Gastronomical Workers Union v. La Mallorquina, No. 08-1255 (JP).

• Decision Date: 09 February 2009
• Docket Number: No. 08-1255 (JP).
• Citation: 597 F.Supp.2d 265
• Parties: GASTRONOMICAL WORKERS UNION LOCAL 610 and Metropolitan Hotel Association Pension Fund, et al., Plaintiffs v. LA MALLORQUINA, INC., Defendant.
• Court: U.S. District Court — District of Puerto Rico

597 F.Supp.2d 265

GASTRONOMICAL WORKERS UNION LOCAL 610 and Metropolitan Hotel Association Pension Fund, et al., Plaintiffs v. LA MALLORQUINA, INC., Defendant.

Civil No. 08-1255 (JP).

United States District Court, D. Puerto Rico.

February 9, 2009.

Jose G. Barea-Fernández, Esq., González-Nieto, García & Balzac Law Office, Luis A. Guzmán-Dupont, Esq., Luis A. Guzmán-Dupont Law Office, San Juan, PR, for Plaintiffs, Counter-Defendants and Third-Party Defendant.

Manuel Durán-Rodriguez, Esq., Manuel Durán Law Office, San Juan, PR, for Defendant, Counter-Claimant and Third-Party Plaintiff.

OPINION AND ORDER

JAIME PIERAS, JR., Senior District Judge.

Before the Court is a motion to dismiss Defendant's counterclaim and for summary judgment (No. 7) filed by Plaintiffs Gastronomical Workers Union Local 610 (the "Union") and Metropolitan Hotel Association Pension Fund and its Trustees (the "Fund") (collectively, "Plaintiffs"). Also before the Court is Defendant La Mallorquina, Inc.'s ("La Mallorquina") opposition thereto (No. 11). Plaintiffs filed the instant lawsuit pursuant to Sections 4201-4225 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., as amended by the Multiemployer Pension Plan Amendments Act of 1980 (the "MPPAA"), 29 U.S.C. § 1381 et seq., for La Mallorquina's failure to pay withdrawal liability when its obligation to contribute to the Fund ceased. La Mallorquina has filed a counterclaim, seeking monetary damages from Plaintiffs. La Mallorquina has also filed a third party complaint against the Union (No. 6).

Plaintiffs move for summary judgment on their complaint, and also to dismiss the counterclaim against them pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons stated herein, the Court hereby GRANTS Plaintiffs' motion for summary judgment, and GRANTS Plaintiffs' motion to dismiss the counterclaim.

I. PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

In support of their motion for summary judgment, Plaintiffs argue that there is no question of material fact that La Mallorquina defaulted on its withdrawal liability payments and failed to timely initiate arbitration proceedings. In response, La Mallorquina argues that it did not decide to withdraw from the pension plan, but rather this decision was made by the Union and La Mallorquina's employees.

A. Material Facts Not in Genuine Issue or Dispute

The following facts are deemed uncontested by the Court because they were included in the motion for summary judgment and opposition and were agreed upon, or they were properly supported by evidence and not genuinely opposed.

1. The Fund is a joint labor-management pension fund established pursuant to Section 302(c) of the Labor Management Relations Act (29 U.S.C. § 186(c)) and a multiemployer benefit plan within the meaning Sections 3(3) and 3(37) of ERISA, 29 U.S.C. §§ 1002(3) and 1002(37). Its purpose is to provide pension, retirement and related benefits to the eligible employees of employers who contribute to the Fund pursuant to various collective bargaining agreements with the Union.

2. La Mallorquina is an employer within the meaning of 29 U.S.C. §§ 152(2) and Section 3(5) of ERISA, 29 U.S.C. § 1002(5), and is engaged in an industry affecting commerce within the meanings of Sections 3(11) and 3(12) of ERISA, 29 U.S.C. §§ 1002(11) and (12), and Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185.

3. La Mallorquina was a signatory to and bound by a collective bargaining agreement ("CBA") with the Union under which it was required to make contributions to the Fund on behalf of its employees who were covered thereby. When this CBA expired on or about February 3, 2007, after negotiations, the Union and La Mallorquina signed a new CBA under which La Mallorquina was no longer required to contribute to the Fund.

4. The Fund determined La Mallorquina's withdrawal liability to be $14,821.00.

5. By letter dated June 29, 2007, the Fund sent La Mallorquina a Notice and Demand for payment of withdrawal liability in accordance with §§ 4202(2) and 4219(b)(1) of ERISA, 29 U.S.C. §§ 1382(2) and 1399(b)(1). This Notice and Demand for payment informed La Mallorquina that its withdrawal liability was assessed by the Fund to be $14,821.00, payable either in a single installment or in ten monthly installments of $1,374.91 plus an eleventh monthly installment of $1,153.02, with the payment of the full amount or the first monthly installment due by August 28, 2007.

6. In response to the Fund's June 29, 2007 Notice and Demand for Payment, by letter dated August 16, 2007, La Mallorquina, through counsel, objected to the Fund's demand for withdrawal liability and requested that the Fund review its assessment on the grounds that La Mallorquina had not withdrawn from the Fund because "the employees covered by the Collective Bargaining Agreement decided to withdraw themselves from the plan."

7. La Mallorquina did not make any payment by August 28, 2007. By letter dated September 25, 2007, the Fund notified La Mallorquina that it had not received payment and that if payment was not received by November 24, 2007, La Mallorquina would be in default and the entire amount of the withdrawal liability, $14,821.00, would be due and owing.

8. La Mallorquina did not provide payment by November 24, 2007.

9. The Fund responded to La Mallorquina's request for review by letter dated January 16, 2008.

10. La Mallorquina did not make any payment by January 26, 2008. It has made no payment regarding withdrawal liability to the Fund to date.

11. La Mallorquina has not requested or initiated arbitration with respect to the subject matter at issue in this case.

B. Legal Standard for a Motion for Summary Judgment

Summary judgment serves to assess the proof to determine if there is a genuine need for trial. Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir.1990). Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate when "the record, including the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, viewed in the light most favorable to the nonmoving party, reveals no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Zambrana-Marrero v. Suárez-Cruz, 172 F.3d 122, 125 (1st Cir.1999) (stating that summary judgment is appropriate when, after evaluating the record in the light most favorable to the non-moving party, the evidence "fails to yield a trial worthy issue as to some material fact"); Goldman v. First Nat'l Bank of Boston, 985 F.2d 1113, 1116 (1st Cir.1993); Canal Ins. Co. v. Benner, 980 F.2d 23, 25 (1st Cir.1992). The Supreme Court has stated that "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In this way, a fact is material if, based on the substantive law at issue, it might affect the outcome of the case. See Mack v. Great Atl. and Pac. Tea Co., Inc., 871 F.2d 179, 181 (1st Cir.1989).

On a summary judgment motion, the movant bears the burden of "informing the district court of the basis for its motion and identifying those portions of the [record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the movant meets this burden, the burden shifts to the opposing party who may not rest upon mere allegations or denials of the pleadings, but must affirmatively show, through the filing of supporting affidavits or otherwise, that there is a genuine issue of material fact for trial. See Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Celotex, 477 U.S. at 324, 106 S.Ct. 2548; Goldman, 985 F.2d at 1116.

C. Analysis

ERISA states that "[i]f an employer withdraws from a multiemployer plan ... then the employer is liable to the plan in the amount determined ... to be the withdrawal liability." 29 U.S.C. § 1381. A complete withdrawal from a multiemployer plan 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." 29 U.S.C. § 1383.

Although there is limited jurisprudence within this Circuit regarding the applicability of withdrawal liability for involuntary withdrawals, other courts have found that withdrawal liability is imposed whether or not an employer voluntarily withdraws from a pension plan. See Central States, Southeast & Southwest Areas Pension Fund v. Midwest Motor Express, Inc., 999 F.Supp. 1153, 1162 (N.D.Ill.1998) (stating that Congress did not intend for the existence of an exception to withdrawal liability based on involuntariness of an employer's withdrawal from a pension plan); Centennial State Carpenters Pension Trust Fund v. Woodworkers of Denver, Inc., 615 F.Supp. 1063, 1065 (D.Colo. 1985) (granting summary judgment on behalf of pension plan where the employer's withdrawal occurred involuntarily upon the employees' decertification of their union); Pacific Iron & Metal Co. v. Western Conference of Teamsters Pension Trust Fund, 553 F.Supp. 523, 525 (W.D.Wash.1982) (holding that the MPPAA does not exclude involuntary withdrawal liability due to employees' vote to decertify their union). In Midwest Motor Express, the district court noted that "Congress did not intend withdrawal liability to attach as a punishment for a withdrawing employer's malice or willfulness, but to protect the vested pension interests of the employees." 999 F.Supp. at 1163. The United States Court of Appeals for the First Circuit has stated that Congress "chose withdrawal liability as a means to both deter withdrawals and to make...