United States District Court, S.D. New York
THE ANNUITY, PENSION, WELFARE AND APPRENTICESHIP SKILL IMPROVEMENT & SAFETY FUNDS OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 137, 137A, 137B, 137C & 137R, AFL-CIO, BY ITS TRUSTEES ALBERT J. GIRARDI, JR., EDWARD KELLY, JEFFREY LOUGHLIN, PETER PATERNO, ROSS PEPE AND NICHOLAS SIGNORELLI, JR., Plaintiffs,
COLONIAL SURETY COMPANY, Defendant.
OPINION & ORDER
NELSON S. ROMN, District Judge.
This case was brought by the Annuity, Pension, Welfare and Apprenticeship Skill Improvement & Safety Funds (the "Funds") of the International Union of Operating Engineers, Local 137, 137A, 137B, 137C & 137R, AFL-CIO (the "Union" or "Local 137") by its Trustees (together, "Plaintiffs") to recover contributions in connection with a collective bargaining agreement between DeRosa Tennis Contractors, Inc ("DeRosa Tennis") and the Union. Plaintiffs also named DeRosa Sports Construction, Inc. as a defendant. On April 9, 2014, Plaintiffs entered into a stipulation to dismiss DeRosa Sports Construction, Inc. from the case. On June 3, 2014, Plaintiffs entered into a consent judgment as to DeRosa Tennis Contractors, Inc. The only remaining Defendant is Colonial Surety Company. Before the Court is Colonial Surety Company's motion for partial summary judgment. For the following reasons, Defendant's motion is DENIED.
On March 3, 2008,  DeRosa Tennis entered into a collective bargaining agreement (the "CBA") with the International Union of Operating Engineers Local 137, 137A, 137B, 137C and 137R, AFL-CIO and the Local 137 Annuity, Pension, Welfare and Apprenticeship Skill Improvement & Safety Funds. Plaintiffs' Statement of Material Facts Pursuant to Local Rule 56.1 ("Pl.'s 56.1") ¶ 4. As stated in the preamble, the CBA was entered into between the parties "for the purpose of establishing the wages, hours and conditions of employees represented by the [International Union of Operating Engineers Local 137, 137A, 137B, 137C and 137R, AFL-CIO], and employed by Employees subject to this Contract." CBA, preamble. The CBA provides that "[w]ages shall be paid weekly in currency... on the job where Employees covered by this Agreement are employed at least one (1) hour... in accordance with the weekly rates itemized on the schedule attached [to the CBA] and made a part of this Agreement." CBA Art. IX, s. 1. Additionally, the CBA provides for contributions to the Funds as follows: "It is hereby mutually understood and agreed that commencing March 3rd, 2008 the Employer shall contribute as agreed and allocated as set forth hereinafter on the Fringe Benefit Schedule of this Agreement. Contributions shall be on all hours paid. Check in payment of said contributions shall be made payable to Local 137 Joint Funds account and shall be delivered to each Employee weekly, simultaneously with payment of wages." CBA Art. X, s. 1(a). The same language is repeated for the Pension Fund and the Apprenticeship, Skill Improvement and Safety Fund. CBA Arts. XI, s. 1 & XII, s. 1.
Colonial Surety subsequently issued three bonds as surety on behalf of DeRosa Tennis, as principal. The first was issued on November 2, 2009 in favor of the City of Yonkers, as obligee, in connection with a project known as the Pelton Park Project. Defendant Colonial's Statement of Material Facts Pursuant to Local Rule 56.1 ("Colonial's 56.1") ¶ 2. The second was issued on March 9, 2010 in favor of the City of New York, as obligee, in connection with a project known as the Crotona Park Project. Id. ¶ 3. On March 3, 2010, Colonial issued a union bond bearing bond no. CSC-94495 in favor of Local 137, as obligee, in the amount of $100, 000. Id. ¶ 7. The bond states that "the Principal and Surety are held and firmly bound pursuant to the terms of the [CBA] between Principal [DeRosa Tennis] and Obligees [the Union]." Delaney Aff. Ex. D (hereinafter, the "Union Bond"). It further states, "In the event of a default by the Principal, the Obligees shall notify the Surety via certified mail/return receipt requested of such default within one (1) year of the last act of default[.]" Id. The Rider to the Union Bond states, "It is understood and agreed that failure by the obligee to notify the Surety of delinquency more than Thirty (30) days shall void the Surety's obligation under this bond." Delaney Aff. Ex. D, p. 3 (hereinafter, the "Union Bond Rider").
Pursuant to the results of an audit for the period of June 1, 2009 through August 30, 2010, on January 14, 2011, representatives of the Union sent a letter to Colonial Surety notifying that DeRosa Tennis failed to pay fringe benefit contributions in the amount of $203, 831.93. Colonial's 56.1 ¶ 10. The letter served to make a demand on Colonial Surety under the Union Bond. Colonial Surety acknowledged receipt of the letter and on January 18, 2011 sent a letter requiring the Union to complete a Proof of Claim form and submit documents to allow Colonial Surety to verify the amount of the claim. Such information was sent to Colonial Surety on January 26, 2011. Id. ¶ 11. On June 18, 2012, the Union revised the amount of the claim to $129, 356.61. Id. ¶ 18. That revised amount included a payment made by DeRosa Tennis in the amount of $108, 405.40 toward the amount due as indicated in the audit. Id. ¶ 20(a).
II. Legal Standards
a. Summary Judgment Standard
Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure. The rule states in pertinent part:
A party may move for summary judgment, identifying each claim or defense - or the part of each claim or defense - on which summary judgment is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a). The moving party bears the initial burden of demonstrating the absence of any genuine dispute or issue of material fact by pointing to evidence in the record, "including depositions, documents... [and] affidavits or declarations, " Fed.R.Civ.P. 56(c)(1)(A), "which it believes demonstrate[s] the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has fulfilled its preliminary burden, the onus shifts to the nonmoving party to raise the existence of a genuine dispute of material fact. Fed.R.Civ.P. 56(c)(1)(A); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). A genuine dispute of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248; accord Benn v. Kissane, 510 F.Appx. 34, 36 (2d Cir. 2013); Gen. Star Nat'l Ins. Co. v. Universal Fabricators, Inc., 585 F.3d 662, 669 (2d Cir. 2009); Roe v. City of Waterbury, 542 F.3d 31, 35 (2d Cir. 2008); Jeffreys v. City of New York, 426 F.3d 549, 553 (2d Cir. 2005). Courts must "constru[e] the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor." Fincher v. Depository Trust & Clearing Corp., 604 F.3d 712, 720 (2d Cir. 2010) (quoting Allianz Ins. Co. v. Lerner, 416 F.3d 109, 113 (2d Cir. 2005)). In reviewing the record, "the judge's function is not himself to weigh the evidence and determine the truth of the matter, " Anderson, 477 U.S. at 249; see also Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010) ("The function of the district court in considering the motion for summary judgment is not to resolve disputed questions of fact...."), nor is it to determine a witness's credibility, Anderson, 477 U.S. at 249. Rather, "the inquiry performed is the threshold inquiry of determining whether there is the need for a trial." Anderson, 477 U.S. at 250.
a. Territorial Application of CBA
Colonial argues that the "Territorial Application" provision of the CBA limits Plaintiffs' claims to contributions sought solely for work performed within a certain geographic territory. Article 1 of ...