Carpenters Pension Trust Fund v. Moxley

Summarized by:

  • Court: 9th Circuit Court of Appeals Archives
  • Area(s) of Law: Bankruptcy Law
  • Date Filed: 08-20-2013
  • Case #: 11-16133
  • Judge(s)/Court Below: Circuit Judge Schroeder for the Court; Circuit Judge Callahan; Chief District Judge Vance
  • Full Text Opinion

Pension fund “withdrawal liability” owed after a collective bargaining agreement has expired is dischargeable in a bankruptcy proceeding, and withdrawal liability, as a statutory obligation, is different from any unpaid obligations that arise from obligations created by a collective bargaining agreement.

Michael Moxley, through his cabinet installation business, was part of a multiemployer bargaining agreement called “The 46 Northern California Counties Carpenter’s Master Agreement of Northern California” (“the Agreement”). The Agreement required Moxley to contribute to the Carpenters Pension Trust Fund for Northern California (“the Fund”). In June 2004, the Agreement expired, and Moxley was no longer a signatory to the Agreement. Moxley thus stopped contributing to the Fund, but continued to do his carpentry work. In 2005, the Fund informed Moxley that he was still doing work covered under the Agreement and was “subject to withdrawal liability pursuant to 29 U.S.C. § 1381.” The Fund sued Moxley for the liability amount, but the suit was stayed because Moxley filed for bankruptcy. The Fund claimed that it was a trust fund, and Moxley, as someone who administered, owned, or controlled assets of a trust fund, “was a fiduciary for funds in his control representing the amount of withdrawal liability that he should pay to the fund.” The bankruptcy court disagreed and held that Moxley was in fact not a fiduciary when it came to the debt owed to the Fund. The Fund appealed to the district court. The district court upheld the bankruptcy court’s decision. The Fund again appealed. The Ninth Circuit held that although Moxley continued to do work covered by the Agreement, he was subject to withdrawal liability under the Employment Retirement Income Security Act (“ERISA”). Therefore, the debt was dischargeable in bankruptcy because “the withdrawal liability is not an unpaid contribution.” The withdrawal liability is not an unpaid contribution because “withdrawal liability is imposed by ERISA to account for the pension fund’s needs going forward,” and thus is different from the contributions required by the plan agreements. AFFIRMED.

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