The opinion of the court was delivered by: RICHARD BERMAN, District Judge
On March 2, 2004, the Operative Plasterers' and the Cement
Masons' International Association, Local 530 Welfare Fund,
Insurance Fund, Annuity Fund, Vacation Fund, Training Fund and
Apprenticeship Fund (the "Funds"), and the Operative Plasterers'
and the Cement Masons' International Association, Local 530,
AFL-CIO (the "Union") (collectively, "Plaintiffs") filed a
complaint ("Complaint") against Santa Fe Drywall Corp. ("Santa
Fe"), an employer with whom the Union had entered into a
collective bargaining agreement, dated February 2, 2000,
governing the rates of pay and working conditions of individuals
employed by Santa Fe, and Santa Fe's principal, Xerches Frechiani
("Frechiani") (collectively, "Defendants"), pursuant to Section
301 of the Labor Management Relations Act ("LMRA"),
29 U.S.C. § 185, and Sections 515 and 502(a)(3) of the Employee Retirement
Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1145 and 1132(a)(3). (See "Collective Bargaining Agreement"
dated Feb. 2, 2000, Ex. A to Plaintiffs' Statement of Undisputed
Material Facts pursuant to Local Civil Rule 56.1 dated Dec. 3,
2004 ("Pl. 56.1 Stmt.") ("CBA" or "Agreement").) Plaintiffs
allege that, among other things, Defendants breached the
collective bargaining agreement by failing to "produce to the
Fund's auditors all books and records to conduct a payroll audit"
for the period July 1, 2001 through June 30, 2003 and, as a
result, is required to pay (the amount calculated by the Funds'
auditor to be delinquent) no less than $369,784.94 in outstanding
fund contributions and no less than $37,601.04 in outstanding
union dues. (Complaint ¶¶ 13, 18, 22-23, 25.)*fn1 Plaintiffs
also seek liquidated and statutory damages, interest, attorneys'
fees and costs. (Id. at 6-7.)
On December 3, 2004, Plaintiffs moved for summary judgment
("Pl. Mot.") pursuant to Federal Rule of Civil Procedure ("
Fed.R.Civ.P.") 56. In support of their motion, Plaintiffs submitted
a Rule 56.1 Statement and several affidavits. On or around
February 15, 2005, Defendants opposed Plaintiffs' Motion ("Def.
Opp'n") and submitted supporting affidavits, but did not respond
to Plaintiffs' Rule 56.1 Statement, or submit its own Rule 56.1
Statement. Plaintiffs filed a Reply Memorandum of Law in Further
Support of the Plaintiffs' Motion for Summary Judgment, with
supporting affidavits, on March 1, 2005 ("Pl. Reply"). The
parties waived oral argument at a conference before the Court on
January 27, 2005. For the reasons below, Plaintiffs' motion for
summary judgment is granted in part and denied in part.
The following facts are undisputed, except where noted: Santa Fe was incorporated in the State of New York and engaged
in the business of drywalling, skim-coating and finishing walls.
(Pl. 56.1 Stmt. ¶ 10; Def. Opp'n at 1.) Frechiani is the
president and principal of Santa Fe. (Frechiani Aff. ¶ 2; Pl.
56.1 Stmt. ¶ 11; CBA at 45.) Since on or about February 2, 2000,
Santa Fe and the Union have been parties to the CBA which, among
other things, provides for "jointly administered labor-management
trust funds" whose purpose is "to receive and collect required
fringe benefit contributions and to provide various fringe
benefits to eligible employees on whose behalf employers
contribute to the Funds pursuant to Collective Bargaining
Agreements." (See CBA at 1; Pl. 56.1 Stmt. ¶¶ 5, 7.) Pursuant
to the CBA, Defendants "are required to remit monthly
contributions to the Funds in agreed amounts per hour of the
wages of [Santa Fe] employees engaged in covered employment
within the jurisdiction of the Union." (Pl. 56.1 Stmt. ¶ 14.) The
Agreement also states, among other things:
The Employer shall retain, for a minimum period of
six (6) years, payroll and related records for the
conduct of a proper audit in order that a duly
designated representative of the Trustees may make
periodic review to confirm that contributions owed
pursuant to this Agreement are paid in full. In the
event, after the Trustees have made a reasonable
request, the Employer fails to produce its books and
records necessary for a proper audit, the Trustees,
in their sole discretion, may determine that the
Employer's monthly hours subject to contributions for
each month of the requested audit period are the
highest number of employee hours for any month during
the twelve preceding months audited, or during the
last twelve (12) months for which reports were filed,
whichever monthly number of hours is greater.
(CBA, Art. X, § 7 (emphasis added).) The Agreement also states:
"The person signing on behalf of the Employer also agrees to be
personally bound by and to assume all obligations of the Employer
provided in the Agreement . . ." (CBA, Art. XX.) Frechiani, as
President, signed the CBA on behalf of Santa Fe. (Pl. 56.1 Stmt.
¶ 11; CBA at 45.) The Agreement expired on February 4, 2003. (CBA, Art. XIX.)
Defendants claim that in or around the Spring of 2002, after
experiencing financial difficulty, Frechiani determined that he
"could no longer maintain Santa Fe" and made plans to "shut it
down by the summer." (Affidavit of Xerches Frechiani dated Feb.
4, 2005 ("Frechiani Aff."), ¶ 19.) According to Defendants, Santa
Fe "was effectively out of business by July 2002." (Id. ¶ 22.)
Plaintiffs dispute that Santa Fe ceased business operations in
July 2002. (See Affidavit of Charles Farinella dated March 1,
2005 ("Farinella Reply Aff."), ¶¶ 31-47.)
"In or around October, 2003 the Funds performed an audit of the
defendants' payroll records for the period of July 1, 2001
through to September 30, 2003." (Pl. 56.1 Stmt. ¶ 15; Affidavit
of Charles Farinella dated Dec. 2, 2004 ("Farinella Aff."), ¶
10.) Plaintiffs' auditor determined a delinquency "in fringe
benefit funds . . . in the aggregate amount of $371,658.04 and
$37,193.87 in dues owed to [the Union]." (Farinella Aff. ¶ 10;
"Local 530 Payroll Audit" dated Dec. 3, 2004, Ex. B to Farinella
Reply Aff. ("Plaintiffs' Audit").) Because Santa Fe did not
provide "to the Plaintiffs, to Plaintiffs' counsel or to
[Plaintiffs' auditor], the required documentation . . . to
complete the payroll audit" for the period August, 2002 to
September, 2003, the "$371,658.04 audit amount . . . includes an
assessment made by the auditors for [that period]" pursuant to
Article X, Section 7 of the CBA. (Farinella Aff. ¶¶ 14-15; CBA,
Art. X, § 7.)
Defendants maintain that "all the documents, payroll records,
tax returns and canceled checks made payable to the union
demonstrates Santa Fe did not continue operations after July 2002
and the monies it received [after July 2002] was for work
previously performed." (Affidavit in Opposition of Pablo F.
Sanchez dated Feb. 4, 2005 ("Sanchez Aff."), ¶ 24; see also
Frechiani Aff. ¶ 31 ("The plaintiffs' contention that Santa Fe
continued in business into 2003 is incorrect and not true.").) According to the calculations of Defendants'
auditor, for the period of July 1, 2001 to June 30, 2003, "the
amount due to Local 530, Welfare Fund and other benefits [was]
$198,633.18." (Sanchez Aff. ¶¶ 9-11.) The amount "paid to Local
530 or [the] General Benefits Fund Local 530 for the period
February 6, 2001 to July 1, 2002" was $197,039.50, and thus, the
amount currently outstanding and owed to "Local 530, Welfare Fund
and other benefits" is $1,593.68. (Id. ¶¶ 11, 14.) Plaintiffs
dispute that they were provided with "documents proving that this
money was retainage and not for actual work performed by Santa Fe
after the defendant alleges that Santa Fe ceased business
operations." (Farinella Reply Aff. ¶¶ 36-37.)
Federal Rule of Civil Procedure 56(c) provides that summary
judgment "shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material issue of fact and that the
moving party is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(c); see Sharkey v. Ultramar Energy Ltd.,
70 F.3d 226, 228 (2d Cir. 1995). A district judge "must view the evidence
in the light most favorable to the non-moving party and draw all
reasonable inferences in its favor." Cement & Concrete Workers
Dist. Council Welfare Fund, Pension Fund, Legal Servs. Fund &
Annuity Fund v. Lollo, 35 F.3d 29, 32 (2d Cir. 1994) (internal
quotations omitted) ("Lollo").
Once a party moves for summary judgment, in order to avoid the
granting of the motion, the non-movant must come forward with
specific facts showing that a genuine issue for trial exists.
Tri-State Employment Servs., Inc. v. Mountbatten Sur. Co.,
295 F.3d 256, 260 (2d Cir. 2002). A genuine issue of material fact
exists if "a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986); see also Converse v. Gen. Motors Corp.,
893 F.2d 513, 514 (2d Cir. 1990). "If there is evidence in the record
as to any material fact from which an inference could be drawn in
favor of the non-movant, summary judgment is unavailable." Brown
v. Dominic Prisco Transp., Inc., No. 95 Civ. 1121, 1997 WL
1093463, at *2 (E.D.N.Y. Aug. 16, 1997); see Rattner v.
Netburn, 930 F.2d 204, 209 (2d Cir. 1991).
Rule 56.1 of the Local Rules of the United States District
Courts for the Southern and Eastern Districts of New York ("Rule
56.1") requires that any motion for summary judgment be
accompanied by "a separate, short and concise statement . . . of
the material facts as to which the moving party contends there is
no genuine issue to be tried," Rule 56.1(a), and that "papers
opposing a motion for summary judgment shall include a
correspondingly numbered paragraph responding to each numbered
paragraph in the statement of the moving party, and if necessary,
additional paragraphs containing a separate, short and concise
statement of the material facts as to which it is contended that
there exists a genuine issue to be tried," Rule 56.1(b). "If the
opposing party ? fails to controvert a fact so set forth in the
moving party's Rule 56.1 statement, that fact will be deemed
admitted. However, . . . `the local rule does not absolve the
party seeking summary judgment of the burden of showing that it
is entitled to judgment as a matter of law . . .'" Giannullo v.
City of New York, 322 F.3d 139, 140 (2d Cir. 2003) (internal
Section 301 of the LMRA ("Section 301") governs labor disputes
and states, in relevant part:
Suits for violation of contracts between an employer
and a labor organization . . . may be brought in any
district court of the United States having
jurisdiction of the parties, without respect to the amount in controversy or without regard to the
citizenship of the parties.
29 U.S.C. § 185. Section 515 of ERISA applies to this action and
Every employer who is obligated to make contributions
to a multiemployer plan under the terms of the plan
or under the terms of a collectively bargained
agreement shall, to the ...