The opinion of the court was delivered by: BATTS
DEBORAH A. BATTS, United States District Judge.
Plaintiffs, I.L.G.W.U. National Retirement Fund ("the Fund") and its trustees, bring this action to compel the Defendants to pay the withdrawal liability that arises when an employer withdraws from a retirement pension plan covered by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq., as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. §§ 1381, et seq., and to remedy violations of state law. Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Defendants, Salvatore J. Vitale ("Vitale") and Seymour Cohen ("Cohen"),
have moved to dismiss the action, stating that the Plaintiffs' claims were not properly commenced within the statute of limitations as provided for in the MPPAA, 29 U.S.C. § 1451(f) and in the New York Civil Practice Law and Rules §§ 213(8), 203(g). For the reasons stated below, Defendants' motion is denied.
Defendants, Vitale and Cohen, were sole officers and 50% shareholders of two New York corporations, Leslie Ann Fashions, Inc. ("Leslie Ann") and Plenti-Ful Fashions Ltd. ("Plenti-Ful")
which manufactured women's clothing. (Compl. PP 9-10; Schaefer Aff. PP 5-6.) Leslie Ann was a party to a collective bargaining agreement with Plaintiff, I.L.G.W.U. National Retirement Fund, obligating Leslie Ann to make contributions to the Fund on behalf of some of its employees. (Compl. P 13.)
The Fund was established to maintain a retirement income plan (the "Plan") for employees. Plaintiffs, Irwin Solomon and Joseph Moore, are two members of the Plan's Board of Trustees. (Compl. PP 4-6.)
Both Plenti-Ful and Leslie Ann ceased doing business and became defunct in February and May of 1988 respectively. (Schaefer Aff. PP 5-6.) During this time Leslie Ann failed to satisfy its obligations to the Plan, thereby completely withdrawing from it. (Compl. P 14.) At the time of its withdrawal, Leslie Ann's withdrawal liability to the Fund was determined to be $ 1,178,023.00. (Compl. P 15; Schaefer Aff. P 8.) By letter dated November 8, 1989, the Fund notified Leslie Ann of its withdrawal liability,
presented a payment schedule, and requested that the first payment be made by December 8, 1989. (Compl. P 16.) On December 11, 1989, the Fund notified Leslie Ann that this first required payment was overdue and demanded that Leslie Ann make the payment within 60 days of the notice, or it would be default. (Barker Aff. P 6.) Leslie Ann failed to comply with the Fund's demand, and on February 9, 1990, defaulted on its payment. (Compl. P 16.) The Fund, on March 26, 1990, commenced an action against Leslie Ann and Plenti-ful, the only commonly-controlled entity of Leslie Ann which the Fund was then aware, entitled, I.L.G.W.U. Nat'l Retirement Fund, et al. v. Leslie Ann Fashions, Inc. and Plenti-ful Fashions Ltd., 90 Civ. 2063 (S.D.N.Y.), seeking judgment for the withdrawal liability, accrued interest, liquidated damages and attorney's fees and costs. (Barker Aff. P 7; Compl. P 17.) When the defendants in that action failed to answer, a default judgment was entered against them on July 2, 1990, and the Fund was granted full judgment in the amount of $ 1,329,975.39, of which neither Leslie Ann nor Plenti-ful has made any payments. (Compl. PP 18-19; Schaefer Aff. P 10.)
After entry of the default judgment, the former attorneys for the Fund -- Milgram, Thomajan & Lee ("MT&L") -- sought to commence proceedings to collect the judgment. (Barker Aff. P 8.) On July 19, 1990, MT&L mailed a copy of the default judgment to the attorneys for Leslie Ann and Plenti-ful and asked to schedule Defendants' depositions. (Id.) After some delay,
a deposition was scheduled for November 15, 1990, at which Vitale appeared on behalf of Leslie Ann and Plenti-ful. (Barker Aff. P 11; Schaefer P 11.) During the deposition, Vitale testified that he and Cohen individually owned a warehouse building in Pennsylvania from which Leslie Ann and Plenti-ful shipped their garments. (Barker Aff. P 11; Schaefer Aff. P 13.) Vitale testified that the warehouse building had been sold prior to the time that Leslie Ann and Plenti-ful went out of business, but could not recall the date of the sale. (Barker Aff. P 11.) MT&L requested 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.
"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. ...