Bricklayers and Allied Craftsmen Local Union No. 3 v. Union Stone, Inc. et al
MEMORANDUM AND ORDER denying 3 Motion to Dismiss Count II of the Complaint for Lack of Jurisdiction. So Ordered by Chief Judge Mary M. Lisi on 5/14/2013. (Duhamel, John)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
BRICKLAYERS AND ALLIED
CRAFTSMEN LOCAL UNION NO. 3,
C.A. No. 13-138-ML
UNION STONE, INC.
NUZZO CAMPION STONE
MEMORANDUM AND ORDER
The Bricklayers and Allied Craftsmen Local Union No. 3 (“Local
3") seeks to enforce a labor arbitration award against Union Stone,
Inc. (“Union Stone”) pursuant to § 301 of the Labor Management
Relations Act (“LMRA”), 29 U.S.C. § 185. Local 3 has brought this
complaint (the “Complaint”) against Union Stone as well as Nuzzo
Campion Stone Enterprises, Inc. (“Nuzzo”) on the ground that Nuzzo
is Union Stone’s alter ego or that the two entities comprise one
single employer. The matter before the Court is Nuzzo’s motion to
dismiss the Complaint for lack of proper service and lack of
subject matter jurisdiction.
I. Factual Background and Procedural History
bargaining representative for marble masons, tile layers, terrazzo
Union Stone and Nuzzo are Rhode Island based
employers in that field. Union Stone and Local 3 are parties to a
arbitration of disputes arising under the CBA. Local 3 submitted
several charges against Union Stone in arbitration. On September
26, 2012, the Arbitration Board conducted a hearing on Local 3's
charges. Although it had been given proper notice, Union Stone did
not appear. On October 4, 2012, the Arbitration Board issued an
arbitration award (the “Award”) against Union Stone and awarded to
Local 3 the sum of $156,867, which was due for payment no later
than thirty days from issuance of the Award.
According to the Complaint, Union Stone did not make payment
of the Award, nor did it file an action to vacate the Award. On
March 1, 2013, Local 3 commenced an action against Union Stone and
Nuzzo in this Court, seeking payment of the Award from Union Stone,
together with pre-judgment interest, costs, and attorney’s fees.
With respect to Nuzzo, Local 3 asserts that Nuzzo is an alter ego
of and/or single employer with Union Stone and it seeks enforcement
of the Award against Nuzzo as well.
According to the affidavit of service submitted by Local 3,
Nuzzo was served on March 7, 2013 by certified mail.1 On March 26,
2013, Nuzzo filed a motion to dismiss Count II of the Complaint on
the grounds that (1) Nuzzo was not properly served with the Summons
and Complaint, and (2) the claim against Nuzzo is a state claim in
equity that fails to invoke this Court’s jurisdiction. Subsequent
to the filing of Nuzzo’s motion, the summons as to Nuzzo was reissued on April 1, 2013. Between April 8 and April 11, 2013, Local
3 unsuccessfully attempted to effect personal service on Nuzzo on
five separate occasions.
On April 12, 2013, Local 3 submitted an objection to Nuzzo’s
motion, asserting that (1) service by certified mail was sufficient
where Nuzzo (a) conceded it had actual notice of the claim against
it, and (b) Nuzzo repeatedly sought to evade personal service.
Local 3 also pointed out that the Arbitration Board concluded that
Nuzzo is an alter ego of Union Stone and that the Board assessed
damages against both entities. Further, it asserted that alter ego
claims are subject to federal jurisdiction.
On April 16, 2013, Local 3 submitted an “Affidavit in Support
of Plaintiff’s Motion for Alternate Service,”2 which details the
Rhode Island State Sheriff’s efforts to serve the summons and
There is no indication that Union Stone has been served as of
the date of this Memorandum and Order. A summons for Union Stone
was reissued on April 16, 2013.
No motion for alternate service was filed with respect to
complaint on an employee at Nuzzo’s office in Cumberland, Rhode
Island. The Affidavit sets forth that the process server made
several visits to Nuzzo’s office and encountered an individual at
that location who refused to give her name and repeatedly refused
to accept service. (Docket # 5).
In Nuzzo’s April 22, 2013 response to Local 3's objection to
the motion to dismiss the Complaint, Nuzzo maintains that Local 3
has not completed proper service upon Nuzzo.
Nuzzo asserts that
Local 3 refused to provide a proper waiver and the papers to be
filed to Nuzzo’s counsel so he could accept service. Nuzzo also
states that Count II seeks to hold Nuzzo liable for an arbitration
award pursuant to an agreement that was not signed by Nuzzo.
Standard of Review
When considering a motion to dismiss for lack of subject
matter jurisdiction under Rule 12(b)(1), the court applies the same
standard of review which is applicable to motions under Rule
12(b)(6). Negron–Gaztambide v. Hernandez–Torres, 35 F.3d 25, 27
(1st Cir.1994). In order to withstand a motion to dismiss for
failure to state a claim under Rule 12(b)(6), “the ‘complaint must
contain sufficient factual matter ... to ‘state a claim to relief
that is plausible on its face.’” Katz v. Pershing, LLC, 672 F.3d
64, 72-73 (1st Cir. 2012)(quoting Ashcroft v. Iqbal, 556 U.S. 662,
129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007)). The Court takes “the complaint's well-pled (i.e.,
reasonable inferences in the pleader's favor and see if they
plausibly narrate a claim for relief.” Schatz v. Republican State
Leadership Comm., 669 F.3d 50, 55 (1st Cir.2012)(internal citations
omitted). The party asserting jurisdiction bears the burden of
demonstrating the existence of federal subject matter jurisdiction.
Skwira v. U.S., 344 F.3d 64, 71 (1st Cir.2003).
Service of Process
The requirements for proper service on a domestic corporation
are set forth in Rule 4(h)of the Federal Rules of Civil Procedure.
corporation must be served “(1) in a judicial district of the
United States: (A) in the manner prescribed by Rule 4(e)(1) for
serving an individual; or (B) by delivering a copy of the summons
and of the complaint to an officer, a managing or general agent, or
any other agent authorized by appointment or by law to receive
service of process and--if the agent is one authorized by statute
and the statute so requires--by also mailing a copy of each to the
defendant.” Fed. R. Civ. P. 4(h)(1). Rule 4(e)(1) provides that
service can be effected “following state law for serving a summons
in an action brought in courts of general jurisdiction in the state
where the district court is located or where service is made.” Fed.
R. Civ. P. 4(e)(1).
Rule 4 of the Rhode Island Rules of Civil Procedure requires
that service upon a private corporation, from which a waiver of
service has not been obtained and filed, is to be made
“by delivering a copy of the summons and complaint to an
officer, a managing or general agent, or by leaving a
copy of the summons and complaint at an office of the
corporation with a person employed therein, or by
delivering a copy of the summons and complaint to an
agent authorized by appointment or by law to receive
service of process, provided that if the agent is one
designated by statute to receive service, such further
notice as the statute requires shall be given.” R.I.
Super. Ct. R. Civ. P. Rule 4 (e).
It is apparent that Local 3's initial service to Nuzzo by
certified mail was improper. Nuzzo is a domestic Rhode Island
corporation which, in the absence of a waiver of service, had to be
served personally. Nevertheless, it is also apparent that Nuzzo did
receive the summons and complaint and that it responded thereto,
addressing not only the question of proper service, but also this
Court’s jurisdiction over Local 3's claim against Nuzzo. Moreover,
Local 3 subsequently attempted to effect personal service on Nuzzo
and its chronicled efforts indicate that Nuzzo was deliberately
trying to evade personal service.
It is true that actual notice, by itself, is insufficient to
establish compliance with the requirement of personal service.
Precision Etchings & Findings, Inc. v. LGP Gem, Ltd., 953 F.2d 21,
24 (1st Cir. 1992)(noting that “[w]hen the defendant has received
actual notice of the action ... service of process requirements are
to be “‘broadly interpreted.’”)(citation omitted). However, under
the circumstances of this case, where the defendant has been
apprised of the commencement and the subject of litigation, where
a response has been made to the complaint with respect to issues
beyond that of the adequacy of service, and where the defendant’s
repeated attempts at evading personal service are well-documented,
the plaintiff’s prior insufficient service on the defendant cannot
serve, by itself, to provide a basis for dismissal of a complaint.
Benjamin v. Grosnick, 999 F.2d 590, 592 (1st Cir.
1988)(dismissal of lawsuit for defective service of process was not
required where, inter alia, defective service did not prejudice
defendant who had actual notice of service);
Toledo-Davila, 266 F.R.D. 46, 49-50, Civil 07-1863 (JA) (D.P.R.
Mar. 11, 2010)(in determining “good cause” for failure to complete
timely service, courts consider whether “the defendant has evaded
service of the process or engaged in misleading conduct” and/or
“the plaintiff has acted diligently to effect service.”) See also
Gambone v. Light-Rock Drywall Corp., 124 Fed. Appx. 78, 80 (3d Cir.
2005)(“The two essential factors that justify relaxed personal
service are i) the defendant's active evasion of service and ii)
clear evidence that the defendant actually received the papers at
issue when allegedly served.”)
B. Subject Matter Jurisdiction
Local 3 asserts federal question jurisdiction under Section
301 of the LMRA, 29 U.S.C. § 185. Section 301 provides federal
district courts with jurisdiction to hear “[s]uits for violation of
contracts between an employer and a labor organization representing
employees in an industry affecting commerce....” 29 U.S.C. §
185(a). Generally, a federal district court has subject matter
jurisdiction over the enforcement of arbitration awards. Local
2322, Int’l. Bhd. of Elec. Workers v. Verizon New England, Inc.,
464 F.3d 93, 96 (1st Cir. 2006)(“Where a collective bargaining
agreement includes an arbitration clause, the arbitration award is
treated as a contractual obligation that can be enforced through a
section 301 suit.”)
In the Complaint, Local 3 alleges that Union Stone - which is
a signatory to the CBA3 with Local 3 - has refused to comply with
the Abitration Board’s Award. Local 3 further asserts that Nuzzo is
an alter ego of and/or single employer with Union Stone and that,
“as such, [Nuzzo] is liable for the Arbitration Award issued
against [Union Stone.]” Complaint ¶ 16. In other words, Local 3
seeks enforcement of the award against Union Stone as a signatory
to the CBA and against Nuzzo as alter ego of, or single employer
with, Union Stone.
The Complaint does not indicate that Nuzzo, itself, is a
signatory to the CBA.
“A finding that two employers are alter egos will bind the
nonsignatory to a collective bargaining agreement between the union
and the nonsignatory's alter ego.” Massachusetts Carpenters Cent.
Collection Agency v. Belmont Concrete Corp., 139 F.3d 304, 307 (1st
Cir. 1998)(citing Nat’l Labor Relations Bd. v. Hosp. San Rafael, 42
F.3d 45, 52-53 (1st Cir. 1994); Penntech Papers, Inc. v. NLRB, 706
F.2d 18, 24 (1st Cir.1983)). Typically, an alter ego analysis is
“applied where an employer attempts to avoid its obligations under
a collective bargaining agreement and is particularly common in the
context of successor employers, where the successor is “‘merely a
disguised continuance of the old employer,’” C.E.K. Indus. Mech.
1990)(quoting Southport Petroleum Co. v. N.L.R.B., 315 U.S. 100,
106, 62 S.Ct. 452, 456, 86 L.Ed. 718 (1942)).
Similarly, the “single employer doctrine” may be applicable
“in cases where ‘liability is sought to be imposed on the legal
employer by arguing that another entity is sufficiently related
employer.’” Torres-Negron v. Merck & Co., Inc., 488 F.3d 34, 40-41
(1st Cir. 2007) (quoting Engelhardt v. S.P. Richards Co., 472 F.3d
1, 4 n. 2 (1st Cir.2006)). However, “[a] finding of single employer
status does not mean that one business is bound by a union contract
signed by another, absent an additional finding that the employees
of each constitute a single appropriate bargaining unit.” C.E.K.
Indus. Mech. Contractors, Inc. v. N.L.R.B., 921 F.2d at 353-354
(citing South Prairie Constr. Co. v. Local 627, Int’l Union of
Operating Eng’rs, 425 U.S. 800, 96 S.Ct. 1842, 48 L.Ed.2d 382
A determination by this Court that Nuzzo is an alter ego of
Union Stone would bind Nuzzo to the CBA as if it were a signatory
thereto and make Nuzzo subject to enforcement proceedings under the
Arbitration Award. Local Union No. 38, Sheet Metal Workers’ Int’l
Assoc., AFL-CIO v. Custom Air Sys., Inc., 357 F.3d 266, 268 (1st
Cir. 2004)(“A district court’s independent determination of alter
ego signifies that, for all relevant purposes, the non-signatory is
legally equivalent to the signatory and is itself a party to the
If, as Local 3 alleges in the Complaint, Nuzzo is an alter ego
of, or single employer with, Union Stone, a determination of that
assertion and of the extent of Nuzzo’s obligations under the CBA,
particularly with respect to the Arbitration Award, is properly
subject to this Court’s jurisdiction. Therefore, Nuzzo’s motion to
dismiss the Complaint for lack of subject matter jurisdiction must
For the reasons stated herein, Nuzzo’s motion to dismiss the
Complaint is DENIED.
/s/ Mary M. Lisi
Mary M. Lisi
Chief United States District Judge
May 14, 2013