a copy of the closing statement for the sale of the warehouse building and the attorneys for the Defendants agreed to provide it. (Id.)
Despite numerous requests,
the Fund did not receive a copy of the closing statement until February 1, 1994. (Barker Aff. P 14.) The statement revealed that, contrary to Vitale's deposition testimony, the warehouse building was not owned by Vitale and Cohen individually, but by Defendant Vaco Holding Co., a general partnership in Pennsylvania of which Vitale and Cohen were the sole partners. (Id. ; Compl. P 7.) In addition, the statement revealed that the warehouse building was sold on May 13, 1988, during the time Leslie Ann had ceased operating, and not before, as Vitale had testified. (Barker Aff. P 14.) A copy of the 1988 tax return for Vaco showed that the proceeds of the sale of the warehouse building amounted to $ 318,855.00, of which $ 235,965.00 was distributed to Vitale and Cohen.
(Compl. PP 28-29; Barker Aff. P 15.) In Scene Ltd. ("In Scene") is named as a Defendant in this action because Vitale and Cohen were allegedly officers and 50% shareholders of the company which dissolved on May 12, 1989. (Barker Aff. P 4; Compl. P 11.)
The Fund initiated this action
on December 8, 1995, alleging that Defendants Vaco and In Scene are trades or businesses under common control with Leslie Ann and, therefore, jointly and severally liable for the withdrawal liability of Leslie Ann. (Compl. PP 20-25.) As general partners of Vaco, Vitale and Cohen are Defendants for the alleged liability of the partnership and for receiving the proceeds of the sale of the warehouse building.
On May 8, 1996, Defendants Vitale and Cohen moved to dismiss this action pursuant to Fed. R. Civ. P. 12(b)(6), claiming that the Fund's lawsuit is barred by the applicable statute of limitations.
A. Applicable Standard
"On a motion to dismiss under Rule 12(b)(6), the court must accept as true the factual allegations in the complaint, and draw all reasonable inferences in favor of the plaintiff." Bolt Elec., Inc. v. City of N.Y., 53 F.3d 465, 469 (1995) (citations omitted). "The district court should grant such a motion only if, after viewing plaintiff's allegations in this favorable light, 'it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Walker v. City of N.Y., 974 F.2d 293, 298 (2d Cir. 1992) (quoting Ricciuti v. New York City Transit Auth., 941 F.2d 119 (2d Cir. 1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957))), cert denied, 507 U.S. 961, 122 L. Ed. 2d 762, 113 S. Ct. 1387 (1993).
B. The ERISA Statute
"In order to prevent employers from withdrawing from multiemployer funds before contributions are sufficient to cover vested benefit, Congress enacted the" MPPAA in 1980, amending ERISA. Board of Trustees v. H.F. Johnson, Inc., 830 F.2d 1009 (9th Cir. 1987); ILGWU Nat'l Retirement Fund v. Levy Bros. Frocks, Inc., 846 F.2d 879, 880-81 (2d Cir. 1988). An employer who withdraws from a multiemployer pension plan is assessed with withdrawal liability, rendering the employer responsible for its proportionate share of the plan's unfunded vested benefits. 29 U.S.C. §§ 1381, 1391. The amount of the withdrawal liability is based upon the date that the employer completely withdraws from a plan. 29 U.S.C. §§ 1383, 1391. An employer is deemed to have completely withdrawn from a plan when it either permanently ceases to have an obligation to contribute to the plan, or permanently ceases all covered operations under the plan. 29 U.S.C. § 1383. Levy, 846 F.2d at 881; ILGWU Nat'l Retirement Fund v. Smart Modes of Cal., Inc., 735 F. Supp. 103, 104 (S.D.N.Y. 1990). All those entities under common control are liable for a single entity's withdrawal liability.
Upon employer withdrawal, the plan sponsor must determine the extent of the withdrawal liability, notify the employer of the amount of the liability, and demand payment. 29 U.S.C. § 1382. Under MPPAA, the plan sponsor is required to notify the employer of the amount of the withdrawal liability and the schedule of payments "as soon as practicable after an employer's complete . . . withdrawal." 29 U.S.C. § 1399(b)(1). Withdrawal liability is due in accordance with the payment plan set out by the plan sponsor beginning no later than 60 days after the date of demand. 29 U.S.C. § 1399(c)(2). If the employer fails, within 60 days, to satisfy a payment and is notified of such failure, it is deemed to be in default and the plan sponsor is authorized to "require immediate payment of the outstanding amount of an employer's withdrawal liability." 29 U.S.C. § 1399(c)(5)(A); Smart Modes, 735 F. Supp. at 104.
1. Plaintiffs' Claim Against Vaco
Defendants Vitale and Cohen contend that the Fund's action seeking to hold then individually liable for the withdrawal liability of Leslie Ann lacks merit because as stockholders and officers of the corporation they cannot be held personally liable for such contributions. The Fund, however, states that the action against Vitale and Cohen is not based on the Defendants' positions as corporate officers or shareholders of Leslie Ann, but as general partners of Vaco, a commonly controlled trade or business with Leslie Ann.
a. Commonly Controlled