By order to show cause of September 14, 2000, the Funds filed
the instant motion for a temporary restraining order attaching
Vanderveer's assets during the pending litigation and for a
preliminary injunction. Vanderveer filed a memorandum of law in
opposition on September 19, 2000, and the motion was deemed fully
submitted after oral argument was heard on September 20, 2000.
Vanderveer is the owner of a number of residential apartment
buildings in a complex named "Vanderveer Estates" at 3301 Foster
Avenue, Brooklyn, New York. When it purchased those properties,
Vanderveer assumed the prior owner's obligation to honor the
terms and conditions of a collective bargaining agreement with
the RAB, although Vanderveer itself is not a member of the RAB.
The CBA requires that employers that are parties to it contribute
funds to a group of union-sponsored employee benefit funds.
Vanderveer has not made any such payments since purchasing the
properties known as Vanderveer Estates.
Vanderveer's obligation to pay is the subject of the underlying
action in this case. While the Funds allege that Vanderveer is a
recidivist violator of its obligations to pay and seek to enjoin
it from selling off any assets, Vanderveer contends that it would
in fact be illegal for it to contribute to the Funds.
Despite the binding obligation to pay under the CBA, Vanderveer
argues, the trust agreement does not authorize receipt of
contributions from Vanderveer because it is not a party. In lieu
of this specific authorization, according to Vanderveer, a
federal statute bars Vanderveer from paying the Funds. See
29 U.S.C. § 186(g). This question is the subject of the pending
motion for summary judgment.
The Funds brought the instant motion for a preliminary
injunction upon learning that Vanderveer "may be in the process
of" selling Vanderveer Estates, which the Funds believe to be
Vanderveer's sole asset, and thus sole source of money to pay the
sums due. Their proposed injunction would bar Vanderveer from (1)
selling or disposing of Vanderveer Estates until it pays the
contributions due; (2) continuing not to pay the contributions
due; (3) engaging in fraudulent conduct to hinder or delay
payment of the contributions; and (4) paying any bills that do
not have statutory priority over the payments owed to the Funds,
except for the mortgage and taxes on Vanderveer Estates or wages
and benefits to its employees.
In the alternative, the Funds propose that Vanderveer be
ordered to post a one million dollar bond as security with the
Clerk of Court, pursuant to the CBA.
I. Preliminary Injunction
A. Legal Standard
In order to justify the issuance of a preliminary injunction, a
movant has the burden of proving two factors: First, "[p]erhaps
the single most important prerequisite for the issuance of a
preliminary injunction is a demonstration that if it is not
granted the applicant is likely to suffer irreparable harm before
a decision on the merits can be rendered." Jayaraj v. Scappini,
66 F.3d 36, 39 (2d Cir. 1995) (citing Citibank N.A. v. Citytrust,
756 F.2d 273, 275 (2d Cir. 1985)). Second, the movant must show
either (a) a likelihood of success on the merits or (b)
sufficiently serious questions going to the merits to make them a
fair ground for litigation. See Jayaraj, 66 F.3d at 38.
Irreparable harm is that injury which is so serious that "a
monetary award cannot be adequate compensation." Citibank N.A. v.
Citytrust, 756 F.2d 273, 275 (2d Cir. 1985). Moreover, the
specter of harm must not be "remote or speculative but actual and
imminent." Tom Doherty Assoc., Inc. v. Saban Entertainment, Inc.,
60 F.3d 27, 37 (2d Cir. 1995). As the Supreme Court has
emphasized, "[t]he key word in this consideration is irreparable.
Mere injuries, however substantial, in
terms of money, time and energy necessarily expended in the absence
of a stay, are not enough. The possibility that adequate compensatory
or other corrective relief will be available at a later date, in the
ordinary course of litigation, weighs heavily against a claim of
irreparable harm." Sampson v. Murray, 415 U.S. 61, 90 (1974); see
Reuters Ltd. v. United Press Int'l, Inc., 903 F.2d 904, 907 (2d
1. Irreparable Harm
The Funds allege that, if Vanderveer continues its failure to
pay, timely contribution to the employee health, pension and
annuity funds will not be made. This proposition fails to support
a finding of irreparable harm for several reasons.
a. The Allegedly Impending Sale of Vanderveer Estates
First, the Funds have failed to provide any factual support for
their allegation that Vanderveer is "in the process of selling"
Vanderveer Estates. Without this factual foundation, the Funds'
contention is merely speculative. Moreover, the Funds have not
suggested any connection between the allegedly impending sale of
Vanderveer Estates and Vanderveer's continuing failure to
contribute to the employee trust funds. Even if the Funds could
prove that the sale was imminent and that Vanderveer Estates was
Vanderveer's sole asset, then, the Funds would still have failed
to prove that any harm would result. The only effect of such a
sale would be a continuation of the status quo, Vanderveer's
failure to pay, for which, it should be noted, Vanderveer claims
a legal justification.
b. Continuing Failure to Pay
Although the allegedly impending sale of Vanderveer Estates
provided the "hook" for the Funds' motion for a preliminary
injunction in this matter, this motion is more properly construed
as an attempt to deal with Vanderveer's continuing failure to pay
a prior judgment issued by another court.
The Funds submit a portion of a Senate committee staff report
as evidence that "[d]elinquencies of employers in making required
contributions are a serious problem for most multiemployer plans.
Failure of employers to make promised contributions in a timely
fashion imposes a variety of costs on plans." Staff of Senate
Comm. on Labor and Human Resources, 96th Cong., 2d Sess., S.1076,
The Multiemployer Pension Plan Amendments of 1980: Summary and
Analysis of Consideration (Comm.Print 1980) at 43-4 (cited in
Central States, Southeast and Southwest Areas Pension Fund v.
Alco Express Co., 522 F. Supp. 919, 921-23 (E.D.Mich. 1981)
(internal quotations omitted). With regard to the status of the
Funds in this case, however, the plaintiff alleges only that:
It is possible that as a result of Defendant's [failure
to pay], the Funds may be required to either deny
employee benefits, for whom contributions have not been
made . . . or to provide said beneficiaries the benefits
provided under the plan, notwithstanding Defendant's
failure to make required contributions, thereby reducing
the corpus of the Funds and endangering the rights of the
employee beneficiaries on whose behalves contributions
have been made. . . .
(Plaintiff's Mem. at 5.)