CENTRAL STATES, ETC., AR. PEN. F. v. Sztanyo Trust

• Decision Date: 26 July 1988
• Docket Number: Civ. A. No. 86-1219.
• Parties: CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Employee Benefit Plan, and Howard McDougall, Trustee, Plaintiffs, v. LLOYD L. SZTANYO TRUST, Lloyd L. Sztanyo Company, a Michigan Co-Partnership, Lloyd L. Sztanyo Company, a Sole Proprietorship, Lloyd L. Sztanyo d/b/a Lloyd L. Sztanyo a Sole Proprietor, and Lloyd L. Sztanyo, Personally, as the Co-Partner in Lloyd L. Sztanyo Co., individually, jointly and severally, Defendants.
• Court: U.S. District Court — Western District of Michigan

693 F. Supp. 531

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Employee Benefit Plan, and Howard McDougall, Trustee, Plaintiffs, v. LLOYD L. SZTANYO TRUST, Lloyd L. Sztanyo Company, a Michigan Co-Partnership, Lloyd L. Sztanyo Company, a Sole Proprietorship, Lloyd L. Sztanyo d/b/a Lloyd L. Sztanyo a Sole Proprietor, and Lloyd L. Sztanyo, Personally, as the Co-Partner in Lloyd L. Sztanyo Co., individually, jointly and severally, Defendants.

Civ. A. No. 86-1219.

United States District Court, E.D. Michigan, S.D.

July 26, 1988.

COPYRIGHT MATERIAL OMITTED

Thomas J. Blessing, Bloomfield Hills, Mich., for plaintiffs.

Martin J. Leavitt, Karen L. Faber, Northville, Mich., for defendants.

MEMORANDUM OPINION AND ORDER

SUHRHEINRICH, District Judge.

The present lawsuit was brought by plaintiffs Central States, Southeast and Southwest Areas Pension Fund, and the pension fund's trustee, Howard McDougall (hereinafter collectively referred to as Central States). Central States filed suit on March 26, 1986 against the defendants, Lloyd L. Sztanyo Trust; Lloyd L. Sztanyo Company, a co-proprietorship; Lloyd L. Sztanyo d/b/a Lloyd L. Sztanyo, a sole proprietorship; and Lloyd L. Sztanyo in his personal capacity, as a co-partner in Lloyd L. Sztanyo Co., individually, jointly and severally (hereinafter collectively referred to as the defendants). In the complaint, Central States alleges that these defendants are jointly and severally liable for Employee Retirement and Income Security Act (ERISA) withdrawal liability.¹ This withdrawal liability was previously assessed against Apollo Truck Lines, Inc.; Apollo Expediting, Inc.; and Jordan Engineering and Consultants, Inc. As grounds for their allegations, Central States asserts that the defendants are members of the same controlled group as Apollo Truck Lines, Inc.; Apollo Expediting, Inc.; and Jordan Engineering and Consultants, Inc. Central States obtained a consent judgment against the latter three companies in a previous lawsuit. See Apollo Truck Lines v. Central States, No. 83-3135 (E.D.Mich. January 30, 1985) (consent judgment). Apollo Truck Lines, Apollo Expediting, and Jordan Engineering and Consultants were counter-defendants in that case. Under the terms of the consent judgment, Central States was to receive a total judgment of $881,130.83 plus interest. This total represented ERISA withdrawal liability of $638,477.20, unpaid interest on the withdrawal liability through December 26, 1984, statutory damages pursuant to 29 U.S.C. § 1132(g)(2)(C)(ii), and attorney fees and costs.

Currently pending before the Court is Central States' motion for summary judgment, to which defendants have responded. Central States filed both a reply and supplemental briefs. The defendants have also filed a summary judgment motion; Central States has responded to that motion. Central States seeks summary judgment on the ground that the defendants are joint obligors with the three counter-defendants in Civil Action No. 83-3135. It is contended that, under the provisions of the Multi-employer Pension Plan Amendment Act of 1980 (MPPAA), 29 U.S.C. §§ 1301-1453, the defendants in the present case and the counter-defendants in the earlier case are in the same controlled group and hence are a single employer. Therefore, Central States asserts that the present defendants are jointly and severally liable for any withdrawal liability assessed against the previous counter-defendants.

Central States also contends that the defendants' affirmative defenses should be stricken. These defenses are laches, election of remedies, collateral estoppel due to a previous judgment, estoppel due to the absence of indispensable parties, and estoppel due to the actions of the parties and/or their representatives. It is claimed that these defenses are not applicable under the facts of this case.

The defendants seek summary judgment on several grounds. First, they allege that Central States has failed to state a cause of action upon which relief may be granted. In specific, defendants aver that Central States, although alleging a cause of action under ERISA, actually seeks to enforce a consent judgment. Thus, defendants contend that ERISA has been improperly evoked. Second, it is contended that the consent judgment entered in Civil Action No. 83-3135 constituted an accord and satisfaction of the claims which gave rise to the consent judgment. On this basis, defendants contend that the claim for withdrawal liability involved in Civil Action No. 83-3135 was extinguished by the consent judgment. Therefore, defendants assert that Central States cannot pursue a claim for withdrawal liability even if the present defendants and the counter-defendants in Civil Action 83-3135 are in the same controlled group. Finally, defendants assert that there is no common control between the present defendants and the previous counter-defendants such that the present defendants are liable for the previous counter-defendants' obligations. In accordance with Local Rule 17(l)(2), the Court shall hold no hearing in this matter.

The standards to be utilized in deciding motions for summary judgment are clear. Fed.R.Civ.P. 56(c) dictates the entry of summary judgment if the pleadings, depositions, answers to interrogatories, admissions on file, and the affidavits, if any, demonstrate that no genuine issue of material fact exists and that the moving party is entitled to a judgment as a matter of law. Under Fed.R.Civ.P. 56(e), the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed. 2d 202 (1986). The movant in a motion for summary judgment has the initial responsibility of informing the Court of the basis for the motion and demonstrating the absence of a genuine issue of material fact. Fed.R.Civ.P. 56(e). There is no express or implied requirement that the moving party support its motion with affidavits or similar materials negating the opponent's claim. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the nonmovant cannot establish an essential element of his claim and summary judgment is appropriate, the movant is entitled to entry of summary judgment as a matter of law. Id. Finally, the evidence of the nonmovant is to be believed and all justifiable inferences are to be drawn in his favor. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). These standards shall be applied in deciding the summary judgment motions currently before the Court.

Before examining the merits of the two summary judgment motions, note should be taken of issues previously resolved in this matter. In its Memorandum Opinion and Order of June 9, 1988, the Court rejected defendants' argument that the consent judgment in Civil Action No. 83-3135 constituted an accord and satisfaction of the withdrawal liability. Finding the argument to be without legal basis, the Court denied defendants' motion to amend their answer to assert the defense of accord and satisfaction. Therefore, defendants' contention in their motion for summary judgment that the claim for withdrawal liability was extinguished by the consent judgment is without merit. As the elements of accord and satisfaction are missing in the present case, defendants' contentions based on that defense are baseless.

Also without merit is defendants' contention that Central States has not stated a cause of action under ERISA. Defendants claim that Central States seeks only to enforce a consent judgment to which defendants were not parties, rather than to establish or collect ERISA withdrawal liability. Defendants argue that Central States is actually seeking to add defendants to a judgment entered in a previous proceeding. On this basis, defendants claim that summary judgment should be granted in their favor, since Central States has failed to state a cause of action for which relief can be granted.

On review of the complaint in this matter, it is apparent that an ERISA claim is stated. The defendants' claim that Central States seeks to enforce a consent judgment is based on a single reference in the complaint to the consent judgment in Civil Action No. 83-3135 and a demand letter sent to the defendants which sought the amount of the consent judgment. The demand letter is dated March 19, 1986, a full week prior to the filing of the instant lawsuit. The Court finds these references insufficient to establish defendants' claim. The demand letter and the complaint clearly refer to ERISA withdrawal liability. Despite the references to the consent judgment in Civil Action No. 83-3135, the complaint obviously seeks payment of ERISA withdrawal liability. Even though the consent judgment references could be construed arguendo as seeking enforcement of the consent judgment, such a construction would not mean that an ERISA claim has not been stated. Rather, the rules of pleading indicate that, when two or more statements of a claim are made, the insufficiency of one statement of the claim does not render the pleading insufficient. Fed. R.Civ.P. 8(e)(2). Additionally, the rules of pleading require the Court to construe the pleadings "as to do substantial justice." Fed.R.Civ.P. 8(f). Substantial justice would not be done in this case were the Court to take the defendants' position. See Starks v. Perloff Bros., Inc., 760 F.2d 52 (3d Cir.1985) (overly restrictive reading of complaint inconsistent with Rule 8(f)). The complaint sufficiently states facts supporting an ERISA claim, and the Court shall deny defendants' motion on this issue.

Finally, defendants contend that the complaint contains no allegations which would lead to a finding that withdrawal liability exists or which would provide evidence of the amount of withdrawal liability assessed against the counter-defendants in Civil Action No....