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Central States, Southeast And Southwest Areas Pension Fund v. CLP Venture LLC

United States Court of Appeals, Seventh Circuit

July 29, 2014

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND and ARTHUR H. BUNTE, JR., TRUSTEE, Plaintiffs-Appellees,
v.
CLP VENTURE LLC, et al., Defendants-Appellants

Argued June 4, 2014

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 11 C 3785 - Ronald A. Guzman, Judge.

For Central States, Southeast And Southwest Areas Pension Fund, Arthur H. Bunte, Jr., Plaintiffs - Appellees (13-3010, 13-3776): Thomas M. Weithers, Attorney, Central States, Southeast & Southwest Areas Pension Fund, Rosemont, IL.

For CLP VENTURE LLC, an Illinois limited liability company, JM VENTURE LLC, an Illinois limited liability company, LATHROP STAR, LTD., an Illinois corporation, NEW CONCORD OHIO, INC., an Illinois corporation, PLAIN JAR, LLC, an Illinois limited liability company, Defendants - Appellants (13-3010, 13-3776): Trisha K. Tesmer, Attorney, Cassiday Schade LLP, Chicago, IL.

Before WOOD, Chief Judge, and CUDAHY and ROVNER, Circuit Judges.

OPINION

Page 746

Cudahy, Circuit Judge.

This case arises under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA); we must determine primarily whether or not the various codefendants were under common control, and therefore are jointly and severally liable for the withdrawal liability indisputably incurred by General Warehouse, Inc.. Because there is overwhelming evidence that these entities were under common control, we now affirm.

This appeal originated with General Warehouse, which as an employer was obligated to contribute to the Central States Pension Fund (the Fund) on behalf of certain employees. In 2005 it ceased to have an obligation to the fund, which led to a complete withdrawal, incurring withdrawal liability in the amount of $1,262,568. The Fund filed suit to collect from General Warehouse, as well as GEOBEO and other businesses under common control. The parties to that litigation entered into a consent judgment, acknowledging that the named defendants were jointly and severally liable. The Fund then initiated this action to add the defendants to the group of business entities from which it can collect.

The only other pertinent facts in this case pertain to George Cibula's ownership of GEOBEO, and the rather convoluted Stock Redemption Agreement that resulted in his acquiring the right to acquire at least 80% of GEOBEO shares. In 1997, Cibula owned 65% (650 shares) of GEOBEO, while Robert Pieranunzi owned the remaining 35% (350 shares). That same

Page 747

year, they entered into a Stock Redemption Agreement through which GEOBEO[1] would buy back Pieranunzi's stock. Pieranunzi surrendered his shares and new stock certificates were issued to an escrowee. The escrowee was to hold the stock certificates in escrow and release them as installment payment were made according to the Stock Redemption Agreement. GEOBEO made the first of several payments, and accordingly 112 shares were released from escrow, giving Cibula 73% of GEOBEO's total shares. GEOBEO defaulted on the Stock Redemption Agreement, and the untransferred shares remained in escrow. To resolve his liability under the Stock Redemption Agreement, Cibula entered into an Assignment Agreement with Pieranunzi, under which Cibula gained the right to direct the voting shares while in escrow or direct a distribution of the shares to himself. At all relevant times, the remaining 27% of GEOBEO shares were in escrow. Pursuant to the Assignment, voting control of the escrow was vested in Cibula.

The district court granted summary judgment in favor of the Fund and struck the defendants' jury demand. The defendants now appeal the district court's finding that Cibula had a controlling interest in GEOBEO, the characterization of the defendants as " trades" or " businesses" and the order striking their jury demand. While a grant of summary judgment is typically reviewed de novo, because the only issue before the district court was the characterization of undisputed subsidiary facts, we review for clear error. Cent. States, Se. & ...


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