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CONNORS v. CALVERT DEV. CO.

November 25, 1985

JOSEPH P. CONNORS, SR., et al., Plaintiffs
v.
CALVERT DEVELOPMENT COMPANY, et al., Defendants


June L. Green, U.S.D.J.


The opinion of the court was delivered by: GREEN

This is an action 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. (1982). Presently before the Court is a motion by plaintiffs to compel interim payment of withdrawal liability. For the reasons stated herein, the Court grants plaintiffs' motion. *fn1"

 I. Statement of Facts

 Plaintiffs are the Trustees of the United Mine Workers of America ("UMWA") 1950 Pension Plan and the UMWA 1974 Pension Plan ("Plans"). The plaintiffs allege that the defendants, two West Virginia corporations, a partnership, and the former individual members in the partnership, are liable to the Plans for withdrawal liability assessed against one of the corporations.

 The defendant corporations are Calvert Development Company ("Calvert") and C. C. & L. Coal Company ("C. C. & L."), both of which were engaged in the contract mining business. Calvert contributed to the Plans as a signatory to the National Bituminous Coal Wage Agreement of 1978 and 1981 ("Agreements"). Defendant C.A.M. Associates ("C.A.M.") was a West Virginia partnership of Retha Calvert, Vincent M. Calvert, Jr., Daniel K. Calvert, John Morgan, Thomas Canterbury, and Kermit Alley ("individual defendants"). Defendant Pauline Alley is the Executrix of the Estate of Kermit Alley. Neither C. C. & L. nor C.A.M. was signatory to the National Bituminous Coal Wage Agreements.

 The individual defendants were the officers and controlling shareholders of Calvert and C. C. & L. Affidavit of Daniel K. Calvert paras. 15(a), 16(a). "The individual defendants are all former partners in C.A.M., . . . which was part of a commonly controlled group of businesses which included Calvert Development." Defendants' Opposition to Plaintiffs' Motion to Compel Interim Payment of Withdrawal Liability ("Defendants' Opposition") at 4-5.

 Pursuant to its obligations under the terms of the Agreements, Calvert was a participating employer in the Plans and was obligated to and did make contributions to the Plans on behalf of its employees covered under the Agreements. Calvert ceased to be a participating employer in the Plans on or about December 23, 1981. As a result, Calvert withdrew from the Plans in a complete withdrawal as that term is defined in section 4203(a) of ERISA, 29 U.S.C. § 1383(a). *fn2"

 Pursuant to Sections 1382(2) and 1399(b)(1), the Trustees notified Calvert of the amount of its withdrawal liability. By letter dated June 16, 1983, the Trustees determined that Calvert incurred withdrawal liability to the 1950 Plan in the amount of $101,647.16. Similarly, on June 20, 1983, the Trustees wrote to Calvert notifying it of withdrawal liability to the 1974 Plan in the amount of $52,096.80. Both letters included schedules determined by the Trustees according to which Calvert was to discharge its liability payments.

 Calvert has failed to make any withdrawal payments to the 1950 Plan or the 1974 Plan. In addition, Calvert never requested review of the Trustees' withdrawal liability assessments within the time period required by Section 1399(b)(2)(A), and failed to initiate arbitration within the time period required by Section 1401(a)(1). The Trustees then made a second demand for payment on September 19, 1983, to which Calvert did not respond.

 On March 29, 1984, the Trustees filed suit against Calvert and other defendants, seeking enforcement of their assessment of withdrawal liability against Calvert, alleging that Calvert is in default under Section 1399(c)(5). On July 9, 1985, the Trustees were granted leave by the Court to file an amended complaint which named as a defendant Pauline Alley as the Executrix of the Estate of Kermit Alley. The Trustees now move to compel defendants to make interim payments under Sections 1399(c)(2), (c)(3), (c)(5), and 1401(b)(1). The Trustees seek to have the defendants pay $153,743.96 in withdrawal liability, plus $36,126.29 in accrued interest as of September 24, 1985, continuing at $42.13 per day until payment is made.

 It appears that Calvert and C. C. & L. are without assets and unable to pay any withdrawal liability. Affidavits of Vince and Daniel K. Calvert at paras. 13, 14(f). The issue in this case, then, is whether the individual partners in C.A.M., which was part of a common control group that included a withdrawing employer, may be held responsible in default for the withdrawal liability of the withdrawing employer.

 II. Conclusions of Law

 Section 1399(c)(2) provides:

 
Withdrawal liability shall be payable in accordance with the schedule set forth by the plan sponsor under subsection (b)(1) beginning no later than 60 days after the date of the demand notwithstanding any request for review or appeal of ...

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