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New York City Dist. Council of Carpenters Pension Fund v. TADCO Construction Corp.

February 28, 2008

THE NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS PENSION FUND, NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS WELFARE FUND, NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS VACATION FUND, NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS ANNUITY FUND, NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS APPRENTICESHIP, JOURNEYMAN RETRAINING, EDUCATIONAL AND INDUSTRY FUND, NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS CHARITY FUND, AND NEW YORK CITY AND VICINITY CARPENTERS LABOR MANAGEMENT COOPERATION FUND, BY MICHAEL J. FORDE, AND PAUL O'BRIEN, AS TRUSTEES, PLAINTIFFS,
v.
TADCO CONSTRUCTION CORP., DEFENDANT.



The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge*fn1

OPINION & ORDER

On April 3, 2007, Michael J. Forde and Paul O'Brien, as Trustees of The New York City District Council of Carpenters Pension Fund et al.*fn2 (the "Funds") sought pursuant to Section 301 of the Labor Management Relations Act (the "LMRA")*fn3 against TADCO Construction Corp. ("TADCO") to confirm a January 20, 2007 arbitration award (the "Award") against TADCO.*fn4

TADCO opposed and moved to vacate. For the reasons set forth below, the Funds' motion to confirm and to award attorneys' fees (up to $5,000) is GRANTED, the Funds' motion to award costs is DENIED, and TADCO's cross-motion to vacate is DENIED.

I. FACTUAL BACKGROUND

A. The Parties and Relevant Agreements

At all relevant times TADCO was a New York corporation with its principal place of business in the State of New York and was an employer within the meaning of Section 3(5) of the Employee Retirement Income Security Act ("ERISA").*fn5 Compl. ¶¶ 7-8. The Funds were established pursuant to the LMRA*fn6 and are employee benefit plans under ERISA*fn7 and jointly administered, Taft-Hartley Trusts. Decl. of Andrew GraBois (July 20, 2007) (hereinafter "GraBois Decl.") Ex. A (hereinafter "CBA") at 40. See 29 U.S.C. § 186(c)(5).

The collective bargaining agreement (the "CBA") was between The District Council of New York City and Vicinity of the United Brotherhood of Carpenters and Joiners of America (the "Union") and the General Contractors Association of New York, Inc. (the "Employers," which included TADCO), and required the Employers to make contributions to the Funds, based on hours worked by covered employees.*fn8 CBA Art. I, XI § 1. The Funds in turn provided pension, health, medical, welfare benefits and other benefits to covered employees and their beneficiaries. Compl. ¶ 6. To ensure that the Employers made the required contributions, the CBA required the Employers upon request to make available certain books and records for an audit by the Funds. CBA Art. XI § 7. The parties agree that the Funds, and their trustees, were not parties to the CBA. Tr. at 3:18-4:7.

A series of Agreements and Declarations of Trust (the "Trust Agreement") established and governed the Funds and was incorporated by reference into the CBA. CBA Art. XI § 1(a) ("The Employer [including TADCO] is bound by all the terms and conditions of the Agreement and Declaration of Trust with respect to each of the Fringe Benefit Funds [i.e., the Funds], which Agreement and Declaration of Trust are hereby made part of this Agreement and shall be considered as incorporated herein.").*fn9

B. The Arbitration Clauses

The CBA mandated the final and binding arbitration of any dispute between the Union and an Employer before a designated impartial arbitrator, who "shall have full and complete authority to decide any and all issues raised by the submission and to award appropriate damages." CBA Art. XI § 11. See also CBA Art. V(4) ("It is the intent of the parties hereto that all disputes between them, both within and outside of the Agreement, shall be submitted to arbitration, as provided within, and that no defense to prevent the holding of the arbitration shall be permitted."). The arbitration provisions in the CBA expressly applied to the Union and the Employers, including TADCO.

The CBA contemplated that the Funds, through their trustees, could bring an action in court to recover delinquent contributions from an Employer, and should this occur enumerated certain recoverable damages. CBA Art. XI § 6(f). The Trust Agreement expressly required the Funds, through their trustees, to arbitrate any disputes relating to an Employer's provision of books and records, but to litigate any other type of dispute:

Any matter involved in or arising under this Trust Agreement shall not be subject to the grievance or arbitration procedure established by any collective bargaining agreement; provided, however, that this provision shall not affect the rights and liabilities of any parties to those collective bargaining agreements; and further provided that the collection or provision of records relating to Contributions which may be required under this Trust Agreement or collective bargaining agreement shall be subject to the grievance or arbitration procedure established by any collective bargaining agreement.

Trust Agreement Art. VII § 13 (emphasis added).

C. The Arbitration

The specific issues submitted to the Arbitrator were (1) whether TADCO owed the Funds delinquent benefit contributions from April 1, 2004 through March 11, 2005, (2) whether TADCO was obligated under the CBA to provide the Funds books and records for an audit for the period from March 12, 2005 through June 30, 2006, and (3) the appropriate remedy, if any. GraBois Decl. Ex. B (hereinafter "Award") at 2.

In response to the Funds' Notice of Intention to Arbitrate, from June to August 2006 Frank DeMartino, TADCO's president ("DeMartino"), sent three letters to the Funds' counsel, with copies to the Arbitrator, requesting an adjournment of the arbitration on grounds that TADCO would furnish its books and records "when the outstanding audit items [relating to a prior audit] have been resolved." All three letters contained a disclaimer: "Nothing contained herein shall be construed as a waiver or modification of, or forbearance from exercising any of TADCO's rights, powers ...


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