The opinion of the court was delivered by: Ramos, D.J.:
Plaintiffs, union trust funds ("the Funds") established under the Employee Retirement Income Security Act ("ERISA") and the Labor Management Relations Act ("LMRA"), brought this action against brothers Lawrence, Martin, and Richard Hopwood, principals of Richards Conditioning Corporation ("RCC"). The Funds allege that RCC was party to a collective bargaining agreement ("CBA") in which it was required to pay certain fringe benefits to the Funds and that Martin and Richard Hopwood signed an agreement personally guaranteeing those payments ("the Payment Agreement").
The Funds alleged four causes of action against the Hopwoods and now move for summary judgment on two of those causes of action. First, the Funds claim that the Hopwoods breached the Payment Agreement by failing to pay the fringe benefit contributions. Second, they claim that Martin Hopwood breached his duty as an ERISA fiduciary.
The Hopwoods counter that RCC was not party to the CBA and that they only signed the Payment Agreement under the mistaken assumption that RCC was party to the CBA. They also contend that, because RCC is now bankrupt, the bankruptcy court, and not this court, should resolve this dispute.
For the reasons set forth below, the Court GRANTS the motion and enters summary judgment for the Funds on the breach of the Payment Agreement claim and the breach of fiduciary duty claim.
Local Union 38 of the Sheet Metal Workers' International Association entered into a CBA with a set of employers known as the Sheet Metal and Roofing Contractors Association of Southeastern New York ("the Association"), which has been in effect since at least 1990. See
Pl.'s Motion for Summary Judgment, Ex. B at 2-3, 6. A representative of the Association signed the CBA on behalf of the group, which, as of 1990, consisted of 21 businesses including RCC. See id. at 2-3, 8.
The CBA provides that "[e]mployers shall contribute to the following funds on behalf of their [e]mployees according to the wage and fringe benefits negotiated by the parties." Pl.'s Motion, Ex. C at 20. The CBA then lists the funds to which this obligation is owed, and that list includes each of the Funds that are Plaintiffs in this lawsuit. See id.
The Funds allege that RCC was part of the Association that signed the CBA and was, therefore, party to the CBA. See, e.g., Am. Compl. ¶ 7. The Funds have attached to their motion two lists of the members of the Association, one undated and one dated June 1990. See Pl.'s Motion, Ex. B at 3, 8. They have also attached a letter from Local Union 38 to RCC dated April 21, 1992, which states that RCC is part of the Association. See id. at 5. They have further attached an agreement between the Local Union 38 and the Association which states that each employer "will hereafter be a member of the multi-employer bargaining unit represented by said Association unless this authorization is withdrawn by written notice to the Association and the Union." See id. at 7. The authenticity of these documents is not challenged. There is no evidence in the record before this Court that RCC ever submitted any writing withdrawing its authorization to be represented by the Association.
It is not disputed that, at times relevant to this lawsuit, RCC employed members of Local Union 38, see, e.g., id., Ex. I at 3, and, according to an unrebutted affidavit filed by Fund Administrator Mark Modzeleski, RCC made fringe benefit contribution payments for its employees to the Funds of at least $25,000 per year from 1999 to 2008 and continued to make some payments in 2009 and 2010. See id., Ex. D at 8.
Martin Hopwood has been employed by RCC from 1992 to the present. Id., Ex. G at 4. From 1992 until February 26, 2009, he served as its CFO, and from that date until the present, he has served as its CEO. Id. Richard Hopwood has been employed by RCC since 2006. Id. From 2006 until February 26, 2009, he served as a Vice President, and from that date until the present, he has served as its COO. Id. Together with Lawrence Hopwood, Martin and Richard Hopwood "made decisions regarding the payment of corporate bills on behalf of [RCC]." Id. at 5.
In a deposition in this case, Martin Hopwood was asked about whether RCC paid fringe benefits to Local Union 38 and testified as follows:
Q: And you submitted those forms because you believed that fringe benefits were owed to Local 38, based on labor provided by its members?
A: At the time I did, yes.
Q: Did RCC submit fringe benefit contribution forms for other jobs-
Q: And did the company submit those contribution forms because it believed that it owed fringe benefits for labor provided by Local 38?
A: It submitted the forms because it believed-yes.
In the spring of 2009, Martin and Richard Hopwood, signed the Payment Agreement with the Funds. Id., Ex. E at 3. The Payment Agreement stated that RCC "is a signatory to a Collective Bargaining Agreement with the Sheet Metal Local 38"; that it "agrees that it owes employee benefit contributions for November and December 2008, and January 2009"; and, that it "will repay the aforementioned due and owing contributions . . . pursuant to the schedule attached." Id. at 2. The Agreement also states that Martin and Richard Hopwood "personally guarantee[d] this debt, and assume[d] personal liability for its repayment." Id. at 3.
The payment schedule attached to the Agreement stated that payment would start March 6, 2009; and, that the debt would be paid in full by August 17, 2009. Id. at 4. The Hopwoods do not specifically dispute the Funds' statement that the Payment Agreement was for a sum certain of $101,298.44. Def.'s Response to Pl.'s Rule 56.1 Statement ¶ 6 ...