Carpenters Pension Trust Fund v. Michael Moxley

INTRODUCTION

When contractors in the construction industry stop working under the terms of a collective bargaining agreement, but continue in business, they cannot simply stop making payments to the pension fund administered under that agreement. Pursuant to the Employee Retirement Income Security Act (“ERISA”), they are liable to the fund in the amount determined necessary to ensure payment of benefits to employees whose rights have vested. 29 U.S.C. §§ 1381 , 1391. The issue in this appeal is whether that “withdrawal liability” is dischargeable in bankruptcy. The answer requires some analysis of possible differences between withdrawal liability and liability for delinquent contributions, but we ultimately agree with the result reached by both the bankruptcy court and the district court that the debt is dis-chargeable. The pension fund cannot establish that the debtor is a fiduciary with respect to money it owes as withdrawal liability.

BACKGROUND

The debtor is Michael G. Moxley, who did business as MGM’s Cabinet Installation Service. In 1999 he became a signatory to the multiemployer bargaining agreement entitled “The 46 Northern California Counties Carpenter’s…