Roofers Local No. 30 Combined Pension Fund v. D.A. Nolt Inc.

Decision Date25 August 2010
Docket NumberCivil Action No. 09-1445.
PartiesROOFERS LOCAL NO. 30 COMBINED PENSION FUND; Board of Trustees, Roofers Local No. 30 Combined Pension Fund and Michael O'Malley, in his fiduciary capacity, Plaintiffs, v. D.A. NOLT, INC., Defendant.
CourtU.S. District Court — Eastern District of Pennsylvania




Kent Cprek, Jennings Sigmond, Philadelphia, PA, for Plaintiffs.

Marc Furman, Jonathan Landesman, Mark J. Leavy, Cohen Seglias Pallas Greenhall & Furman, PC, Philadelphia, PA, for Defendant.


ROBERT F. KELLY, Senior District Judge.

Presently before the Court are two Motions for Summary Judgment. Plaintiffs Roofers Local No. 30 Combined Pension Fund, and its Board of Trustees and fiduciary Michael O'Malley (collectively, the Fund) move for summary judgment against Defendant D.A. Nolt (Nolt) and to dismiss all counterclaims in this action. Nolt filed a Cross-Motion for Summary Judgment against the Fund seeking to enforce a March 5, 2009 Opinion and Award (“Arbitration Decision”) and a June 20, 2009 Final Award (“Final Award”) of Arbitrator Ira F. Jaffe, Esquire (the “Arbitrator”) resulting from arbitration conducted pursuant to 29 U.S.C. § 1401(a), and awarding attorneys fees and costs pursuant to 29 U.S.C. § 1451(e).


This is an appeal by a multiemployer pension fund of the determination made at statutory arbitration that an employer owed no withdrawal liability under the Multiemployer Pension Plan Amendments Act of 1980 (the “MPPAA”). This is the last of three related legal disputes involving the Fund which arose out of the former relationship between Nolt and Local Union 30 (“Local 30”).

Nolt is a corporation that performs commercial roofing work. Local 30 is a labor union. Nolt was also a member of the Roofing Contractors Association (the “RCA”), a multi-employer association of commercial roofing contractors that exists primarily to conduct negotiations for collective bargaining agreements with the Union on behalf of its members. Since 1993, the RCA has entered into numerous collective bargaining agreements with Local 30. These were made possible because the RCA was authorized by its members to negotiate with Local 30 on their behalf. Nolt joined the RCA in June 1999. At that time, Nolt signed a Bargaining Agent Authorization (“BAA”), which authorized the RCA to serve as Nolt's bargaining agent with Local 30. Under the terms of the 1999 BAA, Nolt could withdraw from the RCA, but had to do so at least ninety days before the expiration of the existing agreement.

In June 2000, ten months before the 1997-2001 Collective Bargaining Agreement (“CBA”) was due to expire, Local 30 initiated negotiations with the RCA concerning the terms of a subsequent agreement. In July 2000, the RCA and Local 30 concluded negotiations for a successor CBA for the period May 1, 2001 to April 30, 2009, and the union membership ratified the CBA. On January 30, 2001, Nolt sent a letter to the RCA stating that it was exercising its right to withdraw from the RCA. Because this had been the procedure for withdrawal under the terms of the 1999 BAA, Nolt asserted that this was proper notice of withdrawal. Consequently, Nolt believed that it was not bound by the new 2001-2009 agreement.

On May 2, 2001, Local 30 filed an unfair labor charge against Nolt before the National Labor Relations Board (“NLRB”), seeking to enforce the terms of the 2001-2009 CBA. On October 22, 2001, Local 30 also filed a Complaint in this Court under the Employee Retirement Income Security Act of 1974 (ERISA) seeking contributions due under the terms of the 2001-2009 agreement. See Local 30, United Union of Roofers, Waterproofers and Allied Workers v. D.A. Nolt, Inc., 625 F.Supp.2d 223 (E.D.Pa.2008). 1

On January 23, 2002, a hearing was held before an Administrative Law Judge (“ALJ”) on the unfair labor charges that Local 30 had filed before the NLRB. The ALJ found for Nolt and determined that Nolt was not bound by the terms of the 2001-2009 agreement. Local 30 appealed the ALJ's decision to the NLRB. On December 15, 2003, a three-member panel of the NLRB overturned the ALJ's decision and found that Nolt was bound to the terms of the 2001-2009 CBA. Nolt appealed the Board's decision to the Court of Appeals for the Third Circuit. On May 4, 2005, the Third Circuit overturned the Board's decision and issued an opinion in favor of Nolt, finding that Nolt was not bound by the terms of the agreement. 2 See NLRB v. D.A. Nolt, Inc., 406 F.3d 200 (3d Cir.2005). 3 The instant action derives from the same factual circumstances as the labor dispute. Nolt ceased making contributions to the Fund after the prior CBA expired on April 30, 2001. On May 1, 2006, the Fund issued a notification to Nolt that it owed withdrawal liability (the “Withdrawal Liability Demand”). The Fund advised Nolt that Nolt had made a complete withdrawal from the Plan during the 2001 Plan year, and that Nolt was liable to pay withdrawal liability as required under 29 U.S.C. §§ 1382 and 1399(b)(1). 4 (Pls.' Mot. Summ. J., Ex. 49.) The Fund informed Nolt that its withdrawal liability, calculated pursuant to 29 U.S.C. § 1391(b), was $370,327, and demanded nine quarterly payments of $41,024, plus a final payment of $33,339. ( Id.)

As will be discussed, infra, this was not the Fund's first calculation of its withdrawal liability, but rather, a second revised calculation, and was more than six times greater than the Fund's prior 2002 calculation of $58,226. ( Id., Ex. 79.) The Fund recalculated Nolt's withdrawal liability after a retroactive adjustment was made by the Fund's actuary that increased the Plan's 2000 schedule of unfunded vested benefit liabilities (“UVBLs”), or an excess of nonforfeitable benefits beyond the value of current fund assets, that is, benefits beyond the value of current fund assets by more than $10 million. 5 ( Id.) Nolt issued a timely Request for Review of the Fund's Withdrawal Liability Demand on July 17, 2006, pursuant to 29 U.S.C. § 1399(b)(2)(A). ( Id., Ex. 58.)

Nolt issued a demand for arbitration on December 26, 2006, and supplemented on January 7, 2007, challenging the amount of the Fund's withdrawal liability determination. ( Id.) The parties agreed to arbitrate under the rules of the American Arbitration Association 6 ( Id., Ex. 76.)

The arbitration hearings were held on April 28, 2008 and May 15, 2008, and the Arbitrator issued a 64-page written decision on March 5, 2009 (the “Arbitration Decision”). The Arbitrator rejected each successive change in position that the Fund had taken with respect to Nolt's withdrawal liability. This restored the matter to the Fund's initial determination of Nolt's withdrawal liability of $58,226, which was derived from the calculation of $2.7 million in UVBLs for 2000. 7 The Arbitrator further found that the Fund had improperly included certain benefits in its calculation of $2.7 million in UVBLs for 2000, and directed the Plan actuary to ascertain the value of those benefits and recalculate the amount of the UVBLs. The Plan actuary determined there was more than $8.5 million in improperly included benefits, and the net result of this correction was that there were no UVBLs for 2000. Accordingly, the Arbitrator determined that Nolt never owed any withdrawal liability. 8

The Arbitrator entered a Final Award on June 20, 2009. The Fund was directed to refund all of Nolt's payments, with statutory interest. 9 Subsequently, the Fund appealed this decision to this Court.


“Summary judgment is appropriate when, after considering the evidence in the light most favorable to the nonmoving party, no genuine issue of material fact remains in dispute and ‘the moving party is entitled to judgment as a matter of law.’ Fed.R.Civ.P. 56(c); Hines v. Consol. Rail Corp., 926 F.2d 262, 267 (3d Cir.1991) (citations omitted). The inquiry is “whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party carries the initial burden of demonstrating the absence of any genuine issues of material fact. Big Apple BMW, Inc. v. BMW of N. Am. Inc., 974 F.2d 1358, 1362 (3d Cir.1992). “A fact is material if it could affect the outcome of the suit after applying the substantive law. Further, a dispute over a material fact must be ‘genuine,’ i.e., the evidence must be such ‘that a reasonable jury could return a verdict in favor of the nonmoving party.’ Compton v. Nat'l League of Prof'l Baseball Clubs, 995 F.Supp. 554, 561 n. 14 (E.D.Pa.1998), aff'd, 172 F.3d 40 (3d Cir.1998) (citations omitted).

Once the moving party has produced evidence in support of summary judgment, the nonmoving party must go beyond the allegations set forth in its pleadings and counter with evidence that demonstrates that there is a genuine issue of fact requiring a trial. See Big Apple BMW, 974 F.2d at 1362-63. Summary judgment must be granted “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). [A]n opposing party may not rely merely on allegations or denials in its own pleading; rather, its response must ... set out specific facts showing a genuine issue for trial.” Fed.R.Civ.P. 56(e)(2).


The MPPAA amended ERISA to provide for “withdrawal liability.” When an employer makes a “complete withdrawal” from a multiemployer pension plan, and that plan carries UVBLs or an excess of nonforfeitable benefits beyond the value of current fund assets, the employer may be...

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