Langone v. N&D Transportation Company, Inc.

          MEMORANDUM OF DECISION

          DATE RYA W. ZOBEL, SENIOR UNITED STATES DISTRICT JUDGE

         I. Introduction

         Plaintiff Edward F. Groden, Executive Director of the New England Teamsters and Trucking Industry Pension Fund (“Fund”), seeks to collect a $1.5 million default judgment for ERISA withdrawal liability entered in 2012 against D&N Transportation, Inc. (“D&N”). Langone v. D&N Transp. Co., Inc., No. 12-cv-10646-NMG (D. Mass. Sept. 24, 2012) (ECF No. 14). Unable to recover from D&N, the Fund initiated this case to recover from N&D Transportation Company, Inc. (“N&D”), the amount owed on the ground that N&D is the alter ego of D&N and thus equally liable for the judgment. Plaintiff has moved for summary judgment as to N&D (Docket # 131), and to strike certain affidavits submitted by defendants incident thereto (Docket # 142).

         II. Facts^[1] and Procedural History

         In 1974, husband and wife Laurent and Elizabeth Duhamel founded D&N, a trucking company. As a signatory to one or more collective bargaining agreements with Teamsters Local Union No. 251, D&N was bound to make contributions to the plaintiff Fund on behalf of certain of its employees. The Fund is a multi-employer pension fund that enables otherwise-competing trucking companies to jointly contribute on behalf of their union employees, thus guaranteeing stable employment benefits on defined terms over the course of the employee's career.

         On December 11, 1991, Laurent and Elizabeth's children--David Duhamel and Nancy Belsito (née Duhamel)-- founded N&D and entered the trucking industry on their own. Unlike their parent's company, N&D has never employed members of any labor union and it continues to operate to the present day.

         D&N and N&D co-existed for almost twenty years, during which time the two companies worked out of the same office space at 100 Industrial Drive in North Smithfield, Rhode Island, and used the same central phone number.

         But on March 31, 2011, D&N ceased operations, triggering the withdrawal liability at issue in this case. By closing down, D&N terminated its obligation to contribute to the Fund on a forward-looking basis, but became obligated to pay an exit fee for withdrawing from the Fund. 29 U.S.C. § 1381.

         On August 9, 2011, the Fund sent to D&N a demand for payment of the withdrawal liability. After failing to receive the first scheduled installment, the Fund sent D&N a notice of default on October 14, 2011. Because D&N remained delinquent, the Fund sued to collect the unpaid withdrawal liability and on September 24, 2012, secured a default judgment against D&N in the amount of $1, 505, 186.18. Langone v. D&N Transp. Co., Inc., No. 12-cv-10646-NMG (D. Mass. Sept. 24, 2012) (ECF No. 14). Unable to collect from D&N for more than a year, the Fund initiated the instant action to satisfy its judgment from D&N's alleged alter ego, N&D.

         In addition to the primary alter ego liability claim against N&D, the first amended complaint included alter ego and fraudulent transfer claims against Laurent and Elizabeth Duhamel personally, as well as “reach and apply” and alter ego claims against defendant JED Realty-a real estate company owned by David Duhamel.^[2] In June 2015, plaintiff sought leave to file a second amended complaint to add several defendants it alleged were alter egos of the existing defendants. Around the same time, all defendants filed motions to dismiss the first amended complaint. This court granted the motions to dismiss for want of any description of defendants' (as opposed to non-party D&N's) underlying ERISA violation. The court also denied permission to file the requested second amended complaint, ruling that “the chain is already broken” by the failure of the alter ego claim against N&D. Id. Thus, adding additional defendants as derivative alter egos of N&D would be futile. Id. The court subsequently denied plaintiff's motion for relief from and/or to amend the judgment, because subject-matter jurisdiction would still be lacking even if plaintiff amended the complaint to allege that N&D was the alter ego of D&N at the time of D&N's ERISA violation.

         Plaintiff appealed and the First Circuit determined that there was subject matter jurisdiction over the Fund's claims against N&D and remanded the case to this court. It also vacated the denial of plaintiff's motion for relief from and/or to amend the judgment. Although the Court of Appeals found subject matter jurisdiction over the claims against N&D, it reserved judgment about whether this court should extend supplemental jurisdiction over plaintiff's other claims against derivative alter ego defendants like JED Realty.

         On remand, this court allowed plaintiff's motion to file a third amended complaint, which added the same defendants plaintiff had sought to add earlier. All defendants subsequently filed motions to dismiss that complaint. At the hearing on these motions, counsel agreed that the claims against all defendants might be resolved more efficiently if the Fund's claim against N&D were to be adjudicated first on plaintiff's motion for summary judgment. Accordingly, this court denied N&D's motion to dismiss, reserved ruling on the remaining defendants' motions to dismiss, and instructed the parties to brief summary judgment as to N&D only. Given the First Circuit's decision that this court has jurisdiction over plaintiff's claim against N&D, the only issue on summary judgment is whether on undisputed facts N&D is or was D&N's alter ego such that N&D may be liable for the default judgment.

         III. Plaintiff's Motion for Summary Judgment

         A. ...