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UNITED BHD. OF CARPENTERS JOINERS v. TILE HELPERS

September 25, 1992

UNITED BROTHERHOOD OF CARPENTERS JOINERS OF AMERICA (AFL-CIO) AND FRANK FIANO, in his official capacity as Trustee of TILE, FINISHERS UNION, LOCAL NO. 88 of the TILE, MARBLE, TERRAZZO, FINISHERS, SHOPWORKERS AND GRANITE CUTTERS INTERNATIONAL UNION (AFL-CIO), Plaintiffs, against TILE HELPERS UNION LOCAL 88, INTERNATIONAL UNION OF BRICKLAYERS & ALLIED CRAFTSMEN; TILE FINISHERS UNION, LOCAL NO. 88 OF THE TILE, MARBLE, TERRAZZO, FINISHERS, SHOPWORKERS AND GRANITE CUTTERS INTERNATIONAL UNION (AFL-CIO); TILE HELPERS MORTUARY FUND; JOHN STOREY, individually and as Trustee of the TILE HELPERS MORTUARY FUND; WILLIAM GUNTHER; CHARLES MCKENNA, individually and as Trustee of the TILE HELPERS MORTUARY FUND; and CHARLES HILL, individually and as Trustee of the TILE HELPERS MORTUARY FUND, Defendants.

Nickerson


The opinion of the court was delivered by: EUGENE H. NICKERSON

NICKERSON, District Judge:

 The defendants are the new local affiliated with the Bricklayers, now called Tile Helpers Union Local 88 (herein called "new Local 88"), as well as a Mortuary Fund, and former officers of old Local 88 now trustees of the Fund.

 The Carpenters seek, in substance, to recover from defendants damages because of the transfer by old Local 88 of assets plaintiffs say it was obligated to turn over to the TMT International under the terms of its constitution.

 Jurisdiction is based on Section 301(a) of the Labor-Management Relations Act, 29 U.S.C. § 185(a); Section 501(b) of the Labor-Management Reporting and Disclosure Act, 29 U.S.C. § 501; and 28 U.S.C. §§ 1331 and 1337.

 By Memorandum and Order dated June 26, 1990, familiarity with which is assumed, this court held that the Carpenters, as successor to TMT International, had standing to bring this action.

 Both sides now ask for summary judgment. The chief issue is whether old Local 88 properly transferred into a mortuary account assets that the Carpenters say should have been forfeited to the TMT International.

 I.

 Most of the critical facts are not in serious dispute.

 In 1987 the members of a number of the larger locals of TMT International, including old Local 88, having become dissatisfied with their parent, decided to leave and join the Bricklayers. See e.g., Tile, Marble, Terrazzo, et al. v. Local 32, 896 F.2d 1404 (3d Cir. 1990) (Philadelphia and Harrisburg Local); Tile, Marble, Terrazzo, et al. v. Ceramic Tile Finishers Union, Local 25, 972 F.2d 738, (7th Cir. 1992) (Chicago Local).

 On September 10, 1987, the Executive Board of old Local 88 unanimously recommended to its members that they leave TMT International and join the Bricklayers and that Local 88 establish a mortuary account as soon as practicable in an amount not to exceed one hundred percent of the local's assets. The business manager of Local 88 then established a mortuary fund on October 6, 1987.

 Some time following September 10, 1987 the President and Business Manager of Local 88 sent a special notice to its entire membership stating, among other things, that it was of the utmost importance that all members attend the October 7, 1987 regular monthly meeting. On that date 169 out of 243 active members attended the meeting and unanimously adopted a resolution authorizing the creation of a death benefit or mortuary account in an amount not to exceed 100% of the local's assets and appointing a Committee to oversee the account. The members then voted unanimously to leave the TMT International and join the Bricklayers.

 The members at the meeting, followed by others in the succeeding weeks, also signed the Bricklayers' membership applications. Members of old Local 88 stopped paying dues to the Local and to TMT International. On October 8, 1987 the Bricklayers issued a charter for a local union, now new Local 88.

 Pursuant to the resolution to establish a mortuary account, the Committee developed the terms of a death benefit plan, executed a Declaration of Trust that established an ERISA trust fund, adopted rules governing the plan, obtained an Employer Identification Number, and filed for and obtained tax exempt status for the fund as a death benefit trust from the Internal Revenue Service. Out of funds remaining in old Local 88's account, the Committee paid to TMT International the September 1987 "per capita" payment due from its constituent Locals.

 In May 1988 the TMT International named plaintiff Frank Fiano as a Trustee over old Local 88, ...


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