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Board of Trustees of the Ufcw Local 174 Pension Fund v. Jerry Wwhs Co.

March 5, 2012


The opinion of the court was delivered by: Seyebrt, District Judge:


Plaintiff Board of Trustees of the UFCW Local 174 Pension Fund ("Plaintiff") commenced this action on July 14, 2011 against Jerry WWHS Co., Inc. d/b/a West Washington Meats ("Defendant") seeking payment of Defendant's withdrawal liability pursuant to Section 4203 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1383. Presently pending before the Court is Defendant's motion to dismiss the Complaint. For the following reasons, Defendant's motion is DENIED.


Plaintiff is the named fiduciary of the Local 174 Pension Fund (the "Fund").*fn1 (Compl. ¶ 2.) The Fund is administered and maintained pursuant to collective bargaining agreements in accordance with Section 302(c)(5) of the Taft Hartley Act, 29 U.S.C. § 186(c)(5). (Compl. ¶ 2.) Defendant and UFCW Local 342, the labor organization that for collective bargaining purposes represented the Defendant's employees, were the parties to one of those collective bargaining agreements (the "CBA"). (Compl. ¶ 6.) Pursuant to the CBA, Defendant had a duty to make contributions to the Fund in accordance with the terms of the CBA as well as the terms of the Agreement and Declaration of Trust governing the Fund. (Compl. ¶ 6.)

At some point in or before 2008, Defendant stopped making the required contributions and completely withdrew from the Fund, thereby triggering the imposition of withdrawal liability under ERISA § 4203, 29 U.S.C. § 1383. (Compl. ¶ 7.) However, Defendant refused to make any withdrawal liability payments; so in June 2008, Plaintiff commenced a lawsuit in the Eastern District of New York seeking payment of the outstanding withdrawal liability. (Compl. ¶ 7.) Defendant failed to appear or otherwise respond to that complaint, and in April 2009 Plaintiff was awarded a default judgment in the amount of $322,680.15. (Compl. ¶¶ 8-9 & Ex. A.)

Rather than seek to collect under the default judgment, on September 3, 2009, Plaintiff entered into a settlement agreement (the "Agreement") with Defendant. (Compl. Ex. B.) Pursuant to the Agreement, Defendant agreed to pay Plaintiff a total of $503,961.00 in periodic installments to settle the outstanding withdrawal liability. (Compl. ¶ 11 & Ex. B ¶ 2.) The Agreement also provided that, in the event of default, Plaintiff had "at its sole option and discretion the right to demand immediate payment of the entire $503,961.00, together with interest, liquidated damages, costs and attorney's fees." (Compl. Ex. B ¶ 3.) Defendant "expressly waive[d] any notice of the submission of a default judgment to the Court . . . and further expressly waive[d] any right to challenge, object to or defend against entry by the Court of such default judgment." (Compl. Ex. B ¶ 3.)

Defendant failed to make its scheduled payment on February 17, 2011. (Compl. ¶ 13.) Then, on April 6, 2011, Defendant assigned all of its assets and liabilities to Douglas A. Pick (the "Assignee") for the benefit of all of Defendant's creditors. (Pick Aff. ¶ 3 & Ex. B.) Defendant's estate is now being administered by Mr. Pick under the supervision of the New York State Supreme Court, Kings County (the "Assignment Proceeding"). In re Gen. Assignment for the Benefit of Creditors of Jerry WWHS Co., Inc. d/b/a W. Wash. Meats v. Pick, No. 8288/2011 (Sup. Ct. Kings Cnty.). (Pick Aff. ¶ 3.) Then, on May 17, 2011, Defendant missed a second payment to Plaintiff, again breaching the Agreement. (Compl. ¶ 13.)

After providing Defendant with a notice of default and an opportunity to cure, Plaintiff commenced the present action on July 14, 2011, seeking a judgment in the amount of $503,961.00 in accordance with the terms of the Agreement. (Compl. ¶ 18.) Plaintiff served the Summons and Complaint on Defendant through the New York Secretary of State on July 26, 2011. (Docket Entry 2.) Defendant, however, did not receive the Summons and Complaint until August 12, 2011, because the address on file with the Secretary of State was outdated and the mail needed to be forwarded. (Pick Aff. ¶ 6 & Ex. E.)*fn2

On August 15, 2011, Defendant filed the pending motion to dismiss. It consists of an affidavit of the Assignee and accompanying exhibits. Defendant did not file a memorandum of law stating that one was not necessary because the motion to dismiss "does not present any novel issues of law." (Pick Aff. ¶ 10.)


Defendant seeks dismissal on two grounds: (1) because Plaintiff "failed to properly effect service of the Summons and Complaint with regards to this action," and (2) because Plaintiff is required to pursue all claims in the pending Assignment Proceeding as opposed to "piecemeal" litigation "outside of the confines of the Assignment Proceeding." (Pick Aff. ¶ 8.) The Court will address each argument in turn.

I. Service of Process

Under New York law,*fn3 service of process on a domestic corporation shall be made either by delivery to an agent authorized to receive service or pursuant to Section 306 of New York's Business Corporation Law. N.Y. C.P.L.R. 311(a)(1). Section 306 of the Business Corporation Law provides for service on a domestic corporation by personally delivering two copies of the summons and complaint to the Secretary of State, who then sends them via certified mail, return receipt requested "to such corporation, at the post office address, on file in the department of state, specified for the purpose." N.Y. BUS. CORP. LAW § 306(b)(1).

Here, Defendant admits that Plaintiff served copies of the Summons and Complaint on the Secretary of State, who in turn "mailed copies thereof" to Defendant. (Pick Aff. ΒΆ 6). Thus, by effectuating service on Defendant through the Secretary of State, ...

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