The opinion of the court was delivered by: John T. Curtin United States District Judge
In this action, plaintiffs United Union of Roofers, Waterproofers, and Allied Workers, Local No. 210, AFL-CIO ( "Union"), and Jack Lee and Geoffrey McCreary, Trustees of the Union's Money Purchase Pension Plan and Joint Health & Welfare Program (jointly referred to herein as "the Funds"), seek declaratory, injunctive, and other equitable relief against corporate defendants A.W. Farrell & Son, Inc. ("A.W. Farrell") and Roof Craft Systems, Inc. ("Roof Craft"), and individual defendants John W. ("Bill") Farrell and John T. ("John") Farrell, pursuant to sections 502(a)(3) and 515 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1132(a)(3), 1145, and section 301 of the Labor-Management Relations Act of 1947, 29 U.S.C. § 185 ("LMRA" or the "Taft-Hartley Act"). The individual defendants, Bill and John Farrell, have moved for partial summary judgment (Item 20) dismissing the claims brought against them, and for an award of attorney's fees and costs related to the motion.
For the reasons that follow, defendants' motion is denied.
The following background facts are not in dispute. A.W. Farrell is a New York corporation engaged in the business of commercial flat roofing, with facilities in Dunkirk, Horseheads, and Rochester, New York; Solor and Milford, Ohio; and Erie, Pennsylvania. Bill Farrell is the Chief Executive Officer and 100 percent shareholder of A.W. Farrell. John Farrell is Bill Farrell's son. John is the Vice President of A.W. Farrell and manages the company's facility in Erie.
A.W. Farrell is subject to a collective bargaining agreement between the Union and the Erie Construction Council, Inc. (see Item 18, Ex. A), governing the work at its Erie and Dunkirk locations. Under the terms of the agreement, A.W. Farrell makes certain payments for each hour worked by covered employees to joint Union/Employer Funds, including the Money Purchase Pension Plan and Health & Welfare Funds administered by the plaintiff Trustees.
Roof Craft is also a New York corporation engaged in the commercial roofing business, with facilities in several cities, including Dunkirk, New York; Cleveland, Columbus and Cincinnati, Ohio; and Erie, Pennsylvania. Roof Craft is owned by Bill Farrell's daughter Kathleen, and another son Mark. Roof Craft is a nonunion contractor and is not a signatory to the collective bargaining agreement.
In their amended complaint, plaintiffs allege that Roof Craft performs identical roofing and related construction work that A.W. Farrell performs for many of the same customers within the scope and jurisdiction of the collective bargaining agreement, but Roof Craft does not make payments to the Funds or pay membership dues to the Union for its employees. Plaintiffs claim that Roof Craft is an "alter ego" corporation of A.W. Farrell, established and maintained in order to evade the obligations of the collective bargaining agreement.
The first and second causes of action set forth claims for relief against the corporate defendants under section 515 of ERISA and section 301 of LMRA, respectively. In the third cause of action, plaintiffs allege that Bill and John Farrell established Roof Craft as an alter ego of A.W. Farrell in order to intentionally and fraudulently evade the obligations of the collective bargaining agreement by concealing "material overlapping of business purpose, management, labor control, customers, scope of work, use of equipment and services . . . ," to plaintiffs' detriment (Item 18, ¶¶ 37-38). Plaintiffs seek to hold Bill and John Farrell "personally, jointly, and individually" liable for the unpaid contributions and membership dues alleged to be due and owing to the Funds from May 1, 2004 onward (id. at ¶ 39 & Prayer for Relief, ¶ 7).
Bill and John Farrell move for partial summary judgment to dismiss the third cause of action based on the argument that neither individual defendant can be held personally liable for the obligations contained in the collective bargaining agreement between A.W. Farrell and the Union, and that plaintiffs have failed to produce any evidence that Roof Craft was established in an attempt to intentionally defraud the Union or the Funds. The individual defendants also seek an award of attorney's fees and costs related to this motion, pursuant to ERISA section 502(g)(1).
I. Summary Judgment Standards
Summary judgment is appropriate "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 movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c)(2); see also Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 247 (1986). The burden of demonstrating the absence of any genuine dispute as to a material fact rests with the moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). In determining whether there is a genuine issue as to any material fact, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in [its] favor." Anderson, 477 U.S. at 255. "Only when reasonable minds could not differ as to the import of evidence is summary judgment proper." Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991). Summary Judgment cannot be entered "if there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party." Yurman Design, Inc. v. Golden Treasure Imps., Inc., 275 F. Supp. 2d 506, 508 (S.D.N.Y. 2003).
The trial court's function at the summary judgment stage "is carefully limited to discerning whether there are genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue-resolution." Gallo v. Prudential Residential Services, Ltd. P'ship, 22 F.3d 1219, 1224 (2d Cir. 1994); see ...