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CENTRAL STATES v. GATEWAY FOODS OF TWIN PORTS

December 17, 1996

CENTRAL STATES, SOUTHEAST and SOUTHWEST AREAS PENSION FUND, and HOWARD McDOUGALL, Trustee, Plaintiffs/Counterdefendants,
v.
GATEWAY FOODS OF TWIN PORTS, INC., Defendant/Counterplaintiff. GATEWAY FOODS OF TWIN PORTS, INC., Plaintiff, v. CENTRAL STATES, SOUTHEAST and SOUTHWEST AREAS PENSION FUND, and HOWARD McDOUGALL, Defendants.



The opinion of the court was delivered by: NORGLE

 CHARLES R. NORGLE, SR., District Judge:

 Before the court are two motions for summary judgment, each filed by the respective Plaintiffs in the above two actions, and both involving the same issues of fact and law. For the following reasons, the court grants the motion filed by Central States, Southeast and Southwest Areas Pension Fund, and denies the motion filed by Gateway Foods of Twin Ports, Inc.

  I.

 Central States, Southeast and Southwest Areas Pension Fund ("Central States") initially filed a declaratory judgment action (Case No. 95 C 5020) against Gateway Foods of Twin Ports, Inc. ("Gateway"). Central States seeks a court declaration that Gateway is not entitled to a refund of $ 440,000 in alleged mistakenly-paid pension contributions. Before Central States effectively served Gateway with the first Complaint, Gateway filed suit against Central States (Case No. 95 C 5066) seeking restitution of the same contributions at issue in Case No. 95 C 5020. Gateway then filed a counterclaim, also seeking restitution of the pension contributions, in Case No. 95 C 5020.

 Central States is a multiemployer, defined benefit pension fund that provides specified monthly retirement benefits to employees who satisfy the plan's vesting requirements and are covered by collective bargaining agreements negotiated between employers and local union affiliates of the International Brotherhood of Teamsters ("IBT"). Participating employers, such as Gateway, contribute to Central States at weekly rates, which are set forth in the collective bargaining agreement between the employer and the IBT, ranging between $ 6 (Benefit Class 1) and $ 124 (Benefit Class 17) per week per covered employee. Central States is managed by a Board of Trustees ("Board") consisting of eight representatives, four selected by employer associations and four selected by unions affiliated with the IBT.

 The amount of an employee's retirement benefit depends primarily upon three factors, the employee's age at retirement, the number of years of earned pension credit, and the employee's benefit class based upon the contribution rate paid by the employer on the employee's behalf. When an employee retires, his or her benefit amount is fixed for the remainder of the retiree's life, and does not change even if his or her employer subsequently agrees to contribute on behalf of its active employees at higher rates (that correspond with a higher benefit class) or lower rates (corresponding with lower benefit classes).

 From January 1, 1989 to January 31, 1995, both Gateway and Central States were bound by a collective bargaining agreement ("1989-1995 Agreement") that required Gateway to contribute to Central States as follows:

 
PENSION : Effective February 1, 1989, [Gateway] shall contribute to [Central States] the sum of $ 65.00 per week, per the 1982 Schedule of Contribution, for each employee covered by this Agreement who has been on the payroll thirty (30) days or more, except as provided in this Agreement.
 
* * *
 
[GATEWAY] AGREES THAT IT WILL CONTINUE TO FUND THE EXISTING BENEFIT LEVEL, INCLUDING THE TRANSITION BENEFIT, FOR THE TERM OF THIS AGREEMENT. [GATEWAY] UNDERSTANDS THAT ITS CONTRIBUTIONS WILL INCREASE TO $ 69 A WEEK IN 1990. EFFECTIVE ON FEBRUARY 1 OF EACH YEAR, 1991 THROUGH 1994, THE PENSION RATE TO BE PAID BY [GATEWAY] WILL BE ESTABLISHED BY [CENTRAL STATES] TRUSTEES.

 On December 23, 1991, Central States received a letter from the union ("union letter") which provided as follows:

 
Re: Gateway Foods - Account # : 3018630 - 0101
 
P.O. Box 1149, Gateway Court, Superior, WI 54880
 
Pension Contributions Effective 02-01-92
 
Dear Sir & Brother:
 
Regarding the above captioned matter, the new pension rate for [Gateway] is $ 79.00 per week effective February 1, 1992, $ 83.00 per week effective February 1, 1993, and $ 85.00 per week effective February 1, 1994.

 Gateway received a copy of the letter on December 20, 1991.

 The $ 65 contribution rate of the 1989-1995 Agreement, for which Gateway was obligated to pay the initial year, corresponds with Benefit Class 15B. The $ 69 rate corresponds with Benefit Class 15C. The 15C level is the highest rate within Benefit Class 15. The rates set forth in the union ...


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