United States District Court, N.D. Indiana, Hammond Division
FRED A. COLVIN, CHAIRMAN of the BOARD OF TRUSTEES, on behalf of BRICKLAYERS UNION LOCAL NO. 6 OF INDIANA PENSION FUND, et al., Plaintiffs,
H.E.S.S. CAULKING AND RESTORATION, INC., Defendant.
OPINION AND ORDER
E. MARTIN, MAGISTRATE JUDGE
matter is before the Court on Plaintiffs' Motion for
Leave to File First Amended Complaint [DE 13], filed on May
2, 2016. Plaintiffs request that the Court grant them leave
to amend the Complaint to add two counts naming Charles
Ramsey, individually, d/b/a H.E.S.S. Caulking &
Restoration, Inc., as a party defendant, and asserting that
he is personally liable for the contributions and deductions
owed to Plaintiffs. Defendant filed a response on May 12,
2016, and on May 19, 2016, Plaintiffs filed a reply.
September 29, 2016, Plaintiffs, employee benefit funds
collectively referred to as the Trust Funds, filed a
Complaint pursuant to the Employment Retirement Income
Security Act of 1974, as amended, alleging that Defendant
breached obligations owed to Plaintiffs. In particular,
Plaintiffs allege that Defendant owes delinquent
contributions and deductions to Plaintiffs, plus liquidated
damages, interest, and attorney fees.
Court entered a discovery plan requiring Plaintiffs to file
any motion for leave to amend pleadings or add parties before
May 1, 2016. The instant Motion was filed on April 27, 2016,
with the proposed First Amended Complaint attached as an
exhibit. Plaintiffs seek to add two counts against Charles
Ramsey, individually, d/b/a H.E.S.S. Caulking &
Restoration, Inc. They allege that Charles Ramsey may have
been acting in an individual capacity when he signed a
Memorandum of Agreement (“MOA”) with Plaintiff
Bricklayers' Union, Local No. 6 of Indiana,
Administrative Unit of Indiana of the International Union of
Bricklayers and Allied Craftsmen, AFL-CIO, on behalf of an
employer identified as H.E.S.S. Caulking & Restoration on
November 4, 1992. Plaintiffs allege that H.E.S.S. may not
have been incorporated at that time, and that Ramsey
therefore may be personally liable for the contributions and
deductions owed to Plaintiffs.
Rule of Civil Procedure 15(a) provides that, when a party
seeks leave to amend a pleading, the “court should
freely give leave when justice so requires.”
Fed.R.Civ.P. 15(a)(2). Thus, if the underlying facts or
circumstances relied upon by a plaintiff are potentially a
proper subject of relief, the party should be afforded an
opportunity to test the claim on the merits. Foman v.
Davis, 371 U.S. 178, 182 (1962). The decision whether to
grant or deny a motion to amend lies within the sound
discretion of the district court. Campbell v. Ingersoll
Milling Mach. Co., 893 F.2d 925, 927 (7th Cir. 1990).
However, leave to amend is “inappropriate where there
is undue delay, bad faith, dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, or futility of the
amendment.” Villa v. City of Chi., 924 F.2d
629, 632 (7th Cir. 1991) (citing Foman, 371 U.S. at
183). An amendment is considered “futile” if it
would not withstand a motion to dismiss or motion for summary
judgment. Sound of Music Co. v. Minnesota Min.
& Mfg. Co., 477 F.3d 910, 923 (7th Cir. 2007);
Vargas-Harrison v. Racine Unified Sch. Dist., 272
F.3d 964, 974 (7th Cir. 2001).
plaintiff seeks to add a new defendant through an amended
complaint, Federal Rule of Civil Procedure 20 is implicated.
See Chavez v. Ill. State Police, 251 F.3d 612,
631-32 (7th Cir. 2001). It provides that defendants may be
joined to an action if “(A) any right to relief is
asserted against them jointly, severally, or in the
alternative with respect to or arising out of the same
transaction, occurrence, or series of transactions or
occurrences; and (B) any question of law or fact common to
all defendants will arise in the action.” Fed.R.Civ.P.
20(a)(2). “The standard for permissive joinder under
Rule 20 is liberal, ” Eclipse Mfg. Co. v. M & M
Rental Ctr., Inc., 521 F.Supp.2d 739, 744 (N.D. Ill.
2007), and “courts are inclined to find that claims
arise out of the same transaction or occurrence when the
likelihood of overlapping proof and duplication in testimony
indicates that separate trials would result in delay,
inconvenience, and added expense to the parties and to the
court.” 7 Charles Alan Wright et al., Federal Practice
and Procedure § 1653 (3d ed. 2001); see also
Chavez, 251 F.3d at 632; Thompson v. Boggs, 33
F.3d 847, 858 (7th Cir. 1994).
seek leave to add as a party defendant an entity who they
allege may be personally liable for benefits owed Plaintiffs
pursuant to the agreement between the parties in this case.
Defendant does not dispute that the right to relief asserted
against Ramsey does not arise out of the same transaction or
occurrence, but argues that the additional counts seeking
personal liability against Charles Ramsey would be futile. It
argues that there can be no personal liability of corporate
officers, and that since H.E.S.S. Caulking was incorporated
prior to the MOA that is at issue in this case and there is
no evidence that Ramsey was acting in his individual capacity
in signing the MOA or in his subsequent dealings with the
Trust Funds, there is no basis to assess personal liability
against him. Plaintiffs argue that Ramsey signed the MOA as
an individual sole proprietor doing business as H.E.S.S.
Caulking & Restoration, which had not properly
incorporated at that time, and therefore Ramsey may be
exposed to personal liability for the obligations arising out
of the collective bargaining agreement.
H.E.S.S. was a sole proprietorship, with Ramsey as a sole
proprietor, he would be personally liable for the
business's debts and obligations. See, e.g., Bledsoe
v. State Farm Fire & Cas. Co., No. 1:04 CV 1584
DFH-TAB, 2005 WL 2491577, at *4 (S.D. Ind. Oct. 7, 2005). The
parties agree that H.E.S.S. was not incorporated until May 2,
1995. Plaintiffs argue that Ramsey was acting in his
individual capacity when he signed the 1992 MOA and therefore
may be personally liable for the benefits owed Plaintiffs.
Defendant argues that the MOA binding H.E.S.S. to a
collective bargaining agreement Dated: June 9, 2005, is the
operative MOA governing H.E.S.S.'s obligations to
Plaintiffs, and as H.E.S.S. was incorporated prior to that
signing, Ramsey cannot be held personally liable for the
obligations that arose as a result of that agreement.
the Complaint nor the proposed Amended Complaint identify the
document that initially created the collective bargaining
agreement between the parties in this case, and the Answer
admits that H.E.S.S. is a signatory to a collective
bargaining agreement with Plaintiffs. On the basis of the
pleadings and the parties' arguments, the Court cannot
conclude that the proposed Amended Complaint would not
survive a motion to dismiss or motion for summary judgment.
Since the underlying facts relied upon by Plaintiffs are
potentially a proper subject of relief and the claims they
seek to add against Ramsey arise out of the same operative
facts, amendment is appropriate.
foregoing reasons, the Court hereby GRANTS Plaintiffs'
Motion for Leave to File First Amended Complaint [DE 13] and
ORDERS that Plaintiffs shall have through September
5,2016, within which to file the Amended
Complaint, currently on the docket as an attachment to the