Trustees of National Retirement Fund v. Fireservice Mgmt. LLC

384 F. Supp. 3d 412
CourtDistrict Court, S.D. Illinois
DecidedApril 17, 2019
DocketNo. 17-CV-4003 (CS)
StatusPublished
Cited by10 cases

This text of 384 F. Supp. 3d 412 (Trustees of National Retirement Fund v. Fireservice Mgmt. LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trustees of National Retirement Fund v. Fireservice Mgmt. LLC, 384 F. Supp. 3d 412 (S.D. Ill. 2019).

Opinion

CATHY SEIBEL, District Judge

Before the Court are the motion for summary judgment of Plaintiffs Trustees of the National Retirement Fund, (Doc. 51), and the motion to intervene, (Doc. 33), and motion for summary judgment, (Doc. 35), of Proposed Intervenors TurnoutRental LLC and Schoolcraft Ventures LLC. For the reasons stated below, Proposed Intervenors' motions are DENIED, and Plaintiffs' motion is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

A. Facts

The following facts are taken from the parties' Local Civil Rule 56.1 Statements and supporting materials and are undisputed unless otherwise noted.

Plaintiffs Trustees of the National Retirement Fund (the "Fund"), based in White Plains, New York, (see Doc. 2 at 2), sponsor a multiemployer pension plan (the "Plan") that provides pension benefits to, among others, members of the Chicago and Midwest Regional Joint Board (the "Union") under the Employee Retirement Income Security Act of 1974 ("ERISA") (codified at 29 U.S.C. §§ 1001 - 1461 ). (Doc. 43 ("Ds' 56.1 Resp.") ¶ 1.) Defendant Fireservice Management LLC f/k/a Fireservice Management Michigan LLC ("Fireservice"), a Michigan limited liability company that cleans and repairs protective clothing used in the firefighting industry, (Doc. 47 ("Ps' 56.1 Resp.") ¶¶ 1-2), was a party to a collective bargaining agreement with the Union, (Ds' 56.1 Resp. ¶ 3). Pursuant to this agreement, Fireservice made contributions to the Fund on behalf of certain of Fireservice's employees. (Id. )

Defendant Smeltzer Enterprises Inc. ("Smeltzer"), a Michigan corporation, operated under the name "White Tower Industrial Laundry & Cleaners Inc." and provided cleaning services to the automotive industry. (Ps' 56.1 Resp. ¶¶ 4-6.) It *417ceased doing business and was dissolved on July 15, 2009. (Id. ¶ 8.)

At all times, Martin T. Smeltzer was the sole owner of Smeltzer. (Id. ¶ 9.) He also initially owned 100 percent of Fireservice, but Joel Weiner purchased a 49 percent interest in Fireservice on July 1, 2007, and maintained that interest through the filing date of the Complaint in this case. (Doc. 42-1 ("Smeltzer Aff.") ¶¶ 20-22; Doc. 42-2 ("Weiner Aff.") ¶¶ 3-4.) Mr. Smeltzer and Mr. Weiner each own 50 percent of the membership interests of two other businesses incorporated in Michigan: TurnoutRental LLC, which rents out firefighting gear, and Schoolcraft Ventures LLC, which owns the real property out of which Fireservice and TurnoutRental operate (together, "Proposed Intervenors"). (Ps' 56.1 Resp. ¶¶ 11-12, 14-17, 19.)

Smeltzer and Fireservice ("Defendants") contend that Smeltzer was a party to a collective bargaining agreement with the Union that was separate and distinct from Fireservice's agreement. (Ds' 56.1 Resp. ¶ 3.) According to Plaintiffs, however, Defendants "were parties to a series of collective bargaining agreements" and "collectively identified themselves as the employer obligated to make contributions to the Fund." (Doc. 54 ("Ps' 56.1 Stmt.") ¶ 3.)1

On May 4, 2011, the Fund notified Defendants that it had determined that "Fire Service Management LLC f/k/a White Tower Laundry" had withdrawn from the Plan as of December 31, 2009, and therefore incurred a withdrawal liability to the Fund of $ 221,783.46 under 29 U.S.C. § 1381. (Oh Decl. Ex. B; Ds' 56.1 Resp. ¶¶ 4, 6.) The notice demanded that Defendants make eighty payments of $ 4,079.09 per quarter beginning on or before June 1, 2011. (Ds' 56.1 Resp. ¶ 6.) On June 15, 2011, the Fund notified Defendants that they had failed to make the first quarterly payment and would be in default unless they cured within sixty days. (Oh Decl. Ex. C; Ds' 56.1 Resp. ¶ 7.)

On June 2, 2011, and July 1, 2011, Fireservice requested by letter that Plaintiffs review their withdrawal liability determination because Fireservice is "separate and distinct" from Smeltzer. (Oh Decl. Ex. D; Ds' 56.1 Resp. ¶ 9.) Defendants did not initiate arbitration of the withdrawal liability. (Ps' 56.1 Resp. ¶ 10.) Defendants have made no withdrawal liability payments to the Fund. (Id. ¶¶ 8, 11.)

B. Procedural History

Plaintiffs commenced this action on May 26, 2017, and asserted four causes of action. The first claim alleges that Defendant Fireservice is in default within the meaning of Section 4219(c)(5)(A) of ERISA and that Plaintiffs are entitled to immediate payment of withdrawal liability in the amount of $ 221,783.46 plus accrued interest, liquidated damages, and attorneys' fees and costs under Section 502(g). (See Doc. 1 ("Compl.") ¶¶ 21-30; Ps' 56.1 Resp. ¶ 7.) The second claim alleges that Defendant Smeltzer is an "employer" of the employees of Fireservice within the meaning of Section 3(5) of ERISA because it had an alter ego, single employer, and/or joint employer relationship with Fireservice, and that Smeltzer therefore is jointly *418and severally liable for Fireservice's withdrawal liability, interest, liquidated damages, and attorneys' fees and costs. (Id. ¶¶ 31-35.) The third claim alleges that John Doe Defendants 1-10 are and at all relevant times were trades or businesses under common control with Fireservice under Section 4001(b)(1) of ERISA and Section 414 of the Internal Revenue Code of 1986, and that the John Does are therefore jointly and severally liable for the total amount of Fireservice's liability. (Id. ¶¶ 36-40.) The fourth claim alleges that the Fund will be irreparably harmed unless Defendants are immediately restrained from disposing of their assets. (Id. ¶ 42.)

Discovery concluded on June 4, 2018. (See Doc. 21.) On September 7, 2018, Proposed Intervenors moved to intervene or be joined. (Doc. 34 ("Intervenors' Mem.").) On the same date Proposed Intervenors also moved for summary judgment on Plaintiffs' third and fourth claims on the ground that Proposed Intervenors were not under common control with Defendants when Fireservice withdrew from the Plan. (Doc. 35; Doc. 40 ("Intervenors' SJ Mem.") at 2.) On October 15, 2018, Plaintiffs moved for summary judgment on their claims against Fireservice and Smeltzer. (Doc. 51.)

II. LEGAL STANDARD

A. Intervention and Joinder

Proposed Intervenors advance several theories to support their introduction into this action.

1. Intervention as of Right

Under Federal Rule of Civil Procedure 24(a)(2),

the court must permit anyone to intervene who ...

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
384 F. Supp. 3d 412, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trustees-of-national-retirement-fund-v-fireservice-mgmt-llc-ilsd-2019.