Central States, Southeast & Southwest Areas Pension Fund v. Messina Trucking, Inc.
821 F. Supp. 2d 1000
N.D. Ill.2011Background
- Fund filed ERISA/MPPAA withdrawal liability claim of about $8 million against Messina Control Group and individuals after Messina Trucking's 2007 withdrawal.
- Messina Control Group includes Messina Trucking, Auburn Supply Co., Utica Equipment Co., and Messina Products; Stephen and Florence Messina privately control ≥80% of these entities.
- Auburn Supply previously engaged in real estate and aggregate activities; later primarily leased property and parked trucks; Messina Trucking used Auburn property for operations.
- Messina Products, LLC purportedly engages in real estate development and gravel production/marketing, with tax returns treating rental activity as primary, and Stephen/Florence handling management.
- Stephen and Florence Messina own property adjacent to Auburn and hold rental/lease arrangements, including several residential properties, with rent deposited to their personal account.
- Court explored whether Auburn, Messina Products, and the Messinas were 'trades or businesses' under Groetzinger for withdrawal liability purposes; held Messina Trucking fully withdrew and is liable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Auburn Supply is a trade or business at withdrawal. | Auburn under common control and engaged in trade or business. | Auburn not a trade or business at withdrawal date; liability reserved for arbitration. | Auburn liable; issue reserved for arbitration on some aspects, but fund's liability stands. |
| Whether Messina Products, LLC is a trade or business under Groetzinger. | Messina Products engaged in regular income-generating activity and had business plans and tax practice indicating a trade. | Messina Products was an investment vehicle, not a trade or business. | Messina Products engaged in trade or business; jointly liable for Messina Trucking's withdrawal. |
| Whether Stephen and Florence Messina are liable under § 1301(b)(1) as individuals. | Unincorporated activities (landlord/ rental) qualify as trade or business under Groetzinger. | Ownership of property alone is insufficient to constitute trade or business; cannot impose personal liability. | Messinas not liable; individual liability not established under Groetzinger. |
Key Cases Cited
- McDougall v. Pioneer Ranch Limited Partnership, 494 F.3d 571 (7th Cir. 2007) (applies Groetzinger test to determine trade or business for withdrawal liability)
- Central States, Southeast and Southwest Areas Pension Fund v. White, 258 F.3d 636 (7th Cir. 2001) (distinguish investments from trades or businesses under Groetzinger)
- Central States, Southeast and Southwest Areas Pension Fund v. Fulkerson, 238 F.3d 891 (7th Cir. 2001) (ownership of property alone not a trade or business; focus on conduct and regularity)
- Pioneer Ranch Ltd. P'ship v. Messina, 494 F.3d 577 (7th Cir. 2007) (formal business structure and stated purpose support trade or business finding)
- Central States, Southeast and Southwest Areas Pension Fund v. Personnel, Inc., 974 F.2d 789 (7th Cir. 1992) (evidence of business activity and tax reporting supports trade or business finding)