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Wisconsin Laborers Pension Fund v. Bristol Group, LLC

United States District Court, W.D. Wisconsin

January 9, 2020

WISCONSIN LABORERS PENSION FUND, et al. Plaintiffs,
v.
THE BRISTOL GROUP, LLC, METROSCAPES, LLC, Defendants.

          OPINION AND ORDER

          William M. Conley District Judge.

         On September 12, 2018, this court granted partial default judgment in favor of plaintiffs, finding that The Bristol Group, LLC (“Bristol Group”) failed to pay fringe benefit contributions on behalf of its employees. (Dkt. #28.) The court assessed damages against Bristol Group in the amount of $263, 076.40 in favor of plaintiff Wisconsin Laborers Health Fund and $275, 366.10 in favor of plaintiff Building Trades Union Pension Fund. (Id.) In the instant summary judgment motion, plaintiffs argue that defendant Metroscapes, LLC (“Metroscapes”) is a successor to Bristol Group and should be held liable for the judgment already entered against Bristol Group. (Dkts. #48, 49.) Although initially responsive to discovery, Metroscapes has since failed to respond to plaintiffs' requests for admissions, introduce facts, or file briefing opposing plaintiffs' summary judgment motion. Although Metroscapes' failure to respond does not automatically result in a judgment in plaintiffs' favor, the court finds for the reasons discussed below that plaintiffs have proven that no genuine issue of fact exists and that they are entitled to judgment as a matter of law.

         UNDISPUTED FACTS[1]

         A. Parties and Procedural History

         The plaintiffs in this action are four employee benefit plans -- namely, the Wisconsin Laborers Pension Fund; Wisconsin Laborers Health Fund; Wisconsin Laborers Apprenticeship and Training Fund; and Building & Public Works Laborers Vacation Fund (the “Funds”) -- John J. Schmitt, a trustee and fiduciary of the Wisconsin Laborers' Health Fund; the Wisconsin Laborers District Council (“District Council”), a labor union; and the Wisconsin Laborers-Employers Cooperation and Education Trust Fund. Before ceasing operations, Bristol Group was a landscaping business.

         On May 13, 2009, Bristol Group signed a Memorandum of Understanding with the District Council, agreeing to be bound by a collective bargaining agreement (the “CBA”). Under this agreement and subsequent agreements, Bristol Group agreed to pay fringe benefit contributions and submit working dues for each employee covered by the CBA. On November 28, 2017, plaintiffs filed suit against Bristol Group, alleging that it had failed to abide by the terms of the CBA in violation of the Labor-Management Relations Act, 29 U.S.C. § 141, et seq., and the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq.

         After Bristol Group failed to plead or otherwise defend against this lawsuit, the clerk of courts entered default (dkt. #9), and this court subsequently granted default judgment against Bristol Group on September 12, 2018 (dkt. #28). In its decision, the court assessed damages against Bristol Group in the amount of $263, 076.40 in favor of plaintiff Wisconsin Laborers Health Fund and $275, 366.10 in favor of plaintiff Building Trades Union Pension Fund. Meanwhile, plaintiffs amended their complaint to include Metroscapes as a defendant, alleging that it was a successor of Bristol Group. (Dkt. #17.)

         B. Facts Regarding Successor Liability

         On January 15, 2018, Robert Moore, the owner and registered agent of Metroscapes, signed an Operating Agreement with Second Wind Consultants, LLC (“Second Wind”). Under this agreement, Second Wind obtained a 1% interest in and became a manager of Metroscapes. The agreement provided that one of Second Wind's management responsibilities was to structure an asset acquisition deal between Bristol Group and Metroscapes, including ensuring that Metroscapes did not assume any unknown liabilities through the deal and communicating any potential liabilities to Metroscapes.

         By January 15, 2018, Second Wind was aware that Bristol Group was a signatory to the CBA with the District Council and that plaintiffs were claiming that Bristol Group had failed to remit all required contributions to the funds. Further, Second Wind was aware at the time that VJS Construction Services, Inc. (“VJS”) -- a general contractor on projects for which Bristol Group provided work -- was making payments directly to the Funds as a result of Bristol Group's failure to itself remit contributions due for the hours worked by its employees on said projects. On January 30, 2018, Bristol Group ceased operations.

         On April 30, 2018, Metroscapes acquired the assets of the Bristol Group and began operations as a separate corporate entity. Metroscapes retained many of Bristol Group's management, salaried and hourly jobsite employees, and it performed the same type of landscaping work for many of the same customers as Bristol Group. In the acquisition, Metroscapes assumed the obligation to pay $297, 000 to Byline Bank in exchange for the bank's release of liens it had taken on Bristol Group's assets. Previously, Byline Bank had notified Bristol Group in a Notice of Private UCC Sale of Collateral that it intended to sell the collateral for $297, 000. Therefore, the amount paid by Metroscapes to Byline Bank to release the liens was the exact amount the bank had previously requested; Metroscapes is not aware of any facts suggesting that the $297, 000 sales price took into account the possibility of successor liability.

         OPINION

         Summary judgment is appropriate if the moving party “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The court must view all facts and draw all inferences in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Even where, as here, no opposition to the summary judgment motion has been filed, the movant still bears the initial burden of showing that summary judgment is warranted. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-59 (1970).

         In this case, plaintiffs argue that Metroscapes is a successor to Bristol Group and that this court should impose liability upon Metroscapes for the value of the judgment previously entered against Bristol Group. (Pls.' Br. (dkt. #49) at 12.) In general, the federal common law rule provides that “where one company sells its assets to another company, the latter is not liable for the debts and liabilities of the seller.” Tsareff v. ManWeb Servs., Inc., 794 F.3d 841, 845 (7th Cir. 2015). In some circumstances, however, courts have found the imposition of successor ...


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