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Iue Multi-Employer Pension Fund v. M & C Vending

May 10, 2013

IUE MULTI-EMPLOYER PENSION FUND,
PLAINTIFF,
v.
M & C VENDING, INC., DEFENDANT.



The opinion of the court was delivered by: William J. Martini, U.S.D.J.:

OPINION

Plaintiff IUE-CWA Multi-Employer Pension Fund (the "Plan") brings this action against Defendant M & C Vending, Inc. ("M&C Vending" or the "Company") under the Employee Retirement Income Security Action of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq. The Plan previously moved for default judgment against the Company. The Court determined that it lacked subject-matter jurisdiction over the action and dismissed the case. This matter comes before the Court on the Plan's motion for reconsideration of that dismissal. For the reasons set forth below, the motion for reconsideration is GRANTED, and the underlying motion for default judgment is GRANTED.

I.BACKGROUND

The following facts are set forth in the Amended Complaint, the motion for default judgment, and the attached exhibits. The Plan is an employee pension benefit plan and a multiemployer plan within the meaning of Section 3(37)(A) of ERISA. 29 U.S.C. § 1002(37)(A); Am. Compl. ¶ 4. M&C Vending is a company that was a party to a collective bargaining agreement ("CBA") and a corresponding Memorandum of Agreement ("MOA"), pursuant to which the Company was required to make period contributions to a pension fund. Am. Compl. ¶ 7. These agreements were supposed to be periodically renewed by the parties through subsequent MOAs. M&C Vending entered into an MOA that expired on June 30, 2009, and did not sign a new MOA after that. Am. Compl. ¶ 8. Thus, effective July 1, 2009, M&C Vending affected a complete withdrawal from the Plan. Id. ¶¶ 9-10.

The Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA") (29 U.S.C. §§ 1381-1461 (1982) (amending ERISA)) provides that when a contributing employer withdraws from a multiemployer pension fund, it incurs withdrawal liability, which is a sum that covers the pension benefits that the employer has already promised to the beneficiaries but has not yet paid into the fund. 29 U.S.C. § 1381(a), (b). Withdrawal liability is necessary to prevent withdrawing employers from shifting their obligations to the remaining employers in the fund. 29 U.S.C. § 1001. In this case, the Plan calculated that M&C Vending was obligated to pay withdrawal liability in the amount of $114,362.00 (plus interest, fees, costs, etc.). Am. Compl. ¶¶ 10-11.

On September 25, 2009, the Plan sent a letter to M&C Vending setting forth the calculated amount of withdrawal liability and stating that, "[p]ursuant to [ERISA], any dispute between the Company and the Fund concerning the determination of withdrawal liability shall be resolved through arbitration." Am. Compl. Ex. B at 2, ECF No. 5-2. Neither party ever initiated an arbitration proceeding.

The Plan commenced this action to collect withdrawal liability from M&C Vending on July 27, 2011. ECF No. 1. The Plan filed an Amended Complaint on August 15, 2011. ECF No. 5. The Amended Complaint was served on M&C Vending on August 22, 2011. ECF No. 6. The time for M&C Vending to answer or otherwise respond to the Amended Complaint expired on September 12, 2011. ECF No. 7. The Company did not file any response by that date. Pursuant to Federal Rule of Civil Procedure 55(a), the Clerk entered a Default against the company on October 25, 2011. ECF No. 8.

On December 19, 2011, Eliot J. Faber, the President of M&C Vending, filed an Answer on behalf of the Company. ECF No. 10. On March 8, 2012, the Plan filed a motion for default judgment. ECF No. 11. The Plan argued that M&C Vending had not properly filed an Answer because all filings made on behalf of a corporation must be made by a licensed attorney and Mr. Faber was not a licensed attorney. Gant Decl. ¶ 12, ECF No. 11-1. On March 29, 2012, Mr. Faber filed a motion to dismiss. ECF No. 12.

On November 13, 2012, the Court issued an Opinion and Order. ECF Nos. 14-15. The Court denied the motion to dismiss filed by Mr. Faber, finding that only a licensed attorney could make filings on behalf of a corporation. With respect to the motion for default judgment, the Court found that, under the MPPAA, parties to a withdrawal liability dispute could seek judicial review only if they had first submitted the dispute to arbitration. Op. at 3. Because the Plan and M&C Vending had not submitted the dispute to arbitration, the Court found that it lacked subject-matter jurisdiction over the dispute and dismissed the action. The Plan now moves for reconsideration of that decision.

II.DISCUSSION

The Court will address the motion for reconsideration, followed by the underlying motion for default judgment.

A.MOTION FOR RECONSIDERATION

The Plan moves for reconsideration of the Court's decision to dismiss the action, arguing that the action was properly filed in federal court because the Company waived its right to arbitrate the withdrawal liability dispute. The Court agrees.

A motion for reconsideration may be granted only if: (1) there has been an intervening change in the controlling law; (2) evidence not available when the Court issued the subject order has become available; or (3) it is necessary to correct a clear error of law or fact to prevent manifest injustice. Max's Seafood Cafe by Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. ...


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