Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Bd. of Trustees of IBEW Local No. 82 Pension Fund v. Bright Street, LLC

United States District Court, S.D. Ohio, Western Division

December 11, 2017

BD. OF TRUSTEES OF THE IBEW FUND LOCAL NO. 82 PENSION FUND et at., Plaintiffs,
v.
BRIGHT STREET, LLC, et al., Defendants.

         DECISION AND ENTRY OVERRULING MOTION TO DISMISS THE AMENDED COMPLAINT OF DEFENDANT SECURITY FENCE GROUP INC. (DOC. #21), AND OVERRULING AS MOOT SECURITY FENCE'S MOTION TO STRIKE MEMORANDUM OF FACTS (DOC. #15); CLAIMS OF PLAINTIFFS BOARD OF TRUSTEES OF THE IBEW FUND LOCAL NO. 82 PENSION FUND, IBEW LOCAL NO. 82 PENSION FUND BOARD OF TRUSTEES OF THE NATIONAL ELECTRICAL BENEFIT FUND AND THE NATIONAL ELECTRICAL BENEFIT FUND AGAINST SECURITY FENCE SHALL PROCEED TO DISCOVERY

          WALTER H. RICE UNITED STATES DISTRICT JUDGE.

         Plaintiffs Board of Trustees of the IBEW Local No. 82 Pension Fund, IBEW Local No. 82 Pension Fund ("IBEW Fund"), Board of Trustees of the National Electrical Benefit Fund and National Electrical Benefit Fund ("NEB Fund" or "NEBF") (collectively "Plaintiffs")[1] allege that Defendant Security Fence Group, Inc. ("Security Fence"), purchased substantially all of co-Defendant Bright Street, LLC's ("Bright Street") assets via an Asset Purchase Agreement ("APA"). Plaintiffs argue that, upon execution, Bright Street effected a "complete withdrawal" from the IBEW and NEB Funds, as that term is defined by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and Security Fence, by substantially continuing Bright Street's business, became its successor entity. Doc. #18, ¶¶ 26-28, 33-34, PAGEID #480-81, 482 (citing 29 U.S.C. § 1384). Consequently, Plaintiffs allege, Security Fence assumed liability for any contribution obligations that Bright Street had incurred to the IBEW and NEB Funds, and Security Fence, Bright Street and Bright Street Supply, LLC ("BSS"), are jointly and severally liable "for a proportionate share of the unfunded vested liability for benefits owed to participants" of the IBEW and NEB Funds. Id., ¶¶ 29-30, PAGEID #481.[2]Security Fence has filed a Motion to Dismiss the Amended Complaint with Prejudice ("Motion"). Doc. #21. For the reasons set forth below, its Motion is OVERRULED.

         I. RELEVANT FACTUAL BACKGROUND AND PROCEDURAL HISTORY[3]

         Bright Street and BSS were Ohio companies that were owned by a Julia K. Gourley ("Gourley"), and Bright Street employed members of Local Union No. 82, International Brotherhood of Electrical Workers ("Local 82" or "the Union"). Doc. #18, ¶¶ 8-11, PAGEID #476-77. As part of the Collective Bargaining Agreement ("CBA") between Bright Street and Local 82, Bright Street was required to make regularly scheduled contributions to the IBEW and NEB Funds, both of which are defined benefit multiemployer pension funds governed by ERISA's Multiemployer Pension Plan Amendment Acts of 1980 ("MPPAA"). Id., ¶¶2, 5, PAGEID #474, 475 (citing 29 U.S.C. §§1002(35, 37), 1301(a)(3)).

         On or about June 12, 2015, Bright Street and Security Fence executed the APA, through which Security Fence purchased "substantially all" of Bright Street's assets. Doc. #18, ¶¶ 10, 31-32, PAGEID #476, 481-82 (citing Doc. #19, § 1.1, PAGEID #495-96). The APA contained no provision that would have "exempt[ed the] asset sale from causing a complete withdrawal" by Bright Street from the Plaintiff Funds. Id., ¶ 33, PAGEID #482 (citing 29 U.S.C. § 1384). However, the APA did contain a provision requiring Bright Street to indemnify Security Fence for any obligation that Bright Street had incurred or would incur as to Local 82 or any other union. Id., ¶ 35 (citing Doc. #19, § IV.3.ii, PAGEID #501).

         Further, Plaintiffs allege that after the APA was executed:

Security Fence performed the same work in the same jurisdiction of the Local No. 82 CBA that Defendant Bright Street had performed prior to June 12, 2015[, ] for which contributions had been required by Defendant Bright Street. As a result, the business of Defendant Bright Street taken over by Defendant Security Fence continued uninterrupted.

Doc. #18, ¶ 34, PAGEID #482. Security Fence hired at least two of Bright Street's employees, took over Bright Street's business telephone number, and rechristened Bright Street as the Security Fence Traffic Signals and Street Lighting Division. Id., ¶¶ 37, 39-40, PAGEID #483 (citations omitted). In light of the above, Plaintiffs claim, Security Fence is jointly and severally liable for any contribution obligation by Bright Street that was due and owing at the time that the APA was executed. Further, Security Fence is liable for the contributions that would have become liabilities of Bright Street, based on the work performed by Security Fence's Traffic Signals and Street Lighting Division that was subject to the CBA and Inside Working Agreement ("IWA"). Doc. #18, PAGEID #492-93.

         On or about December 30, 2015, NEB Fund issued to Bright Street a demand for payment in the amount of $101, 639.12. Bright Street did not request review of NEB Fund's liability determination; nor did it request arbitration or otherwise dispute liability or the amount owed. Doc. #18, ¶¶ 66-68, PAGIED #489 (citing Doc. #19-9). Plaintiffs argue that, because Bright Street failed to cure its default within sixty days of receiving notice, "the entire amount of the withdrawal liability ... is now due and owing from Defendant Bright Street." Id., ¶ 73, PAGEID #490-91.

         On or about January 13, 2016, IBEW Fund issued to Bright Street a demand for payment of its withdrawal liability in the amount of $618, 045. Bright Street did not request review of IBEW Fund's liability determination; nor did it request arbitration or otherwise dispute liability or the amount owed. Doc. #18, ¶¶ 53-55. PAGEID #486. As Bright Street failed to cure its default within sixty days of receiving notice, Plaintiffs argue, "the entire amount of the withdrawal liability ... is now due and owing from Defendant Bright Street." Id., ¶ 60, PAGEID #487.

         On November 18, 2016, Plaintiffs filed their initial Complaint against Bright Street, BSS and Security Fence. Doc. #1. On January 27, 2017, Security Fence filed a motion to dismiss the Complaint as against it. Doc. #8. On April 17, 2017, after briefing on Security Fence's initial motion was complete, Plaintiffs moved for leave to file an amended complaint, Doc. #17, which this Court sustained in a notation order the following day. Plaintiffs filed their Amended Complaint on April 19, 2017, Doc. #18[4], and Security Fence filed the instant Motion on May 3, 2017. Doc. #21. At no point did Security Fence seek review of the liability determinations made by Plaintiff Funds; nor did it demand arbitration or take any other action under ERISA.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 8(a) provides that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." The complaint must provide the defendant with "fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.