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Central States, Southeast and Southwest Areas Pension Fund v. Telegraph Paving Company

August 31, 2010

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, AND HOWARD MCDOUGALL, TRUSTEE, PLAINTIFFS,
v.
TELEGRAPH PAVING COMPANY, INC., DEFENDANT.



The opinion of the court was delivered by: Judge George M. Marovich

MEMORANDUM OPINION AND ORDER

Plaintiffs Central States, Southeast and Southwest Areas Pension Fund (the "Fund") and Howard McDougall, Trustee, filed a complaint against Telegraph Paving Company, Inc. ("Telegraph"). Plaintiffs seek an order requiring defendant to pay interim withdrawal liability (as well as liquidated damages and interest) pending the outcome of arbitration. Plaintiffs have moved for summary judgment. For the reasons set forth below, the Court grants the motion for summary judgment.

I. Background

Before the Court discusses the undisputed facts, it reiterates the importance of complying with Local Rule 56.1. Local Rule 56.1 outlines the requirements for the introduction of facts parties would like considered in connection with a motion for summary judgment. The Court enforces Local Rule 56.1 strictly. Facts that are argued but do not conform with the rule are not considered by the Court. For example, facts included in a party's brief but not in its statement of facts are not considered by the Court because to do so would rob the other party of the opportunity to show that such facts are disputed. Here, for example, Telegraph failed to include a statement of facts. Where one party supports a fact with admissible evidence and the other party fails to controvert the fact with citation to admissible evidence, the Court deems the fact admitted. See Ammons v. Aramark Uniform Services, Inc., 368 F.3d 809, 817-818 (7th Cir. 2004). This, however, does not absolve a party of its initial burden of putting forth admissible evidence to support its facts. Asserted "facts" not supported by deposition testimony, documents, affidavits or other evidence admissible for summary judgment purposes are not considered by the Court.

The following facts are undisputed unless otherwise noted.

The plaintiff Fund is a multiemployer pension plan within the meaning of the Employee Retirement Income Security Act ("ERISA"). Defendant Telegraph is a corporation that signed a collective bargaining agreement that required it to make contributions to the Fund for some of its employees. As of March 31, 2007, Telegraph stopped making contributions to the Fund.

March of 2007 was not the first time the Fund and Telegraph had a dispute over contributions. In December 2004, the Fund determined that Telegraph had effected a partial withdrawal. The Fund sent Telegraph a notice and demand for payment. When Telegraph refused to pay, the Fund filed suit and, after obtaining a judgment, used post-judgment garnishment proceedings to collect the amount Telegraph owed.

When, in March of 2007, Telegraph stopped making contributions, the Fund investigated. The Fund asked Telegraph to complete a Statement of Business Affairs. John Wykes, Telegraph's President, signed the Statement of Business Affairs under oath. With respect to the question of why Telegraph had stopped making contributions, Telegraph checked the box for "Last covered employee retired, quit or laid off." Telegraph added, "Our sales are down, there is no need to hire full time Teamsters anymore." Among other things, Telegraph's President also stated that he was planning to close the business because he was out of money and owed more than $250,000.00. Based on this information, the Fund concluded that Telegraph had effected a complete withdrawal from the Fund.

The Fund determined Telegraph's withdrawal liability, which it calculated at $214,158.38. The Fund also determined that there was a substantial likelihood that Telegraph would be not able to pay the withdrawal liability based on the facts that: (1) Telegraph was planning to cease operations; and (2) years earlier, when the Fund found Telegraph to be liable for a partial withdrawal, Telegraph had failed to pay until the Fund obtained a judgment. The Fund has proffered rules, which set out the events that will lead the Fund to conclude that an employer is unable to pay, and those events include the employer's insolvency, "failure or inability to pay its debts as they become due," bankruptcy, and "any other event or circumstance which in the judgment of the Trustees materially impairs the Employer's credit worthiness or the Employer's ability to pay its withdrawal liability when due." The Fund determined that there was a substantial likelihood that Telegraph would not be able to pay its withdrawal liability and, therefore, accelerated the withdrawal liability, which is to say it decided to require Telegraph to pay the entire amount right away instead of issuing Telegraph a schedule of payments.

On March 25, 2009, Telegraph received from the Fund a notice and demand for payment of the 2007 withdrawal liability. In the notice, the Fund did not provide Telegraph a payment schedule. Instead, the Fund informed Telegraph that it needed to make a lump sum payment of $214,158.38.

On May 20, 2009, Telegraph requested a review. The Fund's Board of Trustees considered and denied the request for review. On November 11, 2009, Telegraph initiated arbitration, which is still pending. Telegraph has not paid any of its withdrawal liability.

II. Summary Judgment Standard

Summary judgment should be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). When making such a determination, the Court must construe the evidence and make all reasonable inferences in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Summary judgment is appropriate, however, when the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to the party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "A genuine issue of ...


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