Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Chicago Truck Drivers, Helpers and Warehouse Workers Union Pension Fund v. El Paso CGP Co.

January 20, 2010

CHICAGO TRUCK DRIVERS, HELPERS AND WAREHOUSE WORKERS UNION (INDEPENDENT) PENSION FUND, AND JACK STEWART, TRUSTEE, PLAINTIFF,
v.
EL PASO CGP COMPANY, EL PASO MIDWEST COMPANY, EL PASO CNG COMPANY, LLC, AND AMERICAN NATURAL RESOURCES COMPANY DEFENDANTS.



The opinion of the court was delivered by: Judge David H. Coar

MEMORANDUM OPINION AND ORDER

The Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) Pension Fund and its Trustee Jack Stewart (collectively "Plaintiff" or the "Fund"), filed this action against Defendants El Paso CGP Company, El Paso Midwest Company, El Paso CNG Company, LLC, and American Natural Resources Company (collectively "Defendants") to collect withdrawal liability payments due under the Employment Retirement Income Security Act ("ERISA"), as amended by the Multiemployer Pension Plan Amendments of 1980 ("MPPAA"), 29 U.S.C. §§ 1001-1461. On May 13, 2008, the Seventh Circuit affirmed this Court's ruling as to Defendants' liability but reversed the Court's damages judgment, remanding the case to provide the parties with a full opportunity to be heard on the issue of damages. Chicago Truck Drivers Pension Fund v. El Paso CGP ("Chicago Truck Drivers"), 525 F.3d 591 (7th Cir. 2008), reh'g denied,(7th Cir. 2008). Presently before this Court is Plaintiff's motion for summary judgment regarding damages. For the reasons stated below, Plaintiff's motion is GRANTED.

BACKGROUND

I. ERISA Overview

The Court begins with a brief exposition of the relevant law under the Employment Retirement Income Security Act ("ERISA"), as amended by the Multiemployer Pension Plan Amendments of 1980 ("MPPAA"), 29 U.S.C. §§ 1001-1461. ERISA provides for multiemployer plans, which require contributions from more than one employer and are maintained pursuant to collective bargaining agreements between employers and employee organizations. 29 U.S.C. § 1301(a)(3). Employers who withdraw from multiemployer pension plans are subject to "withdrawal liability," which means that they must pay their share of "unfunded vested benefits" upon withdrawal. § 1381. Withdrawal liability is triggered by notice from the plan sponsor; "[a]s soon as practicable" after an employer's withdrawal, the sponsor must: (A) notify the employer of the amount of liability and the schedule for liability payment, and (B) demand payment. § 1399(b)(1). Once an employer receives this "notice and demand," it must begin making payments. Chicago Truck Drivers, 525 F.3d at 595. "The statute places a premium on prompt payment; it is a 'pay now, dispute later' scheme." Id. (citing Robbins v. Pepsi-Cola Metro. Bottling Co., 800 F.2d 641, 642 (7th Cir. 1986) (per curiam)).

If an employer would like to contest a plan sponsor's assessment of its withdrawal liability, it must submit to arbitration. § 1401(a)(1). Once an employer receives "notice and demand" pursuant to § 1399(1), it has 90 days to request an informal review of the assessment, § 1399(b)(2)(A), and roughly 120 additional days to demand arbitration, § 1401(a)(1). If an employer does not demand arbitration, its withdrawal liability "shall be due and owing on the schedule set forth by the plan sponsor." § 1401(b)(1).

II. Relevant Facts

With this background in mind, the Court sets forth the facts relevant to the instant motion for summary judgment. In 1998, ANR Advance Transportation Company ("ANR Advance") withdrew from the Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) Pension Fund (the "Fund"). An involuntary Chapter 11 petition was subsequently filed against ANR Advance on February 2, 1999, and the case was converted into a Chapter 7 proceeding on March 3, 1999. On June 3, 1999, the Fund filed a proof of claim for withdrawal liability in the ANR Advance bankruptcy. The proof of claim was entitled, in part, "Determination of Withdrawal Liability Payment Schedule," and included two pages of calculations. Section I listed the "withdrawal liability" as $1,747,610.00. Section III, which was entitled "Payment Schedule," included several calculations, and listed, under the subheading "Total number of quarterly payments:" nine quarters at $185,989.00 and a final quarter at $181,200.54. The proof of claim did not provide a date for the commencement of these payments. When reciting the facts on appeal, the Seventh Circuit explained that "[t]he proof of claim referred to 'withdrawal liability,' stated the total amount of the assessment and carried a liability payment schedule, which broke the assessment down into ten installments." Chicago Truck Drivers, 525 F.3d at 597.

When the proof of claim was filed, the bankruptcy proceeding was under Chapter 7, and the trustee responsible for administering the proceeding apparently never informed Defendants of the filing of the claim. Over two years later, in late 2001, a lawyer for Defendants stumbled upon the claim while performing due diligence in an unrelated matter. Defendants, however, did not respond to the proof of claim at that time. As the Court of Appeals stated, "[t]hey chose to sit on their hands." Id. at 597. So, too, did the Fund, which did not follow up for more than five years after it initially filed its proof of claim in the Chapter 7 bankruptcy. Then, on November 18, 2004, the Fund sent Defendants letters that each contained a notice and demand for an assessment of $1,747,610.00. The letters provided for payment either in a lump sum on or before December 1, 2004, or in nine quarterly installments of $185,989.00 commencing on the first day of each quarter beginning on December 1, 2004 and a final quarterly installment of $181,200.54. Defendants did not pay the first installment until February 10, 2005. On February 15, 2005, Defendants requested review of the assessment, and on August 3, 2005, they demanded arbitration.

On December 6, 2004, the Fund and its trustee, Jack Stewart, initiated this action to collect withdrawal liability from Defendants. Resolving the parties' cross-motions for summary judgment on the issue of liability, this Court granted the Fund's motion and denied Defendants' motion on April 17, 2006. Shortly thereafter, the Fund moved for summary judgment on the issue of damages. This Court denied the Fund's motion and, in a separate opinion, entered a final judgment under a different theory of damages. On appeal, the Seventh Circuit affirmed this Court's judgment on liability but reversed and remanded the case for further consideration on the issue of damages.

III. The Seventh Circuit Appeal

A brief summary of the Seventh Circuit's analysis provides useful background for the instant opinion. On appeal, the Seventh Circuit first reviewed and affirmed this Court's judgment on withdrawal liability. To resolve the issue of withdrawal liability, the court analyzed whether Defendants failed to make a timely demand for arbitration, thus rendering their withdrawal liability "due and owing" under § 1401(b)(1). Because a defendant's duty to arbitrate under § 1401(a)(1) is not triggered until it receives proper notice, the court's decision turned on the adequacy, as statutory notice and demand, of the proof of claim filed in bankruptcy on June 3, 1999. See Chicago Truck Drivers, 525 F.3d at 598. Defendants asserted that the only valid notice and demand was the Fund's November 18, 2004 letter, and they therefore made a timely demand for arbitration on August 3, 2005. The court agreed with the Fund, however, that Defendants acquired notice of the claim against them before they received the November 2004 letter, they failed to demand arbitration within the appropriate time period following their original notice, and they therefore waived their opportunity to contest their withdrawal liability. See id. at 600-01. Crucial to this result was the fact that Defendants had actual notice of the Fund's proof of claim no later than January 1, 2002, after Defendants' attorney discovered the claim while conducting due diligence in an unrelated matter. Id. The Court of Appeals held specifically that this actual notice trumped any deficiencies in the statutory notice and was sufficient to trigger Defendants' duty to arbitrate. Id. at 600. The court went on to chastise Defendants for their arguments that: (1) "'mere awareness' or 'mere possession' of the proof of claim does not amount to 'receipt,'" and (2) although they knew of the proof of claim, they did not know of its content. Id. at 600-01. Rejecting these arguments, the court stated: "These arguments partake of the meta-physical. The proof of claim clearly stated that it concerned withdrawal liability; the Defendants cannot stick their heads in the sand and later claim ignorance." Id. at 601.

After affirming this Court's decision on Defendants' liability, the Seventh Circuit reviewed the judgment on damages. Much of this discussion focused on whether Defendants' withdrawal liability was "accelerated" under § 1399(c)(5) and therefore became immediately due when Defendants became aware of their indebtedness. The Seventh Circuit held that this Court's damages judgment was improper because the parties did not have an adequate opportunity to present their arguments on the issue. Chicago Truck Drivers, 525 F.3d at 603. Specifically, because the Fund was not on notice that it might argue an entitlement to accelerate Defendants' debt under § 1399(c)(5), the Seventh Circuit directed that this Court now consider the Fund's argument for statutory acceleration. Id. at 603-04. Additionally, the Seventh Circuit noted that this Court's determination of liquidated damages depends upon a resolution of the acceleration issue. Id. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.