TRUSTEES OF PLMRS. & PIPFTRS. PEN. v. Mar-Len, Inc.

• Decision Date: 12 September 1994
• Docket Number: No. 1:93-CV-550,1:93-CV-598.,1:93-CV-550
• Citation: 864 F. Supp. 599
• Court: U.S. District Court — Eastern District of Texas
• Parties: TRUSTEES OF the PLUMBERS AND PIPEFITTERS NATIONAL PENSION FUND, Plaintiffs v. MAR-LEN, INC., Constructionistics, Inc. and Blackwell & Blackwell Company, Defendants.

864 F. Supp. 599

TRUSTEES OF the PLUMBERS AND PIPEFITTERS NATIONAL PENSION FUND, Plaintiffs v. MAR-LEN, INC., Constructionistics, Inc. and Blackwell & Blackwell Company, Defendants.

Nos. 1:93-CV-550, 1:93-CV-598.

United States District Court, E.D. Texas, Beaumont Division.

September 12, 1994.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Louis P. Malone III, O'Donoghue & O'Donoghue, Washington, DC and Stephen E. Price, Freedman Hull Mathews & Price, Houston, TX, for plaintiffs.

Kerwin B. Stone, Moore Landrey Garth Jones Burmeister & Hulett and Susan Jennifer Oliver, Benckenstein & Oxford, Beaumont, TX, for defendants.

MEMORANDUM OPINION

COBB, District Judge.

Before the court is the Plaintiffs' Motion for Summary Judgment on Counts I and IV of its First Amended Complaint. In Count I, plaintiffs ask this court to enforce an arbitration award of withdrawal liability against defendant Mar-Len, Inc. ("Mar-Len"). Count IV alleges that defendants, Mar-Len, Constructionistics, Inc. ("Constructionistics"), and Blackwell & Blackwell Company ("Blackwell & Blackwell"), operated as a single business enterprise in violation of Texas law. Plaintiffs also seek attorneys' fees and costs.

I. FACTS AND PROCEDURAL HISTORY

The Trustees of the Plumbers and Pipefitters National Pension Fund, plaintiffs, are trustees of a multi-employer benefit plan defined under 29 U.S.C. § 1002(37) of ERISA. Defendant, Mar-Len, is a Texas Corporation that operates as a contractor or subcontractor in the construction industry. Mar-Len was bound to the UA Local 195 for several years under its collective bargaining agreement. The agreement expired in 1987 and subsequent negotiations on a new agreement broke down. Mar-Len made its last payment to this multiemployer Pension Fund on December 1, 1988. At the end of the agreement in 1987, the Pension Fund had vested unfunded benefits as defined by ERISA. This pension fund subsequently merged with the Plumbers' and Pipefitters' National Pension Fund.

The President of Mar-Len is Leonard Malinowsky. His daughter, Ann Blackwell, performed various consulting services for Mar-Len since 1986. Ms. Blackwell, a rather industrious individual, also continues to act as the President and majority shareholder of another defendant, Constructionistics. Constructionistics, a Texas Corporation, provided equipment and machinery to Mar-Len for its daily operations. However, neither Mar-Len nor Constructionistics kept recorded entries of the "rented" equipment or machinery.

Ann Blackwell is also a partner in defendant Blackwell & Blackwell with her son. According to depositions and exhibits, no recorded transactions of equipment rental costs existed between Mar-Len and Blackwell & Blackwell. Depositions further indicated that Mar-Len simply agreed orally to pay Constructionistics and Blackwell & Blackwell when it was financially able to do so.

On October 5, 1990, plaintiffs notified Mar-Len that the company owed withdrawal liability of $329,285 because of its withdrawal from the Local Pension Fund. In accordance with 29 U.S.C. § 1401(a), the dispute over this assessment of withdrawal liability was submitted to arbitration. An arbitration hearing was conducted on January 22, 1992. At this hearing, Ann Blackwell acted as the representative for Mar-Len. She also represented the company at subsequent judicial hearings before the Honorable Richard Schell, United States District Judge for the Eastern District of Texas.

On September 1, 1992, the arbitrator ruled that Mar-Len was obligated to contribute to the Pension Fund. However, the arbitrator held that the amount of contribution was incorrect and ordered the plaintiffs to recalculate the amount owed. On October 22, 1992, the plaintiffs notified defendant Mar-Len that the new amount of withdrawal liability was $223,565. Mar-Len objected to this recalculation and another arbitration hearing was set for April 7, 1993.

Prior to the hearing on the recalculation of withdrawal liability, Mar-Len argued that it had been subsequently released from liability because of certain checks cashed by the local pension fund that stated "in full and final payment of all debts owed."

Next, on February 1, 1993, Mar-Len's Board of Directors (Leonard Malinowsky and his wife Marion) adopted a series of resolutions "reacknowledging" certain debts to Constructionistics and Blackwell & Blackwell. To pay these debts, Mar-Len executed various promissory notes and pledges of real and personal property as security for these debts. No appraisals of these properties were taken. Mar-Len then transferred virtually all of its assets, including future receivables, to the other defendants.

On April 2, 1993, Mar-Len informed the arbitrator that the April 7, hearing was unnecessary and requested a ruling. On October 25, 1993, the arbitrator ruled in favor of the plaintiffs and held Mar-Len responsible for $223,565 in withdrawal liability. The Trustees of the Plumbers and Pipefitters National Pension Fund then filed a claim in this court to enforce the arbitrator's ruling and to grant further relief under Federal and State law grounds. The complaint alleged violations under an alter ego theory, the single business enterprise theory and fraudulent conveyances.

Before this court is Plaintiffs' motion for summary judgment on Count I and Count IV of plaintiffs' first amended complaint.¹ For the reasons stated below, this court confirms the arbitrator's award in all respects and grants Plaintiffs' Motion for Summary Judgment on Count I. Plaintiffs' motion under Count IV is denied due to the expressly preemptive language of 29 U.S.C. § 1301(b)(1). However, on its on motion, this court grants summary judgment pursuant to 29 U.S.C. § 1301(b)(1), finding defendants, Constructionistics and Blackwell & Blackwell, jointly and severally liable as companies that exercised common control over Mar-Len. Plaintiffs are also awarded reasonable attorneys' fees and costs.

II. STANDARD OF REVIEW

Summary judgment is appropriate when the movant is able to demonstrate that the pleadings, affidavits, and other evidence available to the Court establish that there are no genuine issues of material fact, and that the moving party is entitled to summary judgment as a matter of law. Fed.R.Civ.P. 56(c); See Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986); and Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-88, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). When the nonmoving party has the burden of proof on an issue, the movant must state the basis for the motion and identify those portions of the pleadings, depositions, admissions, answers to interrogatories, together with affidavits, that demonstrate the absence of a genuine issue of material fact.²Celotex, 477 U.S. at 323, 106 S.Ct. at 2553; Topalian v. Ehrman, 954 F.2d 1125, 1131-32 (5th Cir.1992), cert. denied, ___ U.S. ___, 113 S.Ct. 82, 121 L.Ed.2d 46 (1992). A mere conclusory statement that the other side has no evidence is not enough to satisfy a movant's burden. See Celotex, 477 U.S. at 324, 106 S.Ct. at 2553.

Once the movant demonstrates that the case presents no material fact issues, the opposing party has a duty to respond, via affidavits or other means, asserting specific facts that show that there is a genuine issue of material fact for trial. Fed.R.Civ.P. 56(e); Anderson, 477 U.S. at 256, 106 S.Ct. at 2514; Celotex, 477 U.S. at 322, 106 S.Ct. at 2552. The Court must view the evidence introduced and all factual inferences from the evidence in the light most favorable to the party opposing summary judgment. Eastman Kodak v. Image Technical Services, ___ U.S. ___, ___, 112 S.Ct. 2072, 2077, 119 L.Ed.2d 265 (1992); Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356. However, a party opposing summary judgment may not rest on mere conclusory allegations or denials in his pleadings. Fed.R.Civ.P. 56(e); see also Topalian, 954 F.2d at 1131.

Genuine issues of material fact are not disputed and summary judgment is proper "where the record taken as a whole could not lead a rational trier of fact to find for a non-moving party...." Leonard v. Dixie Well Service Supply, Inc., 828 F.2d 291, 293-94 (5th Cir.1987). It is important to note that "one of the principle purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses." Celotex Corp., 477 U.S. at 323, 106 S.Ct. at 2553.

In the present case, parties submitted briefs in support of and in opposition to the plaintiffs' motion for summary judgment. Furthermore, an August 22, 1994 hearing was held to further clarify any issues before the court. The plaintiffs duly informed this court of the basis for its summary judgment motion and identified portions of the record which it believed demonstrate the absence of a genuine issue of material fact. See Celotex Corp., 477 U.S. at 323, 106 S.Ct. at 2553.

In response to this motion, the defendants failed to show specific facts that created triable issues. The non-moving party must go beyond the pleadings and, through affidavits, depositions, interrogatories, and admissions, show that a material fact question exists. Celotex Corp., 477 U.S. at 324, 106 S.Ct. at 2553. According to the Supreme Court,

... the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.

Celotex Corp., 477 U.S. at 322, 106 S.Ct. at 2552. Credibility determinations, however, are not within the province of the District Courts. Anderson v. Liberty Lobby, Inc., 477 U.S. at 255, 106 S.Ct. at 2513.

Credibility determinations, the weighing

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