The Mahoney Principle:
Representative Signatures vs. Personal-Liability Clauses in ERISA Contribution Actions

Introduction

R.R. Maintenance & Industrial Health & Welfare Fund v. Clinton Mahoney, Nos. 24-2704 & 24-2817 (7th Cir. July 17, 2025) pits an employee-benefit fund against the sole member of a now-defunct limited-liability company. The Fund sought to collect delinquent contributions personally from Mr. Mahoney, relying on a clause in the trust agreement that made “officers and directors” personally liable for willful underpayments. Mahoney signed the operative memorandum of agreement only “as manager” of Mahoney & Associates, LLC. The central issue: Does the coexistence of a personal-liability clause and a representative signature conclusively establish personal liability, or does it create a factual dispute for the jury?

The district court granted summary judgment to the Fund and awarded fees. On appeal, the Seventh Circuit (Judges Easterbrook, St. Eve, Kirsch) reversed, vacated the fee award, and remanded, holding that conflicting indicia of intent created a genuine issue of material fact. The decision sets an important precedent—dubbed here “the Mahoney Principle”—clarifying that:

Summary of the Judgment

• Jurisdiction & Timeliness: Despite an initially defective Rule 58 judgment, the appeal was timely. The panel relied on Bankers Trust v. Mallis and later filings to confirm finality.
• Standard of Review: De novo review of summary judgment.
• Federal Common-Law Framework: Although pled as a state contract claim, ERISA §502 and LMRA §301 completely pre-empt the field. Federal common law therefore governs, guided by state contract principles where consistent with ERISA policy.
• Main Holding: The clash between (a) Mahoney’s representative signature and (b) the trust agreement’s personal-liability clause created a factual ambiguity regarding intent. Under both Illinois law and the Restatement (Third) of Agency, that ambiguity must be resolved by a fact-finder, not on summary judgment.
• Secondary Issues:
  • Laches defense deemed waived/undeveloped.
  • Attorney-fee award vacated contingent on merits outcome.
• Disposition: Reversed in part, vacated in part, and remanded.

Analysis

1. Precedents Cited & Their Influence

• Sullivan v. Cox, 78 F.3d 322 (7th Cir. 1996) – Demonstrated the Seventh Circuit’s willingness to borrow state contract law (Illinois) when construing ERISA obligations; provided the analytic template.
• Wottowa Insurance Agency v. Bock, 472 N.E.2d 411 (Ill. 1984) – Illinois Supreme Court rule: An agent signing in a representative capacity is not personally bound absent contrary intent in the document, and any conflict triggers a jury question. Core precedent directly applied.
• Knightsbridge Realty Partners v. Pace, 427 N.E.2d 815 (Ill. App. 1981) & Central States H&W Fund v. Pitman, 383 N.E.2d 793 (Ill. App. 1978) – Illinois cases rejecting summary judgment where signature and clause conflicted; reinforced Bock.
• Restatement (Third) of Agency §6.01 – General common-law principle adopted: representative signatures typically shield the agent unless the parties “agree otherwise.” Comment (d) and note (c)(2) emphasize ambiguity created by mixed signals.
• Railway Express Agency v. Greenberg, 1995 WL 753908 (N.D. Ill. 1995) – District precedent the lower court relied on; 7th Circuit implicitly disapproved its distinction between “single” vs. “dual” obligations, aligning instead with Bock/Knightbridge/Pitman.
• Complete-preemption authorities – Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (2003); Firestone Tire v. Bruch, 489 U.S. 101 (1989); Textile Workers v. Lincoln Mills, 353 U.S. 448 (1957) – confirmed federal interest & adoption of state-law rules.

2. The Court’s Legal Reasoning

1. Federal Question Via Complete Pre-emption.
   Even though the Fund invoked state contract theories, ERISA §502(a) and LMRA §301 convert the claim into one “arising under” federal law.
2. Choice of Law in Federal Common-Law Development.
   Seventh Circuit opted—following Sullivan—to borrow Illinois contract law, but noted result identical under “general” contract law principles.
3. Signature vs. Clause = Ambiguity.
   Mahoney’s signature line read: “Mahoney & Associates, LLC, by: Clinton Mahoney, Manager,” a paradigmatic representative signature. Yet the trust agreement stated: “officers and directors … shall be personally liable …” Under Illinois law, these conflicting signals create factual ambiguity—not resolved by judge on summary judgment.
4. Rejecting the Greenberg Exception.
   Greenberg’s “dual-obligation” rationale lacked Illinois Supreme Court endorsement and conflicted with Bock and its progeny. The Seventh Circuit thus realigned with state-level authority.
5. Laches Waiver.
   Although Mahoney invoked laches, he failed to grapple with (1) whether the claim was equitable or legal, and (2) interaction with borrowed statutes of limitation. Undeveloped = waived.

3. Potential Impact of the Judgment

The “Mahoney Principle” will resonate across the Midwest (and likely beyond) in three principal arenas:

• ERISA/LMRA Collection Suits: Funds may no longer secure quick judgments against business owners merely by citing personal-liability clauses. They must marshal additional undisputed evidence— emails, negotiations, or separate guaranties—showing the officer intended personal liability.
• Contract Drafting: Union trust agreements and benefit funds will likely revise signature blocks to require two distinct signature lines (company & personal guarantor) or obtain stand-alone guaranties to avoid factual ambiguity.
• Summary-Judgment Practice: District courts in the Seventh Circuit must treat conflicting indicia of intent as a triable issue. Earlier reliance on Greenberg is now questionable.

Complex Concepts Simplified

• Representative Capacity: Signing on behalf of a company (“XYZ, Inc. by John Doe, President”) usually shields the signer from personal liability.
• Personal-Liability Clause: A sentence in a contract stating that certain individuals—often “officers/directors”—are personally responsible for corporate obligations.
• Complete Pre-emption: A doctrine where federal statutes (here, ERISA & LMRA) are so dominant that any related state claim becomes federal, conferring federal jurisdiction and federal common-law rules.
• Summary Judgment: A procedural device allowing judgment without trial when no material facts are disputed.
• Laches: An equitable defense barring a claim if the plaintiff unreasonably delays and the delay prejudices the defendant. Not typically available where a statute of limitations applies.

Conclusion

R.R. Maintenance & Industrial H&W Fund v. Mahoney refines the intersection of contract interpretation, ERISA enforcement, and agency law. The Seventh Circuit’s key takeaway is straightforward yet powerful: where the documentary record pulls in opposite directions on personal liability, courts must let the fact-finder decide. This guidance restores doctrinal consistency with Illinois precedent, curtails over-reliance on Greenberg, and signals to benefit funds and employers alike that meticulous drafting—and clear manifestation of individual assent—are indispensable when personal liability is intended. Going forward, litigants should expect tougher evidentiary burdens at the summary-judgment stage and adjust their contractual practices accordingly.