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July 30, 1999


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


Plaintiff, an employee medical services fund, claims that defendants controlled Salco Trucking Corporation and wrongfully withheld that corporation's payments to the fund. In a prior action, plaintiff won a judgment holding the corporation liable for delinquent contributions to the fund. In the present action, plaintiff seeks to hold defendants liable for their role in the Salco delinquency, alleging that each defendant acted as the corporation's alter ego (Count I), breached fiduciary duties to the fund (Count II), and embezzled fund assets (Count III). Defendants responded with a counterclaim for attorney's fees.

Defendants have moved for summary judgment and plaintiffs have cross-moved for partial summary judgment. For the reasons given below, the court grants in part and denies in part both parties' motions. As to defendant Sabato Catucci, the court grants plaintiff summary judgment on Count II, grants defendant summary judgment on Count III, and denies both parties summary judgment on Count I. As to defendants Kevin Catucci, Keith Catucci, and Ronald Catucci, the court grants defendants summary judgment on all counts.

I. Background

Unless otherwise indicated, the following facts are undisputed, with citations to any pleading also referring to the opposing party's admission of the cited facts.

A. The Fund

Plaintiff NYSA-ILA Medical & Clinical Services Fund ("Fund") provides funding for medical clinics serving longshore employees (and retirees, dependents, and others) as a multiemployer benefit plan within the meaning of the Employee Retirement Income Security Act ("ERISA"), §§ 3(3), 3(37), 4, 29 U.S.C. § 1002(3), 1002(37), 1003. Compl. ¶ 4. The Fund is a jointly administered labor-management trust fund established in collective bargaining agreements (CBAs) between the New York Shipping Association, Inc. ("NYSA") and the International Longshoremen's Association, AFL-CIO ("ILA") in accordance with the Labor Management Relations Act ("LMRA"), § 302(c)(5), 29 U.S.C. § 186(c)(5). Compl. ¶ 4. CBAs between Salco Trucking Corporation ("Salco"), a now-bankrupt trucking company, and an ILA local union are the source of the disputed Salco obligations to the Fund. Id. ¶¶ 7-9.

B. Salco and the Catuccis

Salco was incorporated in 1970, with ownership and control split between Sabato (a/k/a Sal) Catucci and Reuben Coher. Epstein Aff., Ex. B. On February 1, 1974, Sabato Catucci gained sole ownership and control when Reuben Cohen resigned as officer and director, transferring his 50 percent interest to Sabato Catucci. Id. Salco then became a family business, with all shares and corporate offices held by Sabato Catucci, his sons Kevin Catucci and Keith Catucci, and his brother Ronald Catucci. Sabato Catucci, maintaining a controlling interest, ran Salco and made all decisions on its payments. Pl.'s R. 3(g) Stmt. ¶¶ 7-8. From February 1, 1974 to January 5, 1988, Sabato Catucci was the sole shareholder and principal, owning all 200 shares of stock. On January 5, 1998, he transferred a 96-share minority interest to his sons, split 48 shares each for Kevin Catucci and Keith Catucci. Id. ¶ 5. A shareholder meeting that day elected Sabato Catucci as President, Kevin Catucci as Vice President, Keith Catucci as Secretary/Treasurer, and all three as Directors. Id. ¶ 6.

The role of defendant Ronald Catucci is a bit murkier. Sabato Catucci testified that Ronald Catucci was Secretary-Treasurer of Salco between 1974 and 1988; no records show any such appointment, however. Id. ¶ 12. Sabato Catucci elaborated that Ronald Catucci signed bank papers and procured loans for Salco, but had no say in the company's policies and finances, and essentially served in a "figurehead position" that began before 1988 and continued afterwards. Id. ¶ 13. Ronald Catucci testified that he served as Salco's "bookkeeper" at all times since 1977 but did not hold any Salco office, was never a Salco officer, and was not Salco's Treasurer. Id. ¶¶ 14-15. At least in the late 1980s, however, Ronald Catucci signed as Treasurer of the corporation on Salco's federal corporation income tax returns, which must be signed by a corporate officer, and on Salco's federal income tax returns. Id. ¶¶ 16-18 (federal corporation income tax return covering September 1986 to August 1987; federal income tax returns for 1986, 1987, 1988, and 1989). Ronald Catucci also signed Salco checks bearing notations indicating that they were loan repayments by Salco. Id. ¶¶ 27-28.

C. Salco's Delinquent Contributions to the Fund

Salco failed to make contributions to the Fund that the Fund believed Salco was obligated to make under two consecutive three-year CBAs with effective dates of April 1, 1984 ("1984 CBA") and April 1, 1987 ("1987 CBA"). Compl. ¶ 8. On September 14, 1990, plaintiff filed an action against Salco to recover delinquent contributions, NYSA-ILA Med. & Clinical Servs. Fund v. Salco Trucking Corp., 90 Civ. 5949(CSH) (S.D.N.Y.) ("1990 action"). On April 15, 1993, plaintiff was awarded summary judgment as to Salco's liability under the 1984 CBA but not the 1987 CBA. Id., 1993 WL 119702 (Apr. 15, 1993 memorandum opinion and order). On July 11, 1995, after proceedings to determine the proper relief for Salco's breaches of the 1984 CBA, judgment was entered against Salco in the amount of $142,114.51. Id., 1995 WL 404863 (July 6, 1995 memorandum opinion and order); Fier Aff., Ex. A. (July 11, 1995 judgment for $142,114.51). Less than three months later, on October 5, 1995, Salco filed a voluntary Chapter 7 bankruptcy petition, signed by Kevin Catucci as Vice President, in the United States Bankruptcy Court for the Eastern District of New York. Epstein Aff., Ex. A (petition).

On January 22, 1996, plaintiff filed this action against the Catuccis for their alleged roles in the Salco delinquencies originating from April 1, 1984 to March 31, 1990 under both the 1984 CBA and the 1987 CBA. Compl. ¶ 10. Count I (Delinquent Contributions Under ERISA) seeks to pierce the Salco corporate veil to hold the Catuccis liable for the judgment against Salco in the 1990 action under the 1984 CBA as well as for delinquent contributions by Salco under the 1987 CBA. Count II (Breach of ERISA Fiduciary Duty) alleges that Sabato Catucci was a fiduciary of the Fund who used his discretionary control over Salco assets to deny the Fund its contributions from Salco and to benefit himself. Count III (Conversion of Plan Assets) asserts a civil claim for damages resulting from the federal crime of theft or embezzlement from an employee benefit plan. Defendants counterclaim under New York state law for attorney's fees for a prevailing party in an action for fraud, misconduct, and breach of fiduciary duty.

II. Discussion

A. Breach of Fiduciary Duty

1. Statute of Limitations

The limitations period for an ERISA fiduciary beach action is:

the earlier of —

    (1) six years after (A) the date of the last action
  which constituted a part of the breach or violation,
  or (B) in the case of an omission, the latest date on
  which the fiduciary could have cured the breach or
  violation, or
    (2) three years after the earliest date on which
  the plaintiff had actual knowledge of the breach or
  except that in the case of fraud or concealment, such
  action may be commenced not later than six years
  after the date of discovery of such breach or

29 U.S.C. § 1113.

The three-year limitations period applicable once a plaintiff has "actual knowledge of the breach or violation" bars any claims based solely on Salco's failures to meet deadlines between 1984 and 1990 for Fund contributions. By 1990, when plaintiff filed a civil action against Salco for delinquent contributions, it clearly had actual knowledge that Salco, the company that Sabato Catucci controlled, had been in delinquency, and therefore in possession of Fund assets, since 1984, when Salco should have begun making contributions. Because a three-year limitations period beginning ...

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