United States District Court, E.D. New York
THOMAS GESUALDI, ANTHONY D'AQUILA, LOUIS BISIGNANO, ANTHONY PIROZZI, JOSEPH A. FERRARA, SR., FRANK FINKEL, MARC HERBST, DENISE RICHARDSON, THOMAS CORBETT, and MICHAEL O'TOOLE, as Trustees and fiduciaries of the Local 282 Welfare, Pension, Annuity, Job Training, and Vacation and Sick Leave Trust Funds, Plaintiffs,
REINFORCING SUPPLY, LLC, Defendant.
SANDRA J. FEUERSTEIN, District Judge.
On October 26, 2012, plaintiffs Thomas Gesualdi, Anthony D'Aquila, Louis Bisignano, Anthony Pirozzi, Joseph A. Ferrara, Sr., Frank Finkel, Marc Herbst, Denise Richardson, Thomas Corbett and Michael O'Toole, as Trustees and fiduciaries (the "Trustees" or "Plaintiffs") of the Local 282 Welfare, Pension, Annuinty, Job Training, and Vacation and Sick Leave Trust Funds (collectively, the "Funds"), commenced this action against Reinforcing Supply, LLC ("Reinforcing Supply" or "Defendant"), seeking injunctive and monetary relief under Sections 502(a)(3) and 515 of the Employee Retirement Income Security Act of 1975, as amended ("ERISA"), 29 U.S.C. §§ 1132(a)(3) and 1145. Now before the Court is the Trustees' motion for summary judgment. For the reasons that follow, the Trustees' motion is granted.
A. Factual Background
Reinforcing Supply is a party to the Local 282 Building Material Supply Industry Agreement (the "CBA") with Local 282, International Brotherhood of Teamsters ("Local 282"), which binds Reinforcing Supply to the Restated Agreement and Declaration of Trust for the Funds (the "Trust Agreement"). (Pl. 56.1 Stmt. ¶¶ 1-2; Bardavid Decl., Ex. A (CBA), at 10). The Funds are "employee benefit plans" and "multiemployer plans" established to provide welfare, pension, annuity, job training, and vacation and sick leave benefits to employees covered by the CBA. (Compl. ¶¶ 4-6; Bardavid Deel., Ex. B (Trust Agreement), at 1). The Funds are maintained by the Trust Agreement and are administered by the Trustees. (Compl. ¶¶ 4, 6).
The Trust Agreement provides that "[t]he Trustees may at any time audit the pertinent books and records of any Employer in connection with the [Employer's contributions to the Trusts]." (Trust Agreement, Art. IX, § 1(d)). Article IX, Section 1(d) of the Trust Agreement further provides that:
Pertinent books and records of an Employer include the books and records of any business which is bound by a collective bargaining agreement with the Union which requires contributions to any of the Funds and any other business entity which is affiliated with such business and which either: 1) has employed persons who have performed the same type of work as the employees of the Employer covered by the Union agreement, or 2) is part of a control group of trades or businesses "under common control, " as that term is used in 29 U.S.C. § 1301(b)(1) for withdrawal liability purposes, which includes the Employer.
( Id. ).
On December 27, 2011, the Funds sought to audit Reinforcing Supply for the period September 30, 2010 through September 30, 2011. (Bardavid Decl, Ex. C (Dec. 27, 2011 Audit Letter); Pl. 56.1 Stmt. ¶ 5). On January 17, 2012, the Funds' auditor (the "Funds' Auditor") sent a second letter seeking to audit Reinforcing Supply for the period September 30, 2010 through September 30, 2011. (Bardavid Decl., Ex D (Jan. 17, 2012 Audit Letter); Pl. 56.1 ¶ 6).
On February 15, 2012, the Funds' Auditor met with Reinforcing Supply's accountant to examine Reinforcing Supply's books and records. (Bardavid Decl., Ex. E (N. Mastres Decl.) ¶ 6; P1. 56.1 Stmt. ¶ 7). During this examination, the Funds' Auditor observed that Reinforcing Supply's corporate tax returns (form 1120S) for 2010 reflected an entry entitled "Due from Affiliated Company." (Bardavid Decl., Ex. E ¶ 7; Pl. 56.1 Stmt. ¶ 8). The Funds' Auditor requested that Reinforcing Supply produce the books and records of the affiliate referenced on Reinforcing Supply's corporate tax return, but "[Reinforcing Supply] refused to provide that information and [the Funds' Auditor] was unable to complete the examination report." (Bardavid Decl., Ex. ¶¶ 9-10; Pl, 56.1 Stmt. ¶¶ 9-10).
The Funds' Auditor made several follow up requests to Reinforcing Supply's accountant to produce the books and records of the affiliate reflected on Reinforcing Supply's tax return, but Reinforcing Supply did not comply with the Funds' Auditor's additional requests. (Bardavid Decl., Ex. E. ¶ 11). By letter dated April 10, 2012, the Funds' Auditor informed the Funds that the audit could not be completed because "[Reinforcing Supply's] accountant did not provide books and records of affiliates as reflected on corporate tax returns." (Bardavid Decl., Ex. F (Apr. 10, 2012 Letter from Funds' Auditor to Funds); Bardavid Decl., Ex. E ¶ 12; Pl. 56.1 Stmt. ¶ 12).
On May 14, 2012, counsel for the Funds sent a letter to Reinforcing Supply, stating that "Reinforcing Supply has failed to submit the books and records of its non-signatory affiliates as reflected on its corporate tax returns, for the period commencing September 30, 2010 in accordance with [the CBA], " and "reiterate[ing] [the Trustees'] demand... that [Reinforcing Supply] provide the non-signatory affiliates' books and records to audit within ten (10) days of the date of this letter." (Bardavid Decl., Ex. G (May 14, 2012 Letter from Funds' Counsel to Reinforcing Supply); Pl. 56.1 Stmt. ¶¶ 13-14).
On June 5, 2012, James Larkin ("Larkin"), President of Reinforcing Supply, sent a facsimile to counsel for the Funds (the "Larkin Facsimile"), which states:
The assets in question go back to when Brooklyn Rebar opened and did not have any credit. We purchased some computer software and machinery for them and finally took the transaction off the books this past year. The total amount involved was $23, 000. My accountant ...