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Trustees of Michiana Area Electrical Workers Pension Fund v. La Places Electric Company, Inc.

United States District Court, N.D. Indiana

February 15, 2017

TRUSTEES OF THE MICHIANA AREA ELECTRICAL WORKERS PENSION FUND, Plaintiff,
v.
LA PLACE'S ELECTRIC COMPANY, INC., LAPLACE ELECTRIC, INC., and HAROLD OSCAR LAPLACE, Individually and d/b/a LAPLACE ELECTRIC, Defendants.

          OPINION AND ORDER

          THERESA L. SPRINGMANN UNITED STATES DISTRICT JUDGE

         This matter is before the Court on a Motion for Summary Judgment [ECF No. 32] filed by the Plaintiffs, Trustees of the Michiana Area Electrical Workers Pension Fund. The Plaintiffs filed the Complaint [ECF No. 1] on July 14, 2014, seeking unpaid pension fund withdrawal liability from the Defendants, Harold Oscar LaPlace, La Place's Electric Company, Inc. (“LECI”), and LaPlace Electric, Inc. (“LEI”). The parties commenced the discovery period on December 14, 2014, which ended on October 7, 2015. On December 7, 2015, the Plaintiffs filed this Motion and their Memorandum in Support [ECF No. 33]. On February 1, 2016, the Defendants filed their Response [ECF No. 36]. On February 15, 2016, the Plaintiffs filed their Reply [ECF No. 37]. The Motion is now fully briefed and ripe for ruling.

         BACKGROUND

         The following facts are undisputed. The Plaintiffs are trustees of the Michiana Area Electrical Workers Pension Fund (the “Fund”). They filed this suit against the Defendants under 29 U.S.C. § 1381 of the Multiemployer Pension Plan Amendments Act of 1980 (the “MPPAA”), seeking to obtain unpaid pension fund withdrawal liability from the Defendants. LaPlace, who is 81 years old, filed articles of incorporation for LPEC, an Indiana corporation, in 1967. (Resp. to Pls.' First Interrog. ¶ 2, ECF No. 33-1.) He owned and operated LPEC for 43 years as a union shop, “always” utilizing labor from the International Brotherhood of Electrical Workers 153 (“Local 153”), of which he himself was also a member. (Id. ¶ 4.) LaPlace wholly owned LECI from its incorporation to its dissolution. (Id. ¶ 3.) Over the course of LECI's existence, the entity participated in various collective bargaining agreements (“CBAs”) and signed a series of Assent of Participation Agreements (“Participation Agreements”) with Local 153. (Sullivan Aff. ¶ 4, ECF No. 33-2.) The Participation Agreements bound LECI to follow the provisions of the CBAs. These provisions included an obligation that LECI make periodic pension fund contributions to the Plaintiffs' fund. (Id. ¶ 5; Participation Agreement 1, ECF No. 33-3.) All LECI employees were members of Local 153. (Resp. to Pls.' First Interrog. ¶ 2.)

         Around 2006-2007, LaPlace began experiencing financial difficulty. He was unable to secure Local 153's and the Fund's increase in their bond requirement (from $10, 000 to $40, 000). With consent of Local 153 and the Fund, LaPlace established a line of credit in lieu of the bond. He continued to contribute to the Fund, but eventually was unable to make his required contributions. In 2010 LECI ceased operations. (Resp. to Pls.' First Interrog. ¶ 2(d).) And on or about March 19, 2010, LECI was administratively dissolved by the Indiana Secretary of State. (Resp. to Pls.' Req. for Admis. ¶ 2, ECF No. 33-11.) LECI paid contributions to the Fund until September 2010. (Sullivan Aff. ¶ 7.) LECI did not pay contributions to the Fund for any period of time after the September 2010 contributions were paid. (Resp. to Pls.' Req. for Admis. ¶ 3.) Thereafter, the Fund determined that LECI withdrew its participation during the plan year ending June 30, 2011. (Sullivan Aff. ¶¶ 9-10.)

         But after LaPlace dissolved LECI, he filed articles of incorporation for a new entity, LEI, also an Indiana corporation, with the Secretary of State in 2011. (Resp. to Pls.' Req. for Admis. ¶ 2.) Like LECI, LaPlace also wholly owned and operated LEI. (Id. ¶¶ 5, 9.) In addition, LaPlace continued to employ his son, Bud LaPlace, who resigned his union membership at Local 153 in 2010, the same year that LaPlace dissolved LECI. LEI is a non-union shop and not a signatory to the CBA or Participation Agreements with Local 153 like LECI was.

         But the Fund and Local 153 soon became aware that LaPlace was still performing electrical contracting work in its jurisdiction even after he had dissolved LECI. The Fund took steps to determine LECI's withdrawal liability for having continued to perform covered work as LEI, work that would require Fund contribution. The Fund's administrator, TIC International Corporation requested Cheiron, Inc., the Fund's actuarial firm, to prepare actuarial calculations. Cheiron assessed the total withdrawal liability amount at $246, 910.00, at 13 quarterly payments of $19, 330.00 and a final payment of $17, 169.00 (Cheiron Assessment 1, ECF No. 33-24.) On February 25, 2011, the Fund notified LECI of its continued obligation to pay withdrawal liability because it continued to operate in the electrical contracting industry as LEI.

         In February 2013, Stanley Miles, Local 153's business agent and membership development coordinator, reviewed the electrical contracting permit database for the City of Mishawaka, Indiana, and discovered a permit issued to LEI on February 21, 2013. (Miles. Aff. ¶ 9, ECF No. 33-12). On March 15, 2013, Miles took his investigation to the Mishawaka CVS as part of his official duties for Local 153 and discovered Bud performing electrical work there. Bud confirmed to Miles that he was “working for [his] dad.” (Id. ¶ 10.) Miles continued to monitor the Mishawaka electrical contractor permitting database thereafter, and found permits issued to LEI through October 23, 2015.[1]

         On October 15, 2013, the Fund's attorney sent a letter to LECI's attorney, reaffirming a demand for payment, with the deadline of November 1, 2013 for LECI to make its first quarterly payment. When LECI failed to pay, the Fund's attorney sent another letter to LECI's attorney, notifying him that LECI was in default, and provided him with an opportunity to cure, pursuant to ERISA § 4219(c)(5).

         LECI admits that it did not request review of the withdrawal liability assessment pursuant to ERISA § 4219(b)(2)(A). LECI also admits it did not initiate arbitration within the deadlines set forth in ERISA § 4219(b)(2).

         DISCUSSION

         A. Legal Standard

         Summary judgment is warranted when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Summary judgment is the moment in litigation where the non-moving party is required to marshal and present the court with evidence on which a reasonable jury could rely to find in his favor. Goodman v. Nat'l Sec. Agency, Inc., 621 F.3d 651, 654 (7th Cir. 2010). A court's role in deciding a motion for summary judgment “is not to sift through the evidence, pondering the nuances and inconsistencies, and decide whom to believe. A court has one task and one task only: to decide, based on the evidence of record, whether there is any material dispute of fact that requires a trial.” Waldridge v. Am. Heochst Corp., 24 F.3d 918, 920 (7th Cir. 1994). Although a bare contention that an issue of material fact exists is insufficient to create a factual dispute, a court must construe all facts in a light most favorable to the nonmoving party, view all ...


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