Mertens held liable for assets in company it bought

Fulton-based Mertens Construction Co. is liable for the employment security issues of a Tipton company it bought, an appeals court panel ruled Tuesday.
Mertens mines, operates rock quarries and sells crushed rock. So did Tipton-based Prestage Quarries Inc., which conducted its business in a quarry on real estate it owned.
According to Presiding Judge Gary Witt's ruling, Mertens and Prestage agreed to an asset purchase agreement in 2012, allowing Mertens to buy the real estate that included Prestage's quarry, along with Prestage's inventory of crushed rock, equipment, supplies, goodwill and customer list.
Mertens also purchased and continued to use the telephone number Prestage had used.
However, the sale didn't include Prestage's accounts receivable, petty cash, cash-in-banks, certificates of deposit, prepaid insurance or vehicles.
The agreement also did not require Mertens to hire any of Prestage's employees, and it didn't. In fact, Prestage had no employees when Mertens took over.
But Missouri's Employment Security division notified Mertens that, as of Jan. 1, 2013, the company was considered Prestage's successor under the state's employment security law and was liable for "separate account, actual contribution and benefit experience, annual payrolls, and liability for current or delinquent contributions, interest and penalties, and contribution rate" under the law.
Mertens argued it had no liability for those unemployed, former Prestage workers. In addition to the Prestage employees being fired before the ownership change, Mertens argued it had not been allowed to take over Prestage's land reclamation permit from the Missouri Natural Resources department to continue work at the purchased quarry.
DNR required Mertens to apply for a new permit, which Mertens didn't receive until August 2013.
While it sold the 75,000-ton inventory of crushed rock from the purchased location, Mertens said it did not operate any mining or crushing operations at the quarry.
Since Prestage had been an "employer" as defined by Missouri law, and Mertens continued operating the business even though it didn't do so all at once, the Labor and Industrial Relations Commission ruled Mertens had continued Prestage's role as an "employer."
Witt's opinion for the appeals court panel agreed Prestage's dismissal of the workers before the sale didn't prevent Employment Security from finding Mertens liable.
And, as far as the delay in getting to operate the entire business, the appeals court ruled: "There is substantial competent evidence to support the Commission's determination that Mertens continued Prestage's business without interruption."