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CECO Concrete Construction, LLC v. Centennial State Carpenters Pension Trust

United States District Court, D. Colorado

December 18, 2014


Page 1329

For CECO Concrete Construction, LLC, Plaintiff, Counter Defendant: Richard Lee Samson, Robert Patrick Casey, Ogletree, Deakins, Nash, Smoak & Stewart, P.C.-Chicago, Chicago, IL; Roger Glenn Trim, dOgletree, Deakins, Nash, Smoak & Stewart, P.C.-Denver, dDenver, CO.

For Centennial State Carpenters Pension Trust, Defendant: Michael P. Monaco, Song Mondress PLLC, Seattle, WA.

For Board of Trustees of the Centennial State Carpenters Pension Trust, Counter Claimant: Michael P. Monaco, Song Mondress PLLC, Seattle, WA.

For Centennial State Carpenters Pension Trust, Counter Claimant: Roger Glenn Trim, Ogletree, Deakins, Nash, Smoak & Stewart, P.C.-Denver, Denver, CO; Michael P. Monaco, Song Mondress PLLC, Seattle, WA.

Page 1330


R. Brooke Jackson, United States District Judge.

This case is before the Court on parties' cross-motions for summary judgment. Plaintiff/counter-defendant seeks enforcement of an arbitration award entered pursuant to 29 U.S.C. § 1401(a)(1) of the Multiemployer Pension Plan Amendment Act of 1980 (" MPPAA" ), an amendment of the Employee Retirement Income Security Act of 1974 (" ERISA" ). Defendant/counter-plaintiffs ask this Court to overturn the arbitrator's decision and instead issue a judgment in their favor. Jurisdiction is proper under 29 U.S.C. § 1401(b)(2). For the reasons explained below, the plaintiff/counter-defendant's motion is now granted, and the defendant/counter-plaintiffs' motion is now denied.


" ERISA was designed to ensure that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in them." Concrete Pipe & Products of California, Inc. v. Constr. Laborers Pension Trust for S. California, 508 U.S. 602, 607, 113 S.Ct. 2264, 124 L.Ed.2d 539 (1993). Soon after ERISA was enacted, Congress became concerned about the financial trouble many plans were facing, a problem exacerbated by the fact that the potential liability employers faced upon termination of a plan created an incentive for them to withdraw from weak plans. Id. at 608. To address this problem, the MPPAA was enacted to impose " withdrawal liability" on employers choosing to withdraw. Id. at 609. However, " in enacting the MPPAA Congress recognized the transitory nature of contracts and employment in the building and construction industry with a specific exception" for such employers. Carpenters Pension Trust Fund for N. Cal. v. Underground Constr. Co., 31 F.3d 776, 778 (9th Cir. 1994). Under the exception, an employer incurs withdrawal liability only if it (1) ceases to have an obligation under a multiemployer plan and (2) continues or resumes work in the same jurisdiction. 29 U.S.C. § 1383(b)(2). At issue in this case is whether plaintiff/counter-defendant Ceco Concrete Construction (" Ceco" ) performed work in Colorado after

Page 1331

ceasing to have an obligation to defendant/counter-plaintiff, the Centennial State Carpenters Pension Trust (" the Plan" ), thus incurring liability despite the construction industry exception.

The MPPAA also provides a procedure to resolve such disputes. Under 29 U.S.C. § 1399(b)(1), once an employer has notified a plan of its intent to withdraw and provided any requested information, the plan assesses that employer's withdrawal liability. If the employer disagrees with the plan's liability determination, it may ask the plan to review any specific matter relating to the determination. 29 U.S.C. § 1399(b)(2). Any further dispute about the employer's liability shall be resolved through arbitration pursuant to 29 U.S.C. § 1401(a). Finally, " [u]pon completion of the arbitration proceedings in favor of one of the parties, any party thereto may bring an action, no later than 30 days after the issuance of an arbitrator's award, in an appropriate United States district court . . . to enforce, vacate, or modify the arbitrator's award." 29 U.S.C. § 1401(b)(2). This case is before the Court pursuant to this statutory provision.


The parties agree on essentially all of the facts relevant to this dispute.[1] Ceco is an " employer" under ERISA § § 3(5) and 3(14)(C), and the Plan is a multiemployer plan, an employee benefit plan, and a defined benefit plan within the meaning of § § 3 and 4001. ECF No. 1 at ¶ ¶ 4, 5; ECF No. 8 at ¶ ¶ 4, 5. Ceco was formerly a signatory to collective bargaining agreements for employees performing carpentry work in Colorado, under which it was required to make contributions to the Plan. ECF No. 1 at ¶ 6; ECF No. 8 at ¶ 6. The last such agreement expired on April 30, 2010. ECF No. 1 at ¶ 7; ECF No. 8 at ¶ 7.

The present dispute began when, on March 3, 2011, the Plan assessed withdrawal liability against Ceco in the amount of $917,904.00, payable in quarterly installments of $38,697.00. ECF No. 1 at ¶ 8; ECF No. 8 at ¶ 8. Ceco requested that the Plan review its liability determination and then initiated arbitration in accordance with 29 U.S.C. § 1401(a). ECF No. 1 at ¶ ¶ 9, 10; ECF No. 8 at ¶ ¶ 9, 10. The parties agreed to have the arbitration administered by the American Arbitration Association (" AAA" ), AAA Number 7762122211 DECR, and the case was submitted to Arbitrator Norman Brand. ECF No. 1 at ¶ 10; ECF No. 8 at ¶ 10. During the pendency of the arbitration process, Ceco made the requisite withdrawal payments to the Plan pursuant to 29 U.S.C. § 1399(c)(2). ECF No. 1 at ¶ 11; ECF No. 8 at ¶ 11.

Multiple issues were presented to the arbitrator. ECF No. 1 at ¶ 12; ECF No. 8 at ¶ 12. On June 23, 2012, Arbitrator Brand issued an Interim Award and Opinion (" Interim Award" ) in favor of Ceco as to the first issue in the case, which involved the Plan's " common control" theory of liability. ECF No. 1 at ¶ 12; ECF No. 8 at ¶ 12. In stipulated facts, the parties agreed that Ceco and Heico Holdings, Inc. (" Heico" )--Ceco's corporate parent--had been under " common control" for a number of years. Unified Record (" UR" ) at 100 ¶ 3. They also stipulated that Heico acquired Concrete Frame Associates, Inc. (" CFA" ) on October 1, 2010, five months

Page 1332

after Ceco withdrew from the Plan, and that with that acquisition, Ceco, Heico, and CFA came under " common control." Id. at 101 ¶ ¶ 4, 7, 8. Furthermore, CFA has performed work in Colorado of the type for which contributions to the Plan would have been required if it had been performed by Ceco. Id. at 101 ¶ 9. The Plan argued that CFA's post-acquisition work triggered Ceco's withdrawal liability under ERISA's common control provision, ERISA § 4001(b)(1), 29 U.S.C. § 1301(b)(1). Id. at 93. However, the arbitrator disagreed in the Interim Award, finding that " the 'common control' proviso of ERISA § 4001(b)(1) does not make CFA's work Ceco's work, and does not trigger withdrawal liability for Ceco." Id. at 99.

On June 7, 2013, the arbitrator issued a Final Award and Opinion (" Final Award" ) resolving the remaining issues in the case,[2] holding that Ceco had not incurred withdrawal liability, and ordering the Plan to refund Ceco the $348,273.00 it paid while the arbitration was pending. ECF No. 1 at ¶ 14; ECF No. 8 at ¶ 14. Specifically, the Final Award rejected the two theories that the Plan put forth as bases for Ceco's withdrawal liability. First, the arbitrator found that Ceco and CFA were not a single employer, and thus Ceco was not subject to withdrawal liability on that theory. UR at 1124. Second, the arbitrator rejected the Plan's contention that because Ceco sold work back to a contractor to avoid withdrawal liability, it must be deemed to have done the work and thereby incurred liability under ERISA § 4212(c). Id. Finally, the arbitrator incorporated the earlier Interim Award by reference. Id. at 1109.

Ceco now seeks an order confirming the Final Award and awarding Ceco $348,273.00 plus interest, costs and expenses, and attorney's fees. ECF No. 1 at ¶ 17. The Plan, joined by the Board of Trustees of the Plan (" the Board" ),[3] filed counterclaims, asking that the Court vacate the arbitrator's awards, enforce the Plan's withdrawal liability assessment of $917,904.00 against Ceco, and award the Plan/the Board interest, costs, and attorney's fees. ECF No. 8, Counterclaims, at 13. Specifically, the defendant/counter-plaintiffs argue that the arbitrator erred in his conclusions about Ceco and CFA's common control status, Ceco and CFA's status as a single employer, and the legal implication of Ceco's transaction undertaken with the purpose of evading or avoiding liability. Id. at ¶ ¶ 17-31. Both sides have moved for summary judgment. ECF Nos. 38, 39.


Before analyzing the merits of the parties' arguments, the Court will first lay out the summary judgment standard and then determine the appropriate standard of review to apply in considering the arbitrator's findings on each issue. The Court then turns to the merits of each finding.

A. Summary Judgment Standard.

" Summary judgment is appropriate 'if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.'" Utah Lighthouse Ministry v. Found. for Apologetic Info. & Research, 527 F.3d 1045, 1050

Page 1333

(10th Cir. 2008) (quoting Fed.R.Civ.P. 56(c)). In examining a motion for summary judgment, the Court considers " the factual record, together with all reasonable inferences derived therefrom, in the light most favorable to the non-moving party . . . ." Id. The moving party has the burden of producing evidence showing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In challenging such a showing, the non-movant " must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). " Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute about a material fact is genuine if " the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

B. The Applicable Standards of Review.

The present case is before the Court pursuant 29 U.S.C. § 1401(b)(2), which provides for district court review of an arbitrator's award. § 1401(c) provides that " [i]n any proceeding under subsection (b) of this section, there shall be a presumption, rebuttable only by a clear preponderance of the evidence, that the findings of fact made by the arbitrator were correct." The statute does not provide a standard of review for the arbitrator's findings of law, but the Tenth Circuit has held that " district courts review the arbitrator's legal conclusions de novo." Trustees of Colorado Pipe Indus. Pension Trust v. Howard Elec. & Mech. Inc., 909 F.2d 1379, 1386 (10th Cir. 1990).

The Tenth Circuit has not laid out a standard of review applicable to mixed questions of law and fact in the MPPAA context. However, as a general matter, the circuit looks to whether considerations of fact or those of law predominate: " Where the mixed question involves primarily a factual inquiry, the clearly erroneous standard is appropriate. If, however, the mixed question primarily involves the consideration of legal principles, then a de novo review by the appellate court is appropriate." Supre v. Ricketts, 792 F.2d 958, 961 (10th Cir. 1986) (citing Ninth Circuit precedent). The Ninth Circuit has adopted this approach in the MPPAA context, see United Foods, Inc. v. W. Conference of Teamsters Pension Trust Fund, 816 F.Supp. 602, 607 (N.D. Cal. 1993) aff'd, 41 F.3d 1338 (9th Cir. ...

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