United States District Court, E.D. New york
BRICKLAYERS INSURANCE AND WELFARE FUND, BRICKLAYERS PENSION FUND, BRICKLAYERS SUPPLEMENTAL ANNUITY FUND, BRICKLAYERS AND TROWEL TRADES INTERNATIONAL PENSION FUND, NEW YORK CITY AND LONG ISLAND JOINT APPRENTICESHIP AND TRAINING FUND, INTERNATIONAL MASONRY INSTITUTE and JEREMIAH SULLIVAN, JR., in his fiduciary capacity as Administrator, and BRICKLAYERS LOCAL 1, INTERNATIONAL UNION OF BRICKLAYERS AND ALLIED CRAFT WORKERS, Plaintiffs,
KENNETH LASALA, MARK LASALA, KENNETH LASALA, JR., LIBERTY MUTUAL INSURANCE COMPANY, and PLAZA CONSTRUCTION COMPANY, Defendants.
James I. Wasserman, Esq., DOAR RIECK KALEY & MACK, New York, NY, Attorneys for Plaintiffs.
Lawrence J. Leibowitz, Esq., BALLON STOLL BADER & NADLER, P.C., New York, New York, Attorneys for LaSala Defendants.
Robert J. Costello, Esq., Steven I. Tolman, Esq., Alan Levy, Esq., LEVY, TOLMAN & COSTELLO, LLP, New York, New York, Attorneys for Defendant and Cross-Claim Plaintiff Plaza Construction LLC, successor by merger to Plaza Construction Corp.
MEMORANDUM AND ORDER
JOHN GLEESON, District Judge.
Plaintiff Bricklayers Local 1, International Union of Bricklayers & Allied Craftworkers ("Local 1"), along with several employee-benefit funds, move for summary judgment on claims that the principals of two subcontracting firms breached their fiduciary duty under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. § 1001 et seq., and committed conversion under New York law by failing to remit employee union dues. At the same time, Defendant/Cross-Claim Plaintiff Plaza Construction LLC ("Plaza"),  a general contractor who had hired the subcontracting firms, moves for summary judgment against the firms' principals on claims relating to Labor and Material Payment Bonds, certain loan guarantee agreements, and various assigned claims.
For the reasons explained below, Plaintiffs' motion for summary judgment is granted in part and denied in part, and Defendant/Cross-Claim Plaintiff Plaza's motion for summary judgment is granted in part and denied in part.
Unless otherwise noted, the following facts, taken from the parties' statements submitted pursuant to Local Rule 56.1, are undisputed:
A. Plaintiffs' Claims Against the LaSala Defendants
Local 1 is a labor union that represents bricklayers and related trades in New York City and Long Island. Along with various employee-benefit funds, it has brought an action against Defendants Kenneth LaSala Sr., ("Ken Sr."), Mark LaSala ("Mark"), and Kenneth LaSala, Jr. ("Ken Jr.") (collectively, the "LaSala Defendants"). Ken Sr., Mark, and Ken Jr. are the sole officers and shareholders of two masonry subcontractors: Town Masonry Corp. and New Town Corp. ("Town" and "New Town, " respectively). Pl. Rule 56.1 Stmt ¶ 17.
1. The Obligations of Town and New Town Pursuant to the Collective Bargaining Agreements
Both Town and New Town were members of the Associated Brick Mason Contractors of Greater New York, a multi-employer bargaining association that had negotiated collective-bargaining agreements with Local 1. Pursuant to these agreements, Town and New Town were required to make contributions at specified rates per employee-hour worked to several union funds: the Bricklayers Pension Fund ("Pension Fund"), the Bricklayers Supplemental Annuity Fund ("Annuity Fund"), Bricklayers Insurance and Welfare Fund ("Welfare Fund"), the New York City and Long Island Joint Apprenticeship and Training Fund ("JATC"), and the International Masonry Institute. Importantly, all contributions to these funds came directly from the employers, and were not deducted from employee paychecks.
These funds were established pursuant to the Taft-Hartley Act, 29 U.S.C. ¶ 186(c), and thus governed by a board of trustees composed of employer and union representatives in equal number. Id. ¶¶ 10 & 12. Ken Sr. was a trustee of the Welfare Fund, the Pension Fund, the Annuity Fund and the JATC during the time period covered by this lawsuit. Mark and Ken Jr. were not trustees to any of the funds.
The collective bargaining agreements also obligated Town and New Town to take after-tax deductions from employee paychecks and remit them to (1) the Vacation Fund ("VF"),  (2) the Bricklayers and Trowel Trades International Pension Fund ("IPF"),  and (3) to Local 1 and its parent union as union dues ("Dues").
2. Ken Sr.'s Alleged Agreement to Guarantee Amounts Owed by Town and New Town
An October 2010 payroll audit of Town and New Town revealed delinquencies of more than $1.4 million. Id. ¶ 24. To address these owed amounts, the Plaintiffs entered into a payment agreement with Town and New Town. After additional audits and additional payments made by Town, the parties entered into an amended payment agreement on July 31, 2011, under which Town and New ...