United States District Court, W.D. New York
CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and ARTHUR H. BUNTE, JR., as Trustee, Plaintiffs,
COMPLETE PERSONNEL SOLUTIONS, LLC, a New York limited liability company; and COMPLETE AUTO NETWORK CANADA, LTD., a New York corporation, Defendants.
DECISION AND ORDER
WILLIAM M. SKRETNY, Chief District Judge.
Plaintiffs commenced this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. § 1001, et seq., to collect withdrawal liability from Defendants Complete Personnel Solutions, LLC ("Complete Personnel") and Complete Auto Network Canada, Ltd. ("Complete Auto"). Presently before this Court is Plaintiffs' motion for summary judgment. The Court finds the motion fully briefed and oral argument unnecessary. For the reasons that follow, Plaintiffs' motion is granted.
The action stems from the withdrawal of non-party Automobile Distribution of Buffalo, Inc. ("Automobile Distribution") from the Plaintiff Pension Fund on October 30, 2010. (Pls' Stmt Facts ¶ 22, Docket No. 59-2; Defs' Opp'g Stmt Facts ¶ 22, Docket No. 62; Brown Aff ¶¶ 11, 17, Docket No. 59-4; Brown Aff ¶ 7 Ex 5, Docket Nos. 64-2, 64-3.) The MPPAA "requires that an employer withdrawing from a multiemployer pension plan pay a fixed and certain debt to the pension plan. This withdrawal liability is the employer's proportionate share of the plan's unfunded vested benefits, ' calculated as the difference between the present value of vested benefits and the current value of the plan's assets." Pension Ben. Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 725, 104 S.Ct. 2709, 467 L.Ed.2d 601 (1984) (citing 29 U.S.C. §§ 1381, 1391)). By way of a consent order entered on December 14, 2011 in the Northern District of Illinois, Automobile Distribution and the Plaintiff Pension Fund stipulated that Automobile Distribution completely withdrew from the fund within the meaning of ERISA on October 30, 2010, and as a result incurred a withdrawal liability to the fund in the amount of approximately $1.3 million. (Brown Aff Ex 5, Docket No. 64-3.) These parties further stipulated that Automobile Distribution failed to either pay the withdrawal liability or timely commence arbitration disputing the amount following the July 21, 2011 notification of the assessed liability. (Id.); see 29 U.S.C. § 1401(a)(1)(A) (any dispute regarding withdrawal liability must be resolved by arbitration initiated within 60-days of notification).
Despite the consent judgment, the withdrawal liability has not been paid. (Pls' Stmt Facts ¶ 23; Defs' Opp'g Stmt Facts ¶ 23.) Plaintiffs therefore commenced this action on August 29, 2013, in the Northern District of Illinois against Defendants on the ground that these companies were in a common control group with Automobile Distribution; therefore all three were considered a single employer for the purpose of ERISA and the MPPAA. As a result, Defendants are jointly and severally liable for the withdrawal liability incurred by Automobile Distribution, plus interest, statutory damages, attorneys' fees, and costs. (Docket No. 1.) The matter was transferred to this Court on November 4, 2013.
"A motion for summary judgment may properly be granted... only where there is no genuine issue of material fact to be tried, and the facts as to which there is no such issue warrant the entry of judgment for the moving party as a matter of law." Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010). A court's function on a summary judgment motion "is not to resolve disputed questions of fact but only to determine whether, as to any material issue, a genuine factual dispute exists." Kaytor, 609 F.3d at 545 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). "A dispute regarding a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d Cir. 2000) (quoting Anderson, 477 U.S. at 248), cert denied, 540 U.S. 811 (2003). A court must also "construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant." Dallas Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 780 (2d Cir. 2003). Further, where, as here, both parties move for summary judgment, "each party's motion must be examined on its own merits, and in each case all reasonable inferences must be drawn against the party whose motion is under consideration." Morales v. Quintel Entm't, 249 F.3d 115, 121 (2d Cir. 2001).
A. Common Control Liability
Plaintiffs contend that they are entitled to summary judgment because, under the common control doctrine, Defendants and Automobile Distribution are considered one employer for purposes of assessing and collecting withdrawal liability. (Pls' Mem of Law at 7-9); see generally Corbett v. MacDonald Moving Servs., 124 F.3d 82, 86 (2d Cir. 1997) (citing 29 U.S.C. § 1301(b)(1), 26 C.F.R. §§ 1.414(c)-1 through 1.414(c)-5). In order to establish that an organization other than the one originally obligated to a pension fund is jointly and severally liable for an assessed withdrawal liability, a plaintiff must establish that: (1) that organization is under common control with the owing entity; and (2) the defendant organization is engaged in a "trade or business." Cent. States, Se. & Sw. Areas Pension Fund v. Neiman, 285 F.3d 587, 594 (7th Cir. 2002); see 29 U.S.C. § 1301(b)(1). The existence of such a controlled group is determined as of the date of the employer's withdrawal from the pension fund. UFCW Local One Pension Fund v. Enivel Properties, LLC, No. 6:11-CV-1144, 2014 WL 2711660, *6 (N.D.N.Y. June 16, 2014) (citing Cent. States, Se. & Sw. Areas Pension Fund v. SCOFBP, LLC, 668 F.3d 873, 881 (7th Cir.2011), cert denied, 132 S.Ct. 2688 (2012)). Notably, although the MPPAA requires that all disputes between an employer and a pension fund be arbitrated, the threshold issue of whether an entity is an employer is a matter for the courts. N.Y.S. Teamsters Conference Pension & Retirement Fund v. Express Servs., 426 F.3d 640, 645-46 (2d Cir. 2005).
Plaintiffs assert that Defendants and Automobile Distribution are under common control because they belong to a "brother-sister" category of commonly-controlled trades or businesses. (Pl's Mem of Law at 8-9.)
The term "brother-sister group of trades or businesses under common control" means two or more organizations conducting trades or businesses if (i) the same five or fewer persons who are individuals, estates, or trusts own (directly and with the application of [26 C.F.R.] § 1.414(c)-4) a controlling interest in each organization, and (ii) taking into account the ownership of each such person only to the extent such ownership is identical with respect to each such organization, such persons are in effective control of each organization.
26 CFR § 1.414(c)-2 (c)(1). Plaintiffs assert, and Defendants do not dispute, that Teresa D'Angelo holds such a controlling interest in each of the Defendants and in Automobile Distribution. (Pls' Stmt Facts ¶¶ 24, 25, 28; Defs' Opp'g Stmt Facts ¶¶ 24, 25, 28.)
With respect to the second requirement, an entity that engages in an activity with continuity and regularity for the primary purpose of income or profit is a "trade or business" for the purpose of imputed withdrawal liability. Cent. States, Se. & Sw. Areas Pension Fund v. Fulkerson, 238 F.3d 891, 895 (7th Cir. 2001) (citing Comm'r v. Groetzinger, 480 U.S. 23, 35, 107 S.Ct. 980, 94 L.Ed.2d 25 (1987)), cert denied, 534 U.S. 821 (2001). Defendants dispute only that Defendant Complete Auto had ceased operations in June 2010 and therefore was no longer a "trade or business" in October 2010 when Automobile Distribution withdrew from the Plaintiff Pension Fund. (Defs' Mem in Opp'n at 6-8; see D'Angelo Aff ¶ 16.) ...