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