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April 24, 1991


The opinion of the court was delivered by: Stewart, District Judge:


Plaintiff Harry J. Diduck ("Diduck") brings this class action*fn1 against defendants William Kaszycki and Kaszycki & Sons Contractors, Inc., defendant John Senyshyn, a trustee of the House Wreckers' Union Local 95 ("the Union"), and defendants Trump-Equitable Fifth Avenue Co. ("Trump-Equitable")*fn2, the Trump Organization, Inc., Donald J. Trump, Donald J. Trump d/b/a The Trump Organization, and the Equitable Life Assurance Society of the United States (the "Trump defendants").

Diduck, a beneficiary of the Union's pension and welfare insurance funds, alleges that Senyshyn breached the fiduciary duty imposed upon him as a trustee of the funds by section 404 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. § 1104. Plaintiff alleges Senyshyn breached his fiduciary duty by failing to collect pension and welfare fund contributions due on the wages of non-union, Polish workers.

He also alleges that the Trump defendants participated in the breach, thereby becoming jointly and severally liable. He seeks as damages the contributions and liquidated damages, which the funds would have recovered but for the defendants' breach of duty and participation therein, and interest from April 1, 1980, in the sum $1,027,858.10. Plaintiff also seeks his necessary costs and disbursements of the action and a reasonable attorneys' fee.

A non-jury trial of sixteen days was held. The following constitutes our findings of fact and conclusions of law as mandated by Rule 52 of the Federal Rules of Civil Procedure.


Trump-Equitable hired William Kaszycki and his company Kaszycki and Sons Contractors, Inc. ("Kaszycki Corporation" and collectively "the Kaszycki defendants") to demolish the old Bonwit Teller building in midtown Manhattan at 56th Street and Fifth Avenue to make way for the Trump Towers. An agreement was signed on January 29, 1980.*fn3 Under the agreement Trump-Equitable was to pay the Kaszycki Corporation $775,000 for its demolition work. The Kaszycki Corporation was responsible for providing labor, equipment, and supplies.

Before this time Kaszycki had been engaged in doing construction cleaning (i.e., cleaning up after a building has been constructed) through a company called Interstate Window Cleaning Company. He had never before performed a total demolition job involving completely taking down a building.

Immediately before doing the demolition work on the Bonwit Teller building at 56th Street ("the Bonwit Teller job" or "the 56th Street job"), Kaszycki and Interstate performed interior demolition work*fn4 on a contiguous building at 57th Street (the "57th Street job"). That building was owned by Donald J. Trump who leased it to Allied Stores, parent of the Bonwit Teller company. Testimony established that Donald Trump visited the 57th Street site and observed Kaszycki's Polish workers, noting that they were "good hard workers." Tr. 2181. Workers also observed Trump visiting the job site of the Bonwit Teller demolition job. Tr. 647-50; 1169-71; 1320-21.

Zbigniew*fn5 Goryn was Kaszycki's foreman for both the 57th Street job and the Bonwit Teller job. Goryn testified that while he was on the 57th Street job Kaszycki told him he had to join the union (Local 23 of the Laborers' International Union of North America) and sign up five of the workers for the union as well. Kaszycki withheld money for union dues from their wages. Tr. 2182. However, they later discovered that they were not members of the union because their dues were never forwarded to the union. Tr. 2183.

Most, if not all, of Kaszycki's Polish workers had recently arrived from Poland. They were undocumented and worked "off the books." Tr. 725. No records were kept, no Social Security or other taxes were withheld, Tr. 715, 724, 728, and they were

An article appeared in the New York Times on or about March 16, 1980 reporting on the demolition. In late March 1980 union workers from Housewreckers Local 95 came on the job. The Polish workers were told they would be let go, but some continued to work until June 1980. Defendant John Senyshyn started working on March 24, 1980. Tr. 2051, 2059. Senyshyn was the shop steward for at least the first three weeks he worked on the Bonwit Teller job. Tr. 2061-62. He was also the president of Local 95 in 1980. Tr. 2050. As president he was a trustee of the union's pension and welfare funds.*fn6 Tr. 1388; 1390-91.

Senyshyn worked for about two and a half to three weeks and then worked very briefly at another Local 95 job in the Bronx. Tr. 2054-55. He returned to the Bonwit Teller job and worked there through August 1980.*fn7 Tr. 2060-61.

The Shop Steward Reports Submitted by Senyshyn

Senyshyn was the shop steward for the first three weeks he worked on the Bonwit Teller job.*fn8 Tr. 2061-62. He submitted three shop steward reports, the first dated March 27, 1980.*fn9 Senyshyn's shop steward report for the week ending March 27 listed 12 workers, including Senyshyn himself. Pltf's Exh. 88A. The employer's report for the week ended March 25 also listed 12 workers. Pltf's Exh. 89C. Senyshyn's two other reports show 15 workers, Pltf's Exh. 88B, and 16 workers, Pltf's Exh. 88C. The employer's reports for April 1 and April 8 both show 16 workers. Pltf's Exh. 89D, 89E.

The Shop Steward Reports and the Employer's Reports

The shop steward report form is entitled "Weekly Shop Stewards [sic] Payroll Report." See e.g., Pltf's Exh. 88A. The basic purpose of the shop steward report is to list those working on the job and their earnings. Tr. 1907. The form has a space for the employee's book number. Pltf's Exh. 88A. If there is no book number, that is an indication that the worker is not a union member. Tr. 1442-43. The shop steward reports were sent by the shop steward to the administrators of the pension and welfare funds. Tr. 1417-18. If the shop steward report listed non-union workers on the job site, the administrator would bring the listing to the secretary-treasurer. Id.; Tr. 1442-43. . The administrator would turn that information over to the union's business manager who would then get the workers into the union. Id. The only way for the union to find out that there were non-union workers on a job was through the shop steward report. Tr. 1443.

The employer also prepared a weekly payroll report listing employees and their earnings on a form provided by the union. The employer's weekly payroll report was also sent to the administrators of the union's pension and welfare funds. Tr. 842.

The shop steward report was used by the fund administrators as a cross-check on the employer's weekly payroll reports. Tr. 1907. The pension fund administrator took information from the employer's report regarding the employee's earnings and gave credit on the employee's record card. Id. These cards were maintained for both members of Local 95 and nonmembers. Tr. 1908. Information both for members and for nonmembers of Local 95 was typically included in the employer's weekly report. Id. The shop steward's report was supposed to include basically the same information as the employer reports. Id.

If the total earnings reported by the employer were greater than the total earnings on a corresponding shop steward report, the pension fund administrator used the larger figure. Tr. 1916-17. But if the total earnings on the shop steward report were greater than that on the employer's report, the administrator would try to work it out with the employer. Tr. 1917.*fn10 If the administrator discovered any delinquencies in payment of fund contributions by an employer, the matter was reported at the meeting of the funds' trustees. Tr. 1918. The trustees would notify the employer, and then, if they did not pay, the union would "take action on the job," i.e., threaten to stop work. Tr. 1919.

Kaszycki's employer's report was prepared by Doris Butler, Kaszycki's bookkeeper. Tr. 841-42. She prepared the report based on information provided to her by the union timekeeper. Tr. 834-35, 842-43. She sent them to Thomas Macari, Trump-Equitable's vice president who was in charge of the Bonwit Teller demolition job. Tr. 843-44; 2087; Pltf's Exh. 136. Macari admitted that the employer's reports were part of the backup he examined before authorizing payments by Trump-Equitable to the pension/welfare funds. Tr. 2157; see also Tr. 843-44, Pltf's Exh. 136 at 3.*fn11

While both the shop steward reports and the employer's reports show that only 12 to 15 workers were on the Bonwit Teller job during the three weeks after March 24, 1980, the evidence clearly shows that there were considerable numbers of Polish workers doing demolition covered by the contract who should have been listed on both the shop steward reports and the employer's reports. Polish worker Wojciech Kozak estimated that in March 1980, there were 30-40 Polish workers on the day shift and 150 at night. Tr. 1162-63. Another worker estimated 40-60 on the day shift. Tr. 1311. A third estimated 80-100. Tr. 385. Data collected in early 1981 by James Dondzil, the investigator for the United States Labor Department, lists 53 Polish workers for the period of late March to early April.*fn12 Pltf's Exh. 101. Although the exact number of Polish workers is not available because no records were kept, all of the numbers are dramatically different from the 12-15 workers reported by Senyshyn on the shop steward report. Further, the Polish workers' estimates are based on their personal observations of the numbers of workers visible on the job site.

The Polish workers were obvious not only in numbers but also in appearance. In contrast to the union workers the non-union, Polish workers were distinguished by the fact that most of them did not wear hard hats. Tr. 1317-18. In addition the Polish workers staged several very visible work stoppages because they were not being paid their wages.*fn13

We do not find credible Senyshyn's unsupported assertion that he thought the Polish workers were members of Local 23, a sister union. Senyshyn testified that Mike Novak, Local 95's business manager, introduced Ziggy Goryn (Kaszycki's foreman) as the shop steward for Local 23.*fn14 Tr. 2052-53. Goryn denied that any such conversation took place. Tr. 2186-87. As a foreman Goryn was a member of management, preventing him from being a union steward, a fact of which he was well aware. Id.

Macari's Role as Trump-Equitable's Agent

Thomas Macari was a vice president of Trump-Equitable and its manager in charge of the demolition of the Bonwit Teller Building Tr. 1097; 2087. Macari was experienced in construction work. As a youth, he had worked as a laborer for a contractor during the summer. Pltf's Exh. 18A at 5. In addition he worked for several retail stores, including Saks where he oversaw construction jobs. Id. at 6. And he was familiar with the various unions on the Bonwit Teller job. On direct examination he easily recited the four unions present on that job, Tr. 2089, a striking contrast to his frequent "I don't recall" statements regarding most other aspects of that job.

Macari was frequently on the Bonwit Teller job site to oversee the everyday progress of the work. Tr. 655. He often conferred with both the union foreman and with Ziggy Goryn, the Polish workers' foreman. Tr. 652. Macari knew that there were Polish workers hired by Kaszycki who were doing demolition work on the Bonwit Teller job. Tr. 169; Pltf's Exh. 4. He also knew that they were non-union workers and ...

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