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Gould v. Bond

United States District Court, E.D. Missouri, Eastern Division

August 19, 2019

JONATHAN GOULD, on behalf of St. Louis-Kansas City Carpenters Regional Council, Plaintiff,
v.
ALBERT BOND, Defendant and ST. LOUIS-KANSAS CITY CARPENTERS REGIONAL COUNCIL, Intervenor Defendant.

          MEMORANDUM OPINION

          DAVID D. NOCE UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court on the motion of plaintiff Jonathan Gould for leave to file a verified complaint under 29 U.S.C. § 501(b). Defendant Albert Bond and intervenor defendant St. Louis-Kansas City Carpenters Regional Council (“CRC”) oppose the motion. The parties have consented to the exercise of plenary authority by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(b).

         Background

         Plaintiff brought this action on behalf of intervenor CRC, alleging breaches of fiduciary duties owed to CRC by defendant Albert Bond, who is currently the Executive Secretary of CRC. According to plaintiff's verified proposed complaint, plaintiff is a member of CRC and was previously employed as a business agent for the union. Prior to the filing of this case, plaintiff brought a wrongful termination claim against CRC in 2016 in the Circuit Court of the City of St. Louis, Missouri. Jonathan Gould v. St. Louis-Kansas City Carpenters Regional Council et al., No. 1622-CC09954. (Doc. 17, Ex. 1). That case is still pending.

         Plaintiff alleges that defendant ignored and blatantly violated CRC policies, resulting both in personal benefit to defendant and other CRC officers, and loss to CRC in the amount of hundreds of thousands of dollars. Specifically, plaintiff claims that CRC business agents and executive board members receive weekly vehicle allowances of $300, and approximately $1000 per year for auto insurance. This allowance is counted as income, and the CRC pays approximately $15, 600 per year in taxes on this income per employee, or nearly $800, 000 per year in additional taxes. Plaintiff argues this should be set aside as a benefit rather than being included in weekly salaries. Plaintiff also claims that CRC pays into each business agent's and executive board member's pension at least 13 percent of their salary. Plaintiff argues that this is excessive compensation and improperly inflates pensions. Finally, plaintiff claims that certain funds have been misappropriated to pay for personal, non-business-related expenses. (Doc. 1 at 6-9).

         According to plaintiff, he repeatedly challenged these practices, beginning in 2007. (Id.). In January 2018, he sent defendant a formal demand letter under 29 U.S.C. § 501(b). (Id. at 11). On January 23, 2018, CRC answered plaintiff's demand, stating “the Council will launch a thorough and comprehensive investigation of [plaintiff's] allegations, ” acknowledging that the CRC has “a duty both to the Council and our 22, 000 members to remove all doubt respecting whether we are fulfilling our fiduciary duties as required by federal law and the Council's governing documents.” (Id. at 12). Defendant stated it would retain the services of Calibre CPA Group to investigate. (Id.).

         Plaintiff challenged Calibre's impartiality, as a CRC-affiliated group, the International Carpenters' Union, hired the firm from 2012 to 2016, paying $330, 000 in that time. Plaintiff asked that he be permitted to share documents directly with Calibre to ensure their accounting was accurate. CRC hired Mr. Clash-Drexler to facilitate communication between plaintiff and Calibre. In April 2018, Mr. Clash-Drexler advised plaintiff that CRC “provided Calibre with full cooperation and unrestricted access to the relevant financial records, including the Council's regular audit reports, expense reimbursement policies, employee expense reports, credit card records, and back-up documents.” (Id. at 12-13). Plaintiff was invited to share any documents with Mr. Clas-Drexler, and plaintiff sent 18, 000 to Mr. Clash-Drexler to be forwarded to Calibre for the accounting. These documents consisted mostly of expense reports, credit card receipts, and other CRC accounting documents. (Id. at 13). Mr. Clash-Drexler informed plaintiff he would need to identify the documents showing specific violations of 29 U.S.C. § 501, and that he would not forward 18, 000 documents to Calibre. Plaintiff then categorized the documents into three groups of 17, 302 pages; 1, 050 pages; and 102, 318 pages respectively. (Id. at 13-14). Mr. Clash-Drexler informed plaintiff that these still were not sufficiently organized, and that they were beyond the scope of the accounting, which was limited to the “five specific instances of alleged misappropriation” that plaintiff had identified in his demand:

1. Flying spouses, significant others, and/or family members to Council conventions and conferences;
2. Paying expenses for spouses, significant others, and/or family members at Council conventions and conferences;
3. Paying for non-business related alcohol expenses at Council conventions and meetings;
4. Paying for non-business related lunches, dinners, and alcoholic drinks with Council funds and “petty cash;” and
5. Increasing salaries via an illegal vehicle policy that serves to fraudulently inflate their pensions.

(Doc. 1, Ex. 8).

         Ultimately, Mr. Clash-Drexler did not forward any of the documents plaintiff provided on to Calibre. (Doc. 1 at 15). Calibre's review found that “there was missing documentation consisting of fourteen transactions amounting to $1, 341 relating to one individual. Subsequent to the issuance of that report, we have been provided with supporting documentation for nine of those transactions. This documentation appears to satisfy the expense substantiation requirements of the DOL and IRS. Furthermore, it is our understanding that $539 which is the total of the remaining five transactions for which support has not been provided, will be remitted by ...


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