901 F.2d 1514 (10th Cir. 1990), 89-1080, In re Centric Corp.

Docket Nº:89-1080, 89-1081.
Citation:901 F.2d 1514
Party Name:In re CENTRIC CORPORATION, Debtor. TRUSTEES OF the CENTENNIAL STATE CARPENTERS PENSION TRUST FUND, Creditor-Appellant, v. CENTRIC CORPORATION, Debtor-Appellee, U.S. Trustee, Trustee. CENTRIC CORPORATION, Plaintiff-Appellee, v. TRUSTEES OF the CENTENNIAL STATE CARPENTERS PENSION TRUST FUND; and the Centennial State Carpenters Pension Trust Fund, Def
Case Date:April 23, 1990
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 1514

901 F.2d 1514 (10th Cir. 1990)

In re CENTRIC CORPORATION, Debtor.

TRUSTEES OF the CENTENNIAL STATE CARPENTERS PENSION TRUST

FUND, Creditor-Appellant,

v.

CENTRIC CORPORATION, Debtor-Appellee,

U.S. Trustee, Trustee.

CENTRIC CORPORATION, Plaintiff-Appellee,

v.

TRUSTEES OF the CENTENNIAL STATE CARPENTERS PENSION TRUST

FUND; and the Centennial State Carpenters Pension

Trust Fund, Defendants-Appellants.

Nos. 89-1080, 89-1081.

United States Court of Appeals, Tenth Circuit

April 23, 1990

Page 1515

Timothy J. Parsons (David B. Seserman with him on the briefs), Gorsuch, Kirgis, Campbell, Walker and Grover, Denver, Colo., for defendants-appellants.

Kenneth R. Stettner (Cynthia R. Hanley with him on the brief), Stettner, Miller and Cohn, P.C., Denver, Colo., for plaintiff-appellee.

Before McKAY, BARRETT, and ANDERSON, Circuit Judges.

STEPHEN H. ANDERSON, Circuit Judge.

The Trustees of the Centennial State Carpenters Pension Trust Fund ("the Trustees") appeal two orders of the district court. We affirm both.

BACKGROUND

On April 7, 1983, the Trustees notified Centric Corporation ("Centric") that Centric had been found to have withdrawn from the Centennial State Carpenters Pension Trust Fund and was therefore accountable for withdrawal liability under the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), in the amount of $372,775. See R. Vol. I at Tab 4, Ex. A. The MPPAA requires disputes between a plan sponsor and an employer to be resolved through arbitration, which either party must initiate within 180 days of a request by the employer that the sponsor review specific matters (which must be made within 90 days of the notice), or within 60 days of the sponsor's response to such a request, whichever comes first. 29 U.S.C. Secs. 1399(b)(2), 1401(a)(1). If arbitration is not properly initiated, the assessed liability becomes "due and owing." 29 U.S.C. Sec. 1401(b)(1).

On April 29 and July 6, 1983, Centric asked the Trustees to review certain alleged errors in the assessment. When the Trustees did not respond, Centric on December

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30, 1983 1 filed suit seeking a declaratory judgment that portions of the MPPAA, including the arbitration requirement, were unconstitutional. The complaint also alleged that, even if the MPPAA was constitutional, Centric had incurred no withdrawal liability because of the exception in 29 U.S.C. Sec. 1398 for suspensions caused by labor disputes. The Trustees counterclaimed for the assessed withdrawal liability. Centric posted a bond sufficient to pay the assessment. In April 1985, the district court ruled against Centric's constitutional claims but held that the applicability of the labor dispute exception could not be determined on a motion for summary judgment.

In July 1985, Centric filed a bankruptcy petition. The district court consequently stayed its proceedings and terminated the litigation without prejudice. The Trustees filed a proof of claim in the bankruptcy court for the assessed withdrawal liability, and moved for relief from the automatic stay. The motion was granted on May 13, 1986.

In May 1987, Centric objected to a number of the claims filed against it, including the Trustees' claim. Pursuant to a local bankruptcy rule, 2 each party to whose claim Centric objected was notified that if the creditor opposed the objection, a written request for a hearing had to be filed by June 22, 1987 or the bankruptcy court would act on the objection on June 29, 1987. The Trustees admit that they received their notice. Brief of Appellant at 14. Many creditors responded, but not the Trustees. On August 10, 1987, the bankruptcy court resolved the claims of the creditors who responded. The bankruptcy court then approved a plan under which all of Centric's assets would go to its secured creditors, after which the company would be dissolved. The unsecured creditors, including the Trustees, were to receive nothing from the bankruptcy estate.

Sometime between June 1986 and January 1988 (the record does not permit greater specificity), the Trustees changed legal counsel. On January 29, 1988, the Trustees, through their new attorney, filed a motion in the district court to reopen those proceedings and a motion in the bankruptcy court for leave to respond to Centric's objection to the Trustees' claim. The district court granted the motion to reopen. On July 14, 1988, the bankruptcy court, which had not formally ruled upon Centric's objection to the Trustees' claim, denied the Trustees' motion to respond to Centric's objection, and disallowed their claim. 3 The Trustees appealed to the district

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court, which affirmed the bankruptcy court's decision. In a separate order, the district court held that the Trustees' withdrawal liability claim was barred by the doctrine of laches. The Trustees appeal both orders.

DISCUSSION

I. AFFIRMANCE OF THE BANKRUPTCY COURT

The Trustees were notified that if they opposed Centric's objection to their proof of claim, a written opposition and request for a hearing had to be filed by June 22, 1987. Yet, the Trustees did not try to respond until January 29, 1988--seven months after their opposition was due. The bankruptcy court denied their motion:

"This Court is convinced that if it were to allow the response of the Trust Fund to the Debtor's Objection to Claims, which was extremely tardy and...

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