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MARTINEZ v. BARASCH

June 11, 2004.

JOSE MARTINEZ and HAYWANTIE SINGH, on Their Own Behalf and On Behalf of All Other Similarly Situated Persons, and GEORGE MIRANDA, as a Trustee of the UNION MUTUAL FUND PENSION PLAN, the ALLIED WELFARE FUND and the VACATION FRINGE BENEFIT FUND, Plaintiffs,
v.
GEORGE BARASCH; STEPHEN BARASCH; LINDA BARASCH GLAZER; RICHARD GLAZER; JOHN MORRO, Individually and as President of ALLIED TRADES COUNCIL; JACK SIEBEL, REGINALD ROSADO and JAMES CROWLEY, as Officers of ATC; GERALD HERSKOWITZ, LOUIS KAPLAN, BRUCE NAGRES, STEPHEN CAMADECO, RUDOLPH PASCUCCI, ANTHONY GUIGLIANO, as Trustees of ALLIED WELFARE FUND; GERALD HERSKOWITZ, HARVEY ROSEN, BRUCE ROGERS, HERMAN WOLFSON, STEPHEN CAMEDECO, and JAMES CROWLEY, as an Officer of ATC and Trustee of the VACATION FRINGE BENEFIT FUND; IRVING HANS, IRVING KROOP, DONALD MERINO, HAROLD BANNER, BERTRAM GELFAND, as Trustees of UNION MUTUAL FUND PENSION PLAN; MORRIS AARONS, IRVING HANS, GERALD HERSKOWITZ, HERBERT POBINER, CHARLES SACHS, BERTRAM GELFAND, as Trustees of UNION MUTUAL FUND PENSION PLAN; CHURCHILL ADMINISTRATORS, INC.; and FINANCIAL ADMINISTRATORS, INC., Defendants.



The opinion of the court was delivered by: MICHAEL MUKASEY, Chief Judge, District

OPINION & ORDER

Plaintiffs Jose Martinez and Haywantie Singh ("the Individual Plaintiffs") are former members of the Allied Trades Council ("ATC") and participants in related employee benefit funds, including the Union Mutual Fund Pension Plan, the Allied Welfare Fund, and the Vacation Fringe Benefit Fund (collectively as "the Employee Benefit Funds"). Plaintiff George Miranda is a Trustee of the Employee Benefit Funds. Plaintiffs assert two claims against defendants George Barasch, Stephen Barasch, Linda Barasch Glazer, and Richard Glazer ("the Barasch Family"), the Trustees of the Employee Benefit Funds, Financial Administrators, Inc. ("Financial"), and Churchill Administrators, Inc. ("Churchill") arising under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et. seq., for breaches of fiduciary duties. The Individual Plaintiffs also assert a claim against the Officers of ATC arising under the Labor-Management Reporting and Disclosure Act ("LMDRA"), 29 U.S.C. § 401, et. seq., for breach of fiduciary duties. Individual Plaintiffs have moved to certify a class on behalf of all participants in and beneficiaries of the Employee Benefit Funds and members of ATC. For the reasons set forth below, Individual Plaintiffs' motion is denied. I.

  Individual Plaintiffs are residents of New York, and are or were "employees," as that term is defined in Section 2(5) of the LMRDA, 29 U.S.C. § 152 (5); "members," as that term is defined in Section 3(o) of the LMRDA, 29 U.S.C. § 402(o), of a labor organization, ATC; and "participants," as that term is defined in Section 3(7) of ERISA, 29 U.S.C. § 1002(7), in the Employee Benefit Funds. (Fourth Amended Complaint ("FAC") ¶¶ 4, 15, 16) They bring this action for and on behalf of themselves and other "participants" of the Employee Benefit Funds within the meaning of Section 3(7) of ERISA, 29 U.S.C. § 1002(7). (Id.)

  Plaintiff George Miranda is the principal officer of the International Brotherhood of Teamsters, Local Union 815 ("Local 815"), a labor organization as that term is defined in Sections 2(5) and 3(i) of the LMRDA, 29 U.S.C. § 152(5), 402(i). (Id. at ¶ 5) Miranda has been designated by Local 815 as a Trustee of each of the Employee Benefit Funds since January of 2000. (Id.)

  Defendant John Morro is President of ATC, a "labor organization" as that term is defined in Sections 2(5) and 3(i) of the LMRDA, 29 U.S.C. § 152(5), 402(i). (Id. at ¶ 6) Defendants Jack Siebel, Reginald Rosado, and James Crowley (collectively "the ATC Defendants") are officers and members of the Executive Council of ATC. (Id.) Defendants Stephen Barasch and Linda Barasch Glazer are the children of George Barasch. (Id. at ¶ 7) Richard Glazer is married to Linda Barasch Glazer. (Id.) Defendant Stephen Barasch administers defendant Churchill and, together with the rest of the Barasch Family, controls Churchill. (Id. at ¶ 11) Defendants Richard Glazer and Linda Barasch Glazer administer defendant Financial and, together with the rest of the Barasch Family, control Financial. (Id. at ¶ 12) The Barasch Family also exercises discretionary authority or control over the management and/or disposition of the assets of the Employee Benefit Funds as well as ATC. (Id. at ¶¶ 13, 18)

  Defendants Gerald Herskowitz, Louis Kaplan, Stephen Camadeco, Rudolph Pascucci, Bruce Rogers and Anthony Guigliano serve as Trustees of the Allied Welfare Fund, which is a multi-employer, collectively-bargained employee benefit plan within the meaning of Section 302 of the LMRDA, 29 U.S.C. § 186, that provides health and related benefits to plan participants and their beneficiaries. (Id. at ¶ 8) The Allied Welfare Fund is also an "employee welfare benefit plan" as that term is defined in Section 3(1) of ERISA, 29 U.S.C. § 1002(1). (Id.)

  Defendants Harvey Rosen, Bruce Rogers, Gerald Herskowitz, Herman Wolfson, Stephen Camadeco and James Crowley serve as Trustees of the Vacation Fringe Benefit Fund, which is a multi-employer, collectively-bargained employee benefit plan within the meaning of Section 302 of the LMRDA, 29 U.S.C. § 186, that provides vacation and related benefits to plan participants and their beneficiaries. (Id. at ¶ 9) The Vacation Fringe Benefit Fund is also an "employee welfare benefit plan" as that term is defined in Section 3(1) of ERISA, 29 U.S.C. § 1002(1). (Id.)

  Defendants Irving Hans, Irving Kroop, Donald Merino, Harold Banner and Bertram Gelfand serve as Trustees of the Union Mutual Fund Pension Plan, which is a multi-employer, collectively-bargained employee benefit plan within the meaning of Section 302 of the LMRDA, 29 U.S.C. § 186, that provides vacation and related benefits to plan participants and their beneficiaries. (Id. at ¶ 10) The Union Mutual Fund Pension Plan is also an "employee welfare benefit plan" as that term is defined in Section 3(1) of ERISA, 29 U.S.C. § 1002(1). (Id.)

  Defendant Churchill Administrators, Inc. is a corporation incorporated in New Jersey with its principal place of business also in New Jersey. (Id. at ¶ 11) Churchill exercises discretionary authority or control over the management and/or disposition of the assets of the Employee Benefit Funds. (Id. at ¶ 13)

  Defendant Financial Administrators, Inc. is a corporation incorporated in New Jersey with its principal place of business also in New Jersey. (Id. at ¶ 12) Financial exercises discretionary authority or control over the management and/or disposition of the assets of the Employee Benefit Funds. (Id. at ¶ 13)

  This action arises under Sections 404, 405 and 406 of ERISA, 29 U.S.C. § 1104, 1105, 1106, and Section 501 of the LMRDA, 29 U.S.C. § 501. (Id. at ¶ 2) Jurisdiction is present pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 501(b) and 1132(a). (Id.) Venue in this court is proper under 28 U.S.C. § 1391 because a substantial part of the events giving rise to this action occurred in this district. (Id. at ¶ 3)

  II.

  This court has issued two prior opinions in this action, see Bona v. Barasch, No. 01 CIV. 2289, 2003 WL 1395932 (S.D.N.Y. Mar 20, 2003) and Bona v. Barasch, No. 01 CIV. 2289, 2003 WL 21222531 (S.D.N.Y. May 27, 2003), in which the facts of this case are set forth more fully and with which familiarity is assumed.

  Plaintiffs assert two claims against defendants George Barasch, Stephen Barasch, Linda Barasch Glazer, and Richard Glazer ("the Barasch Family"), the Trustees of the Employee Benefit Funds, Financial Administrators, Inc. ("Financial"), and Churchill Administrators, Inc. ("Churchill") arising under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et. seq. (FAC ¶ 1) Plaintiffs claim first that Financial, Churchill, the Trustees of the Employee Benefit Funds, and the Barasch Family (collectively "the ERISA Defendants") breached their fiduciary duties in violation of Sections 404 and 405 of ERISA, 29 U.S.C. § 1104(a)(1), 1105(a)(1). Plaintiffs allege that the ERISA Defendants failed to act solely in the interest of the participants and beneficiaries of the Employment Benefit Funds; to administer the funds for the exclusive purpose of providing benefits to the participants and beneficiaries; "to exercise the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims"; and "to diversify the investments of the plan so as to maximize the gain or minimize the risk of large losses of fund ...


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