The opinion of the court was delivered by: Robert W. Gettleman United States District Judge
Judge Robert W. Gettleman
MEMORANDUM OPINION AND ORDER
Plaintiff Central States, Southeast and Southwest Areas Pension Fund (the "Fund") is a multiemployer pension fund mainly funded by contributions obtained pursuant to collective bargaining agreements. These agreements are executed by employers with unions representing the International Brotherhood of Teamsters. Plaintiff Howard McDougall serves as the trustee and "fiduciary" of the Fund, as that term is defined in section §3(21)(A) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §1001. Plaintiffs (together, the "Fund") bring an ERISA claim against defendant Auffenberg Ford, Inc. ("Auffenberg"), pursuant to §502(g)(2) of the act, to collect unpaid contributions owed from a period beginning on May 1, 2006, and extending to February 10, 2007. The claim is based on Auffenberg's alleged violation of §515 of that act, 29 U.S.C. §1145. The Fund now moves for summary judgment, requesting the court award the damages and fees owed by the defendant. For the reasons discussed below, the motion is granted.
Defendant Auffenberg Ford, Inc. ("Auffenberg") is an Illinois dealership whose primary business is the sale of vehicles. An ancillary part of that business is the operation of a parts and service department, which employs various tradesmen represented by the Local Union No. 50 ("Local 50"), such as mechanics, stockmen, and warehousemen. Local 50 negotiates on behalf of these union members with employers such as Auffenberg to secure collective bargaining agreements ("CBA") that guarantee the union members certain wages, working conditions, and retirement benefits.
Prior to the events that gave rise to this case, Auffenberg was a signatory to a CBA that expired in 1997. As part of that agreement, Auffenberg was to make payments to the Fund, to secure pension benefits for its members. At the expiration of the CBA in 1997, Auffenberg opted to terminate its duty to contribute, which resulted in the assessment of approximately $49,500 in withdrawal liability, which Auffenberg paid. Some of the veteran members of Auffenberg's workforce had earned significant pension credit as a result of that plan, but fell just short of the amount needed to qualify for a higher level of pension benefits.
When Auffenberg and Local 50 began to negotiate a new CBA in 2001, Local 50's president at that time, Al Green, suggested that Auffenberg begin paying into the Fund once again, so that those veteran members of Auffenberg's staff could complete the necessary credits they needed to obtain increased amounts of retirement benefits. Auffenberg was reluctant; it desired to avoid the withdrawal liability it had been assessed as a result of leaving the original agreement. In the course of these negotiations, Auffenberg discovered that the Fund offered a program, pursuant to 29 U.S.C. §1390, which allows a pension fund to offer a "free look," giving an employer the opportunity to temporarily contribute into a pension fund without fear of being assessed withdrawal liability, should that employer choose to end its contribution obligation. The statute does not extend this free look indefinitely, nor does it give the employer the right to terminate its obligation, but provides, in pertinent part (29 U.S.C. §1390(a)):
.an employer who withdraws from a plan in complete or partial withdrawal is not liable to the plan if the employer.had an obligation to contribute to the plan for no more than.the number of years required for vesting under the plan.
In the present case, the "number of years required for vesting under the plan" is five, which gives an employer entering into an agreement with the Fund-if the free look provision applies-five years to effect a complete or partial withdrawal without fear of being assessed withdrawal liability. In the course of negotiations, Al Green allegedly communicated to Auffenberg that the parties could negotiate a new CBA, with a duration of five years, which required Auffenberg to once again make contributions to the Fund under the "five year free look," assuring the parties that once the new agreement expired, so would Auffenberg's duty to contribute. Auffenberg signed the new CBA, which went into effect on May 1, 2001, and expired on April 30, 2006. Auffenberg also entered into a participation agreement with Local 50 and a trust agreement with the Fund, agreements which reflected and governed the contribution obligations that Auffenberg assumed as a result of signing the CBA.
The participation agreement provides for two ways in which an employer may validly terminate its obligation to contribute to the Fund: (1) The trustees may terminate at their discretion; or (2) the employer, no longer obligated by contract or statute to contribute, notifies the Fund, describing the reason the obligation ended. Further, when a new CBA is entered into or the employer and the union agree to change the standing agreement, the employer must submit the entire agreement or modification to the Fund; absent this notification, the participation and trust agreements make clear that no changes are binding on the Fund.
At or around the same time as the 2001-2006 CBA was entered into by the parties, Auffenberg entered into a secondary agreement, purporting to cover a different group of his employees. The basis for this, on the advice of Green, was that Auffenberg split its workforce into two different groups-though still technically working for the same entity-a "Lincoln Mercury/Ford" group, and a "Ford" group. This would allow those employees whom the Auffenberg wished to earn further credit with the Fund to do so, and the rest of the employees to enter into a separate 401(k) plan. The Fund was not notified about this additional agreement.
Sometime during the 2001-2006 term, Al Green passed away. His successor in dealing with Auffenberg was Scott Alexander, who notified Auffenberg sometime before the expiration of the 2001-2006 agreement of Local 50's intent to renegotiate a new agreement.*fn1 The notification signaled Auffenberg that Local 50 desired to negotiate a completely new contract, thereby ensuring that the 2001-2006 agreement would officially terminate on April 30, 2006. However, Article 33, §1 of the 2001-2006 CBA-the "evergreen clause"-made clear that the terms and provisions of the 2001-2006 CBA would remain in effect during the negotiation process, until the parties entered into a new agreement or reached impasse.*fn2
Auffenberg and Local 50 entered into negotiations shortly thereafter. At the expiration of the 2001-2006 agreement, Auffenberg tendered a letter to the Fund, dated May 1, 2006, stating that its obligation to contribute had ended, and that it no longer had any intention to contribute to the Fund. As a justification for this action, Auffenberg pointed to the alleged agreement with Green-made during the negotiations of the 2001-2006 agreement-that the expiration of the 2001-2006 agreement would also effect Auffenberg's withdrawal from the pension program, with no liability, pursuant to the "five year free look." The Fund sent Auffenberg a letter in reply, stating that the May 1 letter was not sufficient to terminate Auffenberg's contribution obligation, and that its duty to contribute had not-and would not-end until the consummation of a new agreement or until there was no longer a living employee who was covered by the Fund.
At this time, Auffenberg and Local 50 were still in negotiation for a successor agreement to the 2001-2006 CBA. Pursuant to the "evergreen clause," the terms and conditions of that agreement remained valid and in effect until the completion of a new or modified agreement. The Fund claims that this was further evidence of Auffenberg's continuing duty to contribute. In November of 2006, while negotiations were still underway, Auffenberg tendered another letter to the Fund, which the Fund received in December of 2006, this time signed by Local 50's representative Scott Alexander, which reiterated Auffenberg's belief that they had no further duty to contribute as of April 30, 2006. Alexander claims in his ...