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Burke v. Lash Work Environments

March 24, 2010

THOMAS BURKE, ET AL., PLAINTIFFS,
v.
LASH WORK ENVIRONMENTS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court

DECISION AND ORDER

I. INTRODUCTION

Plaintiffs commenced this action by filing a complaint in this Court, alleging violations of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 et seq. Defendants move for dismissal based on lack of subject-matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, or, in the alternative, for summary judgment pursuant to Rule 56. For the reasons discussed below, Defendants' Motions to Dismiss are granted.

II. BACKGROUND

A. Facts

Defendant Gary M. Casey purchased LASH Equipment Corp. on May 29, 1987. (G. Casey Declaration, Docket No. 23-3, ¶ 2.) On October 16, 1998, LASH Equipment Corp. changed its name LASH Work Environments, Inc. ("LASH").

LASH contributed to the Buffalo Carpenters' Pension Fund, as required by its collective bargaining agreement with the United Brotherhood of Carpenters and Joiners of America. (G. Casey Decl., ¶¶ 5-6.) But on July 6, 1995, LASH terminated the collective bargaining agreement and stopped contributing to the pension fund. (Id. ¶ 7; Johnsen Decl., Docket No. 30-2, ¶ 4.) Thereafter, pursuant to an escrow agreement dated June 27, 2001, LASH made nine payments to counsel for the Fund, as escrow agent, totaling $53,634.08. (G. Casey Decl., Ex. C.)

By letter dated November 30, 2001, the Fund notified LASH that, in accordance with the provisions of ERISA, it was assessing withdrawal liability for its withdrawal from participation in the pension fund. (Zini Decl., Docket No. 23-4, Ex. A; Johnsen Decl., ¶ 4.) According to the formula in section 4211(b) of ERISA, the Fund computed LASH's total withdrawal liability to be $256,081, which it directed LASH to pay in quarterly payments of $5,954.26. (Id.)

On March 28, 2002, LASH sought redetermination of its withdrawal liability from the Fund. (Compl., Docket No. 1, ¶ 13.) On July 16, 2002, the Fund denied LASH's request for review and reaffirmed its initial determination of withdrawal liability. (Compl., ¶ 14). LASH then initiated arbitration proceedings on September 12, 2002, to challenge the Fund's assessment of withdrawal liability in accordance with the provisions of ERISA. (Compl., ¶ 1.) During the course of the arbitration proceedings, LASH made interim withdrawal liability payments to the Fund totaling $11,908.52. (G. Casey Decl., ¶ 9, Ex. C.)

Before completion of the arbitration proceedings, LASH and the Fund entered into a settlement agreement, dated September 1, 2004, which purported to resolve their dispute over LASH's withdrawal liability obligations. (G. Casey Decl., ¶ 10, Ex. C; Johnsen Decl., ¶ 8.)

In accordance with Paragraph 1 of the settlement agreement, the Fund agreed to accept the following amounts as full payment for LASH's withdrawal liability obligations: (1) $11,908.52 paid by LASH as interim payments during the arbitration proceedings; (2) $53,634.08 in escrow paid by LASH, plus any accrued interest; (3) four quarterly payments of $6,000, to commence on October 29, 2004; (4) one payment of $5,000, to be paid on October 29, 2005; and (5) 42 quarterly payments of $4,000, to commence on January 29, 2006. (G. Casey Decl., Ex. C.)

Paragraph 4 of the agreement provided that:

The Pension Fund acknowledges the termination of Lash's participation in the Pension Fund. Further, the Pension Fund shall accept the payments set forth in this Agreement in full and complete satisfaction of any and all claims it has, or may have, arising from Lash's participation in the Pension Fund. The Pension Fund shall execute and deliver to Lash a Release in the form attached hereto as Exhibit B. Lash shall also execute and deliver a reciprocal Release in favor of the Pension Fund in the form attached hereto as Exhibit C. (Id.)

Paragraph 9 of the agreement further provided that:

If the Pension Fund breaches any obligation under this Agreement, Lash shall provide the Pension Fund with written notice of the breach and the Pension Fund shall have 10 calendar days to remedy the breach. If the Pension Fund fails to timely remedy the breach after notice, then in any litigation over the breach, the prevailing party shall be entitled ...


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