Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Salvatore J. Lascala, Douglas A. Janese and Richard J. Marino v. Santo S. Scrufari

December 19, 2012

SALVATORE J. LASCALA, DOUGLAS A. JANESE AND RICHARD J. MARINO, INDIVIDUALLY, AS MEMBERS OF LOCAL 280, AND AS PARTICIPANTS AND TRUSTEES OR FORMER TRUSTEES OF THE NIAGARA-GENESEE & VICINITY CARPENTERS LOCAL 280 WELFARE AND PENSION FUNDS, PLAINTIFFS,
v.
SANTO S. SCRUFARI, INDIVIDUALLY AND AS PLAN MANAGER OF THE NIAGARA-GENESEE & VICINITY CARPENTERS LOCAL 280 WELFARE AND PENSION FUNDS, DEFENDANT.



The opinion of the court was delivered by: John T. Curtin United States District Judge

By order entered on March 12, 2012, this court granted plaintiffs' application for attorney's fees under ERISA § 1132(g)(1). LaScala, et al. v. Scrufari, 859 F. Supp. 2d 509 (W.D.N.Y. Mar. 12, 2012). The court also granted plaintiffs' motion pursuant to Fed. R. Civ. P. 19(a)(1)(A), joining the Empire State Carpenters Funds (the "Empire Funds"), successor in interest to the Niagara-Genesee & Vicinity Carpenters Local 280 Welfare and Pension Funds (the "Niagara Funds") and aligning the Empire Funds as a party defendant "for the limited purpose of standing in the place and stead of the predecessor Funds as the insured under Labor Management Trust Fiduciary Liability Policy No. 8127-92-16, and/or as the beneficiary of the fidelity bond required by ERISA § 1112(a) .." Id. at 522. The court reasoned that, in the absence of any documentation to substantiate the Empire Funds' assertion that the insurance carrier has disclaimed coverage, the existence of fiduciary liability insurance and the prospect of a fidelity bond presented "the only real options" for recovery of both the fee award (totaling $411,871.46) and the judgment against defendant Scrufari (totaling $966,389.39; see Item 294), making joinder "necessary to accord complete relief among the existing parties" under the equitable circumstances presented. Id.

As a result, and upon the parties' inability to come to an agreement as to the appropriate language for incorporating these rulings into the final judgment, the court directed the Clerk of the Court to enter judgment as follows:

IT IS . ORDERED AND ADJUDGED that the Empire State Carpenters Pension Fund as the successor in interest to the Niagara-Genesee & Vicinity Carpenters Local 280 Pension Fund, and the Empire State Carpenters Welfare Fund as the successor in interest to the Niagara-Genesee & Vicinity Carpenters Local 280 Welfare Fund, are deemed the insured under Labor Management Trust Fiduciary Liability Policy No. 8127-92-16 and/or the respective beneficiaries of the fidelity bonds required by ERISA § 1112(a); and, IT IS FURTHER ORDERED AND ADJUDGED that, pursuant to ERISA § 1132(g), plaintiffs are awarded attorney's fees against defendant Santo S. Scrufari and/or the Empire State Carpenters Pension Fund as the successor in interest to the Niagara-Genesee & Vicinity Carpenters Local 280 Pension Fund and the Empire State Carpenters Welfare Fund as the successor in interest to the Niagara-Genesee & Vicinity Carpenters Local 280 Welfare Fund, in the amount of $399,114.39, and disbursements in the amount of $12,757.07, for a total award of $411,871.46.

Item 293. Final judgment was entered accordingly on August 3, 2012. Item 294.

The Empire Funds filed a notice of appeal on August 29, 2012 (Item 295), followed by a motion for relief from the final judgment (Item 296) and a motion to stay execution of the judgment for attorneys' fees pending the outcome of the appeal (Item 297). Plaintiffs filed a notice of cross-appeal on September 4. Item 298. The court then issued an order staying execution of the judgment for attorneys' fees pending resolution of both the motion to reconsider and the appeal, waiving the supersedeas bond requirement of Fed. R. Civ. P. 62(d) upon the representation of counsel as to the sufficiency of the Empire Funds' assets. Item 299.

The motion for reconsideration seeks amendment of the final judgment to relieve the Empire Funds of direct liability for the award of attorney's fees and costs in favor of plaintiffs, and to hold Mr. Scrufari, the fiduciary in breach, solely liable for satisfaction of the award. The motion is grounded on Rule 60(b), which provides for relief from a final judgment for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);

(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;

(4) the judgment is void; (5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

(6) any other reason that justifies relief.

Fed. R. Civ. P. 60(b).

The Empire Funds rely primarily on the "newly discovered evidence" provision of Rule 60(b)(2). To obtain relief from the judgment under Rule 60(b)(2), the movant must present evidence that is 'truly newly discovered or ... could not have been found by due diligence.' " Insurance Co. of North America v. Public Service Mut. Ins. Co., 609 F.3d 122, 131 (2d Cir. 2010) (quoting United States v. Potamkin Cadillac Corp., 697 F.2d 491, 493 (2d Cir.), cert. denied, 462 U.S. 1144 (1983)). Generally, courts require a showing that the newly discovered evidence is "highly convincing," that the party had good cause for failing to present the evidence sooner, and that the relief from judgment would impose no undue hardship on other parties. Figueroa v. Walsh, 2008 WL 1945350, at *4 (E.D.N.Y. May 1, 2008) (citing Kotlicky v. U.S. Fidelity & Guar. Co., 817 F.2d 6, 9 (2d Cir. 1987)).

The "newly discovered" evidence submitted by the Empire Funds to support the motion for relief from the judgment consists of a letter from the Chubb Group of Insurance Companies ("Chubb") on behalf of the insurer, the Federal Insurance Company ("Federal"), dated August 22, 2012, rejecting the Empire Funds' tender of the judgment and disclaiming coverage under Labor Management Trust Fiduciary Liability Policy No. 8127-92-16. Item 296-1, pp. 4-6. Specifically, the letter states that coverage is unavailable under the policy for several reasons, including: there was no claim made against the Empire Funds during the policy period; there was no breach of fiduciary duty by either the Niagara Funds or the Empire Funds as would be required to trigger coverage; there was no finding that the Empire Funds are legally responsible for Mr. Scrufari's breach of fiduciary duty; and, in the absence of coverage for the damages owed by Mr. Scrufari, there can be no coverage for plaintiffs' attorney's fees. Id. at 6. In addition, the Empire Funds have submitted recent correspondence and associated documentation indicating that no timely claim or notice was tendered to the fidelity bond carriers by the predecessor Niagara Funds at the time the losses were sustained or discovered, calling into serious question the prospect of satisfying the judgment through recourse to the bonds. See Item 296-1, pp. 8-17. According to the Empire Funds, this evidence reveals that the judgment as ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.