United States District Court, S.D. New York
NEW YORK DISTRICT COUNCIL OF CARPENTERS PENSION FUND, et al., Plaintiffs,
MICHAEL FORDE, et al., Defendants
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For New York City District Council of Carpenters Pension Fund, by their Trustees, Frank Spencer, Douglas J. McCarron, John Ballantyne, Paul Tyznar, Paul O'Brien, Kevin M. O'Callaghan, Catherine Condon, David Meberg, Bryan Winter, and John DeLollis, New York City District Council of Carpenters Welfare Fund, by their Trustees, Frank Spencer, Douglas J. McCarron, John Ballantyne, Paul Tyznar, Paul O'Brien, Kevin M. O'Callaghan, Catherine Condon, David Meberg, Bryan Winter, and John DeLollis, New York City District Council of Carpenters Annuity Fund, by their Trustees, Frank Spencer, Douglas J. McCarron, John Ballantyne, Paul Tyznar, Paul O'Brien, Kevin M. O'Callaghan, Catherine Condon, David Meberg, Bryan Winter, and John DeLollis, New York City District Council of Carpenters Apprenticeship, Journeyman Retraining, Educational and Industry Fund, by their Trustees, Frank Spencer, Douglas J. McCarron, John Ballantyne, Paul Tyznar, Paul O'Brien, Kevin M. O'Callaghan, Catherine Condon, David Meberg, Bryan Winter, and John DeLollis, Plaintiffs: Raymond G. McGuire, LEAD ATTORNEY, Elizabeth O'Leary, Harlan J. Silverstein, Kauff McGuire & Margolis LLP, New York, NY; Scott M. Himes, Stillman, Friedman & Shechtman, P.C., New York, NY.
For Michael Forde, Defendant: Dino J. Lombardi, LEAD ATTORNEY Lombardi & Salerno PLLC., New York, NY.
For John Greaney, Defendant: Victoria Quesada, Quest Diagnostics, Madison, NJ.
For Joseph Olivieri, Defendant: Brian L. Gardner, LEAD ATTORNEY, Sullivan Gardner, P.C, New York, NY.
For Brian Hayes, Defendant: James R. Froccaro, Jr., James R Froccaro Attorney At Law, Port Washington, NY.
For Turbo Enterprises, Inc., Terence Buckley, Gerard McEntee, James Duffy, Defendants: Niall Mac Giollabhui, LEAD ATTORNEY, Law Office of Jonathan R. Sennett, P.C., New Paltz, NY.
Joseph Ruocco, Defendant, Pro se, East Stroudsberg, PA.
For Joseph Ruocco, Defendant: Ira Treuhaft, Treuhaft & Zakarin, LLP, New York, NY.
For Michael Vivenzio, Defendant: Bruno Vincent Gioffre, Jr., LEAD ATTORNEY, Law Office of Bruno V. Gioffre, Jr., Harrison, NY.
For EMB Contracting Corp., Michael Batalias, Elisavet Batalias, Defendants: Thomas J. Curran, LEAD ATTORNEY, Doris Diana Short, Peckar & Abramson, P.C., New York, NY.
For Matthew Kelleher, Defendant: Irving Cohen, Irving Cohen, Attorney-At-Law, New York, NY.
Loretta A. Preska, Chief United States District Judge.
MEMORANDUM & ORDER
Plaintiffs (or " Funds" ) bring this action against a number of named Defendants in the above-referenced matter. Defendants Joseph Olivieri (" Olivieri" ), EMB Contracting Corp., Michael Batalias, and Elisavet Batalias (collectively, " EMB" ), and Michael Brennan (" Brennan" ) have each moved to dismiss Plaintiffs' First Amended Complaint [dkt. no. 30 (" Complaint" or " Compl." )] pursuant to Federal Rule of Civil Procedure 12(b)(6). Additionally, Brennan moves to strike a portion of Plaintiff's Complaint. For the reasons set forth herein, Defendants' motions to dismiss Plaintiffs' Complaint [dkt. nos. 62, 65, 97] and Brennan's motion to strike [dkt. no. 97] are DENIED.
The Court takes as true the following factual allegations in the Complaint and draws all reasonable inferences in favor of Plaintiff. See Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir. 2008).
Plaintiffs commenced this action on August 5, 2011, naming Olivieri and Brennan, among others, as defendants asserting claims pursuant to civil RICO and RICO conspiracy statutes, breach of fiduciary duty under. ERISA, and New York common law fraud. [Dkt. No. 1.] Plaintiffs
filed an amended complaint November 21, 2011 [dkt. no. 30], naming additional defendants including Michael and Elisavet Batalis and their company EMB Contracting Corporation.
Olivieri filed a Motion to Dismiss on February 10, 2012 [dkt. no. 62]. (See Memorandum of Law in Support of Defendant Joseph Olivieri's Motion to Dismiss the Complaint, Feb. 10, 2012 [dkt. no. 64] (" Olivieri Memo" ).) EMB filed a Motion to Dismiss on February 13, 2012 [dkt. no. 65]. (See Memorandum of Law in Support of Defendants EMB Contracting Corp., Michael Batalias, and Elisavet Batalias' Motion to Dismiss the First Amended Complaint, Feb. 13, 2012 [dkt. no. 69] (" EMB Memo" ).) Plaintiffs filed an opposition in response to both Olivieri's and EMB's motions on March 21, 2012 [dkt. no. 78] (" Pl. First Opp." ). Olivieri filed a reply memorandum on April 25, 2012 [dkt. no. 93] (" Olivieri Reply" ). EMB filed a reply memorandum on April 25, 2012 [dkt. no. 95] (" EMB Reply" ). Brennan filed his motions pro se on May 7, 2012. (See Memorandum of Law in Support of Defendant Michael E. Brennan's Motion to Dismiss the Complaint, May 7, 2012 [dkt. no. 97 at 3] (" Brennan Memo" ); Defendant Michael Brennan's Motion to Strike, May 7, 2012 [dkt. no. 97 at 15] (" Brennan Mot. to Strike" ). Plaintiffs filed an opposition to both motions on June 18, 2012 [dkt. no. 114] (" Pl. Brennan Opp." ). Brennan filed a reply memorandum on August 8, 2012 [dkt. no. 122] (" Brennan Reply" ).
Plaintiffs represent the jointly-administered employee benefit plans for the United Brotherhood of Carpenters and Joiners (" U.B.C.J." ) who are appointed by the District Council of New York City and Vicinity of the U.B.C.J. (" District Council" ). (Compl. ¶ 5.) Plaintiffs bring this action to recover monies they allege were embezzled from the Funds through a racketeering conspiracy and enterprise that included former trustees of the Funds, union official's, and a number of contractors who furthered a scheme in which contractors made improper payments of money and other things of value to labor representatives in exchange for those representatives to deliberately fail to enforce applicable collective bargaining agreements. (Id. ¶ 1.)
Defendant Olivieri was the Executive Director of the Association of Wall, Ceiling and Carpentry Industries of New York. (Compl. ¶ 19.) He served as a trustee of the Funds from approximately 2000 through approximately August 2009. (Id.) While he was a trustee of the Funds, he was associated with James Murray (" Murray" ), sole owner of On Par Masonry (" On Par" ), and knew of or assisted Murray in Murray's circumventing On Par's collective bargaining agreement (" CBA" ) with the District Council and local unions. (Id. ¶ ¶ 44-46, 87.) Murray and On Par engaged in bribery of union officials in exchange for assistance in evading requirements to pay contractual wage rates and make contributions to the Funds between 2000 and 2005. (Id. ¶ ¶ 89-90, 111-15.)
Specifically, the Complaint alleges the following actions taken by Olivieri. In January 2005, Murray loaned Olivieri $730,000, which Olivieri did not disclose to the Funds. (Id. ¶ ¶ 88, 93.) In March 2005, when Murray was being investigated for possible instances of union corruption and then served with a shut-down order, Olivieri assisted Murray in having the order withdrawn allowing On Par to remain open. (Id. ¶ ¶ 89, 115.) In April 2005, Olivieri also introduced Murray to the owner of a defunct contracting company so that Murray could continue operations under a different name while On Par was under investigation. (Id. ¶ ¶ 90, 115.) In July 2005, Olivieri approved a payment
plan for On Par to repay $750,000 of its delinquent contributions without disclosing to the Funds the above information. (Id. ¶ 91.)
In 2006, Murray fled the United States. (Compl. ¶ 115.) Murray was subsequently indicted and plead guilty in 2009 to charges of embezzling and conspiring to embezzle the assets of an employee benefit fund, bribing and conspiring to bribe union officials, offering to influence the operations of an employee benefit plan, and other charges. (Id. ¶ 51.) The superseding information and plea were unsealed on July 22, 2011. (Id.) In December 2007, Olivieri gave testimony denying his association with Murray and his involvement in, or knowledge of, Murray's takeover of the additional company. (Compl. ¶ ¶ 60, 86, 93.) In October 2010, Olivieri was convicted of perjury for providing this false testimony. (Id. ¶ 86.)
Plaintiffs name Olivieri in their Second and Seventh Causes of Action for a violation of the civil conspiracy provision of the Racketeer Influenced and Corrupt Organizations Act of 1970 (" RICO" ), 18 U.S.C. § 1964(d), and for a breach of fiduciary duty under the Employee Retirement Income Security Act of 1974 (" ERISA" ), 29 U.S.C. § 1104(a). Olivieri moves to dismiss the Complaint on the grounds that: (1) the delinquencies owed by On Par--which are the only damages alleged against Olivieri--are not recoverable due to a prior satisfaction of judgment between the Funds and On Par; (2) both the RICO and ERISA claims are time barred; and, (3) Plaintiffs fail to state a claim for RICO conspiracy.
Defendants Michael and Elisavet Batalias are the owners of EMB Construction Corporation, a signatory to a CBA with the District Council under which it was required to make contributions to the Funds for covered work. (Compl. ¶ ¶ 36-39.) Matthew Kelleher (" Kelleher" ), a former employee of EMB, admitted in a plea allocution that during 2007 and 2008, he delivered cash and other things of value to union officials-including Defendant Brian Hayes, an employee of the District Council--on behalf of EMB so that EMB could pay carpenters off the books and avoid making the required contributions to the Funds. (Id. ¶ ¶ 40, 135, 138-39.)
Plaintiffs name EMB in their Second Cause of Action for a violation of the civil RICO conspiracy statute, 18 U.S.C. § 1964(d). EMB moves to dismiss the Complaint on the grounds that: (1) Plaintiffs fail to allege a RICO conspiracy claim; and (2) the claims are barred by the doctrine of in pari delicto.
Defendant Brennan was a member of the District Council from approximately 1994 through approximately 2004. (Compl. ¶ 25.) Brennan served as a " shop steward" for the Local 608 and held the responsibility of accurately recording the presence of carpenters working under a CBA at certain job sites and the total number of hours worked by each carpenter. (Id. ¶ ¶ 25, 10, 215.) The Trustees of the Funds relied on these reports in determining whether employers were making required contributions to the Funds. (Id. ¶ 216.) Brennan pleaded guilty in 2010 to charges of unlawful racketeering acts in violation of 18 U.S.C. § 1962(c). (Id. ¶ 110.) In his plea, Brennan admitted that he accepted payments of money and other things of value from On Par from 2000 to 2004 in return for the understanding that On Par would not be making required contributions to the Funds. (Id. ¶ 108.) Brennan assisted On Par by deliberately underreporting on shop steward reports the number of hours being worked on On Par job sites. (Id. ¶ ¶ 114, 217.) Brennan further admitted to destroying subpoenaed documents to impede an investigation by a
court-appointed independent investigator. (Id. ¶ ¶ 60(f), 109.)
Plaintiffs name Brennnan in their First, Second, and Ninth Causes of Action for a violation of the civil RICO statute, 18 U.S.C. § 1962(c), a violation of the civil RICO conspiracy statute, 18 U.S.C. § 1962(d), and under New York common law fraud.
Brennan moves to dismiss the Complaint on the grounds that: (1) the delinquencies owed by On Par are not recoverable; (2) Plaintiffs' claims are time barred; (3) Plaintiffs fail to state a claim for RICO conspiracy; and (4) Plaintiffs' claim under New York common law fraud is time barred and lacks specificity. Brennan also moved to strike the allegations in paragraph 10 of the Complaint as being fabricated or misleading.
I. Standard of Review for a Motion to ...