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CENTRAL STATES v. SCHILLI CORPORATION

November 15, 2004.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREA PENSION FUND; and HOWARD McDOUGALL, Trustee, Plaintiffs/Counter-Defendants,
v.
SCHILLI CORPORATION, a Missouri corporation, Defendant/Counter-Plaintiff.



The opinion of the court was delivered by: JOHN W. DARRAH, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff, Central States, Southeast and Southwest Area Pension Fund, a multiemployer pension plan, pursuant to §§ 3(37) and 4001(a)(3) of ERISA, 29 U.S.C. §§ 1002(37) and 1301(a)(3), filed suit against Defendant, Schilli Corporation, parent of a wholly-owned subsidiary corporation employer who contributed to the plan. The Multiemployer Pension Plan Amendments Act provides that when an employer withdraws from a multiemployer pension plan, it must pay a "withdrawal liability" in an amount approximately equal to the employer's proportionate share of the pension plan's unfunded vested benefits. 29 U.S.C. § 1381. A pension plan's unfunded vested benefits are computed by taking the difference between the present value of a pension plan's assets and the present value of the benefits the pension plan will be obligated to pay in the future. 29 U.S.C. § 1391.

A withdrawal can occur in one of two ways. An employer can effect a complete withdrawal from a pension plan by completely ceasing to make contributions to the plan on behalf of their employees. 29 U.S.C. § 1383. An employer can make a partial withdrawal by reducing their obligations to their plan. 29 U.S.C. § 1385.

  After an employer is assessed withdrawal liability by a pension plan, the employer may ask the plan to review the assessment. 29 U.S.C. § 1399(b)(2). If the employer is not satisfied with the review, it may initiate arbitration challenging the withdrawal liability assessment. 29 U.S.C. § 1401(a)(1). After the arbitration proceedings, any party can seek to enforce, vacate, or modify the arbitrator's decision by filing an action in federal court. 29 U.S.C. § 1401(b)(2).

  In this case, an arbitrator found that Defendant had not incurred a partial withdrawal from Plaintiffs' pension fund in 1997 and that Defendant should have only been assessed fees for a complete withdrawal in 1998. Thereafter, Plaintiffs filed suit, seeking to vacate the arbitrator's decision. Defendant filed a counterclaim, seeking to modify the arbitrator's award by correcting the omission of principal and interest owed to Defendant. Presently before the Court are cross-motions for summary judgment.

  Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Cincinnati Ins. Co. v. Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 150 (7th Cir. 1994). "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses. . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Thus, although the moving party on a motion for summary judgment is responsible for demonstrating to the court why there is no genuine issue of material fact, the non-moving party must go beyond the face of the pleadings, affidavits, depositions, answers to interrogatories, and admissions on file to demonstrate, through specific evidence, that a genuine issue of material fact exists and to show that a rational jury could return a verdict in the non-moving party's favor. Celotex, 477 U.S. at 322-27; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254-56 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Waldridge v. American Hoechst Corp., 24 F.3d 918, 923 (7th Cir. 1994).

  Disputed facts are material when they might affect the outcome of the suit. First Ind. Bank v. Baker, 957 F.2d 506, 507-08 (7th Cir. 1992). When reviewing a motion for summary judgment, a court must view all inferences to be drawn from the facts in the light most favorable to the opposing party. Anderson, 477 U.S. at 247-48; Popovits v. Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir. 1999).

  An arbitrator's legal conclusions are reviewed de novo. Central States, S.E. & S.W. Areas Pension Fund v. Midwest Motor Express, Inc., 181 F.3d 799, 805 (7th Cir. 1999) (Midwest Motor). An arbitrator's factual findings and application of law to fact are reviewed under the clearly erroneous standard. Midwest Motor, 181 F.3d at 804-05.

  BACKGROUND

  The undisputed facts, for the purposes of these motions, are taken from the parties' Local Rule 56.1(a) & (b) statements of material facts and exhibits ("Pl.'s 56.1" and "Def's 56.1.").

  Plaintiffs are a multiemployer pension fund, within the meaning of the Employee Retirement Income Security Act, which is funded by contributions from participating employers. Def.'s 56.1 ¶¶ 1, 6. Defendant owns a number of subsidiaries, including the employer, Truck Transport, Inc., which is obligated to contribute to the pension fund. Def.'s 56.1 ¶ 8.

  The employer and a union were parties to a collective bargaining agreement. Pl.'s 56.1 ¶ 14. Thereafter, the employer and the union entered into a Participation Agreement that required Truck Transport to make pension contributions on behalf of certain employees. Pl.'s 56.1 ¶ 15; Def.'s 56.1 ¶ 15. The Participation Agreement provided:
This Agreement shall continue in full force and effect until such time as the Employer notifies the Fund(s) by certified mail (with a copy to the Local Union) that the Employer is no longer under a legal duty to make contributions to the Fund(s). The Employer shall set forth in the required written notice to the Fund(s) the specific basis upon which the Employer is relying in terminating its obligation to make contributions to the Fund(s). The Employer expressly agrees and hereby acknowledges by signing this Agreement that its obligation to make contributions to the Fund(s) shall continue until the above-mentioned written notice is received by the Fund(s) and the Trustees acknowledge the Employer's termination in writing.
Pl.'s 56.1 ¶ 17.

  Plaintiffs became bound by the Participation Agreement after Plaintiffs' trustees approved and accepted the agreement's terms in writing on January 18-19, 1988. Def.'s Attachment C, Ex. B, ¶ 15; Def.'s Attachment E, Ex. 8. Plaintiffs communicated its acceptance of Defendant's participation in the pension fund by way of letter. Def.'s Attachment E, Ex. 8.

  On November 21, 1997, the employees represented by the union voted to decertify the union as the employees' bargaining representative. Pl.'s 56.1 ¶ 25. After the decertification, the employer continued to submit contributions to the pension fund for approximately two more months, until 1998. Pl.'s 56.1 ¶¶ 28, 33. The employer, though, did not inform Plaintiffs of ...


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