Bright Construction, Inc. v. Carpenters District Council of Kansas City Pension Fund et al

Filing 9

ORDER - Motion to Vacate or Modify Arbitration Award 1 is provisionally denied pending briefing completion. Substantive opposition to the Motion to Vacate or Modify Arbitration Award shall be filed by Defendant The Fund and Defendant DCM on or befo re 5/7/13. Reply Suggestions shall be filed by Petitioner on or before 5/21/13. The Fund shall file a Motion to Confirm Arbitration Award with respect to itself on or before 5/7/13. Suggestions in opposition shall be filed on or before 5/21/13. Rep ly Suggestions shall be filed on or before 6/4/13. DCM's Motion to Dismiss 6 shall be stricken from the record. DCM shall file a Motion to Confirm Arbitration Award with respect to itself on or before 5/7/13. Suggestions in opposition shall be filed on or before 5/21/13. Reply Suggestions shall be filed on or before 6/4/13. Signed on 4/23/13 by Chief District Judge Fernando J. Gaitan, Jr. (Enss, Rhonda)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
BRIGHT CONSTRUCTION, INC.
Petitioner,
v.

CARPENTERS DISTRCIT COUNCIL
OF KANSAS CITY PENSION FUND
and
MELMORE CONSTRUCTION, INC.
Defendant.

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Case No. 4:12-mc-09028-FJG

ORDER
Currently pending before the Court is Petitioner’s Motion to Vacate or Modify
Arbitration Award (Doc. No. 1) and Defendant Melmore Construction, Inc.’s Motion to
Dismiss (Doc. No. 6).
I.

BACKGROUND
In January 2003, Defendant Melmore Construction, Inc. f/k/a DCM Construction,

Inc. (“DCM”) signed a Residential Labor Agreement with Carpenters District Council of
Kansas City & Vicinity Pension Fund (“The Fund”), United Brotherhood of Carpenters
and Joiners of America, AFL-CIO, and the Builders’ Association of Missouri to represent
DCM’s employees for collective bargaining purposes. DCM was obligated to make
payments to the Fund. Subsequently, DCM and Petitioner entered into an Asset
Purchase Agreement whereby Petitioner purchased certain assets of DCM. Employees
of DCM, with respect to whom DCM had an obligation to contribute to the Fund,
performed work in the building and construction industry pursuant to the Employee

Retirement Income Security Program (“ERISA”) as described in 29 U.S.C. § 1383(b).
Following the asset purchase, DCM allegedly ceased making contributions to the Fund
and did not affirmatively or expressly cancel its Residential Labor Agreement. The
Fund assessed liability against DCM and Petitioner in the amount of $710,106.00.
Petitioner and DCM requested reconsideration. The Fund denied the request. (Doc.
No. 1).
Thereafter, on October 10, 2011, Petitioner, the Fund, and DCM jointly requested
arbitration to determine the issue of withdrawal liability as asserted by the Fund. Prior
to the hearing, Petitioner and DCM filed a Motion to Dismiss, which was denied.

On

November 21, 2012, an arbitration award was issued in which Petitioner, The Fund, and
DCM were all of the parties. The arbitrator ruled that there was no evidence supporting
the Fund’s alter ego theory, but found that Petitioner was liable under the successor
doctrine for withdrawal liability in the amount sought by the Fund, plus an award of the
Fund’s attorneys’ fees and arbitration expenses. The arbitrator found no liability on the
part of DCM. (Doc. No. 1).
On December 21, 2012, Petitioner Bright Construction filed a Motion to Vacate or
Modify Arbitration Award pursuant to 29 U.S.C. § 1401(b)(2). The Motion initiated a
miscellaneous case in this Court. (Doc. No. 1).
II.

DISCUSSION
Petitioner requests the Court set a schedule for submission of the record in this

matter, briefs and arguments to the Court in order to allow Petitioner an opportunity to
rebut any findings of fact made by the arbitrator and provide the Court an adequate

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basis to conduct de novo review of the questions of law determined in the award. (Doc.
No. 1).
The Fund’s opposition to Petitioner’s Motion to Vacate states that “[r]eview of the
Motion to Vacate or Modify Arbitration Award reveals it is in the nature of a complaint….
[However] as of [January 7, 2013], there has been no formal service of a Complaint and
Summons…….Attached is copy of the form of Notice and Acknowledgement of Service
By Mail received by counsel for [The Fund] designating the pleading filed in this case as
a Complaint and requesting acknowledgement of receipt of Summons and Complaint.”
(Doc. No. 2). The Fund requests the Court accept this [opposition] as properly
responsive and direct that the Motion to Vacate or Modify Arbitration Award be: (1)
considered a Complaint; (2) direct that further proceedings be conducted in accordance
with FRCP 4, including service; (3) permit Defendant Fund to respond to the Complaint
after proper service without waiver of any defenses. (Doc. No. 2).
On February 19, 2013, DCM filed a Motion to Dismiss for Failure to State a Claim
(Doc. No. 6). The crux of the Motion to Dismiss is that Bright Construction does not
assert any claim against DCM, but rather its causes of action lie with The Fund.
Therefore, DCM should be dismissed from the action. DCM also states that due to the
confusing procedural posture of the case, it does not have an obligation to file an
Answer. DCM argues that motion practice, not notice pleading, governs this summary
proceeding. Numerous federal statutes and rules apply to Petitioner’s Motion to Vacate
including, ERISA, the Federal Arbitration Act (“FAA”), and the Federal Rules of Civil
Procedure (“FRCP”). ERISA provides that arbitration proceedings shall be carried out
pursuant to the FAA. The FAA provides that such proceedings should occur pursuant

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to the making and hearing of motions. Furthermore, FRCP 81(a)(3) provides that in
proceedings under the FAA, the FRCP only applies to the extent that matters of
procedure are not provided in the FAA. (Doc. No. 6).
On February 25, 2013, The Fund filed an Answer and Counterclaim to the Motion
to Vacate or Modify Arbitration Proceedings or “Complaint” (Doc. No. 7). On March 18,
2013, Petitioner filed an Answer to the Counterclaim (Doc. No. 8).
No substantive responses have been filed for the Motion to Vacate or the Motion
to Dismiss.
ERISA provides, “[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). ERISA
further provides, “[a]ny arbitration proceedings under this section shall, to the extent
consistent with this subchapter, be conducted in the same manner, subject to the same
limitations, carried out with the same powers (including subpoena power), and enforced
in the United States courts as an arbitration proceeding carried out under Title 9
[Federal Arbitration Act].” 29 U.S.C. § 1401(b)(3). The FAA states, “[a]ny application
to the court hereunder shall be made and heard in the manner provided by law for the
making and hearing of motions…” 9 U.S.C. § 6.
Therefore, “a party initiates judicial review of an arbitration award not by filing a
complaint in the district, but rather by filing….a motion to vacate or modify the award.”
Booth v. Hume Pub., Inc., 902 F.2d 925, 932 (11th Cir. 1990). “[T]he party challenging
the award should provide the court with all matters it would like the court to consider in

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support of the motion to vacate…In response, the other party should file a motion to
confirm the arbitration award and also provide the court with supporting documentation.”
Plastic Recovery Technologies, Co., v. Samson, 2011 WL 3205305, *2 (N.D. Ill. 2001).
See Tremorio S.A. v. Electranta S.P., 487 F.3d 928, 940 (D.C. Cir. 2007) (motions to
enforce arbitral awards should proceed under motions practice, not notice pleading).
“These rules further the Act’s policy of expedited judicial action because they prevent a
party who has lost in the arbitration process from filing a new suit in federal court and
forcing relitigation of the issues. Booth v. Hume Pub., Inc., 902 F.2d 925, 932 (11th Cir.
1990).
Given the above, Petitioner is permitted to proceed with this judicial action since
the Motion to Vacate or Modify Arbitration Award was filed within 30 days of the
arbitration award being issued. Nonetheless, consistent with the applicable law, this
action shall proceed under motions practice.
III.

CONCLUSION
Therefore, it is hereby ORDERED:
1.

Motion to Vacate or Modify Arbitration Award (Doc. No. 1) is provisionally
denied pending briefing completion. Substantive opposition to the Motion
to Vacate or Modify Arbitration Award shall be filed by Defendant The
Fund and Defendant DCM on or before May 7, 2013. Reply Suggestions
shall be filed by Petitioner on or before May 21, 2013.

2.

The Fund shall file a Motion to Confirm Arbitration Award with respect to
itself on or before May 7, 2013. Suggestions in opposition shall be filed

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on or before May 21, 2013. Reply Suggestions shall be filed on or
before June 4, 2013.
3.

DCM’s Motion to Dismiss (Doc. No. 6) shall be stricken from the record.1
DCM shall file a Motion to Confirm Arbitration Award with respect to itself
on or before May 7, 2013. Suggestions in opposition shall be filed on or
before May 21, 2013. Reply Suggestions shall be filed on or before
June 4, 2013.

IT IS SO ORDERED.

Date: April 23, 2013
Kansas City, Missouri

S/ FERNANDO J. GAITAN, JR.
Fernando J. Gaitan, Jr.
Chief United States District Judge

1

 DCM cites U.S. Ship Mgmt., Inc. v. Maersk Line, Ltd., 188 F.Supp.2d 358 (S.D.N.Y. 2002) in support of the 
contention that its Motion to Dismiss was properly filed.  However, in that case, the Motion to Dismiss was filed by 
Defendant who endeavored to place the action in a proper procedural posture by responding to the Complaint 
with a Motion to Confirm the Panel’s Award and alternatively, should the Court have determined the case was 
properly initiated by the Complaint, Defendant styled its response as a Motion to Dismiss.  Id. at 363.  Because the 
action was fully briefed by the parties’ motions and cross‐motions, the Court regarded the matter as properly 
instituted under the FAA.  Id.  These are not the circumstances presently before this Court.  Briefing has barely 
commenced and this Court has determined this case not properly initiated under the FAA.   

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