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February 4, 1992

JOHN J. CANARIO, et al., as Trustees of the Local 816 Labor and Management Pension Fund, Plaintiffs, against LIDELCO, INC., Defendant. JOHN J. CANARIO, et al., as Trustees of the Local 816 Labor and Management Pension Fund, Plaintiffs, -against- CHARLES A. FRANCOLINI, and JEAN FRANCOLINI, Defendants.

The opinion of the court was delivered by: CAROL BAGLEY AMON


 I. Introduction

 Plaintiffs' complaint seeks recovery from the Defendants of the withdrawal liability of Lidelco, Inc. ("Lidelco") pursuant to the Multiemployer Pension Plan Amendment Act ("MPPAA"), 29 U.S.C. § 1381 et seq. (1985). The case is currently before the Court on Defendants' Motion for Summary Judgment or, In the Alternative, for an Order Compelling Arbitration.

 II. Background

 Lidelco was a New York corporation engaged in the trucking industry. Prior to 1977, it maintained its primary terminal on Long Island. At that time, its principals were Richard Kuster, Joan Kuster, Charles Francolini ("Mr. Francolini") and Jean Francolini ("Mrs. Francolini"). Due to deregulation of the trucking industry and an adverse economic climate, Lidelco's business declined dramatically. In 1977 the Company moved its main terminal to New Jersey in order to reduce operating costs. Subsequent to this move, the company redeemed the stock owned by the Kusters, a total of 157 1/2 shares, for $ 200,000. In 1983 further deterioration of the economic climate forced Lidelco to cease all operations. Its remaining assets were liquidated. According to Defendants, the liquidation process did not completely pay off the debts of the company and no distribution was made to any shareholder.

 On or about March 14, 1983, the Local 816 Labor and Management Pension Trust Fund (the "Fund") mailed a letter to Lidelco at its former address in New Jersey, despite having received notification that all correspondence was to be sent to a Virginia address. *fn1" The letter was mailed pursuant to 29 U.S.C. § 1399(a) and was designed to inform Lidelco that the Fund had determined that they had withdrawn from the Pension Fund, and were thus potentially liable for withdrawal liability. The letter requested certain information to be used in calculating Lidelco's liability. Plaintiffs have produced a return receipt which bears a signature purporting to be that of Mr. Francolini, but Defendants deny that this is his signature or that he ever received the letter.

 The Fund claims that on or about May 26, 1983, it sent a second letter to Lidelco at its New Jersey address informing it that withdrawal liability in the amount of $ 897,000 had been calculated. Again, Plaintiffs have a return receipt, and Defendants deny ever having received such a letter.

 When no payment was received, a notice of non-payment was sent to Lidelco which was returned "Addressee Unknown". After the required payment was 60 days overdue, the Fund attempted to declare a default pursuant to 29 U.S.C. § 1399(c)(5)(A). The Fund was informed by counsel that this could not be done since the notice of non-payment had never been received by Lidelco. Instead, pursuant to § 1399(c)(5)(B), the Fund declared a default on the grounds that Lidelco did "not have the financial ability to make full payment of their withdrawal liability under the schedule of payments". *fn2" Savitt Affidavit, Exh. G at 3.

 Plaintiffs commenced suit against Lidelco on or about December 11, 1984, by serving the New York Secretary of State. No notice was sent to Lidelco as the summons was returned to the Secretary of State marked "Addressee Unknown". Savitt Affidavit, Exh. Y. A default judgment on this complaint was obtained by Plaintiffs on May 16, 1985, in the amount of $ 1,242,212.50.

 On July 24, 1986, an action was commenced against Charles and Jean Francolini seeking to hold them personally liable on the default judgment. According to Defendants, this was the first time that the Fund asserted personal liability on the part of the Francolinis. The claim was that Charles and Jean Francolini were "employers" within the meaning of the ERISA statute.

 Lidelco moved to vacate the default judgment on December 5, 1986, claiming that the first time they received notice of that action was when the Francolinis were served. The two actions were consolidated, and on July 23, 1988, the default judgment was vacated by the Honorable Joseph M. McLaughlin.

 While the instant suit was pending, the Fund informed Charles and Jean Francolini, by a letter dated December 15, 1989 (attached to Plaintiffs' Memorandum in Opposition as Exhs. 1 and 2), that "your shareholder status with Lidelco, Inc. . . . and your relationship to the Fund on behalf of Lidelco, brings you within the definition of 'employer', as defined in Section 3(5) . . . and subjects you, jointly and severally with Lidelco, to satisfy the withdrawal liability obligation that Lidelco has to the Fund." Plaintiffs' Memorandum of Law in Opposition, Exh. B. This letter purports to serve as a notice of non-payment, such that the Francolinis' failure to respond and make payment within 60 days constitutes a default. No default has, however, been declared by the Fund.

 III. Discussion

 Defendants move for summary judgment on several grounds. Defendant Lidelco claims it is entitled to summary judgment because: (1) the jurisdictional requirements of ERISA have not been complied with; (2) Plaintiffs have failed to comply with the express requirements of the statute; and (3) the liquidation liability of Lidelco is in fact zero. The individual defendants claim summary judgment is appropriate in that: (1) they are not "employers" within the meaning of the statute; (2) the individual defendants have never been found to be in default; and (3) the default judgment on which the complaint is based has been vacated.

 Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The court's function is not to resolve disputed issues of fact, but only to determine whether there is a genuine issue to be tried. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Eastman Machine Co. v. United States, 841 F.2d 469, 473 (2d Cir. 1988). No genuine issue exists:

 unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.

 Anderson v. Liberty Lobby, Inc., 477 U.S. at 249-50 (citations omitted). In making this determination, the court is required to view the evidence in the light most favorable to the nonmoving party. Adickes v. S.H. Kress and Co., 398 U.S. 144, 157, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970).

 The party seeking summary judgment always bears the initial responsibility of informing the district court of the basis of its motion, and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact.

 Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986) (quoting Fed. R. Civ. P. 56(c)). In addition, summary judgment is appropriate against a non-movant who, after adequate time for discovery, fails to establish the existence of an element that is essential to his case and on which he will bear the burden of proof at trial. Id. at 322; United States v. Pilot Petroleum Associates, Inc., 712 F. Supp. 1077, 1081 (E.D.N.Y. 1989). The Court will address each of Defendants' contentions in light of these well-settled principles.

 A. Lidelco

 1. Satisfaction of Jurisdictional Prerequisites

 The gravamen of Lidelco's argument is that as a prerequisite to bringing suit, the MPPAA requires the Fund to adhere to a specific schedule of notice before imposing withdrawal liability or declaring a default, and that the Fund in this instance never provided Lidelco with the required statutory notice.

 Judge McLaughlin described the operation of the MPPAA scheme in his order of May 26, 1987, vacating the default:

 The MPPAA provides a comprehensive scheme to determine the liability of an employer who withdraws from a multiemployer pension plan. See 29 U.S.C. § 1381(a). Once an employer withdraws, the plan sponsor must calculate the employer's withdrawal liability. See id. § 1382. The sponsor must then notify the employer of the amount of such liability and demand payment. See id. § 1399(b)(1). The employer then has 90 days in which to request review of the sponsor's determination. See id. § 1399(b)(2)(A). Upon such a request the sponsor must conduct a review and notify the employer of its decision and the basis for the decision. See 29 U.S.C. § 1399(b)(2)(B). If a dispute arises, either party may initiate an arbitration proceeding within 60 days of the earlier of (1) the sponsor's notification of the employer of the basis for its decision, or (2) 120 days after the employer's request for such a decision. See 29 U.S.C. § 1401(a)(1). If arbitration is not initiated, the amount determined by the plan sponsor is considered due and owing and the sponsor may sue in federal or state court for collection. See id. § 1401(b)(1).

 Canario v. Lidelco, Inc., CV-84-4657 (E.D.N.Y. May 26, 1987) (McLaughlin, J.).

 Lidelco is correct in its assertion that compliance with the statutory notice requirements is a prerequisite to collection on a suit to recover withdrawal liability. Trustees of Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) Pension Fund v. Central Transport, Inc., 888 F.2d 1161, 1163 (7th Cir. 1989); Teamsters Pension Trust Fund Board of Trustees of Western Conference v. Allyn Transp. Co., 832 F.2d 502, 506 (9th Cir. 1987); Debreceni v. George Lamoureux & Co., 629 F. Supp. ...

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