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Central States v. Warner and Sons

September 9, 2008

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, AND HOWARD MCDOUGALL, TRUSTEE, PLAINTIFFS,
v.
WARNER AND SONS, INC., DEFENDANT.



The opinion of the court was delivered by: District Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

Plaintiffs Central States, Southeast and Southwest Areas Pension Fund and Howard McDougall, Trustee, (collectively the "Pension Fund") sued Warner and Sons, Inc. for withdrawal liability pursuant to 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. Plaintiffs have moved for summary judgment [20]. For the following reasons, the Court grants Plaintiffs' motion for summary judgment.

I. Background

The Pension Fund is a multiemployer pension plan under ERISA, administered by its trustee. Warner and Sons, an Indiana corporation, was party to several collective bargaining agreements executed with Local Union 364 of the International Brotherhood of Teamsters, which required Warner and Sons to make contributions to the Pension Fund on behalf of certain employees. On December 15, 2006, Warner and Sons ceased doing business. The Pension Fund subsequently determined that Warner and Sons had effected a "complete withdrawal" from the Fund and, as a result, determined that it incurred withdrawal liability to the Pension Fund in the amount of $387,500.16. Pursuant to the MPPAA, on May 18, 2007, the Fund sent Warner and Sons a notice and demand for payment of withdrawal liability.

On August 15, 2007, Warner and Sons requested that the Pension Fund review its withdrawal liability assessment on the ground that it is an excavation company entitled to invoke ERISA's "building and construction industry" exemption. In support of its claim that it is entitled to the exemption, Warner and Sons claims that the primary job function of the covered truck drivers was hauling earth on construction sites, hauling earth to and from construction sites, and hauling materials to construction sites. By letter dated September 14, 2007, the Fund responded by stating that the building and construction industry exemption to withdrawal liability did not apply because Warner and Son's covered employees were merely truck drivers rather than employees involved in work at a construction site. On October 19, 2007, Warner and Sons initiated arbitration, which remains pending. Warner and Sons has ceased operations and its only activity is winding up its business affairs. Warner and Sons has not made any withdrawal liability payments to the Pension Fund.

II. Discussion

A. Summary Judgment Standard

Summary judgment is proper where "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 determining whether there is a genuine issue of fact, the Court "must construe the facts and draw all reasonable inferences in the light most favorable to the nonmoving party." Foley v. City of Lafayette, Ind., 359 F.3d 925, 928 (7th Cir. 2004). To avoid summary judgment, the opposing party must go beyond the pleadings and "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (internal quotation marks and citation omitted). A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is proper against "a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322. The non-moving party "must do more than simply show that there ...


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