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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

TRUSTEES OF THE OPERATING

ENGINEERS’ LOCAL 324 PENSION

FUND, et al.,

Plaintiffs,

Case No. 09-11702

v.

Hon. John Corbett O’Meara

ABBOTT CONSTRUCTION, INC.,

a Michigan corporation, and BRUCE

ABBOTT, individually,

Defendants.

_______________________________________/

OPINION AND ORDER GRANTING

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT

Before the court is Plaintiffs’ motion for summary judgment, which has been fully briefed.

The court heard oral argument on March 4, 2010, and took the matter under advisement. For the

reasons explained below, the court grants Plaintiffs’ motion.

BACKGROUND FACTS

Plaintiffs are various fringe benefit funds seeking delinquent employee benefit contributions

from Defendants Abbott Construction, Inc., and Bruce Abbott pursuant to the Employee Retirement

Income Security Act (“ERISA”). The Funds are third-party beneficiaries of the constructive

bargaining agreement between Abbott Construction and Operating Engineers’ Local 324. It is

undisputed that Abbott Construction owes the Funds some amount in delinquent contributions.

According to an audit completed on October 15, 2009, the amount of unpaid contributions was

$63,351.51; liquidated damages resulting from the audit were $6,300.65; and liquidated damages
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resulting from late payments were $1,711.55. The Funds are holding $2,174.64 in escrow, leaving

a total balance of $69,189.07.

LAW AND ANALYSIS

I. Defendants Fail to Sufficiently Dispute Audit Amount

In their response brief, Defendants contend that Bruce Abbott provided information to the

auditor demonstrating that the audit figures are incorrect. Defendants do not explain why the

numbers are incorrect, however. In their reply, Plaintiffs contend that the revisions sought by

Defendants (which they dispute) would only decrease the delinquency by $650.11. In light of their

failure to provide specific facts contesting the audit, Defendants have not sufficiently supported their

position to avoid Plaintiffs’ motion on this issue. See Plumbers Local 98 Defined Benefit Pension

Fund v. M & P Master Plumbers of Michigan, 608 F. Supp.2d 873, 881 (E.D. Mich. 2009) (Rosen,

C.J.) (where plaintiff funds have produced evidence of delinquent contributions, burden shifts to

employer to show what work is not covered under the CBA); Michigan Laborer’s Health Care Fund

v. Grimaldi Concrete, Inc., 30 F.3d 692 (6th Cir. 1994) (same). Absent specific documentation

challenging the audit from Defendants, the court must accept Plaintiffs’ properly supported

calculations.

II. Fiduciary Liability of Bruce Abbott

The other issue raised by Plaintiffs is the fiduciary liability of Bruce Abbott. It is undisputed

that Mr. Abbott controlled which creditors would be paid by Abbott Construction. It is also clear

that Abbott Construction paid other creditors, including paying down a line of credit, and continued

to operate rather than contributing to the Funds during the relevant time period. Under these

circumstances, the court finds that Mr. Abbott was a fiduciary with respect to plan assets and that
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he breached his fiduciary duty. “Congress intended ERISA’s definition of fiduciary ‘to be broadly

construed.’” LoPresti v. Terwilliger, 126 F.3d 34, 40 (2d Cir. 1997) (citation omitted).

Unlike the common law definition under which fiduciary status is

determined by virtue of the position a person holds, ERISA’s

definition is functional. Section 1002(21)(A) of ERISA defines a

fiduciary in several ways. In relevant part, that statute provides that

a “person is a fiduciary with respect to a plan,” and therefore subject

to ERISA fiduciary duties, “to the extent” that he or she “exercises

any authority or control respecting management or disposition of

[plan] assets,” or, “has any discretionary responsibility in the

administration of such plan.” 29 U.S.C. § 1002(21)(a)(i) and (iii).

Id. (citations omitted). 

In LoPresti, the court found the president of a closely held corporation to be an ERISA

fiduciary where he had a role in determining which creditors to pay and when those creditors were

to be paid. Id. at 40. The company president in LoPresti failed to pay fringe benefit fund

contributions and paid other creditors instead. The court stated:

[T]his Court is convinced that Donald’s commingling of plan assets

with the Company’s general assets, and his use of those plan assets

to pay Company creditors, rather than forwarding the assets to the

Funds means that he “exercise[d] . . . authority or control respecting

. . . disposition of [plan] assets,” and hence is a fiduciary for purposes

of imposing personal liability under ERISA.

LoPresti, 126 F.3d at 40. See also Operating Engineers’ Local 324 Fringe Benefit Funds v. Nicolas

Equip. L.L.C., 353 F. Supp.2d 851, 854-55 (E.D. Mich. 2004) (Edmunds, J.) (finding principal of

company personally liable for unpaid fringe benefits because “instead of depositing the owed fringe

benefit payments with the Funds, he used the money for other purposes”); M & P, 609 F. Supp.2d

at 877-79 (finding that by failing to pay benefit contributions “while continuing to pay operating

costs for the company, [defendant] functionally ‘withheld’ unpaid wages and fringe benefit

contributions in violation of his contractual obligations”). 
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ORDER

Therefore, IT IS HEREBY ORDERED that Plaintiffs’ November 30, 2009 motion for

summary judgment is GRANTED. Plaintiffs shall submit a proposed judgment for entry.

Date: March 12, 2010 s/John Corbett O’Meara

United States District Judge

I hereby certify that a copy of this document was served upon counsel of record using the

court’s electronic filing system on this date, March 12, 2010.

s/William Barkholz

Case Manager