United States District Court, D. Massachusetts
EDWARD F. GRODEN, AS EXECUTIVE DIRECTOR OF THE NEW ENGLAND TEAMSTERS AND TRUCKING INDUSTRY PENSION FUND
v.
N&D TRANSPORTATION COMPANY, INC., et al.
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.
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