The opinion of the court was delivered by: KAPLAN
LEWIS A. KAPLAN, District Judge.
This is another dispute between the trustees of the Hotel Employees and Restaurant Employees International Union Pension and Welfare and Pension Funds (the "Funds") and an employer concerning the meaning of a settlement which they concluded in order to settle a prior dispute concerning unpaid benefit plan contributions.
This is the Court's decision after a non-jury trial.
The defendant operates Sarge's Deli on Third Avenue in Manhattan and has been signatory to successive collective bargaining agreements ("CBAs") with Local 100, Hotel Employees & Restaurant Employees, AFL-CIO, covering the period relevant to this case. Pursuant to those agreements, defendant was obliged to make contributions to and was bound to the terms of the Fourth Amended and Restated Agreement and Declarations of Trust creating the Funds. The trust agreements empowered the Funds to audit the books and records of contributing employers in order to ensure that the contractually required contributions were made.
The Prior Action and Settlement
On January 19, 1995, the Funds commenced an action in this Court (the "Prior Action"). The complaint alleged that the defendant breached the CBAs by failing to make the required monthly contributions for the period December 1993 through October 1994 and that a total of $ 6,486.65 was due and owing, inclusive of accrued interest and late fees.
It further asserted that the Funds were entitled to an audit of the defendant's business records relating to each of its employees during the terms of the CBAs.
In February 1995, while the action was pending, the Funds demanded an audit of the defendant's books and records for the calendar year 1994.
While the record is not entirely clear, it appears that the audit began some time later. In any case, a dispute arose concerning its scope. Very few of the defendant's employees were members of the bargaining unit represented by Local 100, but the Funds nevertheless demanded -- and the defendant refused -- access to records concerning the non-unit employees.
While the precise sequence of events is neither clear nor material, it appears that there were unconsummated settlement discussions during the summer of 1995. In November 1995, counsel appeared before Judge Keenan, before whom the Prior Action was pending, at which time defendant's attorney either offered or indicated that he previously had offered $ 7,800 in settlement of the case. Plaintiffs' counsel then advised Judge Keenan that no settlement had been reached because the 1994 audit had not been completed in consequence of the dispute over access to records of non-unit employees and the Funds' insistence on retaining the right to complete it.
Following the November conference, defendant changed counsel and renewed efforts to settle the case ensued. Mr. Cutro, one of the Funds' attorneys, briefed Mr. Farrell, one of defendant's new counsel, on the status of the matter, noting in substance that the $ 7,800 figure was acceptable but that the Funds would not give up the right to complete the 1994 audit, which required access to information regarding the non-unit employees.
On March 11, 1996, a meeting took place among Mr. Frank, the new lead counsel for the defendant, Ms. Venuti and Mr. Curto on behalf of the Funds, and Mr. Hobson, who represented the Funds' auditor. As the $ 7,800 figure was acceptable to both sides and the only outstanding issue was the Funds' right to access to information regarding non-unit employees, the latter topic was virtually the only subject of discussion. Mr. Frank and Ms. Venuti ultimately resolved the dispute concerning the 1994 audit by the defendant agreeing that it would give access to payroll information for non-unit employees other than management personnel and defendant's bookkeeper, for whom it would give an aggregate annual payroll figure. There was no mention whatever of the Funds' auditing any period earlier than 1994. Nor was there any discussion of the effect of the settlement or the $ 7,800 payment on the Funds' right to claim additional amounts in respect of any period prior to November 1, 1994.
On March 11, 1996, the parties executed two documents, a settlement agreement and a stipulation and order dismissing the Prior Action which was "so ordered" by Judge Keenan on the same day.
The provisions of the settlement agreement relevant here were paragraphs 1 and 6. Paragraph 1 recited that (1) the Funds had determined that the defendant's liability for past due contributions and interest for the period from November 1994 to January 1995 was $ 11,215.70 inclusive of interest, fees and liquidated damages accrued through June 12, 1995, and (2) "the parties have agreed to settle this matter for the sum of $ 7,800.00."
Paragraph 6 provided: "The . . . Funds reserve the right to audit the books and records of the Employer upon seven (7) days' notice, pursuant to the Funds' Audit Procedures and Guidelines."
The stipulation and order of dismissal ...