United States District Court, E.D. New York
September 20, 2005.
TRUSTEES OF THE LOCAL 807 LABOR-MANAGEMENT HEALTH & PENSION FUNDS, Plaintiffs,
RIVER TRUCKING AND RIGGING, INC. Defendant.
The opinion of the court was delivered by: JOAN AZRACK, Chief Magistrate Judge
MEMORANDUM AND ORDER
Plaintiffs, the trustees and fiduciaries (the "Trustees") of
Local 807 Labor-Management Health and Pension Funds (the
"Funds"), bring this action under Sections 502 and 515 of the
Employee Retirement Income and Security Act of 1974, as amended
("ERISA"), 29 U.S.C. §§ 1132(a)(3) and 1145, against defendant,
River Trucking and Rigging, Inc. ("River Trucking"), to collect
unpaid fringe benefit contributions to the Funds. Plaintiffs also
seek interest, liquidated damages, as well as attorney's fees and
costs pursuant to 29 U.S.C. § 1132(g)(2).
By motion of December 17, 2004, plaintiffs move for summary
judgment pursuant to Fed.R.Civ.P. 56. The parties have consented to disposition of
this action by a magistrate judge pursuant to 28 U.S.C. § 636(c).
For the reasons set forth below, plaintiffs' motion for summary
judgment is hereby granted.
Defendant River Trucking is a New York corporation, having its
principal place of business in Brooklyn, New York, and is engaged
in the business of providing trucking and rigging services on a
per contract basis. (Def.'s Mem. of Law in Opp'n to Pls.' Mot.
for Summ. J. ("Def.'s Opp'n") at 1.) Defendant entered into the
National Master Freight Agreement (the "Agreement") with Truck
Drivers Local Union No. 807 of the International Brotherhood of
Teamsters (the "Union") covering the period April 1, 1998 through
March 31, 2003. (Pls'. 56.1 Stmt. ¶ 3.) Under the terms of the
Agreement, defendant was required to make specific contributions
to the Funds for each hour worked by employees covered by the
Agreement. (Id. at ¶ 4.) The Funds are multiemployer benefit
plans within the meaning of ERISA, 29 U.S.C. §§ 1002(3) and (37),
and are collectively bargained funds created pursuant to
29 U.S.C. § 186(c). (Id. at ¶ 1.) The Funds hired Schultheis &
Panettieri to conduct an audit of defendant's payroll records for
the period November 1, 1999 through September 30, 2003. (Id. at
¶ 6.) The audit was conducted on November 14, 2003 and it was
determined that for the period January 1, 2000 through December
31, 2002 defendant did not make all of the required contributions
to the Funds for employees Ryan Farrell ("Farrell"), Julio Cali
("Cali"), and Henry Womack ("Womack"). (River Trucking Payroll
Audit, annexed to Pls.' Mot. for Summ. J. at F0008-F00013.) The
audit revealed that defendant's unpaid contributions totaled
$15,048.80. (Id. at F00010.) In addition to $15,048.80 for
unpaid contributions, plaintiffs are seeking interest, liquidated damages, attorney's fees, and costs.
A. Summary Judgment Standard
The standard for granting summary judgment is well established.
Summary judgment should be granted only where there is "no
genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c);
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see
also Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 585-87 (1986). "[T]he burden is upon the moving party
to demonstrate that no genuine issue respecting any material fact
exists," Gallo v. Prudential Residential Services, L.P.,
22 F.3d 1219, 1223 (2d Cir. 1994), but "the mere existence of some
alleged factual dispute between the parties will not defeat an
otherwise properly supported motion for summary judgment; the
requirement is that there be no genuine issue of material fact."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
"An issue of fact is `material' for these purposes if it `might
affect the outcome of the suit under the governing law,'" while
"[a]n issue of fact is `genuine' if `the evidence is such that a
reasonable jury could return a verdict for the non-moving
party.'" Konikoff v. Prudential Ins. Co. of America,
234 F.3d 92, 97 (2d Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986)).
In determining whether any material facts are in dispute, the
court "must view the evidence in the light most favorable to the
non-moving party and draw all reasonable inferences in its
favor." Am. Cas. Co. of Reading, Pa. v. Nordic Leasing, Inc.,
42 F.3d 725, 728 (2d Cir. 1994) (quoting Consarc Corp. v. Marine
Midland Bank, N.A., 996 F.2d 568, 572 (2d Cir. 1993)); see
also Anderson, 477 U.S. at 255. To defeat a motion for summary
judgment, the non-moving party must "set forth specific facts showing that there is a
genuine issue for trial." Matsushita, 475 U.S. at 587. The
non-moving party, however, "must do more than show there is some
metaphysical doubt as to the material facts." Id. at 586. Mere
conclusory allegations, speculation or conjecture will not avail
a party resisting summary judgment. Kerzer v. Kingly Mfg.,
156 F.3d 396, 400 (2d Cir. 1998); Kulak v. City of New York,
88 F.3d 63, 71 (2d Cir. 1996). The non-moving party must come forth
with "significant probative evidence" demonstrating that a
factual dispute does in fact exist. Anderson, 477 U.S. at 249.
B. Plaintiff's Motion for Summary Judgment
Under Section 515 of ERISA, employers are required "to make
contributions to a multiemployer plan under the terms of the plan
or under the terms of a collectively bargained agreement. . . ."
29 U.S.C. § 1145.
Plaintiffs assert that for the period January 1, 2000 through
December 31, 2002 defendant failed to make required contributions
to the Funds totaling $15,048.80 for employees Farrell, Cali, and
Womack. (Aff. of Alfred Fernandez dated Oct. 28, 2004 ("Fernandez
Aff."), ¶ 5.) Plaintiffs further assert that during this time,
defendants made only sporadic contributions to the Funds on
behalf of these three employees. (Aff. of Viorel Kuzma dated Oct.
18, 2004 ("Kuzma Aff."), ¶ 4.) In addition to $15,048.80 in
delinquent contributions, plaintiffs are also requesting
interest, liquidated damages, attorney's fees, and costs. (Pls.'
Mot. for Summ. J. at 4.)
Defendant makes two arguments in opposition to plaintiffs'
motion for summary judgment. First, defendant argues that Farrell
was not a "teamster driver" but an office employee and not a
member of the union. (Def.'s Opp'n at 2.) Defendant, therefore,
contends that it was not required to make contributions to the
Funds on his behalf. (Id.) Second, defendant argues that Cali and Womack did not work for River Trucking at various
times from January 1, 2000 through December 31, 2002 because of a
company work shortage. (Id.) Defendant states that during these
periods of "lay-offs," it would "loan [Cali and Womack] money to
carry them over" and "these monies were paid back to the company
at a later date." (Id.; see also Aff. of Julio Cali dated
Jan. 23, 2004 ("Cali Aff."), Ex. B to Def.'s Opp'n; Aff. of Henry
Womack dated Jan. 23, 2004 ("Womack Aff."), Ex. C to Def.'s
Opp'n.) Defendant, therefore, contends that it was not required
to make contributions to the Funds on behalf of Cali and Womack
for the periods when they were unemployed.
1. Ryan Farrell
Defendant argues that it was not required to make contributions
to the Funds on behalf of Farrell because he was not a covered
employee under the terms and conditions of the Agreement. (Def.'s
Opp'n at 2.) Defendant also states that the Agreement required
employers to terminate any non-union employee within 72 hours of
being notified by a union representative of the employee's
continued refusal to become a member of the Union. (Id.)
Defendant argues that since it was never given the requisite
notice of termination for Farrell, it was not obligated to make
contributions on his behalf. (Id.)
In Teamster's Local 348 Health and Welfare Fund v. Kohn
Beverage Co., 749 F.2d 315, 319 (6th Cir. 1984) (en banc),
cert. denied, 471 U.S. 1017 (1985), the Sixth Circuit rejected
defendant's argument that the collective bargaining agreement
required contributions only on behalf of those employees who were
members of the union. The court held that defendant was obligated
to make contributions for both union and non-union employees and
set forth four factors that would aid in determining the scope of
a collective bargaining agreement. See id. at 318. First, the court explained that where the collective
bargaining agreement defines employees by job classification,
all employees, union and non-union, are covered by the terms of
the agreement. See id. at 318. (emphasis added). Second, it
stated, "a recognition clause designating the union as the
exclusive bargaining agent for all employees indicates that
fringe benefit contributions are required for both union and
non-union members." Id. at 318. Third, the court noted that the
lack of any specific language in the collective bargaining
agreement distinguishing between union and non-union employees
suggests that no distinction was intended and therefore, all
employees are covered by the agreement. See id. at 318.
Finally, the court found that the presence of a union shop
clause, which requires employees to be members of the union,
merely requires "payment of union dues and not union membership."
Id. at 318.
Several courts within this circuit have adopted the approach of
the Sixth Circuit. See Demolition Workers Union v. Mackroyce
Contracting Corp., No. 97 Civ. 4094, 2000 WL 297244, at *4
(S.D.N.Y. Mar. 22, 2000); Plumbers, Pipefitters & Apprentices
Local Union No. 112 Pension, Health & Educ. & Apprenticeship
Plans v. Mauro's Plumbing, Heating & Fire Suppression, Inc.,
84 F. Supp. 2d 344, 353 (N.D.N.Y. 2000); Cent. Pension Fund of the
Int'l Union of Operating Engineers & Participating Employers v.
Murphy's Tire, Inc., No. 97-CV-814, 1998 WL 865594, at *5
(N.D.N.Y. Dec. 9, 1998); NYSA-ILA Med. and Clinical Servs. Fund
v. Golten Marine Co., Inc., 91 Civ. 4707, 1994 WL 800706, at *4
(S.D.N.Y. Dec. 21, 1994); New York State Teamsters Council
Health and Hosp. Fund v. City of Utica, 643 F. Supp. 619, 621-22
(N.D.N.Y. 1986). I find this approach instructive and will
therefore apply it to the facts of this case.
First, the Agreement defendants and the Union defines employees
by job classification. Article 40, § 1 of the New Jersey-New York General Trucking
Supplemental Agreement ("Supplemental Agreement") states, "this
Agreement shall cover all . . . office and clerical help."
Furthermore, Article 40, § 2 states, "the term employee also
includes but is not limited to, all employees used in . . .
office and garage work." Second, the Agreement includes a
recognition clause designating the Union as the "exclusive
representative? of all employees in the classifications of work
covered" by the Agreement." Article 3, § 1(a). Third, the
Agreement does not make a distinction between union and non-union
employees for the purposes of contribution payments. Rather,
Schedule B of the Agreement provides that the employer shall make
payments to the Funds "per hour per employee for every hour
paid. . . ." Finally, the union shop clause requires that "[a]ll
present employees who are not members of the Local Union and all
employees who are hired hereafter shall become members of the
Local Union as a condition of employment. . . ."*fn1 Article
3, § 1(b). As courts have held in previous cases, "equating
covered employees with union members would render the clause
meaningless." Demolition Workers, 2000 WL 297244, at *5; see
also Kohn Beverage, 749 F.2d at 318; Mauro's Plumbing, 84 F. Supp. 2d at 354.
Whether there is any ambiguity in the contract language is a
question of law. See, e.g., Haber v. St. Paul Guardian Ins.
Co., 137 F.3d 691, 695 (2d Cir. 1998). "If the contract language
is clear, summary judgment is appropriate." Mauro's Plumbing,
84 F. Supp. 2d at 352 (citations omitted). Additionally,
in determining a motion for summary judgment
involving the construction of contractual language, a
court should accord that language its plain meaning,
giving due consideration to the surrounding
circumstances and apparent purpose which the parties
sought to accomplish. There may not be any genuine
issue regarding the inferences to be drawn from the
language. The inferences may not be reasonably
susceptible to having more than one meaning ascribed
Healy v. Rich Prod. Corp., 981 F.2d 68
, 72 (2d Cir. 1992)
(quotations and citations omitted).
Having examined the Agreement and documentation submitted by
both parties, I conclude that plaintiffs have produced sufficient
evidence to establish that, as a matter of law, Farrell was a
covered employee and that there is no genuine issue of material
fact as to whether defendant was obligated to make contributions
to the Funds on his behalf. The Agreement unambiguously required
defendant to make contributions on behalf of office employees and
no distinction was made between union and non-union employees.
Accordingly, plaintiff's motion for summary judgment as to
defendant's liability for unpaid contributions on behalf of
Farrell is granted.
2. Julio Cali and Henry Womack
Defendant argues that at various times during the period
January 1, 2000 through December 31, 2002 Cali and Womack were
not employed by River Trucking and therefore, it was not required
to make contributions to the Funds on their behalf. Defendant
also states that during these periods of "lay-offs," it would
"loan [Cali and Womack] money to carry them over" and "these monies were paid back to the company at a later date."
(Def.'s Opp'n at 2.) In support of its position, defendant
produced affidavits from both Cali and Womack stating that
defendant paid them "approximately one month's salary" as a loan
that "was to be paid back at a later date." (Cali Aff.; Womack
Aff.) Defendant contends that "[t]he affidavits of these two
employees raise material issues of fact" that preclude granting
plaintiffs' motion for summary judgment. (Def.'s Opp'n at 2.)
Under ERISA, "every employer shall . . . maintain records with
respect to each of his employees sufficient to determine the
benefits due" 29 U.S.C. § 1059(a)(1). "Since the employer is in
the best position to know the number of hours worked, courts have
determined that the policies of ERISA are advanced by the
imposition of a burden that reflects the employer's duties under
ERISA." Local 282 Welfare Trust Fund v. A. Morrison Trucking,
Inc., No. 92-CV-2076, 1993 WL 120081, at *1 (E.D.N.Y. March 30,
1993) (citing Combs v. King, 764 F.2d 818, 825 (11th Cir.
1985)); see also Anderson v. Mt. Clemens Pottery Co.,
328 U.S. 680, 687 (1946).
Courts have utilized a burden shifting framework in cases where
a benefit fund challenges the contributions owed by an employer.
See Michigan Laborers' Health Care Fund v. Grimaldi Concrete,
Inc., 30 F.3d 692 (6th Cir. 1994); Brick Masons Pension Trust
v. Indus. Fence & Supply, Inc., 839 F.2d 1333 (9th Cir. 1988);
Combs v. King, 764 F.2d 818, 825 (11th Cir. 1985). First, the
Funds must establish a prima facie case by demonstrating the
inaccuracy of the employer's contributions. See Brick Masons,
839 F.2d at 1338; Combs, 764 F.2d at 825. Once the Funds
produce this evidence, the burden then shifts to the employer to
produce evidence of the precise amount of work performed, see
Brick Masons, 839 F.2d at 1338; Combs, 764 F.2d at 825, or evidence that the assumptions underlying the
audit are incorrect. See Painters Dist. Council No. 30 Pension
Fund v. W & P Enterprises, Inc., No. 89-C-1866, 1991 WL 28232,
at *3 (N.D. Ill. Feb. 27, 1991).
Although the Second Circuit has not yet decided the applicable
standard in these cases, it has favorably discussed this burden
shifting analysis. See New York State Teamsters Council Health
and Hospital Fund v. Estate of DePerno, 18 F.3d 179, 183 (2d
Cir. 1994); Jaspan v. Glover Bottled Glass Corp., 80 F.3d 38,
41 n. 3 (2d Cir. 1996) cert. denied, 519 U.S. 821 (1996). While
lower courts have applied the burden shifting analysis at trial,
see Grabois v. Action Acoustics, Inc., 94 Civ. 7386, 1995 WL
662127, at *2-3 (S.D.N.Y. Nov. 9, 1995); A. Morrison Trucking,
Inc., 1993 WL 120081, at *1-2 (E.D.N.Y. Mar. 30, 1993), they
have generally declined to do so at the summary judgment stage,
stating that "the proper question in deciding the Fund's motion
for summary judgment is whether defendant has submitted evidence
that raises a factual dispute as to the amount of damages owing
the Fund." Demolition Workers, 2000 WL 297244, at *7; see
also Murphy's Tire, 1998 WL865594, at *8; Brown v. Dominic
Prisco Transport, Inc., 95-CV-1121, 1997 WL 1093463, at *10
(E.D.N.Y. Aug. 16, 1997).
It is unnecessary to examine whether the burden shifting
analysis is appropriate in this case because defendant has
nonetheless failed to meet its burden on summary judgment. To
rebut plaintiffs' assertion that defendant failed to remit all of
the required contributions to the Funds on behalf of Cali and
Womack, defendant offers two virtually identical affidavits from
these employees stating, "[t]his letter is to verify that River
Trucking & Rigging Inc. paid me approximately one month's salary
as a loan due to the fact that there was no work available at
that time. As agreed upon by River Trucking & Rigging Inc. this
money was to be paid back at a later date."*fn2 (Cali Aff.) These employee affidavits are
insufficient to defeat plaintiffs' motion for summary judgment
because, standing alone, they simply do not raise a genuine issue
of material fact. See Lujan v. Nat'l Wildlife Fed'n,
497 U.S. 871, 888 (1990) ("The object of [summary judgment] is not to
replace conclusory allegations of a complaint or answer with
conclusory allegations of an affidavit.").
Defendant has not submitted any additional documentation to
support its assertion that the money received by Cali and Womack
were in fact loans. Furthermore, the affidavits do not state
whether these alleged loans were made during the period covered
by the audit, nor do they state whether these loans were paid
back, if ever. More importantly, however, the facts contained in
the affidavits directly undermine the accuracy of defendant's
payroll accounts, which was the principal means by which the
auditors determined that a deficiency in contributions
existed.*fn3 Based upon defendant's records, the auditor
concluded that both Cali and Womack worked a specific number of
hours for which no contributions were made. In its opposition to
plaintiffs' motion for summary judgment, defendant does not offer
any evidence of its payroll records to contradict these findings.
Finally, even if the money received by Cali and Womack were in fact loans, their affidavits state that the loans
were the equivalent of "approximately one month's salary." The
audit, however, revealed that there were several months during
the three year audit period for which defendant failed to make
contributions to the Funds on behalf of Cali and Womack.*fn4
To defeat plaintiff's motion for summary judgment, defendant
had to provide more than the conclusory allegations contained in
the two employee affidavits. This evidence is, by itself,
insufficient to raise a factual dispute as to the amount of
damages owing the Funds. Accordingly, plaintiff's motion for
summary judgment as to defendant's liability for unpaid
contributions on behalf of Cali and Womack is granted.
E. ERISA Relief
ERISA allows employee benefit plan fiduciaries to bring civil
actions to enforce the provisions of the plan and obtain
equitable relief. 29 U.S.C. § 1132(a)(3)(B)(ii); see also
id. § 1132(d)(1). Section 1145 makes clear that a plan member's
contractual duty to make contributions to multiple employer plans
"becomes a statutory requirement, and the duty may be enforced in
accordance with § 1132(g)." Gilles v. Burton Cont. Co.,
736 F.2d 1142, 1143 n. 2 (7th Cir. 1984).*fn5 With respect to
actions by fiduciaries, ERISA also allows for the recoupment of attorney's fees and costs stemming from delinquent
contributions. Section 1132(g)(2) provides that in such actions
the district court shall award the following:
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the greater of
(i) interest on the unpaid contributions, or
(ii) liquidated damages provided for under the plan
in an amount not in excess of 20 percent (or such
higher percentage as may be permitted under Federal
or State law) of the amount determined by the court
under subparagraph (A),
(D) reasonable attorney's fees and costs of the
action, to be paid by the defendant, and
(E) such other legal or equitable relief as the court
This action was brought on behalf of the employee benefit plans,
therefore, section 1132(g)(2) controls.
Defendant failed to properly remit all of the required
contributions to the Funds on behalf of employees Farrell, Cali,
and Womack for the period January 1, 2000 through December 31,
2002 in the amount of $15,048.80. Plaintiffs are therefore
entitled to $15,048.80 for unpaid contributions, plus any
interest, liquidated damages, attorney's fees, and costs accrued
during the pendency of this action.
For the reasons set forth above, plaintiffs' motion for summary
judgment is granted as to defendant's liability for unpaid
contributions to the Funds in the amount of $15,048.80, plus
interest, liquidated damages, attorney's fees, and costs.
Plaintiffs shall submit updated documentation, including all
relevant provisions of the collective bargaining agreement and
any trust agreements, to support its request for interest and
liquidated damages, as well as an affidavit to support its
request for attorney's fees and costs no later than 30 days from
the date of this Order.
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