Opinion ID: 785377
Heading Depth: 2
Heading Rank: 2

Heading: ERISA Liability

Text: 10 Finally, the Funds argue that Scanlan, as the signatory employer, is liable under ERISA § 515, for the fringe benefit contributions. ERISA § 515 states: 11 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 shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement. 12 29 U.S.C. § 1145. Employer is defined as any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan; and includes a group or association of employers acting for an employer in such capacity. 29 U.S.C. § 1002(5). Person means an individual, partnership, joint venture, corporation, mutual company, joint-stock company, trust, estate, unincorporated organization, association, or employee organization. 29 U.S.C. § 1002(9). 13 We have already determined that corporate officers cannot be held personally liable under ERISA where there is no basis for piercing the corporate veil. Rockney v. Blohorn, 877 F.2d 637, 643 (8th Cir.1989). Thus, if Scanlan had signed the agreement as an officer of SBS, he could not be held personally liable for the fringe benefit contributions unless the corporate veil of SBS as to Scanlan had been pierced. Here, the district court only pierced the corporate veil of SBS Enterprises as to SBS. We find, however, that the district court clearly erred in concluding that Scanlan signed the CBA only as an officer of SBS. 14 The district court did not make any findings of fact regarding Scanlan's motive for signing the CBA. The court merely asserted that because SBS Enterprises is indistinguishable from SBS, it follows that Scanlan for all practical purposes signed the CBA as an officer of SBS, Inc. (Dist. Ct. Order Feb. 4, 2002, at 5.) Neither party disputes that Scanlan was the sole owner of SBS Enterprises. Scanlan designated himself as owner when he signed the CBA and admitted in his deposition that he was the sole owner of the business. It is true that Scanlan's status as owner of SBS Enterprises probably afforded him no personal benefit beyond what he received as an officer of SBS because the proceeds of union contracts were deposited into SBS's bank account. However, the district court also found that Scanlan intended to form a separate business entity: 15 There is no evidence that SBS Enterprises as a business took any kind of action other than signing the CBA, and SBS, Inc., managed and controlled every obligation SBS Enterprises had under the CBA. Although Scanlan asserts, and the Funds do not deny, that he intended to establish SBS Enterprises as a separate concern to accommodate his union employees, that intent does not excuse Scanlan from the practical necessity of operating SBS Enterprises as an independent business. 16 ( Id. at 4.) In light of this finding, it is clear that Scanlan intended to sign the CBA as the owner of SBS Enterprises, and not as an officer of SBS. Further, the record indicates that SBS Enterprises operated as a separate business entity to the extent that Scanlan relied upon SBS Enterprises to procure union contracts. While the omission of corporate officers from the definition of person implies that Congress wanted to protect corporate officers from liability, the plain text of the same statutory provision clearly indicates that Scanlan, as the owner of an unincorporated organization, is subject to ERISA liability. See 29 U.S.C. § 1002(9). This intent is evidenced by the inclusion of individual and unincorporated organization in the list of those defined as persons. Id. 17 Scanlan relies on Operating Engineers Pension Trust v. Reed, 726 F.2d 513 (9th Cir.1984), Audit Services, Inc. v. Rolfson, 641 F.2d 757 (9th Cir.1981), and Seymour v. Hull & Moreland Engineering, 605 F.2d 1105 (9th Cir.1979), for the proposition that merely signing a CBA does not make the signatory jointly and severally liable for obligations set forth in the CBA. Reed and Seymour, however, pertained to situations in which a sole proprietorship or a partnership was formed initially, but then was incorporated. See Reed, 726 F.2d at 514; Seymour, 605 F.2d at 1108. Rolfson also does not instruct us, as it dealt with piercing the veil of a formed corporation. Rolfson, 641 F.2d at 759, 764. 18 Unlike the defendants in the Ninth Circuit cases, Scanlan attempted to operate two separate business entities simultaneously. Scanlan never indicated to the Funds that a different business entity was assuming the CBA obligations, and he represented to the Funds, by signing the CBA as owner, that he and SBS Enterprises were responsible for meeting the terms of the CBA. Therefore, we hold that Scanlan is liable for fringe benefit contributions as set forth in the terms of the CBA.