The opinion of the court was delivered by: SPATT
This lawsuit arises from the claims of the plaintiffs, Tracey Losquadro, Joseph Cavalieri, Anthony Senia, Andrew Jeacoma, Michael DeSena and Joseph Riccardo (the "plaintiffs"), as members of the General Building Laborers' Local Union No. 66 (the "Union") and participants and beneficiaries of the General Building Laborers' Local Union No. 66 Training Fund (the "Training Fund" or "Fund,"), against the defendants FGH Realty Credit Corporation ("FGH"), the Union, Paul O'Brien, Eugene Messina, Gerald Losquadro and David Elabor as Trustees of the Training Fund, the General Building Laborers' Local Union No. 66 Building Corporation (the "Building Corporation"), and Michael LaBarbara, Jr., James Abbatiello, Sr. and Peter Vario, (the "Former Trustees") individually and as the former trustees of the Training Fund and former Officers and members of the Executive Board of the Union and of the Building Corporation's Board of Directors, pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 et seq., and related state law.
Presently before the Court is the motion of the defendant FGH to dismiss the plaintiffs' ERISA claims pursuant to Fed. R. Civ. P., 12(b)(6) for failure to state a claim based on the statute of limitations and Fed. R. Civ. P. 12(b)(1) based on lack of subject matter jurisdiction over the pendent state law claims.
Paul O'Brien, Eugene Messina, Gerald Losquadro and David Elabor are the current Trustees of the Training Fund (the "Current Trustees"), a jointly-trusted employee benefit fund within the meaning of ERISA. The Training Fund has an office at the same address as the Union in Melville.
The Building Corporation is a not-for-profit corporation organized under New York law. The Union is the owner of the stock of the Building Corporation which holds the corporate stock in trust for the Union membership. The sole asset of the Building Corporation is the Union headquarters located in Melville.
According to the amended complaint, at all times relevant to this litigation, Michael LaBarbara, Jr. was a Trustee, Secretary of the Board of Trustees of the Training Fund, Business Manager and member of the Union's Executive Board, and President and member of the Building Corporation's Board of Directors. Similarly, James Abbatiello was, at all relevant times a Trustee and a member of the Board of Trustees of the Training Fund, Assistant Business Manager and a member of the Union's Executive Board, and the Secretary and a member of the Board of Directors of the Building Corporation. Peter Vario was a Trustee and a member of the Board of Trustees of the Training Fund and Vice President and a member of the Union's Executive Board. He also served as the Treasurer and a member of the Board of Directors of the Building Corporation. As a result of their occupying these various positions, the plaintiffs claim that the Former Trustees were fiduciaries of both the Union and the Training Fund.
According to the amended complaint, the remaining defendants, specifically the Union, the Current Trustees and the Building Corporation, are "named as . . . defendant[s] herein for relief purposes only."
B. The underlying loan transaction
In December 1986, the Training Fund purchased a parcel of real property located in Medford, New York (the "Medford Property") in order to build a "training facility." The purpose of this facility is not described. The purchase was financed in part by a $ 2.5 million dollar building loan entered into by the Training Fund and National Westminster Bank U.S.A. ("NatWest"), which was secured by a mortgage. In 1989, with the construction almost complete, the Training Fund attempted to convert the loan into a long term financing. NatWest declined, instead offering to contact defendant FGH to investigate the possibility of such financing.
Sometime in September 1989, Training Fund representatives approached FGH to determine whether it would be willing to extend a $ 4 million long term loan to the Fund. The loan would be secured by a mortgage on the Medford Property. FGH declined unless the Union headquarters located in Melville (the "Melville Property") was also offered as collateral. By letter dated September 13, 1989 (the "Approval Letter"), FGH's Vice President, Vincent J. Gatto ("Gatto"), advised LaBarbara that he "would endeavor to obtain approval" of the loan conditioned upon "among other things, a first mortgage on both the Melville and Medford Properties, the posting with FGH for the duration of the Loan of a certificate of deposit in the amount of $ 500,000, and a full repayment guaranty from the Union." Compl. P 15. On October 12, 1989, a commitment letter was signed by Gatto setting forth FGH's approval of the $ 4 million loan and the related security interests conveyed to FGH including the two mortgages on the Medford and Melville Properties. The commitment letter was executed by LaBarbara on behalf of the Fund. Subsequently, FGH discovered that title to the Melville Property belonged to the Building Corporation and refused to proceed unless the Building Corporation was included as a "co-borrower" willing to grant the mortgage on the Melville Property. The Former Trustees agreed.
On November 20, 1989, the loan transaction closed. At that time FGH was provided with the following certifications from the Union, Training Fund and Building Corporation, which were executed by LaBarbara and Abbatiello:
1. That at a special meeting held on November 15, 1989, the Training Fund Trustees unanimously approved the $ 4 million loan from FGH and the first mortgage on the Medford Property and authorized LaBarbara to execute all necessary documents;
2. That at a special meeting held on November 15, 1989, the Union Executive Board unanimously authorized the guarantee of the loan from FGH and authorized LaBarbara to execute all necessary documents; and
3. That at a special meeting on held on November 15, 1989, the Building Corporation's Board of Directors unanimously authorized the FGH loan and a first mortgage on the Melville Property and authorized LaBarbara to execute all necessary documents.
At the closing, FGH transferred $ 4 million to the Training Fund. In exchange, FGH received a first mortgage on the Medford and Melville properties, a "purported full repayment Guaranty" from the Union, and security deposit of $ 500,000, including a pledge from the Union in the form of a certificate of deposit in the amount of $ 250,000. The transaction is evidenced by a "Mortgage and Agreement of Consolidation, Spreader, Modification and Extension of Mortgage" from the Training Fund and Building Corporation in the sum of $ 4 million, a "Substitute Promissory Note" from the Training Fund and Building Corporation, a "Guaranty of Payment" by the Union, Training Fund and Building Corporation, and a "Pledge and Security Agreement" from the Union and Training Fund. These documents are all dated November 20, 1989 and were executed by defendant LaBarbara.
On September 29, 1989, prior to the execution of the loan transactions set forth above, defendants LaBarbara and Abbatiello pled guilty to various counts of a criminal indictment alleging among other things, accepting illegal payoffs from employers of Union members in violation of the Taft-Hartley Act, 29 U.S.C. § 186(b)(1). LaBarbara pled guilty to six felony counts of accepting illegal payoffs, and Abbatiello pled guilty to two felony counts and one misdemeanor count of accepting illegal payoffs and one felony count of obstruction of justice. The plaintiffs allege that these guilty pleas received wide media coverage.
On June 26, 1995, FGH initiated an action, against the Training Fund, Union and Building Corporation among others, seeking a foreclosure judgment and sale of the Medford and Melville properties. Further, FGH sought judgment against the Training Fund and Building Corporation as borrowers and the Union as Guarantor for joint and several liability on any outstanding indebtedness after the ...