defendants filed a Reply, (ECF No. 18).[1]

         For the reasons discussed herein, Defendants' Motion to Dismiss is DENIED.

         I. BACKGROUND

         This case arises from Defendants' alleged creation of a sham company in order to avoid payment obligations under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001, et seq. (“ERISA”). Defendant Super Structures, Inc. (“SS1”) is a now-defunct Nevada corporation, formerly owned by Defendants Tracey Reynolds and Robert Reynolds. (Compl. ¶¶ 9-11, ECF No. 1). Defendant Super Structures Inc. (“SS2), which is presently owned by the Reynolds', is a Nevada corporation that came into existence approximately three years after SS1 closed its operations. (Id. ¶¶ 34, 40). Plaintiffs are several construction-related, employee-benefit trusts and associations who bring this action seeking to hold SS2, and the Reynolds', liable for SS1's alleged unpaid ERISA contributions. (Id. ¶¶ 5-7).

         In November 2005, SS1 signed a collective bargaining agreement (the “CBA”) with the International Union of Painters and Allied Trades, District Council 15, Painters Local 159 (the “Union”), and the Painting and Decorating Contractors of America, Southern Nevada Chapter (“PDCA”). (Id. ¶ 18). The CBA states that its provisions remain in effect from July 1, 2004, through June 30, 2007. (Id.) A clause of the CBA (the “Duration Clause”) provides that the CBA automatically renews annually unless terminated by either party. (Id. ¶ 20). Termination of the CBA requires written notice of termination, which must be “served by either party upon the other no less tha[n] sixty (60) and not more than ninety (90) days prior to 6-30-2007 or June 30 of any subsequent year.” (Id.). In January 2007, SS1 assigned its bargaining rights to PDCA, authorizing it to represent SS1 in labor negotiations with the Union under the CBA. (Id. ¶ 22). Plaintiffs allege that SS1 never revoked this assignment, which is expressly incorporated into the CBA. (Id. ¶¶ 21, 23).

         Under the terms of the CBA and incorporated agreements, SS1 was obligated to submit written reports stating the identities and hours worked of employees performing labor covered by the CBA. (Id. ¶ 27). Plaintiffs are intended beneficiaries with respect to SS 1 's reporting and contribution obligations. (Id. ¶ 29).

         On September 2, 2009, SS 1 sent a letter to the Union advising that it would be winding down its business and “closing its doors on or about December 31, 2009.” (Id. ¶ 34). The letter further states, “as we have no trade employees, we will not be renewing the Bond expiring November 29, 2009.” (Id.).

         In January 2009, in response to a remittance inquiry by a third-party administrator of the trust funds, SS1 stated it was out of business and requested deactivation of the account. (Id. ¶ 35). In August 2009, SS1 contacted the Nevada State Contractors Board (“Contractors Board”) to request that its licenses be placed on inactive status, which the Contractors Board granted, effective August 14, 2009. (Id. ¶ 36). SS1 allegedly continued to renew its corporate registration with the Secretary of State by filing Annual Lists in November 2009 and 2010, identifying 3395 S. Jones, #279, Las Vegas 89146 as the company's address (the “Jones Address”). (Id. ¶ 37). In June 2011, SS1 surrendered its contractor's license to the Contractors Board and filed a Certificate of Dissolution in October 2011. (Id. ¶¶ 38-39). Both of these filings identify the Jones Address as SS1's operative address. (Id.).

         On May 27, 2013, Tracey Reynolds filed Articles of Incorporation with the Nevada Secretary of State to establish an entity called Super Structures Inc. (“SS2”).[2] (Id. ¶ 40). SS2's address was represented to be the Jones Address, and Tracey Reynolds was listed as President and Director, and non-party Carol Downing (“Downing”) as Secretary and Director. (Id. ¶ 41). SS2 applied to the Contractors Board for general building, painting and decorating, and wrecking licenses. (Id. ¶ 43). The application included a request for waiver of tests required to obtain these licenses based upon SS1's prior licenses. (Id.). The Contractors Board granted SS2's requested licenses on July 26, 2013. (Id. ¶ 45).

         According to Plaintiffs, since its inception, SS2 has interchangeably identified itself as “Super Structures, ” “Super Structures Inc.” and “Super Structure, Inc, ” and consistently used the Jones Address on its filings with the Nevada Secretary of State. (Id.). In November 2012, Robert Reynolds replaced Downing as Secretary of SS2, leaving Robert and Tracey Reynolds as SS2's only corporate officers. (Id. ¶ 47).

         Plaintiffs allege that since August 1, 2009, SS1 has not submitted any remittance reports or tendered payment to Plaintiffs for their work. (Id. ¶ 49). In April 2018, Plaintiffs sent Defendants a letter stating an intent to conduct a payroll compliance review of Defendants' records for the period of April 1, 2012, through March 31, 2018. (Id. ¶ 51). SS2 declined Plaintiffs' request, stating that SS2 is not a signatory to the CBA. (Id. ¶ 52).

         Plaintiffs were able to obtain certified payroll records (“CPRs”) for two projects for which Defendants performed. (Id. ¶ 55). Plaintiffs' auditor confirmed that Defendants' employees performed labor covered by the CBA on these projects, but Defendants did not correspondingly submit reports or make payments to Plaintiffs as required. (Id. ¶ 59). The CPRs additionally show at least one common employee between the SS1 and SS2. (Id. ¶ 57).

         Plaintiffs filed their Complaint on July 24, 2018, bringing the following causes of action: (1) breach of contract against all Defendants; (2) violation of ERISA against all Defendants; (3) personal liability against Tracey and Robert Reynolds; (4) demand for relief on bond against Western National Mutual Insurance Company; and ...

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