Amalgamated Lithographers of America v. Unz & Co., 08 Civ. 7046(CM).

Citation670 F.Supp.2d 214
Decision Date03 November 2009
Docket NumberNo. 08 Civ. 7046(CM).,08 Civ. 7046(CM).
PartiesAMALGAMATED LITHOGRAPHERS OF AMERICA Lithographic Industry Pension Plan, Plaintiff, v. UNZ & CO. INCORPORATED, Defendant.
CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

Thomas Martin Kennedy, John Reed Howard, Kennedy, Jennik & Murray, P.C., New York, NY, for Plaintiff.

Aaron C. Schlesinger, Peckar & Abramson, P.C., New York, NY, for Defendant.

McMAHON, District Judge.

Introduction

Plaintiff, the Amalgamated Lithographers of America Lithographic Industry Pension Plan (the "Plan"), moves for summary judgment against defendant Unz & Co., Inc. ("Unz"), on its claim for withdrawal liability arising under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., as amended by the Multiemployer Pension Plan Amendments Act ("MPPAA"). Unz opposes the motion, and cross-moves for summary judgment dismissing the Plan's action or, in the alternative, compelling arbitration to settle the dispute. For the reasons set forth below, plaintiffs motion is GRANTED, and defendant's cross-motion is DENIED.

Background

The basic facts underlying this case are not in dispute. They are taken from Plaintiffs Rule 56.1 Statement of Uncontested Material Facts in Support of Motion for Summary Judgment ("Pl. Rule 56.1 Stmt.") and Defendant's Reply to Plaintiffs Local Rule 56.1 Statement ("Def. Rule 56.1 Reply."). The Court sua sponte strikes Defendant's Counterstatement of Undisputed Material Facts. It is nothing of the sort. Very little of it is statements of fact; for the most part, it is legal argument. To the extent in contains any "statements of fact," it merely duplicates Defendant's Rule 56.1 Reply.

The Plan is an "employee pension benefit plan" as defined by ERISA. (Pl. Rule 56.1 Stmt. ¶ 1). The Plan is a "multiemployer plan" as defined by ERISA, and is designed to provide retirement and other benefits to eligible participants and beneficiaries. (Id. ¶¶ 2-3.) Scott Printing Corp. ("Scott Printing") was an employer as defined by ERISA. (Id. ¶ 4.)

Scott Printing was a commercial printing company, with facilities located in New Providence, New Jersey and at 55 Broadway, New York (also known as 1 Exchange Place). (Id. ¶ 5.) Scott Printing was a member of the Metropolitan Lithographers of America ("MLA"), an employer bargaining association. As such, it was bound by the provisions of the collective bargaining agreement between Union Local 1-L, Lithographers of America, GCIU ("Local 1") and the MLA during Scott Printing's membership with MLA. (Pl. Rule 56.1 Stmt. ¶¶ 6-7; Def. Rule 56.1 Reply ¶¶ 6-7.) Under the collective bargaining agreement between MLA and Local 1, Scott Printing was required to make regular contributions to the plan. (Pl. Rule 56.1 Stmt. ¶ 8.)

On January 17, 2003, Scott Printing ceased operations. Daniel Scott, the president of Scott Printing, sent a letter to the employees of the company, stating that Scott Printing was shutting down production, and that there was no reason to expect it would reopen in the future. (Pl. Rule 56.1 Stmt. ¶¶ 9-11.) In two letters sent within the following month, counsel for Scott Printing advised counsel for the Plan and Local 1 that the company had ceased operations, that it had no money, and that it would not respond to the Plan's lawsuits or demands for collection. (Pl. Rule 56.1 Stmt. ¶¶ 12-14.) Based on the shutdown and these communications, the Plan determined that Scott Printing had completely withdrawn from the Plan. (Pl. Rule 56.1 Stmt. ¶ 15.)

There is some confusion about the date when it was determined that Scott Printing completely withdrew from the Plan. As will be further discussed below, both the Complaint and letters from the Plan dated January 3, 2005 identify January 24, 2003 as the withdrawal date. (Declaration of Aaron C. Schlesinger, Esq. Submitted in Opposition to Plaintiff's Motion for Summary Judgment and in Support of Defendant's Cross-Motion for Summary Judgment ("Schlesinger Decl.") Ex. A, E-G.) In its Rule 56.1 Statement and in a letter dated November 29, 2004, the Plan states that Scott Printing withdrew on January 17, 2003. (Schlesinger Decl. Ex, D.) However, this discrepancy in dates appears to be due more to sloppiness on the part of plaintiffs counsel rather than to any genuine issue of material fact; it has no bearing on the resolution of the case.

At the time Scott Printing ceased operations, Daniel Scott and his brother Walter Scott, Jr., owned 100% of Scott Printing stock: Daniel owned 75%, while Walter owned 25%. (Pl. Rule 56.1 Stmt. ¶ 25; Def. Rule 56.1 Reply ¶ 25.)

The Plan's actuaries calculated Scott Printing's final withdrawal liability amount under ERISA at $765,474. (Pl. Rule 56.1 Stmt. ¶ 18; Def. Rule 56.1 Reply ¶ 18.) In accordance with the procedure for collecting withdrawal liability under 29 U.S.C. § 1399, the Plan sent letters via certified registered first class mail on January 3, 2005, addressed to Scott Printing at three addresses: 1 Exchange Place, New York, New York, 10006; 55 Broad Street, New York, New York, 10004; and 55 Broadway, New York, New York, 10006. (Pl. Rule 56.1 Stmt. ¶ 21; Declaration of Howard Savlick ("Savlick Decl.") Ex. I-K.) These letters demanded payment of withdrawal liability in the amount of $765,474, accompanied by a proposed schedule for quarterly payments to the Plan. (Pl. Rule 56.1 Stmt. ¶ 19; Savlick Decl. Ex. I-K.) It is undisputed that none of these letters was received; all were returned to sender. (Pl. Rule 56.1 Stmt. ¶ 22; Savlick Decl. Ex. L-N.)

Nonetheless, the Plan sent another letter to the 55 Broad Street address on April 28, 2005, advising Scott Printing that it was in default of the first scheduled withdrawal liability payment. The letter said that if Scott did not cure the default, the entire withdrawal liability amount would become due and owing. (Pl. Rule 56.1 Stmt. ¶ 23; Savlick Decl. Ex. O.) This letter likewise was returned to sender unopened. (Pl. Rule 56.1 Stmt. ¶ 24; Savlick Decl. Ex. P.)

The Plan did not send a letter to Scott Printing's operating facility in New Providence, New Jersey.

During discovery, plaintiff produced a copy of a letter dated November 29, 2004, addressed to Scott Printing at 55 Broad Street. (Schlesinger Decl. Ex. D.) This letter purported to notify Scott that its "withdrawal liability" totaled $47,160, "pursuant to the enclosed analysis." The letter was not accompanied by any "enclosed analysis." Plaintiff asserts that this document was never sent, and that the amount of withdrawal liability stated is far too low. No return receipt has been found for any letter dated November 2004 (plaintiff's policy is to send demand letters "return receipt requested."). Defendant does not offer any evidence that it saw this document prior to the time it was produced in discovery.

Unz is a training, software, and publishing company, specializing in advising businesses on compliance with regard to the import and export of hazardous materials. (Pl. Rule 56.1 Stmt. ¶ 26.) Daniel Scott is the president of Unz. At the time Scott Printing ceased operations, Daniel and Walter Scott Jr. together owned 100% of the shares of Unz, with Daniel again own ing 75% and Walter Jr. owning 25%. (Pl. Rule 56.1 Stmt. ¶¶ 26-27; Affidavit of Daniel T. Scott Submitted in Opposition to Plaintiffs Motion for Summary Judgment and in Support of Defendant's Cross-Motion for Summary Judgment ("Scott Aff.") ¶ 1.)

Unz was originally located at 700 Central Avenue, New Providence, New Jersey—the same location as Scott Printing's New Jersey facility. (Scott Aff. ¶ 11.) In January 2003, Unz moved to a new location in Bound Brook, New Jersey, and in June 2006, moved to 201 Circle Drive North, Piscataway, New Jersey—its current address. (Id. ¶ 12.)

On May 19, 2008—over five years after Scott ceased operations, and three years after the Plan's unsuccessful attempt to contact Scott Printing—the Plan sent a letter to Unz, informing Unz that a "routine review of Plan files" had raised the question of whether Unz and Scott Printing were members of a "controlled group" (as defined by ERISA) at the time Scott Printing ceased operations. The letter asked for information regarding ownership of Unz stock during the three years prior to Scott Printing's withdrawal from the Plan. (Pl. Rule 56.1 Stmt. ¶¶ 28-30; Savlick Decl. Ex. T.) The May 19,2008 letter was accompanied by a copy of the letter sent to Scott Printing on January 3, 2005. (Pl. Rule 56.1 Stmt. ¶ 30; Savlick Decl. Ex. T.) It is undisputed that Unz received the May 19, 2008 letter. (Pl. Rule 56.1 Stmt. ¶ 31; Def. Rule 56.1 Reply ¶ 31.)

Unz did not respond to the May 19, 2008 letter. (Pl. Rule 56.1 Stmt. ¶ 32; Def. Rule 56.1 Reply ¶ 32.) On August 7, 2008, more than 60 days after the letter was sent, the Plan commenced this action by filing the Complaint, and on August 13, 2008, the Plan served Unz with the Summons and Complaint. Attached to the Complaint as exhibits were copies of both the January 3, 2005 letter to Scott Printing and the May 19, 2008 letter to Unz. (Pl. Rule 56.1 Stmt. ¶ 33-34.)

The Complaint demands judgment in the sum of $765,474, representing the calculated withdrawal liability, as well as other damages allowed for in ERISA, including interest on that amount, liquidated damages, and attorneys fees and costs.

After answering the Complaint and denying liability, Unz served "Defendant's First Set of Interrogatories" on the Plan. (Schlesinger Decl. Ex. C.) Among other things, Unz requested "a detailed analysis regarding Plaintiff's calculation of withdrawal liability against Scott Printing and/or Defendant and copies of all documents used in performing the calculation." (Id. ¶ 3.) Unz received the Plan's initial response on January 3, 2009, consisting of documents responsive to the request—including copies of the November 29, 2004, the three January 3, 2005, and the April 28, 2005 letters. (Id...

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