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Groden v. J. Tartaglia Trucking, Inc.

United States District Court, D. Massachusetts

January 27, 2017

EDWARD F. GRODEN, as EXECUTIVE DIRECTOR of the NEW ENGLAND TEAMSTERS AND TRUCKING INDUSTRY PENSION FUND, Plaintiff,
v.
J. TARTAGLIA TRUCKING, INC., TARTAGLIA TRUCKING CO., INC., TRI CITY PETROLEUM INC., and JESSE TARTAGLIA, Defendants.

          MEMORANDUM AND ORDER

          PATTI B. SARIS, Chief United States District Judge

         INTRODUCTION

         This is an action for the collection of withdrawal liability under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1461, as amended by the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”). Edward Groden1 brought suit on behalf of the New England Teamsters and Trucking Industry Pension Fund 1 The named plaintiff at the commencement of the suit was Charles Langone, the fund manager of the New England Teamsters and Trucking Industry Pension Fund. Upon Langone's retirement, Groden, the Executive Director of the Fund, was substituted as plaintiff. (“Fund”) to collect from J. Tartaglia Trucking, Inc. (“JTT”). Groden also names as defendants Tartaglia Trucking Co., Inc. (“TTC”) and Tri City Petroleum, Inc. (“Tri City”) on the basis that they are businesses under common control with JTT and therefore jointly and severally liable for the payment of withdrawal liability.

         The Fund moves for summary judgment on Counts I, II, and IV and moves to dismiss the remaining counts, namely Counts III, V, VI, and VII. The Fund's motion (Docket No. 50) is ALLOWED.

         BACKGROUND

         I. Factual Background

         The following facts are undisputed except where stated.

         The Fund is an “employment benefit plan” within the meaning of section 3(3) of ERISA, 29 U.S.C. § 1002(3), and a “multiemployer plan” within the meaning of section 3(37)(A) of ERISA, 29 U.S.C. § 1002(37)(A). Pursuant to the Fund's Agreement and Declaration of Trust (“Trust Agreement”), the Fund receives pension contributions from participating employers and provides pension benefits to eligible employees of those employers. Contributing employers are obligated to pay into the Fund pursuant to collective bargaining agreements (“CBAs”) between the employers and the unions participating in the Fund. Payments into the Fund must be accompanied by monthly remittance reports identifying each employee performing work within the scope of the CBA, the number of hours worked, and the hourly contribution rate.

         JTT was a Rhode Island corporation in the business of hauling dirt, gravel, and asphalt. The sole shareholder was Jesse Tartaglia.

         JTT began participating in the Fund in 1988. JTT's obligation to contribute to the Fund arose from a series of CBAs between JTT and Teamster Local Union 251. The last CBA that JTT signed expired on April 30, 2003. JTT states that it did not enter into any subsequent CBA. Nonetheless, JTT continued to make contributions to the Fund on behalf of its employees until July 2009, when its last union employee retired.2 The Fund continued to award pension credit and benefits to the employees of JTT until 2009 based upon the 2 Even after 2003, the Fund continued to provide JTT with preprinted remittance reports for each month.

         One of the preprinted fields of the remittance reports was the hourly contribution rate. The contribution rate increased every year that JTT was Dated:to the CBA and, after 2003, the contribution rate continued to increase annually in the statewide Rhode Island construction agreement. The preprinted remittance reports reflected those annual increases even after 2003, when JTT ceased to be a CBA signatory. The rate was $4.21 per hour at the time the 2000-2003 CBA expired. The rate rose to $5.26 per hour by 2008. contributions paid and the hours of service reported by JTT. Between August 2009 and August 2013, JTT submitted “no hours” remittance reports to the Fund.

         On December 10, 2013, Jesse Tartaglia notified the Fund that JTT would no longer contribute to the Fund because its last union employee retired in July 2009.

         On January 6, 2014, the Fund notified JTT of its withdrawal from the Fund and demanded payment of JTT's proportionate share of the Fund's unfunded vested benefit liability. See 29 U.S.C. § 1399(b)(1). The notice determined a withdrawal date of August 1, 2009 and calculated an unpaid withdrawal liability of $544, 308 based on contributions paid from October 1998 to September 2008.3 In letters dated March 13 and 17, 2014, JTT requested review of the withdrawal liability assessment. See Id. § 1399(b)(2)(A).

         In a letter dated April 7, 2014, the Fund responded to the request for review by confirming the amount of the withdrawal liability. See id. § 1399(b)(2)(B). The letter informed JTT that “[i]f you disagree with this determination, you have the right to dispute the decision 3 A worksheet attached to the Notice explains the calculation, which is based on the formula in Article XV of the Fund's Rules and Regulations. in accordance with the attached Article XV of the Fund's Rules and Regulations.” In a letter dated April 14, 2014, JTT requested further review of the withdrawal liability assessment on the basis of the construction industry exemption in ERISA section 4203(b), 29 U.S.C. § 1383(b).

         In a letter dated July 7, 2014, the Fund replied with a determination that JTT was ineligible for the ...


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