United States District Court, S.D. New York
MASON TENDERS DISTRICT COUNCIL WELFARE FUND; MASON TENDERS DISTRICT COUNCIL PENSION FUND; MASON TENDERS DISTRICT COUNCIL ANNUITY FUND; MASON TENDERS DISTRICT COUNCIL TRAINING FUND; MASON TENDERS DISTRICT COUNCIL HEALTH AND SAFETY FUND; and DOMINICK GIAMMONA, as FUNDS' CONTRIBUTIONS/DEFICIENCY MANAGER, Plaintiffs,
GIBRALTAR CONTRACTING, INC.; and CHRISTIAN VARELA, in his Personal Capacity, Defendants.
ANALISA TORRES UNITED STATES DISTRICT JUDGE.
Mason Tenders District Council Welfare Fund, Mason Tenders
District Council Pension Fund, Mason Tenders District Council
Annuity Fund, Mason Tenders District Council Training Fund,
Mason Tenders District Council Health and Safety Fund (the
“Funds”), and Dominick Giammona, in his fiduciary
capacity as the Funds' contributions and deficiency
manager, bring this action pursuant to, inter alia,
the Employment Retirement Income Security Act
(“ERISA”), 29 U.S.C. §§ 1132(a)(3),
1145, and the Taft-Hartley Act, 29 U.S.C. § 185.
Plaintiffs allege that Defendants, Gibraltar Contracting,
Inc. (“Gibraltar”) and Christian Varela, breached
the parties' collective bargaining agreement (the
“Agreement”) by, among other things, failing to
pay the full amounts due to the Funds. Plaintiffs move for
summary judgment pursuant to Federal Rule of Civil Procedure
56, seeking damages as well as injunctive and other equitable
relief under ERISA and the Agreement. ECF No. 55. For the
reasons stated below, Plaintiffs' motion is GRANTED.
facts discussed in this opinion are undisputed except where
otherwise noted. The Court has drawn all reasonable
inferences in favor of Defendants, as the nonmovants. See
Costello v. City of Burlington, 632 F.3d 41, 45 (2d Cir.
Funds are jointly administered, multi-employer, labor
management trust funds established and maintained pursuant to
various collective bargaining agreements and trust agreements
in accordance with Sections 302(c)(5) and (c)(6) of the
Taft-Hartley Act, 29 U.S.C. §§ 186(c)(5) and
(c)(6). Pl. 56.1 ¶ 1, ECF No. 60-1. The Funds provide
fringe benefits to eligible employees on whose behalf
employers in the construction industry contribute to the
Funds pursuant to collective bargaining agreements with the
Mason Tenders District Council of Greater New York
(“Union”) to which such employers are bound.
Id. ¶ 3. Plaintiff Mason Tenders District
Council Welfare Fund is also the duly authorized collection
agent for the Union and the Mason Tenders District Council
Political Action Committee (“PAC”). Id.
times relevant to the action, Gibraltar, the employer, was a
party to the Agreement with the Union. Id.
¶¶ 9-12. The Agreement requires that Gibraltar make
fringe benefit contributions to the Funds for every hour of
“covered work”-that is, work performed by its
employees within the trade and geographic jurisdiction of the
Agreement. Id. ¶ 16. The Agreement also
requires Gibraltar to deduct and remit dues checkoffs and PAC
contributions from the wages of all authorized employees
performing covered work. Id. ¶ 17.
paid to the Funds at least $931, 468.30 in fringe benefit
contributions from May 27, 2015 through December 27, 2016.
Id. ¶ 41.
Agreement requires Gibraltar to permit the Funds or their
designated representatives to inspect and audit
Gibraltar's books and records to confirm payment of all
contributions owed. Id. ¶ 18. Pursuant to a
2017 engagement letter, the Funds directed Schultheis &
Panettieri, LLP (“S&P”) to inspect
Gibraltar's books and records for the period of May 27,
2015 through December 27, 2016, and to identify whether
Gibraltar had made all contributions to the Funds required
under the Agreement, and to issue reports of any findings.
Pl. Supp. 56.1 ¶ 4, ECF No. 54.
of the audit, S&P requested access to documents Gibraltar
is required to maintain and provide the Funds and their
representatives access to pursuant to the Agreement and the
Funds' trust agreements, including to payroll records,
certified payroll records, time sheets, job contracts, bank
statements and cancelled checks, and payroll reports to all
benefit funds. Id. ¶ 13. Because Gibraltar did
not provide full documentation showing the scope of work
performed by several of its employees, S&P requested
additional documents. Id. ¶¶ 15-16.
completed review of Gibraltar's books and records on
September 1, 2017, id. ¶ 22, and sent
preliminary findings of the audit to Gibraltar by letter
dated October 26, 2017, id. ¶ 24. Gibraltar
neither responded to nor provided documentation disputing the
preliminary findings. Id. ¶ 27. The audit was
submitted to the Funds on December 6, 2017. Id.
Independent Accountants' Report on Applying Agreed-Upon
Procedures, dated November 29, 2017 (the “11/29/17
Report”), describes the procedures performed and the
findings. Id. ¶ 29. The 11/29/17 Report found
that Gibraltar failed to make fringe benefit contributions,
and remit dues checkoffs, and PAC contributions in the
principal amount of $1, 894, 698.89. Id. ¶ 31.
The 11/29/17 Report also found Gibraltar to be substantially
delinquent and that Gibraltar owed the Funds $235, 290.36 in
imputed audit costs. Id. ¶ 32. Gibraltar
disputed the 11/27/17 Report and provided the Funds with
additional documentation. Id. ¶¶ 33, 35.
S&P issued a revised report on April 11, 2018 (the
“4/11/18 Report”), which found that Gibraltar
failed to make fringe benefit contributions, and remit dues
checkoffs, and PAC contributions in the principal amount of
$1, 630, 003.71. Id. ¶ 37. The 4/11/18 Report
also found that Gibraltar owed the Funds imputed audit costs
in the amount of $202, 415.76. Id. ¶ 38.
April 26, 2018, Plaintiffs commenced this action against
Defendants for delinquent fringe benefit contributions, dues
checkoffs, and PAC contributions pursuant to the 4/11/18
Report. ECF No. 7. Based on documents received in discovery,
S&P further adjusted the audit results. Pl. Supp. 56.1
¶¶ 53-54. On December 12, 2018, S&P issued a
revised report which stated that Gibraltar failed to pay
fringe benefit contributions (the “12/12/18
Report”), and remit dues checkoffs and PAC
contributions in the principal amount of $1, 239, 273.69.
Id. ¶ 54. The 12/12/18 Report also found that
Gibraltar owed the Funds imputed audit costs in the amount of
$153, 862.12. Id. ¶ 55.
additional discovery, S&P issued yet another revised
report on April 2, 2019 (“4/2/19 Report”), which
found that Gibraltar failed to pay $566, 555.67 in fringe
benefit contributions, dues checkoffs, and PAC contributions.
Id. ¶ 74. The 4/2/19 Report found that
Gibraltar owed the Funds imputed audit costs in the amount of
$70, 292.87. Id. ¶ 75.
April 17, 2019, the parties entered into a stipulation in
which Defendants admitted, inter alia, that they are
jointly and severally liable to the Funds for the 4/2/19
Report findings, including the dates, individuals, and hours
for which contributions are due, and that they owe $527,
196.43 in principal fringe benefit contributions, and $39,
359.13 in principal dues checkoffs, and PAC contributions to
the Funds for a total delinquency of $566, 555.67 for the
audit period. Pl. 56.1 ¶¶ 19-22. In subsequent
submissions, Defendants affirmed their liability to the Funds
in the amount of $566, 555.67, and that they are liable to
the Funds for all contractual and statutory damages including
interest, liquidated damages, and attorney's fees and
costs. Id. ¶¶ 25, 28-39, 44-45, 48-49;
Def. Opp. at 1-2, ECF No. 62. Defendants further admit that
Gibraltar is “substantially delinquent” in its
payment of fringe benefit contributions, as the term is
defined in the Agreement. Pl. 56.1 ¶ 42.
VI § 17(f) of the Agreement provides that if an audit
determines an employer to be delinquent in the payment of
fringe benefit contributions to the Funds, an employer shall
also pay interest on the unpaid amounts from the date due
until the date of judgment at the rate prescribed under 26
U.S.C. § 6621, as well as reasonable costs and
attorney's fees incurred. Id. ¶ 26.
the Agreement sets forth the Fund's entitlement to
certain relief upon an entry judgment for the Fund by a court
of competent jurisdiction, including the unpaid
contributions, interest on unpaid contributions, reasonable
attorney's fees and costs, and other legal or equitable
relief as deemed appropriate by the court. Id.
¶ 27. The Agreement also sets forth a formula to
calculate the imputed ...