Court Opinion

ID: 2668355
Source: CourtListenerOpinion
Date Created: 2014-04-04 15:05:10.884315+00
Date Added: 2024-06-11T13:04:58.332279
License: Public Domain

UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF COLUMBIA

__________________________________________
                                          )
JOHN J. FLYNN, et al.,                    )
                                          )
            Plaintiffs,                   )
                                          )
      v.                                  )                    Civil Action No. 08-0588 (PLF)
                                          )
JOHN DANIEL BERICH, et al.,               )
                                          )
            Defendants.                   )
__________________________________________)

                                   MEMORANDUM OPINION

               This matter is before the Court on two separate but largely identical motions to

dismiss the complaint pursuant to Rules 12(b)(1), 12(b)(2) and 12(b)(6) of the Federal Rules of

Civil Procedure or, in the alternative, to transfer this case to the United States District Court for

the District of Colorado pursuant to 28 U.S.C. § 1404(a). One motion is submitted on behalf of

defendants John and Todd Berich; the other is submitted on behalf of defendant Integrity

Equipment Company, Inc. Upon consideration of the motions, plaintiffs’ oppositions thereto and

defendants’ replies, the Court will deny defendants’ motions to dismiss without prejudice and

transfer this case to the United States District Court for the District of Colorado.

               Plaintiffs are the trustees of the Bricklayers & Trowel Trades International

Pension Fund (the “Pension Fund”). The Pension Fund is an “employee benefit plan” and a

“multiemployer plan” under the Employee Retirement Income Security Act of 1974, as amended,

29 U.S.C. §§ 1001, et seq. (“ERISA”). Defendants John and Todd Berich acted as the

controlling owner and principal officer, respectively, of Dan Berich, Inc. (“DBI”), a Colorado
corporation that filed for bankruptcy in 2006. Before it filed for bankruptcy, DBI contributed to

the Pension Fund for many years pursuant to collective bargaining agreements between DBI and

the International Union of Bricklayers and Allied Craftworkers or its affiliates. See Compl. ¶¶ 5,

8. Defendant Integrity Equipment Company, another Colorado corporation, is owned and

controlled by defendant Todd Berich. See id. ¶ 7. The Pension Fund alleges that (1) before it

filed for bankruptcy, DBI incurred so-called “withdrawal liability” to the Pension Fund; (2) all

three of the defendants engaged in transactions designed to evade DBI’s withdrawal liability; and

thus that (3) the defendants are now liable to the Pension Fund under Sections 1381 and 1392(c)

of ERISA. See id. ¶¶ 8-36.1 Defendants argue that this case should be dismissed or, in the

alternative, that it should be transferred to the District of Colorado. Because the Court agrees

with the latter argument, it need not address the former argument. See, e.g., Kazenercom TOO v.

Turan Petroleum, Inc., 590 F. Supp. 2d 153, 157 n.5 (D.D.C. 2008).

                                    I. LEGAL FRAMEWORK

               “For the convenience of parties and witnesses, in the interest of justice, a district

court may transfer any civil action to any other district or division where it might have been

brought.” 28 U.S.C. § 1404(a). ERISA includes a special venue provision applicable to this

matter, which provides that “[a]n action . . . may be brought in the district where the plan is

administered or where a defendant resides or does business[.]” 29 U.S.C. § 1451(d). Section

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                 Section 1381 provides, in pertinent part, that “[i]f an employer withdraws from a
multiemployer plan . . . then the employer is liable to the plan in the amount determined under
this part to be the withdrawal liability.” 29 U.S.C. § 1381(a). Section 1392(c) 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. § 1392(c).

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1451(d) was intended to make collection actions more “efficient, economical, and inexpensive

for ERISA funds” by permitting them to bring such actions in their home districts. Plaintiffs’

Opposition to Defendants’ Motion to Dismiss Or, In the Alternative, to Transfer at 18. See also

Int’l Painters and Allied Trades Indus. Pension Fund v. Tri-State Interiors, Inc., 357 F. Supp. 2d

54, 56 (D.D.C. 2004). Section 1451(d) was not, however, intended to displace Section 1404(a).

See Hanley v. Omarc, Inc., 6 F. Supp. 2d 778, 779 (N.D. Ill. 1998). Thus, as Judge Revercomb

explained:

               [In all cases the] moving party bears the burden of showing that
               venue should be transferred. See Int’l Bhd. of Painters and Allied
               Trades Union and Industrial Pension Fund v. Best Painting and
               Sandblasting Co., 621 F. Supp. 906, 907 (D.D.C. 1985). In the
               ERISA context, this burden is greater because [ERISA’s special
               venue provisions] evince[] Congress’s intent “to expand, rather
               than restrict, the ERISA plaintiff’s choice of forum.” Trustees of
               the Hotel Employees and Restaurant Employees Internat’l Union
               Welfare Pension Fund v. Amivest Corp., 733 F. Supp. 1180, 1182
               (N.D. Ill. 1990). . . . Nevertheless, [ERISA’s special venue
               provisions do] not preclude transfer under the general venue statute
               of 28 U.S.C. § 1404(a). See Board of Trustees, Sheet Metal
               Workers National Fund v. Baylor Heating & Air Conditioning,
               Inc., 702 F. Supp. 1253, 1257 & n.13 (E.D. Va. 1988).

Int’l Bhd. of Painters and Allied Trades Union and Indus. Pension Fund v. Rose Bros. Home

Decorating Ctr., Inc., Civil Action No. 91-1699, 1992 WL 24036, at *2 (D.D.C. 1992).

                                        II. DISCUSSION

               Venue is undoubtedly proper in the District of Columbia because this is the

“district where the [Pension Fund] is administered.” 29 U.S.C. § 1451(d). But the case might

have been brought in the District of Colorado as well because that is where the defendants reside

and do business. See id. The question, therefore, is which venue is more appropriate. To

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answer this question, the Court “uses its broad discretion to balance case-specific factors related

to the public interest of justice and the private interests of the parties and witnesses.” Aftab v.

Gonzalez, Civil Action No. 07-2080, 2009 WL 368660, at *2 (D.D.C. Feb. 17, 2009). Having

reviewed the parties’ arguments and the relevant case law, and having carefully weighed the

interests at stake in light of the circumstances of this case, the Court concludes that this case

should be transferred.

               Defendants argue, and the Pension Fund acknowledges, that “the only connection

the claims in this case have to the District of Columbia is that the District of Columbia is the

place the [Pension Fund] is administered.” Integrity’s Motion to Dismiss Plaintiffs’ First

Amended Complaint Or, In the Alternative, to Transfer at 11. In contrast, this case has many

connections to the District of Colorado. For example:

               Dan Berich and Todd Berich are residents of the State of Colorado.
               Dan Berich was the president and chief executive officer of DBI,
               which maintained offices and conducted business in the State of
               Colorado. Todd Berich is a former officer of DBI. DBI was
               signatory to collective bargaining agreements with Local # 7 of the
               International Union of Bricklayers and Allied Craftworkers
               (“Union”) until 2003[.] Local # 7 is located in the State of
               Colorado. The transactions complained of are alleged to have
               occurred in Colorado. The facts that would determine whether
               piercing the corporate veil is justified in this case would come from
               witnesses and evidence located in Colorado.

               It can reasonably be inferred . . . that most, if not all, of the
               witnesses . . . reside in Colorado and that most of the exhibits
               related to the claims will be found there as well. . . . Key Bank,
               alleged in plaintiffs’ Amended Complaint as the location of DBI’s
               operating account and source of disbursements to Dan and Todd
               Berich, is located in Colorado.

John and Todd Berich’s Motion to Dismiss Plaintiffs’ First Amended Complaint Or, In the

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Alternative, to Transfer at 14-15 (citations to Amended Complaint and exhibits omitted).

               Relatedly, and no less importantly, “DBI filed [for] bankruptcy in the United

States Bankruptcy Court for the District of Colorado,” John and Todd Berich’s Motion to

Dismiss Plaintiffs’ First Amended Complaint Or, In the Alternative, to Transfer at 15, and the

Pension Fund has filed a claim in that ongoing action. As the Pension Fund’s claims in this case

arise from – or at least are closely related to – the Pension Fund’s claim in the bankruptcy case,

and as the two cases are likely to involve many of the same exhibits and witnesses, it would be

far more convenient and efficient to conduct them both in Colorado.

               Finally, the fact that the Pension Fund has chosen to file a claim against DBI in

the United States Bankruptcy Court for the District of Colorado cuts strongly against any

suggestion that it would be unduly burdensome to require the Fund to litigate this action in the

United States District Court for the District of Colorado.

               In sum, given the circumstances identified above, and notwithstanding the

heightened deference owed to the Pension Fund’s choice of forum under ERISA, the Court

concludes that “[f]or the convenience of parties and witnesses, [and] in the interest of justice,”

this case should be transferred to the District of Colorado. 28 U.S.C. § 1404(a).

               An Order consistent with this Memorandum Opinion will issue this same day.

               SO ORDERED.

                                              /s/___________________________
                                              PAUL L. FRIEDMAN
                                              United States District Judge

DATE: March 25, 2009

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