United States District Court, D. Massachusetts
EDWARD F. GRODEN, as Executive Director of the New England Teamsters and Trucking Industry Pension Fund, Plaintiff,
REICHERT & SON TRUCKING, INC., et al., Defendants.
REPORT AND RECOMMENDATION ON PLAINTIFF'S MOTION
FOR SUMMARY JUDGMENT
Gail Dein, United States Magistrate Judge.
an action under 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 (“MPPAA”), 29 U.S.C.
§§ 1381 et seq. The MPPAA requires
employers withdrawing from a multiemployer pension plan to
pay a withdrawal fee equal to their proportionate share of
the pension fund's vested but unfunded benefits. The
defendant Reichert & Son Trucking, Inc. (“Reichert
Trucking”) was a participant in such a plan, the New
England Teamsters and Trucking Industry Pension Fund (the
“Fund” or “Pension Fund”). Reichert
Trucking withdrew from the Fund in 2012 without satisfying
its withdrawal liability, and ceased doing business in 2014.
The plaintiff, Edward F. Groden, is the Executive Director of
the Fund. The Fund brought this action against Reichert
Trucking seeking to recover its withdrawal liability. (Compl.
(Docket No. 1) Count I).
stock of Reichert Trucking was owned 100% by Donna Reichert.
Her husband, William Reichert, owns 100% of the stock of the
defendant, Reichert & Son Fuel Oil, Inc. (“Reichert
Fuel”). By this action, the Fund is also seeking to
hold Reichert Fuel liable for Reichert Trucking's
withdrawal liability under a theory of common control as
defined by ERISA § 4001(b)(1), 29 U.S.C. §
1301(b)(1) and relevant regulations. (Compl. Count II).
matter is presently before the court on
“Plaintiff's Motion for Summary Judgment”
(Docket No. 32) whereby the Fund is seeking judgment against
both defendants for the withdrawal liability of Reichert
Trucking. In response to the motion, the defendants agree
that judgment should enter against Reichert Trucking.
However, they argue that there is no common control between
the companies or, in the alternative, that there are material
facts in dispute that preclude summary judgment on the issue
of Reichert Fuel's liability.
careful review of the record and oral argument of counsel,
this court finds that the material facts are not in dispute,
and that Reichert Fuel is liable for Reichert Trucking's
withdrawal liability under a theory of common control.
Therefore, this court recommends to the District Judge to
whom this case is assigned that the Fund's motion for
summary judgment be ALLOWED. This court further recommends
that the Fund provide an updated calculation of the amount
due, and that judgment be entered against all named
defendants, which includes aliases used by, or authorized to
be used by, Reichert Fuel.
STATEMENT OF FACTS
The following facts are undisputed unless otherwise
of the Fund
Edward F. Groden is the Executive Director of the Pension
Fund and a “fiduciary” within the meaning of
ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3). (PF
¶ 1). The Fund was established in 1958 pursuant to an
Agreement and Declaration of Trust (the “Trust
Agree-ment”). (Id. ¶ 4). It is a
“multi-employer [pension] plan” within the
meaning of ERISA § 3(37)(A), 29 U.S.C. §
1002(37)(A), and an “employee benefit plan” or
“plan” within the meaning of ERISA § 3(3),
29 U.S.C. § 1002(3). (Id. ¶ 2). The
purpose of the Fund is to receive pension contributions from
contributing employers, and to then provide pension benefits
to eligible employees of those employers. (Id.
¶ 4). Contributing employers are obligated to make
contributions to the Fund on behalf of their employees
pursuant to collective bargaining agreements
(“CBA”) between the employer and local Teamster
union. (Id. ¶ 5). Contributions are based on
the hours worked by each employee covered by the CBA, as
reflected in monthly remittance reports submitted by the
employer. (Id. ¶¶ 6-7). These
contributions, in turn, determine the amount of benefits to
which employees/participants may be entitled.
amended ERISA and enacted the MPPAA in 1980 “to protect
the viability of defined pension benefit plans, to create a
disincentive for employers to withdraw from multiemployer
plans, and also to provide a means of recouping a fund's
unfunded liabilities.” Sun Capital Partners III, LP
v. New England Teamsters & Trucking Indus. Pension
Fund, 724 F.3d 129, 138 (1st Cir. 2013) (citing
Pension Benefit Guar. Corp. v. R.A. Gray & Co.,
467 U.S. 717, 720-22, 104 S.Ct. 2709, 2713-15, 81 L.Ed.2d 601
(1984)). “As such, the MPPAA requires employers
withdrawing from a multiemployer plan to pay their
proportionate share of the pension fund's vested but
unfunded benefits.” Id. (citing 29 U.S.C.
§§ 1381, 1391), and cases cited. “An employer
withdraws when it permanently ceases its obligation to
contribute or permanently ceases covered operations under the
plan.” Id. (citing 29 U.S.C. § 1383(a)).
If an employer challenges a pension fund's calculation of
withdrawal liability, it must file a timely request for
arbitration under ERISA § 4221, 29 U.S.C. § 1401.
If an employer fails to pay its withdrawal liability, the
fund is also entitled to collect interest, liquidated
damages, and costs and reasonable attorneys' fees.
(See Groden Aff. ¶ 33).
Trucking's Participation in the Pension
Reichert Trucking was organized as a Rhode Island corporation
in 2005. (DF ¶ 17). It was in the business of renting
trucks and it owned two dump trucks. (D. Reichert Dep.
(Docket No. 36-2) at 22). Donna Reichert was the owner of
100% of the stock in that company. (See DF
¶¶ 18-19). As detailed below, however, it is
undisputed that William Reichert was officially an employee
of Reichert Trucking, and was actively involved in, if not
primarily responsible for, the management and operation of
the trucking company's business.
October 2005, William Reichert made the decision for Reichert
Trucking to enter into a CBA with Teamster Local 251 (the
“Union”), a participating union in the Pension
Fund. (PF ¶ 12; W. Reichert Aff. ¶
From October 2005 through January 2012, Reichert Trucking
made contributions to the Pension Fund for hours worked by
the trucking company's three employees who were covered
by the CBAs, specifically William Reichert, the
Reicherts' son, and a third employee. (PF ¶ 13; W.
Reichert Dep. (Docket No. 36-3) at 46-47). William Reichert
prepared the remittance reports with respect to the hours
worked by these employees. (PF ¶ 15). Based upon the
contributions paid and hours worked by the employees, all
three of Reichert Trucking's employees have earned
“pension credits” and two of the three employees
are vested and eligible for a pension benefit from the Fund.
(Groden Aff. ¶ 22).
Trucking “permanently ceased to have an obligation to
contribute to the Pension Fund or permanently ceased covered
operations under the Pension Fund as of February 1,
2012.” (PF ¶ 18). The company ceased operations in
2014. (DF ¶ 31). The Pension Fund notified Reichert
Trucking that it had withdrawn from the Fund and demanded
payment of its proportionate share of the Fund's unfunded
vested benefit liability ($252, 115.00) by letter dated May
21, 2015. (PF ¶¶ 19-22). Receiving no response to
the demand for payment, or, in the alternative, a payment
plan, the Fund sent Reichert Trucking a notice entitled
“Failure to Pay Withdrawal Liability” on October
15, 2015, followed by a “Notice of Default” dated
November 3, 2015. (Id. ¶¶ 23-26). Reichert
Trucking made no payments, took no steps to challenge the
demand for withdrawal liability and did not request
arbitration. (Id. ¶¶ 29-30). In response
to the present motion for summary judgment, the defendants
have taken the position that they “do not dispute that
judgment should enter against the defendant Trucking
Company for the withdrawal liability pursuant to 29 U.S.C.
§ 1399(B)(1).” (Defs. Mem. (Docket No. 40) at 1).
Thus, the sole issue before the court is whether Reichert
Fuel is also liable.
husband, William, owns 100% of the stock in Reichert Fuel.
(DF ¶¶ 4-5). Organized as a Rhode Island
corporation in 1989, Reichert Fuel is in the business of
delivering heating fuel and servicing heating systems.
(Id. ¶¶ 6-7). It is operated out of the
same location as Reichert Trucking - the Reicherts' home.
(W. Reichert Dep. (Docket No. 36-3) at 11).
Involvement with Reichert Trucking
was an employee of Reichert Trucking. (PF ¶ 40; DF
¶ 25). The undisputed facts establish that while William
did not own any stock of Reichert Trucking, and was not an
official officer or director, he was actively involved in, if
not primarily responsible for, the operation of the company.
As Donna explained in her deposition, she was the owner and
officer of Reichert Trucking but had no other position in the
company, and while she oversaw the company she was not
“as hands on, ” instead giving a variety of
responsibilities to William. (See D. Reichert Dep.
(Docket No. 36-2) at 19-20). Thus, when a truck or driver was
needed, William was the one who was called. (Id.).
William's idea for Reichert Trucking to sign the
collective bargaining agreement with Local 251. (W. Reichert
Dep. (Docket No. 43-3) at 26-27, 29-30). William was Reichert
Trucking's main contact with the Union. (See id.
at 34-35). He determined what work would be done to account
for the weekly hours remitted to the Fund on behalf of
Reichert Trucking, and he prepared the remittance reports to
be submitted to the Fund in return for union benefits. (PF
¶ 15; W. Reichert Dep. (Docket No. 36-3) at 37-38, 42).
As noted above, William, the Reicherts' son, and a third
employee were the ones who participated in the Pension Fund.
(W. Reichert Dep. (Docket No. 36-3) at 46-47). On occasion,
William signed some checks in Donna's name on behalf of
Reichert Trucking. (Id. ...