The opinion of the court was delivered by: CHARLES R. RICHEY
Before the Court is Defendant Ronald K. Harden's Motion to Vacate and Set Aside Default Judgment and to Dismiss for Want of Personal Jurisdiction, and opposition, reply, and sur-reply
thereto. Pursuant to Fed.R.Civ.P. 60(b)(4), Defendant Ronald K. Harden moves the Court to vacate and set aside the Order of Default and Judgment entered by this Court on July 26, 1993, arguing that this Court lacked personal jurisdiction over Mr. Harden. In that Order, the Court entered a judgment of $ 243,178.35 for Plaintiffs Trustees of the United Mine Workers of America ("UMWA") 1950 and 1974 Pension Plans (the "Plans"), against Defendants Old Mill Mining Company, Inc. ("Old Mill"); Harden Trucking Company, Inc. ("Harden Trucking"); and Ronald K. Harden individually and t/a Harden Construction Company
In light of the pleadings filed, the applicable law, and the entire record herein, the Court shall deny the Defendant's Motion to Vacate and to Dismiss.
This lawsuit arises from the Plaintiffs' pursuit of delinquent pension payments from a construction venture that took place in the early 1980s. According to his Affidavit, Mr. Harden formed the sole proprietorship of Harden Construction in September, 1981 to work on a single construction project in West Virginia for Itmann Coal Co., and Harden Construction did no work after January, 1982. Affidavit of Ronald K. Harden PP 2, 3, 7 ("Harden Affidavit"). Harden alleges that in December, 1984, Defendant Old Mill ceased its operations covered under the 1950 UMWA Plan, and that in December, 1986, both Old Mill and Harden Trucking ceased covered operations under the 1974 UNWA Plan.
On May 27, 1987, the Trustees of the United Mine Workers of America 1950 Pension Plan filed a lawsuit against Old Mill, Harden Trucking, and Harden (collectively known as "Employers"), seeking the recovery of delinquent withdrawal liability payments. The defendants in that case challenged the plaintiffs' use of March, 1984 as a withdrawal date for the calculation of withdrawal liability. On August 13, 1990, the 1950 and 1974 Plans and these defendants signed a Tolling Agreement, which included provisions that Harden Trucking would submit to an audit, and that
Within sixty (60) days of such notification [of post-audit revised withdrawal liability], the Employers may request review from the Plans. The Plans shall then have the opportunity to respond to the request for review. Within one hundred and eighty (180) days of receiving the notification . . ., the Employers may initiate arbitration. However, the issues raised in the request for review and arbitration shall be limited to (1) the date of the withdrawal, and (2) the propriety of the Plans' determination of the numerator of the withdrawal liability fraction. The Employers' obligations in conjunction with any request for arbitration shall be governed by Section 4221(d) of ERISA. Nothing in this Agreement shall restrict the Plans' rights to recover, pursuant to ERISA, the Employers' withdrawal liability, interest, liquidated damages and attorneys fees if the Employers do not initiate arbitration within the time set out in this paragraph . . . . Without limiting the foregoing, if the Employers do not timely request arbitration, the Plans may immediately commence litigation to enforce any and all of their rights under ERISA.
Tolling Agreement, Plaintiff's Opposition Exhibit A, at P 3.
The parties executed a Dismissal Agreement on September 19, 1987, under which Old Mill consented to submit to an audit to determine its withdrawal liability to the 1950 and 1974 Plans. In a letter dated May 20, 1992, the Plans notified the defendants of their revised withdrawal liability, calculated on the basis of a withdrawal date of December, 1984. None of those defendants requested review nor initiated arbitration proceedings regarding the date of withdrawal liability, nor did they make any payments to the Plans.
On May 17, 1993, the Plaintiffs filed this action. On May 28, 1993, Defendants were notified by mail of a status conference scheduled for June 1, 1993. However, Defendants telephoned counsel for the Plaintiffs on May 28, 1993, explaining that they had not yet obtained counsel, and Defendants failed to appear at that status conference. In a letter dated June 4, 1993, Plaintiffs advised Defendants of a second status call scheduled for June 21, 1993, but Defendants did not appear at that conference. Plaintiffs filed an Application for Entry of Default in July 20, 1993, stating that (1) the Defendants were served on June 17, 1993; (2) the Court received proof of service on June 25, 1993; (3) the Defendants' time in which to answer or otherwise respond to the Complaint had expired; and (4) the Defendants failed to enter an appearance. On July 26, 1993, the Court issued an Order of Default and Judgment.
II. COURT'S JURISDICTION OVER DEFENDANT HARDEN
The threshold question before the Court is whether it has jurisdiction over Harden in this case. More specifically, the issue is whether Harden is an employer under the Employment Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA").
Harden asserts that he is not an "employer" under ERISA, and therefore the Plaintiffs may not use ERISA's nationwide service of process provisions. The heart of Harden's argument is that because Harden Construction was out of operation when Old Mill and Harden Trucking withdrew, his sole proprietorship was not a trade or business under common control on that date and is consequently not an "employer" for the purposes of withdrawal liability. Contending that he was out of business well before the date of the alleged earliest withdrawal, he reasons that he dropped out of the controlled group in time to avoid liability.
The Court holds that because Harden qualifies as an employer under ERISA, the Court has jurisdiction and its entry of default judgment against Harden is valid. Once an employer withdraws from a multiemployer pension plan, Section 4001(b)(1) of ERISA, 29 U.S.C. § 1301(b), governs the withdrawal liability of other enterprises. This statute looks to two facets of an enterprise in making this assessment, and any entity that is (1) a "trade or business" and (2) under "common control" with the employer who withdraws is jointly and severally liable for the principal employer's withdrawal liability. Connors v. Incoal, Inc., 301 U.S. App. D.C. 345, 995 F.2d ...