Gciu-Employer Retirement Fund et al v. Quad Graphics, Inc.

NOTICE OF MOTION AND MOTION for Partial Summary Judgment as to First Claim for Relief

C.D. Cal.January 13, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Attorneys for Plaintiffs, GCIU-Employer Retirement Fund and Board of Trustees of the GCIU-Employer Retirement Fund UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA GCIU-EMPLOYER RETIREMENT FUND AND BOARD OF TRUSTEES OF THE GCIU-EMPLOYER RETIREMENT FUND Plaintiffs, v. QUAD/GRAPHICS, INC., Defendant. CASE NO. 2:16-cv-00100-ODW-AFM NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF DATE: February 27, 2017 TIME: 1:30 pm DEPT: Courtroom 5D, 5th Floor Trial Date: June 6, 2017 TO DEFENDANT AND ITS ATTORNEY OF RECORD. NOTICE IS HEREBY given that on February 27, 2017 at 1:30 p.m., or as soon thereafter as counsel may be heard by the above-entitled court, located at 350 West 1st Street, Los Angeles, CA. 90012, Plaintiffs, GCIU-EMPLOYER Anthony T. Ditty (SBN 105597) tonyditty@gmail.com LAW OFFICES OF ANTHONY T. DITTY 1017 E. Grand Ave. Escondido, CA 92025 Tele (760) 747-1200 Fax (760) 747-1188 Kerry K. Fennelly (SBN 232621) Valentina S. Mindirgasova (SBN 272746) kfennelly@donaldsonandcornwell.com vmindirgasova@donaldsonandcornwell.com Cornwell & Baldwin 1017 E. Grand Avenue Escondido, CA 92025 Phone: (760) 747-1100 Fax: (760) 747-1188 Case 2:16-cv-00100-ODW-AFM Document 56 Filed 01/13/17 Page 1 of 2 Page ID #:930 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY RETIREMENT FUND AND BOARD OF TRUSTEES OF THE GCIU- EMPLOYER RETIREMENT FUND (collectively “Plaintiffs” or “ERF”), will and hereby do move this Court for summary adjudication of their first claim for relief for the collection of unpaid withdrawal liability payments, interest, liquidated damages, attorneys’ fees and costs on the ground that the moving party is entitled to judgment on this claim as a matter of law. There is no genuine issue of material fact as to this claim and the law clearly establishes Defendant’s obligation to make the interim withdrawal liability payments prior to the entry of the arbitrator’s final award, Plaintiff’s right to those payments and Plaintiffs’ right to interest, liquidated damages, and attorneys’ fees. This Motion is based on this Notice of Motion and Motion; on the Memorandum of Points and Authorities, the Separate Statement of Uncontroverted Facts, and the Declaration of Judi Knore, concurrently filed and served; all pleadings and papers filed in this action; and upon such other matters as may be presented to the Court at the time of hearing or be requested to take judicial notice. This Motion is made following the Conference of Counsel pursuant to Local Rule 7-3, which took place on January 10, 2017. Dated: January 13, 2017 LAW OFFICES OF ANTHONY T. DITTY CORNWELL & BALDWIN By: __s/ Anthony T. Ditty___________________ Anthony T. Ditty Attorneys for Plaintiffs, GCIU-EMPLOYER RETIREMENT FUND AND BOARD OF TRUSTEES OF THE GCIU-EMPLOYER RETIREMENT FUND Case 2:16-cv-00100-ODW-AFM Document 56 Filed 01/13/17 Page 2 of 2 Page ID #:931 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Attorneys for Plaintiffs, GCIU-Employer Retirement Fund and Board of Trustees of the GCIU-Employer Retirement Fund UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA GCIU-EMPLOYER RETIREMENT FUND AND BOARD OF TRUSTEES OF THE GCIU-EMPLOYER RETIREMENT FUND Plaintiffs, v. QUAD/GRAPHICS, INC., Defendant. CASE NO. 2:16-cv-00100-ODW-AFM PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF DATE: February 27, 2017 TIME: 1:30 pm DEPT: Courtroom 5D, 5th Floor Trial Date: June 6, 2017 Plaintiffs, GCIU-EMPLOYER RETIREMENT FUND AND BOARD OF TRUSTEES OF THE GCIU-EMPLOYER RETIREMENT FUND (collectively “Plaintiffs” or “ERF”), provide the following points and authorities in support of Anthony T. Ditty (SBN 105597) tonyditty@gmail.com LAW OFFICES OF ANTHONY T. DITTY 1017 E. Grand Ave. Escondido, CA 92025 Tele (760) 747-1200 Fax (760) 747-1188 Kerry K. Fennelly (SBN 232621) Valentina S. Mindirgasova (SBN 272746) kfennelly@donaldsonandcornwell.com vmindirgasova@donaldsonandcornwell.com Cornwell & Baldwin 1017 E. Grand Avenue Escondido, CA 92025 Phone: (760) 747-1100 Fax: (760) 747-1188 Case 2:16-cv-00100-ODW-AFM Document 56-1 Filed 01/13/17 Page 1 of 9 Page ID #:932 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 PLAINTIFFS MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY their motion for summary partial summary judgment adjudicating their first claim for relief: SUMMARY OF MOTION. By law, an employer that is assessed withdrawal liability under the Employee Retirement Income and Security Act (ERISA) is required to make payments on that assessment even if the assessment is challenged in arbitration. The payments (commonly referred to as “interim payments”) must be made until the arbitrator issues his final award. Here, ERF issued an assessment to Defendant, Quad/Graphics Inc. (Quad), which Quad then challenged by way of arbitration. In the middle of that arbitration, Quad unilaterally decided to stop making the interim payments it was required to make. This occurred approximately eleven months before the final award was issued. As a result, Quad failed to make over $3.5 million in interim payments which form the basis of this motion in which ERF asks for an award of those payments, accrued interest, liquidated damages, and attorney’s fees. Central to this Motion is the “pay now dispute later” doctrine Congress enacted as part of ERISA. By statutory mandate, employers are required to make assessed withdrawal liability payments notwithstanding an ongoing dispute. By requiring that these interim payments are made until the dispute is resolved, Congress intended to protect pension plans from delays in payment and prevent employers from using litigation tactics to withhold payment as leverage against the plans. Quad’s violation of that statutory mandate gives rise to ERF’s first claim for relief in which ERF seeks an award of $3,532,663.42 in unpaid assessment installments, 10% interest from the date of each missed monthly payment, liquidated damages of 20% on the payments that were not made, and a mandatory award of ERF’s attorney’s fees. Case 2:16-cv-00100-ODW-AFM Document 56-1 Filed 01/13/17 Page 2 of 9 Page ID #:933 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 PLAINTIFFS MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY As will be discussed, the burden for this motion requires proof of only three simple elements: (1) that there was an assessment of withdrawal liability; (2) that notice of that assessment was given to the Defendant; and (3) that the Defendant did not make payments as set forth in that assessment as required by statute. Not one of these facts is in dispute. First, there was an assessment of which Quad was aware in that Quad had made payments on that assessment until it unilaterally decided to stop. Second, Quad admits that the cessation of payments took place approximately eleven months prior to the issuance of a final award in the arbitration. The obligation to make the installment payments as set forth in the payment schedule of the assessments is absolute. Payments must be made regardless of the strength or ultimate merits of an employer’s challenge to the assessment. Moreover, the employer’s obligation to make withdrawal liability payments during arbitration is not vitiated even where it ultimately prevails on its challenge to the assessment. The failure to make those payments which are due before the issuance of the final award is a violation of statute giving rise to a separate cause of action. Here, the undisputed facts will demonstrate that ERF is entitled to judgment on the first claim of relief as follows: $3,532,663.42 in principal, $706,532.68 in liquidated damages, 10% interest on each installment from the date it was due until judgment (calculated to be $439,317.27 as of February 27, 2017, the date set for hearing of this Motion) plus attorney’s fees. SUMMARY OF RELEVANT FACTS Relevant to the present Motion, the following allegations of ERF’s First Amended Complaint (FAC) have been admitted in Quad’s Answer: 1. This court has jurisdiction over ERF’s interim withdrawal liability payment claim. (Separate Statement in Support of Motion (“SS”) #1.) Case 2:16-cv-00100-ODW-AFM Document 56-1 Filed 01/13/17 Page 3 of 9 Page ID #:934 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 PLAINTIFFS MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY 2. ERF and its Board of Trustees are authorized to bring this action for collection of interim payments as a Multi-Employer Pension Plan under 29 U.S.C. §1451. (SS #2.) 3. Quad is a successor in interest to Quebecor World (USA), Inc., an entity that was obligated to make contributions to ERF under various Collective- Bargaining Agreements (CBA’s) on behalf of employees at a facility in Versailles Kentucky. (SS #3.) 4. In December 2010, the employees at Quad’s Versailles facility voted to decertify their union and Quad notified ERF it was ceasing participation in the Plan at all of its facilities. (SS #4.) 5. In February, 2013, ERF assessed Quad for a 2010 partial withdrawal liability and a 2011 complete withdrawal liability pursuant to the provisions of the Employee Retirement Income and Security Act (ERISA) 29 U.S.C. §§1382 and 1385, and pursuant to 29 U.S.C. §1399 notified Quad it was required to make $321,151.22 in monthly payments for 20 years on the 2010 partial withdrawal and $351,501.80 in monthly payments for approximately 8 ½ years on the 2011 complete withdrawal. (SS #5.) 6. Quad challenged the ERF’s assessments and the dispute was submitted to arbitration pursuant to 29 U.S.C. §1401. (SS #6.) 7. Quad did not make its $321,151.22 monthly interim withdrawal liability payments on the 2010 partial withdrawal liability assessment after June, 2015. (SS #7.) 8. ERF demanded Quad make the monthly interim payments of $321,151.22 in an after July, 2015 but Quad has refused. (SS #8.) SUMMARY OF RELEVANT LAW Quad was required to make interim payments on ERF’s withdrawal liability assessments from the date it was notified of the assessment, even if there was a Case 2:16-cv-00100-ODW-AFM Document 56-1 Filed 01/13/17 Page 4 of 9 Page ID #:935 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 PLAINTIFFS MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY dispute subject to arbitration. 29 U.S.C. § 1399(c) (2). That obligation continued “until the arbitrator issues a final decision with respect to the determination submitted for arbitration.” Lads Trucking Co. v. Board of Trustees of Western Conference of Teamsters Pension Trust Fund, 777 F.2d 1371, 1374-75. (9th Cir. 1985). Quad violated the statutory requirement to make the interim payments pursuant to ERF’s assessed schedule while the arbitration of the dispute over ERF’s assessment was ongoing. (SS #9). The cessation in payments took place in June of 2015, while the arbitrator took further evidence in November of 2015 to address some of the issues submitted for decision. The final arbitration award was not issued until May 17, 2016. (SS #10). Quad failed to make eleven of the monthly payments it was required to make prior to the entry of the final award (SS #11), as required by 29 U.S.C. §1399(c)(2), regardless of the merits of the employer’s claim: Congress has effectively determined that pension funds will be irreparably harmed unless employers are enjoined to make interim payments while litigation proceeds. By enacting the withdrawal liability provisions, Congress has concluded that the uninterrupted flow of payments is important in itself, Pantry Pride Inc. v. Retail Clerks Tri State-Pension Fund, 747 F.2d 169,171 (3d Cir. 1984), and that the ultimate recovery of payments will not suffice to make the Fund whole. Congress has likewise determined that neither party's probability of success in litigation is relevant: interim payments must be made regardless. Galgay v. Beaverbrook Coal Co., 105 F.3d 137, 140 (3d Cir. 1997) (emphasis added). In an action for the recovery of interim payments, a Fund need only prove three simple elements: (1) withdrawal liability was assessed; (2) the employer was notified of the assessment; and (3) the employer failed to pay the assessed amounts. “That is all the statute requires.” Id. at 141; Debrecenci v. Merchants Terminal Case 2:16-cv-00100-ODW-AFM Document 56-1 Filed 01/13/17 Page 5 of 9 Page ID #:936 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 PLAINTIFFS MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY Corporation, 740 F. Supp. 894, 897 (D. Mass. 1989), aff'd, 889 F.2d 1 (1st Cir. 1989). As noted in, Debrecenci, “enforcement of interim payments is a relatively mechanical statutory obligation for the courts and not the occasion for an extended factual inquiry.” Id. These three simple elements have been satisfied. Pursuant to the Federal Rules of Civil Procedure (“FRCP”) Rule 56(c), summary judgment is required when the evidence reviewed in the light most favorable to the nonmoving party shows there is no genuine issue of material fact. The moving party bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-324 (1986). Once the moving party has met its initial burden, FRCP Rule 56(e) requires the nonmoving party to go beyond the pleadings and identify facts that show a genuine issue for trial. Id. at 323-324. Here, ERF has satisfied the three elements necessary to establish liability. As for the calculation of damages, it is a simple mathematical process based on undisputed facts as well. Accordingly, the motion should be granted. DAMAGES AND THE CALCULATION OF THE AWARD Having established the necessary elements for liability, ERF is entitled to partial summary judgment on its first claim for relief directing Quad to pay the eleven interim payments that Quad was required to make. This represents a principal total of $3,532,663.42. (SS #15.) In addition, ERF is entitled to recover interest, liquidated damages and attorney’s fees. Under 29 U.S.C. § 1451(b), actions to collect delinquent withdrawal liability payments are treated in the same manner as delinquent employer contributions under section 29 U.S.C. § 1145. Lads Trucking Co. v. Board of Trustees of the Western Conference of Teamsters Pension Trust, 777 F.2d at 1373, n.2. When a plan obtains a judgment for delinquent contributions under 29 U.S.C. § 1145, “the court shall award the plan” the unpaid contributions, interest thereon, Case 2:16-cv-00100-ODW-AFM Document 56-1 Filed 01/13/17 Page 6 of 9 Page ID #:937 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 PLAINTIFFS MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY fees, and costs. 29 U.S.C. § 1132(g)(2). These additional amounts are mandatory in successful delinquent contribution suits (see Operating Engineers Pension Trust v. Beck Engineering & Surveying Co., 746 F.2d 557, 569 (9th Cir. 1984)), as well as, actions to collect delinquent withdrawal liability payments. Lads Trucking Co. v. Board of Trustees of the Western Conference of Teamsters Pension Trust, 777 F.2d at 1374. Moreover, an employer cannot escape the obligation to pay interest, liquidated damages and costs, even if it ultimately prevails on its challenge in arbitration. Interest on the withdrawal liability payments accrues from the date of each missed payment and the liquidated damages are assessed on the total amount of payments missed. Chicago Truck Drivers, Helpers and Warehouse Union (Independent) Pension Fund v. Century Motor Freight, Inc., 125 F.3d 526, 535 (7th Cir. 1997). Century also notes that: A fund is entitled to liquidated damages (up to 20% of withdrawal liability) if an employer refuses to pay its liability at least on an installment basis until a court enters a judgment against it. This penalty holds true even if the employer has (as is the case here) timely invoked arbitration. The liquidated damages are separate from the underlying withdrawal liability itself; they relate to the employer's violation of the “pay now, arbitrate later” scheme in ERISA. In this case, even if [Quad] ultimately prevails in arbitration, it will not be able to recoup the liquidated damages assessed against it as a penalty for litigating before paying. Id. at 534. (emphasis added). The terms of ERF’s plan set the applicable interest rate for litigated contribution defaults at 10% (SS # 11), and the amount of liquidated damages at 20% (SS # 12). Here, liquidated damages total $706,532.68 (SS # 16) and accrued interest as of February 27, 2017 is $439,317.27. (SS #17.) Interest continues to accrue at an additional $967.85 per day thereafter. (SS #17.) Case 2:16-cv-00100-ODW-AFM Document 56-1 Filed 01/13/17 Page 7 of 9 Page ID #:938 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 PLAINTIFFS MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY ERF IS ENTITLED TO RECOVER ITS FEES “Under ERISA, the award of attorneys' fees to a pension plan is mandatory in all actions to collect delinquent contributions. This mandatory attorneys' fees provision applies in all actions to collect delinquent contributions owed under § 1145, including actions to collect unpaid employer withdrawal liabilities.” Lads Trucking Co. v. Board of Trustees of Western Conference of Teamsters Pension Trust Fund, 777 F.2d 1371, 1373–1374 (9th Cir. 1985) (internal citations omitted). Since the total amount of fees and costs will depend upon the amount of additional work needed to address any opposition and oral argument on this motion, ERF proposes to submit a fee application following the court’s ruling. CONCLUSION The law is clear: Defendant was required to make all interim payments on its withdrawal liability assessment until the issuance of a final award in the arbitration proceedings. The facts are clear that the Defendant failed to make eleven monthly payments of $321,151.22. The calculation of ERF’s damages is a simple mathematical equation: (1) the total amount of the principal is eleven times $321,151.22; (2) the total amount of interest is 10% from the date of each payment missed; and, (3) the total amount of liquidated damages is 20% of the total unpaid assessments. As such, ERF has carried its burden for summary adjudication of the first claim for relief and entry of an award against Quad as follows: Principal: $3,532,663.42 Liquidated Damages: $706,532.68 Accrued Interest of $439,317.27 as of February 27, 2017, plus $967.85 for day for each day thereafter. Attorney’s fees: in an amount subject to application following the award on this motion. Case 2:16-cv-00100-ODW-AFM Document 56-1 Filed 01/13/17 Page 8 of 9 Page ID #:939 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 PLAINTIFFS MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY Based on the foregoing, Plaintiffs respectfully request that this court award judgment for the amounts set forth above, and award attorney’s fees in an amount to be determined on application following this Court’s ruling. Respectfully submitted, Dated: January 13, 2017 LAW OFFICES OF ANTHONY T. DITTY CORNWELL & BALDWIN By: __s/ Anthony T. Ditty___________________ Anthony T. Ditty Attorneys for Plaintiffs, GCIU-EMPLOYER RETIREMENT FUND AND BOARD OF TRUSTEES OF THE GCIU-EMPLOYER RETIREMENT FUND Case 2:16-cv-00100-ODW-AFM Document 56-1 Filed 01/13/17 Page 9 of 9 Page ID #:940 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Attorneys for Plaintiffs, GCIU-Employer Retirement Fund and Board of Trustees of the GCIU-Employer Retirement Fund UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA GCIU-EMPLOYER RETIREMENT FUND AND BOARD OF TRUSTEES OF THE GCIU-EMPLOYER RETIREMENT FUND Plaintiffs, v. QUAD/GRAPHICS, INC., Defendant. CASE NO. 2:16-cv-00100 ODW-AFM PLAINTIFFS’ SEPARATE STATEMENT IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF DATE: February 27, 2017 TIME: 1:30 pm DEPT: Courtroom 5D, 5th Floor Trial Date: June 6, 2017 Plaintiffs, GCIU-Employer Retirement Fund and Board of Trustees of the GCIU-Employer Retirement Fund (collectively “Plaintiffs” or “ERF”), hereby submit the following Separate Statement of Uncontroverted Facts together with Anthony T. Ditty (SBN 105597) tonyditty@gmail.com LAW OFFICES OF ANTHONY T. DITTY 1017 E. Grand Ave. Escondido, CA 92025 Tele (760) 747-1200 Fax (760) 747-1188 Kerry K. Fennelly (SBN 232621) Valentina S. Mindirgasova (SBN 272746) kfennelly@donaldsonandcornwell.com vmindirgasova@donaldsonandcornwell.com Cornwell & Baldwin 1017 E. Grand Avenue Escondido, CA 92025 Phone: (760) 747-1100 Fax: (760) 747-1188 Case 2:16-cv-00100-ODW-AFM Document 56-2 Filed 01/13/17 Page 1 of 5 Page ID #:941 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 PLAINTIFFS’ SEPARATE STATEMENT IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY references to evidence in support of their Motion for Partial Summary Judgment adjudicating their first claim for relief for collection of interim withdrawal liability payments, interest, liquidated damages and attorney's fees and costs against Defendant, Quad/Graphics, Inc. (“Quad”). UNCONTROVERTED FACTS SUPPORTING EVIDENCE 1. This court has jurisdiction over ERF’s interim withdrawal liability payment claim. 1. PLAINTIFFS’ FIRST AMENDED COMPLAINT (“FAC”), Paragraph 7, admitted in Answer. 2. ERF and its Board of Trustees are authorized to bring this action for collection of interim payments as a multi-employer pension plan under 29 U.S.C. §1451. 2. FAC, Paragraph 11 admitted in Answer. 3. Quad is a successor in interest to Quebecor World (USA), Inc., an entity that was obligated to make contributions to ERF under various collective- bargaining agreements (CBA’s) on behalf of employees at a facility in Versailles, Kentucky. 3. FAC, Paragraph 13 admitted in Answer. 4. In December 2010, Quad’ employees at the Versailles facility voted to decertify their union and Quad notified ERF it was ceasing participation in the plan at all of its facilities. 4. FAC, Paragraph 14 admitted in Answer. 5. In February, 2013, ERF assessed Quad for a 2010 partial withdrawal and a 2011 complete withdrawal pursuant to the provisions of the Employee Retirement Income and Security Act (ERISA) 29 U.S.C. §§1382, 1385 and 1399 and notified 5. FAC, Paragraph 16 admitted in Answer. Case 2:16-cv-00100-ODW-AFM Document 56-2 Filed 01/13/17 Page 2 of 5 Page ID #:942 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 PLAINTIFFS’ SEPARATE STATEMENT IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY UNCONTROVERTED FACTS SUPPORTING EVIDENCE Quad it was required to make $321,151.22 in monthly payments for 20 years on the 2010 partial withdrawal and $351,501.80 per month for approximately 8 ½ years for the 2011 complete withdrawal. 6. Quad challenged the ERF’s assessments and the dispute was submitted to arbitration pursuant to 29 U.S.C. §1401. 6. FAC, Paragraphs 18-19, admitted in Answer. 7. Quad did not make any interim withdrawal liability payments on the 2010 partial withdrawal liability assessment of $321,151.22 after June 2015. 7. FAC, Paragraph 33; admitted in Answer. 8. ERF demanded Quad make the monthly interim payments of $321,151.22 in an after July 2015 of $321,151.22 but Quad has refused. 8. KNORE DECLARATION, Paragraph 10. 9. Quad’s refusal to make interim payments and its cessation of payments took place while the arbitration of the ERF’s assessment was ongoing. 9. KNORE DECLARATION, Paragraph 11. 10. As noted in the Final Award, the arbitrator took further evidence in November 2015 to address some of the issues submitted in the arbitration and did not issue his final award until May 17, 2016. 10. KNORE DECLARATION, Paragraph 11. 11. In total, Quad failed to make 11 interim payments it was required to make prior to the issuance of the final award in arbitration. 11. KNORE DECLARATION, Paragraph 11. Case 2:16-cv-00100-ODW-AFM Document 56-2 Filed 01/13/17 Page 3 of 5 Page ID #:943 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 PLAINTIFFS’ SEPARATE STATEMENT IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY UNCONTROVERTED FACTS SUPPORTING EVIDENCE 12. Article IX section 7 of the ERF’s Trust Agreement provides for the collection of 20% liquidated damages on unpaid contributions in the event of litigation. 12. KNORE DECLARATION, Paragraph 13; Exhibit 1 to KNORE DECLARATION. 13. Article IX section 6 of the ERF’s Retirement Benefit Plan provides for the collection of 10% interest on unpaid contributions in the event of litigation. 13. KNORE DECLARATION, Paragraph 13; Exhibit 1 to KNORE DECLARATION 14. ERF retained counsel and filed a Complaint in the instant matter on January 6, 2016 to collect the interim withdrawal liability payments, interest and liquidated damages. 14. KNORE DECLARATION, Paragraph 14. 15. Quad owes $3,532,663.42 for the 11 unpaid interim payments that were required to be paid prior to issuance of the arbitrator’s final award. 15. KNORE DECLARATION, Paragraph 11. 16. Liquidated damages of 20% on the $3,532,663.42 in unpaid contributions total $706,532.68. 16. KNORE DECLARATION, Paragraph 15. 17. Interest on the unpaid contributions at 10% through February 27, 2017 totals $439,317.27with interest continuing to accrue at the rate of $967.85 for each day thereafter. 17. KNORE DECLARATION, Paragraph 15. Case 2:16-cv-00100-ODW-AFM Document 56-2 Filed 01/13/17 Page 4 of 5 Page ID #:944 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 PLAINTIFFS’ SEPARATE STATEMENT IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF LAW OFFICES OF ANTHONY T. DITTY Respectfully submitted, Dated: January 13, 2017 LAW OFFICES OF ANTHONY T. DITTY CORNWELL & BALDWIN By: __s/ Anthony T. Ditty___________________ Anthony T. Ditty, Attorneys for Plaintiffs Case 2:16-cv-00100-ODW-AFM Document 56-2 Filed 01/13/17 Page 5 of 5 Page ID #:945 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Attorneys for Plaintiffs, GCIU-Employer Retirement Fund and Board of Trustees of the GCIU-Employer Retirement Fund UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA GCIU-EMPLOYER RETIREMENT FUND AND BOARD OF TRUSTEES OF THE GCIU-EMPLOYER RETIREMENT FUND Plaintiffs, v. QUAD/GRAPHICS, INC., Defendant. CASE NO. 2:16-cv-00100 ODW-AFM DECLARATION OF JUDI KNORE IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT ON FIRST CLAIM FOR RELIEF DATE: February 27, 2017 TIME: 1:30 pm DEPT: Courtroom 5D, 5th Floor Trial Date: June 6, 2017 I, Judi Knore, declare as follows: 1. I am the Assistant Vice President with Benefit Programs Administration, the third-party administrator for Plaintiffs, GCIU- EMPLOYER RETIREMENT FUND and BOARD OF TRUSTEES OF THE GCIU-EMPLOYER RETIREMENT FUND, in the above-entitled action. Anthony T. Ditty (SBN 105597) tonyditty@gmail.com LAW OFFICES OF ANTHONY T. DITTY 1017 E. Grand Ave. Escondido, CA 92025 Tele (760) 747-1200 Fax (760) 747-1188 Kerry K. Fennelly (SBN 232621) Valentina S. Mindirgasova (SBN 272746) kfennelly@donaldsonandcornwell.com vmindirgasova@donaldsonandcornwell.com Cornwell & Baldwin 1017 E. Grand Avenue Escondido, CA 92025 Phone: (760) 747-1100 Fax: (760) 747-1188 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 1 of 29 Page ID #:946 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 DECLARATION OF JUDI KNORE IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT ON FIRST CLAIM OF RELIEF LAW OFFICES OF ANTHONY T. DITTY 2. I have personal knowledge of each of the facts set forth in this Declaration and can competently testify thereto except as to those matters stated on information or belief and, as to those matters, I believe them to be true. 3. This Declaration is submitted in support of Plaintiffs’ Motion for Partial Summary Judgment adjudicating its claim for collection of unpaid interim withdrawal liability payments due on an assessment of withdrawal liability against Quad/Graphics, Inc. (“Quad”). 4. Some of my day-to-day duties include assisting in the determination of employer withdrawals, issuing notifications of withdrawal liability to employers that have withdrawn from the Plaintiff Fund, monitoring the timeliness of payments of withdrawal liability from employers, notifying employers in the event payments become delinquent, and assisting with further collection efforts as necessary. Through these duties, I am familiar with the instant matter in terms of the Plaintiff Fund’s plan documents governing withdrawal liability assessments and payments, and collection procedures as to these payments. 5. The Board of Trustees of the Fund is comprised of the present Trustees who are the named fiduciaries and the plan sponsor of the Fund as set forth under Article III, Section 2 of the Fund’s Trust Agreement. A true and correct copy of those relevant provisions of the Trust Agreement is attached hereto as Exhibit 1, page 6. 1 Payment Obligation for Withdrawal Liability 6. Plaintiff Board of Trustees, as a named fiduciary, is authorized to bring this action on behalf of the Fund to collect the withdrawal liability owed by Defendant as well as any delinquent employee benefit pension contribution 1 Per this Court’s directive that only relevant portions of documents be submitted rather than the entire lengthy document, only those sections referenced are provided, however, the entire document can be lodged on request. Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 2 of 29 Page ID #:947 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 DECLARATION OF JUDI KNORE IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT ON FIRST CLAIM OF RELIEF LAW OFFICES OF ANTHONY T. DITTY payments. 7. Plaintiff Fund is also authorized to bring this action in its own name pursuant to Article VIII, Section 18 of the Fund’s Trust Agreement, attached as Exhibit 1, page 7. 8. After receiving notification from Quad that its employees had voted to decertify their union at the Versailles facility, the Fund determined that, as of 2010, Defendant permanently ceased to have an obligation to contribute to the Fund for its Versailles Facility effectuating a partial withdrawal from the Fund. After receiving notice that the remaining Quad facilities were withdrawing as well, the Fund determined Quad had effectuated a complete withdrawal from the Fund in 2011 as to its other facilities. 9. Once the Fund determined Quad had effectuated a partial and a complete withdrawal, it sent Quad a Notice and Demand for Payment (“Notice & Demand”) dated February 1, 2013. The Notice & Demand set forth a schedule of withdrawal liability payments due from Quad as follows: (a) $321,151.22 in monthly payments for 20 years on the 2010 partial withdrawal and (b) $351,501.80 per month for approximately 8 ½ years for the 2011 complete withdrawal. A true and correct copy of the Notice & Demand is attached hereto as Exhibit 2. 10. Quad began making payments pursuant to Notice and Demand schedules for both assessments and while making these payments it initiated arbitration to challenge the assessments. The last $321,151.22 monthly payment made by Quad for the 2010 partial withdrawal assessment was received on June 11, 2015. Although ERF has demanded that Quad cure the delinquency, Quad has refused to do so. 11. A final award in the arbitration was not issued until May 17, 2016, therefore, Quad failed to make eleven of the scheduled monthly payments of $321,151.22 between the date of its first missed payment and the issuance of that award. The total amount of missed payments is $3,532,663.42. Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 3 of 29 Page ID #:948 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 4 of 29 Page ID #:949 EXHIBIT 1 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 1 to Declaration of Judi Knore Page 5 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 5 of 29 Page ID #:950 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 1 to Declaration of Judi Knore Page 6 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 6 of 29 Page ID #:951 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 1 to Declaration of Judi Knore Page 7 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 7 of 29 Page ID #:952 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 1 to Declaration of Judi Knore Page 8 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 8 of 29 Page ID #:953 EXHIBIT 2 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 9 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 9 of 29 Page ID #:954 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 10 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 10 of 29 Page ID #:955 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 11 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 11 of 29 Page ID #:956 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 12 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 12 of 29 Page ID #:957 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 13 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 13 of 29 Page ID #:958 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 14 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 14 of 29 Page ID #:959 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 15 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 15 of 29 Page ID #:960 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 16 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 16 of 29 Page ID #:961 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 17 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 17 of 29 Page ID #:962 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 18 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 18 of 29 Page ID #:963 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 19 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 19 of 29 Page ID #:964 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 20 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 20 of 29 Page ID #:965 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 21 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 21 of 29 Page ID #:966 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 22 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 22 of 29 Page ID #:967 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 23 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 23 of 29 Page ID #:968 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 24 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 24 of 29 Page ID #:969 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 25 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 25 of 29 Page ID #:970 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 2 to Declaration of Judi Knore Page 26 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 26 of 29 Page ID #:971 EXHIBIT 3 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 3 to Declaration of Judi Knore Page 27 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 27 of 29 Page ID #:972 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 3 to Declaration of Judi Knore Page 28 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 28 of 29 Page ID #:973 GCIU-Employer Retirement Fund, et al. v. Quad Graphics, Inc. Case No: 2:16-cv-00100-ODW-AFMx Exhibit 3 to Declaration of Judi Knore Page 29 Case 2:16-cv-00100-ODW-AFM Document 56-3 Filed 01/13/17 Page 29 of 29 Page ID #:974 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA GCIU-EMPLOYER RETIREMENT FUND AND BOARD OF TRUSTEES OF THE GCIU-EMPLOYER RETIREMENT FUND Plaintiffs, v. QUAD/GRAPHICS, INC., Defendant. CASE NO. 2:16-cv-00100-ODW-AFM [PROPOSED]ORDER ON PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF The Court, having considered the motion of Plaintiffs, GCIU-Employer Retirement Fund and the Board of Trustees of the GCIU-Employer Retirement Fund (collectively “ERF”), for partial summary judgment adjudicating the first claim for relief for failure to make assessed withdrawal liability interim payments and good cause appearing, hereby GRANTS Plaintiffs’ Motion as follows: 1. Plaintiffs are to recover from Defendant, QUAD/GRAPHICS, INC., and are hereby awarded the sum of $3,532,663.42 representing the 11 monthly interim payments of $321,151.22 said Defendant was obligated to make pending the issuance of a final award in arbitration; Case 2:16-cv-00100-ODW-AFM Document 56-4 Filed 01/13/17 Page 1 of 2 Page ID #:975 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 PROPOSED ORDER ON MOTION FOR PARTIAL SUMMARY JUDGMENT ADJUDICATING FIRST CLAIM FOR RELIEF 2. Plaintiffs are also to recover from Defendant, QUAD/GRAPHICS, INC., and are hereby awarded the sum of $439,317.27 representing ten percent (10%) interest on the unpaid contributions due as interim payments from the date they were due to February 27, 2017 plus an additional $967.85 per day to the date of this award; 3. Plaintiffs are also to recover from Defendant, QUAD/GRAPHICS, INC., and are hereby awarded the sum of $706,532.68 representing liquidated damages on the amount of unpaid contributions due as interim payments calculated at twenty percent 20%; and 4. Plaintiffs are to recover from Defendant, QUAD/GRAPHICS, INC., and are hereby awarded attorney’s fees and costs in an amount to be determined by supplemental application to this court. IT IS SO ORDERED. Date: ________________________ ________________________ Hon. Otis D. Wright II United States District Court Judge Case 2:16-cv-00100-ODW-AFM Document 56-4 Filed 01/13/17 Page 2 of 2 Page ID #:976