Cent. Pa. Teamsters Pension Fund v. Waggoner
| Decision Date | 15 December 2022 |
| Docket Number | CIVIL 5:20-cv-05560-JMG |
| Parties | CENTRAL PENNSYLVANIA TEAMSTERS PENSION FUND, et al., Plaintiffs, v. BYRON WAGGONER, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Plaintiffs Central Teamsters Pension Fund and Trustees, seek to recover ERISA withdrawal liability damages assessed against non-party former employer The York Concrete Company. Plaintiffs allege Defendants are liable for these damages following the sale of The York Concrete Company's assets to Defendant York Concrete Company, LLC. Before the Court are the parties' dual motions for summary judgment as to Counts I and II of Plaintiffs' Amended Complaint. For the following reasons Defendants' motion for summary judgment is denied, and Plaintiffs' motion for summary judgment is granted in part and denied in part.
This successor liability action arises from Defendant York Concrete Company, LLC's (“YCC”) asset purchase of a former company, The York Concrete Company (“York”). See Defendants' Statement of Facts [hereinafter “DSOF”] at ¶ 10 (ECF No. 55-2); Plaintiffs' Statement of Facts [hereinafter “PSOF”] at ¶ 5 (ECF No. 57). Plaintiffs, the Central Pennsylvania Teamsters Pension Fund (hereinafter the “Fund” or “Plaintiffs”), allege YCC and the other Defendants are joint and severally liable for $193,363.00 in Employee Retirement Income Security Act (“ERISA”) withdrawal liability, among other related costs, assessed against York. See Amended Compl. (ECF No. 23). The “Defendants” consist of: Byron Waggoner; York Concrete Company, LLC; Waggoner Holdings, LLC; Waggoner Holdings, LP; Girard Avenue Holdings, LLC; Waggoner Construction, Inc.; Waggoner Fabrication & Millwright, LLC; Waggoner Roofing, LLC; Best Mechanical Services, LLC; and Crane Werks, LLC. Before the Court are the parties' Dual Motions for Summary Judgment (ECF Nos. 55 and 56) as to Counts I and II of Plaintiffs' Amended Complaint.
Count I of Plaintiffs' Amended Complaint brings a federal common law successor liability claim against Defendant YCC only. Id.
Count II of Plaintiffs' Amended Complaint brings a separate successor liability claim against Defendants Waggoner Holdings, LLC; Waggoner Holdings, LP; Girard Avenue Holdings, LLC; Waggoner Construction, Inc.; Waggoner Fabrication & Millwright, LLC; Waggoner Roofing, LLC; Best Mechanical Services, LLC; and Crane Werks, LLC. See Amended Compl. (ECF No. 23). Plaintiffs allege these Defendants, along with Defendant YCC, belong to a brothersister controlled group of entities, which Plaintiffs refer to as the “Waggoner Entities,” because Defendant Byron Waggoner (“Mr. Waggoner”) has a “controlling interest” in each of the entities. Id. Plaintiffs contend that because Mr. Waggoner has both a “controlling interest” in each of the entities and exerts “effective control” over each of the entities, the Waggoner Entities collectively constitute a single employer under ERISA such that each entity is jointly and severally liable for York's withdrawal liability, and all other amounts owed to the Fund. Id.
Count III of Plaintiffs' Amended Complaint alleges Defendant Mr. Waggoner is jointly and severally liable with the Waggoner Entities for York's withdrawal liability because the Waggoner Entities are the “alter ego” of Mr. Waggoner. Id. Pursuant to this Court's August 24, 2022 Order, Count III is not presently before the Court.[1]
Plaintiffs and Defendants each filed motions for summary judgment on October 3, 2022.[2] ECF Nos. 55 and 56. The Parties filed responses in opposition on October 17, 2022. ECF Nos. 58 and 60. Plaintiffs filed a Reply in Support of Their Motion for Summary Judgment on October 25, 2022. ECF No. 64.
York was a concrete manufacturer that owned and operated a manufacturing facility at 400 Girard Avenue, York, Pennsylvania, 17403. PSOF ¶ 1-2 (ECF No. 57); Defendant's Response to Plaintiffs' Statement of Facts [hereinafter “DRPSOF”] at ¶ 1-2 (ECF No. 59). As part of its operations, York employed delivery drivers who were, for purposes of collective bargaining, represented by a local affiliate of the International Brotherhood of the Teamsters. PSOF at ¶ 3; DRPSOF at ¶ 3. York contributed to the Fund for those drivers. PSOF at ¶ 3; DRPSOF at ¶ 3.
YCC is 100 percent owned by its sole member, Defendant Mr. Waggoner. PSOF at ¶ 10, 17; DRPSF at ¶ 10, 17. Around 2016, Mr. Waggoner began the process of acquiring York's assets on behalf of Defendant YCC. DSOF at ¶ 13; Plaintiff's Response to Defendants' Statement of Facts [hereinafter “PRDSOF”] at ¶ 13. With this asset sale to YCC impending, York stopped making contributions to the Fund in 2017. PSOF at ¶ 5; DRPSF at ¶ 5. Thereafter, the Fund sent a written assessment dated May 1, 2018 to York, notifying York that this cessation of contributions effectuated a complete withdrawal from the Fund under the Employee Retirement Income Security Act of 1974 (“ERISA”) and Section 4203(a) of the Multiemployer Pension Plan Amendments Act (“MPPAA”), and therefore York owed $193,363 in withdrawal liability to the Fund (“May 1, 2018 Assessment”). Joint App. at ¶ 0029-0030 (ECF No. 57-2). York received the May 1, 2018 Assessment and was aware of this withdrawal liability. PSOF at ¶ 10; DRPSOF at ¶ 10. York and its representatives never responded in writing to the May 1, 2018 Assessment. PSOF at ¶ 11; DRPSOF at ¶ 11.
On July 22, 2019, Plaintiff, the Fund, obtained a judgment award of $193,363.00 against York in withdrawal liability, plus awards of interest, liquidated damages, and attorneys' fees and costs for a total award of $278,978.90 (the “Judgment”). JA 0250-0258 (ECF No. 57-2). To date, York has not made any payments toward the withdrawal liability or total Judgment. Id. at ¶ 0004.
The parties do not dispute that Defendant YCC became aware of the May 1, 2018 Assessment and York's withdrawal liability in May 2018. DSOF at ¶ 74; PRDSOF at ¶ 74; Waggoner Dep. at 142:8-143:1; JA 0205-0206 (ECF No. 57-2).
It is further undisputed that on July 3, 2018, YCC signed a written asset purchase agreement for York's assets (“Written Asset Purchase Agreement” or “the Agreement”). PSOF at ¶ 35; DRPSF at ¶ 35. The Agreement contains a provision stating the parties intend to be legally bound to its terms. See JA 0331, 0333, 0337 (ECF No. 57-2). The Agreement defines the “Acquired Assets” as consisting of York's inventory, equipment, and intangible assets. JA 0331 (ECF No. 57-2). The Agreement contains a Pennsylvania choice of law provision. JA 0343 (ECF No. 57-2). Critically, The Agreement contains a provision titled “Entire Agreement,” which states:
This Agreement, including the Schedules and Exhibits attached hereto and the documents referred to herein shall constitute the entire agreement between the parties hereto with respect to the subject matter hereof and shall supersede all previous oral and written negotiations, commitments and writings with respect to the subject matter of this Agreement.
JA 0344 (ECF No. 57-2).
Defendants contend that before YCC and Mr. Waggoner became aware of York's withdrawal liability and of the May 1, 2018 Assessment, the terms of the asset purchase agreement were finalized via a “handshake agreement which occurred upon in late 2017 or early 2018” (the “Handshake Agreement”). DSOF at ¶ 15. Indeed, Defendants claim that, by December 2017, YCC had already tendered payment of $250,000.00 in connection with this Handshake Agreement. DSOF at ¶ 18. According to Mr. Waggoner, the $250,000.00 payment was “for some trucks and an old loader” owned by York. Waggoner Dep. at 56:21-57:5; JA 0119-0120 (ECF No. 57-2). Moreover, according to Defendants, YCC began to operate out of York's facility by the end of April or beginning of May 2018. DSOF at ¶ 23; Waggoner Dep. at 88:2-14; JA 0151 (ECF No. 57-2).
Therefore, Defendants contend YCC agreed to purchase York's assets “in late 2017” via the Handshake Agreement, that “both parties tendered consideration in segments” and YCC moved into York's property, but that the Handshake Agreement was “never reduced to writing until July 2018 but the terms remained the same.” Defendants' Response at numbered pg. 5 (ECF No. 58). According to Defendants, the July 3, 2018 Written Asset Purchase Agreement “merely memorialized” the earlier Handshake Agreement. DSOF at ¶ 25.
Plaintiffs dispute whether the Handshake Agreement took place. PRDSOF at ¶ 15. However, Plaintiffs admit that YCC did tender a $250,000.00 payment to York and began operating out of York's manufacturing facility prior to execution of the Written Agreement. PRDSOF at ¶ 18; 20.
The parties do not dispute the facts surrounding YCC's operations. YCC is in the same business as York: concrete manufacturing. PSOF ¶ 42; DRPSOF at ¶ 41-42. YCC operates out of the same plant and location that York did: the commercial property located at 400 Girard Avenue, York, Pennsylvania, 17403. PSOF ¶ 1-2; DRPSOF at ¶ 1-2.
YCC holds itself out as a continuation of York. YCC still uses York's former trade name, “York Concrete Company,” a right YCC obtained from the asset purchase agreement. PSOF ¶ 48; DRPSOF at ¶ 48. Indeed, YCC posted signage at the 400 Girard Avenue property advertising the company “has been pouring mud since 1944”; a reference to both the old York Concrete Company and YCC. PSOF ¶ 49; DRPSOF at ¶ 49; Waggoner Dep. at 120:16-121:19, JA 0183-1084 (ECF No. 57-2). Similarly, YCC's website states the company “was established in 1944” and “is the first and oldest ready mix concrete company.” PSOF ¶ 50; DRPSOF at ¶ 49. Moreover, YCC still uses the...
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