I.A.M. Nat. Pension Fund v. Tmr Realty Co., Inc.

• Decision Date: 31 March 2006
• Docket Number: Civil Action No. 04-00594 (CKK).
• Citation: 431 F.Supp.2d 1
• Parties: I.A.M. NATIONAL PENSION FUND, National Pension Plan, et al., Plaintiffs, v. TMR REALTY CO, INC., and Toyota Lift of New York, Inc., Defendants.
• Court: U.S. District Court — District of Columbia

Page 1

431 F.Supp.2d 1

I.A.M. NATIONAL PENSION FUND, National Pension Plan, et al., Plaintiffs, v. TMR REALTY CO, INC., and Toyota Lift of New York, Inc., Defendants.

Civil Action No. 04-00594 (CKK).

United States District Court, District of Columbia.

March 31, 2006.

Joseph Patrick Martocci, Jr., Ellen 0. Boardman, O'Donoghue & O'Donoghue, Washington, DC, for Plaintiffs.

Kevin J. Nash, Finkel Goldstein Rosenbloom & Nash, LLP, New York, NY, Jacqueline Elizabeth Bennett, Reed Smith LLP, Washington, DC, for Defendants.

MEMORANDUM OPINION

KOLLAR-KOTELLY, District Judge.

Plaintiffs I.A.M. National Pension Fund, National Pension Plan ("the Plan"), and the Plan's Co-Chair Trustees Warren Mart and Burton C. Trebour ("Trustees") bring this action against Defendants TMR Realty Co., Inc., and Hi — Lift of New York, Inc., t/a Toyota Lift of New York ("Defendants"), pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), see 29 U.S.C. § 1381, seeking to hold Defendants jointly and severally liable for the withdrawal liability assessed by the Fund against a non-party, Clarklift of New York, Inc. ("Clarklift"), because they are all members of the same control group. Currently before the Court is Plaintiffs' Motion for Summary Judgment, Defendants' Motion for Summary Judgment, and their related Oppositions and Replies. Upon a searching examination of the relevant filings, the attached exhibits and declarations, the relevant case law, and the entire record herein, the Court shall grant Plaintiffs' Motion for Summary Judgment and shall deny Defendants' Motion for Summary Judgment.

I: BACKGROUND

A. Overview of the Parties

Plaintiff I.A.M. National Pension Fund, National Pension Plan ("the Plan") was created under a trust agreement and operates through a joint board of trustees who are equally representative of labor and management. See Pls.' Mot. for Summ. J., Ex. 1 (Decl. of Alan W. Skolnick (hereinafter, "Skolnick, Decl.")) ¶ 2. Plaintiffs Warren Mart and Burton C. Trebour are the Co-Chair Trustees of the Plan. Id. The Plan was created by an Agreement and Declaration of Trust, originally entered into on May 1, 1960, for the purposes of compliance with Section 302(c)(5) of the Labor Management Relations Act, 29 U.S.C. § 186(c)(5). Id. The Plan is operated through a joint board of trustees who are equally representative of labor and management. Id. A number of employers contribute to the Plan under the terms of various collective bargaining agreements with the International Association of Machinists & Aerospace Workers, AFL — CIO, or its affiliates. Id. As such, the Plan is a multiemployer plan under Section 4001(a)(3) of ERISA, 29 U.S.C. § 1301(a)(3). Id.

Defendant TMR Realty Co., Inc., was incorporated on January 3, 1992. Pls.' Stmt. of Mat. Facts Not in Dispute ("Pls.' Stmt.") ¶ 2; Defs.' Resp. to Pls.' Stmt. ("Defs.' Resp.") ¶ 2. In 2002 and 2003, TMR Realty Co. was located at 20B Central Avenue, Farmingdale, N.Y. 11735. See Pls.' Mot. for Summ. J., Ex. 2 (TMR's 2002 and 2003 Tax Returns). Since its inception, 100% of TMR Realty Co. has been owned by Robert F. Riddle. Pls.' Stmt. ¶ 3; Defs.' Resp. ¶ 3. While not a traditional "holding company," TMR Realty Co. owned 100% of the following domestic corporations in 2002: Forklift Headquarters; Clarklift of New York, Inc. ("Clarklift"); Industrial Material Handling Co. of New York, Inc. ("IMH"), and Defendant Hi — Lift of New York, Inc., t/a Toyota Lift of New York ("Toyota Lift"). Id. In 2003, TMR Realty Co. owned 100% of these entities: Forklift Headquarters; Forklift of New York (d/b/a/ Clarklift); IMH; and Defendant Toyota Lift. Id.

Defendant Toyota Lift was incorporated on July 12, 1983. Pls.' Mot. for Summ. J., Ex. 4 (Toyota Lift's 2002 and 2003 Tax Returns). In 2002 and 2003, Defendant Toyota Lift was located at 20B Central Avenue, Farmingdale, N.Y. 11735. Id. Since its inception, 100% of Toyota Lift has been owned by Robert F. Riddle. Id., Ex. 3 (Defs.' Combined Answers to Pls.' First Set of Interrogs., Interrog. Nos. 1 & 2).

B. The Merger Agreement and Clarklift's Employer Agreement

Clarklift, which is not a part to this litigation, is 100% owned by Robert F. Riddle. Id., Ex. 3 (Defs.' Combined Answers to Pls.' First Set of Interrogs., Interrog. Nos. 8 & 9); Pls.' Stmt. ¶ 8; Defs.' Resp. ¶ 8. Clarklift became a contributing employer to the Plan because of the merger of the District No. 15 Machinists' Pension Fund (hereinafter, "District 15 Fund") into the I.A.M. National Pension Fund effective January 1, 1998. Pls.' Mot. for Summ. J., Ex. 1 (Skolnick Decl.) ¶ 4; Defs.' Mot. for Summ. J., Ex. 1 (Decl. of Robert F. Riddle and Kevin J. Nash (hereinafter, Riddle/Nash Decl.)) ¶ 12. Prior to the merger, Clarklift had been a contributing employer to the District 15 fund. Id.

The terms of the January 1, 1998 merger were set forth in an Agreement for Merger of Pension Plans and Program of Relief between the Board of Trustees of I.A.M. National Pension Fund, the Board of Trustees of the District No. 15 Machinists' Pension Fund, and the Pension Benefit Guaranty Corporation ("PBGC"). Id. ¶ 3; see also Ex. A to the Skolnick Decl. ("Merger Agreement"). Under Article V, Paragraph 4 of the Merger Agreement, the PBGC provided $85.6 million in financial assistance. Id.

Clarklift became bound to the terms of the Merger Agreement and became a contributing employer" to the I.A.M. National Pension Fund when Robert F. Riddle signed an Employer Agreement for Merger of Pension Plans and Program of Relief ("Employer Agreement") on June 16, 1998. See Pls.' Stmt. ¶ 11; Defs.' Stmt. ¶ 11; see also Pls.' Mot. for Summ. J., Ex. B to the Skolnick Decl. ("Employer Agreement"). Under Paragraph 6 of the Employer Agreement, Robert F. Riddle, as President of Clarklift, acknowledged that by signing the Employer Agreement, Clarklift had avoided an immediate assessment of withdrawal liability, a likely increase in its required contribution under ERISA Section 4232, 29 U.S.C. § 1423, and a potential assessment of mass withdrawal liability under ERISA Sections 4209 and 4219(c), 29 U.S.C. §§ 1389 & 1399(c)(1)(D). See Pls.' Mot. for Summ. J., Ex. 1 (Skolnick Decl.) ¶ 7.

By signing the Employer Agreement, Mr. Riddle, on behalf of Clarklift, further agreed as follows:

Except as expressly provided herein, these rules do not supplant, waive, or alter the application of Title IV of ERISA, including any regulatory, administrative or judicial interpretation thereof. Accordingly, and without limitation, notice, assessment, and collection of withdrawal liability shall be as provided for withdrawal liability under Section 4219, 4221, and 4301 of ERISA. Notwithstanding the foregoing, the undersigned employer hereby waives all rights to request review, demand arbitration, or otherwise challenge any determination of withdrawal liability under ERISA or under this Agreement, including without limitation, the right to challenge the amount and methods of withdrawal liability as set forth herein, which amount and methods shall be final and binding for all purposes.

Pls.' Mot. for Summ. J., Ex. B to the Skolnick Decl. (Employer Agreement) ¶ 5(a)(v). Under this provision, in the event of an alleged withdrawal, Clarklift could challenge whether or not a withdrawal had actually occurred, but waived its right to challenge the Plan's determination of liability, including the amounts and methods upon which the determination was based. See Pls.' Mot. for Summ. J., Ex. 1 (Skolnick Decl.) ¶ 6.

On behalf of Clarklift, Mr. Riddle also represented and warranted in the Employer Agreement that Clarklift

has full power and authority to enter into this Agreement on behalf of itself and all trades or businesses under common control with it, as described in Section 4001(b)(1) of ERISA, and this Agreement constitutes a legal, valid, and binding contract and agreement for the employer and all trades or businesses under common control with it, as described in [S]ection 4001(b) of ERISA, enforceable against them in accordance with its terms and applicable law.

Pls.' Mot. for Summ. J., Ex. B to the Skolnick Decl. (Employer Agreement) ¶ 7.

C. The Plan's Assessment and Notice of Withdrawal Liability to Clarklift

Upon encountering business problems in the late 1990s, Clarklift and IMH effectuated an internal restructuring and business consolidation involving the re-deployment of mechanics. See Defs.' Mot. for Summ. J., Ex. 1 (Riddle/Nash Decl.) ¶ 14. To this end, approximately a dozen or so Clarklift mechanics then working in Astoria, New York, were transferred, consolidated, and/or relocated to IMH's facilities on Long Island. Id. District 15 was formally notified of the Clarklift internal restructuring under a series of letters, dated August 17, 1999; August 27, 1999; and August 30, 1999. Id. ¶ 15; Defs.' Mot. for Summ. J., Exs. D, E, & F to the Riddle/Nash Decl. (Letters to IMH). In furtherance of the relocation, IMH expressly assumed all pension obligations of the former Clarklift mechanics that were moved to Long Island otherwise owed to the Plan. Id. This relocation was done with full knowledge of District 15. See id. ¶ 16; see also Defs.' Mot. for Summ. J., Ex. G to the Riddle/Nash Decl. (6/21/05 Dep. of James Conigliaro, Director for District 15) at 58, 71-73. District 15 duly recognized IMH's assumption of liability without any imposition of withdrawal liability. See id. ¶¶ 18-19; see also Ex. H to the Riddle/Nash Decl. (10/12/04 Letter from Douglas D. Menagh, Esq., District 15 attorney, to Defendants' counsel). Also in recognition of the internal restructuring, IMH signed a new collective bargaining agreement with District 15 commencing March 1, 2000 and expiring February 28, 2005 (the "CBA"). See id. ¶ 20; see also Ex. I to the Riddle/Nash Decl. (the CBA). The CBA expressly recognized that certain employees of Clarklift...