Board of Trustees of the Automobile Mechanics' Local No. 701 Union and Industry Pension Fund v. Hannah Brothers et al
Filing
60
MEMORANDUM Opinion: Plaintiff's motion for summary judgment against Hannah Brothers and Donald Hannah, as to Count I, on a joint and several liability basis 46 is granted. Signed by the Honorable Charles P. Kocoras on 10/6/2014.Mailed notice(vcf, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BOARD OF TRUSTEES OF THE
AUTOMOBILE MECHANICS’
LOCAL NO. 701 UNION AND
INDUSTRY PENSION FUNDS,
)
)
)
)
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Plaintiff,
)
)
v.
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HANNAH BROTHERS, an Illinois general )
partnership, DONALD C. HANNAH,
)
an individual, FULL CIRCLE GROUP,
)
INC., an Illinois limited liability company,
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FULL CIRCLE SHIPYARD, LLC, an
)
Illinois limited liability company, FULL
)
CIRCLE REPAIR, LLC, an Illinois limited )
liability company, FULL CIRCLE
)
DEVELOPMENT, LLC, an Illinois limited )
liability company, and WATTS CHEMICAL, )
LLC, an Illinois limited liability company,
)
)
Defendants.
)
13 C 5868
MEMORANDUM OPINION
CHARLES P. KOCORAS, District Judge:
This matter comes before the Court on the motion for summary judgment of
Plaintiff Board of Trustees of the Automobile Mechanics’ Local No. 701 Union and
Industry Pension Funds (“Plaintiff”) pursuant to Federal Rule of Civil Procedure 56
(“Rule 56”) against Defendants Hannah Brothers (“Hannah Brothers”) and Donald C.
Hannah (“Donald”) (collectively the “Hannah Defendants”) as to Count I of the
Second Amended Complaint. 1 Plaintiff is not seeking an entry of summary judgment
as to Count I against the remaining Defendants. For the following reasons, the Court
grants summary judgment in favor of Plaintiff as to Count I.
BACKGROUND
I. Facts
The following facts are taken from the parties’ respective statements, responses
and exhibits filed pursuant to Northern District of Illinois Local Rule 56.1 (“Rule
56.1”). We review each Rule 56.1 statement and disregard any argument, conclusion
or assertion unsupported by the evidence in the record. The Court is mindful of its
duty to weigh the credibility of the evidence presented by both parties and only relies
on relevant, admissible evidence when ruling on the motion for summary judgment.
The Hannah Defendants did not provide a Rule 56.1(b)(3)(C) statement of
additional facts for the Court to consider.
They responded to Plaintiff’s Rule
56.1(a)(3) statement, but failed to properly dispute many of the facts in accordance
with Rule 56.1(b).
For any disagreements with Plaintiff’s facts, the Hannah
Defendants were to make specific references to affidavits, parts of the record, and
other supporting materials relied upon. See N.D. Ill. L.R. 56.1(b)(3)(B). Thus, for
those responses that the Hannah Defendants failed to properly dispute, Plaintiff’s
factual allegations are deemed admitted to the extent they are supported by the record.
1
In its motion for summary judgment, Plaintiff incorrectly states that it is seeking an entry of
summary judgment as to Count I of the First Amended Complaint. However, Plaintiff rectifies
this mistake in its reply brief.
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See N.D. Ill. L.R. 56.1(b)(3)(C) (“All material facts set forth in the statement required
of the moving party will be deemed to be admitted unless controverted by the
statement of the opposing party.”).
Hannah Brothers was a general partnership, formed in 1952 by James A.
Hannah Jr. (“James”), Donald and Margaret H. Douaire (“Margaret”). The original
partnership agreement between James, Donald and Margaret stated that the
“partnership shall engage in the business of . . . buying, selling, leasing and operating
tugboats, barges, equipment related thereto, and other marine related equipment . . .”
The sole purpose of the partnership was to purchase barges and any other property for
the exclusive use of the other companies owned by the Hannah family (the “Hannah
Group”). From 1952 to 2006, Hannah Brothers would receive payments from the
Hannah Group to lease tugboats owned by Hannah Brothers.
Plaintiff is a plan sponsor and authorized to administer the Automobile
Mechanics’ Local No. 701 Union and Industry Pension Fund (“Pension Fund”). The
Pension Fund is a multiemployer pension plan that receives contributions from
numerous employers. A member of the Hannah Group, Hannah Maritime Company
(“HMC”) was a signatory to a collective bargaining agreement with the Automobile
Mechanics’ Local Union No. 701, which required it to submit contributions to the
Pension Fund on behalf of its employees working in covered employment.
In 2006, the Hannah Group reorganized.
During his deposition, William
Piotrowski (“Piotrowski”), a certified public accountant (“CPA”) for Hannah
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Brothers, provided a flow chart showing the relationship between all the entities. For
instance, James and Margaret sold their ownership interest in Hannah Brothers to
New Era Hannah Corporation (“New Era”), with Donald as the 100% owner of New
Era. After the reorganization, New Era owned 99% of Hannah Brothers with Donald
retaining the remaining 1%. At the time of withdrawal, HMC was 100% owned by
James A. Hannah, Inc., which also was 100% owned by Donald.
The Hannah Defendants dispute that New Era and Donald were general
partners in Hannah Brothers at the time of the withdrawal. In his deposition, John
Stoeckert (“Stoeckert”), another CPA and employee of Hannah Brothers, testified that
Hannah Brothers was essentially a general partnership that owned assets that were to
be leased to the principal operating entity of the Hannah Group (HMC). Hannah
Brothers’ only assets were vessels that were used exclusively by HMC under a
bareboat charter arrangement. The Hannah Defendants contest that a bareboat charter
is a lease because they claim Hannah Brothers did not even own a checking account.
However, Stoeckert testified that a bareboat charter is the “equivalent” of a net lease
and that HMC would pay Hannah Brothers for the use of the tugboats by using
intercompany journal entries.
During the plan year beginning January 1, 2009 and ending December 31,
2009, HMC withdrew from the Pension Fund. The exact date of withdrawal is in
question. Pursuant to the terms of the trust agreements, contributing employers that
failed to submit payment of contributions by the due date, established by a relevant
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collective bargaining agreement, were responsible for the payment of liquidated
damages equal to 10% of the amount unpaid, plus any reasonable attorney’s fees and
costs of maintaining suit.
On January 25, 2010 2, Plaintiff’s former counsel sent a notice and demand for
withdrawal liability. The notice and demand also included a schedule for HMC to pay
its liability. On September 14, 2010, Plaintiff filed suit against HMC in the United
States District Court for the Northern District of Illinois and the court entered a
default judgment in favor of Plaintiff and against HMC in the aggregate amount of
$380,380.38. See Trustees of the Automobile Mechanics Local No. 701 Union and
Industry Pension Fund v. Hannah Maritime Corp., 10-CV-3702 (N.D. Ill. Sept. 14,
2010). Under the Pension Benefit Guaranty Corporation, the interest rate has been at
3.25% since 2009.
Plaintiff is asking for $352,485.00 for withdrawal liability,
$35,248.50 in liquidated damages, $50,080.33 for statutory interest at a rate of 3.25%
from the date that the withdrawal liability was assessed, and $19,675.03 in attorney’s
fees and costs, totaling $457,488.86.
II. Procedural History
On June 12, 2014, Plaintiff filed its Second Amended Complaint against the
Hannah Defendants for the withdrawal liability owed by HMC.
The lawsuit is
brought pursuant to the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et seq., as amended by the Multiemployer Pension Plan
2
Plaintiff incorrectly dates the letter as January 27, 2010 in its statement of facts.
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Amendments Act of 1980 (“MPPAA”), 29 U.S.C. §§ 1301-1461. Jurisdiction is
proper under 29 U.S.C. § 1451(c). Venue is proper pursuant to
29 U.S.C. §§ 1132(e)(2) and 1451(d). On July 14, 2014, Plaintiff filed the instant
motion seeking an entry of summary judgment as to Count I against the Hannah
Defendants, jointly and severally, in the aggregate amount of $457,488.86 for the
withdrawal liability of HMC, liquidated damages, statutory interest and attorney’s
fees.
LEGAL STANDARD
Summary judgment is appropriate when the pleadings, discovery, disclosures,
and affidavits establish that there is no genuine issue of material fact, such that the
movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The movant
bears the initial burden of showing that no genuine issue of material fact exists.
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The burden then shifts to the nonmoving party to show through specific evidence that a triable issue of fact remains on
issues on which the movant bears the burden of proof at trial. Id. at 325. The nonmovant may not rest upon mere allegations in the pleadings or upon conclusory
statements in affidavits; it must go beyond the pleadings and support its contentions
with documentary evidence. Id. A genuine issue of material fact exists when, based
on the evidence, a reasonable jury could find in favor of the non-movant. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In considering a motion for summary
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judgment, a court construes all facts and draws all reasonable inferences in favor of
the non-movant. Id. at 255.
DISCUSSION
The MPPAA protects employees in multiemployer pension plans by requiring
employers who withdraw from such plans to pay their share of “unfunded vested
benefits.” 29 U.S.C. § 1381(b)(1); Chicago Truck Drivers v. El Paso Co., 525 F.3d
591, 595 (7th Cir. 2008). ERISA treats all trades or businesses under common control
as a single employer. 29 U.S.C. § 1301(b)(1).
I. Procedural Requirements
During the plan year beginning January 1, 2009 and ending December 31,
2009, HMC withdrew from the Pension Fund. As a result, the Pension Fund assessed
withdrawal liability against HMC and obtained a judgment for $380,380.38 on
September 14, 2010. The following are the specific procedural steps that a plan
sponsor, like Plaintiff, must complete to assess withdrawal liability against a
withdrawing employer: (i) notify the employer of the amount of the liability;
(ii) notify the employer of the schedule for liability payments; and (iii) demand
payment in accordance with the schedule. 29 U.S.C. § 1399(b)(1). “In the event of a
default, 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 from the due date of the first payment which was not timely made. . . if the
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failure is not cured within 60 days after the employer receives written notification
from the plan sponsor of such failure. . .” 29 U.S.C. § 1399(c)(5)(A).
In the instant matter, the undisputed facts reveal that Plaintiff complied with
these procedural steps when it filed suit for the outstanding liability of HMC.
3
Specifically, on January 25, 2010, Plaintiff sent a notice of default and demand for
withdrawal liability to HMC and enclosed a payment schedule for HMC to pay its
liability.
On September 14, 2010, over sixty days after HMC received written
notification from Plaintiff of its failure to pay the outstanding amount of withdrawal
liability plus interest, Plaintiff filed suit and received a default judgment in its favor
against HMC.
This Court, therefore, finds that Plaintiff satisfied the procedural
requirements to collect withdrawal liability from HMC and all other trades or
businesses under common control if applicable.
II. Existence of Hannah Brothers at the Time of Withdrawal
The Hannah Defendants aver that Plaintiff has failed to establish that Hannah
Brothers, as an entity, even existed at the time of HMC’s withdrawal, and thus, was a
member of a controlled group with HMC. The Hannah Defendants contend that
“there must be a standard for what constitutes withdrawal and that standard, when
applied, should result in a date of withdrawal and not a year.”
3
The Hannah
In their response to Plaintiff’s statement of facts, the Hannah Defendants deny that the demand
letter and schedule from January 25, 2010 were sent, but fail to cite to specific references to the
affidavits, parts of the record, or other supporting materials that they relied upon when coming to
these conclusions. The record reflects in Exhibit 5 of Plaintiff’s motion for summary judgment
that a letter was indeed sent to the Hannah Defendants on January 25, 2010 and thus, these facts
are deemed admitted.
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Defendants continue, stating that summary judgment should not be granted because
Donald, himself, cannot establish when exactly Hannah Brothers’ activities as a
company ceased permanently, and Plaintiff failed to investigate this issue during
discovery. Conversely, Plaintiff argues that the Hannah Defendants’ ability to dispute
specific matters (like the existence of Hannah Brothers at the time of the withdrawal)
that relate to the determination of the employer’s liability, assert any defenses, or
contest the schedule of payments has expired.
Pursuant to 29 U.S.C. § 1399(b)(2)(A)(i), withdrawing employers may request
a review of “any specific matter relating to the determination of the employer’s
liability and the schedule of payments.” After receiving the request for review, “the
plan sponsor shall notify the employer of (i) the plan sponsor’s decision; (ii) the basis
for the decision; and (iii) the reason for any change in the determination of the
employer’s liability or schedule of liability of payments.” 29 U.S.C. § 1399(b)(2)(B).
Next, the withdrawing employer must initiate arbitration to dispute the withdrawal
liability assessment within sixty (60) days of receiving the plan sponsor’s response to
the request for review. 29 U.S.C. § 1401(a)(1)(A).
Under the MPPAA “[a]ny dispute between an employer and the plan sponsor of
a multiemployer plan concerning a determination made under sections 4201 through
4219 [29 U.S.C. §§ 1381-1399] shall be resolved through arbitration.”
29 U.S.C. § 1401(a). § 4203 of the MPPAA defines when complete withdrawal
occurs. 29 U.S.C. § 1383. If the withdrawing employer fails to initiate arbitration in
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a timely manner, “the amounts demanded by the plan sponsor. . . shall be due and
owing on the schedule set forth by the plan sponsor.” 29 U.S.C. § 1401(b)(1). “The
upshot is that either party may seek arbitration, but only the employer suffers a
consequence for failing to do so.” Nat’l Shopmen Pension Fund. v. DISA Indus., Inc.,
653 F.3d 573, (7th Cir. 2011).
In the present case, HMC could have initiated
arbitration pursuant to § 1401(a) to resolve the issue of whether Hannah Brothers
existed at the time of withdrawal within the sixty days of receiving the January 25,
2010 demand.
Arbitration was never initiated and Plaintiff subsequently filed a
lawsuit in September 2010.
Whether Donald realized that Hannah Brothers could have been sued for
HMC’s withdrawal liability at that time is unknown.
However, what is more
conclusive to the Court is the fact that Hannah Defendants raise this issue in their
responses to summary judgment without adequate support. In their defense, the
Hannah Defendants only cite to the Fund’s Administrator’s certificate that they state
omits “the date of withdrawal except to provide the year.” This alleged omission,
without any other evidence, is not nearly enough to create a genuine issue of material
fact. Once Plaintiff bore its initial burden of showing that there was no genuine issue
of material fact as to whether Hannah Brothers existed at the time of withdrawal
through such evidence like the deposition testimony of Piotrowski and the
reorganization flow chart cited to as an exhibit from Stoeckert’s deposition, the
burden then shifted to the Hannah Defendants to show through specific evidence that
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a genuine issue of material fact was in fact present.
Besides not initiating an
arbitration in 2010 to address this issue, without providing documentary evidence and
by solely resting on an alleged omission by Plaintiff, the Hannah Defendants failed to
meet their burden of establishing through particular evidence that a triable issue of
fact remained with respect to the timing issue. See Celotex Corp., 477 U.S. at 325.
Also, the Hannah Defendants’ argument that Donald, himself, cannot even establish
when Hannah Brothers ceased operations as a company and that Plaintiff should have
pursued this more during discovery is unconvincing. Therefore, for the purposes of
this motion, this Court holds that the record supports the contention that Hannah
Brothers existed at the time of the withdrawal.
III. The Hannah Defendants’ Liability
Plaintiff contends that the Hannah Defendants are jointly and severally liable
for the withdrawal liability of HMC. As part of this conclusion, Plaintiff claims that
Hannah Brothers is a “trade or business” pursuant to the MPPAA. Under
29 U.S.C. § 1301(b)(1), “all employees of trades or businesses which are under
common control shall be treated as employed by a single employer and all such trades
and business as a single employer” for purposes of withdrawal liability. For the Court
to hold the Hannah Defendants jointly and severally liable for HMC’s withdrawal
liability, Plaintiff must establish that: (i) the entities involved are “trades or
businesses;” and (ii) they are under common control. Cent. States, Se. & Sw. Pension
Fund v. Personnel, Inc., 974 F.2d 789, 792 (7th Cir. 1992). Each trade or business
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under common control is jointly and severally liable for any withdrawal liability of
any other. Cent. States, Se. & Sw. Areas Pension Fund v. SCOFBP, LLC, 668 F.3d
873, 876 (7th Cir. 2011) (hereinafter “SCOFBP II”). Nowhere in their two-page
response to the motion for summary judgment do the Hannah Defendants contest that
they were under common control with HMC or provide the Court with any supportive
case law. Nevertheless, the Court will still assess this issue based on the record.
A. Common Control
When determining if businesses are under common control, “the [Pension
Benefit Guarantee Corporation (‘PBGC’)] has adopted the language set forth in
Section 414(c) of the Internal Revenue Code, which identifies both ‘parentsubsidiary’ and ‘brother-sister’ organization groupings as forms of common control.”
Cent. States, Se. & Sw. Areas Pension Fund v. SCOFBP, LLC, 738 F.Supp.2d at 846
(citing 26 C.F.R. § 1.414(c)–2) (hereinafter “SCOFBP I”). As noted by the district
court in SCOFBP I:
a ‘parent-subsidiary group’ is one in which one or more ‘chains of
organizations' are connected through a common controlling interest (80
percent of the stock). A ‘brother-sister group’ is one in which (1)
‘five or fewer persons who are individuals, estates, or trusts' own a
controlling interest (at least 80 percent of the stock) in two or more
organizations and (2) the same persons maintain ‘effective control’ (at
least 50 percent of the stock) over each organization.
Id. (internal citation omitted).
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A “combined group” is defined by the Treasury regulations as:
any group of three or more organizations, if (1) each such organization is
a member of either a parent-subsidiary group of trades or businesses
under common control or a brother-sister group of trades or businesses
under common control, and (2) at least one such organization is the
common parent organization of a parent-subsidiary group of trades
or businesses under common control and is also a member of a
brother-sister group of trades or businesses under common control.
26 C.F.R. § 1.414(c)–2(d).
A “controlling interest” means:
In the case of an organization which is a corporation, ownership of stock
possessing at least 80 percent of total combined voting power of all
classes of stock entitled to vote of such corporation or at least 80
percent of the total value of shares of all classes of stock of such
corporation.
26 C.F.R. § 1.414(c)–2(b)(2)(A).
After the reorganization of the Hannah Group in 2006 and at the time of the
withdrawal in 2009, Donald owned 100% of New Era. New Era was the 99% owner
of Hannah Brothers with Donald retaining 1%. HMC was 100% owned by James A.
Hannah, Inc., which also was 100% owned by Donald. With these relationships,
Plaintiff correctly points out in its papers that under the parent-subsidiary regulation:
(i) James A. Hannah, Inc. is the parent of HMC and they are members of the same
parent-subsidiary group; and (ii) New Era is the parent of Hannah Brothers and they
are members of the same parent-subsidiary group. Under the brother-sister regulation,
James A. Hannah Inc. and New Era are members of the same brother-sister controlled
group because of the same ownership by Donald. Since Donald had more than 80%
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ownership in New Era and James A. Hannah Inc., HMC, James A. Hannah Inc., New
Era and Hannah Brothers were all under common control in 2009 when HMC
withdrew from the Fund.
For ERISA purposes, this satisfies the first prong in
establishing joint and several liability.
B. Trade or Business
Although § 1301(b)(1) does not define “trade or business,” the Seventh Circuit
has held that “leasing property to a withdrawing employer itself is categorically a
‘trade or business’” pursuant to 29 U.S.C. § 1301(b)(1). SCOFBP II, 668 F.3d at 879.
With HMC as the withdrawing employer in the instant case, the issue becomes
whether Hannah Brothers’ “leasing” of tugboats to the Hannah Group (including
HMC) aligns with Seventh Circuit precedent.
The Hannah Defendants do not dispute the following facts: (i) that Hannah
Brothers only assets were vessels that were used exclusively by HMC under a
bareboat charter agreement; and (ii) that Hannah Brothers would receive payments
from the Hannah Group to lease tugboats owned by Hannah Brothers. The Hannah
Defendants do, however, dispute that a bareboat charter is a lease. When responding
to Plaintiff’s statement that a bareboat charter is a lease, the Hannah Defendants
provide three reasons for why they dispute this fact, yet only one has the proper
evidentiary citation as required under Rule 56.1(b)(3)(C). For instance, the Hannah
Defendants deny that a bareboat charter is a lease by claiming that “[a] bareboat
charter is a net lease with no responsibility to Hannah Brother[s] for any costs or
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risks,” but do not point the Court to any evidentiary support for why these statements
are true. As reason why a bareboat charter is not a lease, the last sentence provides
the only proper reference to the record—the Hannah Defendants cite to Piotrowski’s
deposition where he states that Hannah Brothers did not own a checking account.
However, the Court is unaware of how the fact that Hannah Brothers did not own a
checking account disclaims a bareboat charter as a lease. Considering that the Hannah
Group, Hannah Brothers and HMC were such intertwined companies, it is quite
realistic that Hannah Brothers leased tugboats to HMC without having a checking
account by using the intercompany journal entries that Stoeckert describes in his
deposition. What is clear to the Court is that Stoeckert testified in his deposition that
a bareboat charter is “equivalent” of a net lease and that at least in 2002 Hannah
Brothers was leasing tugboats to the principal operating entity at that point, HMC.
Additionally, the partnership agreement executed in 1952 by James, Donald and
Margaret states that the “partnership shall engage in the business of . . . buying,
selling, leasing and operating tugboats, barges, equipment related thereto, and other
marine related equipment . . .” (emphasis added). Since the Hannah Defendants fail to
properly controvert whether a bareboat charter is a lease, and the record supports
otherwise, this fact is deemed admitted for the purposes of this motion.
This Court acknowledges the Seventh Circuit’s rule that passive holding of
property does not rise to the level of a trade or business, and that “mere ownership of
property (as opposed to activities taken with regard to the property) cannot be
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considered in determining whether conduct is regular or continuous. Cent. States, Se.
& Sw. Areas Pension Fund v. Fulkerson, 238 F. 3d 891, 895-96 (7th Cir. 2001). It is
important to note that unlike the defendants in Fulkerson who provided expert witness
evidence to support the proposition that the leases were investments, the Hannah
Defendants provide no evidence that the tugboat leases were merely a passive holding
of property besides stating that Hannah Brothers did not own a checking account.
By employing the categorical rule in SCOFBP II that the leasing of property to
a withdrawing company under the common control of the property owner constitutes a
“trade or business” within the meaning of § 1301(b)(1), recently reiterated again by
the Seventh Circuit in Cent. States, Se. & Sw. Areas Pension Fund v. Nagy, 714 F.3d
545, 551 (7th Cir. 2013) and Cent. States Se. & Sw. Areas Pension Fund v. Messina
Prods, LLC, 706 F.3d 874, 882 (7th Cir. 2013), this Court finds that the Hannah
Defendants’ are liable under § 1301(b)(1) for leasing tugboats to HMC while under
common control. See Messina Prods, 706 F. 3d at 882 (“where the real estate is
rented to or used by the withdrawing employer and there is common ownership, it is
improbably that the rental activity could be deemed a truly passive investment.”).
Distinct from the instant matter, in cases where the defendant did not lease
property to a withdrawing company, courts use the test from Commissioner of
Internal Revenue v. Groetzinger, 480 U.S. 23 (1987) to distinguish trades and
businesses from investments. For the sake of thoroughness, if this Court needed to
use this test in its analysis, we would find that Hannah Brothers engaged in regular
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and continuous activity for the primary purpose of generating income or profit,
making them liable for HMC’s withdrawal. See Groetzinger, 480 U.S. at 35 (holding
that a trade or business must be involved in the activity with continuity and regularity
and that the primary purpose must be for income or profit).
C. Donald’s Individual Liability
The reasons for Donald’s individual liability stem from his 100% ownership of
James A. Hannah Inc. (which owned 100% of HMC) and his 100% ownership of New
Era at the time of the withdrawal. Also, under Illinois law, all partners are jointly and
severally liable for the obligations of the partnership. Burnham Nationwide, Inc. v.
Oracle Am., Inc., 11 C 8572, 2012 WL 246463 (N.D. Ill. 2012) (citing 805 ILCS
206/306). Illinois law provides that a person who allows another to hold him out as a
partner during a venture is liable for debts incurred in that venture.
805 ILCS
206/308. Although the Hannah Defendants admit in their response to Plaintiff’s
statement of facts that Hannah Brothers is a general partnership, they deny that
Donald and New Era are general partners of Hannah Brothers. 4 As support for one of
the two denials, the Hannah Defendants point the Court to review a certain page of
Stoeckert’s deposition. The Court searched the cited page of Stoeckert’s deposition
for any testimony that would disprove Plaintiff’s assertion that Donald and New Era
are general partners of Hannah Brothers. Nevertheless, after careful review, we
4
On two occasions in their response to Plaintiff’s statement of facts, the Hannah Defendants
deny that Donald and New Era are general partners of Hannah Brothers. One denial provides a
citation to the record, the other does not.
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continue to remain perplexed as to what Stoeckert said in his deposition that the
Hannah Defendants claim would refute the fact that Donald is a general partner of
Hannah Brothers. Additionally, when responding to another statement by Plaintiff in
its Rule 56.1 statement of facts, the Hannah Defendants make a bare assertion that
Donald and New Era are not general partners of Hannah Brothers without any citation
to the record as support. We refuse to scour the record (in this case Stoeckert’s
deposition) or sift through the evidence “pondering the nuances and inconsistencies,
and decide whom to believe.” Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th
Cir. 1994).
The fact that Donald and New Era are general partners of Hannah
Brothers is therefore deemed admitted. Because the Hannah Defendants fail to cite to
specific parts of the record to support or contradict this fact set forth by Plaintiff, they
also consequently fail to raise a genuine issue of fact for trial.
The undisputed facts, supported by, amongst other things, the deposition
testimony of Piotrowski, establish that Donald is indeed a general partner of Hannah
Brothers.
He is thus jointly and severally liable for all debts of Hannah Brothers,
including its withdrawal liability obligation to Plaintiff.
IV. Amounts
On September 14, 2010, Plaintiff filed suit against HMC in a separate case in
the Northern District of Illinois and the court entered a default judgment in favor of
Plaintiff and against HMC in the aggregate amount of $380,380.38. See Trustees of
the Automobile Mechanics Local No. 701 Union and Industry Pension Fund v.
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Hannah Maritime Corp., 10-CV-3702 (N.D. Ill. Sept. 14, 2010). Under the Pension
Benefit Guaranty Corporation, the interest rate has been at 3.25% since 2009.
Because time and money have accrued since the judgment was entered in its favor,
Plaintiff is now asking for $352,485.00 for withdrawal liability, $35,248.50 in
liquidated damages, $50,080.33 for statutory interest at a rate of 3.25% from the date
that the withdrawal liability was assessed, and $19,675.03 in attorney’s fees and costs,
totaling $457,488.86. The Court concludes that this amount is reasonable, and the
Hannah Defendants are liable to Plaintiff, jointly and severally.
CONCLUSION
For the aforementioned reasons, the Court grants Plaintiff’s motion for
summary judgment against Hannah Brothers and Donald Hannah, as to Count I, on a
joint and several liability basis.
_____________________________________
Charles P. Kocoras
United States District Judge
Dated: 10/6/2014_________
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