Pension Benefit Guaranty Corporation v. DONALD R. BEVERLEY; MARTHA H. BEVERLEY, No. 04-1371 

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 PENSION BENEFIT GUARANTY
CORPORATION,
Plaintiff-Appellee,
v.
DONALD R. BEVERLEY; MARTHA H.
BEVERLEY, No. 04-1371 
Defendants-Appellants,
and
DON’S TRUCKING COMPANY,
INCORPORATED,
Defendant. 
Appeal from the United States District Court
for the Eastern District of Virginia, at Richmond.
James R. Spencer, District Judge.
(CA-03-631)
Argued: November 30, 2004
Decided: April 12, 2005
Before TRAXLER, GREGORY, and DUNCAN, Circuit Judges.
Affirmed by published opinion. Judge Gregory wrote the opinion, in
which Judge Traxler and Judge Duncan joined.
COUNSEL
ARGUED: Paul McCourt Curley, CANFIELD, BAER, HELLER &
JOHNSTON, L.L.P., Richmond, Virginia, for Appellants. Merrill D.

-- 1 of 15 --

Boone, PENSION BENEFIT GUARANTY CORPORATION, Office
of the General Counsel, Washington, D.C., for Appellee. ON BRIEF:
Robert Allen Canfield, CANFIELD, BAER, HELLER & JOHN-
STON, L.L.P., Richmond, Virginia, for Appellants. James J. Keight-
ley, General Counsel, William G. Beyer, Deputy General Counsel,
Karen L. Morris, Assistant General Counsel, PENSION BENEFIT
GUARANTY CORPORATION, Office of the General Counsel,
Washington, D.C., for Appellee.
OPINION
GREGORY, Circuit Judge:
This case involves Pension Benefit Guaranty Corporation’s
("PBGC" or "plaintiff") claims of unfunded benefits liability under
the Employee Retirement Income Security Act of 1974 ("ERISA"),
29 U.S.C. § 1362(a) and (b), which stems from the termination of
Don’s Trucking Company Defined Benefit Pension Plan (the "Plan").
PBGC filed a complaint against the Plan’s sponsor, Don’s Trucking
Company ("Don’s Trucking"), claiming that members of Don’s
Trucking’s controlled group, including Donald R. Beverley ("Don
Beverley" or "Mr. Beverley") and Martha H. Beverley ("Martha Bev-
erley") (collectively "the Beverleys" or "defendants"),1 and the
alleged partnership between the Beverleys, were liable for the
unfunded benefits under ERISA. The Beverleys appeal the district
court’s order granting PBGC’s motion for summary judgment. Defen-
dants raise several issues on appeal, however, finding no error, we
affirm the district court.
I.
Don’s Trucking established the Plan, effective June 1, 1988, to pro-
vide retirement benefits to its employees. The Beverleys own Don’s
Trucking and each serve as two of the three officers and directors of
the company. Don’s Trucking was the administrator and contributing
sponsor of the Plan.
1Don and Martha Beverley are married and have been during the rele-
vant times of this case.
2 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 2 of 15 --

Since the 1980s the Beverleys have also owned certain properties,
1801 Coxendale Road and 1811 Coxendale, in Chester, Virginia
("Coxendale Properties"). Since purchasing the Coxendale Properties
the Beverleys have leased part of the properties to Don’s Trucking
and occasionally have leased part of the properties to other tenants.
PBGC is a wholly-owned United States government corporation,
established under 29 U.S.C. § 1302(a) to administer the pension plan
termination insurance program created by ERISA, codified at 29
U.S.C. §§ 1301-1461 (2000 & Supp. I 2001) ("Title IV").2 PBGC
assures the timely payment of guaranteed pension benefits to partici-
pants in pension plans that terminate when covered by Title IV. See
29 U.S.C. §§ 1302(a)(2), 1321, 1322 (2004).
By agreement between PBGC and Don’s Trucking, the Plan was
terminated in August 1997, with insufficient assets. See 29 U.S.C.
§ 1342. Subsequently, as statutory trustee, PBGC sued Don Beverley
as the Plan fiduciary for improper transfers of Plan assets ("fiduciary
liability suit") pursuant to 29 U.S.C. § 1109.3 In April 2001, PBGC
obtained a judgment against Don Beverley in the amount of
$358,044.40 plus post judgment interest. Don Beverley has not satis-
fied the judgment against him.
PBGC filed a civil action against Martha Beverley and Don Bever-
ley, individually, the alleged Beverley Partnership, and Don’s Truck-
2The United States Code, Subchapter III of Chapter 18 of Title 29
refers to "this title" as Title IV of ERISA. For the sake of brevity we will
follow suit.
329 U.S.C. § 1109 provides in relevant part:
(a) Any person who is a fiduciary with respect to a plan who
breaches any of the responsibilities, obligations, or duties
imposed upon fiduciaries by this title shall be personally liable
to make good to such plan any losses to the plan resulting from
each such breach, and to restore to such plan any profits of such
fiduciary which have been made through use of assets of the plan
by the fiduciary, and shall be subject to such other equitable or
remedial relief as the court may deem appropriate, including
removal of such fiduciary.
Id.
3 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 3 of 15 --

ing in United States District Court for the Eastern District of Virginia.
PBGC asserted that Don’s Trucking as contributing sponsor was lia-
ble to PBGC under 29 U.S.C. § 1362(a)-(b)4 ("employer liability").
See 29 U.S.C. § 1362 (providing that employer liability springs from
plan termination). PBGC also alleged that there was a general partner-
ship between Don Beverley and Martha Beverley for the primary pur-
pose of leasing real estate ("Beverley Partnership"). Thus, PBGC
argued, under § 1362, that Don’s Trucking, as contributing sponsor,
and the Beverley Partnership, as the sponsor’s controlled group, were
jointly and severally liable to PBGC for employer liability. PBGC
also claimed that, as the general partners of the Beverley Partnership,
Don Beverley and Martha Beverley are jointly and severally liable for
its debts, including employer liability to PBGC. See id.
On cross-motions for summary judgment5 the district court granted
PBGC’s motion and denied the Beverleys’ motion. The district court
awarded judgment to PBGC jointly and severally against each defen-
dant in the amount of $366,181.51, plus interest minus any monies
actually recovered on the fiduciary liability judgment. The Beverleys
timely filed this appeal.
II.
We review a district court’s summary judgment ruling de novo,
viewing the evidence in the light most favorable to the losing party.
Goldstein v. The Chestnut Ridge Volunteer Fire Co., 218 F.3d 337,
340 (4th Cir. 2000); Binakonsky v. Ford Motor Co., 133 F.3d 281,
429 U.S.C. § 1362 provides that:
In any case in which a single-employer plan is terminated . . . .
under section 29 U.S.C. § 1342, any person who is, on the termi-
nation date, a contributing sponsor of the plan or a member of
such a contributing sponsor’s controlled group shall incur liabil-
ity under this section. The liability under this section of all such
persons shall be joint and several.
Id. (emphasis added).
5The alleged Beverley Partnership did not answer or otherwise defend
the Complaint. A default judgment was entered by the district court
against the Beverley Partnership on January 15, 2004.
4 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 4 of 15 --

284-85 (4th Cir. 1998). Summary judgment is appropriate if "the
pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to
judgment as a matter of law." Fed. R. Civ. P. 56. Rule 56 also states
that "when a motion for summary judgment is made and supported as
provided in this rule, an adverse party may not rest upon the mere
allegations or denials of the adverse party’s pleading, but the adverse
party’s response, by affidavits or as otherwise provided in this rule,
must set forth specific facts showing that there is a genuine issue for
trial." Fed. R. Civ. P. 56(e); see also Celotex Corp. v. Catrett, 477
U.S. 317, 324 (1986) ("Rule 56(e) permits a proper summary judg-
ment motion to be opposed by any of the kinds of evidentiary materi-
als listed in Rule 56(c), except the mere pleadings themselves").
Rule 56(e) also requires that "affidavits submitted by the party
defending against a summary-judgment motion contain specific facts,
admissible in evidence, from an affiant competent to testify, ‘showing
that there is a genuine issue for trial.’" 10B Wright, Miller & Kane,
Federal Practice and Procedure: Civil 3d § 2740, at 399 (1998).
Once the movant has established the absence of any genuine issue of
material fact, the opposing party has an obligation to present some
type of evidence to the court demonstrating the existence of an issue
of fact. See Pine Ridge Coal Co. v. Local 8377, UMW. 187 F.3d 415,
422 (4th Cir. 1999).
III.
The Beverleys contend that the district court erred when it con-
cluded that the doctrines of res judicata and election of remedies did
not bar PBGC’s claim against Don Beverley. Defendants also argue
that the district court erred in concluding that Martha Beverley
intended to form a partnership with Don Beverley for the purpose of
leasing the Coxendale Properties. We will address each of defendants’
claims in turn.
A.
To analyze defendants’ res judicata claim we must first review the
origin and principal purpose of the PBGC. Congress created the
5 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 5 of 15 --

PBGC with one central purpose — "to prevent ‘great personal trag-
edy’ suffered by employees whose vested benefits are not paid when
pension plans are terminated." Pension Benefit Guar. Corp. v. Carter
& Tillery Enters., 133 F.3d 1183, 1186 (9th Cir. 1998) (quoting Nach-
man Corp. v. PBGC, 446 U.S. 359, 374 (1980). PBGC is funded pri-
marily through premiums paid by pension-plan sponsors. PBGC is
mandated by statute to maintain such premiums "at the lowest level"
consistent with Title IV’s purposes. See 29 U.S.C. § 1302(a)(3).
PBGC carries out this mandate by enforcing the various claims pro-
vided to PBGC under Title IV.
When a pension plan terminates with insufficient assets to fund the
benefits it has promised to pay, Title IV imposes joint and several lia-
bility on the plan’s contributing sponsor and each member of the
sponsor’s "controlled group." 29 U.S.C. § 1362(a).6 A "controlled
group" is a group of trades or businesses related by common owner-
ship, determined under regulations prescribed by the Secretary of the
Treasury. 29 U.S.C. § 1301(a)(14)(A) and (B). In its corporate capac-
ity, PBGC has a claim against the controlled group for the total
amount of the Plan’s unfunded benefit liabilities to all participants
and beneficiaries, as of the Plan’s termination date, together with
interest from the termination date — employer liability. See 29 U.S.C.
§ 1362(b)(1).7
629 U.S.C. § 1362(a) provides:
(a) In general. In any case in which a single-employer plan is ter-
minated in a distress termination under . . . 29 U.S.C. § 1341(c)
or a termination otherwise instituted by the corporation under .
. . 29 U.S.C. § 1342, any person who is, on the termination date,
a contributing sponsor of the plan or a member of such a contrib-
uting sponsor’s controlled group shall incur liability under this
section. The liability under this section of all such persons shall
be joint and several. The liability under this section consists of—
(1) liability to the corporation. . . and (2) liability to the trustee.
Id.
729 U.S.C. § 1362(b) provides:
Liability to corporation. (1) Amount of liability. (A) In general
. . . . the liability to the corporation of a person described in sub-
section (a) shall be the total amount of the unfunded benefit lia-
bilities (as of the termination date) to all participants and
beneficiaries under the plan, together with interest (at a reason-
able rate) calculated from the termination date in accordance
with regulations prescribed by the corporation. Id.
6 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 6 of 15 --

As provided by statute, PBGC may and typically does seek to be
appointed as statutory trustee of plans that terminate with insufficient
assets. 29 U.S.C. § 1342(b)(1). As statutory trustee, PBGC may assert
claims on behalf of the plan, 29 U.S.C. § 1342(d)(1)(B)(ii), against its
fiduciaries based on breaches of their fiduciary duty, 29 U.S.C.
§ 1109(a), such as improper transfers of plan assets. 29 U.S.C.
§ 1106.
Don Beverley argues that the district court erroneously held that
PBGC obtained its prior judgment against him in its representative
capacity as Plan trustee, in contrast to the second action in which
PBGC filed its lawsuit against defendants in its corporate capacity.8
Mr. Beverley alleges that it was an established fact that PBGC had
previously obtained a judgment on the merits against him stemming
from the same transaction or series of transactions, thus the second
suit was barred by res judicata. In addition, Mr. Beverley contends
that the district court illogically granted him a credit for any amounts
recovered by PBGC in the fiduciary liability judgment, which in his
estimation is in direct contradiction to the district court’s ruling con-
cerning identity or privity of parties. Don Beverley avers that the
"credit" was granted by the district court to counteract the application
of the election of remedies doctrine. Mr. Beverley argues that the
"election of remedies doctrine . . . is applied [to], among other things,
. . . prevent double recovery." J.A. 7.
To establish res judicata we have held that "a party must establish:
‘(1) a final judgment on the merits in a prior suit, (2) an identity of
the cause of action in both the earlier and the later suit, and (3) an
identity of parties or their privies in the two suits.’" Jones v. S.E.C.,
115 F.3d 1173, 1178 (4th Cir. 1997) (quoting Meekins v. United
Transp. Union, 946 F.2d 1054, 1057 (4th Cir. 1991)). The first ele-
ment is easily satisfied and the parties do not dispute it. The district
court was correct in its conclusion that the second element was estab-
lished. There is no dispute that PBGC actually knew of its employer
8The district court held that "[d]efendants have established a final
judgment on the merits in the prior suit, and identity of claims, [how-
ever,] they fail to meet the identity of parties or privies element of res
judicata." J.A. 346.
7 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 7 of 15 --

liability claim when it was litigating the fiduciary liability suit. Thus,
our holding in Meekins applies to this case; Meekins stated that:
[t]he preclusive affect of a prior judgment extends beyond
claims or defenses actually presented in previous litigation,
for not only does res judicata bar claims that were raised and
fully litigated, it prevents litigation of all grounds for, or
defenses to, recovery that were previously available to the
parties, regardless of whether they were asserted or deter-
mined in the prior proceeding.
946 F.2d at 1057. Therefore, although PBGC’s claims are separate
and independent, the employer liability claim under 29 U.S.C.
§ 1362(a)-(b), was previously available and could have been brought
in the fiduciary liability suit. Consequently, this court finds that the
second element of res judicata has been met.
Regarding the third element — identity of parties or their privies
in the two suits — Mr. Beverley attempts to distinguish the facts and
our holding in Andrews v. Daw, 201 F.3d 521, 523 (4th Cir. 2000)9
from this case. He argues that in the fiduciary liability suit PBGC, as
the plaintiff, sued him "in its own name, as the Plan trustee, for the
benefit of the plan and its participants and beneficiaries. Appellants’
Br. at 12. Here, Don Beverley contends that PBGC has sued him once
again in its own name, not as Plan trustee, but still for the purpose of
recovering funds for the benefit of the Plan participants and beneficia-
9In Daw, the plaintiff sued several defendants under 42 U.S.C. § 1983
(West Supp. 1999) alleging that his rights were violated during a traffic
stop by one of the defendants — a police officer. As for the officer, the
lower court dismissed, and we affirmed, because he was sued in his offi-
cial capacity and thus was shielded from money damages under the Elev-
enth Amendment. Id. at 523. Plaintiff filed a second § 1983 complaint
against the officer in the officer’s individual capacity. Id. at 524. The
lower court granted the officer’s motion to dismiss on the ground that the
action was barred by the doctrine of res judicata. Id. On appeal, we
reversed and remanded because the officer in his official capacity did not
represent precisely the same legal right as he did in his individual capac-
ity. Id. at 526 (emphasis added). Further, we held that the officer in his
official capacity was not in privity with himself in his individual capacity
for purposes of res judicata. Id.
8 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 8 of 15 --

ries. According to Mr. Beverley, "[w]hether PBGC acts as a plan
trustee or on its own, the purpose is still the same to benefit plan par-
ticipants and beneficiaries." Appellants’ Br. at 12. In contrast, Mr.
Beverley avers that it was the defendant police officer, a government
official, who was sued first in his official capacity and then sued
again in his individual capacity. Thus, Daw does not apply.
Regardless of whether PBGC’s underlying purpose is the same in
each suit, our holding in Daw and the rule of "differing capacities"
makes clear: "[a] party appearing in an action in one capacity, indi-
vidual or representative is not thereby bound by or entitled to the ben-
efits of the rules of res judicata in a subsequent action in which he
appears in another capacity." Daw, 201 F.3d at 525; see also Restate-
ment (Second) of Judgments, § 36 (1982). As we articulated in Daw,
"the rationale for this rule is that ‘in appearing as a representative of
another, a person should be free to take positions inconsistent with
those he might assert in litigation on his own behalf or on behalf of
others he represents in some fiduciary capacity.’" 201 F.3d at 525
(internal citations omitted).
The record is clear and undisputed, PBGC, as the trustee of the
Plan, filed its statutorily provided fiduciary liability claim against Don
Beverley, to recover the amounts owed to the Plan. In addition, PBGC
in its corporate capacity, has a statutorily provided claim against the
controlled group, i.e. the employer liability claim for the total amount
of the Plan’s unfunded liabilities.10 The fact that PBGC has a benefi-
cent purpose in both of its capacities, is no basis for an exception to
the rule. Although PBGC may request and often does request that it
be appointed as a statutory plan trustee pursuant to 29 U.S.C.
§ 1342(b)(1), a third party may also be appointed as statutory plan
trustee. A third party would also be required to act for the purpose of
benefitting plan participants and beneficiaries, however the third party
would not be in privity with PBGC in its corporate capacity. Conse-
quently, we can not find that PBGC is in privity with itself when it
10It is also important to note that Congress did not require PBGC or
any other statutory trustee to bring § 1109 claims in the same suit as
§ 1362 claims. In addition, there were practical concerns: PBGC averred
in oral argument that the statute of limitations was running out on their
fiduciary liability claim against Don Beverley.
9 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 9 of 15 --

acts as the Plan’s statutory trustee in pursuing fiduciary liability and
subsequently, acts in its corporate capacity, in asserting the Plan’s
claim for termination and unpaid contributions. Accordingly, the rule
of "differing capacities" applies and the identity or privity of the par-
ties was not established.
B.
The Beverleys contend that election of remedies also bars PBGC’s
claims. They argue that it was "legally inconsistent [for the district
court] to hold that PBGC was acting in differing capacities for the
purposes of res judicata, yet for the election of remedies doctrine,
PBGC was acting in the same capacity or was at the very least, in
privity with itself enough to have to give Don Beverley a credit."
Appellants’ Br. at 14.
What the district court actually found was that the election of reme-
dies doctrine did not apply and was not required to prevent a double
recovery. Accordingly, the district court structured a judicial remedy
to avoid such a windfall — it ordered that the judgment awarded in
the second case to be offset by any actual recovery from the prior suit.
The doctrine of election of remedies "refers to situations where an
individual pursues remedies that are legally or factually inconsistent."
Artis v. Norfolk & Western Railway Company, 204 F.3d 141 (4th Cir.
2000). As PBGC contends, the doctrine requires a plaintiff to make
an election between seeking rescission of a contract and damages for
breach of the contract. Winant v. Bostic, 5 F.3d 767, 776 (4th Cir.
1993). However, such is not the case here. Sections 1109 and 1362
allow for independent claims to be asserted when a plan’s fiduciary
duty has been breached and when the plan has been terminated with
insufficient funds. "It must be remembered that the purpose of the
statute is not to bail out the employer, but to protect the plan partici-
pants." Pension Ben. Guaranty Corp. v. Alloytek, Inc., 924 F.2d 620,
626 (6th Cir. 1991). The "credit" the district court created was to pre-
vent double recovery, while still enforcing the intent of Congress in
allowing the independent liabilities and judgments to be pursued.
Alexander v. Gardner-Denver Co., 415 U.S. 36, 51 (1974) (acknowl-
edging that the doctrine of election of remedies need not be invoked
to prevent a party from recovering more than it is entitled to recover).
10 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 10 of 15 --

A finding that the doctrine of election of remedies bars recovery in
this case would be misplaced.
C.
The Beverleys claim that the district court erroneously held that
Martha Beverley intended to form the alleged Beverley Partnership
with her husband, for the leasing of their jointly owned real property11
to Don’s Trucking despite insufficient facts to prove Martha Bever-
ley’s intent to form any alleged partnership. Thus, defendants claim
that extending employer liability to Martha Beverley personally is
inappropriate. PBGC contends that the district court correctly found
that Martha Beverley and Don Beverley were partners in the leasing
business, an unincorporated trade or business in the controlled group
of Don’s Trucking, and as such were jointly and severally liable with
Don’s Trucking for employer liability.
Generally, in federal law, one spouse is rarely held responsible for
the other’s obligations. However, courts have held that business part-
ners or joint venturers must share withdrawal liability of companies
that they own. See, e.g., Board of Trustees of Western Conference of
Teamsters Pension Trust Fund v. H.F. Johnson Inc., 830 F.2d 1009,
1015 (9th Cir. 1987) (personal liability for joint venturers); see also
United Food & Commercial Workers Union v. Progressive Super-
markets, 644 F. Supp. 633, 642 (D.N.J. 1986) (personal liability for
partners). Thus, partners are not insulated merely by being married.
See Central States, Southeast & Southwest Areas Pension Fund v.
Johnson, 991 F.2d 387, 391 (7th Cir. 1993). Since we have never
addressed this issue, we look to the Seventh Circuit’s opinion, Central
States, for guidance.
In Central States the court applied a test used in Connors v. Ryan’s
Coal Co., 923 F.2d 1461 (11th Cir. 1991), which considers the intent
of the marital couple to determine if the couple had a partnership. In
Connors, the married couple, George and Janice Simmons,
owned interests in several related coal-mining enterprises. When one
11When a husband and wife own property as tenants by the entirety,
the property is insulated against all but joint creditors. Central States,
991 F.2d at 389.
11 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 11 of 15 --

of those companies, Ryan’s Coal, defaulted on its pension obligations
to the United Mine Workers Pension Plan, the trustees of that plan
brought actions against the other businesses and the Simmonses them-
selves. The district court held that George Simmons was liable based
on his ownership of a business under common control with Ryan’s
Coal, and that Janice Simmons was liable due to her partnership inter-
est in a cattle farm owned jointly with her husband. Janice appealed
the decision, contending that her involvement in the cattle farm was
not so significant as to justify holding her "jointly liable for the with-
drawal amount as a partner in the business." Connors, 923 F.2d at
1464.
Whether Janice was a partner in the cattle business was ultimately
a question of federal law.12 Id. at 392 ("We must consider as a matter
of federal common law whether [a wife] should be held personally
liable for her husband’s unfulfilled debts"); see also H.F. Johnson,
Inc., 830 F.2d at 1014 ("Congress ‘intended that a body of Federal
substantive law will be developed by the courts to deal with issues
involving rights and obligations under private welfare and pension
plans.’") (quoting 120 Cong. Rec. 29942 (1974) (remarks of Sen.
Javits)). The court acknowledged that Mr. and Mrs. Simmons did not
have a formal partnership agreement. Connors, 923 F.2d at 1466-67.
Nevertheless, it affirmed the district court’s decision that a partner-
ship existed on the basis of two main factors. Id. First, the cattle farm
operation made mortgage payments on farm land owned jointly by the
Simmonses and the couple paid the farm’s property taxes. Second,
George and Janice Simmons took those payments as deductions on
their joint tax return. The court acknowledged that co-ownership of
property without more does not create a partnership. But, it found that
the facts in this case — especially the sharing of business profits and
losses — supported a determination that George and Janice Simmons
intended to be partners. Central States, 991 F.2d at 392. Both the Sev-
enth and Eleventh Circuits have agreed:
If, upon consideration of all the facts, it is found that the
partners joined together in good faith to conduct a business,
12While we may look to state law for guidance, the question whether
a business relationship qualifies as a partnership is ultimately one of fed-
eral law. Id. at 392.
12 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 12 of 15 --

having agreed that the services or capital to be contributed
by each is of such value to the partnership that the contribu-
tor should participate in the distribution of the profits, that
is sufficient [to find a partnership existed]. The true focus of
the inquiry must be on whether the alleged partners really
and truly intended to join together in the present conduct of
the enterprise. Their intention in this respect is a question of
fact, and may be determined with reference to an express
agreement or from the circumstances surrounding the pur-
ported partnership arrangement.
Connors, 923 F.2d at 1466-67 (quotations and citations omitted).13
In Central States, the Central States, Southeast and Southwest
Areas Pension Fund challenged the judgment of the district court,
which granted summary judgment in favor of defendant-owner Paul
Johnson’s wife, Lois Johnson, upon a finding that she was not liable
for her husband’s pension obligations under ERISA. 991 F.2d 387,
392-93. The Seventh Circuit recognized:
several pieces of evidence indicating that the property of the
leasing business was purchased out of funds jointly owned
by the Johnsons; the rental income produced by the business
went into joint accounts; losses from the business were
taken as deductions from the couple’s joint income tax
return; Lois Johnson, by her own admission, performed an
undetermined amount of clerical or administrative work at
her husband’s office; and the Johnsons each held a 50 per-
cent interest in another corporation known as Paul’s Cart-
age, Inc.
991 F.2d at 393. The court noted that "Connors is premised on flush-
ing out the true intentions of the married couple to pursue business
activities together. If that test depended on who is shown as owner of
13The court in Connors borrowed the Supreme Court’s test in Commis-
sioner v. Culbertson, 337 U.S. 733, 744-45 (1949), in which the Court
clarified when a family business qualifies as a partnership for tax pur-
poses.
13 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 13 of 15 --

record, it would be easy to protect one spouse simply by listing all
business property in the other’s name." Id.
The court further found that the "moving party (Lois Johnson)
relied only on a self-serving conclusory denial that she intended to
form a partnership with Paul. The fact that Lois Johnson failed to
‘exercise control’ over the leasing business is unrevealing." Id. at 394.
Thus, the court held that the district court erred in granting summary
judgment to Lois Johnson. Id.
As the Seventh Circuit did in Central States, we apply the test used
in Connors to determine if Martha Beverley knowingly joined the
undertaking that ultimately incurred the termination liability, thus
allowing her to be jointly and severally liable for that assessment. The
following is undisputed: (1) the Beverleys jointly owned the Coxen-
dale Properties and Don’s Trucking during the time in question; (2)
there was no express agreement between the Beverleys regarding the
leasing activity for the Coxendale Properties; and (3) Martha Bever-
ley served as an officer for Don’s Trucking. In addition, during the
years 1997 and 1998 all rent payments received for the Coxendale
Properties ($129,985.68) were deposited into checking accounts
owned jointly by the Beverleys. Also during that time period, Don’s
Trucking made mortgage payments for the Coxendale Properties —
the Beverleys made no mortgage payments from their personal
accounts. Since purchasing the Coxendale Properties the Beverleys
have continually leased parts of the Coxendale Properties to Don’s
Trucking and at times to other tenants. The Beverleys paid taxes on
the Coxendale Properties from their joint checking accounts and
deducted expenses for leasing the Coxendale Properties on their joint
tax returns, in the years 1997 and 1998, despite the fact that Don’s
Trucking paid the mortgage during those years.
It is apparent to this court that the Beverleys did not respect the
legal boundaries between Don’s Trucking and their allegedly "per-
sonal" holdings — the Coxendale Properties. Martha Beverley bene-
fitted from the fact that Don’s Trucking paid the mortgage on the
Coxendale Properties. Further, rents from the Coxendale Properties
(from Don’s Trucking and other entities) were deposited into the cou-
ples’ joint account and deducted as expenses on their personal joint
tax returns. This mixing of business and "personal" assets leads this
14 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 14 of 15 --

court to conclude that the Coxendale Properties were more than per-
sonal assets, but were intended to be a rental business partnered by
the Beverleys.
Significantly, Mrs. Beverley never denied her intent to be a partner
in the Beverley Partnership.14 As noted before, "when a motion for
summary judgment is made and supported as provided in this rule, an
adverse party may not rest upon the mere allegations or denials of the
adverse party’s pleading, but the adverse party’s response, by affida-
vits or as otherwise provided in this rule, must set forth specific facts
showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e).
This she did not do. In fact, it was only Mr. Beverley who, though
not in a better position to know, speculated as to Mrs. Beverley’s lack
of intent to form a partnership.15 Because of the undisputed facts in
the record that support the existence of Mrs. Beverley’s intent to form
the Beverley Partnership and the absence of any evidence in the
record from Mrs. Beverley denying that she had an intent to form the
partnership we find that there is no genuine issue of material fact for
trial and that summary judgment was properly granted.
IV.
Based on the foregoing reasons, we affirm the district court.
AFFIRMED
14At oral argument, the Beverleys’ counsel admitted that Martha Bev-
erley "never testified" and was "never deposed" as to her intent. Addi-
tionally, counsel acknowledged that Martha Beverly never presented
direct evidence on the issue of intent.
15Even if Mr. Beverley’s testimony was admissible, it is fatally under-
mined by his admission that the couple owned two pieces of real prop-
erty, one was their home and the other was a "place of business" — the
Coxendale Properties. J.A. 88.
15 PENSION BENEFIT GUARANTY v. BEVERLEY

-- 15 of 15 --