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Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Decided January 9, 2004

No. 02-7091

JOHN FLYNN, JOHN T. JOYCE, LOUIS WEIR, FRANK STUPAR,

JAMES BOLAND, GEORGE HARBISON, DOMINIC SPANO, PAUL SONGER,

CHARLES VELARDO, EUGENE GEORGE, JOHN WALLNER,

WALTER KARDY, DAN SCHIFFER, AND JOSEPH SPERANZA, JR.,

AS TRUSTEES OF, AND ON BEHALF OF THE

BRICKLAYERS AND TROWEL TRADES INTERNATIONAL PENSION FUND,

APPELLEES

v.

R.C. TILE, R.C. CONSTRUCTION, RICHARD C. FLORES, AND

PRISCILLA JEAN FLORES,

APPELLANTS

Appeal from the United States District Court

for the District of Columbia

(No. 99cv02044 (EGS))

Ira R. Mitzner filed a brief for appellees.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #02-7091 Document #795772 Filed: 01/09/2004 Page 1 of 12
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Richard C. Flores, individually and doing business as R.C.

Construction, and Priscilla Jean Flores, individually and

doing business as R.C. Tile, filed a brief for appellants pro se.

Before: GINSBURG, Chief Judge, and SENTELLE and

HENDERSON, Circuit Judges.

Opinion for the Court filed by Chief Judge GINSBURG.

GINSBURG, Chief Judge: Richard Flores, individually and

doing business as R.C. Construction, and Priscilla Flores,

individually and doing business as R.C. Tile, appeal the

judgment of the district court in favor of the Trustees of the

Bricklayers and Trowel Trades International Pension Fund

upon the Trustees’ claim under the Employment Retirement

Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et

seq., for delinquent pension contributions. The appellants

contend the district court overlooked genuine issues of material fact and applied incorrect legal standards in concluding

R.C. Tile was the alter ego of R.C. Construction and liable for

its delinquent pension contributions. We affirm the judgment.*

I. Background

The three Flores brothers – Joseph, Richard, and Jesse –

do tile work on public projects in southern California. Joseph

Flores manages all operations of the family’s tile installation

businesses; his wife, Priscilla Flores, oversees the finances

and acts as office manager for the family’s businesses. Richard and Jesse Flores set tile and do not have management

responsibilities.

Over the past thirty years the Flores family has owned and

operated several tile businesses in southern California. Joseph Flores owned and operated Majestic Tile from 1970 to

1995; Richard Flores worked for him. Majestic Tile closed in

1995 after Joseph Flores encountered problems with the IRS

owing to Majestic’s failure to remit payroll taxes. This case

* This case was considered upon the record from the district

court and upon the briefs submitted by parties. See FED. R. APP. P.

34(a)(2); D.C. CIR. RULE 34(j).

USCA Case #02-7091 Document #795772 Filed: 01/09/2004 Page 2 of 12
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concerns three of the family’s businesses that began operations after Majestic was closed.

In 1995 Richard started a business known as R.C. Construction. Although nominally the owner, Richard had little

knowledge about or involvement with the management and

finances of R.C. Construction. Richard received wages for

his work as a tile setter but received no share of the profits.

Joseph Flores, who referred to himself as the ‘‘operations

manager’’ of R.C. Construction, estimated, bid, and negotiated R.C. Construction’s tile setting contracts as he had Majestic’s before. Priscilla was in charge of R.C. Construction’s

finances, as she had been of Majestic’s.

In 1996 R.C. Construction entered into a collective bargaining agreement (CBA) with the local affiliate of the International Union of Bricklayers and Allied Craftsmen. R.C.

Construction thereby agreed to make contributions to the

Bricklayers and Trowel Trades International Pension Fund

‘‘for each hour worked by all workmen covered by this

agreement’’ – defined to include all tile setters employed by

R.C. Construction – until such time as the company gave

effective notice of its withdrawal from the CBA. Although

R.C. Construction ceased making payments to the Fund in

December 1997, and ceased operating in January 1998, it did

not then provide the Fund with a notice of withdrawal from

the CBA.

Shortly after R.C. Construction ceased operations, Jesse

Flores started R.C. Tile. Although Jesse was listed as the

owner, he did not have any involvement in the management of

the firm; he worked solely as a tile setter. Joseph, who

again styled himself the ‘‘operations manager,’’ stated in his

deposition that ‘‘R.C. Tile was my company.’’ Priscilla served

R.C. Tile, as she had R.C. Construction, as the office manager

and bookkeeper. Although there was no written contract

between the two companies, R.C. Tile assumed R.C. Construction’s tile setting sub-contracts and completed jobs R.C.

Construction had begun. R.C. Tile did not, however, become

a signatory to the CBA or contribute to the Fund.

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In 1998 Jesse Flores transferred the assets of R.C. Tile to

Priscilla Flores; there was no written contract of sale and

apparently no consideration. Priscilla continued to do business under the R.C. Tile name and each member of the

Flores family continued to perform his or her job at R.C. Tile.

When R.C. Construction had not made any payments to the

Fund for more than a year, the Trustees of the Fund made

unavailing demands upon both R.C. Construction and R.C.

Tile. Richard and Priscilla Flores respectively notified the

Trustees that R.C. Construction and R.C. Tile (although not a

signatory) were withdrawing from the CBA.* The Trustees

then sued R.C. Construction, R.C. Tile, and Richard and

Priscilla Flores under, 29 U.S.C. §§ 1132(g)(2) and 1145 to

recover the delinquent pension fund payments.

The district court granted the Trustees’ motion for summary judgment. The court concluded from the undisputed

material facts that ‘‘R.C. Construction and the two R.C. Tile

companies are alter egos’’ and that ‘‘it is in the interest of

justice to hold that these three successive companies are alter

egos.’’ The appellants moved for reconsideration, which the

district court denied, and they now appeal to this court.

II. Analysis

We review the district court’s grant of summary judgment

de novo. See Workman v. United Methodist Comm. on

Relief of the Gen. Bd. of Global Ministries, 320 F.3d 259, 262

(D.C. Cir. 2003). Summary judgment is appropriate only if

‘‘there is no genuine issue as to any material fact and TTT the

moving party is entitled to a judgment as a matter of law.’’

FED. R. CIV. P. 56(c); see Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 247 (1986).

The appellants present three arguments for reversing the

judgment of the district court: First, the court failed to

* The notice of withdrawal was dated May 28, 1999. Under the

CBA, however, a notice of withdrawal delivered within the 60 days

prior to June 1 was not effective until June 1 of the following year.

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consider the Declaration of Joseph Flores, which contained

material facts in dispute. Second, the court both ignored

other facts material to whether R.C. Construction and R.C.

Tile were alter egos and applied incorrect legal standards for

determining whether an entity is an alter ego under the

ERISA. Third, the Trustees are barred by equitable considerations from recovering the delinquent pension contributions.

A. Declaration of Joseph Flores

In its initial decision the district court refused to consider

the Declaration of Joseph Flores because it ‘‘contradicts Mr.

Flores’ deposition testimony at several relevant points.’’ The

court would not allow the Flores to ‘‘create a TTT factual

dispute through the submission of a self-serving declaration

that contradicts prior deposition testimony.’’

Upon the Flores’ motion for reconsideration, however, the

district court did consider the Declaration and found it did

not contradict any fact material to whether R.C. Tile was the

alter ego of R.C. Construction. Rather, the court stated, the

Declaration disputed only ‘‘minor and immaterial issues of

fact’’ and did not alter the district court’s conclusion that the

Trustees were entitled to summary judgment.

On review, therefore, this court need not consider the

merits of the district court’s initial conclusion that the Declaration was a ‘‘sham affidavit.’’ The appellants’ protestation

notwithstanding, at the end of the day the district court

simply did not ignore Joseph’s Declaration in granting summary judgment to the Trustees.

B. Alter Ego Liability

The Trustees’ claim arises under § 515 of the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA). 29

U.S.C. § 1145. That provision makes a federal obligation of

an employer’s contractual commitment to contribute to a

multiemployer pension fund:

Every employer who is obligated to make contributions

to a multiemployer plan under the terms of the plan or

under the terms of a collectively bargained agreement

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shall, to the extent not inconsistent with law, make such

contributions in accordance with the terms and conditions of such plans or such agreement.

Section 515 was a response to the problem created when an

employer defaults upon its obligation to fund a multiemployer

defined-benefit pension plan: If one employer does not make

its contributions to such a plan, then the other participating

employers must make larger contributions to cover the shortfall. See, e.g., H.R. REP. No. 96–869 (II) at 15 (1980). The

funding burden may be shifted beyond other participating

employers to taxpayers via the Pension Benefit Guaranty

Corporation, and to beneficiaries in the form of reduced

pension benefits. See Upholsterers’ Int’l Union Pension

Fund v. Artistic Furniture of Pontiac, 920 F.2d 1323, 1328–

29 (7th Cir. 1990).

Section 515 ‘‘evinces a strong congressional desire to minimize contribution losses and the resulting burden such losses

impose upon other plan participants.’’ Id. at 1328. The

statute ‘‘puts multiemployer plans in a stronger position than

they otherwise occupy under common law contract principles,’’ Bakery & Confectionary Union & Indus. Int’l Pension

Fund v. Ralph’s Grocery Co., 118 F.3d 1018, 1021 (4th Cir.

1997); it facilitates recovery of contributions from delinquent

employers by limiting the defenses available to an employer

in an action brought to enforce the obligation created by

§ 515.

Alter ego liability under § 515 further protects the federal

interest in the solvency of multiemployer pension plans by

enabling ERISA trustees to recover delinquent contributions

from a sham entity used to circumvent the participating

employer’s pension obligations. See Massachusetts Carpenters Cent. Collection Agency v. Belmont Concrete Corp., 139

F.3d 304, 305 n.3 (1st Cir. 1998). If R.C. Tile is the alter ego

of R.C. Construction, then R.C. Tile is bound by the pension

provisions of the CBA and therefore cannot serve to avoid

R.C. Construction’s obligation to the Fund. See id. at 307;

Central States, Southeast & Southwest Areas Pension Fund

v. Sloan, 902 F.2d 593, 596 (7th Cir. 1990) (alter ego of

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signatory employer ‘‘obligated to honor the pension contribution terms of the [CBA]’’).

In order to determine whether two nominally distinct unincorporated businesses are alter egos for the purpose of

assessing liability under § 515, we evaluate the similarities

between the two enterprises in their ownership, management,

business purpose, operations, equipment, and customers. See

Belmont Concrete, 139 F.3d at 308 (‘‘No single factor is

controlling, and all need not be present to support a finding of

alter ego status’’). We also look at any transactions or other

dealings between the two entities. See id.*

The evidence is overwhelming that R.C. Construction and

R.C. Tile had essentially the same ownership, management,

business purpose, operations, and customers. They were in

the same line of business (tile laying), in the same industry

sector (public works construction), in the same geographic

area (southern California). See id. at 306. Three members

of the Flores family successively owned R.C. Construction

(Richard) and R.C. Tile (Jesse, then Priscilla). Under each

owner, however, the assets and operations of the company

were essentially the same. The assets were transferred

among them in non-arms length transactions, which provides

a ‘‘clear foundation for a holding of ‘alter ego’ status.’’ Sloan,

902 F.2d at 597 (intra-family transfer of assets without consideration a sham; transferee held alter ego under ERISA);

cf. Fugazy Cont’l Corp. v. NLRB, 725 F.2d 1416, 1419 (D.C.

Cir. 1984) (non-arms length transfer of operations ‘‘merely a

sham, creating a ‘disguised continuance’ of the predecessor’s

operations’’). In addition, regardless of the changing nominal

* Different considerations may be relevant where a corporation is

involved. Compare Greater Kansas City Laborers’ Pension Fund

v. Superior General Contractors, Inc., 104 F.3d 1050, 1055 (8th Cir.

1997), which applied to corporate entities ‘‘the alter ego doctrine as

developed under corporate law’’ in order to abide the ‘‘longestablished principle that a corporation’s existence is presumed to

be separate and may be disregarded only under narrowly prescribed circumstances,’’ with Belmont Concrete, 139 F.3d at 306–08,

which applied the above-specified criteria to two corporations without reference to their corporate status.

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ownership interest of the various members of the Flores

family, Joseph and his wife at all times managed all facets

and controlled the finances of the enterprise. See NLRB v.

Omnitest Inspection Servs., Inc., 937 F.2d 112, 118 (3d Cir.

1991) (in determining whether employers are alter egos ‘‘actual control can be more significant than formal ownership’’).

On several projects R.C. Tile assumed R.C. Construction’s

subcontracts and completed work begun by R.C. Construction. R.C. Tile also employed many of the tile-setters who

had worked for R.C. Construction.

All these facts indicate R.C. Tile is the alter ego of R.C.

Construction and therefore liable for that company’s pension

obligations as a signatory of the CBA. See Belmont Concrete, 139 F.3d at 309. The appellants point to no significant

differences between R.C. Construction and R.C. Tile.

The appellants’ undocumented assertion that R.C. Tile used

different equipment, employees, and accountants than had

R.C. Construction and that the two companies obtained different construction contracts does not shake our conviction

that they were alter egos. Differences in the contracts and in

the employee roster were inevitable because the entities

operated successively rather than simultaneously. Such differences as may arise over time following a non-arms length

transfer are ‘‘not sufficient for a finder of fact to conclude

that the businesses are not ‘alter egos.’ ’’ Sloan, 902 F.2d at

598. Even if the appellants could point to evidence in the

record to support the asserted differences between the two

companies, therefore, those differences would not outweigh

the similarities of ownership, management, business purpose,

customers, and operations that demonstrate R.C. Tile was the

alter ego of R.C. Construction.

The record also shows the Flores themselves treated R.C.

Tile as the alter ego of R.C. Construction. In a letter to a

general contractor, Priscilla Flores stated, ‘‘R.C. Construction

is now doing business as R.C. Tile.’’ Faxes from Priscilla to

suppliers were signed on behalf of ‘‘R.C. Construction/R.C.

Tile.’’ Letters and bid notes from Joseph to general contractors identify Joseph’s company as ‘‘R.C. Construction/R.C.

USCA Case #02-7091 Document #795772 Filed: 01/09/2004 Page 8 of 12
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Tile.’’ The notice of withdrawal from the CBA stated both

R.C. Construction and R.C. Tile were withdrawing, even

though R.C. Construction was the only signatory.

Nor did the Flores treat the two businesses as distinct

entities in transactions between them. See Laborers’ Pension

Trust Fund v. Sidney Weinberger Homes, Inc., 872 F.2d 702,

705 (6th Cir. 1988) (failure to respect formalities in dealings

between individual and wholly owned company indicative of

alter ego status). The Flores did not observe any of the

formalities indicative of separate enterprises; there is no

evidence of a written agreement, let alone the payment of any

consideration, for either the transfer of assets from R.C.

Construction to R.C. Tile or for the transfer of R.C. Tile from

Jesse to Priscilla. See Fugazy, 725 F.2d at 1419 (lack of

formalities surrounding transfer of assets and operations

evidence of alter egos). On the contrary, R.C. Construction’s

assets were used for the benefit of R.C. Tile. Specifically,

payments received for work performed on R.C. Construction’s contracts went to pay R.C. Tile’s bills. After R.C.

Construction ceased doing business, Priscilla Flores used

R.C. Construction’s bank accounts for R.C. Tile’s purposes.

R.C. Tile borrowed money using R.C. Construction’s line of

credit. R.C. Tile used R.C. Construction’s name to order

supplies and to do business with contractors. For R.C. Tile

to get the benefits of R.C. Construction’s assets and goodwill

without taking responsibility for that company’s pension liabilities would undermine the policy of the ERISA strictly to

bind employers to their pension obligations.

The appellants argue R.C. Construction and R.C. Tile

cannot be alter egos because ‘‘there was no anti-union animus’’ behind their closing R.C. Construction and establishing

R.C. Tile. We shall assume there was none. As the First

Circuit has noted, however, ‘‘A finding of anti-union animus is

not essential’’ to hold one entity is the alter ego of another for

the purpose of ERISA liability. Belmont Concrete, 139 F.3d

at 308; see also NLRB v. Allcoast Transfer, Inc., 780 F.2d

576, 580–82 (6th Cir. 1986) (collecting cases holding anti-union

animus not required to be alter egos under NLRA); Greater

Kansas City Laborers Pension Fund v. Thummel, 738 F.2d

USCA Case #02-7091 Document #795772 Filed: 01/09/2004 Page 9 of 12
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926, 930 (8th Cir. 1984); Fugazy, 725 F.2d at 1419–20; J.M.

Tanaka Constr. Co. v. NLRB, 675 F.2d 1029, 1033 (9th Cir.

1982). Anti-union animus may be a reason one entity should

be deemed the alter ego of another for the purpose of

assigning liability under the ERISA, but the absence of antiunion animus certainly does not establish that two entities are

not alter egos.

Therefore, based upon the similarities between R.C. Construction and R.C. Tile with respect to management, ownership, business purpose, operations, and customers, and in

light of the principals’ complete failure to maintain any meaningful distinction between the two entities, it appears R.C.

Construction and R.C. Tile are alter egos.

C. Defenses

Although a favorable balance of the equities is not required

to conclude that one entity is the alter ego of another for the

purposes of § 515, the appellants present three equitable

arguments against holding R.C. Tile liable as the alter ego of

R.C. Construction. First, the appellants contend R.C. Tile

should not be held the alter ego of R.C. Construction because

R.C. Tile received no economic benefit from its failure to

contribute to the Fund. According to the appellants, R.C.

Tile was required by California law to, and did, pay its nonunion employees ‘‘prevailing wages (which is the same as

union scale wages, including trust fund contributions.)’’

Even assuming the truth of that assertion – for which the

appellants point to no record evidence – such payments do

not absolve R.C. Tile of its obligation to make contributions to

the Fund pursuant to the CBA. See Brogan v. Swanson

Painting Co., 682 F.2d 807, 809 (9th Cir. 1982); Audit Servs.,

Inc. v. Rolfson, 641 F.2d 757, 761 (9th Cir. 1981); Mullins v.

Kaiser Steel Corp., 642 F.2d 1302, 1310–11 n.8 (D.C. Cir.

1980), rev’d on other grounds, 455 U.S. 72 (1982); cf. O’Hare

v. Gen. Marine Transp. Corp., 740 F.2d 160, 170 (2d Cir.

1984) (purchase of equivalent health insurance for non-union

employees does not excuse failure to contribute to ERISA

benefit funds). Nor is the result inequitable. On the contrary, having reaped the benefits of R.C. Construction’s asUSCA Case #02-7091 Document #795772 Filed: 01/09/2004 Page 10 of 12
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sets and goodwill, R.C. Tile should not be able to avoid R.C.

Construction’s liability to the Fund.

Furthermore, even an employer that receives no economic

benefit from avoiding its obligations does harm to the pension

fund, which relies upon contributions (and the investment

income thereon) from all signatory employers to finance the

defined benefits due to beneficiaries. See Cent. Pa. Teamsters Pension Fund v. McCormick Dray Line, Inc., 85 F.3d

1098, 1109 & n.4 (3d Cir. 1996); Mullins, 642 F.2d at 1310

n.8. Payments made to non-union employees in lieu of contributions to the Fund do nothing to remedy the harm to the

Fund from the non-payment of pension contributions due

under the CBA.

Second, the appellants argue holding R.C. Tile liable would

unjustly enrich the Fund, for which any award of damages

would be a windfall. According to the appellants, the Trustees would receive contributions in respect of, but would not

incur any obligations to provide pension benefits to, R.C.

Tile’s non-union employees.

This is nonsense. R.C. Tile’s decision to employ non-union

labor does not diminish the Fund’s defined-benefit obligation

to its union beneficiaries. Mirroring that obligation, the

Trustees had a clear right under the CBA to receive R.C.

Construction’s contributions. See McCormick Dray Line, 85

F.3d at 1109 (‘‘[T]he welfare fund expected to have those

funds at hand for payout of benefits on behalf of other

employees, including employees of other employers who are

members of the multiemployer welfare fund’’). The appellants’ argument is also foreclosed by Mullins, a case brought

by union health and welfare trust funds, in which we stated:

It is not unfair to [the employer] that it be required to

contribute to the TTT funds after having indirectly paid a

comparable amount to other workers, for this is exactly

what it contracted to do. Neither would enforcing the

contract as written create a ‘‘windfall’’ for the Trustees.

642 F.2d at 1310 n.8; see also Bituminous Coal Operators’

Ass’n, Inc. v. Connors, 867 F.2d 625, 636 (D.C. Cir. 1989) (no

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defense that contributions required by CBA would, if paid,

over-fund pension plan).

Finally, the appellants argue (under the heading of ‘‘waiver’’) the Trustees are barred from recovering unpaid pension

contributions because they ‘‘waited for more than a year’’

before notifying R.C. Construction and R.C. Tile of their

delinquency. The appellants claim they were prejudiced by

the delay because R.C. Tile paid out as wages the monies now

claimed by the Trustees for the benefit of the Fund. This

argument, which is doubtful as a matter of law, see McCormick Dray Line, 85 F.3d at 1108 (two year delay between

discovery of delinquency and filing of suit not unreasonable),

is utterly foreclosed by the undisputed facts of this case.

After R.C. Construction ceased making payments to the

Fund in December 1997, the Trustees ‘‘requested an audit of

R.C. Construction’s books and records, pursuant to ERISA

and the [CBA], so that it could be determined whether

contributions had been made’’ in full. Declaration of David

Stupar, Executive Director of the Fund, at ¶ 12. The Trustees were still trying to get that information when they filed

this suit. Upon these facts we cannot say the Trustees were

dilatory in notifying the appellants of their delinquency.

III. Conclusion

For the foregoing reasons, the judgment of the district

court is

Affirmed.

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