The International Painters and Allied Trades Industry Fund claims Clayton B. Obersheimer South Buffalo and two of its officers failed to meet their obligations under certain labor agreements to make contributions to the plan in violation of the Employee Retirement Income Security Act (ERISA), but the officers moved to dismiss the claims against them, saying they are not fiduciaries. U.S. District Judge Ellen Lipton Hollander of the United States District Court for the District of Maryland agreed, finding that International Painters did not sufficiently explain or demonstrate why the officers of Clayton B. Obersheimer should be considered fiduciaries of the plaintiffs’ retirement plan.
Hollander agreed with the officers’ argument that the plaintiffs “allege no facts that support their legal conclusion that the [officers] are fiduciaries,” or that the Officers “have any authority or control to manage or dispose of plan assets.” In addition, she agreed that “the plaintiffs simply insert the phrase, ‘the Individual Defendants’ in front of a modest rewording of the statutory definition of ‘fiduciary’ and nothing more.”
Hollander rejected the plaintiffs’ argument that one of the officer’s signature on a debt obligation document demonstrates that the officers had signature authority to bind the company to agreements and made decisions regarding the order in which issued payment to its creditors, making them fiduciaries. Hollander said this establishes nothing at all about the officer who did not sign the agreement and the fact that the other officer “signed checks on the company’s behalf,” or had the authority to authorize payments on behalf of the company, is insufficient to establish fiduciary status.
The charges against the two officers of Clayton B. Obersheimer South Buffalo named in the suit were dropped.
The court’s opinion is here.
« Pension Funding at Highest Level in a Year