United States District Court, S.D. New York
For Triumph Construction, Corp., Petitioner: Brian L. Gardner, LEAD ATTORNEY, Sullivan Gardner, P.C, New York, NY.
For Michael Bilello, as executive secretary of treasurer of the New York City District Council of Carpenters, Roger E. Maher, Defendants: Charles R. Virginia, Michael Alan Bauman, Nathan Vidra Bishop, Virginia & Ambinder, LLP, New York, NY.
For The New York City District Council Carpenters Pension Fund, New York City District Council of Carpenters Welfare Fund, New York City District Council of Carpenters Annuity Fund, New York City District Council of Carpenters Apprenticeship, Journeyman Retraining, Educational and Industry Fund, New York City District Council of Carpenters Charity Fund, Michael Bilelloas Co-Chairmen of the Coard of Trustees, New York City District Council of Carpenters Charity Fund, by David T. Meberg, as Co-Chairmen of the Board of Trustees, The New York City and Vicinity Carpenters Labor-Management, Corporation, Respondents: Charles R. Virginia, Michael Alan Bauman, Nathan Vidra Bishop, Virginia & Ambinder, LLP, New York, NY.
For New York City District Council of Carpenters Apprenticeship, Journeyman Retraining, Educational and Industry Fund, The New York City District Council Carpenters Pension Fund, New York City District Council of Carpenters Charity Fund, by David T. Meberg, as Co-Chairmen of the Board of Trustees, The New York City and Vicinity Carpenters Labor-Management Corporation, New York City District Council of Carpenters Charity Fund, Michael Bilelloas Co-Chairmen of the Coard of Trustees, New York City District Council of Carpenters Annuity Fund, New York City District Council of Carpenters Welfare Fund, Counter Claimants: Charles R. Virginia, Michael Alan Bauman, Nathan Vidra Bishop, Virginia & Ambinder, LLP, New York, NY.
For Triumph Construction, Corp., Counter Defendant: Brian L. Gardner, LEAD ATTORNEY, Sullivan Gardner, P.C, New York, NY.
OPINION AND ORDER
KATHERINE POLK FAILLA, United States District Judge.
This is the latest round in a long-running dispute between Triumph Construction Corporation, here the petitioner in an effort to stay permanently an arbitration, and the New York City District Council of Carpenters (the " Union" ) and its associated fringe benefit funds (the " Funds" ) (collectively, " Respondents" ), here seeking to enforce via arbitration their claimed right to conduct an audit of Triumph's records. Pending before the Court are the parties' dueling motions for summary judgment as to whether that arbitration should proceed. For the reasons set forth below, Respondents' motion is granted and Petitioner's motion is denied.
A. Factual Background
1. The Relationship Between the Parties
Triumph is a heavy construction contractor. (Pet. 56.1(a) ¶ 3; Resp. 56.1(b)
¶ 3; Resp. 56.1(a) ¶ 7; Pet. 56.1(b) ¶ 7). The Union is composed of a number of local labor unions. (Pet. 56.1(a) ¶ 2; Resp. 56.1(b) ¶ 2). The Funds administer and provide benefits to members of those unions. ( Id.).
Triumph has had a relationship with Respondents since 2004, when it executed a collective bargaining agreement (" CBA" ) covering dockbuilders and began making contributions to the Funds in connection with employing laborers who belonged to the Union. (Resp. 56.1(a) ¶ 12; Pet. 56.1(b) ¶ 12; Pet. 56.1(a) ¶ 5; Resp. 56.1(b) ¶ 5). It is undisputed that since that time Triumph has employed and made payments on behalf of Union members on a regular basis. (Pet. 56.1(a) ¶ 5; Resp. 56.1(b) ¶ 5).
What agreements, if any, existed between the parties over the length of their relationship is a hard-fought issue. Respondents contend that in February 2008, they presented Triumph with a CBA covering the term 2002-2006 (the " 2006 CBA" ), and that Triumph executed that agreement and agreed to be bound by it retroactively. (Resp. 56.1(a) ¶ 18). Around the same time, Respondents allege that Triumph executed a compliance agreement (the " First Interim Agreement" or " FIA" ) in which it agreed to be bound by the terms of that agreement until the finalization of an agreement between the Union and the employer association whose members do work similar to that done by Triumph (a " Successor Agreement" ). ( Id. at ¶ 16).
It is undisputed that Triumph does not belong to any such employer association. Respondents insist that the General Contractors Association (the " GCA" ) is the employer association that does work similar to that done by Triumph for the purposes of the successor-agreement provision of the First Interim Agreement. (Resp. 56.1(a) ¶ 17). In this regard, the Union negotiated an agreement with the GCA covering the term 2006-2011 (the " 2011 GCA CBA" ). Respondents argue that this agreement invoked the successor-agreement provision of the First Interim Agreement and, in consequence, bound Triumph. ( Id.).
Respondents further submit that in June 2012, Triumph executed another compliance agreement (the " Second Interim Agreement" or " SIA" ) continuing the effect of its preceding CBA with the Union
-- in Respondents' view, the 2011 GCA CBA -- until, once again, the Union negotiated a new agreement with the employer association whose members do work similar to that done by Triumph, at which time this new successor agreement would bind Triumph. (Resp. 56.1(a) ¶ 33). The Union subsequently negotiated a new agreement with the GCA covering the term 2011-2017 (the " 2017 GCA CBA" ). Unsurprisingly, Respondents argue that, by virtue of its execution of the Second Interim Agreement, Triumph has assented to and is currently bound by the terms of the 2017 GCA CBA. ( Id. at ¶ 34).
As relevant here, the terms of these agreements are identical. In addition to requiring Triumph to obey specific rules about payments, work assignments, and grievance procedures, they also each contain an agreement to arbitrate disputes regarding benefit payments to the Funds. ( See, e.g., 2006 CBA 31-32). They also each specifically incorporate by reference and bind signatory employers to the terms of the agreements that govern the operations of the Funds (the " Trust Agreements" ). The Trust Agreements, in turn, require employers to submit to audits by the Funds of their records and financial documents. (Trust Agreements 6). The Trust Agreements also contain an arbitration provision requiring the parties to arbitrate disputes regarding the collection and inspection of documents, including the audit requirements; notably, the arbitration provision explicitly excludes disputes over contributions to the Funds from the arbitration process. ( Id. at 24).
The Trust Agreements also empower the Trustees of the Funds to adopt regulations necessary to pursue the purposes of the Trust Agreements. (Trust Agreements 19). Pursuant to this authority, the Trustees have adopted a collection policy (the " Collection Policy" ) that permits the Funds to collect attorneys' fees and costs for actions necessary to enforce their right to conduct an audit of employers' records. The Trustees have also adopted a procedure to be used in estimating the possible delinquency in contributions of employers who refuse to permit the Funds to conduct audits (the " Estimation Policy" ). This policy estimates delinquent contributions by determining the highest number of average hours reported by the employer for any week throughout the period for which the Funds seek to conduct an audit, and then applying that number of hours to every week throughout the audit period.
Triumph resists almost every element of the relationship Respondents contend exists between the parties. To begin with, Triumph insists that it never received or executed the 2006 CBA. (Pet. 56.1(a) ¶ 15). Instead, it claims to have received only a two-page document containing what is apparently the first page of the 2006 CBA followed by a signature page. ( Id. at ¶ 19). This document, termed by Triumph the " 2008 Agreement," is the only document Triumph acknowledges ever receiving or executing in 2008. ( Id. at ¶ 18). Because this two-page document contains no effective terms, Triumph argues that it was never bound by any underlying CBA with the Union. ( Id. at ¶ 20). Further, Triumph claims never to have received or signed the First Interim Agreement ( id. at ¶ 21); the signature on that document, Triumph claims, is not the signature of Triumph's principal, Carlos Cuzzi, nor is it the signature of any individual authorized to sign on his behalf (Cuzzi Decl. ¶ 10). Because Triumph never received or executed the 2006 CBA, it argues here, it had no preexisting CBA with the Union whose terms the First Interim Agreement could have extended. (Pet. 56.1(a) ¶ 22).
Additionally, Triumph refuses to accept that the GCA is the employer association
whose work is similar to its own. It contends that Respondents have failed to explain what association invokes the successor-agreement provision of the First Interim Agreement, and it thus denies that the 2011 GCA CBA has any effect on it. (Pet. 56.1(a) ¶ ¶ 23, 25, 28). Though Triumph does not similarly allege that the signature on the Second Interim Agreement is also a forgery, it similarly denies that that agreement imposed any obligations on it: because it had no CBA in place with the Union at the time its principal signed the Second Interim Agreement, no obligations existed for that agreement to extend. ( Id. at ¶ ¶ 29, 32). Triumph further argues that Respondents have failed to demonstrate what subsequent CBA invoked the successor-agreement provisions of the Second Interim Agreement. ( Id. at ¶ 31). In short, Triumph's position is that at no time in the last decade, with respect to the work at issue here, has it ever been subject to a CBA with the Union, any attendant Trust Agreements, or any regulations promulgated thereunder.
2. The Present Dispute
In May 2010, the Funds conducted an audit of Triumph's records; this was the second such audit the Funds had conducted. (Resp. 56.1(a) ¶ ¶ 25, 43; Pet. 56.1(b) ¶ ¶ 25, 43). Respondents claim that during this audit, a Triumph employee showed the auditor records of affiliated companies, previously unknown to the Funds, that performed similar work to Triumph without hiring Union employees, but then refused to permit the auditor to examine these records further. (Resp. 56.1(a) ¶ 44). Triumph, unsurprisingly, denies that any such episode took place. (Pet. 56.1(a) ¶ 44). This incident is the basis for the years of conflict that have ensued between the parties. Respondents wish to finish the audit; Triumph refuses.
Respondents, confronted with Triumph's resistance, filed a notice of intent to arbitrate the audit issue in August 2010. (Pet. 56.1(a) ¶ 33; Resp. 56.1(b) ¶ 33). Triumph then filed suit in New York State Supreme Court seeking to stay the arbitration; Respondents removed the state action to federal court, after which the parties voluntarily dismissed it. (Pet. 56.1(a) ¶ ¶ 34-36; Resp. 56.1(b) ¶ ¶ 34-36). Respondents initiated a second arbitration in February 2011 that they subsequently withdrew. (Pet. 56.1(a) ¶ ¶ 37-39; Resp. 56.1(b) ¶ ¶ 37-39). Respondents initiated a third arbitration in August 2011; Triumph again filed a state court action seeking to stay this arbitration. (Pet. 56.1(a) ¶ ¶ 40-42; Resp. 56.1(b) ¶ ¶ 40-42). Respondents, later in August 2011, filed an action in federal court seeking to compel the audit via court order. (Pet. 56.1(a) ¶ 49; Resp. 56.1(b) ¶ 49; Gardner Decl. Ex. Q). After this prior federal action was filed, the parties entered into a stipulation of discontinuance (the " Stipulation" ) with respect to the state court action. (Pet. 56.1(a) ¶ 45; Resp. 56.1(b) ¶ 45). The prior federal action was ultimately dismissed because the court there found that the Trust Agreements forced the Funds to arbitrate their claim to conduct an audit of Triumph's records -- and, by extension, precluded them from seeking that relief in court. (Pet. 56.1(a) ¶ 52; Resp. 56.1(b) ¶ 52).
Thereafter, pursuant to the Estimation Policy, the Funds claim they notified Triumph that it would be liable for an estimated delinquency unless Triumph submitted to the long-sought audit of its records. (Resp. 56.1(a) ¶ 50). Triumph did not do so. (Resp. 56.1(a) ¶ 51; Pet. 56.1(b) ¶ 51).
B. The Instant Litigation
In September 2012, Respondents filed the notice of intent to arbitrate at issue in
this action. (Resp. 56.1(a) ¶ 51; Pet. 56.1(b) ¶ 51). Triumph filed a state court action to stay the arbitration and Respondents removed that action here. (Resp. 56.1(a) ¶ 52; Pet. 56.1(b) ¶ 52). After settlement discussions failed, the parties cross-moved for summary judgment on November 19, 2013. (Dkt. #19, 28). Each opposed the other's motion (Dkt. #33, 36), and both motions were fully briefed on January 14, 2014. (Dkt. #40, 42).
A. Applicable Law
Under Fed.R.Civ.P. 56(a), summary judgment may be granted only if all the submissions taken together " show that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The moving party bears the initial burden of demonstrating " the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. A fact is " material" if it " might affect the outcome of the suit under the governing law," and is genuinely in dispute " if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248; see also Jeffreys v. City of New York, 426 F.3d 549, 553 (2d Cir. 2005) (citing Anderson ). The movant may discharge this burden by showing that the nonmoving party has " fail[ed] to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322; see also Selevan v. N.Y. Thruway Auth., 711 F.3d 253, 256 (2d Cir. 2013) (finding summary judgment appropriate where the non-moving party fails to " come forth with evidence sufficient to permit a reasonable juror to return a verdict in his or her favor on an essential element of a claim" (internal quotation marks omitted)).
If the moving party meets this burden, the nonmoving party must " set out specific facts showing a genuine issue for trial" using affidavits or otherwise, and cannot rely on the " mere allegations or denials" contained in the pleadings. Anderson, 477 U.S. at 248, 250; see also Celotex, 477 U.S. at 323-24; Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009). The nonmoving party " must do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (internal quotation marks omitted), and cannot rely on " mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment," Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir. 1986) (quoting Quarles v. Gen. Motors Corp., 758 F.2d 839, 840 (2d Cir. 1985)). Furthermore, " [m]ere conclusory allegations or denials cannot by themselves create a genuine issue of material fact ...