794 F.3d 841 (7th Cir. 2015), 14-1618, Tsareff v. Manweb Servs., Inc.

Docket Nº:14-1618
Citation:794 F.3d 841
Opinion Judge:Bauer, Circuit Judge.
Party Name:JAMES TSAREFF, et al., Plaintiffs-Appellants, v. MANWEB SERVICES, INC., Defendant-Appellee
Attorney:For James Tsareff, Indiana Electrical Workers Pension Benefit Fund, Plaintiffs - Appellants: Rachel Renee Parisi, Attorney, Ledbetter Parisi Sollars, LLC, Miamisburg, OH. For Manweb Services, formerly doing business as: ENTERPRISE ELECTRIC AND MECHANICAL AND doing business as FREIJE ENGINEERING S...
Judge Panel:Before BAUER, ROVNER, and WILLIAMS, Circuit Judges.
Case Date:July 27, 2015
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
SUMMARY

ManWeb, an Indianapolis engineering and installation company, entered into an asset purchase agreement with Tiernan, another Indianapolis electrical contractor. Unlike ManWeb, Tiernan was party to a collective bargaining agreement with a union, under which it contributed to a multiemployer pension fund. After the asset purchase, Tiernan ceased operations. Although ManWeb continued to do the same... (see full summary)

 
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Page 841

794 F.3d 841 (7th Cir. 2015)

JAMES TSAREFF, et al., Plaintiffs-Appellants,

v.

MANWEB SERVICES, INC., Defendant-Appellee

No. 14-1618

United States Court of Appeals, Seventh Circuit

July 27, 2015

Argued September 19, 2014.

As Corrected July 29, 2015.

Page 842

Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:10-cv-00980-SEB-DKL -- Sarah Evans Barker, Judge.

For James Tsareff, Indiana Electrical Workers Pension Benefit Fund, Plaintiffs - Appellants: Rachel Renee Parisi, Attorney, Ledbetter Parisi Sollars, LLC, Miamisburg, OH.

For Manweb Services, formerly doing business as: ENTERPRISE ELECTRIC AND MECHANICAL AND doing business as FREIJE ENGINEERING SOLUTIONS, Defendant - Appellee: James Harold Hanson, Attorney, James T. Spolyar, Attorney, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Indianapolis, IN.

Before BAUER, ROVNER, and WILLIAMS, Circuit Judges.

OPINION

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Bauer, Circuit Judge.

Plaintiff-appellant, Indiana Electrical Pension Benefit Plan (" Plan" ), through its trustee, James Tsareff, brings this action to collect withdrawal liability from defendant-appellee, ManWeb Services, Inc. (" ManWeb" ), under the Employee Retirement Income Security Act (" ERISA" ), as amended by the Multiemployer Pension Plan Amendments Act of 1980 (" MPPAA" ), 29 U.S.C. § § 1001-1461. The Plan argues that ManWeb is responsible for the withdrawal liability incurred by Tiernan & Hoover, certain assets of which ManWeb acquired through an asset sale, under a theory of successor liability. The Plan appeals the district court's grant of judgment as a matter of law to ManWeb and denial of the Plan's motion for summary judgment. For the reasons that follow, we reverse.

I. BACKGROUND

ManWeb is an Indianapolis-based company that performs engineering, construction, and installation-related services. In August 2009, ManWeb entered into an asset purchase agreement (" APA" ) with Tiernan & Hoover, another Indianapolis-based electrical contractor that performed engineering, construction, and service for cold storage facilities under the trade name, " The Freije Company." Unlike ManWeb, a non-union employer, Tiernan & Hoover was party to a collective bargaining agreement (" CBA" ) with IBEW Local 481 Union (" Union" ), in accordance with which it made contributions to the Plan, a multiemployer pension fund. As a result of the asset purchase, Tiernan & Hoover

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ceased operations and no longer had an obligation to contribute to the Plan. Although ManWeb continued to do the same type of work in the jurisdiction of the CBA for which contributions were previously required of Tiernan & Hoover, ManWeb did not make any contributions to the Plan following its purchase of Tiernan & Hoover's assets.

On February 24, 2010, counsel for the Plan sent a letter addressed to " The Freije Company" to Tiernan & Hoover's former Indianapolis address, indicating that it had determined that the company had effectuated a complete withdrawal from the Plan in August 2009 and that, pursuant to § 4202 of ERISA, the Plan had assessed withdrawal liability against Tiernan & Hoover. The letter indicated that Tiernan & Hoover owed $661,978.00 in withdrawal liability, which could be satisfied in one lump sum payment or in nineteen quarterly payments, commencing within sixty days of the company's receipt of the letter. Pursuant to a mail forwarding instruction, the letter was forwarded to ManWeb's address at 9211 Castlegate Drive, Indianapolis, Indiana 46256, where it was received and signed for by a ManWeb employee. Nevertheless, no payments were ever made to satisfy this liability; further, Tiernan & Hoover never sought review of the withdrawal liability assessment or initiated arbitration, despite the availability of both options under the statute. 29 U.S.C. § § 1399(b)(2)(A) and 1401(a)(1). Pursuant to the statute, the assessment against Tiernan & Hoover became due and owing after its failure to request review and initiate arbitration within the statutory deadline. 29 U.S.C. § 1401(b)(1).

As a result of Tiernan & Hoover's failure to make withdrawal payments, the Plan filed a collection action in federal court against Tiernan & Hoover pursuant to 29 U.S.C. § § 1132(e) and (f), and 1451(c). The Plan added ManWeb as a defendant under a theory of successor liability. At the close of discovery, the parties filed cross-motions for summary judgment. The district court granted the Plan's motion in part, finding that Tiernan & Hoover had waived its right to dispute the assessment of withdrawal liability by failing to initiate arbitration proceedings and, therefore, owed the full amount of the assessment. However, with respect to the Plan's claim of successor liability against ManWeb, the district court held that ManWeb was not liable to the Plan and granted ManWeb's motion for judgment as a matter of law. This appeal followed.

II. ANALYSIS

The Plan argues on appeal that the district court erred in granting ManWeb judgment as a matter of law and denying the Plan's motion for summary judgment. We review this decision de novo. McDougall v. Pioneer Ranch Ltd. P'ship, 494 F.3d 571, 575 (7th Cir. 2007). Summary judgment is proper only when the record demonstrates that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where, as here, the district court was faced with cross-motions for summary judgment, our review requires that we construe all facts and inferences in favor of the party against whom the motion under consideration was made--in this case, the Plan. Hendricks-Robinson v. Excel Corp., 154 F.3d 685, 692 (7th Cir. 1998). Before we proceed, however, we must address the district court's interpretation of the federal successor liability notice requirement.

A. Notice of Contingent Withdrawal Liability Satisfies the Successor Liability Notice Requirement

The district court held that the successor liability notice requirement excludes

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pre-acquisition notice of contingent liabilities; thus, because the Plan did not assess the amount of Tiernan & Hoover's withdrawal liability until after the asset purchase, it was impossible for ManWeb to have notice of any existing withdrawal liability prior to acquisition. The Plan argues that, in the narrow context of multiemployer pension fund withdrawal liability, the successor liability notice element encompasses both...

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