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Thomas Burke, Richard Danitz, Robert v. Eaton Associates

January 28, 2012

THOMAS BURKE, RICHARD DANITZ, ROBERT J. KULCZYK, JAMES M. KILGER, BRUCE HOFFMAN, GEORGE FERRARO, JAMES BIDDLE, SR., JOHN O'HARE, JR., JIM LOGAN, JOHN SIMMONS, AS TRUSTEES ON BEHALF OF THE BUFFALO CARPENTERS PENSION FUND, AND THE BUFFALO CARPENTERS PENSION FUND, PLAINTIFFS,
v.
EATON ASSOCIATES, INC., DEFENDANT.



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

DECISION AND ORDER

I. INTRODUCTION

Plaintiffs in this action are trustees and sponsors of the multi-employer Buffalo Carpenters Pension Fund (the "Fund"), which is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq.*fn1 Defendant, Eaton Associates Inc. ("Eaton"), as an employer, was a contributing member to the Fund in late 2001 when the Fund was terminated. At that time, Eaton, along with the other contributing companies, entered into a termination agreement with the Fund that limited its withdrawal liability. The terms of that termination agreement, which were memorialized in a document entitled the "Term Sheet," are at the center of this litigation. Plaintiffs allege that the Term Sheet entitles them to payments from Eaton for the years 2002, 2003, 2006 and 2008.

Eaton made no payments in those years and now contends that under the plain language of the Term Sheet it owes nothing. But sometime between 2002 and 2008, the parties engaged in settlement discussions concerning debt for the years 2002, 2003, and 2006. Those discussions become relevant because Plaintiffs contend that in 2008 they reached an accord*fn2 with Eaton concerning this debt, and that later Eaton breached this accord. Each party now moves for summary judgment (Docket Nos. 18, 20), with Plaintiffs seeking enforcement of either the termination agreement or the accord and Eaton seeking dismissal of the claims. For the following reasons, Plaintiffs' motion is granted and Eaton's is denied.

II. BACKGROUND

There is no dispute that on November 30, 2001, as part of the termination agreement, both parties agreed to the payment plan outlined in the Term Sheet. It sets out Eaton's obligations as follows:

E. Beginning with the month after the Agreed Mass Withdrawal and with respect to each month thereafter for 180 months, [Eaton] shall pay to the Fund the greater of: (1) an amount equal to the product of (a) $3.10 . . . multiplied by (b) each hour worked during the particular month by its employees within the craft and area jurisdiction of the collective bargaining agreement in effect as of the day of the Agreed Mass Withdrawal; and

(2) an amount equal to the quotient obtained when (a) sixty percent (60%) of the average yearly contribution paid by [Eaton] in the lowest three consecutive years in the ten (10) plan years preceding the day of the agreed mass withdrawal (b) is divided by twelve (12) ("Minimum Payment Obligation").

(See Eaton Affidavit, Exhibit A; Johnsen Declaration, ¶¶ 8,9.)

When Eaton did not make payments pursuant to the Term Sheet in 2002 and 2003, Plaintiffs sent Eaton a notice of default. (Johnsen Declaration, ¶ 16.) Eaton responded by requesting settlement discussions, but failed again to pay any amount for the year 2006. (Id., ¶¶ 17, 18.) Subsequently, Eaton proposed that it pay $500.00 per month until its debt for these years was paid in full. (Id., ¶ 20, Exhibit J.) In February 2008,*fn3 Plaintiffs countered and requested that Eaton pay its arrears at a rate of $1,014.06 per month, beginning the next month. (Id.) It appears there was no further formal communication between the parties. But, the next month, in March of 2008, Plaintiffs received a check from Eaton's owner, Charles Eaton with a note reading, "This payment [is] towards the N.Y. State Carpenters Fund." (Id.) The amount was $1,014.00, only six cents less than Plaintiff's proposed settlement. (Id.) Plaintiffs believed that Eaton had accepted its counter-offer and therefore sent Eaton a formal agreement meant to memorialize the agreement. Eaton, however, for reasons undisclosed, refused to sign this agreement, apparently now under the impression that they owed nothing at all. (Id., ¶ 21.) This litigation followed.

III. DISCUSSION

A. Summary Judgment Standard

Rule 56 of the Federal Rules of Civil Procedure provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." A fact is "material" only if it "might affect the outcome of the suit under governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). A "genuine" dispute exists "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Id. In determining whether a genuine dispute regarding a material fact exists, the evidence and the inferences drawn from the evidence "must be viewed in the light most favorable to the party opposing the motion." Adickes v. S. H. Kress & Co., 398 U.S. 144, 158--59, 90 S. Ct.1598, 1609, 26 L. Ed. 2d 142 (1970) (internal quotations and citation omitted).

"Only when reasonable minds could not differ as to the import of evidence is summary judgment proper." Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991) (citation omitted). Indeed, "[i]f, as to the issue on which summary judgment is sought, there is any evidence in the record from which a reasonable inference could be drawn in favor of the opposing party, summary judgment is improper." Sec. Ins. Co. of Hartford v. Old Dominion Freight Line, Inc., 391 F.3d 77, 82--83 (2d Cir. 2004) (citations omitted). The function of the court is not "to weigh ...


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