Central States, et al., Pension Fund v. Bellmont Trucking Co.

• Decision Date: 12 June 1985
• Docket Number: Civ. No. F 84-375.
• Citation: 610 F. Supp. 1505
• Parties: CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Plaintiff, v. BELLMONT TRUCKING CO., INC., Defendant.
• Court: U.S. District Court — Northern District of Indiana

610 F. Supp. 1505

CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Plaintiff, v. BELLMONT TRUCKING CO., INC., Defendant.

Civ. No. F 84-375.

United States District Court, N.D. Indiana, Fort Wayne Division.

June 12, 1985.

Frederick W. Dennerline, III, Fillenwarth, Dennerline, Groth & Baird, Indianapolis, Ind., Stephen J. Lerch, Levine & Lerch, Fort Wayne, Ind., for plaintiff.

Steven L. Jackson, Parrish, Knight, Jackson & Beal, Fort Wayne, Ind., for defendant.

ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on summary judgment motions filed by both parties, and a cross-motion for summary judgment filed by defendant ("Bellmont"). At issue is whether Bellmont owes plaintiff (the "Fund") withdrawal liability under the provisions of the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA" or "the Act"). For the following reasons, Bellmont's motion and cross-motion for summary judgment will be denied, the Fund's motion for summary judgment will be granted, and the Fund will be granted summary judgment on the withdrawal liability claim.

This cause arises out of the business misfortunes of Bellmont. Bellmont was involved in the trucking business. Its drivers were members of Teamsters Local No. 414, and Bellmont itself was a signatory to the National Master Freight Agreement ("NMFA") by virtue of its membership in the Indiana Motor Carriers Labor Relations Association. The NMFA requires that employers like Bellmont make contributions to the Fund in order to help fund the pension benefits of their employees.

In the late 1970s, International Harvester ceased production at its Fort Wayne facility, which significantly affected Bellmont's business. Deregulation of the trucking industry took its toll as well. By 1983, Bellmont had only five Teamster-represented employees.

The union local struck Bellmont over wages on May 23, 1983, and Bellmont filed a Chapter 11 bankruptcy on June 15, 1983. At the time of the bankruptcy filing, Bellmont ceased to have an obligation to continue making payments to the Fund, and the Fund's trustees determined that Bellmont had withdrawn from the Fund as defined under MPPAA, so that Bellmont had incurred withdrawal liability under the Act. The Fund therefore filed a claim in the bankruptcy for the amount of the liability, the claim being for $115,098.66.¹ This court removed the proceeding concerning the withdrawal liability issue from the bankruptcy court on January 15, 1985, and these motions for summary judgment followed.

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment may only be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Thus, summary judgment serves as a vehicle with which the court "can determine whether further exploration of the facts is necessary." Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975).

In making this determination, the court must keep in mind that the entry of summary judgment terminates the litigation, or an aspect thereof, and must draw all inferences from the established or asserted facts in favor of the non-moving party. Peoples Outfitting Co. v. General Electric Credit Corp., 549 F.2d 42 (7th Cir. 1977). The non-moving party's reasonable allegations are to be accepted as true for purposes of summary judgment. Yorger v. Pittsburgh Corning Corp., 733 F.2d 1215, 1218-19 (7th Cir.1984). A party may not rest on the mere allegations of the pleadings or the bare contention that an issue of fact exists. Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.), cert. denied, ___ U.S. ___, 104 S.Ct. 392 (1983). See Adickes v. S. H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). See also Atchison, Topeka & Santa Fe Railway Co. v. United Transportation Union, 734 F.2d 317 (7th Cir.1984); Korf v. Ball State University, 726 F.2d 1222 (7th Cir.1983). See generally C. Wright, Law of Federal Courts, § 99 (4th ed. 1983); 6 Moore's Federal Practice, § 56.15 (2d ed. 1984).

Thus, the moving party must demonstrate the absence of a genuine issue of material fact. The court views all evidence submitted in favor of the non-moving party. Even if there are some disputed facts, where the undisputed facts are the material facts involved and those facts show one party is entitled to judgment as a matter of law, summary judgment is appropriate. Egger v. Phillips, 710 F.2d 292, 296-97 (7th Cir.1983); Collins v. American Optometric Assn., 693 F.2d 636, 639 (7th Cir.1982). Further, if the court resolves all factual disputes in favor of the non-moving party and still finds summary judgment in favor of the moving party is correct as a matter of law, then the moving party is entitled to summary judgment in his favor. Egger, 710 F.2d at 297. See also Bishop v. Wood, 426 U.S. 341, 348, 348 n. 11, 96 S.Ct. 2074, 2079, 2079 n. 11, 48 L.Ed.2d 684 (1976).

The essence of the dispute in the Fund's motion and Bellmont's cross-motion for summary judgment is whether Bellmont is entitled to claim that it is not subject to withdrawal liability because of the "trucking industry exemption" of 29 U.S.C. § 1383(d). The dispute involved in Bellmont's motion for summary judgment is whether the fact that all of Bellmont's union employees are either retired or working for another Fund-member employer relieves Bellmont of withdrawal liability. However, both of these disputes must be understood in the context of the MPPAA, and the court begins by briefly examining this legislative background.

Perhaps the best summary of the legislative history of MPPAA is set forth in Judge Getzendanner's opinion in Peick v. Pension Benefit Guaranty Corp., 539 F.Supp. 1025 (N.D.Ill.1982), aff'd, 724 F.2d 1247 (7th Cir.), cert. denied, ___ U.S. ___, 104 S.Ct. 3554, 82 L.Ed.2d 855 (1984). A brief recap will suffice here.

In 1974, the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq., was enacted as comprehensive federal regulation of pension plans. Title IV of ERISA established a termination insurance program run by the Pension Benefit Guaranty Corporation ("PBGC"), and funded by employer's premium payments.

For multiemployer plans, such as the Fund here, ERISA granted PBGC discretion to determine on a case-by-case basis whether, when a multiemployer pension plan was about to terminate, the PBGC would pay the terminating plan's participants the difference between the value of their guaranteed benefits and the value of the plan's assets on the date of termination. 29 U.S.C. § 1381(c)(2) (1976 ed.). If PBGC funds were expended in meeting such shortfalls, all employers that contributed to a terminated multiemployer plan during the five years preceding termination were collectively liable for the amount disbursed. Id. at 1364. In effect, an employer that withdrew from an ongoing or nonterminating plan incurred a contingent liability: if the plan terminated within the next five years, the employer would be liable for its proportionate share of the amount PBGC might expend at the time of termination.

It became clear to Congress that PBGC "insurance" of a terminating plan's shortfall, and the possibility of avoiding liability by withdrawal more than five years before a plan's termination, created great incentives to withdraw from multiemployer plans. See H.R. No. 869, 96th Cong.2d Sess., 54-55, reprinted in 1980 U.S.Code Cong. & Ad.News 2918, 2922-23. To combat this incentive, the MPPAA was passed.

One significant change wrought by MPPAA was the alteration of the liability for an employer's withdrawal from a multiemployer plan. Whereas ERISA gave an employer a contingent liability, MPPAA assigns a withdrawing employer immediate liability for a fixed and certain debt owed to the plan, 29 U.S.C. § 1381, which is known as "withdrawal liability:"

If an employer withdraws from a multiemployer plan in a complete withdrawal or a partial withdrawal, then the employer is liable to the plan in the amount determined under this part to be the withdrawal liability.

29 U.S.C. § 1381(a). "Complete withdrawal" is defined in § 1383, while "partial withdrawal" is described in § 1385. The "plan sponsor," or trustees of the plan, are responsible for determining the amount of withdrawal liability under § 1391, notifying the employer of the amount of the liability, and collecting it from the employer. 29 U.S.C. § 1382.

The issues here are simplified by the fact that Bellmont does not challenge the Fund's computation of Bellmont's withdrawal liability. The pending motions make clear that the dispute is whether Bellmont owes any withdrawal liability. Two rationales are offered to support Bellmont's argument: the applicability of the "trucking industry exemption," and the retirement or reemployment of all of Bellmont's employees. The court considers each of these in turn.

Trucking Industry Exemption — 29 U.S.C. § 1383(d)(2)

As noted earlier, an employer is immediately liable for withdrawal liability upon a "complete" or "partial" withdrawal from a multiemployer plan. 29 U.S.C. § 1381. Under the terms of § 1383(a), a complete withdrawal occurs when an employer "(1) permanently ceases to have an obligation to contribute under the plan, or (2) permanently ceases all covered operations under the plan." Section 1383 then presents special formulations for particular industries: the building and construction industry (§ 1383(b)); the entertainment industry (§ 1383(c)); and the trucking industry (§ 1383(d)).

The trucking industry exemption alters the § 1383(a) definition of complete withdrawal by mandating that a withdrawal occurs only if

(A) an employer permanently ceases to have an obligation to contribute under the plan or permanently ceases all covered operations under the plan, and

(B) either —

(i) the corporation

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