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Patrick Dolan, Jr. and v. Arc Mechanical Corp

October 17, 2012

PATRICK DOLAN, JR. AND
ANTHONY SAPORITO AS TRUSTEES AND CO-CHAIRMEN AND
KEVIN J. DRISCOLL AS ADMINISTRATOR OF THE STEAMFITTERS' INDUSTRY PENSION FUND,
THE STEAMFITTERS' INDUSTRY SUPPLEMENTAL RETIREMENT PLAN,
THE STEAMFITTERS' INDUSTRY WELFARE FUND,
THE STEAMFITTERS' INDUSTRY HEALTH REIMBURSEMENT ACCOUNT FUND,
THE STEAMFITTERS' INDUSTRY SECURITY BENEFIT FUND,
THE STEAMFITTERS' INDUSTRY VACATION PLAN, AND
THE STEAMFITTERS' INDUSTRY EDUCATIONAL FUND, AND PATRICK DOLAN, JR. AND JEROME MOREALE AS TRUSTEES AND CO-CHAIRMEN AND
KEVIN J. DRISCOLL AS ADMINISTRATOR OF THE METAL TRADES BRANCH LOCAL 638 WELFARE FUND,
THE METAL TRADES BRANCH LOCAL 638 PENSION FUND, AND
THE SERVICE FITTERS INDUSTRY EDUCATIONAL FUND, PLAINTIFFS,
v.
ARC MECHANICAL CORP., DEFENDANT.



The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge:

USDC SDNY

DOCUMENT

ELECTRONICALLY FILED

DOC #:

OPINION & ORDER

Petitioners Patrick Dolan, Jr. and Anthony Saporito, as Trustee and Co-Chairmen, and Kevin J. Driscoll, as Administrator, of The Steamfitters' Industry Pension Fund, The Steamfitters' Industry Supplemental Retirement Plan, The Steamfitters' Industry Welfare Fund, The Steamfitters' Industry Health Reimbursement Account Fund, The Steamfitters' Industry Vacation Plan, and The Steamfitters' Industry Educational Fund ("SI Funds"), and Patrick Dolan, Jr. and Jerome Moreale, as Trustees and Co-Chairmen, and Kevin J. Driscoll, as Administrator, of The Metal Trades Branch Local 638 Welfare Fund, The Metal Trades Branch Local 638 Pension Fund, and the Service Fitters Industry Educational Fund ("MT Funds") (collectively, "the Funds") petition to confirm two 2011 labor arbitration awards ("the Awards") pursuant to Section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), and Section 9 of the Federal Arbitration Act (the "FAA"), 9 U.S.C. § 9, and to enter judgment thereon. (Compl., ECF No. 1.) The arbitration awards arise from disputes between the Construction and Metal Trades (Service) Branches of Enterprise Association Steamfitters' Local 638 of the United Association AFL-CIO and Defendant ARC Mechanical Corporation ("ARC"). (Id. ¶ 3.) The Awards are based on interpretations of Collective Bargaining Agreements ("CBAs") as to ARC's contractual obligation to make certain contributions to the Funds. An arbitrator found in favor of the Funds and issued his Awards in writing.

ARC opposes the Funds' petition on two grounds. First, it claims that the arbitrator rendered awards that were in "manifest disregard" of the evidence. (Opp'n at 5, 7, ECF No. 12.) Second, ARC argues that the Awards should be vacated on statutory grounds because the arbitrator exceeded the scope of his authority and engaged in misconduct by rendering "completely irrational" awards, which failed to consider the evidence. (Id. at 7.) In the alternative, ARC argues that the Awards should be modified to correct miscalculations adopted by the arbitrator with respect to hours worked by CBA-covered employees. (Id. at 9.)

BACKGROUND

The parties are signatories to CBAs that governed the rates of pay, wages, hours, and other terms and conditions of employment for applicable employees of ARC. (Compl. ¶ 8.) Pursuant to the CBAs, ARC agreed to pay the Funds certain benefit contributions per hour worked by employees covered by each respective CBA.*fn1 (Id. ¶ 9.)

The Funds assert that ARC did not contribute the amounts required under the CBAs and relevant statutory provisions. (Id. ¶ 11.) As such, the SI Funds and the MT Funds conducted reviews of ARC's records with regard to its construction steamfitters and service fitters, pursuant to the Construction CBAs and Metal Trades CBA respectively, which the Funds assert constituted valid audits. (Id. ¶¶ 12, 13.) These reviews determined that for the period of January 1, 2006 through December 31, 2008, the amount that ARC owed under the Construction CBA was $135,880.86, and the amount that ARC owed under the Metal Trades CBA was $151,952.69. (Id.)

The Funds thereafter commenced an arbitration for delinquency before Edward J. Nolan, Esq., the designated contractual arbitrator. (Id. ¶ 16.) The arbitrator held a hearing on December 7, 2011, at which the Funds appeared and were represented by counsel. (Id. ¶ 17; Opp'n at 2--3.) ARC received proper notice but chose not to appear; instead, ARC was represented by its counsel, who participated in the arbitration and conducted extensive cross-examination of the Funds' witnesses. (Opp'n at 2--3; Compl. ¶ 17; see Compl. Ex. A at 2; Compl. Ex. B at 2.) ARC also submitted post-hearing materials, including an affidavit of its president, along with various exhibits. (Id.) During the arbitration, ARC argued that the reviews of ARC's books and records ordered by the Funds did not constitute valid audits and did not utilize proper procedures and assumptions. (Opp'n at 2--3; see Compl. Ex. A at 2--4; Compl. Ex. B at 2--4.)

The arbitrator considered the evidence and arguments and, on December 22, 2011, issued his decision, finding in favor of the Funds, and awarding the SI Funds $139,880.86 and the MT Funds $155,952.69 (including arbitration and legal costs). (Compl. ¶¶ 18, 31; Compl. Ex. A at 5; Compl. Ex. B at 5.)

On December 30, 2011, the Funds commenced this action seeking to confirm and enforce the Awards. (Compl.) On January 31, 2012, the Funds moved for default judgment as to ARC, pursuant to Federal Rule of Civil Procedure 55(b)(2). (ECF No. 9.) On February 28, 2012, the parties met for a pre-motion conference before this Court, at which the Funds withdrew their motion for default judgment, and the Court ordered the parties to submit memoranda of law in support of and in opposition to the petition to confirm the Awards. ARC opposes the ...


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