Court Opinion

ID: 8678141
Source: CourtListenerOpinion
Date Created: 2022-11-25 03:28:02.092391+00
Date Added: 2024-06-11T16:57:26.855926
License: Public Domain

MERRITT, Circuit Judge,
concurring in
part and dissenting in part.
I agree that the judgment below in this case should be reversed and the case remanded. My problem is that my colleagues seem to want to exclude from the audit to be undertaken below any of the books and records of Francesco, the alleged “alter ego entity” affiliated with Pa-trie and wholly owned by Bercich. In my view the limitation of the audit narrowly to the books and records of Patrie only is simply contrary to the language and the intent of the collective bargaining agreement.
The agreement executed by Bercich for Patrie states on its face in paragraph 5.4, entitled “Alter Ego/Successor Entities,” that “subterfuge” by the signatory is a potential problem and that “all” the terms and conditions of the contract “shall be applicable” to an “alter ego entity.” It seems plain that in light of the “subterfuge” concern and the “audit” requirements of the contract that the books of the affiliated company, Francesco, should be open to inspection and audit. The complaint specifically alleges in paragraphs 20 and 21 that Bercich and Patrie used Fran-cesco as an alter ego to “evade its fringe obligations,” explaining that it did so on a particular job in “December of 2011, to allow Patrie Construction Co. to avoid paying fringe benefits to the plaintiffs.... ”
The collective bargaining agreement expressly applies not only to employer signatories like Patrie, but also to “any other business entity ... wherein the Employer (including its ... owners ...) ... exercises ... any significant degree of ownership, management, or control.” Section 5.4. Bercich (as Patrie’s owner) and Francesco (as affiliated business entity owned by Bercich) are thus subject to the same auditing regime as Patrie by the terms of the agreement whenever they take part in “work of the type covered by this Agreement at the site of a construction project.”
Therefore, it seems obvious to me from the agreement that upon remand the plaintiffs should be entitled to inspect the books and records of the alleged “alter ego entity.” The refusal by Bercich to allow a complete audit of either company is suspicious and may be a partial cause of the plaintiffs failure to be able to fully plead their statutory alter ego claims. It is unclear to me why my colleagues seem to think that the alter ego claims are over and should no longer be considered. The alter ego claims have been the main point of this case from the beginning. A remand seems beside the point if the books of Bercich’s affiliated company — the alleged alter ego — is off limits.