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International Masonry Training and Education Foundation v. Hawaii Masons' Training Fund

United States District Court, D. Hawaii

October 10, 2019

INTERNATIONAL MASONRY TRAINING AND EDUCATION FOUNDATION, et al., Plaintiffs,
v.
HAWAII MASONS' TRAINING FUND, et al., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS, ECF NO. 38

          J. Michael Seabright, Chief United States District Judge

         I. INTRODUCTION

         Plaintiffs International Masonry Training and Education Foundation (“IMTEF”) and its Board of Trustees (“IMTEF Trustees”) (collectively, “Plaintiffs”) have alleged violations of state and federal laws against Defendants Hawaii Masons' Training Fund a/k/a Hawaii Masons' and Plasterers' Apprenticeship and Training Fund (“Hawaii Fund”), and its trustees, Peter Iriarte, Tryson Mook, Albert Mandac, [1] Francis Pascual, Darlean Kiyokane, Glen Kaneshige, Claude Matsumoto, and Michael Mazzone (“Defendant Trustees”) (collectively, “Defendants”). Specifically, Plaintiffs argue that Defendants violated a collective bargaining agreement (“CBA”), entered between International Union of Bricklayers and Allied Craftworkers, Local #1 of Hawaii, AFL-CIO (“the Union”) and the Contractors Association of Hawaii, an association of contractors, or contractor employers directly (“the Contractors”), by not forwarding contributions made to Plaintiffs' fund, as agreed upon in the CBA.

         Before the court is Defendants' Motion to Dismiss. ECF No. 38. Based on the following, the court hereby GRANTS in part and DENIES in part Defendants' Motion to Dismiss.

         II. BACKGROUND

         A. Factual Background[2]

         IMTEF is an employee welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (“ERISA”) § 3(1), 29 U.S.C. § 1002(1), an employee benefit plan within the meaning of ERISA § 3(3), 29 U.S.C. § 1002(3), and an multiemployer plan within the meaning of ERISA § 3(37)(A), 29 U.S.C. § 1002(37)(A), which was “established and maintained for the purpose of providing apprenticeship training and educational benefits to eligible participants.” Compl. ¶ 8, ECF No. 19-1. IMTEF is also a jointly-administered trust fund established pursuant to Section 302(c)(5) of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 186(c)(5). Id. The IMTEF Trustees are fiduciaries within the meaning of ERISA § 3(21)(A), 29 U.S.C. § 1002(21)(A). Id. ¶ 9.

         Defendant Hawaii Fund is an employee welfare benefit plan within the meaning of ERISA § 3(1), 29 U.S.C. § 1002(1), an employee benefit plan within ERISA § 3(3), 29 U.S.C. § 1002(3), and a multiemployer plan within the meaning of ERISA § 3(37)(A), 29 U.S.C. § 1002(37)(A). Id. ¶ 10. Defendant Trustees are members of the Board of Trustees of the Hawaii Fund. Id. ¶ 11.

         Pursuant to the CBA between the Union and the Contractors, each Contractor must make “payments to the various Trust and other Funds, as specified in [the CBA].” Defs.' Ex. 1, ECF No. 38-2 (“The CBA”) at § 14(A)(1). The CBA outlines five Funds to which the Contractors are required to contribute. Of relevance here is the “Apprenticeship and Training Fund, ” which requires the following contributions:

F. Apprenticeship and Training Fund
1. Each Contractor shall participate in the Hawaii Masons' and Plasterers' Apprenticeship and Training Trust Fund (hereinafter referred to as the [“the Hawaii Fund”]) under the terms and conditions as set forth in the Hawaii Masons' Training Fund Declaration of Trust Agreement as executed December 28, 1977, and as it may be amended in the future. . . .
Effective August 31, 2015, for Apprentices indentured on or after September 1, 2003, from the above amounts, IMI contributions shall be made pursuant to and as set forth as in Section 14.F.4.
4. International Masonry Institute (“IMI”). Effective August 31, 2015, each Contractor shall contribute to IMI on behalf of each employee covered by this Agreement, one percent (1 %) of the total hourly wage and benefits package. These contributions shall be paid to [the Hawaii Fund] in the same manner as other Trust Fund contributions as set forth in Section 14, Section I of this Collective Bargaining Agreement.

         The CBA at § 14(F).[3] The CBA was subsequently amended to replace “IMI” with “IMTEF.” Defs.' Ex. 3, ECF No. 38-4. Based on this provision, “it was understood by all parties that this provision was intended to require employers to pay their IMTEF contributions to the Hawaii Fund, and that the Hawaii Fund would then forward said contributions to the IMTEF.” Compl. ¶ 15. Neither the Hawaii Fund nor IMTEF are signatories to the CBA. See Id. ¶ 12 (listing parties to the CBA).

         The Hawaii Fund “has accepted at least $430, 770 in contributions intended for the IMTEF from employers who made such contributions under the belief and with the expectation that the Hawaii Fund would forward those contributions to the IMTEF on behalf of the employers.” Id. ¶ 16. But the Hawaii Fund has not forwarded any of these contributions to IMTEF. Id. ¶¶ 18, 20.

         B. Procedural Background

         Plaintiffs filed their Complaint in the United States District Court for the District of Maryland on October 26, 2018. See ECF No. 19-1. Plaintiffs assert two federal claims: that the Hawaii Fund violated ERISA for delinquent contributions under §§ 502(g)(2) and 515 of ERISA, 29 U.S.C. §§ 1132(g)(2) and 1145 (Count I) and that all Defendants violated ERISA for breaches of their fiduciary duties under §§ 409, 502(a)(2) of ERISA, 29 U.S.C. §§ 1109, 1132(a)(2) (Count II). See Compl. ¶¶ 22-43. Plaintiffs also assert state law claims of conversion, breach of fiduciary duty, and tortious interference with contractual relations against all Defendants (Counts III-V), and unjust enrichment against the Hawaii Fund (Count VI). See Id. ¶¶ 44-76.

         On January 4, 2019, Defendants filed motions to transfer venue to the District of Hawaii and to dismiss Plaintiffs' Complaint. ECF No. 19-7. On April 3, 2019, the United States District Court for the District of Maryland granted Defendants' motion to transfer to the District of Hawaii. See ECF No. 19-13 (“Transfer Order”). In so doing, it did not reach the merits of Defendants' Motion to Dismiss. Transfer Order at 1, n.1. Presently before the court is Defendants' Motion to Dismiss, re-filed in this district on July 3, 2019. ECF No. 38. Plaintiffs filed their Opposition on July 31, 2019. ECF No. 40. Defendants filed their Reply on August 20, 2019. ECF No. 41. A hearing was held on October 1, 2019.

         III. STAN ...


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