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Masino v. Persico Contracting & Trucking, Inc.

United States District Court, E.D. New York

February 28, 2018

VINCENT MASINO, KEITH LOSCALZO, FRANCISCO FERNANDEZ, ANTHONY FASULO, PHILIP FAICCO, and JAMES KILKENNY, as Trustees and Fiduciaries of the PAVERS AND ROAD BUILDERS DISTRICT COUNCIL WELFARE, PENSION, ANNUITY AND APPRENTICESHIP, SKILL IMPROVEMENT AND TRAINING FUNDS, Plaintiffs,
v.
PERSICO CONTRACTING & TRUCKING, INC., PERSICO REALTY CORP., PCI CONTRACTING a/k/a PCT CONTRACTING LLC, AND PCI INDUSTRIES CORP., Defendants.

          MEMORANDUM & ORDER

          Edward R. Korman United States District Judge[*]

         Plaintiffs Vincent Masino, Keith Loscalzo, Francisco Fernandez, Anthony Fasulo, Philip Faicco, and James Kilkenny (“Plaintiffs”) “are employer and employee trustees of the Pavers and Road Builders District Council Welfare, Pension, Annuity and Apprenticeship, Skill Improvement and Training Funds (collectively, the “Funds”).” (Compl. ¶ 4, ECF No. 1.) The Funds are employee benefit plans under the laws of the Employee Retirement Income Security Act of 1974 (“ERISA”). (Id.) Plaintiffs are suing Defendants Persico Contracting & Trucking (“Persico Contracting”), Persico Realty Corporation (“Persico Realty”), PCI Contracting a/k/a/ PCT Contracting LLC (“PCI Contracting”), and PCI Industries Corporation (“PCI Industries, ” collectively “Defendants”) to enforce a settlement agreement stemming from prior litigations in this jurisdiction under the ERISA laws. Currently before the Court is Defendants' motion to dismiss the case under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction. (ECF No. 63.) For the reasons set forth below, the Court grants Defendants' motion and dismisses this case for lack of subject-matter jurisdiction.

         THE 2008 AND 2010 LITIGATIONS

         On April 9, 2008, Plaintiffs sued Defendant Persico Contracting under ERISA, 29 U.S.C. § 1145, to recoup allegedly delinquent contributions owed to the Funds under a collective bargaining agreement (“CBA”) (the “2008 Litigation”). (Compl.¶ 14; see also Masino v. Persico Contracting & Trucking, Inc., 08-cv-3561 (E.D.N.Y.)) The 2008 Litigation was assigned to United States Magistrate Judge Joan M. Azrack. On April 13, 2010, Plaintiffs sued Persico Contracting again, as well as the “controlling shareholder Richard Persico, and surety First National Insurance Company of America[]” under § 1145 of ERISA to recoup allegedly delinquent contributions under the CBA (the “2010 Litigation”). (Compl. ¶ 15; see also Masino v. Persico Contracting & Trucking, Inc., 10-cv-1648 (E.D.N.Y.)) The 2010 Litigation was assigned to United States District Judge Jack B. Weinstein and United States Magistrate Judge Cheryl L. Pollak.

         On October 13, 2010, Plaintiffs and “Persico” entered into a settlement agreement (“Settlement Agreement”) whereby: “(1) Persico acknowledged that it owed $350, 000 to the Funds; (2) the Funds agreed to accept that amount in full satisfaction of all claims against Persico and its owner; and (3) Persico agreed to withdraw all claims against the Funds.” (Compl. ¶ 18.) On February 22, 2011, Plaintiffs sent a letter to the Court in the 2010 Litigation stating that they and Persico Contracting had “entered into a written settlement providing in pertinent part that plaintiffs' claims against … Persico Contracting … and Richard Persico will be dismissed with prejudice.” (10-cv-1648 (E.D.N.Y.), ECF No. 23.) Plaintiffs explained that they had not yet filed a stipulation of dismissal because the defendants' counsel had failed to sign the stipulation without providing any reason for failing to do so. (Id.) Consequently, Plaintiffs attached a copy of the Settlement Agreement signed by their counsel and Richard Persico as “the president of the corporate defendant ….” (Id.) The Settlement Agreement is a handwritten document titled “Agreement” that consists of five paragraphs. (Id.) Plaintiffs further stated in their February 22nd letter to the Court that since the Settlement Agreement is executed and “expressly provides for the dismissal of this action, ” it should suffice “to effectuate the dismissal.” (Id.)

         On March 2, 2011, Judge Weinstein docketed the following entry in the 2010 Litigation: “ORDER DISMISSING CASE. Ordered by Senior Judge Jack B. Weinstein, on 3/1/2011.” (ECF No. 24.) The docket entry attached another copy of Plaintiff's February 22, 2011 letter to the Court with the handwritten note “close the case JW 3/1/11[.]” (Id.) Judge Weinstein's Order made no mention of incorporating the terms of the Settlement Agreement into this Order or retaining jurisdiction over the 2010 Litigation for any reason.

         On March 2, 2011, in the 2008 Litigation, Plaintiffs submitted a similar letter to the Court attaching the Settlement Agreement. (08-cv-3561 (E.D.N.Y.), ECF No. 44.) On March 7, 2011, Plaintiffs filed a Stipulation and Order of Dismissal in the 2008 Litigation. (Stip. and Order of Dismissal, 08-cv-3561 (E.D.N.Y.), ECF No. 45.) Paragraph Two of the Stipulation states that “[t]his Court retains jurisdiction to enforce the settlement agreement between the parties.” (Id.) Although the Stipulation has a space for Judge Azrack's signature, the Stipulation was neither signed nor “So Ordered.” (Id. at 2.) On April 25, 2012, Judge Azrack dismissed the 2008 Litigation in a docket entry that stated: “ORDER DISMISSING CASE: The Court, having confirmed with plaintiffs' counsel that this matter has settled pursuant to stipulation [docket entry] 45, and that there are no outstanding issues to be addressed, hereby dismisses this action.” Judge Azrack made no mention of retaining jurisdiction over the 2008 Litigation for any reason. Nor did the Judge incorporate the terms of the Settlement Agreement into her dismissal Order.

         THE INSTANT LITIGATION

         On September 21, 2011, Plaintiffs filed the instant lawsuit against Defendant Persico Contracting and three entities that were not sued in the 2008 or 2010 Litigations, Persico Realty, PCI Contracting, and PCI Industries. (Compl., ECF No. 1.) Plaintiffs allege that they bring this suit under 29 U.S.C. §§ 1132(a)(3) and 1145 of the ERISA laws “to collect delinquent employer contributions to a group of employee benefit plans, and for related relief.” (Id. at ¶ 1.) Plaintiffs then allege that each Defendant is an “employer” under ERISA and maintains its principal place of business in New York. (Id. at ¶¶ 4-8.) They also allege that Persico Contracting was a party to the CBA and was thereby obligated to make contributions to the Funds. Plaintiffs further allege that they sued Persico Contracting in 2008 and 2010 “for, among other things, delinquent fund contributions[, ]” and discuss the resulting Settlement Agreement. (Id. at ¶¶ 13-19.) Next, Plaintiffs allege that Persico Contracting breached the Settlement Agreement by failing to pay Plaintiffs the $350, 000 owed under the Settlement Agreement. (Id. at ¶ 20.) They also allege facts to support their claim that “PCI exists for the purpose of servicing Persico Contracting.” (Id. at ¶¶ 2330.)

         In their First Claim for Relief, Plaintiffs allege facts to support their claim that “Persico Contracting and Persico Realty are alter egos and/or constitute a single employer, and each is liable for the other's obligations.” (Compl. ¶¶ 31-41.) In their Second Claim for Relief, Plaintiffs allege facts to support their claim that “Persico Contracting, PCI, and PCI Industries are alter egos and/or constitute a single employer, and each is liable for the other's obligations.” (Id. at ¶¶ 42-53.) In their Third Claim for Relief, Plaintiffs allege that Persico Contracting breached the Settlement Agreement by failing to pay Plaintiffs $350, 000. (Compl. ¶¶ 56-58.) In the relief section, Plaintiffs allege that they seek to hold Persico Contracting liable for $350, 000, “plus all additional amounts that become due during the course of this litigation[, ]” and to hold Persico Realty, PCI Contracting, and PCI Industries “as alter egos of and a single employer with Persico Contracting … liable for each other's obligations, including the $350, 000.00 owed under the settlement agreement, plus all additional amounts that become due during the course of this litigation ….” (Id. at 9, ¶¶ (1), (2).) Neither the Claims for Relief nor the relief section make any mention about seeking delinquent contributions under the CBA or holding Persico Realty, PCI Contracting, or PCI Industries liable under the CBA or ERISA.

         On January 9, 2015, Defendants filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction because: Plaintiffs' claims do not raise a federal question; the Court did not specifically retain jurisdiction over the 2008 or 2010 Litigation to enforce the Settlement Agreement; and the terms of the Settlement Agreement were not incorporated into either of the Orders dismissing the 2008 and 2010 Litigations. (ECF Nos. 63, 65.) In opposing Defendants' motion, Plaintiffs do not argue that their claim to enforce the Settlement Agreement against Persico Contracting provides the Court with subject-matter jurisdiction. Rather, they argue that the Court has subject-matter jurisdiction because Plaintiffs have alleged “an ERISA common law claim of alter ego” and that “[b]ecause Defendants are de facto the same entity, the claim alleges that the new entities are directly liable to the Funds under ERISA.” (Memo. of Law in Opp. to Defendants' Mot. to Dismiss 3, 5-6, ECF No. 64.) Neither argument was made in the Complaint.

         DISCUSSION

         “Federal courts are courts of limited jurisdiction …. [that] possess only that power authorized by Constitution and statute … which is not to be expanded by judicial decree ….” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted). “[A] plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.” Vill. of W. Hampton Dunes v. New York, 89 F.Supp.3d 433, 441 (E.D.N.Y. 2015) (quoting Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008)) (internal quotation marks omitted).

         “In considering a motion to dismiss for lack of subject matter jurisdiction, we accept as true all material factual allegations in the complaint.” Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir. 1992) (citation omitted). “However, argumentative inferences favorable to the party asserting jurisdiction should not be drawn.” Id. (citation omitted). In determining subject-matter jurisdiction, the Court can properly consider evidence outside the pleadings. See Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) (“In resolving a motion to dismiss for lack of subject matter jurisdiction ...


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