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Upstate New York Engineers Health Fund v. Dipizio Construction Co., Inc.

United States District Court, N.D. New York

July 14, 2017

UPSTATE NEW YORK ENGINEERS HEALTH FUND, by Daniel P. Harrigan, as Administrator, UPSTATE NEW YORK ENGINEERS PENSION FUND, by Daniel P. Harrigan, as Administrator, UPSTATE NEW YORK ENGINEERS S.U.B. FUND, by Daniel P. Harrigan, as Administrator, UPSTATE NEW YORK ENGINEERS TRAINING FUND, by Theron Hogle and Eugene Hallock, as Trustees, OPERATING ENGINEERS LOCAL 17 TRAINING FUND, by James Smolinski, as Administrative Manager, CENTRAL PENSION FUND OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS AND PARTICIPATING EMPLOYERS, by Michael R. Fanning, as Chief Executive Officer, INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL UNION NO. 17, by Norman Noon, as Business Manager, INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL UNION NO. 463, by Paul McCollum, as Business Manager, Plaintiffs,
v.
DIPIZIO CONSTRUCTION CO., INC., BERNARD DIPIZIO, individually and as an Officer of DiPizio Construction Co., Inc., ROSANNE DIPIZIO, individually and as an Officer of DiPizio Construction Co., Inc., Defendants.

          BLITMAN, KING LAW FIRM Attorneys for Plaintiffs

          BARCLAY DAMON LLP Attorneys for Defendants

          JENNIFER A. CLARK, ESQ.

          MICHAEL E. FERDMAN, ESQ.

          MEMORANDUM-DECISION AND ORDER

          Mae A. D'Agostino, U.S. District Judge.

         I. INTRODUCTION

         On December 19, 2014, Plaintiffs Upstate New York Engineers Health Fund ("Health Fund"), Upstate New York Engineers Pension Fund ("Pension Fund"), Upstate New York Engineers S.U.B. Fund ("S.U.B. Fund"), Upstate New York Engineers Training Fund ("Training Fund"), Operating Engineers Local 17 Training Fund ("Operating Fund"), Central Pension Fund of the International Union of Operating Engineers and Participating Employers ("Central Fund") (collectively, the "Funds"), International Union of Operating Engineers, Local Union No. 17, and International Union of Operating Engineers, Local Union No. 463 (collectively, the "Unions") commenced this action against DiPizio Construction Co., Inc., Bernard DiPizio, and Rosanne DiPizio for failing to timely remit benefit contributions and deductions under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 1985. See Dkt. No. 1 at ¶¶ 1-2. Presently before the Court are Plaintiffs' motion for summary judgment and Defendants' cross-motion for leave to file an amended answer. See Dkt. Nos. 61, 63. As set forth below, the motion for summary judgment is granted in part and denied in part, and the motion for leave to file an amended answer is denied.

         II. BACKGROUND

         Defendant DiPizio Construction is a New York corporation. See Dkt. No. 1 at ¶ 16. Plaintiffs allege that Bernard DiPizio is DiPizio Construction's president, and that Rosanne DiPizio is its vice president. See Id. at ¶¶ 17-18. Plaintiffs are fiduciaries of the Funds and the business managers of the Unions, and they bring this action alleging that DiPizio Construction failed to timely remit contributions and deductions owed to the Funds and the Unions. See Id. at ¶¶ 7-14. When the complaint was filed on December 19, 2014, Plaintiffs alleged that DiPizio Construction owed $315, 696.74 in fringe benefit contributions and deductions. See Id. at ¶ 32. Based on two audits conducted after the complaint was filed and DiPizio Construction's remittance reports, Plaintiffs now claim that DiPizio Construction owed a total of $508, 371.56 in contributions and deductions through February 2016. See Dkt. No. 61-57 at 8.[1] Of that amount, Defendants, Defendants' surety, and third parties had untimely paid $276, 048.07 as of the time that the motion for summary judgment was filed. See Id. Therefore, DiPizio Construction allegedly owes $232, 323.49 in outstanding contributions and deductions.

         According to Plaintiffs, DiPizio Construction is required to pay contributions and deductions to the Funds and the Unions because it is bound to collective bargaining agreements ("CBAs") with Local No. 17 and Local No. 463. See Id. at ¶¶ 24-25. Defendants' obligations to the Funds arise from the CBAs, and the CBAs require DiPizio Construction to comply with the terms of the Funds' trust agreements. See Dkt. No. 61-57 at 3-4. Although the CBAs at issue were signed by the Unions and the Association of General Contractors Labor Relations Division ("AGC/LRD"), Plaintiffs allege that DiPizio Construction is nonetheless bound to those CBAs. See Id. In their answer, Defendants admitted that DiPizio Construction is bound to the CBAs, see Dkt. No. 16 at ¶ 1, but Defendants now seek to amend their answer to assert that they were never bound to the CBAs between the AGC/LRD and the Unions, see Dkt. No. 63-1 at 3.

         On December 15, 2016, Plaintiffs filed a motion for summary judgment seeking an award of unpaid deductions and contributions, as well as interest, liquidated damages, audit fees, and attorneys' fees and costs. See Dkt. No. 61-57 at 1. Defendants filed an opposition to the motion in which they argue-for the first time-that DiPizio Construction was never bound to the CBAs between the Unions and the AGC/LRD. See Dkt. No. 63-1 at 5. Defendants claim that DiPizio Construction withdrew bargaining authority from the AGC/LRD before it signed the CBA with Local No. 17, and that the AGC/LRD was never delegated as DiPizio Construction's bargaining agent with respect to Local No. 463. See Dkt. No. 63-1 at 5-6; Dkt. No. 64-4 at ¶ 12. In support of that claim, Defendants submit an affidavit from Rosanne DiPizio stating that while reviewing Plaintiffs' summary judgment motion, she was "reminded" that DiPizio Construction had withdrawn its designation of the AGC/LRD as a bargaining agent. See Dkt. No. 64-4 at ¶ 9. Defendants also submit a letter stating that "DiPizio Construction Company, Inc. hereby withdraws its' [sic] designation from the AGC/LRD, multi-employer bargaining unit as previously designated on 2/24/05 and 3/8/05." Dkt. No. 64-5 at 2. The letter is dated May 27, 2005, see id., years before the AGC/LRD signed the 2009-2014 and 2014-2017 CBAs with Local No. 17, to which Plaintiffs claim DiPizio Construction is bound, see Dkt. Nos. 68-2, 68-3.

         On the same day that Defendants responded to the summary judgment motion, Defendants also cross-moved to amend their answer in order to deny being bound to the CBAs. See Dkt. No. 63-1 at 4. Plaintiffs responded to Defendants' cross-motion to amend, arguing that even if Defendants withdrew AGC/LRD's bargaining authority, Defendants are still bound to the CBAs. See Dkt. No. 68.

         III. DISCUSSION

         A. Standard of Review

         1. Summary Judgment

         A court may grant a motion for summary judgment only if it determines that there is no genuine issue of material fact to be tried and that the facts as to which there is no such issue warrant judgment for the movant as a matter of law. See Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 36 (2d Cir. 1994) (citations omitted). When analyzing a summary judgment motion, the court "'cannot try issues of fact; it can only determine whether there are issues to be tried.'" Id. at 36-37 (quotation and other citation omitted). Moreover, it is well settled that a party opposing a motion for summary judgment may not simply rely on the assertions in its pleading. See Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (quoting Fed.R.Civ.P. 56(c), (e)).

         In assessing the record to determine whether any such issues of material fact exist, the court is required to resolve all ambiguities and draw all reasonable inferences in favor of the nonmoving party. See Chambers, 43 F.3d at 36 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)) (other citations omitted). Where the non-movant either does not respond to the motion or fails to dispute the movant's statement of material facts, the court may not rely solely on the moving party's Rule 56.1 statement; rather, the court must be satisfied that the citations to evidence in the record support the movant's assertions. See Giannullo v. City of New York, 322 F.3d 139, 143 n.5 (2d Cir. 2003) (holding that not verifying in the record the assertions in the motion for summary judgment "would derogate the truth-finding functions of the judicial process by substituting convenience for facts").

         "[S]ummary judgment may be requested not only as to an entire case but also as to a claim, defense, or part of a claim or defense." Fed.R.Civ.P. 56(a) advisory committee's note to 2010 amendment. Summary judgment may also be granted against any part of the remedy sought by the opposing party's claims. See Hamblin v. British Airways PLC, 717 F.Supp.2d 303, 307 (E.D.N.Y. 2010).

         2. Motion to Amend

         "A party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). District Courts have broad discretion to grant or deny an opportunity to amend. See Foman v. Davis, 371 U.S. 178, 182 (1962). Under Rule 15(a), a motion to amend a pleading should only be denied, "if there is an 'apparent or declared reason - such as undue delay, bad faith or dilatory motive . . ., repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of the allowance of an amendment, [or] futility of amendment.'" Dluhos v. Floating and Abandoned Vessel Known as "New York", 162 F.3d 63, 69 (2d Cir. 1998) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)) (other citation omitted); accord Richardson Greenshields Sec., Inc. v. Lau, 825 F.2d 647, 653 n.6 (2d Cir. 1987) (citation omitted). An amendment of a pleading is considered "futile" when the proposed new claim would not withstand a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See Ricciuti v. N.Y.C. Transit Auth., 941 F.2d 119, 123 (2d Cir. 1991); see also Vasile v. Dean Witter Reynolds Inc., 20 F.Supp.2d 465, 468 (E.D.N.Y. 1998), aff'd, 205 F.3d 1327 (2d Cir. 2000).

         B. The Collective Bargaining Agreements

         In their opposition to the motion for summary judgment and their motion to amend, [2]Defendants make three different arguments regarding the applicability of the CBAs signed by the AGC/LRD and the Unions. First, Defendants argue that DiPizio Construction was never bound to the CBAs between the AGC/LRD and the Unions because the AGC/LRD lacked bargaining authority to bind DiPizio Construction to the CBAs. See Dkt. No. 64 at 8-9. Second, even if the Court finds that DiPizio Construction was bound to the CBAs, DiPizio Construction should not be required to remit contributions and deductions for work performed on certain jobs that Defendants claim were not covered by the terms of the CBA. See Id. at 9. Third, Defendants argue that any dispute over the applicability of the CBAs is governed by the arbitration clauses contained in the CBAs; therefore, Plaintiffs' claims should be referred to arbitration. See Id. at 10.

         1. Withdrawal of Bargaining Authority

         In their complaint, Plaintiffs allege that "[a]t all times relevant herein, Defendant Corporation was bound to" both the 2009-2014 CBA with Local No. 17 and the 2012-2016 CBA with Local No. 463. Dkt. No. 1 at ¶¶ 24-25. In their May 22, 2015 answer, Defendants admitted those allegations. See Dkt. No. 16 at ¶ 1. Over a year and a half later-after the close of discovery and after the deadline for dispositive motions-Defendants now seek to amend their answer in order to deny those and other allegations. Defendants now claim that DiPizio Construction was never bound to the CBAs with Local No. 17 because it withdrew bargaining authority from the AGC/LRD by letter dated May 27, 2005-years before the CBAs in question were signed. Additionally, Defendants claim never to have designated bargaining authority to the AGC/LRD with respect to Local No. 463, and that they were therefore never bound to any CBAs between the AGC/LRD and Local No. 463.[3] Plaintiffs argue that even if DiPizio Construction did not delegate bargaining authority to the AGC/LRD, DiPizio Construction was still bound to the CBAs because it adopted the CBAs through its conduct.

         Section 302(c)(5)(B) of the LMRA requires that payments to a trust fund be made pursuant to a "written agreement with the employer." 29 U.S.C. § 186(c)(5)(B). However, "[s]ection 302(c)(5)(B) does not require that an agreement be signed, only that it be 'written' and set forth 'a detailed basis on which . . . payments are to be made' to a trust fund. Accordingly, an unsigned, written agreement satisfies Section 302(c)(5)(B)'s 'written agreement' requirement." Brown v. C. Volante Corp., 194 F.3d 351, 355 (2d Cir. 1999) (quoting 29 U.S.C. § 186(c)(5)(B)); see also Bricklayers Local 21 of Ill. Apprenticeship & Training Program v. Banner Restoration, Inc., 385 F.3d 761, 766 (7th Cir. 2004) ("We begin with the well-established principle '"that a collective bargaining agreement is not dependent on the reduction to writing of the parties' intention to be bound, " . . . rather "all that is required is conduct manifesting an intention to be bound by the terms of an agreement."'") (quoting Gariup v. Birchler Ceiling & Interior Co., 777 F.2d 370, 373 (7th Cir. 1985)). Therefore, even if DiPizio Construction never signed the CBAs, it can still be bound to the terms of the CBAs.

         Courts have looked to a number of factors in determining whether an employer's conduct "manifested an intent to adopt, or agree to, . . . unsigned CBAs." Brown, 194 F.3d at 355. Those factors include "payment of the wages on the union scale, paying pension and welfare contributions, submission of benefit reports, and accession to union audits." New England Health Care Empls. Welfare Fund v. iCARE Mgmt., LLC, 886 F.Supp.2d 82, 100 (D. Conn. 2012) (citing Brown, 194 F.3d at 355). In Brown, the Second Circuit found that there was no issue of material fact as to whether an employer had adopted an unsigned CBA because the employer submitted monthly remittance reports, cooperated with an audit, paid union wages, and wrote a letter to the plaintiff funds acknowledging "responsibility to the funds." Brown, 194 F.3d at 354-55.

         In this case, DiPizio Construction has similarly manifested its intent to be bound to the CBAs with Local No. 17 and Local No. 463. DiPizio Construction submitted to three separate audits, see Dkt. Nos. 61-42, 61-43, [4] submitted remittance reports, see Dkt. Nos. 61-35, 61-37, 61-38, and even paid a portion of the outstanding contributions and deductions after this action was filed, see Dkt. No. 65 at ¶¶ 23-24.[5] Additionally, DiPizio Construction signed multiple agreements evidencing their intent to be bound to the CBAs. DiPizio Construction signed memoranda of agreement with Local No. 463 in 2008 and 2012 modifying certain aspects of CBAs between the AGC/LRD and Local No. 463. See Dkt. No. 61-19 at 38; Dkt. No. 68-6 at 40. As for the CBA with Local No. 17, DiPizio Construction signed a similar memorandum of understanding on June 22, 2005-nearly a month after withdrawing bargaining authority from the AGC/LRD-modifying the CBA between the AGC/LRD and Local No. 17. See Dkt. No. 68-1. Finally, and perhaps most tellingly, Defendants admitted in their answer that DiPizio Construction was bound to the CBAs. See Dkt. No. 16 at ¶ 1. Although they now seek to amend their answer and assert that DiPizio Construction was never bound to the CBAs, Defendants were, at the very least, under the impression that DiPizio Construction was bound to the CBAs when Defendants filed their answer. According to the evidence before the Court, DiPizio Construction has, at all times prior to Defendants' opposition to the motion for summary judgment, operated as though it were bound to the CBAs.

         Because there is no genuine issue of material fact as to whether DiPizio Construction adopted the CBAs with the Unions, Defendants' motion to amend their answer in order to deny being bound to the CBAs is denied as futile.

         2. "Heavy" and "Highway" Jobs

         Defendants argue that, even if DiPizio Construction was bound to the CBAs, certain jobs were not covered by the 2014-2017 CBA between Local No. 17 and the AGC/LRD, which contains the following language: "This agreement shall apply to Heavy and Highway construction and building site work but shall not apply to the actual building, foundations, structural portion and interiors of buildings that are normally covered by Building agreements in the geographical area of this agreement." See Dkt. No. 63-1 at 7; Dkt. No. 68-3 at 6.

         According to Defendants, some portion of the work performed after the complaint was filed was not heavy, highway, or building site work; instead, it was building work that is not covered by the CBA with Local No. 17. See Dkt. No. 64 at 9-10. Defendants identify four particular projects or categories of projects that they argue are not subject to the CBA: "Clearview, " "Gabes, " "Small Jobs: Misc., " and "Shop." See Dkt. No. 63-5 at ¶¶ 28-29. But Defendants provide no documentary evidence indicating the nature of the work that was done on those jobs. They simply attach an affidavit from Rosanne DiPizio stating in conclusory terms that the work was not covered by the CBA. See id.

         In reply, Plaintiffs provide extensive evidence contradicting Defendants' claim. See Dkt. No. 68. First, Plaintiffs provide affidavits from four different members of Local No. 17 who claim to have worked on the jobs or categories of jobs in question. See Dkt. Nos. 68-12, 68-13, 68-14, 68-15. Each affidavit states that the union members were paid union wages and that they were never given any indication that they would not receive their full employee benefits package. See Id. Furthermore, the affidavits actually describe the work that was performed and, in every instance, it was the type of work that is covered by the CBA. See Id. Second, according to Local No. 17's business manager, DiPizio Construction deducted union dues from the employees' wages in accordance with the CBA. See Dkt. No. 68 at ¶ 22. Third, Plaintiffs provide an application for a highway work permit signed by Bernard DiPizio that describes the work that DiPizio Construction proposed to do on the Gabe job. See Dkt. No. 68-11 at 12. The categories of proposed work were "pavement, " "storm drainage and grading, " and "erosion and sedimentation control." Id. Based on the description of the work included in the application, it appears that the work done on the Gabe job was covered by the CBA.

         Rosanne DiPizio's brief, conclusory statement is not sufficient to create an issue of fact as to whether the jobs in question were covered by the CBAs. See McKenzie Eng'g Co. v. N.L.R.B., 182 F.3d 622, 626 (8th Cir. 1999) (holding that there was no issue of fact as to whether a specific job was covered under a "Highway and Heavy" provision where the employer deducted union dues ...


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