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Trustees of Ohio Bricklayers Health and Welfare Fund v. VIP Restoration, Inc.

United States District Court, N.D. Ohio, Eastern Division

February 16, 2018

Trustees of Ohio Bricklayers Health and Welfare Fund, et al., Plaintiffs,
VIP Restoration, Inc., et al., Defendants.




         This matter is before the Court upon Plaintiffs' Motion for Summary Judgment against Defendant Rick Semersky. (Doc. 15). The motion is unopposed. This is an ERISA case. For the reasons that follow, the motion is GRANTED.


         Plaintiffs are Trustees of the following funds: the Ohio Bricklayers Health and Welfare Fund, the Bricklayers and Trowel Trades International Pension Fund, the International Masonry Institute, the Bricklayers and Allied Craftworkers Local No. 55 Pension Fund, and the Bricklayers and Allied Craftworkers Local No. 7 Pension Fund (together, the “Funds”). Plaintiffs bring this lawsuit against Defendants VIP Restoration, Inc. (“VIP”) and its president, Rick Semersky, Jr., alleging claims for breach of collective bargaining agreements, breach of fiduciary duty, and violation of the Employee Retirement Income Security Act of 1974 (“ERISA”).

         The Funds are multi-employer plans, which are maintained pursuant to collective bargaining agreements (“CBAs”) between VIP and Local Unions Nos. 5, 7, 8, 16 and 55 (“Local Unions”). (Docs. 1 and 5 ¶¶ 3, 10). It is undisputed that the Funds are trust funds that were established for the purpose of providing health care, pension, and related benefits for participants and their dependents. (Docs. 1 and 5 ¶ 3; Doc. 15-6 ¶ 2).

         The CBAs require VIP to pay contributions to the Funds for work done in the geographic jurisdiction of the Local Unions. (Docs. 1 and 5 ¶¶ 12, 13). Pursuant to the CBAs, VIP also agrees to submit timely and accurate monthly reports to the Funds with respect to all employees performing covered work and to make contributions to the Funds. Id. at ¶ 14. The CBAs require VIP to submit to audits by the Funds to determine that the contributions had been made in accordance with the parties' agreements. Id. at ¶ 11. The terms of the CBAs provide that when VIP fails to make timely contributions to the Funds, it is required to pay a penalty, including but not limited to interest and liquidated damages. (Doc. 1-3, PageID# 116; Doc. 1-4, PageID# 137; Doc. 1-5, PageID# 189-190; Doc. 1-7, Page ID#256-57; Doc. 1-8, PageID# 284-85).

         Semersky is the president, owner, and principal officer of VIP. (Docs. 1 and 5 ¶¶ 6, 27). He admits to being a fiduciary under ERISA. Id. at ¶ 6. He is the only person with authority to sign checks at VIP, and he had the final say over which VIP bills were paid. (Doc. 15-11, PageID# 767; Doc. 15-12, PAGEID#851).

         Semersky also owned other companies, and admitted in his deposition that he used monies from the VIP bank account for the benefit of himself and his other companies. (Doc. 15-17, PAGEID#794-800). For example, VIP paid for the liquor permit for one of Semersky's restaurants. Id. at 799-800. VIP paid for a consultant and other individuals who did work for Semersky's other companies. Id. at 794, 800. VIP also paid for Semersky's Shoreby Club membership. Id. at 795. VIP repeatedly transferred money to Semersky's other restaurants. Id. at 797-98. Meanwhile, VIP did not stay current with the contributions that it owed to the Funds. (See Doc. 15-6 ¶ 5).

         The Funds retained an auditor to review the books and records of VIP and determine whether VIP had paid contributions on all work covered by the CBAs during the period January 1, 2012 through September 30, 2016. (Doc. 15-1 ¶ 1). Larry Brown, CPA, conducted the audit. Id. at ¶¶ 1-2. Auditor Brown determined that VIP failed to pay contributions in a timely manner, and, therefore, accrued interest and liquidated damages. Id. ¶ 5. Further, VIP frequently paid contributions late. Funds Administrator Kimberly Wood and Executive Director David F. Stupar calculated the additional interest and liquidated damages associated with VIP's late payments. (Doc. 15-6; Doc. 15-15).

         VIP went into receivership in September 2017. (Doc. 11-1). Documents produced by VIP demonstrate that the funds loaned to Semersky's other businesses by VIP totaled $2, 436, 335.20 at that time. (Doc. 15-13).

         Thereafter, Plaintiffs filed this lawsuit asserting three claims for relief. Count one is a claim for breach of the CBAs between the parties. Count two is a claim for breach of fiduciary duty. Count three is a claim for prohibited transactions under ERISA. When VIP went into receivership, it moved to stay the case. The Court granted that stay as to VIP only, and allowed the case to continue as to Semersky. Plaintiffs move for summary judgment with respect to Counts 2 and 3 against Semersky. Semersky is not a party to Count 1, and Plaintiffs have not moved on that Count. Semersky has not opposed the motion.


         Summary judgment is appropriate when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986) (citing Fed.R.Civ.P. 56(c)); see also LaPointe v. UAW, Local 600, 8 F.3d 376, 378 (6th Cir. 1993). The burden of showing the absence of any such genuine issues of material facts rests with the moving party:

[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of “the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, ” if any, which it believes demonstrates the absence of a genuine issue of material fact.

Celotex, 477 U.S. at 323 (citing Fed.R.Civ.P. 56(c)). A fact is “material only if its resolution will affect the outcome of the lawsuit.” Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). Accordingly, the nonmoving party must present “significant probative evidence” to demonstrate that “there is [more than] some metaphysical doubt as to the material facts.” Moore v. PhilipMorris Cos., Inc., 8 F.3d 335, 340 (6th Cir.1993). The nonmoving party may not simply rely on its pleading, but must “produce evidence that results in a ...

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