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JASPAN v. CERTIFIED INDUS.

October 23, 1985.

Joseph JASPAN, Michael Carbone, Jack Dee, Robert Sasso, Alfred Finkel, Theodore King, Chester Broman and John Quadrozzi as Trustees of the Local 282 Pension Trust Fund, Plaintiffs,
v.
CERTIFIED INDUSTRIES, INC., IIJ Enterprises, Inc., IIJ Associates and Split Rock Realty, Inc., Defendants.



The opinion of the court was delivered by: MISHLER

Memorandum of Decision and Order

MISHLER, District Judge.

The Trustees of the Local 282 Pension Trust Fund, as plan sponsors, instituted this action for the assessment of the sum of $1,166,865 together with interest, attorney's fees and costs, claiming that amount from defendants as the withdrawal liability of Certified Industries, Inc. ("Certified"), a contributor to the multiemployer plan, based on the termination of all covered operations under the collective bargaining agreement as of June 30, 1981. (Amended Complaint).

 Defendants moved to stay the proceedings pending arbitration pursuant to 29 U.S.C. § 1401(a)(1). Plaintiffs moved for summary judgment for the relief demanded in the complaint and dismissing the defendants' counterclaim. The counterclaim alleges a violation of the trustees' fiduciary duty "in fixing the benefits to be received by the participants in the Pension Trust Fund in consideration of the level of contributions that were made." (Answer p. 25). Apparently the defendants say that if benefits were fixed based on appropriate "actuarial assumptions and investment return assumptions," defendants would not be burdened by "the alleged withdrawal liability." *fn1"

 FACTS

 The following facts are either conceded or not disputed:

 Local 282 Pension Trust Fund ("Fund") is a multiemployer pension plan within the meaning of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1002(2) and (37). Certified Industries, Inc. is a New York corporation with its principal place of business at 211 East 46th Street, New York, New York. Defendants IIJ Enterprises, Inc., Split Rock Realty, Inc. and IIJ Associates (a partnership) have their place of business at the same address. *fn2"

 Prior to June 30, 1981, Certified was a party to a collective bargaining agreement with Local 282, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America ("Local 282"). The agreement obligated Certified to make regular contributions to the Fund. It provided that in the event of sale of the employer's "entire operation," the purchaser

 . . . shall continue to be subject to the terms and conditions of this agreement for the life thereof. . . . The Employer shall give notice of the existence of this agreement to any potential successor . . . No transaction . . . shall become effective unless and until the Union has been notified in writing by the Employer and the successor that the successor has agreed to assume the obligations of the Agreement.

 On or about November 25, 1980, Certified entered into a contract to sell all its assets to Marine Pollution Service, Inc. ("Marine"). The contract provided for the assumption by Marine of Certified's obligations under its collective bargaining agreement with Local 282.

 On June 30, 1981, Certified transferred all its assets to Marine pursuant to the contract of sale. Thereafter, Marine made contributions to the Fund for substantially the same contribution base units on which Certified contributed prior to June 30, 1981.

 By letter dated December 13, 1982, the Fund notified Certified that it had withdrawn from the Fund on June 30, 1981, and that it might have incurred a withdrawal liability under ERISA. The letter further advised Certified that the Fund would notify it of the amount of the liability, if any, and of the payment schedule, at which time Certified would have the right, within 90 days of receipt of the notice, to (1) seek review by the trustees; (2) identify any inaccuracy in arriving at the amount claimed; and (3) furnish any additional relevant material.

 By letter dated February 9, 1983, received by Certified on February 14, 1983, the Fund advised Certified that its withdrawal liability was in the amount of $1,167,555, payable in monthly installments of $38,299.83, commencing March 1, 1983, and continuing through December, 1985, with a final payment of $4,000.20 due in January, 1986. The letter again advised Certified of its opportunity within 90 days of receipt of the letter to seek adjustment or correction of the amount claimed, as was noted in the letter of December 13, 1982. It also directed Certified's attention to the employer's right to arbitrate any dispute of the Fund's claim pursuant to Section 4221(a)(1) of the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. § 1401(a)(1).

 When Certified failed to make payment of the first installment due on March 1, 1983, the Fund sent a letter to Certified on March 2, (received on March 4) advising Certified that payment of the March installment was overdue and further that failure to make a payment within 60 days from the date of receipt of the letter would constitute a default upon which the entire amount would be due as provided under Section 4219(c)(5)(A) of the MPPAA, 29 U.S.C. § 1399(c)(5)(A). *fn3" A second demand for the March installment was mailed on March 18, (received by Certified on March 21). On April 4, 1983, the Fund notified Certified that it had not received the payment due on April 1. The letter contained all the advice included in the letter advising Certified of the March payment. As with the March, 1983 notice of installment due, the Fund advised Certified of the failure to make the payment due on April 1, by follow-up letter dated April 19. A similar notice and follow-up letter was mailed for the May 1983 payment. All the letters were received by Certified within two or three days of mailing. The form letters sent each month for the months of February 1983 to May 1983 contained the following:

 . . . A change in the amount of the total withdrawal liability will not affect the amount of the monthly payment due; it will affect ...


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