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Wisconsin Masons Health Care Fund v. Sid'S Sealants, LLC

United States District Court, W.D. Wisconsin

August 31, 2017

WISCONSIN MASONS HEALTH CARE FUND, WISCONSIN MASONS APPRENTICESHIP & TRAINING FUND, GARY BURNS, BRICKLAYERS & TROWEL TRADES INTERNATIONAL PENSION FUND, INTERNATIONAL MASONRY INSTITUTE, BRICKLAYERS & ALLIED CRAFTWORKERS DISTRICT COUNCIL OF WISCONSIN, WISCONSIN LABORERS HEALTH FUND, BUILDING & PUBLIC WORKS LABORERS VACATION FUND, WISCONSIN LABORERS APPRENTICESHIP & TRAINING FUND, JOHN J. SCHMITT, WISCONSIN LABORERS-EMPLOYERS COOPERATION AND EDUCATION TRUST FUND, WISCONSIN LABORERS DISTRICT COUNCIL, BUILDING TRADES UNITED PENSION TRUST FUND, SCOTT J. REDMAN, and INDUSTRY ADVANCEMENT PROGRAM/CONTRACT ADMINISTRATION, Plaintiffs,
v.
SID'S SEALANTS, LLC, and SIDNEY N. ARTHUR, Defendants.

          OPINION & ORDER

          JAMES D. PETERSON, DISTRICT JUDGE.

         Plaintiffs, various labor organizations (unions) and employee benefit plans (funds) and their trustees and fiduciaries, bring claims against defendants Sid's Sealants, LLC, and Sidney N. Arthur for violations of the Employee Retirement Income Security Act of 1974 (ERISA) and the Labor Management Relations Act of 1947 (LMRA). Dkt. 14. Plaintiffs allege that Sid's Sealants, LLC, failed to make contributions to the plaintiff funds, in violation of collective bargaining agreements, trust plans, and trust agreements. Sid's Sealants, LLC, deducted and withheld working dues from their employees but failed to submit those dues to the plaintiff unions. Plaintiffs allege that Arthur kept the unremitted union dues for himself, in violation of Wis.Stat. §§ 895.446 and 943.20 (civil theft). Defendants answered and asserted five counterclaims against plaintiffs. Dkt. 16.

         Now plaintiffs move to dismiss defendants' counterclaims pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt. 6. Because defendants have failed to plead any actionable counterclaims, the court will grant plaintiffs' motion in full.

         ALLEGATIONS OF FACT

         The court draws the following facts from defendants' pleading, Dkt. 16, and construes the allegations “in the light most favorable to the [defendants], accepting as true all well-pleaded facts alleged, and drawing all possible inferences in [their] favor.” Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).

         In answering plaintiffs' first amended complaint, defendants deny that they have violated any collective bargaining agreements, trust plans, or trust agreements, that they have refused to submit contributions, and that they have violated any federal or state law. Dkt. 16, ¶ 1. Then defendants repaint the landscape: contrary to plaintiffs' allegations, at no point was Sid's Sealants, LLC, party to a collective bargaining agreement with the Wisconsin Bricklayers District Council, and at no point did the LLC assume rights and obligations under a collective bargaining agreement with the Wisconsin Bricklayers District Council. Id. ¶ 17. The Bricklayers unions never requested that its collective bargaining agreement with Arthur's sole proprietorship-an entity that preceded the LLC but that no longer exists-be assigned to the LLC named here. Defendants admit that Sid's Sealants, LLC, signed a collective bargaining agreement with the Wisconsin Laborers District Council and that the LLC agreed to and did make timely payments to those unions.

         In the absence of a binding collective bargaining agreement, defendants made voluntary payments to the “various funds, ” including the Bricklayers unions. Id. ¶ 22. Defendants made “voluntary payments” to plaintiffs “for past due voluntary contributions.” Id. Defendants have paid plaintiffs $561, 122.60 since March 2012. That “amount exceed[ed] the amount that would have been due” had defendants been legally obligated to make contributions to the Bricklayers unions, and it “exceed[ed] the amount due the Laborer Unions Plaintiffs' [sic].” Id.

         Between April 2012 and November 2016, defendants repeatedly requested an accounting of the voluntary payments that they have made, “to determine whether there is in fact any obligation for additional payments, whether voluntary or otherwise.” Id. ¶ 42. Neither plaintiffs nor plaintiffs' counsel responded. Defendants suspect that plaintiffs did not properly credit the payments, or credited them “in such a manner as to generate late fees, penalties, and interest obligations.” Id. ¶ 43. Defendants demand an accounting and bring counterclaims for conspiracy to injure business reputation, breach of fiduciary duty, conversion and civil theft, and tortious interference with contract.

         ANALYSIS

         A motion to dismiss pursuant to Rule 12(b)(6) tests the complaint's legal sufficiency.

         To state a claim upon which relief can be granted, a complaint must provide a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 8 “does not require ‘detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A complaint must offer “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555 (citations omitted).

         Plaintiffs attack all five of defendants' counterclaims. The court will address each in turn.

         A. Conversion and civil theft

         Defendants allege that plaintiffs intentionally misapplied defendants' payments and, as a result, committed common law conversion and civil theft in violation of Wis.Stat. §§ 895.446 and 943.20. Had plaintiffs applied defendants' payments “to the appropriate funds, ” “there would be no amounts due and owing” and ...


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