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Cement and Concrete Workers Dist. Council Welfare Fund v. Atlas Concrete Construction Corp.

February 13, 2007

CEMENT AND CONCRETE WORKERS DISTRICT COUNCIL WELFARE FUND, PENSION FUND, ANNUITY FUND AND EDUCATION AND TRAINING FUND AND SILVANA BALDO, IN HER FIDUCIARY CAPACITY AS ADMINISTRATOR OF THE CEMENT AND CONCRETE WORKERS DISTRICT COUNCIL WELFARE FUND, PENSION FUND AND ANNUITY FUND, AND BARRY KAPLAN, AS PRESIDENT OF THE CEMENT AND CONCRETE WORKERS DISTRICT COUNCIL AND IN HIS FIDUCIARY CAPACITY AS A TRUSTEE OF THE EDUCATION AND TRAINING FUND, PLAINTIFFS,
v.
ATLAS CONCRETE CONSTRUCTION CORP., HEADLINE PRODUCTS, LLC DEFENDANT.
ATLAS CONCRETE CONSTRUCTION CORP., THIRD PARTY PLAINTIFF,
v.
GENERAL BUILDING LABORERS' LOCAL UNION 66, AND GENERAL BUILDING LABORERS' LOCAL 66 TRUST FUND, THIRD PARTY DEFENDANTS.



The opinion of the court was delivered by: Sifton, Senior Judge.

MEMORANDUM OPINION AND ORDER

Atlas Concrete Construction Corporation ("Atlas") brings this third party action against Defendants General Building Laborers' Local Union 66 ("Local 66 Union") and General Building Laborers' Local 66 Trust Fund ("Local 66 Trust Fund" or the "Fund") to recover employee benefit payments Atlas made to the Local 66 Trust Fund. Atlas made these payments for workers whose primary benefit provider was the Local 66 Trust Fund, with respect to work performed within a territorial jurisdiction of another labor union and its funds. Atlas contends that the Local 66 Trust Fund must either return these payments to Atlas or transfer them to the trust funds of the other labor union, Cement and Concrete Workers District Council Funds ("CCWDC Funds"), so that Atlas may satisfy claims brought against it by the CCWDC Funds, a group of employee benefit funds that cover Atlas employees who work in the jurisdiction of the Cement and Concrete Workers District Council ("CCWDC Union").*fn1 Atlas asserts three claims for relief: (1) breach of contract by Local 66 Union and Local 66 Trust Fund, (2) its right to an accounting against the Local 66 Trust Fund of all sums paid to the fund by Atlas to cover employees within the jurisdiction of the Cement and Concrete Workers Funds, and (3) unjust enrichment against the Local 66 Trust Fund. Jurisdiction is alleged under the Employee Retirement Security Act ("ERISA") §§ 502(a)(3) and 515*fn2 , the Labor Management Relations Act ("LMRA") § 301*fn3 , 28 U.S.C. § 1331*fn4 , 28 U.S.C. § 1337*fn5 , and supplemental jurisdiction.*fn6

Presently before the Court is Third Party Defendant Local 66 Trust Fund's motion to dismiss Atlas's Third Party Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.*fn7 For the reasons that follow, the Third Party Defendant's motion is granted. Atlas is granted leave to amend its complaint within thirty days of the date of this memorandum opinion and order.

BACKGROUND

The following facts are taken from the Third Party Complaint and the parties' submissions in connection with this motion. To the extent the motion is brought pursuant to Rule 12(b)(6), I accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002) (citing Gregory v. Daly, 243 F.3d 687, 691 (2d Cir. 2001)). Disputes are noted.

Plaintiff Atlas is a construction corporation doing business in the State of New York. Defendant Local 66 Trust Fund provides benefits to employees covered by the Fund. The Local 66 Trust Fund is administered in Melville, New York. Defendant Local 66 Union is a labor organization which maintains its offices at the same address as the Funds in Melville, New York. Nonparty CCWDC Union is a labor organization which maintains offices in Whitestone, New York. Nonparty CCWDC Funds is an employee benefit fund which provides benefits to employees covered by the CCWDC Funds and maintains offices in Whitestone, New York.

Employers in the building and construction industry contribute monies to employee benefit funds pursuant to collective bargaining agreements between the employers and labor unions. Pursuant to the CCWDC Union's Collective Bargaining Agreement ("CCWDC Union CBA") with Atlas, Atlas agreed to pay benefits and contributions to the CCWDC Funds for work performed for Atlas by Local 66 members within the CCWDC Union's territorial jurisdiction. Under a reciprocity agreement between the CCWDC Funds and the Local 66 Trust Fund, the CCWDC Funds transmitted a portion of Atlas's contributions to the Local 66 Trust Fund in order to ensure benefit coverage for employees who had worked in the CCWDC Union's jurisdiction temporarily, but whose "Home Fund," or primary benefit provider, was the Local 66 Trust Fund. The Local 66 Trust Fund is administered by the Local 66 Union.*fn8

On December 31, 2003, the Local 66 Trust Fund and the CCWDC Funds terminated their reciprocity agreement. Thereafter, Atlas states that when Atlas made payments to the CCWDC Funds with respect to work by Local 66 workers within CCWDC's jurisdiction, the CCWDC Funds did not transmit these payments to the Local 66 Trust Fund, "thereby depriving Atlas's employees of the benefit to which they were entitled."*fn9 Thereafter, Atlas contributed solely to the Local 66 Trust Fund, for all its employees whether or not they worked within the jurisdiction of the Local 66 or CCWDC Union.*fn10 In March 2004, the CCWDC Funds commenced an action against Atlas for unpaid contributions for Atlas employees who had worked within the CCWDC Union's jurisdiction. Atlas thereafter on June 14, 2006 commenced a third party action against the Local 66 Trust Fund, contending that the Local 66 Trust Fund's failure to transfer payments to the CCWDC Funds violates the agreement between the Local 66 Union and the CCWDC Union, an agreement of which Atlas claims to be a third party beneficiary.

DISCUSSION

The Third Party Defendant Local 66 Trust Fund moves to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure and failure to state a claim under Rule 12(b)(6).

Rule 12(b)(1)

I turn first to Third Party Defendant's first ground of dismissal, lack of subject matter jurisdiction, "since dismissal of an action for lack of subject matter jurisdiction will render all other accompanying defenses and motions moot." Amalgamated Cotton Garment & Allied Industries Retirement Fund v. Youngworld Stores Group, Inc., No. 99-3852, 2001 WL 314650, at *2 (S.D.N.Y. Mar. 30, 2001). When considering a motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6), the jurisdictional question must come first because "a disposition of a Rule 12(b)(6) motion is a decision on the merits, and therefore, an exercise of jurisdiction." Id (quoting Magee v. Nassau County Medical Center, 27 F.Supp.2d 154, 158 (E.D.N.Y. Nov. 13, 1998) (internal quotations omitted).

A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists. See Luckett v. Bure, 290 F.3d 493, 497 (2d Cir. 2002); Malik v. Meissner, 82 F.3d 560, 562 (2d Cir. 1996). When a defendant moves to dismiss a cause of action pursuant to Rule 12(b)(1), "the movant is deemed to be challenging the factual basis for the court's subject matter jurisdiction." Cedars-Sinai Medical Center v. Watkins, 11 F.3d 1573, 1583 (Fed.Cir. 1993). For purposes of such a motion, "the allegations in the complaint are not controlling . . . and only uncontroverted factual allegations are accepted as true." Id. "All other facts underlying the controverted jurisdictional allegations are in dispute and are subject to fact-finding by the district court." Id., at 1584. Both the ...


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