Bd. of Trs., Sheet Metal Workers’ Nat'l Pension Fund v. Bishop

600 F.Supp.3d 602

BOARD OF TRUSTEES, SHEET METAL WORKERS’ NATIONAL PENSION FUND, Plaintiff,

v.Janet BISHOP, Defendant.

Civil Action No. 1:21-cv-1122

United States District Court, E.D. Virginia, Alexandria Division.

Signed April 25, 2022

Diana Migliaccio Bardes, Mooney Green Saindon Murphy & Welch PC, Washington, DC, for Plaintiff.

Janet Bishop, Pittsburgh, PA, Pro Se.

ORDER

T. S. Ellis, III, United States District Judge

Congress, in enacting the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1101 et seq. ,¹ made unmistakably clear that an employer withdrawing from a qualifying benefits plan is subject to withdrawal liability, and that that this liability may be enforced by the plan administrator. Precisely this has occurred here: Plaintiff, the Board of Trustees of the Sheet Metal Workers’ National Pension Fund, has sued Defendant, the majority owner of Bishop Metals, Inc., for recovery of withdrawal liability. At issue now is Plaintiff's Motion for Summary Judgment (Dkt. 12), for which Plaintiff filed a brief and appeared for oral argument on March 11, 2022. Defendant, who has elected to proceed pro se in this action, did not file a response to Plaintiff's brief and failed to appear for the March 11 hearing. For reasons stated in this Order, Plaintiff's Motion must be granted.

I.

In accordance with Rule 56 of the Federal Rules of Civil Procedure, Plaintiff has prepared and presented a record for resolution of the Motion for Summary Judgment. Additionally, Plaintiff complied with Local Civil Rule 56 by setting forth a statement of undisputed material facts in separately numbered paragraphs. The following facts are drawn from the undisputed factual record in this matter.

• Plaintiff is an employee benefit trust fund located in Falls Church, Virginia.

• Defendant Janet Bishop is the president of Bishop Metals, Inc., a sheet metal fabrication business located in Pittsburgh, Pennsylvania. Defendant owns 80% of Bishop Metals.

• Defendant owns property at 428–430 Hays Avenue, Pittsburgh, Pennsylvania, 15210 (the "Hays Avenue Property"). Bishop Metals leased the Hays Avenue Property from Defendant and operated out of the property.²

• Bishop Metals was a party to a series of collective bargaining agreements with the International Association of Sheet Metal, Air, Rail and Transportation Workers, Local Union No. 12 ("Local 12"). The most recent collective bargaining agreement ("CBA") between Bishop Metals and Local 12 was in effect from April 1, 2017 through March 31, 2020.

• The CBA required Bishop Metals to participate in an ERISA benefits plan sponsored and administered by Plaintiff. Specifically, Bishop Metals was obligated to submit remittance reports and fringe benefit contributions to Plaintiff each month. Plaintiff administered the plan within the Eastern District of Virginia.³

• The CBA also required Bishop Metals to abide by the terms of the Trust Agreement governing Plaintiff.

• As of March 31, 2020, the CBA expired without a replacement agreement in place, and Bishop Metals's obligation to make benefit contributions ceased. At that time, Plaintiff determined that Bishop Metals underwent a "complete withdrawal" from an ERISA benefits plan as defined in ERISA, 29 U.S.C. § 1383.

• On June 2, 2020, Plaintiff submitted notice to Bishop Metals indicating that Bishop Metals owed withdrawal liability and setting forth a schedule of payments.

• Plaintiff's final calculation of Bishop Metals's withdrawal liability totaled $469,396.83.

• Bishop Metals did not request additional review of its calculated withdrawal liability within the 90 days prescribed by ERISA,⁴ or at any point thereafter.

• Bishop Metals failed to make its first withdrawal liability payment pursuant to the schedule submitted by Plaintiff, which was due on August 1, 2020. Plaintiff sent Bishop Metals a delinquency notice on August 26, 2020, stating that Bishop Metals had 60 days to cure the delinquency, or it would be deemed to be in default. See 29 U.S.C. § 1399(c)(5).

• On October 22, 2020, after Bishop Metals communicated its intent to enter into a new CBA with Local 12, Plaintiff and Bishop Metals agreed to toll the sixty-day deadline to cure the withdrawal liability delinquency. Under the October 22 agreement, tolling would cease if Bishop Metals and Local 12 failed to agree to a new CBA.

• On January 5, 2021, Plaintiff received notice that Bishop Metals and Local 12 had reached an impasse and negotiations had come to an end with the parties unable to agree to a new CBA.

• Under the terms of the tolling agreement between Plaintiff and Bishop Metals, the 60-day period for Bishop Metals to cure the withdrawal liability delinquency expired 14 calendar days after January 1, 2021, i.e. January 15, 2021.

• Since January 2021, Bishop Metals has not cured the delinquency stemming from the August 26, 2020 notice or made any other payments towards the withdrawal liability assessed by Plaintiff.

• The Trust Agreement provides that a withdrawn employer must pay interest at a rate of 0.0205%, compounding daily, in the event of default. The interest accrued through February 25, 2022 totals $41,351.89.

• The Trust Agreement further permits Plaintiff to recover liquidated damages in the amount of 20% of the unpaid withdrawal liability. In this case, the liquidated damages total 20% of $469,396.83, or $93,879.37.

II.

The well-settled standard for summary judgment does not require extensive elaboration here. Summary judgment is appropriate when there is "no genuine issue as to any material fact" and based on those undisputed facts the moving party "is entitled to judgment as a matter of law." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). To serve as a bar to summary judgment, a fact must be "material," which means that the disputed fact "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Importantly, at the summary judgment stage, courts must "view the evidence in the light most favorable to ... the non-movant." Dennis v. Columbia Colleton Med. Ctr., Inc. , 290 F.3d 639, 645 (4th Cir. 2002).

The questions presented by Plaintiffs Motion for Summary Judgment are: (1) whether Plaintiff is entitled to collect withdrawal liability from Bishop Metals and (2) if so, whether Defendant is jointly and severally liable for Bishop Metals's withdrawal liability.

A.

With respect to the first question, the undisputed factual record clearly compels the conclusion that Plaintiff is entitled to collect withdrawal liability from Bishop Metals pursuant to ERISA, as amended by the MPPAA, 29 U.S.C. §§ 1381 – 1461. As an initial matter, ERISA specifies that an employer undertakes a "complete withdrawal" from a plan when the employer "ceases to have an obligation to contribute" to the plan. 29 U.S.C. § 1383(a). In this case, the CBA between Local 12 and Bishop Metals obligated Bishop Metals to submit fringe benefit contributions to Plaintiff each month, and that obligation ceased when the CBA expired on March 31, 2020, without a replacement agreement in place. Accordingly, there is no doubt Bishop Metals effected a complete withdrawal from the relevant benefits plan as of March 31, 2020.⁵

Under ERISA, complete withdrawal gives rise to withdrawal liability, which is "the employer's proportionate share of the plan's ‘unfunded vested benefits,’ calculated as the difference between the present value of vested benefits and the current value of the plan's assets." Trustees of the Plumbers & Pipefitters Nat. Pension Fund v. Plumbing Servs., Inc. , 791 F.3d 436, 440 (4th Cir. 2015) (quoting Pension Benefit Guar. Corp. v. R.A. Gray & Co. , 467 U.S. 717, 725, 104 S.Ct. 2709, 81 L.Ed.2d 601 (1984) ). To seek withdrawal liability after an employer's complete withdrawal, a plan sponsor must: (i) notify the employer of the employer's total calculated liability and a schedule of payments and (ii) demand payment. 29 U.S.C. § 1399(b)(1). Plaintiff complied with § 1399(b)(1), sending a letter to Bishop Metals in June 2020 which sought payment of withdrawal liability and set forth a payment schedule. Plaintiffs final calculation of Bishop Metals's liability totaled $469,396.83. Bishop Metals did not object to or seek further review of Plaintiff's withdrawal liability calculation within the ninety-day period required by 29 U.S.C. § 1399(b)(2)(A).

ERISA further specifies that, in the event of a "default" on withdrawal liability payments, "a plan sponsor may require immediate payment of the outstanding amount of an employer's withdrawal liability, plus accrued interest on the total outstanding liability." 29 U.S.C. § 1399(c)(5). The statute defines "default" as "the failure of an employer to make, when due, any payment under this section, if the failure is not cured within 60 days after the employer receives written notification from the plan sponsor of such failure." Id. In this regard, Bishop Metals failed to make its first scheduled payment on August 1, 2020, and Plaintiff sent notice of the delinquency on August 26, 2020. Bishop Metals failed to cure this delinquency within the sixty-day period set forth by § 1399(c)(5), which expired on January 15, 2021 as the result of a tolling agreement between Plaintiff and Defendant, and Defendant has not made any contributions to its withdrawal liability since that date. Accordingly, Plaintiff, as the plan sponsor, is entitled to seek payment of Bishop Metals's entire withdrawal debt due to Bishop Metals's uncured default.

Moreover, ERISA also permits Plaintiff to collect interest, liquidated damages, and reasonable attorney's fees. Importantly, 29 U.S.C. § 1451(b) specifies that, in any action seeking payment of withdrawal liability, a "failure to make any withdrawal liability payment within the time prescribed shall be treated in the same manner as a delinquent contribution." ERISA permits a plaintiff in an action...