The opinion of the court was delivered by: Wexler, District Judge
In the above-referenced action, plaintiffs, Trustees of the Local 282
Welfare, Pension and Annuity Trust Funds ("the Funds"), move for entry of
judgment against defendants Split Rock Associates, Inc. ("Split Rock"),
and Eileen Werner or, alternatively, for sanctions against defendants and
Hauppauge Equipment Leasing Corp. ("Hauppauge"), an affiliate of Split
Rock, in order to to remedy Hauppauge's failure to submit to a
court-ordered deposition and audit.
The dispute from which the present case arises involves plaintiffs'
effort to obtain judgment against Split Rock in the approximate amount of
$260,000. This figure constitutes the difference between Split Rock's
obligation to pay contributions to the Funds for the period prior to May
1, 1989, and payments already made by Split Rock.
The parties entered into a settlement agreement ("the agreement") on or
about May 31, 1989, pursuant to which defendants agreed to pay $330,000
to the Funds. Split Rock did pay $50,000 at the time of the agreement, as
mandated therein. Defendants also agreed to pay the remaining balance at
the monthly rate of the greater amount as between $1,000 or 2% of Split
Rock's gross receipts for the prior month.
As part of the agreement, Split Rock was required to submit monthly
gross receipt reports to the Funds and to permit the Funds to audit their
books and records. Obligations were also included in the agreement so
that Split Rock would "not engage in construction or excavating work as
defined [in Split Rock's contract with Local 282, IBT] under any other
corporate name or other structure than Split Rock Associates, Inc. in the
geographical area covered by said contract." Ostensibly, this was
designed to prevent Split Rock from transferring its gross receipts to
avoid the 2% payment mandate.
On September 28, 1990 this Court held a hearing on the plaintiffs'
initial motion for entry of judgment. At this hearing, representatives of
the defendant did not dispute the testimony of plaintiffs' auditor
indicating that Split Rock had gross receipts in the months of May,
October, November, and December of 1989, and January through April of
1990 that should have been subject to the 2% payment obligation.
Additionally, undisputed testimony revealed that Split Rock's gross
receipts were being funneled through Hauppauge. This Court ordered that
Hauppauge submit to a deposition and audit to determine the extent to
which the gross receipts were being channeled through Hauppauge, but
reserved judgment on plaintiffs' motion for entry of judgment.
The parties scheduled the original deposition and audit for October
22, 1990, but Fred Werner's request for adjournment was granted. The
parties then rescheduled the meeting for December 4, 1990. On the day
before the deposition and audit was to take place, Werner told plaintiffs
that he had taken ill and would not be able to appear on the following
day. Plaintiffs agreed to reschedule the deposition and audit for
December 20, 1990.
Plaintiffs allege that they sent Werner a letter on December 18, 1990,
confirming the upcoming meeting. They also claim that the Post Office has
confirmed delivery of the letter to Werner's post office box. Moreover,
plaintiffs allege that they left a telephone message at Werner's office
again confirming the meeting. A court reporter and counsel for plaintiffs
appeared at plaintiffs' office for the scheduled meeting, but Werner did
not. After unsuccessfully trying to reach him, his secretary told counsel
for plaintiffs that he would not appear because it was his understanding
that the meeting had been postponed. Plaintiffs dispute that they had any
knowledge of the postponement. Currently, plaintiffs move for entry of
judgment against defendants, or in the alternative, for sanctions against
defendants and/or Hauppauge, as a result of plaintiffs' inability to
conduct the court-ordered deposition and audit.
In consideration of the three bases set forth below, the Court hereby
enters judgment for plaintiffs.
Paragraph 10 of the agreement between the ...