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Board of Trustees of Automobile Mechanics'local No. 701 Union and Industry Pension Fund v. Alta Industrial Equipment Company, LLC

United States District Court, N.D. Illinois, Eastern Division

April 23, 2014

BOARD OF TRUSTEES OF THE AUTOMOBILE MECHANICS' LOCAL NO. 701 UNION AND INDUSTRY PENSION FUND, Plaintiff,
v.
ALTA INDUSTRIAL EQUIPMENT COMPANY, LLC d/b/a ALTA EQUIPMENT COMPANY, LLC, a Michigan limited liability company; and ALTA LIFT TRUCK SERVICES, INC., a Delaware corporation, Defendants.

MEMORANDUM OPINION AND ORDER

SHARON JOHNSON COLEMAN, District Judge.

Defendants, Alta Industrial Equipment Company LLC d/b/a Alta Equipment Company LLC, and Alta Lift Truck Services, Inc. (collectively "Alta") move to dismiss plaintiff Board of Trustees of the Automobile Mechanics' Local No. 701 Union and Industry Pension Fund (the "Fund") complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons stated herein, the Court denies the motion.

Background

The Fund filed its complaint seeking redress under the Employee Retirement Income Security Act (herein ERISA) as amended by the Multiemployer Pension Plan Amendment Acts of 1980, 29 U.S.C. §1001 et seq. ULT Services, L.P. f/k/a United Lift Truck, L.P. ("United Lift") was a signatory to a collective bargaining agreement with the Fund. This agreement required United Lift to contribute to the Fund's pension plan based on work completed by United Lift's union covered employees each week.

In December 2009, United Lift sent a letter to the Fund indicating that all of its thirty-six covered employees would be terminated. In January 2010, United Lift sold the majority of its assets to Alta Lift Truck Services Inc., but kept making payments to the pension plan. In 2011, United Lift terminated its relationship with the Fund and ceased contributions. In May 2011, the Fund determined that United Lift had withdrawn from the pension fund within the meaning of 29 U.S.C. §1383. In June 2011, the Fund's actuary determined that United Lift incurred withdrawal liability in the amount of $3, 203, 993.00. On July 11, 2011, the Fund sent notice and demand for payments to United Lift. On March 19, 2012, United Lift initiated arbitration to challenge the Fund's withdrawal liability assessment. In August 2013, the Fund entered into a settlement with United Lift, which required United Lift to dismiss the arbitration with prejudice and to agree to the entry of a Stipulated Judgment Order. United Lift stopped making payments after paying $541, 482.39. To date the Fund claims it is owed $2, 662, 513.61, plus interest and liquidated damages.

Alta hired the majority of the thirty-four employees that were laid off by United Lift including the President and Director of Operations of United Lift, Trent Gorman. Alta recovered over $800, 000.00 in receivables it purchased from United Lift and purchased over $3.1 million dollars in hard assets from United Lift. Alta provides the same sales and service of Hyster products as United Lift did prior to the sale. Alta uses the same telephone numbers previously maintained by United Lift, and completed work previously contracted by United Lift. The Fund filed a one count complaint seeking to impose successor liability on Alta for United Lift's withdrawal liability.

Legal Standard

To survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Federal Rule of Civil Procedure 8(a)(2) sets forth the basic pleading requirement of a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Although Rule 8 does not require a plaintiff to plead particularized facts, the factual allegations in the complaint must sufficiently raise a plausible right to relief above a speculative level. Arnett v. Webster, 658 F.3d 742, 751-52 (7th Cir. 2011). When considering a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the Court must accept as true all well-pleaded factual allegations in the complaint and draw all reasonable inferences in favor of the plaintiff. Ashcroft v. Iqbal, 556 U.S. 662 (2009).

Discussion

I. Successor Liability

Alta moves to dismiss the complaint, arguing that the Fund has failed to include specific factual allegations that demonstrate how Alta can be liable for United Lift's withdrawal liability when the Fund has a judgment in its favor to which Alta was not a party. In order to state a claim for successor liability, a plaintiff must plead that the successor firm had notice of its predecessor's liability and sufficient indicia of continuity between the two companies. Sullivan v. Running Waters Irrigation, Inc., 739 F.3d 354, 357 (7th Cir. 2014); Upholsterers' Intl. Union Pension Fund v. Artistic Furniture of Pontiac, 920 F.2d 1323, 1329 (7th Cir. 1990).

1. Notice

A plaintiff can show notice through actual knowledge, as well as evidence that allows the fact finder to imply knowledge from the circumstances. Sullivan, 739 F.3d at 357 (citing Golden State Bottling Co. v. NLRB, 414 U.S. 168, 173, 94 S.Ct. 414, 38 L.Ed.2d 388 (1973)). "Notice can be implied from variety of circumstances, such as common control or proximity." Id. The Fund alleges that Alta had notice of United Lift's withdrawal liability prior to, or at the time of the sale through Trent Gorman. Alta hired Trent Gorman, United Lift's President and Director of Operations, who would have ...


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