TRUSTEES OF THE NEW YORK CITY DISTRICT: COUNCIL OF CARPENTERS PENSION FUND, WELFARE FUND, ANNUITY FUND, APPRENTICESHIP, JOURNEYMAN RETRAINING, EDUCATIONAL AND INDUSTRY FUND, CHARITY FUND, THE NEW YORK CITY AND VICINITY CARPENTERS LABOR-MANAGEMENT CORPORATION, AND THE DISTRICT COUNCIL FOR NEW YORK CITY AND VICINITY, UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, Plaintiffs,
INTEGRATED STRUCTURES CORP., Defendant.
OPINION & ORDER
KATHERINE B. FORREST, District Judge.
On December 8, 2011, plaintiffs filed this action to confirm an arbitration award pursuant to section 502(a)(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. § 1132(a)(3), section 301 of the Labor Management Relations Act of 1947 ("LMRA"), as amended, 29 U.S.C. § 185, and Section 9 of the Federal Arbitration Act, 9 U.S.C. § 9. (Compl.¶ 1, ECF No. 1.) The dispute that gave rise to the arbitration concerns the alleged failure of defendant Integrated Structures Corp. ("Integrated") to make certain required contributions to ERISA funds for which plaintiffs are trustees. (Id. ¶¶ 4-5, 11-12.)
On January 26, 2012, plaintiffs filed an amended complaint which added a second claim for relief against Integrated for further unpaid contributions to the same ERISA funds by another company, Francis A. Lee Company ("FALC"), which plaintiffs allege is, inter alia, an alter ego of Integrated. (Am. Compl. ¶¶ 19-28, ECF No. 7.) Integrated answered the amended complaint on August 24, 2012. (ECF No. 26.)
On May 17, 2013, plaintiffs timely moved for summary judgment on both claims for relief. (ECF Nos. 31-36.) While Integrated does not oppose confirmation of the arbitration award that is the subject of plaintiffs' first claim for relief (see Opp. at 1 n.1, ECF No. 43), it argues that summary judgment is inappropriate as to plaintiffs' second claim for relief because there is a genuine issue of material fact as
to whether Integrated is an alter ego of FALC (id. at 4-8). Plaintiffs' motion for summary judgment became fully briefed on July 1, 2013. (ECF No. 45.)
For the reasons set forth below, plaintiffs' motion for summary judgment is GRANTED.
Both parties have submitted statements pursuant to Local Civil Rule 56.1 in support of and in opposition to the instant motion-plaintiffs submitted their statement ("SOF") on May 17, 2013 (ECF No. 32), while Integrated submitted its counter-statement ("RSOF") on June 18, 2013 (ECF No. 42). The following facts are undisputed unless otherwise noted.
Plaintiffs Trustees of the New York City District Council of Carpenters Welfare, Annuity, Apprenticeship, Journeyman Retraining and Educational and Industry Fund are employer and employee trustees of multi-employer labor management trust funds organized and operated in accordance with ERISA (the "ERISA Funds"). (SOF ¶ 1.) Plaintiffs Trustees of the New York City District Council of Carpenters Charity Fund is a charitable organization established under section 501(c)(3) of the Internal Revenue Code (the "Charity Fund") (collectively, with the ERISA Funds, the "Funds"). (Id. ¶ 2.) Plaintiff District Council for New York City and Vicinity, United Brotherhood of Carpenters & Joiners of America (the "Union") is a labor organization that represents employees in an industry affecting commerce within the meaning of section 501 of the LMRA, and is the certified bargaining representative for certain employees of Integrated. (Id. ¶ 3.) Plaintiff New York City and Vicinity Carpenters Labor-Management Corporation is a New York not-for-profit corporation. (Id. ¶ 4.)
Integrated is bound by a collective bargaining agreement between the General Contractors Association of New York, Inc., of which Integrated was a member company, and the Union (the "CBA"). (Id. ¶ 5.) The CBA covers all carpentry work performed by member companies within the trade and geographic jurisdiction of the Union. (Id. ¶ 6.) The CBA required member companies to make specified hourly contributions to the Funds for every hour of work performed, and to furnish its books and payroll records when requested for the purpose of conducting an audit to ensure compliance with these contribution requirements. (Id. ¶¶ 7-8.) The CBA provides for the resolution of disputes concerning these contributions by arbitration before certain designated impartial arbitrators. (Id. ¶ 9.) The CBA also sets forth the manner in which the liability of a member company who fails to timely pay these required contributions, and against whom the Funds commence legal proceedings to recover the contributions, is to be calculated. (Id. ¶ 10.) The CBA provides for recovery of the unpaid contributions, interest, attorney's fees, and costs of the action.
Pursuant to the CBA, plaintiffs conducted an audit of Integrated covering the period February 5, 2007 through October 17, 2009. (Id. ¶ 11.) The auditors determined that Integrated failed to report and make contributions in the principal amount of $50, 503.00. (Id.) Plaintiffs then submitted the dispute to arbitration before one of the designated impartial arbitrators. (Id. ¶¶ 12-13.) Despite being sent a notice on September 13, 2011, which advised Integrated that an arbitration hearing was scheduled for October 28, 2011, Integrated failed to appear and the arbitration proceeded as a default hearing. (Id. ¶¶ 14-15.) On November 1, 2011, the arbitrator issued an award requiring Integrated to pay the Funds a sum of $77, 597.72, with interest to accrue at the rate of 5.25% from the date of the award. (Id. ¶ 16; Am. Compl. Ex. A.) To date, Integrated has not paid any portion of this award. (SOF ¶ 17.)
As stated above, plaintiffs also seek to obtain payment from Integrated for unpaid contributions to the Funds by FALC, another member company of the CBA, on the grounds that FALC is an alter ego of Integrated. In an action filed six months before the instant action, on July 14, 2011, the Funds and the Union sought confirmation of a separate arbitration award related to unpaid benefit contributions by FALC to the Funds in a suit before United States District Judge Laura Swain, 11 Civ. 4855 (LTS). (Compl. ¶¶ 9-15, 11 Civ. 4855, ECF No. 1.) The arbitration award that formed the basis for the suit was issued on April 22, 2011 against FALC by the same impartial arbitrator. (Id. Ex. A.) Despite receiving notice of the arbitration, FALC (like Integrated) failed to appear and the arbitration proceeded as a default hearing. (Id. Ex, A.) The award required FALC to pay the Funds a sum of $154, 692.68, with interest to accrue at the rate of 5.25% from the date of the award. (Id.) The arbitrator found that the unpaid contributions due by FALC to the Funds were for the audit period July 1, 2002 through June 30, 2010, though the delinquent payments were found to be between April 28, 2008 and June 30, 2010. (Id. ¶ 11, Ex. A at 2.) After FALC failed to answer the complaint in 11 Civ. 4855, the Funds and the Union moved for default and Judge Swain entered a default judgment against FALC in the amount of $159, 687.88, inclusive of interest, attorney's fees, and costs. (SOF ¶ 18)
Dispute arises as to many of the facts concerning the ownership and operation of Integrated and FALC. While plaintiffs argue that Francis Lee is the "Owner and Sole Officer" of Integrated (citing to an affidavit by Lee that was previously filed in this action) (SOF ¶ 20), Integrated asserts that Lee has been president of Integrated since September 1, 2007 and that, prior to September 1, 2007, Patricia Lee served as president (RSOF ¶ 20). While plaintiffs argue that Francis Lee was the president and sole shareholder of FALC "[a]t all times" (SOF ¶ 19), Integrated states that, between February 15, 2003 and on or around September 1, 2007, Patricia Lee served as president of FALC (RSOF ¶19). Integrated alleges that FALC ceased operations in April 2010. (RSOF ¶ 21.)
Both Integrated and FALC were located at 335 New South Road, Hicksville, New York, 11801, and used the same facsimile number; Integrated asserts that the two companies used different phone numbers. (SOF ¶¶ 21-22; RSOF ¶ 22.) Plaintiffs also allege that the website for FALC is currently registered to Integrated; Integrated responds that, prior to a year ago, the site was not registered to Integrated. (SOF ¶ 28; RSOF ¶ 28.) Integrated asserts that Integrated and FALC paid their membership dues for the General Contractors Association of New York separately. (RSOF ¶ 23.) Lee himself states in an affidavit ...