514 F.3d 801 (8th Cir. 2008), 07-1092, Eckert v. Titan Tire Corp.

Docket Nº:07-1092.
Citation:514 F.3d 801
Party Name:Kenneth ECKERT, Plaintiff, v. TITAN TIRE CORPORATION; Titan Tire Corporation, Employee's Pension Plan; Pirelli Tire, LLC, Defendants, Titan Tire Corporation; Titan Tire Corporation, Employee's Pension Plan, Third Party Plaintiffs-Appellants, v. Pirelli Tire, LLC, Third Party Defendant-Appellee.
Case Date:January 29, 2008
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 801

514 F.3d 801 (8th Cir. 2008)

Kenneth ECKERT, Plaintiff,

v.

TITAN TIRE CORPORATION; Titan Tire Corporation, Employee's Pension Plan; Pirelli Tire, LLC, Defendants,

Titan Tire Corporation; Titan Tire Corporation, Employee's Pension Plan, Third Party Plaintiffs-Appellants,

v.

Pirelli Tire, LLC, Third Party Defendant-Appellee.

No. 07-1092.

United States Court of Appeals, Eighth Circuit.

January 29, 2008

Submitted: Oct. 15, 2007.

Appeal from the United States District Court for the Southern District of Iowa.

Gene R. LaSuer, argued, Des Moines, IA, for appellant.

William A. Blue, Jr., argued, Nashville, TN, for appellee.

Page 802

Before LOKEN, Chief Judge, GRUENDER and BENTON, Circuit Judges.

GRUENDER, Circuit Judge.

Kenneth Eckert brought this lawsuit against Titan Tire Corporation and Titan Tire Corporation Pension Plan (collectively "Titan"), claiming that Titan miscalculated the amount of pension benefits he was entitled to receive. Titan brought a third-party claim against Pirelli Tire, L.L.C. ("Pirelli"), claiming that Pirelli was responsible for the miscalculation and that Pirelli should indemnify Titan. Titan and Eckert settled Eckert's claim. On Titan's third-party claim against Pirelli, the district court1 held that Pirelli was not required to indemnify Titan for the miscalculation of Eckert's pension benefits. For the reasons discussed below, we affirm.

Page 803

I. BACKGROUND

Pursuant to an Asset Purchase Agreement ("APA") dated July 16, 1994, Titan Tire Corporation purchased Pirelli's Des Moines, Iowa tire manufacturing and production plant from Pirelli. Under section 2.04(2) of the APA, Titan assumed the liability to cover Pirelli's obligations for retirement benefits to former Pirelli employees who were continuing in employment with Titan, but Pirelli remained liable for retirement benefits accrued by the employees before Titan's purchase of the plant. To cover Pirelli's liabilities to the employees, section 13.01(3)(a)(iii) of the APA required Pirelli to transfer assets to Titan sufficient to cover Pirelli's pension liability, the "pension amount." Section 13.01(3)(a)(iv) defined the "pension amount" as an amount equal to the actuarial present value of the vested accrued benefits.

In section 5 of the APA, labeled "Representations and Warranties," the parties acknowledged that the representations made under section 5 were "correct and complete in all material respects" and would be "correct and complete in all material respects as of" July 16, 1994, the effective date of the APA. In section 5.18(1)(B), Pirelli represented and warranted that, "[w]ith respect to each Employee Pension Benefit Plan listed in Section 5.18 of the Disclosure Schedule, [Pirelli] has delivered or made available to [Titan] correct and complete copies of . . . actuarial valuations and audited financial statements for the most recent plan year."

According to the testimony of William Hogan, an actuary engaged by Titan, Pirelli's actuaries provided him with "a data file in electronic format which held individual participant information, names, date of birth, date of hires, pay, [and] accrued benefits." The file contained the individual participant records "determining for each individual person what the likely cost of the pension is going to be and the present value of that cost today," which was then "summed up to get a total cost for all participants." Using the data provided by Pirelli's actuaries, Hogan prepared his own calculations using his firm's systems to determine if his actuarial valuations "would come reasonably close to the calculations" provided by Pirelli's actuaries. Hogan did not check the correctness of the underlying data as to each individual participant but instead checked the actuarial calculations to ensure that Pirelli's actuarial calculations were correct. However, Pirelli's actuarial valuations relied on the incorrect starting date for Eckert of March 9, 1987, instead of his correct starting date of February 12, 1970. As a result, the actuarial valuations provided by Pirelli's actuaries were incorrect. Only after Eckert filed his complaint did Titan examine the actuarial valuations Pirelli had provided and realize that it relied on an incorrect hire date for Eckert. The parties determined that the amount Pirelli transferred to Titan was...

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