The opinion of the court was delivered by: MINER
MEMORANDUM-DECISION and ORDER
In this action plaintiff, New York State Teamsters Conference Pension and Retirement Fund, seeks to recover pension benefits and credits allegedly illegally paid to defendant Hoh, and further seeks a judgment declaring that defendants Hoh, Accetta, Greenhut and Carroll are not entitled to any pension credit for the years during which contributions were paid on their behalf by a company which allegedly was not their employer. The complaint is predicated upon § 302 of the Labor Management Relations Act, 29 U.S.C. § 186; jurisdiction is based upon § 302(e) of that Act, 29 U.S.C. § 186(e).
Before this Court are motions by defendants PepsiCo, Inc., F & M Schaefer Brewing Company and Jerome Tierman to dismiss the complaint for failure to state a claim. Fed.R.Civ.P. 12(b)(6). Also before the Court are motions by defendants F & M Schaefer Brewing Company, Hoh, Borra, Pfleiderer, Walsh, Siegmann, Frank, Fink, Accetta, Carroll and Greenhut for summary judgment on the claim, and motions by these individual defendants for summary judgment on the counterclaims. Fed.R.Civ.P. 56.
This action involves the legality of certain payments made to the Brewery Workers Pension Fund (hereinafter "Brewery Fund"). The New York State Teamsters Conference Pension and Retirement Fund (hereinafter "Teamsters Fund") claims that these contributions were made by brewery employers to certain union officials in violation of § 302 of the Labor Management Relations Act.
Prior to its merger with the Teamsters Fund, the Brewery Workers Fund was a jointly administered, multi-employer pension plan, originally created pursuant to a collective bargaining agreement dated June 21, 1949 between ten metropolitan New York brewers and seven local brewery workers unions. (Affidavit of Thomas Donahue, para. 2). The Brewery Fund was created pursuant to § 302(c)(5) of the Labor Management Relations Act, 29 U.S.C. § 186(c)(5).
As required by that Act, employees' contributions were held in trust by a board which consisted of both employer and union appointed trustees.
Under successive collective bargaining agreements that governed both the obligations of the brewery employers to contribute to the Brewery Fund and the rights of employees to accrue pension benefits, any brewery employee who was elected to union office was granted a "leave of absence" from his employer.
(Affidavit of John Hoh, para. 6, Ex. A). Moreover, such union officers were expressly authorized by the Brewery Fund Plan to continue to participate as members of the Brewery Fund during their leaves of absence. (Affidavit of John Hoh, para. 7, Ex. B).
Defendants allege that pension contributions to the Brewery Fund on behalf of the union officers were at all times paid by the unions themselves and that, during the entire existence of the Brewery Fund, it was accepted administrative procedure for these contributions to the pension fund to be paid by the unions through the brewery employers. (Affidavit of Thomas Donahue, para. 4). Thus, defendants contend, the employers were used by the local unions merely as a conduit. This "conduit" procedure was found acceptable by the Brewery Fund trustees. (Affidavit of Thomas Donahue, paras. 5-6; Affidavit of John Hoh, paras. 8-10; Affidavit of Kenneth Carroll, paras. 3-6).
On the other hand, plaintiff alleges that the defendant union officials were not employees of the brewery companies and that "references in the Plan or Labor Bargaining Agreements to leaves of absence or a retention of seniority could not create a valid employee relationship between these defendants and the Brewery companies." (Affidavit of Peter P. Paravati in Opposition to Motion of Hoh, et al., para. 4). Plaintiff further maintains that contributions, on behalf of the elected union officials, were made "to the Pension Fund by various breweries [employers]" at a time when those defendants were "full time employees of the brewery unions involved." Id.
In 1973 the Brewery Fund entered into a Merger Agreement with the Teamsters Fund. In February, 1974 the Teamsters Fund repudiated its obligation under the agreement when the trustees of the Teamsters Fund informed the Brewery trustees that they would not proceed with the merger, purportedly because the Brewery Fund was believed to be in dire financial straits. (Affidavit of Peter P. Paravati in Opposition to Motion of Hoh, et al., para. 24).
There then ensued seven years of litigation in federal and state courts, on behalf of either the Teamsters Fund or the Brewery Fund, to nullify or enforce the Merger Agreement.
Following the Teamsters Fund's repudiation of the Merger Agreement, the Brewery Fund and its trustees commenced an action in the New York Supreme Court, Queens County, in May, 1974, seeking specific performance of the Merger Agreement and a declaration that the agreement was valid, binding and enforceable. Summary judgment was granted and that judgment affirmed by the Appellate Division, Second Department, 49 A.D.2d 755, 374 N.Y.S.2d 590, and the Teamsters Fund's motion for leave to appeal was denied by the Court of Appeals on February 10, 1976. Brewery Workers Pension Fund v. New York State Teamsters Conference Pension and Retirement Fund, 38 N.Y.2d 709, 382 N.Y.S.2d 1028, 346 N.E.2d 558 (1976).
The Brewery trustees resigned effective December 1, 1976 and allegedly attempted to transfer the assets and documents of the Brewery Fund to the Teamsters Fund in accordance with the terms of the Merger Agreement. The Teamsters Fund refused to accept those assets and documents. Thereafter, the Brewery trustees applied for an order and supplemental judgment to specifically enforce the terms of the Merger Agreement. The order and supplemental judgment was entered on April 12, 1977. The April 12, 1977 Order and Supplemental Judgment was affirmed by the Appellate Division. Brewery Workers Pension Fund v. New York State Teamsters Conference Pension and Retirement Fund, 62 A.D.2d 1046, 404 N.Y.S.2d 158 (2d Dep't 1978).
While the state proceedings were pending, the Teamsters Fund commenced an action in United States District Court for the Western District of New York. Plaintiffs there sought to enjoin the Brewery Fund from proceeding to enforce the state court judgment.
Cicatello v. Brewery Workers Pension Fund, 434 F. Supp. 950 (W.D.N.Y.1977). This action was dismissed by the Court and that determination was affirmed by the Second Circuit. Cicatello v. Brewery Workers Pension Fund, 578 F.2d 1366 (2d Cir.1978). A related action was brought in the District of Columbia, where the District Court granted summary ...