The opinion of the court was delivered by: Hurley, Senior District Judge:
Plaintiffs Empire State Carpenters Welfare Annuity and Apprentice Training Funds, by Patrick Morin and Joseph Olivieri as Trustees, and South Central District Council of Carpenters Defined Benefit Fund, by David F. Haines and Frank Jones, as Trustees (collectively, the "Funds"), and the Empire State Regional Council of Carpenters, by Patrick Morin, Business Manager (the "Union") filed the present action against defendant Conway Construction of Ithaca, Inc. ("Conway") to recover unpaid fringe benefit contributions pursuant to a collective bargaining agreement. Both parties previously moved for summary judgment pursuant to Federal Rule of Civil Procedure 56. By Memorandum & Order dated February 19, 2010 (the "February 2010 Decision"), the Court found that although Conway had never signed the collective bargaining agreement at issue, it was nonetheless bound to that agreement by virtue of its conduct, which manifested an intent to adopt the agreement. Because, however, it was unclear from the record before the Court whether Conway effectively terminated its obligations under the collective bargaining agreement, and because the parties had not briefed the issue, the Court denied both motions for summary judgment and gave the parties an opportunity to re-file.
Presently before the Court are plaintiffs' and defendant's second motions for summary judgment. For the reasons set forth below, plaintiffs' motion is granted and defendant's motion is denied.
The material facts, drawn from the Complaint, the parties' Local 56.1 Statements and evidentiary submissions, and the February 2010 Decision, are undisputed unless otherwise noted.
Conway was incorporated in 1996 and engages in the construction business. Conway usually employs between three and six individuals. In November 1996, Conway signed a collective bargaining agreement with the Union (the "1996 CBA"), which had an effective date of June 1, 1995 and expired on April 30, 1998. John Conway, the Vice President of Conway, had several meetings with Union representatives between 1998 (when the 1996 CBA expired) and 2003. During those meetings, he agreed to pay his employees union wages and benefits but refused to sign another written agreement.
In 2001, the Union entered into a collective bargaining agreement (the "2001 CBA") with the Construction Trades Employers of South Central New York, Inc. ("CTE"), a multi-employer bargaining association. The 2001 CBA was effective from May 1, 2001 through April 30, 2006. It is undisputed that Conway never became a signatory to the 2001 CBA. Nevertheless, between May 1, 2001 and April 30, 2003, Conway paid its employees hourly wages and fringe benefit contributions at the rates set forth in the 2001 CBA. John Conway testified at his deposition that although he refused to sign the 2001 Agreement, he paid wages and benefits to his carpenter employees in accordance with that agreement for "[a]s long as [he] could." (Feb. 2010 Decision at 3 (internal quotation marks omitted, alterations in the original).) In addition, when Conway submitted fringe benefit contributions to the Funds on behalf of its carpenter employees, he also submitted remittance forms that provided: "Any signatory to this form is hereby bound to any and all applicable collective bargaining agreement with [the Union] concerning wages, hours and working conditions for the applicable work . . . ." (Id. at 3-4.)
On January 31, 2003, John Conway wrote a letter to CTE (the "January 31, 2003 Letter") providing as follows:
Due to the increasing costs of staying in business in New York State, we will be making a decision at the end of the 1st quarter whether or not we can maintain union rates.
We have been trying to keep up with the rising wages and workers' compensation rates, but we've been losing customers over the past few years. Currently there are only a few remaining in the Ithaca area willing to pay these union rates.
This decision will be based on the amount of union work in the spring. At that time I will make a final decision as to whether or not we remain a union shop. . . . . (Aff. of John Conway, dated July 21, 2011 ("Conway Aff."), Ex. B.) A copy of this letter was sent to the Union.
Thereafter, on April 8, 2003, John Conway notified the CTE via letter (the "April 8, 2003 Letter") that: "Per our letter of January 31, 2003, we have reviewed the first quarter. We will no longer be a union shop effective May 1, 2003." (Id., Ex. C.) A copy of this letter was also sent to the Union. After April 1, 2003, Conway ceased making fringe benefit contributions to the Funds on behalf of its carpenter employees. (Feb. 2010 Decision at 4.)
At his deposition, John Conway testified that although he never signed the 2001 CBA, he sent the January and April 2003 letters pursuant to the termination procedure set forth in Article XV(2) of the 2001 CBA, (id.), which provides as follows:
This Agreement shall remain in full force and effect through April 30, 2006 unless written notice of intent to seek change or to amend the provisions of this Agreement shall be given in either case by the parties desiring such change or amendment at least 90 days prior to the expiration date. (Decl. of David F. Haines, dated June 21, 2011, ("Haines June 2011 Decl.") Ex. A at 19.) Conway testified that he followed this procedure by sending a letter in January 2003 and then confirming his termination with the Union 90 days later in April 2003. (Feb. 2010 Decision at 5.) When asked why he sent these notices, Conway responded that he had been told at a meeting by Union representatives that he "was grandfathered in forever and that they would tell [him] when [he] could stop being a contractor -- [he] would be out of the union." (Id. (internal quotation marks omitted, alterations in the original).)
In February 2004, the Funds audited Conway's books and records for the period between January 1, 2000 and December 31, 2003. As part of the audit, Conway was required to make available certain requested financial books and records. Conway complied with all requests for the production of documents. (Pls.' 56.1 ¶ 16.) According to Conway, he only agreed to the audit "because of the legal costs [it would take] to oppose the audit." (Conway Aff. ¶ 17.) The audit uncovered no contribution deficiencies for the period between January 1, 2000 and December 31, 2003. (Decl. of Joseph W. McCarthy, dated June 20, 2011 ("McCarthy Decl."), Ex. A at 1.) In May 2007, however, Conway refused to cooperate with the Funds' second audit for the period between January ...