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MASON TENDERS DIST. C. v. DELUCCIA ERECTORS & SCAFFOLDING

January 29, 2004.

MASON TENDERS DISTRICT COUNCIL WELFARE FUND, PENSION FUND, ANNUITY FUND, TRAINING FUND, NEW YORK STATE LABORERS-EMPLOYERS COOPERATION AND EDUCATION TRUST FUND, NEW YORK LABORERS' HEALTH AND SAFETY TRUST FUND and BUILDING CONTRACTORS ASSOCIATION INDUSTRY ADVANCEMENT PROGRAM, and JOHN J. VIRGA, in his fiduciary capacity as Director, and ANTHONY SILVERI, as Business Manager of the MASON TENDERS DISTRICT COUNCIL OF GREATER NEW YORK AND LONG ISLAND, Plaintiffs, -against- DELUCCIA ERECTORS & SCAFFOLDING SUPPLY, INC. and EUGENE DELUCCIA, Defendants


The opinion of the court was delivered by: JAMES FRANCIS, Magistrate Judge

REPORT AND RECOMMENDATION

This is an action brought pursuant to Sections 502 and 515 of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. § 1132 and 1145, and Section 301 of the Labor-Management Relations Act of 1947 ("Taft-Hartley Act"), 29 U.S.C. § 185. The suit was commenced by the Mason Tenders District Council Welfare Fund, Pension Fund, Annuity Fund, Training Fund, New York State Laborers-Employers Cooperation and Education Trust Fund, New York Laborers' Health and Safety Trust Fund, Building Contractors Association Industry Advancement Program, and John J. Virga in his capacity as Director (collectively, the "Funds"), and by Anthony Page 2 Silveri as Business Manager of the Mason Tenders District Council of Greater New York and Long Island (the "Union"). The plaintiffs seek damages stemming from the failure of Deluccia Erectors & Scaffolding Supply, Inc. ("Deluccia") to pay contributions to the plaintiffs and to permit an audit of its books and records, as required under a collective bargaining agreement between Deluccia and the Union. The plaintiffs also seek to hold Deluccia's principal, Eugene Deluccia, individually liable.

Following entry of a default judgment, the case was referred to me for an inquest on damages, and a hearing was held on October 23, 2003. Despite being afforded notice of the hearing, the defendants did not appear. The following findings are based on the evidence presented at the hearing and on supplemental information submitted by the plaintiffs.

 Background

  Deluccia is a corporation that conducted business in New York City at all relevant times. (Amended Complaint ("Am. Compl."), ¶ 11). Deluccia entered into a collective bargaining agreement (the "Labor Contract") with the Union which, among other things, obligated Deluccia to pay fringe benefit contributions to the Funds based on work performed for Deluccia by Union members. (Am. Compl., ¶ 11). The Labor Contract also required Deluccia to remit to the Union dues checkoffs and Political Action Committee ("PAC") contributions that were based on the work performed by Union members and were deducted from the wages of those employees who authorized such deductions. (Am. Compl., ¶ 11). In furtherance of Page 3 this program, the Labor Contract obligated Deluccia to make available its books and records for periodic audits by the Funds. (Am. Compl., ¶ 11). Eugene Deluccia was the Vice President of Deluccia and executed the Labor Contract on the company's behalf. (Am. Compl., ¶ 12).

  Notwithstanding the Labor Contract, the defendants failed to pay fringe benefit contributions to the Funds, as well as dues checkoffs and PAC contributions to the Union, for the period June 1, 2000 to August 31, 2000. (Am Compl., ¶¶ 14-15, 22, 45-46, 50, 54-55, 59). The defendants also failed to permit the Funds to audit Deluccia's books for the period May 13, 1999, to the present. (Am. Compl., ¶¶ 1, 17, 39, 47, 56).

  The plaintiffs filed the instant action in 2001. When the defendants failed to answer, the Honorable Whitman Knapp, U.S.D.J., entered a default judgment and referred the case to me for an inquest on damages. (Order dated July 10, 2003).

 Discussion

  A. Jurisdiction

  As this case arises under ERISA, the Court has jurisdiction pursuant to 29 U.S.C. § 1132 (e)(1) and (f), as well as federal question jurisdiction under 28 U.S.C. § 1331. This Court also has jurisdiction under Section 301 of the Taft-Hartley Act, 29 U.S.C. § 185, and under 28 U.S.C. § 1337, as this is a civil action arising under an act of Congress regulating commerce. In addition, both defendants are subject to personal jurisdiction in this Court since they were doing business in New York at all relevant times. Page 4 See New York Civil Practice Law and Rules ("CPLR") § 301.

  B. Liability

  All of the plaintiffs' factual allegations, except those relating to damages, must be accepted as true where, as here, the defendants have defaulted. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997); Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Time Warner Cable of New York City v. Barnes, 13 F. Supp.2d 543, 547 (S.D.N.Y. 1998). In this case, the allegations of the Amended Complaint establish ERISA violations and breach of contract with respect to Deluccia.

  The Funds are employee benefit plans under ERISA, 29 U.S.C. § 1002(1), (2), (3) and 1132(d)(1) (Am. Compl., ¶¶ 4-8), while Deluccia was an employer under the terms of that statute, 29 U.S.C. § 1002(5), 1145. (Am. Compl., ¶ 11). Accordingly, Deluccia's obligations to the Funds under the Labor Contract are enforceable through ERISA. 29 U.S.C. § 1132 (a)(3).

  Deluccia was required by the Labor Contract to pay fringe benefit contributions to the Funds, and dues checkoffs and PAC contributions to the Union. It failed to comply with this requirement for the period June 1, 2000 to August 31, 2000. Deluccia was also required to permit an audit of its books and records, and it failed to comply for the period May 13, 1999 to the present. Consequently, Deluccia is liable to the Funds under ERISA and for breach of contract, and Deluccia is liable to the Union for breach of contract. Page 5 With respect to Eugene Deluccia, there must be "clear and explicit evidence of [an individual] defendant's intent to add personal liability to the liability of the entity." Mason Tenders District Council Welfare Fund v. Thomsen Construction Co., 301 F.3d 50, 53 (2d Cir. 2002) (internal quotation marks and citation omitted). The factors to be considered in determining such intent include "the contract's length, the location of the liability provision relative to the signature line, the presence of the name of the signatory in the contract itself, `the nature of the negotiations ...


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