In Greater St. Louis Construction , Et. Al. v. Park-Mark, Inc., No. 11-3746 (8th Cir. 2012), the Greater St. Louis Construction Laborers Welfare Fund, along with several other employee benefit funds and their trustees (collectively, “the Funds”), brought this action under ERISA to recover delinquent payments from Park-Mark, Inc. (“Park-Mark”). Park-Mark contends that it should not be liable for these delinquent payments because it mistakenly made significant overpayments that require a set-off and a refund. The district court granted summary judgment in favor of the Funds.
In this case, Park-Mark was required, under a collective bargaining agreement (“the CBA”), to make contributions to the Funds, which are union-sponsored welfare benefit plans subject to ERISA. At one point, it was discovered that Park-Mark had mistakenly over paid contributions due by about $548,000. The overpayments were attributable to contributions for hours of work performed outside to the jurisdiction of the CBA. Park-Mark stopped, for a time, making any contributions to the Funds, since the Funds did not provide credit for the overpayments. The Funds then brought this suit against Park-Mark under ERISA for the delinquent contributions (that is, the contributions due that Park-Mark failed to make after it stopped contributing and at certain other times). The issue for the Eighth Circuit Court of Appeals (the “Court”): Is Park-Mark entitled to a set-off and a refund of the $548,000 in overpayments against the delinquent contributions?
In analyzing the case, the Court noted that, under ERISA, contributions made by a mistake of law or fact may be returned “within 6 months after the plan administrator determines that the contribution was made by such a mistake.” (See 29 U.S.C § 1103(c)(2)(A)(ii)). Further, courts have recognized that an employer has a federal common law action for restitution of mistakenly made payments to an ERISA plan. However, (at least in the Eighth Circuit) the employer is not entitled to restitution for mistaken contributions unless it can demonstrate that restitution is equitable under the circumstances. Here, the facts of the case indicate that restitution to Park-Mark would be inequitable to the Funds. These facts include possible extra welfare and pension benefits that Park-Mark employees may have already received due to the overpayments, Park-Mark’s failure to earlier assert the set-off and refund, that the Funds’ decision to not return the mistaken contributions was not arbitrary and capricious, and no unjust enrichment to the Funds resulted from the mistaken contributions. As such, Park-Mark is not entitled to the set-off and refund. Accordingly, the Court affirmed the district court’s decision.