BRICKLAYERS & ALLIED CRAFTWORKERS ADMINISTRATIVE DISTRICT COUNCIL OF NEW JERSEY v. APS CONTRACTING, INC.

Filing 21

OPINION. Signed by Judge Kevin McNulty on 6/8/17. (DD, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

BRICKLAYERS & ALLIED
CRAFTWORKERS ADMINISTRATIVE
DISTRICT COUNCIL OF NEW JERSEY,

Civ. No. 2:16-7646
(KM) (MAR)

Petitioner,
OPINION
V.

APS CONTRACTING, INC.
Respondents.

KEVIN MCNULTY, U.S.D.J.:
The petitioner here asks the Court to confirm an arbitration award
originally entered on consent, but now opposed by respondent. Respondent
suggests that the Court should involve itself in enforcing a settlement
agreement of which the petitioner is allegedly a third-party beneficiary. I will
decide the case as presented by the petition, confirm the award, and enter
judgment against the respondent.
I.

BACKGROUND
A.

The Arbitration Award
Respondent APS Contracting, Inc. (“APS”), is a construction company.

Petitioner Bricklayers & Allied Craftworkers Administrative District Council of
New Jersey (“BAC”) is a union. APS and BAC have entered into a collective
bargaining agreement in which APS is required to contribute to various funds
that provide fringe benefits to union members. (Marimon Aff.

¶J

1, 5, CBA XI

1)1

Citations to items in the record are abbreviated as follows:
“Marimon Aff.”
Affidavit of Nicole Marimon, Esq., submitted in support of
Petitioner’s Motion to Confirm the Arbitration Award, ECF. No. 5
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§

In the summer of 2013, APS contracted with Union County
Improvement Authority (“Authority”) to construct the Union County Family
Courthouse (the “Project”). With BAC, APS entered into a Project Labor
Agreement (“PLA”) under which APS was required to contributed to certain
employee benefit funds. From Fidelity and Deposit Company of Maryland and
Zurich American Insurance Company (“Sureties”), APS procured a performance
bond. (Marimon Aff. ¶j 2-3, PLA, Art. 11; Carmalt Aff.

¶

2, Ex. A)

On April 30, 2015, Authority terminated APS from the Project for
cause. (Carmalt Aff.

¶

3, Ex. B)

On May 14, 2015, BAC notified APS that it owed $55,715.86 in
benefits funds contributions and dues check-off for work performed on the
Project from March 2 to April 24, 2015. About two weeks later, BAC filed a
demand for arbitration pursuant to the CBA and the PLA. (Marimon Aff., ¶j 79, 11, Ex. C-D)
On July 16, 2015, Sureties and Authority executed a Takeover
Agreement. Sureties agreed “to perform and complete.

.

.

all the work required

of APS under the Contract” and “arrange for the discharge or bond-off all liens
not already addressed by APS” in exchange for “APS’s rights to payment and
compensation under the Contract.” The Takeover Agreement appointed the

“Carmalt Aff.”
Certification of Daniel Carmalt, Esq., submitted in support of
Respondent’s Opposition to Petitioner’s Motion to Confirm the Arbitration Award, ECF.
No. 10
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“PLA”
Copy of the Project Labor Agreement Covering Construction of the
Union County Family Court Building in Elizabeth, New Jersey between APS and the
Union County Building and Construction Trades Council, AFL-CIO, attached as Ex. A
to Marimon Aff., ECF No. 5-1
—

“CBA”
Copy of the Building Contractors Association of New Jersey, Masonry
Contractors of New Jersey, Building Contractors Association of Atlantic County, and
the International Union of Bricklayers and Allied Craftworkers/Administrative District
Council of New Jersey, Local Union Nos. 2,4 & 5, attached as Ex. B to Marimon Aff.,
ECF No. 5-2
—

“Arb. Award.”
Copy of the Award and Order Issued by J.J. Pierson, Esq., on
December 31, 2015, attached as Ex. E to Marimon Aff., ECF No. 5-5.
—

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Vertex Companies, Inc. (“Vertex”) as Sureties’ representative to complete the
Project. Neither APS nor BAC is a party to the Takeover Agreement. 2 Sureties
and Authority agreed that they did not “intend.
beneficiaries” or to “extend or increase
(Carmalt Aff.

¶

6, Ex. D

¶J

.

.

.

.

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to create any third-party

Surety’s liabilities or obligations.”

2, 6-8)

On August 6, 2015, APS and BAC attended a hearing before arbitrator
J.J. Pierson. APS conceded liability for $55,715.86 in delinquent fringe benefit
contributions and dues check off for work completed from March 2, 2105 to
April 24, 2015. APS represented, however, that Sureties would satisfy BAC ‘s
claim pursuant to the Takeover Agreement after Pierson issued an award
confirming BAC’s claim and APS’s obligation to pay it. (Award
pp. 1-2)
Sometime in December 2015 (the agreement is not dated), BAC agreed
to “release and waive any and all claims for contribution and dues check off”
alleged to be due from Sureties to BAC “pursuant to the Takeover Agreement”
in exchange for $30,000 (the “Settlement Agreement”). APS is not a party to the
Settlement Agreement. (Carmalt Aff.

¶

8, Ex. F)

Finding the claim uncontested, on December 31, 2015, Pierson
awarded BAC $55,715.86. (Award p. 3) The arbitrators’ fee was $2,500.
About a week later, on January 7, 2016, Vertex issued BAC a check
for $30,000. The top left of the check looks like this:
THE VERTEX COMPANIES INC
FBO APS CONTRACTING
400 LIBBEY PARKWAY
WEYMOUTH MA 02189

“FBO”, everyone agrees, means “For the Benefit Of.” (Carmalt Aff.

¶

10, Ex. G)

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The parties at least contemplated that APS might acquiesce to the Takeover
Agreement, however. Below the Authority and the Sureties’ signatures is an empty
signature line for APS.

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B.

This Petition and Motion to Confirm
On October 25, 2016, BAC moved to confirm the arbitration award

and enter judgment against APS totaling the full amount of the award (plus
half of Pierson’s fee and attorneys’ fees and costs) under section 301 of the
Labor Management Relations Act of 1947, 29 U.S.C. 185 and section 9 of the
Federal Arbitration Act, 9 U.S.C. 9. BAC did not mention the Settlement
Agreement or indicate that it had informed the arbitrator that Vertex had sent
it a $30,000 check for the benefit of APS. (ECF Nos. 4-5)
APS filed an opposition and cross-petition to enforce the Settlement
Agreement the following month. APS doesn’t really contest the arbitrator’s
award. It claims instead that Sureties negotiated and settled BAC’s fringe
benefit claims on its behalf. As APS sees things, the Settlement Agreement and
the $30,000 check Vertex sent BAC “for the benefit of APS” released it from any
further fringe benefit or dues check off claims BAC may have had against it.
(ECF No. 9-10)
In December 2016, BAC responded. It contends that APS’s motion is
tantamount to a motion to vacate the arbitration award and is untimely. It
claims alternatively that APS is not an intended third-party beneficiary of the
Settlement Agreement. Acknowledging that it has received partial satisfaction
of its fringe benefit claim by settling with Sureties, it now requests that I enter
judgment against APS totaling $26,965.86—the full amount owing under the
arbitration award (including the arbitrator’s fee) minus $30,000. (ECF No. 15)
It still requests attorneys’ fees and costs.
II.

DISCUSSION
A.

Petition to Confirm the Arbitrator’s Award
As to the petition to confirm, the issue is a narrow one. Does the

arbitrator’s award draw its essence from the CBA or PLA? If so, I must uphold
it.

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A district court’s review of an arbitration award is “severely limited.”
Mut. Fire, Marine & Inland Ins. Co. v. Norad Reinsurance Co., 868 F.2d 52, 56
(3d Cir. 1989); Swift Indus. V. Botany Indus., 466 F.2d 1125, 1130 (3d Cir.
1972). The Third Circuit has explained that “the terms of the arbitral award
will not be subject to judicial revision unless they are completely irrational.”
Mut. Fire, 868 F.2d at 56. Accordingly, a court may vacate an arbitration award
only in extreme circumstances. “Only when an arbitrator acted in manifest
disregard of the law, or if the record before the arbitrator reveals no support
whatsoever for the arbitrator’s determination, may a district court invade the
province of the arbitrator.” United Transp. Union Local 1589 v. Suburban Transit
Corp., 51 F.3d 376, 380 (3d Cir. 1995) (internal quotation omitted). Indeed, so
long as the arbitrator’s award “draws its essence” from the Agreement in
question, a Court should not vacate the award.
A court may vacate an arbitrator’s award if it does not
draw its essence from the collective bargaining
agreement, but instead represents the arbitrator’s own
brand of industrial justice. This exception is a narrow
one. An arbitration award draws its essence from the
bargaining agreement if the interpretation can in any
rational way be derived from the agreement, viewed in
the light of its language, its context, and any other
indicia of the parties’ intention.
Tanoma Mm. Co. v. Local Union No. 1269, United Mine Workers of Am., 896 F.2d
745, 747-48 (3d Cir. 1990) (internal quotations omitted).
Under this lenient and deferential standard of review, the arbitrator’s
award must be upheld in its entirety because it is consistent with the terms of
the CBA and PLA. APS was required to make benefit contributions to certain
employee benefit funds under Article 11 of the PLA and Article XI of the CBA.
The arbitrator cites the PLA provisions in finding that that APS “violated the
Project Labor Agreement.
by failing to remit fringe benefit contributions and
.

.

dues check-off’ for work performed from March 2, 2015 to April 24, 2015.
(Award pp. 2-5) In the arbitration proceedings, APS conceded that it was liable
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for $55,715.86 in delinquent contributions, plus the arbitrator’s fee. (Id. at 2)
3
This award necessarily “derive[sj from” the parties’ agreements, Tanoma Mm.
Co., 896 F.2d at 747-48, and therefore must be upheld.
APS’s allegation that a third-party settlement released these claims,
see Section II.B, infra, is not strictly within the bounds of my review of the
arbitration award. All I need ask, and all I may ask, is whether the arbitrator’s
award “can in any rational way be derived” from the CBA or PLA. Brentwood
Med. Assocs. v. UMW 396 F.3d 237, 241 (3d Cir. 2005) (“Once a court is
satisfied that an arbitrator’s award draws its essence from a collective
bargaining agreement, it is without jurisdiction to consider the award further.”)
(emphasis in original). The settlement potentially preceded the arbitrator’s
rendering of the award. It is not my role “to correct factual or legal errors made
by an arbitrator,” especially alleged errors or omissions that were not brought
to the arbitrator’s attention and are raised for the first time in this Court. Id.
Because—as APS conceded before the arbitrator—the award here construes

and applies the CBA and PLA, I must uphold it, and so I do.
There seems to be no disagreement that the total amount of the
delinquent payments was $55,715.86, plus half the arbitrator’s fee, for a total
of $56,965.86. The parties also agree to the extent that, if judgment is entered,
it should be reduced by the $30,000 already paid by Sureties. To prevent
double recovery, then, the amount of the judgment would be reduced to
$26,965.86. It is that amount that remains at issue.
B.

Cross-Petition to Enforce Settlement Agreement

APS’s cross-petition alleges that it does not owe the $26,965.86
because the Settlement Agreement waives any claim by BAC to amounts above
$30,000. Although APS is not a party to that settlement, and Sureties is not
before this Court, APS seeks to enforce the settlement for its own benefit. It

The arbitrator nevertheless independently found that BAC’s method of
computing the benefits owed was reliable. (Arb. Award 4)
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says that when BAC released its remaining fringe benefits claims against
Sureties, it impliedly released them against APS as well.
In general, a district court does not lack jurisdiction to enforce a final
and binding settlement of a § 301 dispute. A settlement, like an arbitration,
“can be judicially enforced in federal court as long as the settlement is final and
binding under the contract.” United Mine Workers v. Consolidation Coal Co.,
666 F.2d 806, 810 (3d Cir. 1981)). And the CBA here does provide for the
resolution of disputes via settlement instead of arbitration. (CBA Art. XV.D)
To be judicially enforceable, however, a settlement agreement, like
an arbitration award, must be sufficiently specific as to be capable
of implementation. [citing United Mine Workers v. Barnes & Tucker
Co., 561 F.2d 1093 (3d Cir. 1977)]. To avoid preempting the
factfinding functions which the parties have contractually assigned
to the grievance machinery and arbitration, courts will not attempt
to enforce a settlement agreement that is too vague or ambiguous
in its meaning or effect.
Id. at 810.
Thus, “to enforce a settlement agreement to resolve a dispute that is
otherwise governed by a binding arbitration provision: (1) the agreement must
be final and binding; (2) the agreement must be sufficiently specific to be
capable of implementation; and (3) there must be ‘positive assurance’ that the
agreement is intended to cover the relevant dispute.” Trenton Metro. Area Local
of the Am. Postal Workers Union v. United States Postal Seru., 636 F.3d 45, 53
(3d Cir. 2011).
Given the evidence in the record and the circumstances surrounding
the Settlement Agreement, I cannot say that BAC’s release of claims under the
bond against Sureties was intended to be a final and binding resolution of
BAC’s fringe benefit claims against APS. Nor can I say that BAC or Sureties
intended for APS to be a third-party beneficiary of the Settlement Agreement.
E.g., Ross v. Lowitz, 120 A.3d 178, 191 (N.J. 2015) (“It is a fundamental
premise of contract law that a third party is deemed to be a beneficiary of a
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contract only if the contracting parties so intended when they entered into their
agreement.”)
It is true that Sureties, through Vertex, sent BAC a $30,000 check
“for the benefit of APS.” The Settlement Agreement itself, however, does not
contain any language suggesting that the parties intended BAC’s release of any
remaining claims against Sureties would inure to the benefit of APS. “Positive
assurance” that the Settlement Agreement was intended to cover this fringe
benefits dispute is lacking.
In short, although a court will enforce a settlement or an arbitration
award, here we allegedly have both. The effect of the settlement on APS’s
obligations is vague, and “[tb avoid preempting the factfinding functions which
the parties have contractually assigned to the grievance machinery and
arbitration, [this court] will not attempt to enforce a settlement agreement that
is too vague or ambiguous in its meaning or effect.” Consolidation Coal, 666
F.2d at 810—11.
To look at it another way, Sureties’ liability to BAC arose, not from the
collective bargaining agreement, but from the performance bond. The intent of
the Settlement Agreement between BAC and Sureties seems to have been to
resolve BAC’s claims against Sureties under the bond. Neither the bond nor the
Settlement Agreement, however, purported to extinguish BAC’s rights against
APS under its PLA or CBA. At most, then, APS seems to have derived an
incidental, but not intended, benefit from the Settlement Agreement. E.g., Ross,
at 189-90 (“When a court determines the existence of ‘third-party beneficiary’

status, the ‘inquiry focuses on whether the parties to the contract intended
others to benefit from the existence of the contract, or whether the benefit so
derived arises merely as an unintended incident of the agreement.’”) (quoting
Broadway Maint. Corp. v. Rutgers, 90 N.J. 253, 259 (1982)).
To look at it yet another way, the point has been waived. The
BAC / Sureties settlement potentially preceded (but was executed no later than)

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the arbitrator’s award. APS did not suggest to the arbitrator that the settlement
was an alternative to the arbitration or that it was a defense to the claims in
arbitration.
APS’s “cross-petition” to enforce the Settlement Agreement as against
the arbitrator’s award is therefore denied without prejudice to whatever other
remedies it may seek to pursue.
C.

Costs and Fees
With respect to attorneys’ fees and costs, the CBA entitles BAC to an

award of fees and costs in connection with an action to recover delinquent
benefit fund contributions. (CBA Art. XI §1 .H) BAC has presented billing
records of its legal fees pertaining to this matter. Counsel for BAC billed for two
associates at $200 an hour, one of counsel for $260 an hour, and one paralegal
at $90 an hour. (ECF Nos. 17, 17-1) I find the total amount counsel requests,
$7,019 representing 37.1 hours of work, to be reasonable. The $400 filing fee
for this action is recoverable. I will therefore award $7,553.15 in legal fees and
costs.
III.

CONCLUSION
The arbitrator’s award of $56,965.86 is confirmed. BAC and APS

agree that this amount should be reduced by the $30,000 already paid by
Sureties, to eliminate double recovery. Judgment shall therefore be entered in
the amount of $26,965.86, plus $7,553.15 in attorneys’ fees and costs.
Dated: June 8, 2017

/

KEVIN MCNULTY
United States District Judge

C)

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