United States District Court, D. Kansas
MEMORANDUM AND ORDER
Kathryn H. Vratil, United States District Judge.
BAC Local Union 15 Welfare Fund, et al., bring suit against
Williams Restoration Company, Inc. and Fox Holdings, Inc.
Plaintiffs are trust funds under the Labor Management
Relations Act, as amended, Section 302, 29 U.S.C. § 186,
and employee benefit plans under Section 3 of the Employee
Retirement Income Security Act, 29 U.S.C. § 1003
(“ERISA”). Plaintiffs seek to collect unpaid
contributions to an employee benefit plan under a collective
bargaining agreement with Williams Restoration. Pretrial
Order (Doc. #152) filed March 14, 2019 at 5-6.
Plaintiffs also contend that Fox Holdings is a successor to
Williams Restoration and is thus bound and liable for unpaid
contributions. Id. This matter is before the Court
on Plaintiffs' Motion For Partial Summary Judgment
Against Defendant Fox Holdings, Inc. (Doc. #139) filed
February 11, 2019, which seeks to hold Fox Holdings liable as
a matter of law on a theory of successor liability. For
reasons stated below, the Court overrules plaintiffs'
judgment is appropriate if the pleadings, depositions,
answers to interrogatories and admissions on file, together
with the affidavits, if any, show no genuine issue as to any
material fact and that the moving party is entitled to
judgment as a matter of law. See Fed.R.Civ.P. 56(c);
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247
(1986); Hill v. Allstate Ins. Co., 479 F.3d 735, 740
(10th Cir. 2007). A factual dispute is “material”
only if it “might affect the outcome of the suit under
the governing law.” Liberty Lobby, 477 U.S. at
248. A “genuine” factual dispute requires more
than a mere scintilla of evidence in support of a party's
position. Id. at 252.
moving party bears the initial burden of showing the absence
of any genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986); Nahno-Lopez v.
Houser, 625 F.3d 1279, 1283 (10th Cir. 2010). Once the
moving party meets this burden, the burden shifts to the
nonmoving party to demonstrate that genuine issues remain for
trial as to those dispositive matters for which the nonmoving
party carries the burden of proof. Applied Genetics
Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d
1238, 1241 (10th Cir. 1990); see Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
To carry this burden, the nonmoving party may not rest on the
pleadings but must instead set forth specific facts supported
by competent evidence. Nahno-Lopez, 625 F.3d at
Court views the record in the light most favorable to the
nonmoving party. See Deepwater Invs., Ltd. v. Jackson
Hole Ski Corp., 938 F.2d 1105, 1110 (10th Cir. 1991). It
may grant summary judgment if the nonmoving party's
evidence is merely colorable or is not significantly
probative. See Liberty Lobby, 477 U.S. at 250-51. In
response to a motion for summary judgment, a party cannot
rely on ignorance of facts, speculation or suspicion, and may
not escape summary judgment in the mere hope that something
will turn up at trial. Conaway v. Smith, 853 F.2d
789, 794 (10th Cir. 1988); Olympic Club v. Those
Interested Underwriters at Lloyd's London, 991 F.2d
497, 503 (9th Cir. 1993). The heart of the inquiry is
“whether the evidence presents a sufficient
disagreement to require submission to the jury or whether it
is so one-sided that one party must prevail as a matter of
law.” Liberty Lobby, 477 U.S. at 251-52.
purposes of summary judgment, the following facts are either
uncontroverted or where controverted, the contentions of each
party are noted.
Restoration is in the business of waterproofing, concrete and
masonry restoration and roofing. Jeffery Williams is its
president and owner. Fox Holdings is in the business of
commercial and industrial waterproofing and concrete and
masonry restoration. Jordan Fox is its president and owner.
Williams Restoration's Agreement With
10, 2013, Williams Restoration and BAC Local Union 1 executed
an agreement, effective through May 31, 2016 “and
thereafter from year to year unless changed in accordance
with Article XVIII of this Agreement.” Agreement at 1,
Exhibit 5 to Index Of Exhibits (Doc. #142) filed
February 11, 2019 at 1. Among other things, the agreement
obligates Williams Restoration to contribute to the
union's health, welfare, pension, training and education
and promotion funds. Id. at 11. Article XVIII states
that the agreement will expire on May 31, 2016 and that
“[e]ither party desiring changes in provisions of this
Agreement shall notify the other party in writing at least
ninety (90) days prior to May 31, 2016 and this Agreement
than [sic] shall be opened for discussion relative to such
change or changes.” Id. at 17. In addition,
Article XIV provides as follows:
This Agreement shall be binding on all successors and assigns
of the Employer, in the event of a sale of transfer of the
Employer's business, the Employer agrees to give the
Union ten (10) days notification of said proposed sale or
transfer of assets and agrees this contract shall become a
part of and bind the successor Employers.
Id. at 15. Williams Restoration never notified
plaintiffs of any proposed sale or transfer of assets.
point between July and September of 2014, BAC Local Union 1
notified Williams that it had merged with BAC Local Union 15.
Williams Restoration agreed to an amendment, effective
November 1, 2014, which acknowledged the merger, changed the
identity of BAC Local Union 1 to BAC Local Union 15, and
changed where Williams Restoration directed its benefit
payments. See id. at 18.
Asset Purchase Agreement Between Williams Restoration And
Restoration engaged Sunbelt Business Advisors, Inc. to
solicit a sale of its assets. In early September of 2014,
Williams Restoration and Fox Holdings began negotiating an
Asset Purchase Agreement (“APA”). On November 6,
2014, they executed the final APA by which Fox Holdings
purchased assets and equipment from Williams Restoration.
record reveals a genuine issue of material fact whether,
during the course of negotiations, Williams disclosed to Fox
Holdings the agreement of July 10, 2013 or its successor
provision. The parties also dispute whether Williams
Restoration and Fox Holdings specifically revised the APA to
address disclosure of the collective bargaining agreement or
any other union contracts.
Business Of Fox Holdings Post-Sale
advice of Small Business Administration loan officers, Fox
Holdings did not make any changes during the six months
immediately after the asset purchase. After the sale, Fox
Holdings performed the same type of work as Williams
Restoration, conducted business as Williams Restoration had
performed, retained the same non-supervisory employees and
used the same primary material suppliers, telephone number,
mailing address and principal place of business as Williams
Restoration. Until April of 2015, when it gave raises, Fox
Holdings also maintained the same wages for employees.
parties dispute the extent to which Fox Holdings retained the
same supervisory employees and customers. Plaintiffs assert
that Fox Holdings assumed the contracts of Williams
Restoration and performed work on union-only projects, but
Fox Holdings asserts that it has never signed a contract to
work on a union-only project. Fox Holdings also asserts that