United States District Court, S.D. New York
TRUSTEES OF THE NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS PENSION FUND, WELFARE FUND, ANNUITY FUND, and APPRENTICESHIP, JOURNEYMAN RETRAINING, EDUCATIONAL AND INDUSTRY FUND, TRUSTEES OF THE NEW YORK CITY CARPENTERS RELIEF AND CHARITY FUND, THE NEW YORK CITY AND VICINITY CARPENTERS LABOR-MANAGEMENT CORPORATION, and the NEW YORK CITY DISTRICT COUNCIL CARPENTERS, Plaintiffs,
TONY NGUYEN, Defendant.
OPINION & ORDER
HONORABLE PAUL A. CROTTY, United States District Judge
in the above-captioned case (collectively,
"Plaintiffs") are employer and employee trustees of
multi-employer labor management trust funds (the
"Funds") which are subject to the Employee
Retirement Income Security Act of 1974 ("ERISA").
Defendant Tony Nguyen ("Defendant" or
"Nguyen") is the sole member, officer and director
of Nguyen Custom Woodworking LLC ("NCW").
Plaintiffs seek to hold Nguyen personally liable for damages
caused by his use of assets in NCW's possession for
purposes other than remitting requisite contributions to the
Funds. The parties now cross-move for partial
summary judgment, pursuant to Fed.R.Civ.P. 56, on three
discrete issues: whether Nguyen can be held personally
liable; whether an arbitration award is binding on Nguyen to
the extent it quantifies damages for NCW's unpaid
contributions covering the period June 25, 2010 through
September 30, 2013; and whether Nguyen has the burden of
proof regarding damages for NCW's unpaid contributions
covering two additional time periods.
following reasons, Plaintiffs' motion is GRANTED on all
three issues, and Defendant's motion is DENIED.
judgment is appropriate where "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 Court "resolve[s] all
ambiguities and draw[s] all reasonable inferences in the
light most favorable to the nonmoving party." Summa
v. Hofstra Univ.. 708 F.3d 115, 123 (2d Cir. 2013).
Summary judgment is warranted where "the record taken as
a whole could not lead a rational trier of fact to find for
the non-moving party." Smith v. Cnty. of
Suffolk, 776 F.3d 114, 121 (2d Cir. 2015) (quoting
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp.. 475 U.S. 574, 587 (1986)).
are fiduciaries of the Funds within the meaning of ERISA
§ 3(21), 29 U.S.C. § 1002(21). PI. 56.1(a) Stmt,
ECF 24 ¶ 1. NCW was a party to an Independent Shop
Agreement and an Independent Building Construction Agreement.
Id. at ¶ 5; see ECF 25 Ex. 1 at ¶
10, Ex. 2 at ¶ 10, Ex. 4 at 19-23, Ex. 5, Ex. 6. Nguyen
signed both agreements as NCW's principal member. PI.
56.1(a) Stmt., ECF 24 ¶¶ 2-4; ECF 25 Ex.
5, Ex. 6; ECF 33 at ¶ 7.
agreements require NCW to make hourly contributions for
specified work (the "Covered Work"), and to furnish
its books and records to the Funds for audits upon request.
PI. 56.1(a) Stmt., ECF 24 ¶¶ 6-7.
the Funds is governed by a trust agreement; the terms of the
trust agreements are incorporated by reference into the two
agreements which were in effect as of the effective date of
June 26, 2007. Id. at ¶¶ 26-28; ECF 25 Ex.
5 at Preamble, Art. IX Section 12, Ex. 6 at Art. XV Section
3, Art. XXI.
Third Amendments of each trust agreement, all adopted on
March 22, 2007, define the "assets of [each] Fund"
to include not only the money that employers have
contributed, but also "the sums of money ... which are
due and owing to the Fund by the Employers as required by the
applicable collective bargaining agreement." PI. 56.1(a)
Stmt., ECF 24 ¶¶ 29-32; see ECF 25 Ex. 11
at Third Amendment, Ex. 12 at Third Amendment, Ex. 13 at
Third Amendment, Ex. 14 at Third Amendment. The Independent
Shop Agreement additionally provides that "[i]f during
the life of this Agreement, the Trustees of any fringe
benefit fund adopt a rule which provides for personal
liability of an owner of an Employer cooperation [sic] to pay
fringe benefit contributions due under this Agreement, such
Rule of Trustees will not be a basis for enforcing personal
liability for said payment under this Agreement." ECF 25
Ex. 5 at Art. IX Section 12.
Funds conducted an audit of NCW's books and records for
the period covering June 25, 2010 through September 30, 2013
(the "First Audit Period"), which showed a
delinquency of $88, 425.84, which NCW failed to pay despite
demand. PI. 56.1(a) Stmt., ECF 24 at ¶¶ 8-10. The
Funds initiated arbitration to resolve the dispute, as
permitted. Id. at ¶¶ 11-14. At the April
1, 2015 arbitration hearing, which Nguyen attended with
NCW's counsel, the Funds presented evidence of the
delinquency; NCW did not present any evidence. Id.
at ¶ 15. The arbitrator issued an award on April 3, 2015
in favor of the Funds, finding that NCW violated the terms of
the agreements and ordering NCW to pay the Funds $125, 201.29
(the "Arbitration Award"). Id. at ¶¶
12, 16. NCW has not paid any of the Arbitration Award,
despite demand. Id. at ¶ 17.
audits for the periods covering October 1, 2013 through May
26, 2015 (the "Second Audit" and "Second Audit
Period") and May 27, 2015 through September 24, 2015
(the "Third Audit" and "Third Audit
Period") showed that NCW employees performed Covered
Work during these periods but NCW made no contributions.
Id. at ¶¶ 19-25. Nguyen disputes the
dollar amounts shown in both the Second Audit ($1, 880,
925.76) and the Third Audit ($363, 600.14), see Id.
at ¶¶ 21, 24; Def. 56.1(a) Stmt., ECF 32
¶¶ 21, 24, but agrees that NCW has not paid any
portion of these delinquencies. See PI. 56.1(a)
Stmt., ECF 24 ¶¶ 22, 25; Def. 56.1(a) Stmt., ECF 32
¶¶ 22, 25.
admits that he was the "only person currently or
previously employed or engaged by NCW who has or had
authority to withdraw funds from one or more of NCW's
bank accounts." ECF 25 Ex. 3 at Response 6. Nguyen also
testified that he used money in NCW's possession to pay
parties other than the Funds; his own personal expenses; and
undocumented immigrant employees. See ECF 25 Ex. 4 at
28-29, 32-41; see also PI. 56.1(a) Stmt., ECF 24
filed for relief under Chapter 11 of the Bankruptcy Code on
May 26, 2015 in the United States Bankruptcy Court for the
Southern District of New York. PI. 56.1(a) Stmt., ECF
brought this action on July 13, 2015, alleging breach of
fiduciary duty under ERISA § 409, as ...