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Thomas Gesualdi, Louis Bisignano v. Laws Construction Corp

December 22, 2010


The opinion of the court was delivered by: Denise Cote, District Judge:


Plaintiffs, the trustees and fiduciaries ("Plaintiffs") of the Local 282 Welfare, Pension, Annuity, Job Training, and Vacation and Sick Leave Trust Funds ("Benefit Funds"), bring suit pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 et seq., against the defendant, Laws Construction Corp. ("Laws"), a signatory to a collective bargaining agreement ("CBA") with Local 282 of the International Brotherhood of the Teamsters (the "Union"), for non-payment of contributions to the Benefit Funds. The Plaintiffs have moved for summary judgment on their claim. For the following reasons, the motion is granted.


A. Laws and Jo-Di Laws is a general contractor specializing in road and highway construction and reconstruction, excavating, commercial construction, and construction management. Laws does not maintain trucks for the disposal of excess excavated material, have the necessary permits for waste material hauling, or maintain relationships with disposal sites, so it issues purchase orders to outside companies to fill those roles.

In 2006, Laws was hired by the Dormitory Authority of the State of New York ("DASNY") for work on a construction project in Queens, New York (the "DASNY Project"). Pursuant to its contract with DASNY, Laws was required to engage the services of a woman- or minority-owned business. To fulfill this requirement, on November 16, 2006, Laws issued a purchase order for trucking services from Jo-Di Trucking, Inc. ("Jo-Di"), a woman-owned business approved by DASNY, on an as-needed basis.*fn1

The purchase order reflects the cost to Laws of renting trucks with drivers for eight hours, as well as the price for each hour of overtime. On the DASNY Project, Jo-Di was responsible for hauling away the material excavated by Laws. Laws employees loaded the trucks with debris, and Jo-Di employees drove the trucks away from the work site. The Jo-Di employees were not on Laws's payroll.

The DASNY Project was a "prevailing wage job," meaning that all employees on the job site were required to be paid wages and benefits (or supplemental income) equal to the current union wage and benefit rate, whether the employees are members of a union or not. See N.Y. Lab. Law § 220. Jo-Di was responsible for paying its employees the prevailing wage.

B. Heavy Construction and Excavating CBA At all times relevant to this litigation, Laws was a signatory to the CBA, the full name of which is the Local 282 New York City Heavy Construction & Excavating Contract 2006- 2009. In the CBA, the employer recognizes that the union is the "exclusive bargaining representative . . . of all automobile chauffeurs and euclid and turnapull*fn2 operators employed by the employer." "Heavy construction and excavating work" is defined as the "construction of engineering structures and building foundations, exclusive of the erection of building superstructures." The CBA requires, among other things, that Laws pay into the Benefit Funds dollar amounts defined in the CBA for each hour worked in employment covered by the CBA.*fn3

The CBA places certain restrictions on Laws's ability to rent "outside" trucks, i.e., trucks not owned by Laws, and to hire subcontractors. In particular, § 6(D) of the CBA prohibits employers from hiring outside trucks or equipment "unless all his available suitable trucks and equipment are in use." If that is the case, the employer "shall hire only from truck or equipment suppliers whose drivers receive wages, working conditions, benefits and standards of employment no less favorable than those contained herein." (Emphasis supplied.) Additionally, if an employer hires outside trucks or equipment, it is required to notify the Benefit Funds on a weekly basis of the "identity and address of the truck or equipment supplier, the number of trucks supplied and the hours of work involved for each truck."

The CBA also restricts subcontracting. Pursuant to § 7 of the CBA, employers who subcontract any work covered by the CBA must submit monthly reports to the Union of "all hours worked for each Employee, in all classifications covered by this Agreement, whether that work is performed by an Employee of the Employer or an Employee of a subcontractor, or any subcontractor of a subcontractor." The CBA does not define "Employee"*fn4 or "subcontractor."

The provisions of the CBA concerning renting outside trucks and hiring subcontractors also describe the consequences of not complying with the terms of the CBA. With respect to hiring outside trucks, a supplier that does not provide the wages, working conditions, benefits, and standards of employment required by the CBA is "not complying." In that case, if the Union notifies the employer that the truck supplier is out of compliance, "the Employer . . . may be responsible for such non-compliance" beginning two days after the Union notifies the employer. With respect to subcontracting, non-compliance means that a subcontractor fails to pay the wages or Benefit Funds contributions required by the CBA. In that case, the "Employer shall be responsible" for any non-compliance starting two days after the Union informs the Employer. It is undisputed that Laws did not notify the Union or the Benefit Funds of its hiring of Jo-Di or the hours worked by Jo-Di employees.

The Trust Agreement gives the Plaintiffs the authority to audit any signatory employer's records and books in order to determine compliance with the payment of contributions to the Benefit Funds. The Trust Agreement also defines the interest, attorney's fees, auditor's fees, and liquidated damages that will be due on unpaid contributions.

C. Procedural History The Plaintiffs commenced this action on February 5, 2009, seeking to compel an audit of Laws's books and records to determine whether any contributions were due and owing, and, if amounts were found to be due, payment of those amounts and the statutory damages arising from non-payment. The case was originally assigned to the Honorable Denny Chin. On June 11, the Plaintiffs filed a motion for entry of default judgment. Laws appeared in the action and, with the permission of the Court, filed an answer on August 25, 2009.

In September 2009, the Plaintiffs completed an audit of Laws's books and records for the period from April 2007 through March 2009. The audit revealed approximately 2,000 hours of work for which Laws had not made benefits contributions. The audit report states that "[Laws]'s books and records indicate that the company hired non-union outside trucks from Jo-Di Trucking, Inc." Approximately 1,800 hours*fn5 of the 2,000 hours for which benefits were not paid are attributed to "Non Union Outside Truck Hire" by Jo-Di.

Based on the audit, the Plaintiffs demanded unpaid contributions, interest, auditing fees, and attorney's fees. Laws did not pay the Plaintiffs' demand. On May 12, 2010, the case was reassigned to this Court. Discovery concluded on October 15. On November 5, the Plaintiffs filed a motion for summary judgment seeking $54,092 in contributions, $39,408 in interest and additional statutory interest, $54,861 in auditing fees and attorney's fees, and $53 per day as interest and additional statutory interest from the day of the audit until the day of judgment. The motion was fully submitted on December 8.*fn6


Summary judgment may not be granted unless all of the submissions taken together "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). The moving party bears the burden of demonstrating the absence of a material factual question, and in making this determination, the court must view all facts "in the light most favorable" to the nonmoving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see also Holcomb v. Iona Coll., 521 F.3d 130, 132 (2d Cir. 2008).

Once the moving party has asserted facts showing that the non-movant's claims cannot be sustained, the opposing party must "set out specific facts showing a genuine issue for trial," and cannot "rely merely on allegations or denials" contained in the pleadings. Fed. R. Civ. P. 56(e); see also Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009). "A party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment," as "[m]ere conclusory allegations or denials cannot by themselves create a genuine issue of material fact where none would otherwise exist." Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (citation omitted). Only disputes over material facts -- "facts that might affect the outcome of the suit under the governing law" -- will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (stating that the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts").

"[A] motion for summary judgment may be granted in a contract dispute only when the contractual language on which the moving party's case rests is found to be wholly unambiguous and to convey a definite meaning." Topps Co., Inc. v. Cadbury Stani S.A.I.C., 526 F.3d 63, 68 (2d Cir. 2008). Thus, "[t]he initial question for the court on a motion for summary judgment with respect to a contract claim is whether the contract is unambiguous with respect to the question disputed by the parties." Cont'l Ins. Co. v. Atl. Cas. Ins. Co., 603 F.3d 169, 180 (2d Cir. 2010) (citation omitted). "Whether the contract is unambiguous is a question of law for the court." Id. ...

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