United States District Court, S.D. New York
TRUSTEES OF THE SHEET METAL WORKERS INTERNATIONAL ASSOCIATION LOCAL NO. 38 INSURANCE AND WELFARE FUND, et al., Plaintiffs,
HALDEAN SHEET METAL FABICATORS, INC., FLORENCE HALE, and ROBERT HALE, Defendants.
OPINION AND ORDER
Vincent L. Briccetti United States District Judge
Trustees of the Sheet M Workers International Association
Local No. 38 Insurance and Welfare Fund, Sheet M Workers
International Association Local No. 38 Profit Sharing Plan,
Sheet M International Association Local No. 38 Individual
Vacation Account Fund, Sheet M Workers Local 38 Labor
Management Committee and Trust, Sheet M Workers Local 38
Craft Training Fund, Sheet M Workers National Pension Fund,
and Sheet M Workers Local 38 Craft Training Building Fund,
bring this action against defendants, Haldean Sheet M
Fabricators, Inc. (“Haldean”), Robert Hale, and
Florence Hale, pursuant to the Employee Retirement Income
Security Act of 1974, 29 U.S.C. § 1002 et seq.
Plaintiffs seek to collect unpaid fringe benefit
contributions owed pursuant to a collective bargaining
agreement between Sheet M Workers International Association
Local Union No. 38 (“Local 38”) and defendant
pending are defendants' motion for summary judgment (Doc.
#110) and plaintiffs' cross-motion for summary judgment
(Doc. #116). For the reasons set forth below, defendants'
motion is GRANTED IN PART and DENIED IN PART. Plaintiffs'
cross-motion is GRANTED IN PART and DENIED IN PART.
Court has subject matter jurisdiction pursuant to 28 U.S.C.
§ 1331 and 29 U.S.C. §§ 185(a), 1132(e).
parties have submitted briefs, statements of fact pursuant to
Local Civil Rule 56.1, declarations and affidavits
(“Aff.”), and supporting exhibits, which reflect
the following factual background.
are trustees of multiemployer fringe benefit funds (the
“Funds”) established and administered in
accordance with the Labor Management Relations Act
(“LMRA”) and the Employee Retirement Income
Security Act (“ERISA”).
is a family owned steel fabrication and installation
corporation. Individual defendant Robert Hale and his late
brother-in-law, Peter DeAngelis, incorporated Haldean in
1977. At an initial shareholders' meeting on June 15,
1977, Robert Hale and Peter DeAngelis adopted bylaws,
appointed themselves directors of Haldean, and elected
Hale's wife, defendant Florence Hale, as Haldean's
President and Secretary, and DeAngelis's wife, Mary
DeAngelis, as Haldean's Vice President and Treasurer.
operated out of 581 North State Road, in Briarcliff Manor,
New York. In approximately 1981, after several years renting
the property, Robert Hale and Peter DeAngelis formed North
State Associates Partnership and purchased the property. From
that time, Haldean paid rent to North State Associates, with
the rent being equivalent to North State Associates's
monthly mortgage payment and common condominium charges.
Haldean, Robert Hale managed sheet m fabrication and
installation, and Peter DeAngelis managed sales, bidding, and
client relationships, and was assisted by Florence Hale in
managing bill pay, collection, and payroll. When Peter
DeAngelis died in 2009, Florence Hale and Brian Mullins, a
Haldean employee, took over many of Peter DeAngelis's
failed to file New York State corporate tax returns between
2009 and 2015. As a result, New York State dissolved Haldean
by proclamation in 2012. In 2016, Haldean filed its tax
returns and was reinstated.
The Collective Bargaining Agreement
1997, Haldean entered into a collective bargaining agreement
(the “1998 CBA”) with Local 38. The 1998 CBA
became effective July 1, 1998. Pursuant to the 1998 CBA,
Haldean was required to make fringe benefit contributions to
the Funds for each of its Local 38 employees.
1998 CBA provided for periodic updates to the union wage
scale, and contained an “evergreen” clause,
This agreement shall become effective on the 1st day of July,
1998, and shall remain in full force and effect until the
30th day of April, 2002, and shall continue in force from
year to year thereafter unless written notice of reopening is
given not less than ninety (90) days prior to the expiration
(R. Hale Aff. Ex. B: 1998 CBA, Art. XIII § 4). Following
the 1998 CBA, Haldean was not provided a subsequent CBA, and
neither Haldean nor Local 38 issued a notice of reopening,
written or otherwise.
38 entered into collective bargaining agreements in 2002,
2012, and 2015 (the “subsequent CBAs”). However,
Haldean did not receive or sign the subsequent CBAs.
Haldean's Delinquent Fringe Benefit
Santucci, an employee of the Funds, was responsible for union
employers' remittance of fringe benefit contributions. On
a monthly basis, employers provided Santucci a record of
employee hours worked. Santucci then created an invoice
reflecting benefit contributions owed.
participated in this process, but in 2009 Haldean fell on
hard times - Peter DeAngelis died suddenly, Florence Hale was
in poor health, and, according to defendants, business was
down. Haldean became delinquent in its benefit contributions,
and by 2011 ceased reporting employee hours to Santucci
altogether. Santucci nevertheless input estimated hours for
Haldean's employees on a monthly basis, crediting their
vacation and annuity accounts, which caused fund monies to be
released. Santucci testified she credited those accounts in
particular because she was aware that workers reviewed them,
and would notice any shortfall. Thus, despite Haldean's
delinquency, those accounts were paid and up to date for
was also required to keep a record of employers whose benefit
contributions were delinquent or unpaid. Santucci provided
the Funds' manager, Mark Modzeleski, a list of such
employers each month. Modzeleski reviewed the list and
forwarded it to Local 38. Richard Pagano replaced Modzeleski
in 2014, and he followed the same procedure.
number of telephone conversations, Santucci and Florence Hale
discussed Haldean's delinquent benefit contributions.
Despite her discussions with Florence Hale about
Haldean's arrears, Santucci never relayed to Modzeleski
or Pagano that Haldean's benefit contributions were
six year delinquency ultimately was discovered in March 2015.
Santucci was supposed to send the National Pension Fund
employer hours on a monthly basis, but at that time she
instead sent a single submission of Haldean's hours for
the years 2009-2015 (the “relevant time frame”).
Pagano questioned Santucci, who admitted she had not reported
Haldean's failure to make benefit contributions. As a
result, the Funds terminated Santucci.
November 12, 2015, the Funds obtained a consent judgment
against Santucci in the amount of $1, 682, 509.94. Santucci
remitted her retirement fund in partial satisfaction of the
Haldean's Payroll Audit
Local 38 typically audits employers every three years,
Haldean was not audited between 2003 and 2015. In 2015, after
the National Pension Fund advised Pagano there was an issue
with Haldean's hours, the accounting firm Novak Francella
conducted a payroll audit. Novak Francella's report
reflected that for the period January 1, 2009, to June 30,
2015, Haldean owed the Funds $1, 682, 509.94. Of that amount,
$321, 689.31 is interest, and, according to defendants, $213,
720.72 represents contributions Haldean withheld from its
employees' wages but failed to remit to the Funds.