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July 6, 1999


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




Carl Pasqualini, now a principal of Zodiac, started as a member of the union in 1956 and worked in that capacity until 1963 when he withdrew to take a management position, first with P & P Sheet Metal and later with Future Way Sheet Metal, which went out of business in 1974. During his tenure at Future Way, he appears to have been expelled from the union, although nothing turns on this.

Pasqualini formed Zodiac in 1981 with his wife, his brother Frank, and Sarah Lido.*fn2 He sought a labor contract with Local 38, which declined the request. Zodiac then competed as a non-union contractor and was sufficiently successful that it became a threat to the local. The union evidently concluded that it had made a serious mistake and began intensive efforts to organize Zodiac.

The 1992-93 Negotiations

By late 1992, Zodiac and Local 38 were on the verge of concluding a collective bargaining agreement ("CBA"), but there was one sticking point: Pasqualini insisted on negotiating an owner/member status with the union and a proper pension benefit for himself and his family.*fn3

At that time, the Fund permitted owners of non-union contractors who agreed to CBAs to receive owner-member status, thus making them eligible for union pensions, and to receive up to fifteen years of past service credit. This largesse was limited, however, by a requirement that the owner-member earn 54 months of future service credit in order to qualify for the past service credit, a rule that presented a difficulty for Pasqualini in view of the fact that he then would have been eligible for retirement in considerably less than 54 months. In consequence, the union organizer, Ed Peskie, sought a waiver of the 54 month rule for Zodiac.

After internal deliberations, the union presented a proposal to Pasqualini, but it was rejected. By January 1993, however, the Fund advised Peskie that Pasqualini would receive fifteen years of past service credit when Zodiac signed a union agreement provided that the Fund's board were to decide at its March 1993 meeting to grant past service credit to all owner-members,*fn4 as evidently was anticipated.

The February 9, 1993 Meeting and the CBA

Daniel Willie, who was a representative of the Fund and Peskie and other officials of the International and Local 38 met with Pasqualini on February 9, 1993 in order to assure Pasqualini that his desire for pensions for the Zodiac principals would be satisfied and to obtain his signature of the CBA. Willie passed out a written summary of the pension plan as it affected Zodiac. The summary stated that the Fund would grant 180 months of past service credit to each of the principals, Carl and Ann Pasqualini and Sarah Lido, and computed their anticipated pensions based on the assumption that each of them would earn 36 months of future service credit during the period July 1, 1993 through June 30, 1996.*fn5 While representatives of the defendants have testified that Willie spoke of giving "up to" fifteen years of prior service credit subject to satisfaction of various conditions,*fn6 the Court credits Carl Pasqualini's testimony and finds, particularly given Willie's subsequent correspondence*fn7 and the union's ardent desire to sign Zodiac, that Willie and the union representatives at the meeting made a flat promise that the owner-members would receive fifteen years of past service credit, subject only to their continued employment for three years following the effective date of the CBA. In addition, Pasqualini was promised that each of his employees would receive past service credit equal to the length of his prior employment with Zodiac.*fn8 Nor was any qualification made, either in writing or verbally, for the requirement of approval by the Fund's board at the March meeting.*fn9 It should be noted also that Carl Pasqualini, at least, knew that he was not entitled to the fifteen years of past service credit under the terms of the plan; rather, he relied upon the negotiators' representations that the Zodiac personnel would be given that credit irrespective of the terms of the plan as an inducement to sign the CBA.*fn10

In reliance upon Willie's presentation, Pasqualini signed the CBA, effective July 1, 1993.*fn11 Three days later, Willie wrote to Peskie and confirmed that "three owner/members that are currently employed by Zodiac will be filing owner/member applications with the Plan [and that i]t has been agreed by the Plan that these three owner/members will be granted fifteen (15) years of past service provided that they accumulate thirty-six (36) future service credits before they retire."*fn12 A copy was sent to Walter W. Carlough, the Fund Administrator. Willie wrote similar letters to Peskie again on March 1 and March 22, 1993.*fn13

On August 5, 1993, Zodiac submitted an owner/member registration statement, on a form provided by the Fund, to Local 38. The statement listed Carl, Ann and Frank Pasqualini and Sarah Lido as ...

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