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COMBS v. WESTERN COAL CORP.

June 25, 1985

HARRISON COMBS, WILLIAM MILLER, JOSEPH P. BRENNAN, and PAUL R. DEAN, as Trustees of the UNITED MINE WORKERS OF AMERICA 1950 PENSION PLAN and the UNITED MINE WORKERS OF AMERICA 1974 PENSION PLAN, Plaintiffs,
v.
WESTERN COAL CORPORATION and STOCKTON COAL COMPANY, Defendant



The opinion of the court was delivered by: RICHEY

 CHARLES R. RICHEY UNITED STATES DISTRICT JUDGE.

 INTRODUCTION

 Before the Court are plaintiff's motion for summary judgment and opposition thereto, defendant's motion for summary judgment and opposition thereto, and supplemental memoranda. For the reasons stated herein, the Court finds that there are no material facts in dispute, and that plaintiffs are entitled to judgment as a matter of law. The Court also finds that this is a matter which occasions no need for a hearing.

 BACKGROUND

 Plaintiffs are the Trustees of the United Mine Workers of America ("UMWA") 1950 Pension Plan (the "1950 Plan") and the UMWA 1974 Pension Plan (the "1974 Plan"). They brought this suit on behalf of the 1950 Plan and the 1974 Plan (hereinafter collectively referred to as "the Plans") against Western Coal Corporation ("Western") and Stockton Coal Company ("Stockton"), a division of Western, to collect withdrawal liability under the Employee Retirement Income Security act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. § 1001 et seq. As fiduciaries and sponsors of the Plans, see 29 U.S.C. §§ 1002(21), 1002(16)(b)(iii), and 1301(a)(10)(A), plaintiffs are authorized to bring this action by sections 502(a)(3) and 4301(a)(1) of ERISA, 29 U.S.C. §§ 1132(a)(3) and 1451(a)(1).

 The Plans are multiemployer pension plans within the meaning of ERISA § 4001(a)(3), 29 U.S.C. § 1301(a)(3). The Plans were established by the National Bituminous Coal Wage Agreement of 1974, and continued in effect by the 1978 Wage Agreement and the 1981 Wage Agreement.

 Defendant Western Coal Corporation ("Western") is a West Virginia corporation. Defendant Stockton Coal Company was a division of Western for certain of its mining operation. (For ease of reference, the Court will refer to Western and Stockton collectively as "Western/Stockton"). Western/Stockton was a member of the Bituminous Coal Operator's Association, Inc., ("BCOA"), a multiemployer bargaining group in the coal industry. As a BCOA member, Western/Stockton was signatory to, and bound by, the provisions of the 1974, 1978 and 1981 Wage Agreements.

 In January, 1982, Western/Stockton sold substantially all of its assets to Energy Coal Income Limited Partnership 1981-I ("ECILP") in exchange for a small amount of cash and promissory notes. On April 1, 1983, ECILP filed a voluntary petition under Chapter Eleven of the Bankruptcy Code in the Eastern District of Kentucky.

 The records maintained by the Plans indicate that Western ceased operations in January, 1982, and that Stockton ceased operations in May, 1982. Thus, Western/Stockton ceased to make contributions and to be a participating employer under the Plans during the Plan year ending June 30, 1982. The Trustees of the Plans determined that Western and Stockton had withdrawn from the plans during that year, and, by letters of June 24, 1983, informed Western and Stockton of this determination. See 29 U.S.C. § 1381. The Trustees demanded payment from Western of withdrawal liability in the amount of $2,291,876.84 for the 1950 Plan, and $637,896.99 for the 1974 Plan. Mistakenly believing Stockton to be an entity distinct from Western, the Trustees demanded payment from Stockton of withdrawal liability in the amount of $192,895.30 for the 1950 Plan, and $56,659.32 for the 1974 Plan. The Trustees indicated that these amounts would be payable in monthly installments beginning September 2, 1983.

 By letters dated September 22, 1983, counsel for Western/Stockton advised the Trustees that Stockton was merely a trade name used by Western for certain mining operations, and thus not an entity separate and distinct from Western. The letters also requested the Plans to reconsider their withdrawal liability determinations. By letter dated April 17, 1984, the Plans recognized that Stockton was not distinct from Western, but advised Western/Stockton that the Plans' initial withdrawal liability determinations had been correct.

 By letters dated March 19, 1984, Western/Stockton requested arbitration of the amount of its withdrawal liability. By letters dated April 18 and April 23, 1984, counsel for the Plans repeated the demand for payments. The letters further advised that Western/Stockton had failed to properly institute arbitration pursuant to the rules adopted by the Plans, which rules generally incorporate rules promulgated by the American Arbitration Association. The letter indicated that the Plans would treat the arbitration request as proper if Western/Stockton would comply with the Plans' arbitration rules within 15 days. Western/Stockton made no further attempt to initiate arbitration.

 By letter dated January 4, 1985, the Plans revised the calculations of Western/Stockton's withdrawal liability to the 1974 Plan based upon a recalculation of unfunded vested benefits as of June 30, 1981. The Plans determined that Western/Stockton's revised withdrawal liability amounted to $883,851.19. Western/Stockton has not made any withdrawal liability payments, and plaintiffs filed this action to collect the payments, liquidated damages, accrued interest, attorney's fees, and expenses.

 DEFENDANT CANNOT RELY ON THE DOCTRINE OF LACHES

 Defendant contends that plaintiffs' complaint is barred by the doctrine of laches. This ...


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