United States District Court, N.D. Illinois
February 11, 2004.
CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND and HOWARD McDOUGALL, Trustee, Plaintiffs,
A-P-A TRANSPORT CORP., et al., Defendants
The opinion of the court was delivered by: JOHN GRADY, Senior District Judge
Before the court is plaintiffs' motion for summary judgment. For the
reasons stated below, the motion is granted.
Defendant A-P-A Transport Corporation ("APA") ceased operations on
February 22, 2002. Prior to this date, APA had been an employer
contributing to plaintiff Central States, Southeast and Southwest Areas
Pension Fund (the "Fund"), a multiemployer pension plan. When APA ceased
operations, it effectuated a "complete withdrawal" from the Fund within
the meaning of the Employee Retirement Income Security Act ("ERISA"),
29 U.S.C. § 1383. When an employer withdraws from a multiemployer plan,
the employer becomes immediately liable for its proportionate share of
unfunded vested benefits. See 29 U.S.C. § 1381; Trustees of the Chicago
Truck Drivers. Helpers & Warehouse Workers Union (Indep.) Pension Fund
v. Rentar Indus., 951 F.2d 152, 153 (7th Cir. 1991).
ERISA provides that upon withdrawal, a multiemployer pension fund shall
"determine the amount of the employer's withdrawal liability, notify the
employer of the amount of the withdrawal liability, and collect the
amount of the withdrawal liability from the employer." 29 U.S.C. § 1382
(numerals omitted). Here, the Fund calculated the withdrawal liability of
APA and the companies under "common control" with APA (collectively,
"defendants," see infra note 1) to be $1,988,780.03, and notified
defendants of that amount.*fn1 Thereafter, defendants requested,
pursuant to 29 U.S.C. § 1399 (b)(2)(A), that the Fund review its
withdrawal liability determination. The Fund reaffirmed its assessment.
Defendants then initiated an arbitration proceeding, which is currently
The Fund and its trustee (collectively, "plaintiffs") subsequently
filed the instant action to collect interim withdrawal
liability payments from defendants. Plaintiffs new move for summary
Summary judgment "shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a judgment as
a matter of law." Fed.R.Civ.P. 56(c). In considering such a motion, the
court construes the evidence and all inferences that reasonably can be
drawn therefrom in the light most favorable to the nonmoving party. See
Pitasi v. Gartner Group. Inc., 184 F.3d 709, 714 (7th Cir. 1999).
The law regarding defendants' responsibility to make interim payments
of their withdrawal liability is clear. While the parties' arbitration
proceeds, defendants must either pay the entire sum of their withdrawal
liability or make periodic payments in an amount determined by the
trustees. See Trustees of the Chicago Truck Drivers. Helpers & Warehouse
Workers Union (Indep.) Pension Fund v. Central Transport. Inc.,
935 F.2d 114, 116 (7th Cir. 1991) (citing 29 U.S.C. § 1399(c)(2),
1401(d)).*fn2 Defendants acknowledge as much but contend that we should
"equitable discretion" to deny plaintiffs summary judgment because
of the "unique facts" of this case. (Response at 4.)*fn3 According to
defendants, this case is unique because, while APA does not have "liquid
assets" available to satisfy its withdrawal liability, it does have
valuable real property that it is currently attempting to sell. (Response
Unfortunately for defendants, we have no general equitable power to
excuse interim payments. See Central Transport, 935 F.2d at 119.
Furthermore, there is only one narrow exception to the interim payment
requirement for cases where an employer can show both that a pension fund
lacks a colorable claim end that the employer would be irreparably harmed
by an order compelling interim payments. See id.; Rentar, 951 F.2d at
155. Defendants cannot, and do not attempt to, establish either prong of
the exception. Summary judgment for plaintiffs is thus appropriate.
Plaintiffs seek interest on the interim payments and liquidated damages
plus attorney's fees and costs. Defendants do not appear to object to
awards of interest, costs, or attorney's fees (and even if they did, we
would award them for the reasons outlined infra), but they do argue that
we should exercise our "equitable discretion" to deny the request for
The Fund is entitled to liquidated damages; defendants must pay them as
a penalty for "deciding not to make installment payments until being
ordered to do so by a court." See Chicago Truck Drivers. Helpers
& Warehouse Union (Indep.) Pension Fund v. Century Motor Freight.
Inc., 125 F.3d 526, 534 (7th Cir. 1997). Defendants are also liable
for interest on the missed installment payments, accruing from the due
date of each payment. See id. at 535.
We believe that plaintiffs are also entitled to reasonable attorney's
fees and costs. "ERISA makes it clear that an employer withdrawing from a
multiemployer pension fund must pay withdrawal liability to the Fund, and
[Seventh Circuit] cases make it equally clear that interim payments must
be made pending arbitration." Central States, Southeast & Southwest
Areas Pension Fund v. Wintz Properties, Inc., 155 F.3d 868, 876 (7th
Cir. 1998). Despite this clear mandate, defendants refused to make those
payments, and thus made it necessary for plaintiffs to file this action.
For the foregoing reasons, plaintiffs' motion for summary judgment is
granted. Plaintiffs' motion to voluntarily dismiss without prejudice
defendant Valkyrie Air Corp. is granted.
Plaintiffs may prepare a draft judgment order in accordance with this
memorandum opinion (supported by affidavits as to fees and costs), submit
it to opposing counsel for any objections as to
form, and submit a final draft order to the court by February 27,