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Century Vertical Systems, Inc. v. Local No. 1

September 22, 2009


The opinion of the court was delivered by: Matsumoto, United States District Judge


Plaintiff Century Vertical Systems, Inc., d/b/a PRO Elevator*fn1 ("Vertical") commenced this action against defendant Local No. 1, International Union of Elevator Constructors to enjoin arbitration with the defendant concerning plaintiff's alleged failure to comply with a collective bargaining agreement. Pending before the court are the parties' cross-motions for summary judgment on the issue of whether plaintiff is bound to arbitrate. For the reasons that follow, plaintiff's motion is denied and defendant's motion is granted.


Plaintiff Vertical is a company engaged in the business of maintenance and modernization of elevators. (Dorsey Dep. at 6-8, 10-11, 34-36.) Vertical is owned by Richard Dorsey and Todd Rowan. (Dorsey Dep. at 23; Rowan Dep. at 14.) Defendant, Local No. 1, International Union of Elevator Constructors ("Local 1"), is a labor organization representing elevator mechanics and apprentices who install, construct, repair, service, maintain, and operate elevators and other forms of vertical transportation in the Greater New York City area. (Stork Aff. ¶ 2.)

Dorsey, a fifty-percent owner of Vertical, was previously employed by Century Industrial Services, d/b/a PRO Elevator Services, Inc. ("Industrial"), owned by Michael O'Connor. (Dorsey Dep. at 6-7.) Industrial was incorporated in March 1999 and engaged in the business of elevator maintenance, repair and construction in the New York City area. (Id. at 10-11.) Industrial's business address was 171 West Street, Brooklyn, NY 11222, and its mailing address was P.O. Box 907, Jefferson Valley, NY 10535. (Id. at 12.) Industrial's phone number was (718) 389-3970. (Id. at 13.)

At the start of Dorsey's employment with Industrial in January 2002, he joined Local 1 at the request of Mr. O'Connor, and paid an initiation fee and dues to the Union. At that time, Dorsey was the only employee of Industrial and had the role of a "mechanic, a manager and a salesman." Industrial had "a few chain blocks and a few chain falls," but "the tools that were brought into the company were [Dorsey's] personal tools and [] rigging." (Id. at 12.) The van used by Dorsey to service customers was owned by Industrial. (Id. at 12.) Dorsey remained in his role as "general mechanic" through the length of his employment at Industrial. (Id. at 7, 8.) Dorsey participated in soliciting customers with Mr. O'Connor and finalized contracts with customers. (Id. at 7, 8.)

Additional employees were hired by Industrial beginning in approximately April 2002. (Id. at 9.) Todd Rowan, a fifty-percent owner of Vertical, began his employment with Industrial in May 2002. (Rowan Dep. at 6.) As new employees were hired, they joined Local 1. In performing work for Industrial, employees used their personal tools. (Dorsey Dep. at 22-23.) Some of the Industrial employees used Industrial's vehicles, and others used their own. (Id. at 12.)

On March 9, 2005 Michael O'Connor, in his capacity as President of Industrial, signed a "Joinder Agreement" for the employer, "PRO Elevator," with Local 1, whereby the parties agreed to adopt and be bound by the terms of a January 2, 2002 collective bargaining agreement between Local 1 and ThyssenKrupp Elevator Corporation. (Marcus Aff. Ex. C.) Robert Stork, a vice-president and business agent of Local 1, subsequently received complaints from Industrial's workers that "expenses, vacations and [] worked hours weren't being paid properly." (Stork Dep. at 8.) In response to these complaints, Stork contacted "the first contact point," Dorsey, to discuss alleged violations of the collective bargaining agreement. (Id. at 8.) After speaking with Dorsey, Stork attempted to resolve these problems by speaking to O'Connor. (Id. at 8-9.) Additionally, Stork addressed "basic average discipline problem[s]" regarding some of the employees that were brought to Stork's attention by Dorsey. (Id. at 13-15.) In addition to Dorsey and O'Connor, Stork testified that he also dealt with a "gentleman who was in charge of payroll." (Id. at 16-17.)

As a result of the violations of the CBA, the parties entered into a settlement agreement. (Id. at 27.) However, Industrial failed to comply with the terms of the agreement and Local 1 withdrew manpower*fn2 from Industrial on approximately January 26, 2006 (Id. at 28-30) and eighteen of Industrial's twenty-two workers ceased work. Prior to this withdrawal, Dorsey had "ongoing conversation[s]" with O'Connor about O'Connor's failure to make contribution payments pursuant to the CBA and attempted to persuade him to make such payments. (Dorsey Dep. at 16-17.) Dorsey was one of the four employees who did not cease work on January 26, 2006 because "there was an elevator company to run," and he "was a supervisor." (Id. at 17-18.) The other three employees who did not stop work were Rowan, who was a foreman, and Dorsey's brothers, Scott and Tom, who were field workers. (Id. at 18.)

Dorsey, Rowan, and the two other employees continued to "answer[] service calls and elevator shutdowns," and "still [are] doing it to date." (Id.) O'Connor "said he didn't want any part of the business and said [they] could do what [they] wanted with it." (Id. at 20.) As a result, Dorsey and Rowan formed the plaintiff corporation -- Century Vertical Systems. (Id. at 20-21.) In March 2006, they filed for an assumed name, PRO Elevator (Id. at 21), dropping the word "Services" previously included when the corporation's name was Century Industrial Services, and continued doing business as PRO Elevator.

The newly-formed Vertical remained at the same location as Industrial and kept the same phone number. (Id.) Dorsey contacted Industrial's existing customers about Vertical providing services pursuant to the customers' contracts with Industrial. (Id. at 22-23.) Currently, approximately seventy percent of PRO Elevator's customers were previously serviced by PRO Elevator Services. (Id. at 34.) Dorsey, Rowan, and Dorsey's brothers used their own personal tools -- the same tools used as employees of Industrial -- in their work as Vertical employees. (Id. at 24.) In addition to these employees, James Drummond, a former Industrial employee, began working for Vertical one week after O'Connor gave up the business, and John Drummond, also a former Industrial employee, joined a month later along with a maintenance mechanic. (Id. at 25.) Since then, Vertical has gradually expanded its workforce to include eighteen employees, fourteen of whom are mechanics or apprentices. (Id. at 31.) In September 2006, Industrial filed a petition for bankruptcy.

In March 2007, Local 1 made a demand for arbitration to resolve a dispute concerning the failure of Vertical to pay wage rates and fringe benefit contributions to various employee plans, as required by the CBA, and its failure to maintain the union security provisions of the CBA. Vertical subsequently filed the pending lawsuit seeking to enjoin the arbitration.


A court may grant summary judgment only "if the pleadings, the discovery and disclosure materials on file, and any affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party carries the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In deciding a motion for summary judgment, the court's function is not to resolve disputed issues of fact, but only to determine whether there is a genuine issue to be tried. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The court must construe the facts in the light most ...

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