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O'HARE v. GENERAL MARINE TRANSP. CORP.

April 4, 1983

JOSEPH O'HARE, ALBERT M. CORNETTE, PETER GALE, BRUCE A. McALLISTER, ROBERT M. WANDERS and THOMAS E. MORAN, as Trustees of the NEW YORK MARINE TOWING AND TRANSPORTATION INDUSTRY PENSION FUND AND INSURANCE FUND, Plaintiffs, against GENERAL MARINE TRANSPORT CORPORATION, Defendant.


The opinion of the court was delivered by: SWEET

SWEET, D.J.

Here is yet another chapter in the annals of the conflict between the Berman family and Local 333, United Marine Division, International Longshoreman's Association, AFL-CIO ("Local 333"). The dispute started in the 1970's and gives every sign of continued vitality. The parties presently before the court are the plaintiff trustees of the New York Marine Towing and Transportation Industry Pension Fund and Insurance Fund (the "Trustees" or "Funds") and defendant General Marine Transport Corporation ("General Marine"), a subsidiary of the holding company owned by members of the Berman family.

 The Trustees seeks a determination of the amounts owed in accordance with the summary judgment granted by this court on December 4, 1981 which required General Marine to make payments for its employees for the period from 1976 to 1979. Both parties seek summary judgment on General Marine's counterclaim. Final judgment in favor of the Trustees and dismissing the counterclaim of General Marine will be entered in accordance with this opinion which constitutes findings of fact and conclusions of law.

 Familiarity with the court's earlier opinion in this action and the opinions in related actions is assumed. After the December 4, 1981 opinion was filed, the Trustees discovered the books and records of General Marine, and after considerable delay, a one-day hearing was finally held on September 7, 1982 to resolve the amounts due to accordance with the earlier grant of summary judgment. Testimony was given by Eugene O'Connor ("O'Connor"), the Administrator of the Funds, Richard Siemerling ("Siemerling"), the auditor for the Funds, and Susan Frank ("Frank"), controller of General Marine. This was then followed on November 19, 1982 by argument on General Marine's motion for summary judgment on its counterclaim. By agreement of the parties, briefing was finally completed on or about February 18, 1983. Despite the wealth of past findings, certain facts should be restated as directly relevant to the present disposition.

 In the mid-1970's Berman operated tugs, barges and tankers, and General Marine, a subsidiary of the family holding company, operated sludge vessels. Local 333 had unsuccessfully sought to organize Berman, but it was agreed prior to 1973 that the employees of General Marine would be covered by the collective bargaining agreement between Local 333 and the Marine Towing and Transportation Employers' Association (the "Association").Berman used its employees interchangeably on all its vessels including the sludge vessels during the period covered by the 1973-76 industry-wide collective bargaining agreement and payments were made to the Pension Fund of $124,286.44 and to the Insurance fund of $75,918.33 covering all Berman employees. General Marine was a party to the agreement. All the General Marine and Berman employees received whatever benefits accrued to them as a consequence of these payments.

 In 1976 the Association and Local 333 entered into negotiations and an agreement was reached which purported to cover a "subsidiary company, an affiliated company or a company division in the Port of New York and vicinity." This provision and related events gave rise ultimately to Berman's antitrust litigation, Berman Enterprises, Inc. v. Local 333, 644 F.2d 930 (2d cir.), cert. denied, 454 U.S. 965, 70 L. Ed. 2d 381, 102 S. Ct. 506 (1981), and more immediately, to General Marine's repudiation of the 1976-79 collective bargaining agreement (the "Agreement") between the Association and Local 333. General Marine was struck, the strike was terminated, and on May 13, 1976 General Marine wrote to the Administrator of the Funds as follows:

 Dear Mr. O'Connor:

 In August, 1975, as Administrator of the Pension and Welfare Funds, you took the position that the benefits of Local 333 members employed by this company under the plans terminated because of a dispute about the effectiveness of the Association's contract with Local 333 and General Marine.

 The effectiveness of the Association's contract with Local 333 upon General Marine Transport Corp. is again the subject of disputes and litigation between Local 333 and General Marine. General Marine wants to make pension and welfare payments for the Local 333 members employed by it, but in order to do so, we want the Trustees of the Pension and Welfare Funds to authorize the receipt of payments pending resolution of the disputes.

 Very truly yours,

 Peter M. Frank

 Vice President

 No reply was forthcoming.

 In the fullness of time the NLRB concluded that Berman was entitled to a separate bargaining unit, Case No. 2-RM-1774, December 10, 1976, an election was held, and the Marine Engineers Beneficial Association ("MEBA") was elected as the bargaining representative for employees on Berman vessels. Local 333 then expelled the Berman employees. Berman and General Marine made no payments to the Funds and obtained coverage for their employees elsewhere. Local 333 complained to the NLRB of an unfair labor practice, the NLRB issued a complaint which the Second Circuit held on appeal to have been barred by the statute of limitations. General Marine Transportation Transport Corp. v. NLRB, 619 F.2d 180 (2d Cir. 1980).

 This action by the Trustees seeking recovery of pension fund contributions under the contract initially was brought as a counterclaim in the Berman antitrust suit. After the Trustees were dropped as defendants in that action, the counterclaim was severed from the antitrust suit and asserted through an independent complaint filed on December 29, 1978. Jurisdiction is predicated on section 301 of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185, and Employee Retirement and Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1001 et seq.

 The 1976-79 Agreement provided in Article I, Section 16 for payment by the Employer to the Insurance Fund and Pension Fund "for each of his Employees in the bargaining unit" and also provided in subparagraph (d) as follows:

 d. Delinquent Employer. If an Employer is delinquent for thirty (30) days in the payment of the contributions required of its under paragraphs "a" and/or "b" of this Section 16, the Administrator shall certify in writing to the delinquent Employer and to the Union the estimated delinquency due according to his records and the Union may terminate this agreement as to the delinquent Employer by mailing such Employer a notice to that effect by certified mail, which notice shall specify the date as of which the contract shall be so terminated. The Union will give such notice as its counsel may determine is required by law, if any, and if no notice is required by law, sufficient notice for the Employer to tie up its vessels in safety.

 Thereupon, the contract shall terminate as to such delinquent Employer with the same force and effect as though the termination date set forth in the Union's notice was the date upon which this contract is to terminate with the said delinquent Employer.

 Nothing contained herein, however, shall prevent the Union from immediately striking the said delinquent Employer until all monies owed hereunder by the delinquent Employer are paid together with interest at 2% above the prevailing rate charged by CITICORP BANK to its prime customers from the date on which the contribution should have been paid; and if the Trustees incur legal expense in enforcing payment of such delinquent amount, the Trustees shall also be entitled to recover their reasonable counsel fees and other expense incurred in effecting collection. Such strike shall not violate the "no strike cause" and shall not be subject to the grievance and arbitration machinery of this contract.

 In the event that the amount of delinquency alleged to be due by the Funds' Administrator is questioned by the Employer, the Employer may post a surety company bond in a form satisfactory to the Administrator or in lieu thereof, a cash deposit, for the amount certified by the Administrator of the Funds, in which event the Union shall not strike the delinquent Employer before the date of termination set forth in the aforesaid notice and the amount in dispute shall be resolved in accordance with the grievance and arbitration machinery of this contract.

 The Agreement provides that it "applies only to all licensed and unlicensed Employees, employed on tugboats and self-propelled lighters owned ...


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