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Barbera v. Ferran Enterprises

February 10, 2009


The opinion of the court was delivered by: Hurley, Senior District Judge


Plaintiffs, the Trustees and Fiduciaries of the Local 282 Welfare, Pension, Annuity, Job Training and Vacation and Sick Leave Trust Funds ("Plaintiffs" or the "Funds")) commenced this action to compel Defendant Ferran Enterprises ("Ferran") to produce books and records for audit and, should the audit reveal contributions due and owing, to collect delinquent contributions. Presently before the Court is Plaintiffs' motion to amend the complaint to add New York Marble and Stone Corp. as a defendant and Ferran's cross-motion for summary judgment. For the reasons set forth below, Plaintiffs' motion is denied and Ferran's motion is granted.


The following facts are undisputed unless otherwise noted: Ferran Enterprises is a party to the 2002-2006 New York City Heavy Construction & Excavation Contract ( the "Contract") with Local 282 of the International Brotherhood of Teamsters ("Local 282"). The contract incorporates by reference a Trust Agreement dated as of July 1, 1999, as amended. Article IX, section 1(d) of the Trust Agreement provides in relevant part:

The Trustees may at any time audit the pertinent books and records of any Employer in connection with the above. Pertinent books and records of an Employer include the books and records of any business which is bound by a collective bargaining agreement with the Union which requires contributions to any of the Funds and any other business entity which is affiliated with such business and which either 1) has employed persons who have performed the same type of work as the employees of the Employer covered by the Union agreement, or 2) is part of a group of trades or businesses "under common control," as that term is used in 29 U.S.C. § 1301(b)(1) for withdrawal liability purposes, which includes the Employer....

Restated Agreement and Declaration of Trust (Ex. B to Rasalingam Decl.) at 27-28.*fn1

Plaintiffs commenced this action on June 2, 2005 seeking to compel Ferran to produce books and records for an audit as a result of Ferran's alleged refusal to allow an audit for the period January 28, 2003 to March 29, 2004, and in the event the audit is conducted and reveals contributions due and owing, to recover said delinquent contributions. On June 27, 2006, Plaintiffs amended their complaint to seek an audit of Ferran's books and records "to the present."

In late 2006, the Funds changed auditing firms. At that point in time, the only item needed to make the audit current was Ferran's 2005 tax return. As a result of the change in audit firms, the Funds, in early 2007, requested that Ferran produce all of its books and records from 2001 to present for audit by the new audit firm. That audit took place on November 7, 2007 at Ferran's offices.

During his field audit on November 7, 2007, the auditor overheard a telephone answered in the name of another company, "New York Marble and Stone Corp." When the auditor inquired about that company, he was told it was owned by the daughter and son-in law of the owner of Ferran but that it was a separate entity. "Even though Ferran willingly produced the books and records of other affiliated companies during the field audit, Ferran had never before offered any information about New York Marble in connection with the Funds' prior audit attempts." Pls.' Mem. in Supp. at 3 (citing Jones Aff. at 1).

On December 15, 2007, the auditor submitted his report, dated November 12, 2007, to the Funds. The audit report indicates no delinquent contributions for "Ferran."*fn2 There are two page "1 of 10" to the Report which are identical except for the "Comments" section. One "Comments" section states: " Company's books and records indicate no non-union outside truck hires. Company is a member of a controlled group with CFF Associates Inc. and Carerra International Inc., neither of which have payroll. Frank Ferrante is a 49% shareholder and Carmela Ferrant is a 51% shareholder; neither is reported to the Funds. Audit complete through week ending September 24, 2007." The other "Comments" section includes the foregoing but continues: "Company refused to provide books and records of possible non-signatory affiliate "New York Marble & Stone Corp.", which is owned by Frank Ferrante's daughter, Kathy Crecco, and her husband, Luigi Crecco, who is the driver reported to the funds by Ferran Enterprises Inc." Curiously, the affidavit of the auditor is silent on whether he requested the books and records of New York Marble during his field audit on November 7, 2007. See Aff. of Ken Jones. Indeed, the first mention of a request that Ferran produce the records of New York Marble is the auditor's request on January 22, 2008. Id. at ¶ 10.

Pursuant to the Scheduling Order entered in this case, as amended, (Docket Nos. 12 & 15), motions for joinder of additional parties and for amendment of pleadings were to be completed by July 3, 2007 and discovery was to be concluded by November 26, 2007. Plaintiffs proffers nothing to suggest that the existence of New York Marble as a conceivable affiliate of Ferran could not have been uncovered via the discovery prior to the November 26, 2007 termination date. On February 25, 2008, Magistrate Judge Lindsay denied Plaintiffs' oral motion for discovery.


I. Motion to Amend

It is well- established that "leave to amend shall be freely given," FTD Corp. v. Banker's Trust Co., 954 F. Supp. 106, 109 (S.D.N.Y. 1997). It is also well-established that in deciding a motion to amend to add a party pursuant to Rule 21 of the Federal Rules of Civil Procedure, "courts must consider judicial economy and their ability to manage each case, as well as how the amendment would affect the use of judicial resources, the impact the amendment would have on the judicial system, and the impact [it] would ...

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