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Wisconsin Masons 401(k) Fund v. Froode

United States District Court, W.D. Wisconsin

March 19, 2018


          OPINION & ORDER


         Plaintiffs (a labor organization, employee benefit plan, and the plan's trustee and fiduciary) bring claims against defendant Kathleen M. Froode for violations of the Employee Retirement Income Security Act (ERISA), civil theft, and conversion. Dkt. 1. Plaintiffs move for summary judgment. Dkt. 19. The court will grant plaintiffs' motion on the civil theft claim, deny the motion on the remaining claims, and notify plaintiffs that it intends to resolve the remaining claims as a matter of law before trial.


         Froode appears pro se. The court extended Froode's summary judgment response deadline based on her representation that she was hiring counsel, see Dkt. 29, but despite the extension, she filed her response on the original deadline, and no counsel has appeared on her behalf. At the court's prompting, Froode indicated that she was “still in the process of securing local pro bono counsel that can assist [her] at summary judgment.” Dkt. 40. The court will construe Froode's response as a motion for a second extension of her response deadline and deny it. The court has already allowed Froode a second chance at her response brief, see Dkt. 27, which she took advantage of. Because of the second chance and several extensions, time is now running out to issue a summary judgment opinion before the parties' pretrial filings are due on April 20. Froode has had sufficient time to prepare her response and to attempt to obtain counsel, so the court will not further delay its consideration of plaintiffs' summary judgment motion.


         The following facts are material and, except where noted, undisputed.

         Plaintiff Wisconsin Masons 401(k) Fund (the fund) is an employee benefit plan affiliated with plaintiff Bricklayers and Allied Craftworkers District Council of Wisconsin (the union), a union that represents construction workers. Plaintiff Bill Bonlender is a trustee and fiduciary of the fund. Defendant Kathleen M. Froode is the sole member and president of Masonry Specialists II, LLC, a now-defunct construction company.

         In 2007 and 2008, Masonry Specialists entered into collective bargaining agreements (CBAs) with the union. The CBAs were in force through at least May 31, 2014. Under the CBAs, Masonry Specialists was to deduct “hourly working dues” from each employee's wages and remit them monthly to the union, no later than “the month following the month during which the deductions were made.” Dkt. 21-2, § 21.1. Masonry Specialists was also to remit to the fund monthly 401(k) contributions agreed to by each employee. These 401(k) contributions were to be deposited “at the end of each month in which the work was performed, but not later than the fifteenth day of the following month, after which time the payments will be considered delinquent.” Id. § 17.7. In the case of delinquent payments to the fund, the CBAs allowed for a 20 percent assessment of the delinquent payments “as liquidated damages” and interest of 1.5 percent per month on the unpaid delinquent balance. Id. They also allowed for “reasonable attorney's fees and any other costs and expenses reasonably arising in connection with any collection action.” Id.

         Masonry Specialists generally followed the CBAs' requirements: Froode would deduct dues and 401(k) contributions from employee's wages and remit them to the union and the fund, respectively. But some of the dues that Masonry Specialists deducted in November 2011 through January 2012-specifically, $6, 897.84-were never remitted to the union, despite a March 23, 2012 demand for payment. See Dkt. 22-1. And between April 2010 through January 2013, some of the 401(k) contributions were paid late, resulting in $420.26 in interest that has not been paid.


         Plaintiffs move for summary judgment on all of their claims. Summary judgment is appropriate if plaintiffs show that they are “entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). To avoid summary judgment, Froode must “demonstrate that the record, taken as a whole, could permit a rational finder of fact to rule in [her] favor.” Johnson v. City of Fort Wayne, 91 F.3d 922, 931 (7th Cir. 1996).

         A. ERISA

         It is undisputed that the CBAs required Masonry Specialist to remit 401(k) contributions to the fund and allowed interest to accrue on any unpaid delinquent balance. Nor is it disputed that Masonry Specialist failed to remit certain 401(k) contributions on time, rendering Masonry Specialist liable to plaintiffs for $420.26 in unpaid interest. But plaintiffs aren't suing Masonry Specialist for contribution; instead, they have chosen to assert a breach- of-fiduciary-duty claim against Froode individually.

         “In every case charging breach of ERISA fiduciary duty, the threshold question is whether the defendant was acting as a fiduciary (that is, was performing a fiduciary function) when taking the action subject to complaint.” Brooks v. Pactiv Corp., 729 F.3d 758, 765 (7th Cir. 2013) (quoting Pegram v. Herdrich, 530 U.S. 211, 226 (2000)). “[A] person is a fiduciary with respect to a plan to the extent [that he or she] exercises any authority or control respecting management or disposition of [plan] assets.” 29 U.S.C. § 1002(21)(A)(i). (There other definitions of ...

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