The opinion of the court was delivered by: Hurley, Senior District Judge
Plaintiffs, the fiduciaries of Local 282 employee benefit plans, ("Plaintiffs") seek to recover from Defendants Cretty Enterprises Inc. ("Cretty") and Asbestos Transportation Company, Inc. ("Asbestos") (collectively "Defendants") contributions allegedly due under collective bargaining agreements ("CBAs"), together with certain other relief. Presently before the Court is a motion by Plaintiffs for summary judgment. For the reasons set forth below, the motion is granted in part and denied in part.
The following facts are undisputed unless otherwise indicated.
Plaintiffs are the fiduciaries of the Local 282 Welfare Trust Fund, the Local 282 Pension Trust Fund, the Local 282 Annuity Trust Fund and the Local 282 Job Training Trust Fund (collectively the "Funds") within the meaning of section 3(21)(A) of the Employee Retirement Income Summary Security Act ("ERISA"), 29 U.S.C. § 1002(21)(1). (Defs.' Counterstatement to Pls.' Statement of Undisputed Material Fact ("Counterstatement") ¶ 1.*fn1 ) The Funds are maintained pursuant to a Restated Agreement and Declaration of Trust and are financed solely by contributions that are made to the Funds by employers that are parties to CBAs with Local 282 ("Contributing Employers") and the investment income generated on these contributions. The funds provide welfare, pension, annuity and job training benefits to employees covered by the CBAs who meet the Funds' eligibility requirements. ( Id. at ¶¶ 3-4.)
Contribution rates to the Funds are set forth in the CBAs. Contributing Employers are required to contribute to the Funds for all hours worked by or paid to their employees. The Trust Agreement provides that the books and records of Contributing Employers, as well as any other business entity which is affiliated with said Contributing Employers and either employs persons performing the same type of work as employees of the Contributing Employers or is part of a group of trades or businesses under common control, are subject to periodic audit to verify the accuracy of contributions and identify individuals who are eligible for Fund benefits. (Id. at ¶¶ 5-9.) A Contributing Employer who fails to pay contributions when due is required to pay the delinquent contributions, interest from the first day of the month when the payment was due through the date of payment, liquidated damages, audit fees and attorneys' fees and costs. Contributing Employers are required to provide a surety bond to facilitate and guarantee, inter alia, payment of contributions to the Funds. (Id. at ¶¶ 12-14.)
Cretty, a New York corporation which has been in existence since 1993, is in the business of demolition and debris, asbestos and toxic waste removal and is an employer within the meaning of ERISA.*fn2 (Id. at ¶¶ 19-20.) It is located at 2 Moriches Island Road, Shirley, New York. Gary Cretty was president and sole owner of Cretty from its inception until the mid 2000's, when he transferred ownership of the company to his daughter.*fn3 Gary Cretty admits that he has continued to have a role in the day to day activities of Cretty since the ownership transfer.*fn4
(Id. at ¶¶ 21-23.) Cretty has been a party to CBAs with Local 282 covering the period July 1, 1999 through June 30, 2005, Gary Cretty having signed the agreements on Cretty's behalf. (Id. at ¶¶ 23-25.)
Asbestos is a New York corporation which has been in existence since 1989. It is in the business of asbestos and toxic waste removal in the State of New York and also transports and disposes of waste removal to out of state facilities. Asbestos is not, and has not been, a signatory to any collective bargaining agreement with Local 282. (Id. at ¶¶ 28-29 & 32.) Like Cretty, Asbestos is located at 2 Moriches Island Road, Shirley, New York, although each company has its own telephone number. Gary Cretty has been the president and sole shareholder of Asbestos since the mid-1990's when he took over the company from his father. (Id. at ¶¶ 30-31.)
Cretty and Asbestos share office facilities, including office space and office equipment, as well as clerical employees. These common office facilities are leased from Asbestos Transportation and Disposal Company, Inc., a third entity located at 2 Moriches Island Road and owned by Cretty's fiancé. Cretty and Asbestos share the same accountant and the same bookkeeper. Although the two companies have separate telephone numbers, the office personnel that provide services to Cretty are employed by Asbestos. The two companies also share common equipment and there is a complete intermingling of trucks. Cretty and Asbestos share common drivers and use the same dispatchers with incoming jobs for both companies listed on a common dispatch board. As Defendants put it, "[s]ince all of the contracts that Asbestos and Cretty performed were through contracts between Asbestos and the customers of Asbestos, the customer would contact one of Asbestos's dispatchers and request a driver for a union job or a non-union-job." Id. at ¶¶ 45, 47-50, 52-56, 58.)
Defendants contend that there was apparently a time when the union would allow Asbestos' non-union drivers onto a union site although the customer that engaged Asbestos would then be back billed based on the number of drivers that were sent to the site. Back billing was a method by which the unions recouped the benefit payments that the union believed should have been paid had Asbestos sent union drivers. This apparently became a significant expense that Asbestos' customers did not want to absorb and that unions did not want the administrative burden of monitoring. As a result, by the late 1990's, non-union drivers were denied access to sites requiring union drivers. In order for Asbestos to provide services to a union site it was required to subcontract the work to drivers of another entity and have those drivers operate Asbestos' trucks under Asbestos' permits, a practice about which Asbestos was wary. Then, sometime in late 1999, "a[n unidentified] member of Local 282" suggested that Asbestos have its employees join 282 so that employees could work at projects that required drivers who were members of Local 282. As a result, Cretty became a signatory to the Local 282 collective bargaining agreement. Asbestos did not become a signatory because it would have had to substantially increase the rates that it charged to its customers in order to afford the additional compensation and benefit contributions it would be responsible for. Cretty offered those Asbestos drivers who had proven to be capable and dependable and who desired to become members of Local 282 an opportunity to drive for Cretty on union projects. All of the work performed by Asbestos and Cretty was through contracts obtained by Asbestos. When a customer specified that it was a union job, Asbestos would subcontract to Cretty with Cretty leasing a driver to Asbestos. Apparently there were not enough union jobs for Cretty to employ drivers on a full-time basis. Accordingly, when Cretty did not have work for its drivers, Asbestos would employ the drivers at rates of pay that were less than the union rates and without paying benefits to Local 282 on behalf of the employees. Drivers never worked for both Asbestos and Cretty on any given day.
It is undisputed that Asbestos did not become a signatory to any Local 282 collective bargaining agreement but rather used Cretty to provide union labor to Asbestos' customers on request. (Counterstatement at ¶ 62.) The wage rate paid to drivers depended on whether the driver was being paid by Cretty, in which case the rates provided in the CBAs were paid and contributions were made to Local 282 Funds, or was being paid by Asbestos, in which case no contributions were remitted to the Funds and lower wages were paid. (Id. at ¶¶ 63-64.)
Plaintiffs commenced this action on December 3, 2003 seeking to compel an audit of the books and records of both Cretty and Asbestos. In January 2005, an amended complaint was filed alleging that Cretty and Asbestos share a single employer, joint employer and/or alter ego relationship. In the meantime, a second action was commenced against Cretty in November 2004 as a result of Cretty's alleged failure to comply with its obligation to provide a bond or alternate security. The two actions were consolidated on May 23, 2005. After the commencement of these actions, Cretty submitted to an audit by the Funds for the period from December 28, 2000 through June 30, 2003. The auditor determined that for this period Cretty owed contributions of $4,341.82, with interest through February 7, 2007 in the amount of $3,290.17. Asbestos submitted to an audit for the period December 28, 2000 through December 31, 2003. The auditor determined Asbestos owed $119,482.85, with interest due through February 5, 2007 in the amount of $86,500.67.*fn5 Cretty and Asbestos refused to submit to an audit for the periods July 1, 2003 through June 30, 2005 and January 1, 2004 through June 30, 2005 respectively. The auditor determined the contribution amount due from Cretty for the relevant period, based on the Agreement's estimate formula, to be $16,243.20 with interest due through February 5, 2007 in the amount of $7,421.82. The auditor was unable to perform an estimated audit of Asbestos for the period January 1, 2004 through June 30, 2005. (Id. at ¶¶ 36-39.)
At the conclusion of discovery, Plaintiffs filed the instant motion seeking summary judgment against the Defendants. Plaintiffs assert that Cretty and Asbestos are both liable to the Funds based on their single employer, joint employer and/or alter ego relationship and therefore they should submit to audit for the years 2003 through 2005 and pay any amounts found owing on the audits, ...