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Trustees of the Local 813 Insurance Trust Fund, the Local 1034 Pension Trust Fund, and the Local 813 and Local v. Wilner's Livery Service

September 19, 2012

TRUSTEES OF THE LOCAL 813 INSURANCE TRUST FUND, THE LOCAL 1034 PENSION TRUST FUND, AND THE LOCAL 813 AND LOCAL 1034 SEVERANCE AND RETIREMENT FUND,
PLAINTIFFS,
v.
WILNER'S LIVERY SERVICE, INC.,
DEFENDANT.



The opinion of the court was delivered by: Dora L. Irizarry, U.S. District Judge:

MEMORANDUM AND ORDER

Plaintiffs, Trustees of the Local 813 Insurance Trust Fund, the Local 1034 Pension Trust Fund, and the Local 813, and Local 1034 Severance and Retirement Trust Fund (collectively, "Plaintiffs" or the "Funds") filed the instant action against Defendant Wilner's Livery Service, Inc. ("Defendant") asserting violations of collective bargaining agreements, the respective trust agreements of the Funds, the Employee Retirement Income Security Act, as amended ("ERISA"), and the Labor-Management Relations Act of 1947 (the "Taft-Hartley Act"). Plaintiffs move to strike certain affirmative defenses in Defendant's Answer to the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(f) ("Rule 12(f)"), and alternatively, to dismiss Defendant's affirmative defense alleging fraud pursuant to Federal Rule of Civil Procedure 9(b) ("Rule 9(b)").*fn1 For the reasons set forth below, Plaintiffs' motion is granted in part and denied in part.

BACKGROUND

Plaintiffs are trustees of jointly administered, multi-employer, labor management trust funds established and maintained pursuant to collective bargaining agreements in accordance with section 302(c)(5) and (c)(6) of the Taft-Hartley Act, 29 U.S.C. § 186(c)(5), (c)(6). (First Amended Complaint ("Am. Compl.") ¶ 4, Doc. Entry No. 3.) Plaintiffs allege that Defendant, a provider of passenger transportation services, is a for-profit New Jersey corporation, an employer within the meaning of sections 3(5) and 515 of ERISA, 29 U.S.C. §§ 1002(5) and 1145, and an employer in an industry affecting commerce within the meaning of section 301 of the Taft-Hartley Act, 29 U.S.C. § 185. (Am. Compl. ¶¶ 6, 7, 9.) According to Plaintiffs, Defendant has been a party to a collective bargaining agreement (the "CBA") for the period from January 29, 2008 through January 28, 2011, and Defendant has employed workers who performed work covered by the CBA. (Am. Compl. ¶¶ 8, 9.) Plaintiffs allege that the CBA required Defendant to pay contributions to the Funds on behalf of its employees performing work covered by the CBA at the rates and times set forth therein. (Am. Compl. ¶ 10.)

On or about August 14, 2009, in connection with an audit conducted by the Funds, the Funds' auditor requested that Defendant provide it with records and documents. (Am. Compl. ¶ 21.) Defendant purportedly produced records and documents for the period of 2006 through 2009, but failed to produce complete records and documents for the 2010 year. (Id.) Plaintiffs allege that, on June 14, 2011, the Funds' auditor mailed revised audit findings for the years of 2008, 2009, and 2010 to Defendant and requested payment of the amounts owed, but that Defendant has not yet paid the amounts estimated by the audit. (Am. Compl. ¶¶ 22, 23.) Consequently, the Funds brought this action seeking delinquent contributions pursuant to sections 502(a)(3) and 515 of ERISA, section 301 of the Taft-Hartley Act, the CBA, and the respective trust agreements. (Am. Compl. ¶ 1.)

Defendant asserted twenty-six affirmative defenses in its Answer to the First Amended Complaint. (See Defendant's Answer to Plaintiffs' Amended Complaint ("Answer"), Docket Entry No. 7.) On December 9, 2011, Plaintiffs moved to strike thirteen of Defendant's affirmative defenses pursuant to Rule 12(f), and alternatively, to dismiss Defendant's fraud claim pursuant to Rule 9(b). (See Mem. of Law in Supp. of the Mot. to Strike Affirmative Defenses in Answer to the Am. Compl. ("Pls.' Mem.") at 2-3, 8, Docket Entry No. 16.) Defendant's opposition brief, however, addresses only six of its affirmative defenses, including two affirmative defenses that Plaintiffs have not challenged in this motion. (See Mem. of Law in Opp'n to Pls.' Mot. to Strike Affirmative Defenses ("Def.'s Mem.") at 1-2, 3-6, Docket Entry No. 17.) Although Plaintiffs contend that Defendant has abandoned the remainder of its affirmative defenses, Defendant does not state expressly that it has done so. Therefore, the Court will discuss whether Plaintiffs have made a proper showing with respect to all thirteen affirmative defenses.

DISCUSSION

I.Legal Standard

Rule 12(f) allows courts to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). "Three prerequisites must be satisfied before a court may grant a motion to strike defenses." F.D.I.C. v. Pelletreau & Pelletreau, 965 F. Supp. 381, 389 (E.D.N.Y. 1997). A plaintiff must show that: "(1) there must be no question of fact that might allow the defense to succeed; (2) there must be no substantial question of law that might allow the defense to succeed; and (3) the plaintiff must be prejudiced by the inclusion of the defense." In re Beacon Assocs. Litig., 2011 WL 3586129, at *1 (S.D.N.Y. Aug. 11, 2011) (quoting Specialty Minerals, Inc. v. Pluess--Staufer AG,395 F. Supp. 2d 109, 111 (S.D.N.Y. 2005)).

A "motion to strike an affirmative defense under Rule 12(f) . . . for legal insufficiency is not favored." McCaffery v. McCaffery, 2012 WL 3260299, at *5 (E.D.N.Y. Aug. 8, 2012) (alterations in original) (quoting William Z. Salcer, Panfeld, Edelman v. Envicon Equities Corp., 744 F.2d 935, 939 (2d Cir. 1984), vacated on other grounds,478 U.S. 1015 (1986)). As a result, a motion to strike "will not be granted unless it appears to a certainty that plaintiffs would succeed despite any state of the facts which could be proved in support of the defense." Id. Thus, the "courts should not tamper with the pleadings unless there is a strong reason for so doing." Lipsky v. Commonwealth United Corp., 551 F.2d 887, 893 (2d Cir. 1976) (citations omitted).

Rule 9(b) requires a defendant to plead affirmative defenses alleging fraud with particularity. Yurman Design Inc. v. Chaindom Enters., Inc., 2000 WL 897141, at *3 (S.D.N.Y. July 5, 2000) To state an affirmative defense with the required particularity, a party must: (1) specify the statements that the party contends were fraudulent; (2) identify the speaker; (3) state where and when the statements were made; and (4) explain why the statements were fraudulent. Id.

II. Contractual Affirmative Defenses

Plaintiffs rely primarily on the Second Circuit's decision in Benson v. Brower's Moving & Storage, Inc., 907 F.2d 310 (2d Cir. 1990) to argue that eight of Defendant's contractual defenses are barred as a matter of law in ERISA contribution actions. (Pls.' Mem. at 5-7.) In Benson, the Second Circuit construed section 515 of ERISA, which provides as follows:

Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collective bargained agreement shall, to the extent not inconsistent with law, make such contributions in ...


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