UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 09-1776

TEAMSTERS JOINT COUNCIL NO. 83 OF THE VIRGINIA PENSION 

FUND; W. ROBERT DAVIDSON, Trustee of the Fund; ANTHONY 

NATIONS, Trustee of the Fund; LINDSAY MARSHALL, Trustee of 

the Fund; JOSEPH AYERS, Trustee of the Fund; MICHAEL 

HUGHES, Trustee of the Fund; JOHN FARRISH, Trustee of the 

Fund,

Plaintiffs – Appellants,

and

RONALD JENKINS,

Plaintiff,

v.

WEIDNER REALTY ASSOCIATES,

Defendant – Appellee,

and

EMPIRE BEEF COMPANY, INCORPORATED,

Defendant.

Appeal from the United States District Court for the Eastern 

District of Virginia, at Richmond. Henry E. Hudson, District 

Judge. (3:08-cv-00340-HEH)

Argued: March 24, 2010 Decided: April 30, 2010
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Before TRAXLER, Chief Judge, DUNCAN, Circuit Judge, and Jackson 

L. KISER, Senior United States District Judge for the Western 

District of Virginia, sitting by designation.

Affirmed in part, vacated in part, and remanded by unpublished 

per curiam opinion.

ARGUED: Jonathan G. Axelrod, BEINS & AXELROD, PC, Washington, 

D.C., for Appellants. Glenn Edward Pezzulo, CULLEY MARKS 

TANENBAUM & PEZZULO, LLP, Rochester, New York, for Appellee. ON 

BRIEF: Richard F. Hawkins, III, HAWKINS LAW FIRM, PC, Richmond, 

Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:

The Teamsters Joint Council No. 83 of Virginia Pension Fund 

(“the Fund”) and its trustees (collectively, “Appellants”) 

appeal a district court order granting judgment in favor of 

Weidner Realty Associates (“Weidner”) in Appellants’ action 

seeking to hold Weidner and Empire Beef Co., Inc. (“Empire”) 

jointly and severally responsible for a liability that Empire 

incurred by failing to meet its pension-fund obligations. 

Appellants also appeal a ruling by the district court that 

circuit precedent precluded the court from addressing whether 

Appellants could avoid a transfer of Empire’s assets in 

collecting on their judgment against Empire. We affirm in part, 

vacate in part, and remand for further proceedings.

I.

Weidner is a general partnership that was formed in the 

1930s to purchase a parcel of land in Rochester, New York. Soon 

after the purchase, the parcel became home to a slaughterhouse, 

which Empire, a New York corporation, was formed to operate. In 

1993, Weidner’s then-current partners, who were Empire; Empire’s 

sole shareholder, Steven Levine (“Steven”); and Steven’s father, 

Sidney Levine (“Sidney”), formalized their arrangement by 

entering into an agreement (“the Partnership Agreement”). 
4

In approximately 2002, Empire expanded its distribution 

territory south and established a terminal in Richmond, 

Virginia. Soon thereafter, Empire hired union drivers to 

distribute its product from the new terminal. In so doing, it 

became a party to a collective bargaining agreement that 

obligated Empire to make contributions to the Fund. Empire 

ceased its operations in Richmond in late-2005, however, 

incurring nearly $500,000 in liability to the Fund. Empire 

began to satisfy this liability in monthly installments that it 

paid until September 2007, when it filed a voluntary Chapter 11 

bankruptcy. Then, on January 5, 2008, as the bankruptcy 

remained pending, Steven entered into an agreement (“the 

Composition Agreement”) with Sidney transferring all of Empire’s 

assets, except its receivables, to Sidney, in exchange for a 

release of a secured debt of approximately $1.4 million that 

Empire owed Sidney. The bankruptcy court subsequently dismissed 

Empire’s bankruptcy proceeding five days later without 

discharging Empire’s debts.

The next month, the Fund notified Weidner that it was 

jointly and severally liable with Empire for the assessed 

withdrawal liability because Weidner was a member of Empire’s 

“control group” under the rules and regulations of the 

Employment Retirement Income Security Act of 1974 (“ERISA”), see

29 U.S.C.A. § 1001 et seq. (West 2008 & Supp. 2009). Appellants 
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later filed this ERISA action against Empire and Weidner seeking 

to recover Empire’s unpaid withdrawal liability. Appellants 

were granted summary judgment against Empire, which had not 

contested its liability. Weidner, on the other hand, denied 

that it was jointly and severally liable, maintaining that it 

was not a “trade[] or business[]” and that it and Empire were 

not “under common control.” 29 U.S.C.A. § 1301(b)(1).

Prior to trial, Appellants filed a motion in limine 

announcing that they would argue that they were entitled under 

29 U.S.C.A. § 1392(c) to collect a judgment against Empire and 

to disregard the Composition Agreement (which they had come to 

learn about during discovery). Appellants reiterated as the 

bench trial began that they would be making this argument. 

Indeed, during the trial, both parties examined Steven regarding 

his motivation for entering into the Composition Agreement, a 

pivotal issue in Appellants’ attempt to reach the assets 

transferred to Sidney under that agreement. And, in their posttrial brief, Appellants argued once more that the Composition 

Agreement should be set aside. 

In the end, the district court ruled that Weidner was not 

jointly and severally liable for Empire’s withdrawal obligations 

because Appellants failed to prove that Empire and Weidner were 

under common control. See Teamsters Joint Council No. 83 of Va. 

Pension Fund v. Empire Beef Co., No. 3:08CV340-HEH, 2009 WL 
6

1764554 (E.D. Va. June 18, 2009). The district court declined 

to address the validity of the Composition Agreement, however, 

concluding that circuit precedent precluded the court from 

considering an agreement that was entered into after Empire 

withdrew from the Fund. See id. at *2 n.3.

II.

Appellants first argue that the district court erred in 

concluding that Empire and Weidner were not under common 

control. We disagree.

Congress found in 1980 that the “withdrawals of 

contributing employers from a multiemployer pension plan 

frequently result in substantially increased funding obligations 

for employers who continue to contribute to the plan, adversely 

affecting the plan, its participants and beneficiaries, and 

labor-management relations.” 29 U.S.C.A. § 1001a(a)(4)(A). To 

address this problem, Congress enacted the Multiemployer Pension 

Plan Amendments Act of 1980 (“MPPAA”), see 29 U.S.C.A. § 1381, 

et seq., which amended ERISA. See SUPERVALU, Inc. v. Board of 

Trs. of the Sw. Pa. and W. Md. Area Teamsters and Employers 

Pension Fund, 500 F.3d 334, 336-37 (3d Cir. 2007). MPPAA 

provides that when an employer withdraws from an ongoing multiemployer pension plan, the employer becomes liable for a 

proportionate share of the plan’s unfunded vested liability. 
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See 29 U.S.C.A. § 1381. Under ERISA, the term “employer” 

includes “trades or businesses . . . which are under common 

control” at the time of the withdrawal, which in this case was 

September 30, 2005. 29 U.S.C.A. § 1301(b)(1); see Teamsters 

Joint Council No. 83 v. Centra, Inc., 947 F.2d 115, 121 (4th 

Cir. 1991). Thus, to establish Weidner’s liability, Appellants 

had to show that on that date the same five or fewer persons 

owned a “controlling interest” in both Weidner and Empire and 

that those people were in “effective control” of each 

organization. 26 C.F.R. § 1.414(c)-2(c) (2009). As Empire’s 

sole shareholder, Steven clearly had a controlling interest and 

effective control of Empire. Consequently, the sole issue 

before the district court related to common control concerned 

whether Steven also owned a controlling interest and had 

effective control of Widener. 

The applicable regulation defines “controlling interest” in 

a partnership as “ownership of at least 80 percent of the 

profits interest or capital interest of such partnership.” 26 

C.F.R. § 1.414(c)-2(b)(2)(i)(C) (2009). “Effective control” of 

a partnership is defined as ownership of “an aggregate of more 

than 50 percent of the profits interest or capital interest of 

such partnership.” 26 C.F.R. § 1.414(c)-2(c)(2)(iii). “Capital 

interest in a partnership,” in turn, is defined, as is relevant 

here, as “an interest in [the partnership’s] assets that is 
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distributable to the owner of the interest” upon the 

partnership’s liquidation. Internal Revenue Service Publication 

No. 541, Partnerships (2008).

In finding that Steven had only 50% of the capital interest 

in Weidner, the district court relied on Articles XII and IV of 

the Partnership Agreement. Article XII, entitled “Termination 

and Liquidation,” provides that at the termination of the 

Partnership,

the assets of the Partnership shall be sold and the 

proceeds of the sale shall be applied or distributed 

in the following order of priority:

(a) To pay or provide for the payment of all 

liabilities of the Partnership;

(b) To pay all expenses of liquidation;

(c) To return to the Partners any credit balance 

in their capital accounts; and

(d) To the Partners in proportion to their

percentage interest in the Partnership

J.A. 169-70 (emphasis added). The court noted that the 

partners’ percentage interests in the partnership were set forth 

in Article IV of the agreement:

.

4.1 Percentage Interest in the Partnership

Sidney E. Levine 50%

. Each 

of the partners shall have a percentage interest in 

the Partnership as follows:

Steven H. Levine 121⁄2%

Empire Beef Co., Inc. 371⁄2%
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J.A. 164.1

Appellants challenged this conclusion at trial, pointing to 

Article V of the Agreement, which states, in relevant part:

 The parties agree that Empire’s ownership interest is 

imputed to Steven for purposes of ERISA by virtue of his 

ownership of Empire. Therefore, the district court reasoned, as 

of September 30, 2005, Sidney and Steven each owned a 50% 

percentage interest in Weidner. Because Steven did not own 

greater than 50% of Weidner’s capital interest, he did not 

maintain effective control, and Weidner was not part of Empire’s 

control group.

5.1 Capital Accounts. A separate capital 

account shall be maintained for each Partner. The 

capital interest

J.A. 164 (second emphasis added). Appellants maintained that 

this section essentially redefined “capital interest,” 

superseding the definition provided in IRS Publication 541. For 

of each Partner shall consist of his 

capital contribution, increased by such Partner’s 

subsequent capital contributions and such Partner’s 

share of net Partnership profits, and decreased by 

distributions to such Partner by the Partnership and 

his share of Partnership losses.

 1 That section also provides that 

[t]he percentage of interest of each of the Partners 

in the Partnership, initially as set forth above, and 

as the same may from time to time change by virtue of 

transfers of Partnership interests or otherwise, shall 

be referred to in this Partnership Agreement as the 

“percentage interest in the Partnership.”

J.A. 164.
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this reason, Appellants argued that it is the partners’ capital 

accounts rather than their percentage interests that should be 

used to determine controlling interests and effective control. 

The district court rejected this argument, and we do as well.2

As the district court noted, Section 5.1 is titled “Capital 

Accounts,” and nothing in the agreement gives any indication 

that the words “capital interest” were intended to refer to 

anything other than the amount of a capital account. Indeed, as 

we have noted, the amounts due each partner upon liquidation are 

handled in a completely separate section of the agreement. We 

therefore conclude that the district court correctly looked to 

Article XII rather than Article V of the agreement to determine 

Steven’s capital interest percentage in Weidner. 

 

 2 In rejecting Appellants’ interpretation, the district 

court described the agreement’s use of the words “capital 

interest” as a “scrivener’s error.” J.A. 426. Appellants take 

issue with that characterization, but whether that description 

was correct is immaterial. The critical aspect of the district 

court’s ruling was that the parties did not intend “capital 

interest” in Article V to supersede the definition in IRS 

Publication 541, and the district court was on firm ground in 

drawing this conclusion.
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III.

Appellants also maintain that the district court erred in 

declining to address the validity of the Composition Agreement. 

As to this issue, we agree.3

MPPAA provides that “[i]f a principal purpose of any 

transaction is to evade or avoid liability under this part, this 

part shall be applied (and liability shall be determined and 

collected) without regard to such transaction.” 29 U.S.C.A. 

§ 1392(c). This subsection authorizes the recovery of 

improperly transferred assets from the party to whom they have 

been illegitimately transferred. See IUE AFL-CIO Pension Fund 

v. Herrmann, 9 F.3d 1049, 1056 (2d Cir. 1993). 

 3 Initially, we note that Widener maintains that we should 

not address this issue because Appellants did not raise it in 

their pleadings. However, the parties certainly tried this 

issue by consent. See Fed. R. Civ. P. 15(b)(2) (“When an issue 

not raised by the pleadings is tried by the parties’ express or 

implied consent, it must be treated in all respects as if raised 

in the pleadings.”). Appellants raised the issue in a motion in 

limine and also reiterated at the start of the trial that it 

would seek to litigate the avoidability of the Composition 

Agreement. Both parties examined Steven regarding the purpose 

behind the Composition Agreement. And, Appellants continued to 

request the voiding of the agreement in their post-trial brief. 

Weidner also maintains that Appellants’ challenge to the 

Composition Agreement is moot because the property transferred 

to Sidney pursuant to the Composite Agreement is encumbered with 

substantial debt and will likely be foreclosed upon by a secured 

creditor. Weidner’s predictions concerning the possible future 

fate of this property are not sufficient to moot this case, 

however.
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Citing our discussion in Centra, the district court 

“decline[d] to address the validity of the Composition Agreement 

because, under Fourth Circuit precedent, the Court’s decision 

must be based on the facts as they existed when Empire withdrew 

from the Pension Fund on September 30, 2005.” Empire Beef Co., 

2009 WL 1764554, at *2 n.3. This is an erroneous application of 

Centra, which holds only that the existence of a control group—

which affects whether a company qualifies as an employer—must be 

determined as of the time of the withdrawal. See Centra, 947 

F.2d at 121. The correctness of Centra’s holding is apparent 

because it stands to reason that to incur liability as an 

employer withdrawing from a pension fund, the withdrawing 

company must be an employer at the time of the withdrawal. In 

contrast, nothing in § 1392(c) suggests that it applies only to 

pre-withdrawal efforts to evade or avoid liability. In fact, 

limiting § 1392(c) in that way would thwart MPPAA’s purpose of 

protecting pension funds from the adverse effects of withdrawing 

employers. See id. at 123 (explaining that ERISA and MPPAA are 

remedial statutes that “should be liberally construed in favor 

of protecting the participants in employee benefits plans”). We 

therefore remand so that the district court may address the 

merits of Appellants’ § 1392(c) claim.
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IV.

In sum, we affirm the district court’s ruling that Weidner 

was not jointly and severally liable for Empire’s withdrawal 

liability and we remand for consideration of Appellants’ claim 

that they can collect their judgment against Empire without 

regard to the Composition Agreement.

AFFIRMED IN PART, 

VACATED IN PART, 

AND REMANDED