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ASBESTOS WORKERS SYRACUSE PENSION FUND v. M.G. IND

February 10, 1995

ASBESTOS WORKERS SYRACUSE PENSION FUND, by Charles M. Collins, as Chairman, and R. Edward Parkes, as Secretary, Plaintiff, against M.G. INDUSTRIAL INSULATION COMPANY, INC., Defendant.

ROSEMARY S. POOLER, DISTRICT COURT JUDGE


The opinion of the court was delivered by: ROSEMARY S. POOLER

INTRODUCTION

 Plaintiff Asbestos Workers Syracuse Pension Fund ("Asbestos Fund") moves for summary judgment against defendant M.G. Industrial Insulation Company, Inc. ("M.G. Industrial") in this action under the Employee Retirement Income Security Act ("ERISA") and the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA") to collect $ 56,462.43 in allegedly delinquent withdrawal liability payments owed to Asbestos Fund. M.G. Industrial cross-moves for summary judgment on the grounds that Asbestos Fund lacked capacity to sue because the fluid's trustees did not properly authorize this lawsuit. Asbestos Fund contends that M.G. Industrial waived this argument by not raising it in the answer to plaintiff's complaint. However, we find that the capacity defense not only is timely but also is successful on the facts before us. Accordingly, we do not address the issue of whether M.G. Industrial is required to submit withdrawal liability payments to Asbestos Fund.

 BACKGROUND

 The following facts are not in dispute. M.G. Industrial, an insulation contractor located in Baldwinsville, New York, was party to a collective bargaining agreement between the Syracuse Insulation Contractors Association and the International Association of Heat and Frost Insulators and Asbestos Workers Local No. 30 (the "union"). Under this agreement, M.G. Industrial was obligated to contribute to a fringe benefits plan administered by Asbestos Fund for the benefit of M.G. Industrial's union employees. The Asbestos Fund plan generally was controlled by a committee consisting of three employer-trustee and three union-trustee representatives (the "trustees") acting pursuant to a Trust Agreement. The president of M.G. Industrial, Robert L. Gass, was an employer trustee.

 The collective bargaining agreement between M.G. Industrial and the union expired on April 30, 1993. On May 6, 1993, M.G. Industrial ended its relationship with the union and accordingly terminated its obligation to contribute to the Asbestos Fund benefits plan. On October 18, 1993, Asbestos Fund notified M.G. Industrial that it was obligated to pay the fund a "withdrawal liability" of $ 46,818 pursuant to 29 U.S.C. ยง 1399. Asbestos Fund required two payments, of $ 23,914 due on January 1, 1994, and of $ 23,295 due on April 1, 1994. By letter dated January 14, 1994, M.G. Industrial appealed the assessment of its withdrawal liability to the trustees. The trustees denied the appeal at a March 24, 1994, meeting and so informed M.G. Industrial by letter dated April 12, 1994. Four trustees -- one employer trustee and three union trustees -- attended the March 24th meeting, where they also unanimously authorized this litigation.

 Subsequent to the initiation of this lawsuit, on June 2, 1994, Asbestos Fund appointed another employer trustee. By documents dated October 26, 1994, this new trustee, as well as the four trustees that had attended the March 24th meeting, "unanimously agreed to ratify the action of the Trustees at the March 24, 1994 meeting, unanimously agreed to deny M.G. Industrial Insulation Company, Inc.'s appeal, and unanimously agreed to authorize Fund Counsel to pursue all avenues to collect the withdrawal liability, including the existing action in Federal Court to collect the full amount of the withdrawal liability, plus interest, liquidated damages, attorneys' fees and costs." Pl. Reply Exhibit D. Two copies of this ratification document were submitted to the court. One copy is signed by the four pre-existing trustees, and another copy is signed by the newly appointed trustee. All five signatures are dated October 26, 1994.

 Oral argument took place on December 5, 1994. Counsel for Asbestos Fund argued that the pending arbitration was irrelevant to M.G. Industrial's obligation to make its interim withdrawal liability payments. Counsel for M.G. Industrial denied this interpretation of the law. Moreover, the defendant argued on its cross-motion that we should not reach the merits of the parties' dispute because the trustees violated the Trust Agreement when they authorized this litigation. Asbestos Fund responded that this authorization defect, if it existed, was cured on October 26, 1994, by the trustees' ratification. We permitted the parties to file supplemental letter briefs with respect to whether the trustees' ratification was effective.

 DISCUSSION

 I. Summary Judgment Standard

 Summary judgment shall enter if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The materiality of facts must be determined with reference to the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The moving party has the initial responsibility of demonstrating that there is no genuine issue of material fact to be decided. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). As to any issue on which the moving party does not have the burden of proof, the moving party may satisfy its burden by "pointing out to the district court ... that there is an absence of evidence to support the nonmoving party's case." Id. at 325.

 Once the moving party has satisfied its burdens, its adversary is compelled to respond. "If the movant satisfies the burden of establishing that there is no genuine issue of material fact, then the burden shifts to the nonmovant to proffer evidence demonstrating that a trial is required because a disputed issue of material fact exists." Weg v. Macchiarola, 995 F.2d 15, 18 (2d Cir. 1993). In satisfying this burden, the non-moving party "may not rest upon the mere allegations or denials of the adverse party's pleading, but ... must set forth specific facts showing that there is a genuine issue for trial.'" Fed. R. Civ. P 56(e). The opponent of summary judgment "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). "Merely colorable" evidence will not suffice as a basis for opposing summary judgment. Anderson, 477 U.S. at 249-50.

 In weighing a motion for summary judgment, the court must accept as true the nonmoving party's evidence and make "all justifiable inferences" in the nonmoving party's favor. Id. at 255. The evidentiary standard governing proof at trial determines how the court must assess the evidence in deciding whether the summary judgment standard has been met. Id. at 254-55. In an ordinary civil case, such as this one, where plaintiffs must prove their case by a preponderance of the evidence, the determinative standard is ...


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