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PLUMBERS, PIPEFITTERS AND APPRENTICES v. MAURO'S

February 10, 2000

PLUMBERS, PIPEFITTERS AND APPRENTICES LOCAL UNION NO. 112 PENSION, HEALTH AND EDUCATIONAL AND APPRENTICESHIP PLANS, BY GEORGE FISH, AS FUND ADMINISTRATOR, AND LOCAL UNION NO. 112 OF THE UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND PIPEFITTING INDUSTRY OF THE UNITED STATES AND CANADA, BY WAYNE HOWARD, AS BUSINESS MANAGER; PLAINTIFFS,
V.
MAURO'S PLUMBING, HEATING AND FIRE SUPPRESSION INC., AND NORTHEAST MECHANICAL OF N.Y., INC., DEFENDANTS.



The opinion of the court was delivered by: McAVOY, Chief Judge.

MEMORANDUM — DECISION & ORDER

Plaintiffs bring this action pursuant to the Employee Retirement Income Security Act of 1974, as amended, ("ERISA"), 29 U.S.C. § 1001 et seq., and the Labor-Management Relations Act of 1947, as amended ("Taft-Hartley Act"), 29 U.S.C. § 185(a) to recover benefit contributions allegedly owed by Defendants Mauro's Plumbing Heating and Fire Suppression, Inc. ("Mauro's") and Northeast Mechanical of N.Y., Inc. ("Northeast"). Presently before the Court is Plaintiffs' motion for summary judgment pursuant to FED. R.Civ.P. 56 seeking a judgment that Northeast is the alter ego and/or successor of Mauro's and that Mauro's and Northeast are liable for delinquent fringe benefit contributions, deductions, interest, and liquidated damages totaling $250,657.38, pursuant to ERISA, 29 U.S.C. § 1132(g)(2), for the period of May 3, 1996 to March 31, 1998 and an amount as yet to be determined for the period April 1, 1998 to the present. Plaintiffs also seek $34,979.76 in attorneys' fees and costs and a permanent injunction directing Defendants to comply with the terms of the collective bargaining agreement.

I. Background

A. Facts

1. The Collective Bargaining Agreement

The Plumbers, Pipefitters and Apprentices Local No. 112 Pension, Health and Educational and Apprenticeship Funds (the "Funds") were established pursuant to Restated Agreements and Declarations of Trust. The Funds are multi-employer plans and employee benefit plans as defined by ERISA, 29 U.S.C. § 1002(3) and (37).

On March 13, 1996, Mauro's entered into a collective bargaining agreement between the Broome County, New York Association of Plumbing, Heating and Cooling Contractors, Inc. and Local Union No. 112 of the United Association of Journeyman and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (the "Union") (the "Agreement" or "CBA"). The CBA requires, among other things, that Mauro's report to the Funds and Union the number of hours worked by covered employees; remit certain contributions to the Funds for various employee benefits; and remit deductions to the Union for vacation, dues and contributions to the Industry Improvement and Industry Advancement Plans (the "IAP").*fn1 The CBA also states that by signing the Agreement, Mauro's agrees to be bound "to the terms of the Trust Agreements under which the Health Fund, Pension Fund, and Education and Apprenticeship Fund are operating." See CBA Art. 11(H).

In the event that Mauro's fails to make the required contributions, the CBA provides that the Funds can recover the delinquent contributions and interest at the rate of two percent (2%) per month; plus the greater of interest on the unpaid and untimely paid contributions or liquidated damages equal to twenty percent (20%) of the amount found to be delinquent; plus interest on the unpaid and untimely deduction and IAP monies, at the rate of nine percent (9%) per annum; plus auditing fees; plus attorneys' and paralegal fees and costs arising out of the collection of the delinquent contributions. See CBA Art. 11, ERISA, 29 U.S.C. § 1132(g)(2), Pl. 7.1(a)(3) Statement ¶ 8.

2. The Companies

In this action, Plaintiffs seek to recover allegedly delinquent contributions from Mauro's, a signatory to the CBA, and Northeast, a non-signatory. Plaintiffs assert that Northeast is the alter ego and/or successor of Mauro's and, thus, is bound to the CBA and jointly and severally liable for contributions allegedly owed by Mauro's. Because the parties dispute the alter ego and/or successor issue, a detailed analysis of the formation, business operations, and interrelationship of the two companies is warranted.

Mauro's was incorporated on October 2, 1989. It had an office located at Watson Boulevard, Endicott New York and subsequently moved to 5 Endicott Avenue, Johnson City, New York. Mauro's performed primarily residential, light commercial, and prevailing wage work in the plumbing industry. See P. Mauro Aff. ¶ 3.*fn2 Philip and Albert Mauro held all of Mauro's shares and the offices of President and Secretary/Treasurer, respectively.

In September of 1996 Philip and Albert Mauro established a second corporation, Northeast. On September 24, 1996, the Mauros incorporated Northeast under the laws of New York. Philip and Albert Mauro, the President and Secretary/Treasurer of Northeast, respectively, hold all of its shares. The Mauros established Northeast as a non-Union corporation to perform residential and light commercial work, maintenance, repair, and service work on non-Union, non-prevailing wage jobs. See P. Mauro Aff. ¶ 21. Northeast's original office was located at 404 W. Main Street, Endicott, New York and its phone number was (607) 748-1239. See P. Mauro Aff. ¶¶ 19, 20. This number "rang through" to Mauro's office at 5 Endicott Avenue. See P. Mauro Dep. at p. 131.

In December 1996, Mauro's ceased all operations and was no longer a viable business. See P. Mauro Aff. ¶ 18. As early as January 2, 1997, Northeast began operating at Mauro's 5 Endicott Avenue address and took over Mauro's (607) 729-2521 telephone line. See Clark Aff.Ex. N and Ex. J at p. 11-12.

Northeast employed the following individuals who Mauro's previously employed: Rebecca Anthony, Thomas Brown, Christopher Corbett, Kenneth Fontana, Russell Garruto, Robert Handzel, John Hardy, Mark Klossner, Stan Krizinofski, Mark Lindsay, Joseph Lindsey, Albert Mauro, Philip Mauro, Tim Micalizzi, Greg Misner, Michael Morrelino, David Rosenbloom, Carmen Salva, John Sullivan, Grace Tkach, Thomas Vergona, Carlton Williams, and William Yurko.*fn3 These employees performed the same type of work at Northeast as they did at Mauro's. Philip and Albert Mauro retained similar responsibilities at Northeast.

During early 1997 the business operations of Northeast overlapped with those of the defunct Mauro's. In January 1997, Grace Tkach continued to perform duties on behalf of Mauro's while receiving compensation from Northeast. See Tkach Dep. at pp. 29-30. In December of 1996 or January of 1997 Northeast completed work on Mauro's Stamford Village Apartments project, see P. Mauro Dep. at pp. 85-86, without entering into a new contract with Court Street Companies, the project's manager. Additionally, former employees of Mauro's testified that, while receiving compensation from Northeast, they worked on Mauro's Oneonta School District Project. See Micalizzi Aff. ¶¶ 4, 8; Handzel Aff. ¶ 7. Although Mauro's ceased doing business in December of 1996, it submitted a remittance report to the Union for the period of January 1 to 31, 1997. See McCarthy Aff.Ex. A. This report listed hours for Handzel and Micalizzi. Northeast, rather than Mauro's, paid Micalizzi and Handzel for work completed during the reported period. Mauro's did not notify either employee of the change in company name. In January and February of 1997, Handzel received paychecks that listed no company name and only learned that Northeast employed him when he received his 1997 W-2 Wage Statement. See Handzel Aff. ¶¶ 5, 8. Micalizzi also received paychecks without a company name and learned Northeast employed him when he received his 1997 W-2 Wage Statement. See Micalizzi Aff. ¶¶ 3, 9. As early as November 1996, employees who believed Mauro's employed them received paychecks listing Northeast as their employer. See Lindsay Aff. ¶ 7.

From January 1997 through July 1997 Northeast paid for Blue Cross/Blue Shield health insurance coverage for its employees pursuant to a policy that listed the employer as Mauro's. Moreover, during December of 1996 and January of 1997 Northeast and Mauro's made several payments to each other. See Clark Aff. ¶¶ 4650 (citing, inter alia, Chase Manhattan Check Nos. 2100, 2105 and Binghamton Savings Bank Check Nos. 1582 and 1594). During this same period, Northeast and Mauro's made payments on behalf of one another to suppliers and banking institutions. See Clark Aff. ¶¶ 51-54 (citing, inter alia, Binghamton Savings Bank Check No. 1552 and Chase Manhattan Bank Check Nos. 2697 and 2795).

Northeast utilizes the same attorneys, Hinman, Howard & Kattell, and accountant, Ken Lass, CPA, as Mauro's.

Prior to the repossession of Mauro's tools and equipment in October of 1997, see P. Mauro Aff. ¶ 16, Ex. B, Northeast utilized this equipment. See, e.g., Lindsay Aff. ¶ 9. Northeast also utilized a vehicle previously registered to Mauro's. Northeast assumed the registration, however, no money changed hands. See P. Mauro Dep. at p. 123. Moreover, Northeast used the same office equipment as Mauro's had.*fn4 See Tkach Dep. at p. 19.

Currently, there is a twenty percent (20%) overlap between the former customer list of Mauro's and the customer list of Northeast. Northeast uses virtually identical suppliers and service providers, however, Northeast filled out new ...


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