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Einhorn v. Kaleck Brothers

May 17, 2010


The opinion of the court was delivered by: Irenas, Senior District Judge

(DKT No. 14 & 18)


Before this Court is Plaintiff's motion for summary judgment and Defendant's cross motion for summary judgment. For the reasons set forth below, this Court shall grant Plaintiff's motion and deny Defendant's motion.*fn1


Plaintiff, William J. Einhorn ("Einhorn") is the Administrator of the Teamsters Pension Fund of Philadelphia & the Vicinity (the "Fund"). Einhorn contends Defendant, Kaleck Brothers, Inc. ("Kaleck Brothers") is liable for withdrawal liability, assessed against it by the Fund in 2006. This withdrawal liability was assessed in accordance with the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), a statutory amendment to the Employee Retirement Income Security Act ("ERISA") 29 U.S.C. § 1001 et seq.. Plaintiff filed this complaint in October 27, 2008, asking for $40,337.33 in withdrawal liability, plus prejudgment interest, liquidated damages, attorneys fees and costs.

Defendant, a produce seller, was party to a series of collective bargaining agreements ("CBAs") with Local 929, three of whose members Kaleck Brothers employed. The CBAs required Kaleck Brothers to make monthly contributions to the Fund on behalf of its employees. As of August 31, 2006, Kaleck Brothers no longer had any employees who performed work covered by the operative collective bargaining agreement.*fn2 With the departures of the union employees, Kaleck Brothers ceased contributing to the fund. As a result, the Fund determined Kaleck Brothers had completely withdrawn from the Fund within the meaning of 29 U.S.C. § 1383.*fn3 Per the statutory requirements, the Fund notified Kaleck Brothers on July 31, 2007, that its withdrawal liability had been assessed at $40,337.33 with the first installment due September 29, 2007.*fn4 Plaintiff's Statement of Material Facts ("SMF") ¶ 5. Included in this letter, were specifics regarding the administrative remedies required under MPPAA as well as a copy of the Fund's rules governing these administrative remedies. SMF Ex. B-1.

Kaleck Brothers neither responded to this notice nor made the first scheduled payment. On October 17, 2007, the Fund sent a letter to Kaleck Brothers reminding it of its overdue payment and warning of the consequences of default under the MPPAA. SMF ¶ 6. Kaleck Brothers responded on October 26, protesting the Fund's determination that it had completely withdrawn and requesting review of the assessment of withdrawal liability in accordance with the MPPAA. SMF ¶ 7. This letter also informed the Fund that on October 22, 2007, Kaleck Brothers hired a union employee and would begin to making contributions to the Fund on his behalf as required by the CBA. SMF Ex. B-2. Defendant suggested to Plaintiff that "[p]erhaps this event moots the necessity of the Fund making a claim for the Withdrawal Liability." Id.

The Fund denied Kaleck Brothers' request for review on November 28, 2007 and issued another letter to Defendant warning that if a default occurred, the Fund would pursue all available remedies. SMF ¶ 8. In this letter, the Fund addressed Kaleck Brother's October 22 hire and suggests that "[w]hether new contributions tendered . . . will suffice to abate your client's withdrawal liability would depend on . . . 29 U.S.C. § 1387, its regulations and supplemental case law." Kaleck Brothers did not pursue any course of action with regards to abeyance nor did it initiate arbitration within the allotted time frame established under the MPPAA (by January 28, 2008) and as such, Plaintiff contends, Defendant waived all administrative remedies (including any argument regarding abeyance) to challenge the assessment of withdrawal liability.*fn5

It was only after Plaintiff initiated this law suit, on October 27, 2008, that Kaleck Brothers filed a Demand for arbitration with the American Arbitration Association on February 5, 2009. SMF at ¶ 12. The Arbitrator assigned questioned her jurisdiction and postponed the arbitration, pending a decision by this Court as to the timeliness of Kaleck Brother's arbitration demand. SMF ¶ 13. Ex. C-2.

Plaintiff's main contention is that Defendant waived any administrative remedies by missing the deadline for arbitration and therefore is statutorily required to pay the withdrawal liability as assessed. Defendant argues the arbitration deadline should be equitably tolled, because it only waived its administrative remedies as a result of a conversation allegedly had between Brian Kaleck (co-owner of Kaleck Brothers) and a trustee of the Fund who assured him Kaleck Brothers just had to hire another union member and then would not face withdrawal liability. Defendant claims that reliance on this conversation was the reason for its waiver of administrative remedies and therefore, Defendant's time limit for initiating arbitration should be equitably tolled.

In its cross motion for summary judgment, Defendant contends first and foremost that the Fund's assessment of Defendant's actions as a complete withdrawal is legally incorrect. Second, Defendant questions the legal merit of the MPPAA's administrative remedies in general as a legal matter of separation of powers and finally as a policy matter.


"[S]ummary judgment is proper 'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed. R. Civ. P. 56(c)). "A fact is material if under the governing substantive law, a dispute about it might affect the outcome of the suit." Waste Mgmt. of P.A., Inc. v. Shinn, 938 F. Supp. 1243, 1251 (D.N.J. 1996) (internal citation omitted). In deciding a motion for summary judgment, the Court must construe the facts and inferences in a light most favorable to the non-moving party. Pollock v. Am. Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986). However, "[t]he mere existence of some alleged factual dispute does not necessarily preclude summary judgment, but a motion therefor should only be granted if a reasonable factfinder could only find for the moving party." Doherty v. Teamsters Pension Trust Fund, 16 F.3d 1386, 1389 (3d Cir. 1994).

"The standard by which the court decides a summary judgment motion does not change when the parties file cross-motions. When ruling on cross-motions for summary judgment, the court must consider the motions independently, and view the evidence on each motion in the light most favorable to the party opposing the motion." Clevenger v. First Option Health ...

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