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Moran v. Sasso

February 17, 2009

PATRICK MORAN, AS PRESIDENT OF THE EMPIRE STATE REGIONAL COUNCIL OF CARPENTERS AND JOHN FUCHS, PATRICK MORIN, ANTHONY MACAGNONE, MICHAEL CONROY, DAVID HAINES, GEOFFREY JAMES, JAMES MALCOLM, WILLIAM MACCHIONE, ALAN EHL, WILLIAM WEITZMAN, KEVIN HICKS, JOSEPH OLIVIERI, DALE STUHLMILLLER, ARTHUR GODSELL, ROBERT CARLINO, PAUL J. O'BRIEN, JR., JOSEPH GANIRO, ROSS PEPE, RICHARD O'BEIRNE, JAMES LOGAN, ANTHONY CAROPRESSO, ANTONIO MARTINS, TODD HELFRICH AND FRANK WIRT AS TRUSTEES OF THE EMPIRE STATE CARPENTERS WELFARE PENSION, VACATION, ANNUITY, SCHOLARSHIP, APPRENTICE-TRAINING, LABOR-MANAGEMENT COOPERATION AND CHARITABLE TRUST FUNDS, PLAINTIFFS,
v.
FRANK SASSO, ANDREA SASSO, ROSINA BUILDERS & GENERAL CONTRACTING AND SRC CONSTRUCTION CORP., DEFENDANTS



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

Presently before the Court is Plaintiffs' motion, pursuant to Federal Rule of Civil Procedure 56, for (1) dismissal of the counterclaims of defendants Frank Sasso, Andrea Sasso, and Rosina Builders & General Contracting (collectively the "Rosina Defendants"); (2) entry of judgment against the Rosina Defendants, jointly and severally, for (a) $30,334.22 in unpaid fringe benefit contributions and wage supplements for work in calendar year 2005; (b) $120,101.72 in unpaid fringe benefit contributions and wage supplements for work in calendar year 2006; plus (c) interest, liquidated damages and attorneys' fees and costs. For the reasons set forth below, Plaintiffs' motion is granted in part and denied in part.

Background

The following facts are taken from the parties' submissions and are undisputed unless otherwise noted.*fn1

Defendants Frank Sasso and Andrea Sasso conduct business under the name of Defendant Rosina Builders & General Contracting ("Rosina Builders") as a sole proprietorship. As of June 30, 2004, Rosina Builders became a party to the Master Agreement between the Empire State Regional Council of Carpenters (the "Union") and the Construction Contractors Association of the Hudson Valley (the "Association" and the "2002 Agreement"). Pursuant to the terms of the 2002 Agreement, the Rosina Builders was required to pay benefit contributions and wage supplements to the Plaintiffs' fringe benefit funds in agreed amounts and specified percentages of the wages of their employees working under the terms of the Agreement. It further provides that in the event of delinquency, Rosina Builders was "liable for all contributions due, all collection costs, including auditing and attorney fees, 20% of total due each fund as liquidated damages, plus 1-1/2 % interest for each twenty-one (21) day period the delinquency continues." Agreement Art. 20, § b.

The stated term of the 2002 Agreement was June 1, 2002 through May 31, 2006.*fn2 It contains, however, the following provision:

[E]ach employer, by signing or agreeing to be bound by this Agreement thereby authorizes the [Construction Contractors] Association [of Hudson Valley, Inc. (the "Association")] to act as its collective bargaining representative for all matters pertaining to this Agreement and for subsequent negotiations, covering this multi-employer bargaining unit; and thereby expresses its unequivocal intention to be bound by group rather than individual action in collective bargaining, whether or not it becomes or remains a member of this Association. A withdrawal of such bargaining authority given to the Association by any independent signatory shall only be effective if in writing and received by the Association and the Council more than ninety (90) days prior to expiration of the stated term of this Agreement or any succeeding Agreement in effect between the Council and Association.

Agreement at 3; 34-35.

In April 2005, the Rosina Builders issued two checks totaling $28,105.84 for the payment of fringe benefits owed on behalf of employees pursuant to the Agreement. Both checks were dishonored upon presentment for insufficient funds. There is no dispute that said monies were due and owing to Plaintiffs for worked performed by employees of Rosina Builders pursuant to the Agreement. Indeed, the Court granted Plaintiffs summary judgment for the $28,105.84 and $17,284.07 of that amount has been recovered by Plaintiffs from Defendant SRC.

Effective as of July 1, 2006, the Union and the Association entered into a successive collective bargaining agreement to the 2002 Agreement, with a stated term of July 1, 2006 through June 30, 2009 (the "2006 Agreement").

Plaintiffs commenced this action on October 6, 2005. In the complaint Plaintiffs assert six claims for relief. The first claim is for breach of contract and asserts that the Rosina Defendants failed to pay benefit contributions and/or wage supplements to the funds in the sum of at least $28,453.39 and are liable for said amount "plus such additional sums for unpaid contributions as may have and may hereafter come due during the pendency of this action, together with liquidated damages, interest thereon and the reasonable attorneys' fees, costs and disbursements of this action." The second claim asserts a breach of the Rosina Defendants' obligations under ERISA to make required contributions of at least $28,453.39 and seeks to hold them liable for said amount "plus such additional sums for unpaid contributions as may have and may hereafter come due during the pendency of this action, together with interest on the unpaid contributions at the rate set forth in the Agreement and the Trust Agreements, or as set forth in the United States Internal Revenue Code . . . from the date each such unpaid contribution became due, plus an additional amount equal to the greater of (i) interest on the unpaid contributions or (ii) liquidated damages . . . in the amount of up to the sum of twenty (20%) of the unpaid contributions, together with reasonable attorneys' fees, costs and disbursements . . . ." The third claim for relief seeks an order directing the Rosina Defendants to permit the Plaintiffs to conduct an audit of their books and records and the recovery of delinquent contributions as disclosed by the audit. The fourth, fifth and sixth causes of action are asserted pursuant to the Article 3-A of the Lien Law and seek the recovery of trust funds held by Defendant SRC.

The Rosina Defendants answered the complaint, denying its salient allegations and asserting three counterclaims. The first counterclaim sounds in fraud and/or misrepresentation and alleges that the Rosina Defendants hired Plaintiffs' members based on "plaintiffs['] misrepresent[ations of ] the capabilities" of its members made for the "sole purpose of inducing defendants to hire them and therefore obtain their dues and other financial benefits," and that the individuals hired were in fact so incompetent as to cause defendants to sustain delay in the completion of the referenced project. The second counterclaim asserts that Plaintiffs breached their obligations under the terms of the agreement entered into between the Rosina Defendants and Plaintiffs. The third counterclaim is for libel and asserts that in August 2005 Plaintiffs knowingly made untrue allegations in a letter to the owners of the Santa Clara Church, to wit, that the Rosina Defendants had not paid monies allegedly due to Empire State Regional Council of Carpenters for wages and fringe benefits for carpentry work performed at the church.

In October 2006, Plaintiff moved for summary judgment for (1) an award of $28,104.84 against the Rosina Defendants, jointly and severally, as unpaid contributions owed under the 2002 Agreement plus interest, liquidated damages and, attorneys' fees and costs; (2) an order compelling a payroll audit of the books and records of the Rosina Defendants; and (3) an order disgorging and distributing to Plaintiffs as lien law trust assets $17, 284.07 held by defendant SRC. The only collective bargaining agreement cited to the Court on that first motion for summary judgment was the 2002 Agreement. By Memorandum and Order dated September 13, 2007, the Court granted Plaintiffs' motion for the $28,105.84 in unpaid fringe benefit contributions and for orders directing SRC to pay Plaintiffs $17,284.07 as Lien Law assets*fn3 and directing the Rosina Defendants to submit to an audit of its books and records. (See Memorandum dated Sept. 13, 2007 (Docket No. 26).) No judgment was entered, however, because all claims had not been determined. (See Order dated Oct. 24, 2007 (Docket No.29).)

The court-ordered audit having been completed, Plaintiffs now move once again for summary judgment. Plaintiffs now seek, in addition to the $28,105.84 already awarded (less the $17,284.07 received from SRC as Lien Law assets) the following amounts from the Rosina Defendants: (1) interest and liquidated damages on the $28,105.84 in the amount of $43,079.32; (2) $2,228.38 for additional unpaid contributions in calendar years 2004-05, plus interest and liquidated damages of $2,798.40 for a total of $5,026.78; and (3) $120,101.72 in unpaid contributions for calendar year 2006 plus $88,363.70 in interest and liquidated damages for a total of $208,465.42.

In support of the current motion, Plaintiffs offer the following additional facts. Effective as of July 1, 2006, the Union and the Association entered into a successor collective bargaining agreement with a stated term of July 1, 2006 through June 30, 2009 (the "2006 CBA"). The Union has not received from Rosina Builders a notice withdrawing its designation of the Association as its collective bargaining representative as provided under the 2002 Agreement. Nor has Rosina Builders submitted or pursued any grievance under Article Six of the 2002 Agreement or the 2006 CBA. The audit of Rosina Builders revealed an underpayment of fringe benefits and deductions by Rosina Builders for its carpenter employees during the period January 1, 2004 through December 31, 2005 totaling $30,334.22, which amount includes the $28,105.84 awarded by the Court in its decision on the first motion for summary judgment and against which the $17,284.07 in Lien Law assets recovered from SRC must be credited. Plaintiffs' auditor also determined that there was an underpayment of fringe benefits and deductions for carpentry work performed by Rosina Builders during the calendar year 2006 totaling $120,101.72. Defendant Frank Sasso represented to the auditor that Rosina Builders had no payroll for 2006 and used subcontractors for the company's work in 2006, which subcontractors were paid amounts reflected on IRS form 1099's issued by Rosina Builders for such work. Using the 1099's for those ...


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